By the law of Louisiana, a party to a synallagmatic contract has
no right to rescind it by reason of the failure of performance by
the other party unless he returns to the latter what was received
from him, so as to put him in the same situation in which he was
before.
The controversy in this case related to the validity of certain
judgments, and depended mainly upon the facts disclosed by the
evidence. In one case, the judgment creditor had agreed to accept
$8,000 for a judgment of $11,000, and received $3,000 in cash on
this agreement, and informally assigned the judgment to a friend of
the judgment debtor for his benefit. The subsequent payments not
being made as agreed, the judgment was assigned to Gay, who had
notice of the transaction, and he sought to recover the whole
amount. Alter, the purchaser of the property affected by the
judgment, contended that it could only stand for the reduced
amount, subject to the payment of $3,000, which would leave only
$5,000 due. Gay claimed that, as the payments agreed to be made
were not all made, the agreement was forfeited. The court below
decreed in favor of Alter. Gay thereupon appealed here.
Page 102 U. S. 80
MR. JUSTICE BRADLEY, after stating the case, delivered the
opinion of the Court.
It is contended by the appellant that the contract whereby Ames
agreed to sell his judgment for $8,000, was a synallagmatic
contract, which he had a right to rescind if the agreement of the
other party as to the payment of the purchase money was not
performed. This is undoubtedly the law of Louisiana, but that law
also requires that if a party to a contract wishes to rescind it
for such a cause, he must return to the other party what he has
received, so as to put him in the same situation he was in before.
In the present case, it is not to be supposed that it was Ames'
duty to return the $3,000 which he received, because it was really
received from Aymar, the debtor. But he was at least bound to
credit that amount on the judgment, which would have been a
substantial return, and in that case he would have a right to
maintain his judgment for the whole balance, and Gay, his vendee,
would have had the same right. But he did not do this, nor has Gay
done it; but, on the contrary, the latter has endeavored to collect
the whole judgment without any deduction whatever. This conduct is
totally inconsistent with the position taken. It shows not a
rescission of the contract and a return or credit of the amount
paid thereon, but a determination to regard the transaction as
altogether void and the whole judgment still due.
We think that this position cannot be maintained.
Decree affirmed.