Nordman v. Earle Equipment Co.

• Decision Date: 15 April 1958
• Docket Number: No. 29,29
• Citation: 89 N.W.2d 594,352 Mich. 342
• Parties: Amos NORDMAN, d/b/a American Real Estate Sales & Exchange, Plaintiff and Appellant, v. The EARLE EQUIPMENT COMPANY, a Michigan corporation, Defendant and Appellee.
• Court: Michigan Supreme Court

Page 594

89 N.W.2d 594

352 Mich. 342

Amos NORDMAN, d/b/a American Real Estate Sales & Exchange, Plaintiff and Appellant, v. The EARLE EQUIPMENT COMPANY, a Michigan corporation,

Defendant and Appellee.

No. 29.

Supreme Court of Michigan.

April 15, 1958.

Thomas J. Whinery, Grand Rapids, for appellant.

Williams & Damon, Grand Rapids, for appellee.

Before the Entire Bench.

DETHMERS, Chief Justice.

Dates and the sequence of events are important to decision of this case. On June 7, 1955, plaintiff purchased a tractor with hydraulic bulldozer from defendant and paid $1,364.25 for it. It broke down during its first half day of use by plaintiff and defendant had it returned to its place of business at a cost of $85.40. On July 12, 1955, plaintiff, by his attorney, wrote defendant that he rescinded the contract on the ground of false representations and demanded return of the purchase money. On August 2, 1955, defendant's attorney replied, declining rescission and stating that it was holding the equipment pursuant to further instructions from plaintiff. On August 3, 1955, plaintiff's attorney made an offer to defendant's attorney to settle on the basis that defendant keep the equipment, cancel its cartage claim for $85.40 and return $1,100 to plaintiff. On August 19, 1955, plaintiff commenced suit against defendant, seeking damages on the theory of rescission. On August 23, 1955, defendant's attorney wrote plaintiff's attorney that no answer had as yet been received from defendant to plaintiff's August 3 offer of settlement. In the spring of 1956 defendant's attorney informed plaintiff's attorney that defendant had repaired the equipment but he did not say when, whereupon plaintiff, on May 25, 1956, amended his declaration by adding count 2, alleging that such action by defendant constituted an acceptance by it of plaintiff's July 12 demand for rescission and return of full purchase price and that this had resulted in mutual rescission. It was not until after trial commenced that plaintiff and his attorney learned that defendant's repairing of the equipment had not occurred until on or about September 1, 1955, after the suit had been filed. After the proofs were in the court directed a verdict against plaintiff on count 2, instructing the jury that as a matter of law there could be no mutual rescission in the case because the act of repairing by defendant had not occurred before the suit was commenced. Thus, it was the position of the trial court that the rights of the parties were to be determined by the jury as of the date of commencement of suit. The jury returned a verdict for defendant. No appeal was taken.

Plaintiff then commenced the instant suit, declaring on an alleged contract resulting from his August 3, 1955, offer to accept $1,100 in settlement of his claim against defendant and defendant's acceptance of that offer on or about September 1, 1955, by exercising dominion over and repairing the equipment without authorization or consent of plaintiff. Defendant moved to dismiss this second suit on the ground of res adjudicata by reason of decision in the first case. The motion to dismiss was granted without trial on the merits. Plaintiff appeals.

It is plaintiff's position that the judgment in the former suit for rescission of the purchase contract is not res adjudicata of his rights under the alleged later contract on which this second suit is based. Defendant answers that in this suit plaintiff relies on the same act of defendant which was relied on in count 2 of the first suit as constituting acceptance of plaintiff's offer by defendant, namely defendant's exercise of dominion over the equipment. Defendant goes on from there to urge that plaintiff's theory in this case is inconsistent with that of count 2 in the first suit, that in bringing the first he made an election between two inconsistent theories and that he is thereby barred from suing now on the abandoned alternative claim, citing Mintz v. Jacob, 163 Mich. 280, 128 N.W. 211, and Krause v. Hartford Accident & Indemnity Co., 331 Mich. 19, 49 N.W.2d 41. Defendant further says that plaintiff could have set up the two inconsistent claims in the first suit (Court Rule No. 17, § 6) and that judgment therein is conclusive not only of all matters actually litigated, but also of those which plaintiff might have raised in that action, citing McDannel v. Black, 270 Mich. 305, 259 N.W. 40; ...