indebtedness, and the evidence thereof, due or owing to said parties by or on account of the conducting or carrying on of said business."

The defendant moved for a new trial, which was denied, and he appeals.

Several questions, as to the misjoinder of parties, and rulings at the trial, are presented by the briefs, but the conclusion we have reached upon the merits renders it unnecessary to consider them.

The judgment in favor of the plaintiffs is erroneous for several reasons:

1. The attempted rescission by him was not in time. 2. The tender made upon an offer to rescind was insufficient.

3. It appears to have been impossible, at the time of the offer to rescind, to place the defendant in statu quo.

4. The court having found against the plaintiff in respect to the alleged fraud in taking the inventory, the findings show no cause of action, as there is no finding showing that the representations as to the former profits of the business were material, or resulted in any injury to the plaintiff.

1. It is a well-established and just rule of equity, that a party who seeks to avoid a contract for fraud must rescind the same promptly after the fraud is discovered, or he will be deemed to have waived it. (Civ. Code, sec. 1691; Fratt v. Fiske, 17 Cal. 380; Barfield v. Price, 40 Cal. 535; Cobb v. Hatfield, 46 N. Y. 533; Benjamin on Sales, sec. 452; Ross v. Titterton, 6 Hun, 280; Foley v. Crow, 37 Md. 51.)

It is true, the court finds that the fraud was discovered in June, and that when plaintiff made the discovery he notified the defendant and demanded the rescission. The court also finds that there was no unreasonable delay in bringing the action. So far as the finding as to the time of discovery and offer to rescind is concerned, it has no evidence to support it. The evidence of the

plaintiff, which is undisputed, is, that he made the discovery in May. He says: "I made the discovery that the business was not paying some time in the spring or summer, and notified Fox some time in September or October. I said all along in the spring and summer time we found things were not as we liked there and were represented; it was earlier than May or June that we made the discovery,-along about in May."

The discovery being made in May, if not earlier, and the offer to rescind in September or October, there was at least four months intervening, and the plaintiff testifies that during all of that time he continued to sell the old stock of goods and purchase new stock.

It would be entirely inequitable, it seems to us, to permit a party to rescind a contract after such a delay, under the circumstances of this case.

2. The tender made was not of the goods purchased, as a great part of them had been sold. The offer was to deliver the goods on hand, and pay the amount realized from the sale of those disposed of. This was not sufficient. Upon a rescission, the defendant, before paying back the purchase-money and delivering up the notes, was entitled to receive the identical things sold. He was not bound to take the price at which they were sold. That might, so far as we know, have been less than their value. But whether it was or not, the rule is well settled, that where the party complaining has parted with the thing purchased, he cannot rescind, but must resort to an action for damages. (Herman v. Haffenegger, 54 Cal. 161; Cobb v. Hatfield, 46 N. Y. 533; Benjamin on Sales, sec. 452.)

3. Again, at the time the offer to rescind was made, it had become impossible by the act of the plaintiff himself, or jointly with the other active partner, to place the defendant in statu quo.

As a result of the sale, a partnership had been formed, as we have stated, and the whole of the stock had be

come partnership property, in which Meinecke, who was not made a party to this action, had an interest. A large part of the stock had been sold, and new stock purchased on credit, for which the defendant as well as the other partners was personally liable. This being the situation of affairs, it was utterly impossible to place any of the parties in statu quo. It is well settled that under such circumstances there can be no rescission of the contract. (Civ. Code, sec. 1691; Herman v. Haffenegger, 54 Cal. 161; Pullman v. Alley, 35 N. Y. 637; Gould v. Cayuga County National Bank, 86 N. Y. 75; Sinclair v. Neil, 8 Hun, 80; Hogan v. Meyer, 5 Hill, 389; Matteawan Co. v. Bentley, 13 Barb. 641; Kerr on Fraud, 48, 328; Benjamin on Sales, sec. 452; Fry on Specific Performance, sec. 706; 1 Wharton on Contracts, sec. 286; Cobb v. Hatfield, 46 N. Y. 533.)

4. The complaint states no cause of action so far as it relates to fraudulent representations respecting the question of former profits of the business. It contains no allegation that the plaintiff was induced thereby to pay a higher price for the goods than he would otherwise have done, nor is it averred that the business was not profitable after the plaintiff bought into it. In other words, there is nothing in the complaint to show that the plaintiff was in any way injured by the representations, admitting them to have been false. The findings make no better case for the plaintiff than the complaint.

In order to entitle a party to rescind a contract, he must not only show the fraud, but that as a result thereof some damage has resulted to him. (Morrison v. Lods, 39 Cal. 381; Marriner v. Dennison, ante, p. 202.) For these reasons, the defendant would have been entitled to judgment in his favor on the findings in the court below, if he had asked it.

The form of judgment is objected to. We think these objections are well taken, but the view we have taken of

the merits of the case renders it unnecessary to consider them at length.

As the case has been fully tried by the court, and the facts found, a new trial would be fruitless under the law as stated above.

Therefore the judgment and order appealed from are reversed, with instructions to the court below to modify its conclusions of law as to conform to this opinion, and render judgment thereon for the defendant.

PATERSON, J., MCFARLAND, J., THORNTON, J., and SHARPSTEIN, J., concurred.

[No. 12413. In Bank.-March 15, 1889.]

IN THE MATTER OF H. C. GOOD et aL., IN INSOLVENCY.

INSOLVENCY ACT-FAILURE TO KEEP PROPER BOOKS-DISCHARGE.-Under the insolvency act of 1880, the failure of a merchant or tradesman to keep proper books of account prevents him from obtaining a discharge.

ID.-GOOD FAITH.-The fact that the omission to keep proper books was in good faith is immaterial.

ID. WHAT ARE PROPER BOOKS-MONEY LENT.-A loan to a firm for the purpose of being put into the business is a debt of the firm, and should be entered on the books. Where this was not done, and the omitted items would have shown the firm to be utterly insolvent, when according to the books it appeared to be in a prosperous condition, held, that the books were not "proper."

APPEAL from an order of the Superior Court of Solano County refusing a discharge in insolvency.

The facts are stated in the opinion.

Fred W. Hall, and J. F. Wendell, for Appellant.

Napthaly, Friedenrich & Ackerman, for Respondents.

HAYNE, C.-H. C. Good and James Roney were partners, “carrying on a grocery and bar business at Vallejo in a small way," for about four years. On the third day

of July, 1886, they filed a petition in the superior court · of Solano County, asking to be adjudged insolvents, and in February, 1887, Good applied to the court for a discharge from his debts. This application was opposed by some of the creditors, on the ground that the firm of Good & Roney had not kept proper books of account, and it was specified that they did not enter in their books "an indebtedness of said firm to John Good, amounting to about seven thousand five hundred dollars, and did not enter in said books an indebtedness of said firm to Walter C. Good, amounting to about two thousand five hundred dollars, and thereby falsely made it appear by said books that said firm was indebted in a less sum, to wit, ten thousand dollars less, than said firm actually owed, and thereby falsely made it appear by said books that said firm was solvent, and that the indebtedness of said firm did not exceed its assets, whereas said firm was wholly insolvent, and its actual indebtedness largely exceeded the value of its assets."

Good filed an answer to the objections made to his discharge, and, admitting that the indebtedness of seven thousand five hundred dollars to John Good, his father, and two thousand five hundred dollars to Walter C. Good, his brother, was not entered in the books of the firm, averred that the books were not kept by himself, but by James Roney, and that neither of the partners was an expert book-keeper, and that they did not consider it necessary to enter those items; that the items were for moneys loaned to the firm to enable the partners to commence and continue their business, and constituted their capital stock, and that promissory notes therefor had been given. He also averred that the omissions were made in good faith, and without any intention to deceive or defraud any one, or to make the firm appear solvent when it was insolvent, and that no creditor of the firm was injured or defrauded thereby; that the books correctly set forth the mercantile transactions