Houser & Haines Mfg. Co. v. McKay

• Decision Date: 28 May 1909
• Court: Washington Supreme Court
• Parties: HOUSER & HAINES MFG. CO. v. McKAY.

101 P. 894

53 Wash. 337

HOUSER & HAINES MFG. CO. v. McKAY.

Supreme Court of Washington

May 28, 1909

Appeal from Superior Court, Lincoln County; W. T. Warren, Judge.

Action by the Houser & Haines Manufacturing Company against James McKay. Judgment for appellant, and plaintiff appeals. Reversed and remanded for new trial.

Hamblen Lund & Gilbert and William A. Gilbert, for appellant.

Merritt, Oswald & Merritt, for respondent.

GOSE J.

This action was instituted for the purpose of recovering a judgment against the defendant for the sum of $1,600 and interest upon a contract for the sale and delivery of a combined harvester. The case was tried to a jury, and resulted in a verdict and judgment against the plaintiff for the sum of $520. The plaintiff has appealed from this judgment.

The complaint set forth the sale and delivery of the harvester and the failure of the defendant to pay the purchase price. The defendant pleaded affirmatively: That in October, 1906 he gave the plaintiff a written order directing it to manufacture at Stockton, Cal., and ship to him at Wilbur Wash., a certain described combined harvester, for which he agreed to pay it $1,600 at fixed dates; that the defendant ordered such harvester manufactured for the purpose of harvesting his crop, as the plaintiff well knew; that the plaintiff sold the same to him for harvesting purposes; that there was an implied warranty upon the part of the plaintiff that the harvester was made of good material; that it was fit and proper for such purpose; that it would successfully harvest his crop; that it was not properly constructed; that it was not made of good material; that it was not fit or suitable for harvesting purposes; that after reasonable trial it was found inadequate and useless for the purpose it was intended to accomplish, and of no value; that he gave the machine a fair trial, and as a result of its failure to do the work which it was warranted to do, and the delays incident to its trial, his grain became overripe; that he lost a large part of his crop, and the remainder was greatly impaired in value by reason of such delay. The injury and loss to his crop was alleged to be $1,750, which he specially pleaded. He further claimed the sum of $125, which he alleged he had paid as freight on the harvester from the factory to Wilbur. The reply joined issue on the affirmative matter pleaded in the answer. The court instructed the jury in substance, that, if it found by a preponderance of the evidence that these affirmative facts pleaded in the answer were true, they should determine the amount of damage that might fairly and reasonably be considered as arising from such breach of contract, and such as it would be reasonable to conclude had been in the contemplation of both the parties at the time they made the contract, at the probable result of its breach, and return a verdict for the respondent for such sum. This instruction is assigned as error.

The appellant urges that, when the respondent became aware of the fact that the harvester was not such as the appellant had warranted it to be, he had the right to elect as to one of two courses: (1) He could refuse to accept the machine, rescind the sale, and recover any sum that he had paid on account of the purchase price; (2) that he could retain the machine and offset against the purchase price such damages as naturally and proximately resulted from the breach of the warranty. We think these propositions are well established. At any rate, we have not been able to find any diversity of authority on this question. The governing rule in such cases is very aptly and tersely stated in D. M. Osborne & Co. v. Poindexter (Tex. Civ. App.) 34 S.W. 299. At page 301 it is said: 'The plaintiffs might have tendered back the machine and demanded their notes and money, or at their option might elect to keep the machine and pay the price and sue for damages in the difference in value of the machine as represented and warranted and as it really was, and for the special damages occasioned by the breach of the warranty.' See, also, Mechem on Sales, par. 816; 30 Am. & Eng. Enc. Law (2d Ed.) pp. 190-197. 'The bringing of an action on the warranty for damages implies an affirmation of the contract of sale and a prima facie liability for the contract price less damages sustained in consequence of the breach of warranty.' 30 Am. & Eng. Enc. Law (2d Ed.) 197, par. D. 'The buyer may not pursue two inconsistent remedies. If he choose to exercise the special remedy by returning the article to the seller, he is then confined to a recovery of the purchase money paid and cannot maintain an action to recover damages for a breach of the warranty.' See authority last cited, page 199, par. G. The same rule is very clearly stated in Abrams v. Browder, 114 Ala. 287, 21 So. 818. From page 290 of 114 Ala., page 818 of 21 South., we excerpt the following: 'There must be a subsisting contract to support an action for a breach of warranty. If the facts justify it, a buyer may rescind a contract and sue for the purchase money paid. Or he may sue and recover damages for a fraud practiced upon him. Or he may affirm the contract and maintain an action for breach of warranty. He cannot insist that a contract has been rescinded and yet recover on the contract.' In Park v. Richardson & Boynton Co., 81 Wis. 399, 51 N.W. 572, the court had under consideration an instruction which permitted the purchaser to recover as damages both what he had theretofore paid and any damage which he sustained by reason of the failure of the article purchased to meet the requirements of the warranty. The court said: 'This was certainly error, because it blends two distinct rules of damages, one of which is applicable to the action for rescission and the other to the action for breach of warranty. If the action be one to rescind the sale and recover back the purchase money under the provisions of the contract of sale, then the latter part of the instruction should not have been given.' The respondent, after the breach of the contract was established, properly claimed the right to have the money refunded which he had paid as freight on the harvester from the factory to the point of destination. This was a part of the purchase price. If the machine would not harvest his crop as it was warranted to do, he had a right to a return of this amount. This he had properly pleaded. The fact that he also pleaded items of damages which were not recoverable upon an election to rescind the contract does not preclude the recovery of this item. Whilst it is true that the respondent in his answer did not formally tender a return of the harvester, yet he pleaded that it had no value, and that there was an entire failure of consideration.

The case, however, as we view it, was tried on the theory that there had been a rescission of the contract by the respondent. The appellant introduced in evidence a letter which had been written to it by the respondent, bearing date September 3, 1907, in which it is stated: 'Your combined harvester has not proven satisfactory. I have given it up.' The respondent when on the witness stand in his own behalf, upon cross-examination, testified that he made no claim to the machine. This view is strengthened by one of the court's instructions, wherein, in directing the jury as to the different kinds of verdicts which it could return, the court said: 'The Court: I am furnishing you, gentlemen three forms of verdict. One is a verdict in favor of the Houser & Haines Manufacturing Company and assesses the plaintiff's damages at the sum of $1,600, with interest at 10 per cent. per annum from August 1, 1907. If you should find for the plaintiff, that will be your verdict. The other is: 'We, the jury, find for the defendant in the sum of $_____.' If you should find in...