11903, 183 Mass. 279, 282 ; 67 N. E. 327.
2 1902, 181 Mass. 256; 63 N. E. 435.
3 1905, 123 Ga. 850, 854; 51 S. E. 760; 1 L. R. A. (N. S.) 379. In this case the court said: "This is a general rule where one party to the contract has received goods, money, or other thing of value, which is capable of being returned to the other party. But in a contract like that involved in the present case, where a person agrees to teach another a certain thing, to qualify him for a certain position, if he gives the student some instruction and then refuses to complete his contract, there would be no possible way by which such instruction as he had given could be returned or tendered back to him; nor is the other party required to estimate value for what has been done and tender such amount. He cannot hold on to the amount paid, refuse to proceed with the contract, and defend against an action to recover the price paid on the ground that the plaintiff had not tendered back to him his instruction, and could not restore him to the status quo."
In England this rule that the defendant must be placed in statu quo has been so rigidly applied that one who has received the benefit of part performance is rarely in a position to demand restitution. Thus, though he returns property received by him, he will not be permitted to enforce restitution because he has also enjoyed a benefit which cannot be returned in specie - the temporary use of the property:
Hunt v. Silk, 1804, 5 East 449: Action to recover money paid under a contract for a lease. The plaintiff took immediate possession, but upon the defendant's failure to make repairs within ten days, as agreed, quit the house. Lord Ellen-borough, C.J. (p. 452): "Now where a contract is to be rescinded at all, it must be rescinded in toto and the parties put in statu quo. But here was an intermediate occupation, a part execution of the agreement, which was incapable of being rescinded. If the plaintiff might occupy the premises two days beyond the time when the repairs were to have been done and the lease executed, and yet rescind the contract, why might he not rescind it after a twelvemonth on the same account? This objection cannot be gotten rid of: the parties cannot be put in statu quo." 2
The American courts, in general, have assumed a more liberal attitude, and not infrequently have ignored the incidental benefit derived by the plaintiff from the temporary use or possession of property received under the contract:
Campbell Mfg. Co. v. Marsh, 1894,20 Colo. 22; 36 Pac. 799: Action to recover money paid under a contract for the purchase of a printing press and a folding machine from the defendant. The press was delivered to the plaintiff and used for a period of about seven weeks, when the contract was rescinded for the nondelivery of the folder. Hayt, C.J. (p. 31): "It is urged that as the press had been put in use by the appellees the appellant could not be placed in statu quo and hence the former could not rescind. It is undoubtedly true that where one of the parties to a contract seeks to rescind, he must place the other in statu quo. He will not be allowed to repudiate a contract and retain a benefit derived therefrom. In this case, however, it was in contemplation of the parties that the press should be used pending the delivery of the folder. The evidence shows that, in fact, it was used only to a very limited extent; that appellees had little or no benefit from such use, and that the press was returned in as good condition as when received. It is true that the witness testified that it would not sell so well as an unused press, but the rule requiring the seller to be placed in statu quo has never, we think, been extended so far as to entitle the party in default to be saved from all loss." 1
1 See also Ottoway v. Milroy, 1909, 144 la. 631; 123 N. W. 467, (services of child in return for clothing, education, etc.; defendant was allowed credit for value of benefit actually conferred).
2 Also: Street v. Blay, 1831, 2 Barn. & Ad. 456; Blackburn v. Smith, 1848, 2 Ex. 783; Beed v. Blandford, 1828, 2 Younge & J. 278.
1 See also Nothe v. Nomer, 1887, 54 Conn. 326; 8 Atl. 134, (plf. had been in possession of real property for three months); Benson v. Cowell, 1879, 52 la. 137; 2 N. W. 1035, (plf. had had use of $570 for five months); Reynolds v. Lynch, 1906, 98 Minn. 58; 107 N. W. 145, (value of option for 90 days). This liberality was carried very far in Ankeny v. Clark, 1893, 148 U. S. 345; 13 S. Ct. 617, where the plaintiff was allowed to rescind a contract and recover the value of wheat delivered thereunder, although he had enjoyed the possession of land which the defendant had contracted to convey to him for over four years, which possession was admitted to be worth more than $2000. See also Wright v. Haskell, 1858, 45 Me. 489. Cf. Aultman & Taylor Co. v. Mead, 1901, 109 Ky. 583; 60 S. W. 294, where it was held that one who has used a sawmill for 3 years cannot rescind, since such use "would very probably reduce its salable value."
There are a number of cases which, while holding that rescission cannot be made without a return of property received by the plaintiff, apparently assume that upon such restitution by the plaintiff he may rescind. In these cases nothing is said of the impossibility of placing the parties in statu quo because of the plaintiff's use or possession of the property. See Summerall v. Graham, 1879, 62 Ga. 729; Moore v. Bare, 1860, 11 la. 198; Clover v. Gottlieb, 1898, 50 La. Ann. 568; 23 So. 459; Miner v. Bradley, 1839, 22 Pick. (Mass.) 457; Clark v. Baker, 1843, 5 Metc. (Mass.) 452; Boeker v. Crescent Belting, etc., Co., 1903, 101 Mo. App. 429; 74 S. W. 385; Gale v. Nixon, 1826, 6 Cow. (N. Y.) 445; Brown v. Witter, 1840, 10 Ohio 142.
The many American cases allowing rescission for breach of warranty exemplify this attitude,1 while those denying the right of rescission for breach of warranty rest in the main, not upon the ground that the parties cannot be restored to their original positions because of the plaintiff's temporary enjoyment of the property, but upon the ground that a warranty is a collateral contract.
In a few instances the courts have declared that where the plaintiff has enjoyed the use of property, he should recover, upon its restoration, the value of the benefit conferred upon the defendant less the value of the use of the property.2 This is a just and reasonable solution of the problem. Indeed, even where no part of that which the plaintiff has received can be restored in specie - as in the case of goods which have been disposed of, or of services rendered the plaintiff - it would seem reasonable to permit him to recover the value of the benefit conferred upon the defendant subject to a deduction for what has been received from the defendant. It has been suggested that it is impossible, under such circumstances, to "apportion the consideration" - by which, apparently, is meant that it is impossible to determine the difference in value between the performance of the defendant and that of the plaintiff; but, as Professor Keener has shown, the problem would be no more difficult than that which confronts a jury in many cases of breach of contract.3