Opinion
No. 5178.
November 29, 1927.
In Error to the District Court of the United States for the Northern District of Texas; William H. Atwell, Judge.
Action by Louis Rauch against Eugene Taber, trading as the Taber Manufacturing Company, wherein defendant filed a cross-action. Judgment dismissing the cross-action, and granting plaintiff's motion to dismiss, and defendant appeals. Affirmed.
Alvin H. Lane, of Dallas, Tex. (Donalson Bullard and Winfrey Lane, all of Dallas, Tex., on the brief), for plaintiff in error.
John Davis, of Dallas, Tex. (McNees Roberts and Davis, Synnott Hatchell, all of Dallas, Tex., on the brief), for defendant in error.
Before WALKER, BRYAN and FOSTER, Circuit Judges.
Rauch sued Taber for the purchase price or return of certain pearls. In an amended answer and cross-action filed at the trial, Taber made an unconditional tender of the pearls, and also sought to recover damages for Rauch's breach of warranty as to their quality and value. Rauch accepted the tender in open court, received the pearls, and moved to dismiss his suit. The trial court allowed Taber to file a second amended answer and cross-action, but later sustained a general demurrer and entered judgment dismissing it, at the same time granting Rauch's motion to dismiss his suit. Taber assigns error, and contends that his cross-action states a case which entitles him to recover damages for breach of warranty. The material facts as alleged by him are these:
On December 5, 1925, Rauch offered to sell him two strings of pearls, which he represented and warranted to be genuine Oriental pearls. Taber, in reliance upon this representation and warranty, and being induced thereby, purchased the pearls for $3,300, and gave Rauch two checks and a note in full payment of the purchase price. Before making the purchase, Taber told Rauch that he had two prospective purchasers, and that, if he should buy the pearls, he would do so for the purpose of making resales. Rauch replied that he ought to make a profit of 100 per cent. Taber sold the pearls at a profit of $2,900. On December 8, 1925, Rauch wrote to Taber that he had received information which convinced him that the pearls were not genuine Oriental pearls, but were Japanese cultured pearls, and returned the two checks and the note which he had received in payment. Taber canceled the sales to his customers and did not realize any profit. The damages sought to be recovered were the $2,900 which Taber would have realized, if the pearls had been genuine Oriental pearls as represented.
Rauch promptly returned the two checks and the note received in payment for the pearls, which Taber accepted and kept, with the result that no consideration was actually paid. When, at the suit of Rauch, the pearls were returned to him by Taber, a complete rescission of the contract of sale resulted. Taber had a choice of remedies. He could sue for rescission, or for damages for a breach of warranty; but he could not take back the consideration, return the pearls, and maintain a suit for breach of warranty. These remedies are inconsistent, and exclusive of each other. Wilson v. New United States Cattle-Ranch Co. (C.C.A.) 73 F. 994; 24 R.C.L. 235; 13 C.J. 611; Williston on Contracts, § 1464; Williston on Sales, § 612.
The judgment is affirmed.