First Nat. Bank of Chadron v. Tootle

• Decision Date: 05 October 1899
• Citation: 80 N.W. 264,59 Neb. 44
• Parties: FIRST NAT. BANK OF CHADRON v. TOOTLE ET AL.
• Court: Nebraska Supreme Court

59 Neb. 44

80 N.W. 264

FIRST NAT. BANK OF CHADRON

v.TOOTLE ET AL.

Supreme Court of Nebraska.

Oct. 5, 1899.

Syllabus by the Court.

A vendor of property, who is induced to deliver possession thereof to the vendee by or through the fraudulent representations of the latter, may, at his election, ratify the sale and recover the consideration by action on the contract or account, or may rescind the contract and reclaim the article or articles sold, but he may not pursue both remedies. They are not concurrent, and by selecting one with knowledge of the facts the right to the other is waived. Bank v. McKinney, 66 N. W. 280, 47 Neb. 149.

Error to district court, Dawes county; Westover, Judge.

Action by Kate Tootle and others against the First National Bank of Chadron. Judgment for plaintiffs, and defendant brings error. Reversed.A. W. Crites, for plaintiff in error.

Allen G. Fisher and G. A. Eckles, for defendants in error.

HARRISON, C. J.

Charles F. Yates, who during a portion of the year 1889 was engaged in mercantile business in Chadron under the name and style of Yates & Co., ordered and received from the defendant, a wholesale dealer in dry goods and notions at St. Joseph, Mo., certain articles of merchandise for retail trade in his store at Chadron. Yates executed to the plaintiff in error, the bank, one or more chattel mortgages on his stock of goods; and on June 14, 1889, at which time he failed in business, possession of the stock in the store was taken by the bank under its mortgage. The defendant in error commenced this action to obtain possession of the stock of goods, alleging that the sales to Yates had been induced by his false and fraudulent representations in regard to his financial condition, and that on ascertainment of the falsity of said representations the sales of the goods had been rescinded. A trial of the issues in the district court of Dawes county resulted in a judgment in favor of the bank, which, on error to this court, was reversed, and the cause remanded. A rehearing was granted in this court, and on re-examination the decision of the former hearing was approved and followed. The opinion rendered on the first submission of the cause is reported in 34 Neb. 863, 52 N. W. 396, and the one on rehearing in 42 Neb. 237, 60 N. W. 569. After the return of the case to the district court, a second trial occurred, as a result of which the defendant in error was accorded a judgment, and the bank has prosecuted this error proceeding to this court. For a more extended statement of the case, we refer to the opinion in 34 Neb. 863, 52 N. W. 396. The second trial in the district court was without a jury.

One of the contentions for plaintiff in error is that prior to the institution of this action the defendant in error had caused a suit to be commenced against Yates on account of the goods sold to him, or had ratified and approved the action of attorneys who had begun such a case, and, further, that defendant in error then possessed knowledge of the truth or falsity of the representations which Yates had made in the purchase of the goods; that defendant in error had elected the remedy on the account, and to treat the sale of the merchandise as valid, and could not afterwards claim to rescind the sale and sue for a recovery of the goods. The rule of law which governs on this point is as follows: “A vendor who is induced to part with possession of property through the fraud of a purchaser has his election to rescind the contract and reclaim the property sold, or to ratify the sale and pursue his ordinary remedy by an action ex contractu; but such remedies are not concurrent, and, by electing to...