This rule, however, is subject to the exception that if the consideration was worthless it need not be rettirned.56 And one who attempts to rescind a transaction on the ground of fraud, mistake or otherwise, is not bound to restore that which he has received by virtue thereof, when, in any event, he is entitled to retain it as indisputably his own whatever may be the fate of his effort to rescind the transaction,67 In other cases where on the particular facts it seems equitable to allow rescission without complete or perfect restoration of the consideration, the modern tendency seems to favor the relief, and courts of law adopting the more liberal rule in equity no longer adhere to the strict construction upheld in earlier decisions.58 Thus diminu-

56 Dulaney v. Jones, 100 Miss. 835, 57 So. 225; Babcock v. Case, 61 Pa. St. 427, 100 Am. Dec. 654. On this principle a fraudulent buyer's note which has not been negotiated by the seller need not be returned. It is enough if produced for surrender at the trial. Wilcox v. San Jose Fruit Packing Co., 113 Ala. 519, 28 So. 376, 59 Am. St. Rep. 135; Coghill v. Boring, 15 Cal. 213; Morse v. Woodworth, 155 Mass. 233, 249, 27 N. E. 1010, 29 N. E. 525; Skinner v. Michigan Hoop Co., 119 Mich. 467, 78 N. W. 547, 75 Am. St. Rep. 413; Wood v;. Garland, 58 N. H. 154; Berry v. American Central Ins. Co., 132 N. Y. 49, 55, 30 N. E. 254, 28 Am. St. Rep. 548; Crossen v. Murphy, 31 Or. 114, 49 Pac. 858; Sloane v. Sniffer, 156 Pa. St. 59, 27 Atl. 67. But see contra, Farwell v. Hanchett, 120 111. 573, 11 N. E. 875. It is otherwise in case of a note of a third person. Northampton Nat. Bank v. Smith, 169 Mass. 281, 61 Am. St. Rep. 283; Cook v. Gilman, 34 N. H. 556; Spencer v. St. Clair, 57 N. H. 9; Baker v. Robbins, 2 Denio, 136; Whitcomb v. Denio, 52 Vt. 382. Unless the note is worthless. Mahone v. Reeves, 11 Ala. 345; Esta-brook v. Swett, 116 Mass. 303; Duval v. Mowry, 6 R. 1.479. Compare Cook v. Gilman, 34 N. H. 556; Spencer v. St. Clair, 57 N. H. 9; Crossen v. Murphy, 31 Or. 114, 49 Pac. 858. Other illustrations of worthless property may be found in Dill v. O'Fer-rell, 45 Ind. 268; Haase v. Mitchell, 58 Ind. 213; Kent v. Bornstein, 12 Allen, 342; Brocklehurst & Potter Co. v. Marsch, 225 Mass. 3, 113 N. E. 646.

57 Cobb v. Tirrell, 137 Mass. 143; Brocklehurst & Potter Co. v. Marsch, 225 Mass. 3, 113 N. E. 646, citing Cobb v. Fogg, 166 Mass. 466, 479, 44 N. E. 534; Bruce v. Anderson, 176 Mass. 161, 162, 57 N. E. 354. The court adds: " In this respect the rule at law approaches that prevailing in equity. Thomas v. Beals, 154 Mass. 51, 55, 27 N. E. 1004; Parker v. Simpson, 180 Mass. 334, 343, 62 N. E. 401; Atkins v. Atkins, 195 Mass. 124, 132, 80 N. E. 806, 11 L. R. A. (N. S.) 273, 122 Am. St. Rep. 221; Kley v. Healy, 127 N. Y. 555, 561, 28 N. E. 593."

58 In Bassett v. Brown, 105 Mass. 551, the court said: "This rule is held with great strictness in actions at law, as in the case of the casks that contained worthless lime (Conner v. Henderson, 15 Mass. 319, 8 Am. Dec. 103) and the sack that covered the rejected bale of cotton. Morse v. Brackett, 98 Mass. 205, and tion in value of the consideration by lapse of time,59 or by reasonable use before the discovery of the fraud,60 or the application of the consideration for the defendant's benefit,61 or the use of part of the consideration in testing,62 will not prevent rescission, nor will inability to return the consideration when the inability is due to the wrongful conduct of the fraudulent party.63 The matter has been thus summarized:"That a party seeking rescission of a contract must return, or offer to return, what he has received under it, and thus put the other party as nearly as is possible in his situation before the contract, is the law. But this rule is wholly an equitable one; impossible or unreasonable things, which do not tend to accomplish equity in the particular transaction, are not required." 64 In some cases even where restoration of the consideration is entirely possible, it has not been required. Thus where the wrongdoer has injured goods fraudulently obtained by him to a greater extent than the consideration he gave, it has been held that the defrauded person need not return the latter as a condition of rescission,65 or where the party seeking relief has suffered for any reason a greater loss than the consideration which he re-

104 Mass. 494." Compare with these decisions the cases in the following notes. In equity if the inability of the injured party to make complete restitution is due to no fault on his part, and substantial justice can be done without it by proper terms in the decree, rescission will be allowed. Payne v. Hiram Lindsey Co., 71 Wash. 293, 128 Pac. 678.

59 Armstrong v. Jackson, [1917] 2 K. B. 822.

60 Gatling v;. Newell, 9 Ind. 572. Even where rescission is sought merely for breach of contract, valuable use of the property has been held not to preclude rescission. See supra, Sec. 1460. A reasonable rental value, however, might properly be deducted if the use has been valuable. Allen v. Talbot, 170 Mich. 664, 137 N. W. 97.

61 Brown v. Norman, 65 Miss. 369, 4 So. 293, 7 Am. St. Rep. 663.

62 Eastern Granite Roofing Co. v. Chapman, 140 Ala. 440, 443, 37 So. 199.

63 Clark v. Wells, 127 Minn. 353, 149 N. W. 547, L. R. A. 1916 F. 476; Hammond v. Pennock, 61 N. Y. 145; Hamrah v. Maloof, 127 N. Y. App. Div. 331, 111 N. Y. S. 509; Gates v. Raymond, 106 Wis. 657, 82 N. W. 530. In the latter case the defendant fraudulently caused the plaintiff to become intoxicated and sell his horse and then lose at poker to the defendant and his associates the consideration.

64 Sloane v. Sniffer, 156 Pa. St. 59, 64, 27 Atl. 67. But the fact that a defrauded buyer has disposed of the goods before discovery of the fraud will not excuse restoration. Smith v. Brittenham, 98 111. 188.

65 Phenix Iron Works v. McEvony, 47 Neb. 228, 66 N. W. 290, 53 Am. St. Rep. 527.

tains.66 Where circumstances permit, some courts also have allowed as a substitute for restoration of the consideration a deduction of the amount of it from the recovery against the wrongdoer.67 This is the most satisfactory disposition of many cases. If property fraudulently obtained has got into the hands of a third person who is not a purchaser for value, he is not allowed to object to a claim of the defrauded party for the return of the property that the consideration has not been restored to the fraudulent person.68 Frequently a fraudulent seller will refuse to receive the goods when offered in rescission of the bargain, and as to the rights of the buyer then, it has been said: "A purchaser who is defrauded by the seller, and who in the lawful exercise of his right to rescind renders the property to the seller, who refuses to receive it, is under no other obligation to him than to retain the property as his bailee and agent,69 and, after notice of his intention, may in good faith dispose of the same for account of the owner. If he sells the property otherwise than in good faith, the extent of his liability would be the fair market value of the same." 70 Doubtless such a right of re-

66 In Page Belting Co. v. Prince, 77 N. H. 309, 313, 91 AH. 961, the court said: "Because of this fraud, the Wallaces claim to exercise an equitable right of rescission. It is objected that this cannot be done because they have kept the bonds received by them as a part of the repudiated transaction. While by the strict common-law rule one could not rescind save by putting the other party in statu quo, the theory has been much broken in upon since the distinction between legal and equitable relief has come to be largely disregarded; and the rule now in this jurisdiction is that the rescinding party is only required 'to do what equitably he ought to do.' Mead v. Welch, 67 N. H. 341, 342, 39 Atl. 970; Thorpe v. Packard, 73 N. H. 235, 60 Atl. 432. See, also, Sipola v. Winship, 74 N. H. 240, 66 Atl. 962.

" In view of the fact that the Wallaces have made a substantial loss in the transaction, even after retaining the bonds, it seems plain that equity would not require that the bonds or their proceeds be given up."

67 Ladd v. Moore, 3 Sandf. 589; Evans v. Brooks, 34 Old. 55, 124 Pac. 599; Grossen v. Murphy, 31 Or. 114, 49 Pac. 858; Warner v. Vallily, 13 R. I. 483; Sisson v. Hill, 18 R. I. 212, 26 Atl. 196, 21 L. R. A. 206; Hale v. Bank of Baldwin, 143 Wis. 303, 127 N. W. 969. See also Wilson v. Burks, 71 Ga. 862; Todd v. Leach, 100 Ga. 227, 28 S. E. 43; Todd v. McLaughlin, 125 Mich. 268, 84 N. W. 146; Brewster v. Wooster, 131 N. Y. 473, 30 N. E. 489; Mason v. Lawing, 10 Lea, 264.

68 Stevens v. Austin, 1 Met. 557; Schoonmaker v. Kelly, 42 Hun, 299; Frost v. Lowry, 15 Ohio, 200.

69If he uses the property as his own, he loses the right of rescission. Mizell v. Watson, 57 Fla. Ill, 49 So. 149.

70 Hambrick v. Wilkins, 65 Miss. 18, 3 So. 67, 7 Am. St. Rep. 631. See sale is allowable, but in view of the chance for subsequent dispute as to be propriety of the buyer's conduct, if it does not involve expense or any great degree of care, it would seem safer for a defrauded buyer who wishes to rescind the transaction to retain the goods on behalf of the fraudulent seller if the latter refuses to assent to rescission.