Butler Mfg. Co. v. Elliott

• Decision Date: 09 December 1930
• Docket Number: No. 40236.,40236.
• Court: Iowa Supreme Court
• Parties: BUTLER MFG. CO. v. ELLIOTT & COX.

211 Iowa 1068

233 N.W. 669

BUTLER MFG. CO.

v.ELLIOTT & COX.

No. 40236.

Supreme Court of Iowa.

Dec. 9, 1930.

Appeal from District Court, Webster County; T. G. Garfield, Judge.

Action by Butler Manufacturing Company, a corporation at Kansas City, Mo., against Elliott & Cox, a corporation at Ft. Dodge, Iowa, in four counts to recover purchase price of equipment furnished for defendant's drycleaning establishment and for labor performed in installation. Two of the counts are founded on written contracts, and issue was taken on those. The right of recovery upon the other two counts is not contested. The defense is partial rescission for breach of warranty of severable provisions of the contracts with counterclaim for expense of installation and removal. The case was submitted to a jury which returned a verdict for plaintiff for the full amount of plaintiff's claim. Judgment accordingly. Defendant appeals.

Affirmed.Helsell, McCall & Dolliver, of Ft. Dodge, for appellant.

Frank Maher and D. M. Kelleher, both of Ft. Dodge, for appellee.

MORLING, C. J.

[1][2] I. Defendant's first contention is that its contracts were with the Glover Sales Company, an independent corporation, and not with Butler Manufacturing Company, the plaintiff; that plaintiff is not the owner of the cause of action sued upon. The contracts, though in the body of them “Glover Sales Company” is named as the seller, bear the heading “Glover Sales Company Division of Butler Mfg. Co. Kansas City, Missouri.” Plaintiff conducts its business through departments, one of which is conducted under the name “Glover Sales Company Division of Butler Mfg. Co. Kansas City, Missouri.” It appears that the business now conducted through this department was originally the business of W. C. Glover who transferred it to a corporation called “Glover Sales Company.” W. C. Glover is now a director of plaintiff corporation and manager of the business conducted through the department “Glover Sales Company.” That business is now indisputably operated by plaintiff. The plaintiff is the party with whom the contracts in question were in fact made, and the name “Glover Sales Company,” as it appears in the contracts, is the name under which the plaintiff was doing the business here involved. Defendant makes no claim that it intended to deal or believed that it was dealing with a party other than the Butler Manufacturing Company. A corporation, like an individual, may do business and contract in a name other than its legal name. 1 Thompson Corp. (2d Ed.) § 55. Undisputed evidence, not objected to, shows that the plaintiff was in fact the seller in the contracts in controversy, owner of the cause of action sued upon, and the warrantor in the warranties set up in the answer. The reception of additional evidence of the foregoing facts, over objection, though incompetent, was not prejudicial.

[3] II. If on the pleadings and evidence, including competent and relevant evidence, offered by the appellant and rejected, the appellee was as matter of law entitled to recover the amount awarded it by the verdict, errors in rulings on the admissibility of evidence and in instructions are without prejudice and not ground for a new trial. Dye Produce Co. v. Davis, 202 Iowa, 1008, 209 N. W. 744;Blakely v. Cabelka, 207 Iowa, 959, 221 N. W. 451;Mulroney Mfg. Co. v. Weeks, 185 Iowa, 714, 171 N. W. 36;Brown v. Hunt & Shuetz Co., 163 Iowa, 637, 145 N. W. 310.

At the time the case went to the jury the defense was only to plaintiff's claim of recovery for part of the goods sued for and was based upon the alleged severability of the contract and rescission as to those goods with consequent claim for damages incidental to alleged breach of warranty of those goods. We shall assume for the purpose of the case, without so deciding, that the warranties were given to the full extent claimed by defendant in its rejected as well as its accepted offers of evidence whether to that extent submitted to the jury or not. We shall assume also that there was sufficient evidence to enable the jury to find breach of such warranties.

[4] For breach of warranty defendant had an election of remedies. Defendant had the right to stand on the contract, retain the goods, and recover its damages resulting from the breach. Defendant had the alternative right to rescind the contract and set up rescission in defense to an action to recover for the price of the goods. Lambertson v. National Investment & Finance Co., 200 Iowa, 527, 202 N. W. 119.

[5] Ordinarily, rescission must be of the whole contract, though there may be partial rescission in case of severable provisions. White v. Miller, 132 Iowa, 144, 109 N. W. 465, 8 L. R. A. (N. S.) 727;Inman Mfg. Co. v. American Cereal Co., 124 Iowa, 737, 100 N. W. 860;Pacific Timber Co. v. Windmill & Pump Co., 135 Iowa, 308, 112 N. W. 771;Sturtevant v. LeMars Gas Co., 188 Iowa, 584, 176 N. W. 338; 13 C. J. 623.

Whether or not the contract in suit was severable or entire, we find it unnecessary to determine. See Inman Mfg. Co. v. American Cereal Co., 124 Iowa, 737, 100 N. W. 860;Owens Co. v. Leland Farmers' Elevator Co., 198 Iowa, 271, 198 N. W. 19;White v. Miller, 132 Iowa, 144, 109 N. W. 465, 8 L. R. A. (N. S.) 727;Pacific Timber Co. v. Windmill & Pump Co., 135 Iowa, 308, 112 N. W. 771;Sturtevant Co. v. LeMars Gas Co., 188 Iowa, 584, 176 N. W. 338.

[6][7][8][9] Rescission is the unmaking of the contract. Rescission may be accomplished by acts in pais as well as through resort to the court of equity, but, in order to accomplish rescission in pais for breach of warranty (as well as for other causes), there must be within reasonable time after knowledge of the existence of the cause (in this case breach of warranty) an election to rescind. Within reasonable time, too, knowledge of, from unmistakable act or notice manifesting, such election must be conveyed to the seller (13 C. J. 618), and the buyer must restore, or offer to restore, the status quo. Until restoration or offer to make restoration is made, there is ordinarily at law no rescission. Stauffer v. Mathison, 207 Iowa, 1038, 221 N. W. 918;Messenbrink v. Bliesman et al., 204 Iowa, 223, 215 N. W. 232;Reiger v. Turley, 151 Iowa, 491, 131 N. W. 866; 13 C. J. 620 et seq.; 35 Cyc. 146; Olson v. Brison, 129 Iowa, 604, 106 N. W. 14;Lambertson v. National Inv. & Finance Co., 200 Iowa, 527, 202 N. W. 119;Owen v. Button, 210 Mass. 219, 96 N. E. 333;Haines v. Rowland, 35 Idaho, 481, 207 P. 428;Note to Bryant v. Isburgh, 13 Gray (Mass.) 607, 74 Am. Dec. 655, 661;Chaffee v. Raymond, 241 Mich. 392, 217 N. W. 22; 13 C. J. 620, 621.

[10] When the buyer rescinds, he renounces the contract and his ownership of the property obtained thereunder and invests the seller with the ownership as if the contract had not been made. Continued exercise by the buyer of ownership or dominion of the property after notice of rescission and offer to return necessarily asserts ownership in the buyer, denies the ownership of the seller, and waives or withdraws the notice. Advance-Rumely Thresher Co. v. Glenn Wharton (Iowa) 233 N. W. 673;Owens Co. v. Leland Farmers' Elevator Co., 198 Iowa, 271, 275, 198 N. W. 19;Frey-Sheckler Co. v. Iowa Brick Co., 104 Iowa, 494, 498, 73 N. W. 1051;Smith v. Theiss, 196 Iowa, 514, 521, 194 N. W. 933; Van Dohren v. John Deere Plow Co., 71 Neb. 276, 98 N. W. 830, 831; 24 R. C. L. 437; Sturgis v. Whisler, 145 Mo. App. 148, 130 S. W. 111;Fred W. Wolf Co. v. Monarch Refrigerating Co., 252 Ill. 491, 96 N. E. 1063, 50 L. R. A. (N. S.) 808, 818;Graham v. Hatch Storage Battery Co., 186 Mass. 226, 71 N. E. 532;Stillwell Co. v. Biloxi Canning Co., 78 Miss. 779, 29 So. 513;Samples v. Guyer, 120 Ala. 611, 24 So. 942;McCulloch v. Scott, 13 B. Mon. (Ky.) 172, 56 Am. Dec. 561;Hakes v. Thayer, 165 Mich. 476, 131 N. W. 174.

Continued use of the property after knowledge of breach of warranty further than necessary or proper to make a test as to quality waives the right to rescind and return. 24 R. C. L. 293.

The legal effect of acts asserting and continuing ownership and dominion of the goods and consequent affirmation of the contract may not be overcome merely by testimony to a contrary intention. Id.

We shall not discuss the question whether the alleged rescission was made within reasonable time, or whether, the goods having been sold f. o. b. Kansas City, the offer to return, which will be later set out, was in that respect sufficient. See 35 Cyc. 148.

Under date of August 22, 1927, two writings were executed by the parties to this suit, one of which bore the title “Conditional Sales Contract” and the other “Installation Contract.” They were the written evidence of a single transaction. By the terms of the “Conditional Sales Contract” defendant purchases from plaintiff (under the name “Glover Sales Company”) “the following goods to be shipped, installed and used at: 214 1st Ave., So., Town Fort Dodge, State Ia. Quantity 1 Number 7 Model G. Equipment Clarifier Complete, $2600.00.1 No. 4 Pump extra $75.00, 2 No. 2 Traps extra $60.00, 1 No. 1 Traps extra $25.00, 1 No. 3 deodorize 6? Wide then standard $645.00, 1 36x42 Glove Washer--R Headin $690.00, Total $4095.00. Allowance on 30x41 washer $250.00, total $3845.00, and orders same shipped to address shown above. Via Freight R. R., for which the undersigned agrees to pay the sum of $3845.00 Thirty-eight hundred forty-five and 00-100 Dollars, F. O. B. Kansas City, Mo., on following terms: * * * and the Glover Sales Company guarantees and agrees to replace (F. O. B. Kansas City, Missouri,) any part defective due to defective material and workmanship, * * * The Glover Sales Company guarantees above equipment to be as represented in their literature.”

The “installation” contract provided for supervision of installation by one of plaintiff's engineers. Pursuant to these agreements the equipment so purchased was installed, the installation completed about February 9, 1928. Its operation was not...