Reynolds v. Slaughter

• Court: U.S. Court of Appeals — Tenth Circuit
• Writing for the Court: Before SETH, BARRETT and DOYLE; WILLIAM E. DOYLE
• Citation: Reynolds v. Slaughter, 541 F.2d 254 (10th Cir. 1976)
• Decision Date: 07 September 1976
• Docket Number: No. 75-1840,75-1840
• Parties: Noel REYNOLDS, Plaintiff-Appellee, v. George T. SLAUGHTER, Defendant-Appellant.

Page 254

541 F.2d 254

Noel REYNOLDS, Plaintiff-Appellee, v. George T. SLAUGHTER, Defendant-Appellant.

No. 75-1840.

United States Court of Appeals Tenth Circuit.

Argued and Submitted July 29, 1976.

Decided Sept. 7, 1976.

Orville C. McCallister, Albuquerque, N. M., for plaintiff-appellee.

E. Douglas Latimer, Albuquerque, N. M., for defendant-appellant.

Before SETH, BARRETT and DOYLE, Circuit Judges.

WILLIAM E. DOYLE, Circuit Judge.

This is an action for breach of a contract for sale and delivery of corporate stock of Fluid Power Pump Company. The amended complaint alleges that plaintiff and defendant entered into an oral contract for the purchase by plaintiff from defendant of 50,000 shares of stock of Fluid Power Pump Company for a purchase price of $17,187.50. It is further alleged that the stock had a value of approximately $1.50 per share and that pursuant to the contract plaintiff paid to defendant a sum of $14,382.62. Plaintiff tendered the balance and demanded the transfer of the stock.

In his answer the defendant generally denied the existence of a contract as well as the payment of the $14,382.62. The court found, however, against the defendant on the question of existence of an oral contract and the payment of the $14,382.62. The court also sustained the defendant-appellant's position that the contract for the sale and purchase of the stock could not be enforced because it was barred by the statute of frauds. Having found that plaintiff-appellee had paid the sum of $14,382.62 to defendant-appellant, the court went on to hold that even though a specific performance or a breach of contract remedy was not available due to the statute of frauds, the plaintiff was not without a remedy since Rule 54(c) allows restitution to be granted even though a party has failed to specifically request it in his pleading. The court thereupon said that restitution was the appropriate remedy for plaintiff (Reynolds) and that he was entitled to judgment in the amount of $14,382.62.

At the trial defendant-appellant claimed that plaintiff-appellee had paid the $14,382.62 to him as his share of a certain finders fee which had been received by plaintiff-appellee in connection with his negotiation of a loan on behalf of Fluid Power Pump Company. Defendant-appellant maintained that he was entitled to keep this sum of money as his share of the finders fee. The trial court found against defendant-appellant on this issue, concluding that the $14,382.62 was paid to defendant-appellant as the purchase price for the sale of stock in the Fluid Power Pump Company and was not a sharing of the finders fee. The evidence supports the court's finding.

Since neither party argues that the statute of frauds was not applicable, no issue as to this is before us. The sole question is, then, whether the court erred in awarding judgment to plaintiff-appellee on the theory of restitution in view of the procedural morass. Defendant-appellant's claim that it was error to allow such a recovery is wholly based on the contention that plaintiff-appellee elected irrevocably to affirm the contract and to sue for damages and/or specific performance. This, according to defendant-appellant, closed the door to a recovery of money paid to defendant under the mistaken belief that a contract existed. The trial court disagreed with this and so do we.

Both the New Mexico and the federal courts hold that the doctrine of election of remedies is not substantive but rather is a rule of procedure or judicial administration. Buhler v. Marrujo, 86 N.M. 399, 524 P.2d 1015 (1974); Honaker v. Ralph Pool's Albuquerque Auto Sales, Inc., 74 N.M. 458, 394 P.2d 978 (1964); Bernstein v. United States, 256 F.2d 697, 706 (10th Cir. 1958). The New Mexico Supreme Court has held that the doctrine did not bar the operation of its rule of civil procedure which allowed the granting of appropriate relief even though such relief had not been demanded in the pleadings. State of New Mexico ex rel. Gary v. Fireman's Fund Indemnity Company, 67 N.M. 360, 355 P.2d 291 (1960) (". . . recovery should be allowed on quantum meruit even though the suit was originally framed on express contract . . .").

It is to be inferred from the New Mexico cases that the election of remedies doctrine has little existence in New Mexico at least in the instant context.

Inasmuch as the court found that plaintiff-appellee paid the money in connection with the sale of the Fluid stock, defendant would be the one playing fast and loose with the court. It would be claiming that there was no enforceable contract and at the same time saying that plaintiff-appellee could not both affirm and rescind the identical contract. In final analysis,...