As has been seen, a transaction cannot be rescinded on account of fraud,60 or on account of breach of warranty,61 without prompt election and restoration of the status quo by the party seeking rescission. If this is true in cases where the other party is actively in fault, it must, a fortiori, be true in cases of innocent mistake. It is, therefore, fundamental that one seeking relief by rescission or reformation shall indicate his election promptly on discovery of the mistake and shall restore the former status.62 If the rights of third persons will be injuriously affected relief may be denied for this reason.63
55 Marshall v. Snediker, 25 Tex. 460, 78 Amer. Dec. 534; Bruner v. Stanton, 102 Ky. 459, 43 S. W. 411; Pitcher v. Turin Plank Road Co., 10 Barb. 436.
56 Taylor v. First Nat. Bank, 212 Fed. 898, 001, 129 C. C. A. 418; Schlosser v. Nicholson, 184 Ind. 283, I11 N. E. 13; Haven v. Foster, 9 Pick. 112, 19 Am. Dec. 353; Bank of Chillicothe v. Dodge, 8 Barb. 233; Vinal v. Continental, etc., Const. Co., 53 Hun, 247, 6N. Y. S. 595. See also Ętna Ins. Co. v. Mayor, 7 N. Y. App. Div. 145, 40 N. Y. S. 120, 124; Walker v. Walker, 138 Tenn. 679, 200 S. W. 825. It is held in the case first cited that a corporation chartered in Kentucky but doing business in Indiana was chargeable with constructive knowledge of the statutes of the latter State.
57 The right to relief, however, is based on the law being foreign to the residence of the parties when the transaction in question was entered into - not on the law being foreign to the forum where the question is ultimately litigated. Osincup v, Henthom, 89 Kan. 58, 130 Pac. 652, 46 L. R. A. (N. S.) 174, Ann. Cas. 1914 C, 1262.
58 Conaway v. Gore, 24 Kan. 389.
59 Scott v. Littledale, 8 E. & B. 815; stated supra, Sec. 1563, ad fix.
60S See supra, 5 1526.
61 See supra, Sec. 1453.
62In Chymes v. Sanders, Adm'r, 93 U. S. 55, 23 L. Ed. 798, the settled doctrine was stated: "Where a party desires to rescind upon the ground of mistake or fraud, he must, upon the discovery of the facta, at once announce his purpose, and adhere to it. If he be silent, and continue to treat the property as his own, he will be held to have waived the objection, and will be conclusively bound by the contract, as if the mistake or fraud had not occurred. He is not permitted to play fast and loose. Delay and vacillation are fatal to the right which had before subsisted. These remarks are peculiarly applicable to speculative property like that here in question, which is liable to large and constant fluctuations in value. Thomas v. Bartow, 48 N. Y. 193, 200; Flint v. Woodin, 9 Hare, 620, 622; Jennings v. Broughton, 5 De G. M. & G. 126,139; Lloyd v. Brewster, 4 Paige, 537, 27 Am. Dec. 88; Saratoga & S. R. Co. v. Rowe, 24 Wend. 74; Minturn v. Main, 3 Seld. 220, 7 Rob. Prac. c. 6, sect. 2, p. 43; Campbell v. Fleming, 1 Ad. & El. 40,41; Sugd. Vend. (14 th ed.), 335; Diman v. Providence W. & B. R, Co., 5 R. 1.130.
" A court of equity is always reluctant to rescind, unless the parties can be put back in statu quo. If this cannot be done, it will give such relief only where the clearest and strongest equity imperatively demands it. Here the appellant received the money paid on the contract in entire good faith. He parted with it before he was aware of the claim of the appellees, and cannot conveniently restore it. The imperfect and abortive exploration made by Bowman has injured the credit of the property. Times have since changed. There is less demand for such property, and it has fallen largely in market value. Under the circumstances, the loss ought not to be borne by the appellant. Hunt v. Silk, 5 East, 449, 452; Minturn v. Main, 3 Seld. 220; Okill v. Whittaker, 2 Phill. 338, 340; Brisbane v. Dacres, 5 Taunt. 143; Andrew v. Hancock, 1 Brod. & B. 37; Skyring v. Greenwood, 4 Barn. & C. 281, 289; Jennings v. Broughton, 5 De G. M. & G. 126, 139." See also Kinney v. Consolidated Virginia Min. Co., 4 Saw. 382; Hewitt v. Powers, 84 Ind. 295; Bigelow v. Wilson, 99 Iowa, 456, 68 N. W. 798; Gonaway v. Gore, 21 Kans. 725; Cottrell v. Citizens' Sav. Bank, 53 Minn. 201, 54 N. W. 1111; Cassidy 0. Metcalf, 66 Mo. 519; Green v. Stone, 54 N. J. Eq. 387, 34 Atl. 1099, 55 Am. St. Rep. 577; Crosier v. Acer, 7 Paige, 137; Columbus & T. R. Co. v. Steinfeld, 42 Ohio St 449; State 0. Frontier, 15 Ohio Dec. 613, 626; Fink v. Farmers' Bank, 178 Pa. 154, 35 Atl. 636, 56 Am. St. Rep. 746; Persinger's Ad'm v. Chapman, 93 Va. 349,25S.E. 5, and infra, Sec. 1596, ad fin. 63 In Matter of an Arranging Debtor,