Hamlin Mach. Co. v. Holtite Mfg. Co., 76

• Decision Date: 07 February 1951
• Docket Number: No. 76,76
• Citation: 78 A.2d 450,197 Md. 148
• Parties: HAMLIN MACHINE CO. v. HOLTITE MFG. CO., Inc.
• Court: Maryland Court of Appeals

Page 148

197 Md. 148

78 A.2d 450

HAMLIN MACHINE CO. v. HOLTITE MFG. CO., Inc.

No. 76.

Court of Appeals of Maryland.

Feb. 7, 1951.

Norman C. Melvin, Jr., and Joseph T. Brennan, 2nd, both of Baltimore, for appellant.

Donald N. Rothman, of Baltimore (Simon E. Sobeloff, of Baltimore, on the brief), for appellee.

Before MARBURY, C. J., and DELAPLAINE, COLLINS, and HENDERSON, JJ.

COLLINS, Judge.

This is an appeal by Hamlin Machine Company, hereinafter referred to as appellant, from a judgment rendered by the trial judge, sitting without a jury, in favor of Holtite Manufacturing Company, Inc., hereinafter referred to as appellee, in the amount of $1,000 and costs on the counterclaim of the appellee filed to appellant's declaration.

During the early part of August, 1948, the general manager of appellant received a long distance telephone call from the general manager of appellee inquiring whether he had a '57" Belt Knife Splitter' for sale to use to cut cork and rubber. He was told that the appellant had one for sale for $4,500. Appellee was told that the machine would need certain alterations. After subsequent telephone conversations, a purchase order dated August 16, 1948, was sent to the appellant for a '57" Belt Knife Splitting Machine for Splitting Cork and Rubber up to 4" thick'. With the order was sent a check for $1,000 as a down payment. On the invoice the same words appeared, describing the machine, as on the order. After the receipt of the purchase order, the appellant made certain alterations to the machine and shipped it to appellee on September 10, 1948. The appellant received a telephone call from the appellee on September 29, 1948, complaining that the machine was not operating properly. Certain suggestions were offered. Appellant offered to take the machine back and return the $1,000 at that time, as there were other customers anxious to purchase that machine. The appellee, however, desired to try to remedy the defect and asked the general manager of appellant to send some of his mechanics to Baltimore, or to come himself, which he refused to do. As a result of further conversations, the appellant authorized the appellee to expend up to $200 in an effort to get the machine to operate properly. Nothing further was heard until October 14 or 15, 1948, when the appellee advised the appellant that he could not alter the machine to operate properly and asked the appellant to accept its return. This the appellant refused to do, stating that he had previously offered to take the machine back. Appellant then demanded the balance of the purchase money. This was not paid and on January 5, 1949, the appellant filed suit for the balance of the purchase money due on the machine and certain spare parts sold to the appellee. To the declaration the appellee filed a counterclaim in which it affirmed the sale and prayed the sum of $15,227.32 as damages sustained by it resulting from the breach of warranty of the machine. Rules of Practice and Procedure of The Court of Appeals of Maryland, pt. 2, subd. III, Rule 3.

The case went to trial before the trial judge. The case was argued on both sides. The court indicated that it thought the contract should be rescinded. The defendant, appellee, over objection of the appellant, was permitted by the trial judge to amend its counterclaim by adding a count for rescission and the return of the $1,000 paid on account of the purchase price and other damages directly flowing therefrom. To this additional count, the appellant filed the general issue plea short. The trial judge asked the appellant whether it desired the case continued. To this question, appellant replied: 'No sir, I would like the case finished today.' The court then denied the motion of the appellee to dismiss appellant's claim. The appellant, although contending that the amendment should not have been permitted, in its brief states: 'When the appellee filed its counterclaim for $15,227.32, it elected to affirm the sale and proceeded under Section 69(1)(b) of the Act [Maryland Code Article 83, Section 87(1)(b)]. * * * When the appellee amended the counterclaim he was then proceeding under Section 69(1)(d) of the Act [Maryland Code, Article 83, Section 87(1)(d)] which allows a buyer to rescind the sale * * *'. In its reply brief the appellant also stated that the action was brought under Section 69(1) D. The additional count was therefore treated as the amended counterclaim. The trial judge then granted a rescission of the contract and entered a judgment in favor of the appellee for $1,000 on its counterclaim, the appellee to hold the machine as bailee for the appellant, subject to a lien for the said amount of $1,000. From that judgment appellant appeals. The appellee also filed a cross appeal.

The appellant claims that the trial judge 'did not have the authority to allow the appellee to amend its counterclaim to include a count for rescission of the sale after the appellee, with knowledge of all the facts, had elected to affirm the sale and bring an action for damages arising from an alleged breach of warranty, had proceeded to trial on such theory, and after all testimony had been taken and closing arguments completed by counsel for both parties.'

There does not seem to be much dispute in this case that there was a breach of warranty in the sale of this machine, and we so find. Under the provisions of Code 1939, Article 83, Section 87, where there is a breach of warranty by the seller, the buyer at his election has four alternative remedies. He may

'(a) Accept or keep the goods and set up against the seller the breach of warranty by way of recoupment in diminution or extinction of the price;

'(b) Accept or keep the goods and maintain an action against the seller for damages for the breach of warranty;

'(c) Refuse to accept the goods, if the property therein has not passed, and maintain an action against the seller for damages for the breach of warranty; '(d) Rescind the contract to sell or the sale and refuse to receive the goods; or, if the goods have already been received, return them or offer to return them to the seller and recover the price, or any part thereof, which has been paid.

'(2) When the buyer has claimed and been granted a remedy in any one of these ways, no other remedy can thereafter be granted.'

Appellant claims that under the provisions of Code 1939, Article 75, Section 39, the trial court was not authorized to allow an amendment to the appellee's counterclaim based upon an entirely different cause of action than that upon which the trial had proceeded. Appellant claims that the amendment to the counterclaim here was a change from one cause of action to another. Whether the appellee in this case could have changed its counterclaim from one cause of action to an entirely different cause of action, it is not necessary that we decide. The appellant has evidently confused the clear distinction between cause of action and remdy. The damages sought by appellee's first counterclaim and the rescission sought by the amended counterclaim are both alternative remedies based on the same cause of action, namely, the breach of warranty in the sale. Article 83, Section 87, supra. Here, the cause of action is the breach of warranty. Black's Law Dictionary, 3rd Edition, 1944, defines Cause of Action as: 'Matter for which an action may be brought. The ground on which an action may be sustained. A fact, or a state of facts, to which the law, or principle of law, sought to be enforced against a person or thing, applies. * * * An averment of facts sufficient to justify a court in rendering judgment. * * * The cause of action is distinct from the 'remedy', which is simply the means by which the cause of action is satisfied.' See also 6 Words & Phrases, Causes of Action, Remedy distinguished, Perm.Ed., 1940, page 372, where it is said: 'A 'cause of action' as distinguished from remedy is the right to bring an action, and implies that there is some person in existence who can assert and also a person who can lawfully be sued.' See also Hamlin v. Johns, 1930, 41 Ga.App. 91, 151 S.E. 815. Fuller v. Fried, 1928, 57 N.D. 824, 224 N.W. 668. In this State it appears that from the action of the lower court in granting an amendment within its power, or in refusing to grant it, no appeal will lie. Such action appears to be within the discretion of the court and not subject to review. Lichtenberg v. Joyce, 183 Md. 689, 697, 39 A.2d 789.

The appellant, to sustain its contention that the filing of the original counterclaim constitutes an election such as to bar the remedy of rescission, relies strongly on the case of Johnson v. International Harvester Co., 1933 237 App.Div. 778, 263 N.Y.S. 262. In that case, brought under the Uniform Sales Act, it was held that when in the original complaint the plaintiff alleged his rescission of the contract, and accordingly took the position that the contract between the parties was at an end, he pleaded a good cause of action for rescission both in equity and under the statute. In the amended complaint, the plaintiff alleged the contract between the parties, his performance, the breach of the defendant and claimed damages. The Court there held, that in his original complaint, he made an election of his remedies and he was bound thereby. However, in the later case of Hill v. McKinley, 1938, 254 App.Div. 283, 4 N.Y.S.2d 656, 659, that Court said: 'Under the law of this state, a party claiming to be defrauded, who seeks relief by means of rescission of a contract, is not bound thereby and is not barred from subsequently waiving rescission and suing upon the contract where, as in the present case, the defendant does not acquiesce in the rescission or where the action based upon the rescission has not resulted in a final judgment on the merits. * * * 'the mere bringing of an action which has been dismissed before judgment and in which no element of estoppel in pais has...