United Engine Co. v. Junis

196 Iowa 914
CourtSupreme Court of Iowa
DecidedNovember 13, 1923
StatusPublished
Cited by4 cases

This text of 196 Iowa 914 (United Engine Co. v. Junis) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Engine Co. v. Junis, 196 Iowa 914 (iowa 1923).

Opinion

Faville, J.

The appellant operates an ice cream parlor and candy kitchen in the city of Newton. In January, 1920, he entered into a written contract with appellees for the purchase of an engine, generator, and batteries, to be installed in his place of business. The machinery was installed, and appellant paid $25 on the purchase price. He incurred expenses in the remodeling of his premises to a certain extent, in order to permit the installing of the plant. Appellant claimed that the plant did not operate satisfactorily, and that appellees endeavored to adjust the same to his satisfaction, but without success. He refused payment of the balance of the purchase price, and pleaded [915]*915a breach of warranty, and also contended that he orally, refused to accept the property, and had served a written notice of rescission upon appellees. By reply, appellees pleaded that appellant had waived his right to rescission.

I. It is contended by appellant that the court erred in instructing the jury on the question of rescission of the contract.

Appellant testified that he had certain cement and carpenter work done in his building, in connection with the installing of the plant, and that he had a conversation with the agent for the appellees, in which appellant claimed that the plant did not work, and in Avhich he told appellees’ agent to remove the plant and to pay appellant his ‘ ‘ damages. ’ ’ He said:

“When I told them to pay me the money I had paid out, I meant paying the expenses of the carpenter work and all that stuff. ’ ’

He testified that the value of the work so done by him was $200.

The plant remained in appellant’s place of business, but was not used by him in any way thereafter; and later, the written notice of rescission was served.

The court instructed the jury as follows:

“And in this ease, if you find that the defendant, after he had discovered that the machinery did not do the work, as warranted by the plaintiffs, if you have found that it did not, that he then elected to retain the machinery and claim damages from the plaintiffs for a defect in the machinery, then he could not afterwards claim a rescission by offering to return the machinery to the plaintiffs. And if you find from the evidence in this ease that, on or about the first of September, 1920, the defendant said to the plaintiffs,, or their representatives that the machinery would not do the work, and was not as warranted, but that they could not take the machinery away until they had paid him his damages, this would be an election upon the part of the defendant, and he could not afterwards claim a rescission of the contract by offering to return the machinery. And in that case, the plaintiffs would be entitled to receive [recover] in this action.”

This instruction is made the basis of complaint by appellant.'

It is unnecessary that we enter into a discussion of the [916]*916question of “election of remedies” or “election of rights.”' The rule is well established that a buyer of a chattel that has been sold tuider a warranty, either express or implied, which fails to comply with such warranty, has available, to him either of two remedies. He may (1) retain the purchased article and recover the damages sustained, or (2) restore or offer to restore the article within a reasonable time, rescind the contract, and recover the purchase price. Rogers v. Hanson & Co., 35 Iowa 283; Jack & Toner v. D. M. & Ft. D. R. Co., 53 Iowa 399; Aultman Miller & Co. v. Theirer, 34 Iowa 272; Case Threshing Mach. Co. v. Haven, 65 Iowa 359; Upton Mfg. Co. v. Huiske, 69 Iowa 557; Cummings v. Sherman, 151 Iowa 176. He cannot pursue both of these remedies, and an election to pursue one is a waiver of the right to pursue the other. A rescission contemplates and requires the restoration of the status quo. There cannot, however, be a rescission by the buyer, coupled with a recovery for damages by reason of an alleged breach of the contract. The two remedies are inconsistent.

In the case at bar, it was the contention of the appellant that he had chosen to rescind the contract. It was the contention of the appellees that appellant had waived his right so to do, by having elected, prior to the alleged rescission, to claim damages for the breach of the contract, in lieu of rescission. It is the contention of the appellant that the statement to the effect that he would not take the property, and that appellees should take it back and pay appellant his “damages,” was not intended by appellant as an election to claim damages for breach of the contract, or as a waiver of his right to rescind. Appellant testified that he meant, by the term “damages,” the amount "he had paid out for carpenters, cement work, and similar matters, in the installation of the plant, and that he so informed appellees at the time. Appellant contends that lie had a right to make a claim for these items, in an offer of rescission of the contract. He claims that it was proper that he be reimbursed for these items, in order to restore the status quo between the parties.

The jury might well have found from the record that appellant demanded that appellees should repay him the $25 he had paid on the purchase price, and also the sum of $200 which he had expended in the installation of the plant, as ‘ ‘ damages. ’ ’ [917]*917Did this amount to an election to claim damages for breach of the contract, and was it a waiver of the right to rescind ?

Unquestionably, the rule is well established that a party who once takes a position either to claim rescission or to claim damages for a breach of a contract cannot afterward mend his hold and seek relief on the other theory. So in this ease, if the appellant elected to claim damages for breach of the contract, this was a waiver of his right to claim rescission. In this case, however, the jury might well have found from the record that the intention of the appellant was merely to demand that he be repaid the portion of the purchase price which he had advanced, and in addition thereto the “damages” which he had incurred as expenses in the installing of the plant, and that no other damages were claimed by him. It is a universal rule that, where a party has paid a portion of the purchase price, and seeks a rescission .of the contract, he can, in an action for rescission, recover the portion of the purchase price that has so been paid. A demand that he shall be repaid such portion of the purchase price is not an election to claim damages generally, nor does it constitute a waiver of the right to rescind. It has also been held that, [where the original contract contemplated the : expenditure of money in the installing of the plant, in an action for rescission the rescinding party had a right to demand and^ recover in such action the amount so paid for said purposes. In Lake v. Western Silo Co., 177 Iowa 735, we said:

‘ ‘ The court instructed that plaintiff might recover, not only the purchase price paid, but also the expenses incurred by him in attempting to assemble the silo. This is said to be erroneous, because, upon rescission, a purchaser is entitled to recover nothing more than the purchase price, the contract being, by that act, out of the case, and insufficient to support a claim for damages. In this case, it was contemplated that plaintiff should incur expense in assembling and erecting the silo;

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Bluebook (online)
196 Iowa 914, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-engine-co-v-junis-iowa-1923.