scind the transaction, tender back the stock, and demand a return of the consideration paid for it. A question of public policy is involved in this rule, and it applies, although perfect good faith was intended, and no loss has been sustained.
Conkey v. Bond, 36 N. Y. 427 ;
Taussig v. Hart, 58 N. Y. 425 . The peculiar facts proved on the trial, however, take this case out of the operation of such principle. The transfers of stock to plaintiff were made before the month of September, 1882. In the latter part of 1883 the property and assets of the Silver King Mining Company were conveyed to the Silver King Mining & Tunnel Company, and the shares of the former mining company were made freely convertible into shares of the tunnel company, in all respects equivalent. Plaintiff having previously procured the shares in question to be registered in his name on the books of the mining company, thereupon exchanged them for shares in the tunnel company, which he still retains. He did not attempt to rescind the purchase until 1886, claiming that not until that time did he discover the alleged fraud. He went to defendant, and tendered, not the shares of the tunnel company which he had received in exchange, but he borrowed from different persons 4,000 shares of the mining company’s stock, which had never been transferred, for the purpose of making such tender. Plaintiff admits that he was not the owner of the shares so offered to defendant, and that he borrowed them simply for the purpose of the formal tender. The fact whether or not defendant delivered to plaintiff stock owned by himself, and not secured by
bona fide purchase, is immaterial, because the only right which could be conferred thereby would be that of repudiating the transaction and rescinding the sale. In order to do this, a party must always tender back the stock which he has received under such voidable sale. Here the plaintiff has not made any attempt to do this. He still holds the stock he received in exchange for the original stock, and presumably is gaining the benefit of such holding. If immediately after the discovery of the true nature of the purchase plaintiff had gone to defendant, and offered to restore as far as was within his power the property he had purchased, a different question would have arisen. The shares in the tunnel company were the equivalent of and in all respects stood for the surrendered shares of the mining company. A tender of those shares would have been the nearest plaintiff could have come
to offering restitution. In my judgment, the so-called tender of 4,000 shares of mining stock which he did not own was merely an idle ceremony. Plaintiff’s real position on this point is that he is authorized to retain the stock, but sue for damages. This position is untenable. A principal, under such circumstances, may either repudiate the'transaction and demand back his money, or, if he so elect, may ratify the sale, retain the property, and reap its possible benefit. But he cannot hold on to the stock, presumably taking the chance of making gain thereby, and at the same time treat the wrongful act in delivering stock the agent himself owned as an independent cause of action for damages. The learned trial judge sent the case to the jury upon the question whether false representations were made as to the stock as an inducement to the purchase. Under the facts disclosed, this was the most that plaintiff could claim. We find no errors either in the charge or in the rulings upon the trial, and the judgment appealed from should be affirmed, with costs.