F.E. Lykes & Co., Inc. v. Grove

• Decision Date: 02 July 1931
• Docket Number: 598.
• Citation: 159 S.E. 360,201 N.C. 254
• Parties: F. E. LYKES & CO., Inc., v. GROVE et al.
• Court: North Carolina Supreme Court

159 S.E. 360

201 N.C. 254

F. E. LYKES & CO., Inc., v. GROVE et al.

No. 598.

Supreme Court of North Carolina

July 2, 1931

Appeal from Superior Court, Buncombe County; McElroy, Judge.

Action by F. E. Lykes & Company, Incorporated, against E. W. Grove Jr., and others. From the judgment, plaintiff appeals.

Affirmed.

Nonsuit of purchaser's action for rescission of land sale contracts on ground of alleged total failure of consideration held proper, under facts.

Civil action to rescind contracts for purchase and sale of real estate, recover cash payments made thereon, and cancel notes and deeds of trust given for unpaid balances of purchase price, or, failing in this, to recover damages for breaches of said contracts.

Plaintiff alleges, and offers evidence to prove, that on or about October 5, 1925, he bought from E. W. Grove lots 1, 2, and 3 block B, Battery Park Development, in the city of Asheville at and for the price of $159,525, with the understanding First, that Grove was to erect a large Arcade Building on the center square of said development, retained by him, and complete the same by April 1, 1927; second, that the said Grove would help the plaintiff finance the erection of a building on its property by reducing his notes 5 per cent. and accepting a second mortgage as security, provided the first mortgage did not exceed 60 per cent. of the value of the building, and further that this should be done within a period of eighteen months.

About a year later, the plaintiff, desiring to enlarge its plans, purchased from one Frank L. Nelson, with the advice and consent of the said E. W. Grove, three adjacent lots, 4, 5, and 6, block B, Battery Park Development, at and for the price of $206,250, under similar terms and conditions and with like verbal assurances from the said E. W. Grove as to completion of the Arcade Building and financial assistance for the erection of a hotel and theater building on plaintiff's enlarged premises. Deed for these lots was made direct from Grove to the plaintiff, as title had not passed to Nelson at the time of plaintiff's purchase. (Nelson held a more favorable contract with Grove than the plaintiff, and there is a suggestion, at one place in the record, that this was taken over by the plaintiff, but the whole testimony is otherwise, and the allegation is not pressed.)

Matters were progressing satisfactorily when the death of E. W. Grove January 27, 1927, caused an interruption of the proposed plans. The deceased had spent approximately half a million dollars on the Arcade Building up to that time. Representatives of the Grove estate declined to carry out the agreements which the deceased had with the plaintiff, and not until the summer of 1928 was work resumed on the Arcade Building after it had been purchased by one Walter P. Taylor, who completed it in the spring of 1929, not entirely according to the original plans, however.

The plaintiff has paid on said lots the sum of $110,273.93 in principal, interest, and taxes.

Plaintiff alleges that "a total failure of consideration for the purchase of said lots" has resulted from the refusal of the defendants to recognize and perform the agreements made by the said E. W. Grove; and that it has been damaged in a large sum by reason of said refusal and breach of said contracts on the part of defendants.

The first prayer is for a return of all cash payments and cancellation of the notes and deeds of trust given by plaintiff for balances of purchase price on said lots.

The second prayer is "that in the event said contracts of purchase are not rescinded, the plaintiff have and recover of the defendants by way of damages the sum of $150,000.00."

On motion of defendants, the trial court ruled that, as the plaintiff had originally declared for rescission of the contracts, and then later, in its amended complaint, again asked for rescission, or, failing in this, demanded damages for defendants' refusal to carry out said contracts, it had thereby elected to stand on its alleged right to rescind said agreements. The second cause of action for damages was thereupon dismissed. Objection and exception.

At the close of plaintiff's evidence on the first cause of action, in which rescissions of the contracts were sought, on the ground of an alleged total failure of consideration (no fraud being alleged), the same was dismissed as in case of nonsuit. Plaintiff appeals, assigning errors.

Vonno L. Gudger and Alfred S. Barnard, both of Asheville, for appellant.

Merrimon, Adams & Adams and J. W. Pless, all of Asheville, for appellees.

STACY, C.J. (after stating the case).

Can a plaintiff unite in the same complaint an action for the rescission of a contract and one for its breach? The decisions are to the effect that he may not, as this would be to deny and affirm the contract at the same time--"to blow hot and cold in the same breath." The rights are opposed and the remedies are inconsistent. Machine Co. v. Owings, 140 N.C. 503, 53 S.E. 345; Davis v. Lumber Co., 132 N.C. 233, 43 S.E. 650; Fleming v. Congleton, 177 N.C. 186, 98 S.E. 449; Pritchard v. Williams, 175 N.C. 319, 95 S.E. 570; Leaksville Light & Power Co. v. Casualty Co., 193 N.C. 618, 137 S.E. 817; Irvin v. Harris, 182 N.C. 647, 109 S.E. 867; 9 R. C. L. 965.

Speaking to the subject in Stewart v. Realty Co., 159 N.C. 230, 74 S.E. 736, 738, Brown, J., delivering the opinion of the court, says: "Rescission will bar an action for damages when the only damage sustained is in not getting what was bargained for, and no special damages have been proven. 14 Am. & E. p. 170. But where special damages have been sustained so that the party defrauded is damaged, notwithstanding the rescission, his rescission of the contract will not bar a recovery of such special damages. R. R. Co. v. Hodnett, 29 Ga. 461; Nash v. Title Insurance Co., 163 Mass. 574, 40 N.E. 1039, 28 L. R. A.

753, 47 Am. St. Rep. 489; Warren v. Cole, 15 Mich. 265. *** It seems to be well settled that an election once made, with knowledge of the facts, between coexisting, remedial rights, which are inconsistent, is irrevocable and conclusive, irrespective of intent, and constitutes an absolute bar to any action, suit, or proceeding, based upon any remedial right inconsistent with that asserted by the election. 15 Cyc. p. 262; Moller v. Tuska, 67 N.Y. 166; Clausen v. Head, 110 Wis. 405, 85 N.W. 1028, 84 Am. St. Rep. 933."

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