a money judgment in a county other than the residence of the defendant is maintainable in the county where brought as against a plea of privilege of being sued in the county of defendant's residence, where the plaintiff's pleadings allege in substance that the cause of action is for damages arising under an agreement, made in the county where the suit is brought, by the defendant for services and expenditures of money by the plaintiff, said agreement having been made by the defendant with the deliberate and fraudulent design of inducing the plaintiffs to perform said services and expend said money for his benefit with no intention on the defendant's part at the time of making said agreement of compensating plaintiffs therefor, allegation being further made by plaintiffs that said services were performed and expenditures made in pursuance of and relying upon said agreement, and damages to plaintiff resulting therefrom. Terrell v. Winter, 42 Texas Civ. App. 598[ 42 Tex. Civ. App. 598]; Hunt County Oil Co. v. Scott, 28 Texas Civ. App. 213[ 28 Tex. Civ. App. 213]; Peach River Lumber Company v. Ayers, 41 Texas Civ. App. 334[ 41 Tex. Civ. App. 334]; Howe Grain and Mercantile Co. v. Galt, 32 Texas Civ. App. 193[ 32 Tex. Civ. App. 193]; Baldwin v. Richardson, 39 Texas Civ. App. 348[ 39 Tex. Civ. App. 348], 406; Rotan v. Maedgen, 24 Texas Civ. App. 558[ 24 Tex. Civ. App. 558]; Trinity Valley Trust Co. v. Stockwell, 81 S.W. 793. J. E. McCarty, for appellee.
Although Aldridge may have believed his representations to have been true (of which there is no evidence), yet the representations being material to the contract and false in fact, the appellant's right to have the exchange rescinded is the same as if the representations were known by Aldridge to have been false. Mitchell v. Zimmerman, 4 Tex. 75; Culberson v. Blanchard, 79 Tex. 491; Loper v. Robinson, 54 Tex. 513; McCord-Collins Com. Co. v. Levi, 21 Texas Civ. App. 109[ 21 Tex. Civ. App. 109], 50 S.W. 607; Fisher v. Dippel, 102 S.W. 448; Cetti v. Dunman, 26 Texas Civ. App. 433[ 26 Tex. Civ. App. 433], 64 S.W. 789; Hunt County Oil Co. v. Scott, 28 Texas Civ. App. 213[ 28 Tex. Civ. App. 213], 67 S.W. 451; Beatty v. Bulger, 28 Texas Civ. App. 117[ 28 Tex. Civ. App. 117], 66 S.W. 896. Stuart Bell and Potter, Culp Culp, for defendants in error.
The rule of restoration which we apply here is not unlike the rule applicable to rescission or cancellation of a contract. A party is usually bound under these circumstances where a contract is never completed to restore whatever consideration he may have received under the contract. See Rigsby v. Boone County State Bank, 241 S.W. 207, 210 (Tex.Civ.App.), no writ; Groce v. P. B. Yates Mach. Co., 288 S.W. 161, 162 (Tex.Com.App.); Hunt County Oil Co. v. Scott, 28 Tex. Civ. App. 213 [ 28 Tex. Civ. App. 213], 67 S.W. 451, 452, writ ref. We believe the reasonable intendment of the pleadings and Pasadena Hospital's brief and written arguments are sufficient to present properly the matters heretofore discussed.
(This language seems to be identical with that quoted from 27 C.J. above.) In Hunt County Oil Co. v. Scott ( 28 Tex. Civ. App. 213; 67 S.W. 451) the action was to rescind a contract of purchase of cotton seed and for damages. Holding that plaintiff was entitled to recover, the opinion says (p. 216): "Where the right of rescission is sought and established the authorities seem to assume that the measure of damages, as a general rule, is the return of the whole consideration paid, together with such further special damage or expense as may have been reasonably incurred by the party wronged on account of the contract."
The trial court, therefore, did not err in refusing to award a money judgment in favor of Ellena G. Gaffney against Bush and wife in the sum of $5,000, the amount of exemplary damages found by the jury in response to a special issue submitted upon that subject. Karns v. Allen, 135 Wis. 48, 115 N.W. 357, 15 Ann.Cas. 543; Bird v. Wilmington M. R. Co. (S.C.) 8 Rich.Eq. 46, 64 Am.Dec. 739; Sanders v. Anderson (S.C.) 10 Rich.Eq. 232; Busby v. Mitchell, 29 S.C. 447, 7 S.E. 618; U.S. v. Bernard, 202 F. 728, 121 C.C.A. 190; People v. Small, 319 Ill. 437, 150 N.E. 435, loc. cit. 467; People's Nat'l Bank v. Kern, 193 Pa. 59, 44 A. 331; Norfolk W. Ry. Co. v. A. C. Allen Sons, 122 Va. 603, 95 S.E. 406, loc. cit. 412; Witkop Holmes Co. v. Great Atlantic Pac. Tea Co., 69 Misc. 90, 124 N.Y.S. 956; Welborn v. Dixon, 70 S.C. 103, 49 S.E. 232, loc. cit. 235, 3 Ann.Cas. 407; Hunt County Oil Co. v. Scott, 28 Tex.Civ.App. 213, 67 S.W. 451; 17 Corpus Juris, 971; 1 Sedgwick, Damages (9th Ed.) p. 727, § 371; 2 Sutherland, Damages (4th Ed.) p. 1272, § 392. This conclusion is strengthened by the rule of decision in this state, as well as in others, that exemplary damages are not recoverable in an action for breach of contract. H. T. C. R. Co. v. Shirley, 54 Tex. 125; Hooks v. Fitzenrieter, 76 Tex. 277, 13 S.W. 230; Burnett v. Edling, 19 Tex.Civ.App. 711, 48 S.W. 775; Southwestern T. . T. Co. v. Luckett, 60 Tex.Civ.App. 117, 127 S.W. 856; Fay v. Parker, 53 N.H. 3142, 16 Am.Rep. 270, 271; 17 Corpus Juris, 976.
It sufficiently appears that the representations constituted fraud, and that these fraudulent representations were made in Tarrant county, and the suit was therefore properly brought there. Revised Statutes 1911, art. 1830, § 7; Winter v. Terrill, 42 Tex. Civ. App. 598, 95 S.W. 761; Hunt County Oil Co. v. Scott, 28 Tex. Civ. App. 213, 67 S.W. 451; Kleine Bros. v. Gidcomb, 152 S.W. 462; Howe Grain Mercantile Co. v. Galt, 32 Tex. Civ. App. 193, 73 S.W. 828; Trinity Valley Trust Co. v. Stockwell, 81 S.W. 793; Ferrell v. Millican, 156 S.W. 230; Hunt County Oil Co. v. Scott, 28 Tex. Civ. App. 213, 67 S.W. 451. The assignments are all overruled.
— The court erred in giving the defendant's special charge to the jury to find in favor of the defendant on the plea of privilege. Rev. Stats., art. 1194, secs. 7, 23; Middlebrook v. David B. Mfg. Co., 86, 706; Merchants', etc., Co. v. Seeligson, 4 App. C. C., sec. 205; Landa v. Hunt, 45 S.W. Rep., 860; Hunt County Oil Co. v. Scott, 67 S.W. Rep., 451, 28 Texas Civ. App. 213[ 28 Tex. Civ. App. 213]; History Co. v. Flint, 4 App. C. C., sec. 224; Boothe v. Fiest, 80 Tex. 141. Brown Hughston, for appellee.
In other words, Plaintiff essentially argues that Meridian cannot assert any security interest in the steel materials at all if Plaintiff ultimately succeeds on its rescission claim; rather, the parties would be returned to the status quo ante. Accord Hunt Cty. Oil Co. v. Scott, 67 S.W. 451, 452 (Tex. Civ. App. 1902) ("The reason of the rule is that on a rescission of a contract the contract is avoided ab initio, and the rights of the parties in reference to the subject-matter of it are as if no contract had ever been made." (quoting Nash v. Trust Co., 40 N.E. 1039, 1041 (Mass.
As previously noted, the trial court rendered a take-nothing judgment against the Smiths in their suit for rescission and this rendered unnecessary a determination of the suit for damages in the nature of restitution. Rescission is an equitable remedy and, as a general rule, the measure of damage is the return of the consideration paid, together with such further special damage or expense as may have been reasonably incurred by the party wronged on account of the contract. Groce v. P. B. Yates Mach. Co., 288 S.W. 161 (Tex.Comm'n App. 1926, jdgmt adopted), citing Hunt County Oil Co. v. Scott, 28 Tex. Civ. App. 213, 67 S.W. 451, 452 (1902 writ ref'd); Holland v. Western Bank Trust Co., 56 Tex. Civ. App. 324 [ 56 Tex. Civ. App. 324], 118 S.W. 218, 119 S.W. 694 (1909); Wintz v. Morrison, 17 Tex. 372, 67 Am.Dec. 658 (1856); H. BLACK RESCISSION OF CONTRACTS AND CANCELLATION OF WRITTEN INSTRUMENTS § 695 (1916). See also Atkins v. Beasley, 544 S.W.2d 505 (Tex.Civ.App. 1976, no writ) and cases there cited stating the principle that if damages as well as rescission are essential to accomplish full justice, they will both be allowed.
The reason that such damages are allowed in fraud cases is that “on a rescission of a contract the contract is avoided ab initio,” and the wronged party is entitled to be returned to its position “as if no contract had ever been made.” Hunt Cnty. Oil Co. v. Scott, 28 Tex.Civ.App. 213, 67 S.W. 451, 452 (Tex.Civ.App.1902, writ ref'd). In short, “[c]omplete and full justice is a fundamental doctrine of equity jurisprudence, and if damages, as well as rescission, are essential to accomplish full justice, they will both be allowed.”