#### SIMON PLATT, RECEIVER FOR MANUFACTURERS’ UNION v. THE UNITED STATES1

[No. B-376.

Decided November 16, 1925]

*On the Proofs*

*Contract; rescission; damages.-*— A purchaser of Government supplies, having accepted a refund of the full purchase price from the United States on account of the damaged condition of the goods delivered, has elected to rescind the contract and may not thereafter sue as for breach.

*The Reporter’s*statement of the case:

*Messrs. Fulton Brylawshi*and *Nathan Clayton*for the plaintiff. *Mr. A. F.*Prescott, *jr.,*and *Lyon & Lyon*were on the brief.

*197*Mr. W. F.*Norris, with whom was *Mr. Assistant Attorney General Herman J.*Galloway, for the defendant.

The court made special findings of fact, as follows:

I. The Manufacturers’ Union is a corporation organized under the laws of the State of Delaware, and at the times herein involved it maintained an office at 407 Broadway, New York City, and was engaged in exporting and importing and as manufacturers agent, specializing in the British West Indies and South America.

This suit was brought in the name of the said Manufacturers’ Union and the present plaintiff as receiver of said corporation has been substituted.

II. In or about July, 1920, the United States, by the Surplus Property Division of the Quartermaster General’s Office issued, published, and distributed a circular in which it advertised for sale to the public large lots of towels, underwear, etc., including approximately 5,500,000 garments of underwear, reclaimed, class B, a copy of which was sent to and received by the Manufacturers’ Union.

III. The circular advertisement which was distributed offered the goods for sale at fixed prices and listed the various classes of goods to be sold, some described as new and some as reclaimed.

It was said in said circular, “ Here’s your chance to. buy desirable, dependable merchandise available for prompt delivery at prices considerably under the market. Physical inspection of the actual merchandise is advised since these goods are sold ‘ as is.’ ” A further paragraph was as follows : “ These goods will in all cases be sold ‘ as is ’ at storage point. The samples are displayed and may be seen upon application to the Depot Officer in charge of the various zones as per the addresses which follow, but, since no definite guarantee can be given that the merchandise will in every way conform to samples, purchasers are advised to make actual physical inspection of the merchandise they contemplate buying. A number of bales will be opened for this purpose in each of the depots.”

Under the subhead “ Reclaimed summer underwear ” it was said: “ All of these garments have been thoroughly *198renovated, in the best * **** manner, have been folded in regulation commercial fold, properly and * * * packed, are in good condition and ready for use.” The stated fixed pi-ice was 25 cents per garment, subject to quantity purchase discounts.

One of the addresses referred to above where it was said that “ samples are displayed and may be seen upon application to the depot officer ” was 461 8th Avenue, New York City.

IY. The Manufacturers’ Union, through its proper representative, acting upon the statement contained in said circular, called .at the address in New York City given in said advertisement, conferred with the officer found in charge, stated to him the purposes as for export for which the purchase was contemplated, and purchased from said officer in charge several garments of underwear which were represented by said officer to be fair samples of the reclaimed underwear advertised for sale in said circular.

V. The Manufacturers’ Union, relying upon the statements contained in said circular and the statements made by the said officer in charge at the time of the purchase of the said garments of underwear, distributed said garments as samples to its foreign customers, as a result of which it received orders from said foreign customers to the aggregate amount of 3,510 dozen garments at prices aggregating $12,703.96.

YI. Thereafter the said company through its proper representative advised said officer in charge of the receipt of said orders for export, and relying upon the statements contained in said circular and the statements made by said officer in charge, and upon the samples sold by him to it, submitted an offer to purchase from the United States 3,510 dozen garments of reclaimed underwear at 25 cents per garment less a discount of 10 per cent, said garments to be packed in numbered bales and in quantities specified in certain orders for export submitted by said company. With said offer said Manufacturers’ Union made a deposit to the amount of 10 per cent of the offered purchase price for the said underwear.

*199Thereafter on September 24, 1920, the offer of the said Manufacturers’- Union was accepted in writing by Maj. W. S. Barringer, Q. M. C., assistant eastern property control officer, office of the depot quartermaster.

VII. Thereafter the Manufacturers’ Union paid to the proper representative of the United States the remainder of the purchase price for said goods so purchased and received from the officer in charge at Governor’s Island certain bales of goods marked “Reclaimed Underwear,” numbered as specified in said company’s export orders and purporting to contain reclaimed underwear as advertised and sold to said company. Said bales were without inspection as to their contents immediately addressed and shipped to foreign customers of said company.

VIII. Upon the arrival of the said bales of underwear sold by the United States to the Manufacturers’ Union as aforesaid and their opening by the consignees it was ascertained that said bales did not contain reclaimed underwear in good condition and ready for use, but that said bales contained filthy, bloody, insanitary, and fragmentary underwear wholly unfit for use. The contents of said bales were examined by United States consuls at the respective ports to which they were consigned and in each instance they were found and reported by said consuls to be as stated above. Some of said goods were delivered to said consuls, who sold them for such prices as could be obtained therefor. One shipment was by direction sold by the consignee for $1 per dozen and one shipment was returned. The returned shipment was by officers of the United States, accompanied by a representative of the Manufacturers’ Union, opened for inspection and emitted such a stench that those present were driven from the warehouse in which it was situated.

IX. Because of the ascertained condition of said goods as aforesaid the United States refunded to the Manufacturers’ Union the total purchase price of said goods, less the $1 per dozen which had been received by the foreign consignee of one shipment as hereinbefore stated, and the Manufacturers’ Union accepted said refund.

X. For these goods sold by the Manufacturers’ Union to its foreign customers said customers had either paid said *200company in advance or paid therefor on sight draft and said company was compelled to refund to its said foreign customers the amount they had paid therefor, which was $4,623.21 in excess of the cost of said goods to the said Manufacturers’ Union, and also expenses by way of freights, duties, exchange, etc., incurred by said foreign consignees in the aggregate amount of $5,830.17.

The court decided that plaintiff was not entitled to recover.

1

 Writ of certiorari denied.

DowNey, Judge,

delivered the opinion of the court:

Under the facts found it seems scarcely necessary to consider or determine the character of the sale or what the plaintiff’s rights might be if it had elected to stand on its contract of purchase and sue for such damages as it might be entitled to by reason of a breach of the contract, if there was in fact a breach. This it has not done, and its remedy must be determined in the light of the 'facts presented. When the horrible condition of the goods sold and shipped abroad was ascertained and attention of representatives of the United States called thereto, and an investigation made by foreign representatives of the United States which confirmed the reports as to that condition, the United States refunded to the Manufacturers’ Union the full purchase price for said goods and said Manufacturers’ Union accepted said refunds. This clearly worked a rescission of the contract, and it is well settled that one having elected to rescind may not thereafter sue upon the contract as for a breach. There are some circumstances under which a purchaser electing to rescind may be entitled to something else than the refunding of the purchase price actually paid, but the elements of damage sought to be recovered here are all of the nature which might be recovered only, if at all, in an action for a breach of the contract, and are barred from consideration in case of rescission, as here. There was resultant damage to the Manufacturers’ Union growing out of this transaction, in which it was apparently acting in good faith, but its election of a remedy by way of rescission precludes any other.

Graham, *Judge;*Hay, *Judge;*Booth, *Judge;*and Campbell, Ch*ief Justice,*concur.