A compromise may be avoided for fraud.1 If a contract of compromise is not under seal, it may be avoided at law for fraud in the inducement without resorting to equity for rescission, and an action may be brought at law on the original cause of action.2 A formal decree of rescission is not necessary.3 If an unsealed release was obtained from A by fraud, it was held that he need not sue in equity to avoid it, but must offer to return the value received therefor and in his suit on the original claim he may have the release declared void if the defendant seeks to use such release as a defense.4 In some jurisdictions the principles which the common law applied to the release under seal,5 have, however, been applied to a release not under seal; and it has been said that if the party who signed such release knows its contents, and is induced to sign it by fraud as to some collateral matter, he can not avoid such release informally and sue at law to recover damages upon his original cause of action; but that he must have such release set aside in equity.6

Life Ins. Co., 189 Mass. 655, 2 L. R. A. (N.S.) 821, 76 N. E. 217.

Minnesota. Loveridge v. Coles, 72 Minn. 57, 74 N. W. 1109; Corse v. Minnesota Grain Co., 94 Minn. 331, 102 N. W. 728 (obiter); Gibson v. Nelson, 111 Minn. 183 [sub nomine, Nelson v. Nelson, 126 N. W. 731]; Wagner v. Magee, 130 Minn. 162, 153 N. W. 313.

Missouri. Cecil v. Spurger, 32 Mo. 462, 82 Am. Dec. 140.

Nebraska. Linton v. Sheldon, 98 Neb. 834, 154 N. W. 724.

North Carolina. J. I. Case Threshing Machine Co. v. Feezor, 152 N. Car. 516, 67 S. E. 1004.

Oregon. Olston v. Oregon Water Power & Ry. Co., 52 Or. 343, 96 Ac. 1095 [denying rehearing, 97 Ac. 538].

Virginia. Jordan v. Annex Corporation, 109 Va. 625, 64 S. E. 1050.

West Virginia. Sams v. Barnes, 74 W. Va. 420, 82 S. E. 124.

See on this question, Fraud as a Defense at Law in the Federal Courts, by Edwin H. Abbot, Jr., 15 Columbia Law Review 489; Proof of Fraud Under Denial, by Alfred F. Sears, Jr., 31 American Law Review, 865; Setting Up Fraud and Illegality Under the General Denial, by Seymour D. Thompson, 31 American Law Review, 535.

2 Iowa. Schneider v. Schneider, 125 la. 1, 98 N. W. 159.

Kentucky. Wolford v. Steele (Ky.), 87 S. W. 1071 [denying, Wolford v. Steele (Ky.), 84 S. W. 327].

Massachusetts. Chute v. Quincy, 156 Mass. 189, 30 N. E. 550.

North Dakota. Bennett v. Glaapell, 15 N. D. 239, 107 N. W. 45.

Utah. LeVine v. Whitehouse, 37 Utah 260, 109 Ac. 2; Swanson v. Sims, - Utah - , 170 Ac. 774.

Virginia. Ratliff v. Vandikes, 89 Va. 307, 15 S. E. 864.

West Virginia. Cleavenger v. Sturm, 59 W. Va. 658, 53 S. E. 593.

3 Harriman National Bank v. Seldom ridge, 249 U. S. 1, 63 L. ed. - .

1 New Mexico. Morstad v. Atchison, Topeka & Santa Fe Ry. Co., - N. M. - , 170 Ac. 886.

North Dakota. Clark v. Northern Ac. Ry. Co., 36 N. D. 503, 162 N. W. 406; Gilmore v. Western Electric Co., 172 N. W. 111.

Oklahoma. Chicago, Rock Island & Pacific Ry. Co. v. Johnson, - Okla. - , 175 Ac. 494; Chicago, Rock Island & Pacific Ry. Co. v. Burke, - Okla. - 175 Ac. 547.

While a foreign corporation which is engaged in interstate commerce is not subject to provisions which render invalid contracts of a foreign corporation which has not complied with the statutes on the subject of the admission of a foreign corporation to do business, a contract of such a corporation is subject to the ordinary rules of fraud, and the defense of fraud may be interposed in an action by such corporation.7

Rhode Island. Anthony v. Boyd, 15 R. I. 495, 8 Atl. 701, 10 Atl. 657.

South Carolina. Floyd v. New York Life Ins. Co., - S. Car. - , 96 S. E. 912.

2Indiana. McLean v. Assurance Society, 100 Ind. 127, 50 Am. Rep. 779; Michigan Mutual Life Ins. Co. v. Naugle, 130 Ind. 79, 29 N. E. 393.

Iowa. Rauen v. Prudential Ins. Co., 129 la. 725, 106 N. W. 198.

Oklahoma. Chicago, Rock Island & Pacific Ry. Co. v. Burke, - Okla. - , 175 Ac. 547.

Pennsylvania. Hogarth v. Grundy, 256 Pa. St. 451, 100 Atl. 1001.

South Carolina. Floyd v. New York Life Ins. Co., - S. Car. - , 96 S. E. 912.

3 Wilder v. Beede, 119 Cal. 646, 51 Ac. 1083; Bjorklund v. Seattle Electric Co., 35 Wash. 439, 77 Ac. 727; Norvell v. Kanawha & M. Ry. Co., 67 W. Va. 467, 68 6. E. 288.

4 Illinois. Woodbury v. United States Casualty Co., 284 III. 227, 120 N. E. 8.

Iowa. McCord v. Mitchell, - la. - , 165 N. W. 453.

Missouri. Och v. Ry. Co., 130 Mo. 27, 36 L. R. A. 442, 31 S. W. 962.

New Jersey. Elmer v. Loper, 66 N. J. L. 50, 48 Atl. 550.

North Dakota. Clark v. Northern Ac. Ry. Co., 36 N. D. 503, 162 N. W. 406.

Pennsylvania. Hogarth v. Grundy, 256 Pa. St. 451, 100 Atl. 1001.

5 See Sec. 346.

6 Perry v. 0'Neil, 78 O. S. 200, 85 N. E. 41. (The cases cited in this case are cases of sealed releases. Many of them are Illinois cases, and in Illinois an unsealed release may be avoided informally at law. Woodbury v. United States Casualty Co., 284 111. 227, 120 N. E. 8.)

7 Hamley v. Till, 162 Wis. 533, 156 N. W. 968.