Harden v. Lang
| Decision Date | 06 April 1900 |
| Citation | 36 S.E. 100,110 Ga. 392 |
| Parties | HARDEN v. LANG. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
1. When two parties enter into a contract for different articles of machinery, which altogether constitute an outfit for ginning cotton, for a gross price, the contract is an entire one, and a breach of it is caused by a failure to deliver any separate article of the machinery named. When a breach is so occasioned, the purchaser has a right to rescind the contract on notification and return of the articles which he has received, or he may, at his pleasure, abide by the contract and have a right of action to recover damages for the breach but he cannot do both. When, after such breach, he not only retains the articles received, but puts them to his own use and notifies the seller that he has purchased elsewhere the part of the machinery contracted for, but not delivered, this is equivalent to an election to abide by the terms of the original contract, and he thereafter holds the articles received under those terms.
2. A claim for damages arising from a breach of a contract cannot be allowed by a plea of recoupment in defense to an action of trover, unless some special intervening equity arises in favor of the defendant, such as insolvency or nonresidence of the plaintiff.
Error from superior court, Burke county; W. M. Henry, Judge.
Action between S. G. Lang and R. A. Harden. Judgment for plaintiff. Defendant brings error. Affirmed.
Phil. P. Johnston, for plaintiff in error.
Rawlings & Hardwick and Lawson & Scales, for defendant in error.
Harden purchased from Lang certain machinery. The contract between them is embodied in an order of which the following is a copy: All of the machinery was delivered, and received by Harden according to contract, except the cotton gin, which was promised to follow the shipment of the other articles in a few days. On the 23d of September, finding that his efforts to obtain the gin were unavailing. Harden purchased another gin, and telegraphed that fact to the defendant in error, in consequence of which the gin originally contracted for was never shipped. Harden put in place and used the machinery which he purchased from Lang in connection with a gin which he procured elsewhere, and was in his possession and being so used when the first of the notes became due under the contract. The defendant in error requested Harden to pay him the value of the machinery which he had received. This Harden declined to do. He then instituted an action of trover to recover the engine, fixtures, and other machinery which Harden so received. To this action Harden filed several pleas. Among them was one to the effect that, by reason of the failure of Lang to ship the gin, the reservation of the title to the other property named in the contract became null and void, and Lang was not, therefore, entitled to recover. He further averred that the contract was an entire one; that he purchased the machinery as a plant to establish a cotton ginnery, with the object not only of ginning his own cotton, but that of the public generally, all of which was well known to Lang; that, anticipating the prompt delivery of the machinery, he had entered into contracts with various farmers to gin their cotton for a consideration of $1.50 per bale, all of which he lost by the failure to deliver the gin. Other items of damage resulting from such failure were also set forth, all of which he pleaded in the nature of recoupment against the plaintiff's action. The court sustained a demurrer to a part of the plea on the ground that the damages claimed were too vague, remote, and speculative to be recovered. The court also ruled that unless the defendant should make proof of the insolvency of the plaintiff, who, it was admitted, was a resident of Washington county, in the state of Georgia, the plea of recoupment for the damages sustained by the nondelivery of the gin could not be sustained; and on an admission made by counsel for the defendant that he was not prepared to make proofs of such insolvency, and the admission of the receipt of the machinery which the action was brought to recover, and on proof of its value, the court directed a verdict for such proven value, less the amount of freight paid by the defendant, the plaintiff having elected to take a money verdict. To the rulings which sustained the demurrer and directed the verdict, the defendant excepted.
1. There can be no doubt but that the contract entered into between the parties is by its terms an entire one, and not divisible. While there were several articles of machinery contracted for, they were all articles purchased to be used in one business, to wit, that of ginning cotton, and it required all of them to constitute the plant which Harden proposed to establish, and it seems that these facts were known to the seller. No separate price was put on any of the articles, but Harden agreed to pay a gross sum for this entire plant. The contract, therefore, was not by its first terms divisible. In relation to entire contracts, section 3643 of the Civil Code declares that the whole contract stands or falls together, and it is further declared that the character of the contract is determined by the intention of the parties. Treating this as an entire contract, the failure to deliver the cotton gin at the time agreed was a breach and the question arises, what remedies or rights accrued to Harden by reason of that breach? Under plain principles of law, as we understand them, his rights were threefold in number: (1) If he elected to treat the breach as a discharge from further performance of the terms of the contract on his part, he was legally entitled to do so. (2) If he had done anything under the contract, or paid out any money in the execution of its terms, he had a right to sue on a quantum meruit and recover for the same; this being a cause of action distinct from the original contract, but based upon a contract created by law. (3) He had a right of action on the original contract, which he might sustain either by a suit to obtain damages for the loss occasioned by the breach, or a suit to obtain specific performance of the contract. He could not exercise all of these rights, but he was entitled to have any one of them enforced. But if he acquiesced in the breach, and did not claim his discharge from the terms of the contract, but chose to go on with it, instead of repudiating it, and took a benefit under it, he can only have the right of recovery of damages. Clark, Cont. p. 676, and authorities cited in note 177. It was his right originally to have required a delivery of all of the machinery he contracted to purchase, and to have refused to receive any part of it unless the whole was delivered, and we do not mean to say that, if a part of it was received on the promise of the seller that the remaining part would also be thereafter immediately furnished, he would not have been justified in receiving the part shipped, and waiting a reasonable time for the other part, without losing his right to claim that he was discharged from the terms of the contract. But, in order for such claim to be effectual, it was necessary, not only that he should have made an election whether he would continue under the contract or claim that he was discharged therefrom in a reasonable time but he must also have notified the other party, and surrendered, or offered to surrender, the articles which he had received. If he desired to rescind the contract for the breach occasioned by the nondelivery of the gin, it was necessary, in any event, that the other party should be notified (Parmlee v. Adolph, 28 Ohio St. 10); and this must have been done within a reasonable time, and he must otherwise have done what would have put him and the other party in statu quo, and if he did not do this there was no legal rescission. The rule which prescribes the duty of the party seeking to rescind the contract is that the one...
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