Court Opinion

ID: 3532202
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:44:48.656475+00
Date Added: 2024-06-11T13:55:19.867201
License: Public Domain

I do not concur in the part of the majority opinion holding that plaintiff cannot recover because it is in the nature of a rescission, and plaintiff did not tender back to defendant all the canned corn it received under the purchase contract. I think the judgment should be affirmed.
It should be kept in mind that this suit is not properly one in equity to rescind an executory contract. The contract in question was fully performed by both parties; *Page 371 
that is, the canned corn sold by one party had been fully delivered, and the other party had paid for it. After the contract was fully performed, it was discovered that the corn was worthless for the purpose for which it was sold by defendant to plaintiff. The corn was ultimately intended for human food, but plaintiff bought it for resale as a wholesale dealer; and, while some cases of the corn were good, yet so much of it was unfit for food, and there was no way of distinguishing the good from the bad except by opening each can, which itself destroyed its value except for immediate consumption, the plaintiff was justified in treating it as worthless. The discovery that the corn was worthless was not made by plaintiff, but by those to whom plaintiff had resold the corn in smaller quantities; consequently this discovery was not made till some time after plaintiff had paid for the corn on the assumption by both parties that it was of the kind and quality mentioned in the contract and suitable for human food. It was then that plaintiff, having had to refund to those to whom it had sold the corn, demanded that defendant refund to it the price it had paid defendant for this worthless corn.
There was no fraud in the sale, and plaintiff is not seeking to rescind a sale contract procured by fraud. Both parties acted in good faith, each believing that the corn was of good quality and suitable for food. Defendant had bought it from the manufacturer on this theory, and sold it to plaintiff on the same theory. All questions of fraud or plaintiff's duty on discovering the fraud are out of the case.
It is conceded by both parties and by the majority opinion that there was an express or implied warranty, or both, in the sale of this corn by each successive seller that this corn was suitable for human food and salable as such. This warranty failed, and defendant stands in the position of having sold and delivered to plaintiff a worthless article of merchandise for which *Page 372 
it has collected the purchase price as for sound merchandise and with an express or implied warranty that it was such.
In such case it seems clear that the purchaser who has paid for the worthless article can recover from the seller the amount of the purchase price paid. Thus it is said in 9 Cyc. 410:
"If the matter innocently misrepresented is a term or condition in the contract, or if the party has warranted it to be true, its falsity does not affect the formation of the contract; but it operates to discharge the other party from his obligation or to give him a right of action ex contractu for the damages which he has sustained by the breach."
The petition in this case, which is denominated one for rescission rather than for damages, alleges the terms of the sale contract, and that it was implied and agreed that the corn so sold should be fit for human consumption and salable as such, and further alleges that defendant delivered only 1,500 cases of corn, and that plaintiff paid the defendant therefor the sum of $2,250, the contract price for same. It is further alleged that: — Such corn was in fact, and was later discovered to be, "not reasonably fit for human consumption as food, and was not salable and did not comply with the national Pure Food Law of June 30, 1906, in that all or at least a considerable portion of said corn was filthy, decomposed, and putrid and in a condition commonly known as `flat sour;' that because of the fact that there was no external evidence of the condition of said corn, its actual condition could not be determined except by opening the cans, and the same could not be handled and sold in the usual manner and in any other practicable manner by reason of said facts, and same was all worthless both to plaintiff and defendant."
The plaintiff prays judgment for the amount paid by plaintiff to defendant for said corn. *Page 373 
The petition, therefore, is clearly one for damages on a rescinded contract rather than in equity for a rescission of an executory contract. The contract had been fully executed, had passed into history, and there was no need of any relief by way of rescission. The allegation of the petition that plaintiff had no adequate remedy at law because the exact amount of bad corn could not be ascertained without destroying same is refuted by the alleged and proven fact that so much of it was bad that it had no value as a vendible commodity, and was worthless to either plaintiff or defendant. The damages prayed for and recovered was exactly what plaintiff was entitled to in any form of action where he had bought and paid for worthless merchandise, to wit, the recovery of the price paid. The petition also alleges that plaintiff, on discovering that the corn in question was not salable or fit for human food and of no value offered to return the corn to defendant, and demanded repayment of the purchase price, but this allegation is mere surplusage, since all the authorities hold that even in suits for rescission, if the property received under the contract is worthless, then no restoration of such property or tender of same is necessary. 9 Cyc. 439.
Where the purchaser under a sale contract receives thereunder goods differing in kind or quality from what he purchased, but the goods received have some value, it is but justice that he should not be compelled to keep and pay for the inferior goods. In such case he has an election to retain the inferior goods and recover, if he has already paid for same, the damages sustained which is usually the difference in value between what he did receive and what he was entitled to receive, or he may return the inferior goods or offer to do so and recover the full price paid. Whether the vendee does the one or the other determines the form of his action, whether it be on the rescinded contract or in affirmance of it for damages, [City Light, Power  Storage Co. v. Mach. Co., 170 Mo. App. 231, 156 S.W. 83.] Obviously, however, the vendee is not put to an election as to retaining the property or returning it, unless it has some value (St. Louis Brewing Ass'n *Page 374 
v. McEnore, 80 Mo. App. 429); and, since it makes no difference whether he did or did not offer to return the worthless property, there is no necessity for an election of remedies, and there is no essential difference in the two forms of action or the essential facts constituting the same, and the relief is the same, to-wit, a judgment for the full value of the property, whether by way of damages or on a rescission.
It must be remembered that under our system of Code pleading, forms of action are abolished, and all that the pleader need do is to state the facts constituting his cause of action. The pleader here in his second count of his petition, on which he elected to stand, has stated the essential facts entitling him to a judgment for the amount he has paid defendant for the worthless corn, and the fact that he made some useless allegations as to offering to return the worthless property and the failure to prove such allegations are immaterial. If plaintiff did not need to allege or prove that he returned, or offered to return, any of the corn, he cannot be defeated in his action for failure to prove that he returned all of it. Where a sale contract has been fully executed and the property delivered to the vendee is of no value, and he is seeking to recover the purchase money paid and nothing else under an express or implied warranty, and the plaintiff states in his petition and proves by his evidence the facts warranting such relief, then form should yield to substance.
I think, also, that the judgment should be affirmed even if it had been necessary that plaintiff return, or offer to return, the corn received by it under the contract before suing for a recovery of the purchase money paid as damages on a rescinded contract. The plaintiff did in fact offer to return all the corn, the purchase price of which he seeks to recover. The fact that plaintiff resold some of the corn for value, as, for example, the 300 cases shipped to a firm at Neosho, Mo., and did not and could not return that corn, makes no difference here, since plaintiff is not seeking to and has not recovered *Page 375 
anything for that corn. While the general rule is that one who seeks to rescind a contract must return, or offer to return, all that he has received under it, and cannot keep part and return part (9 Cyc. 437), yet this case falls under the well-known exception to such general rule that such rule does not apply to severable or divisible contracts. [2 Black on Rescission and Cancellation, section 585.]
Nor does this rule apply to contracts for sale of goods to be delivered in installments at separate times and places, especially where the goods sold are themselves easily divided and of uniform kind and quality. [2 Black on Rescission and Cancellation, section 586; Sigerson v. Harker, 15 Mo. 101; Grafeman Dairy Co. v. St. Louis Dairy Co., 96 Mo. App. 495, 503, 70 S.W. 390.]
In 6 R.C.L., 939, this is said: "In cases where, acting in good faith, property has been so changed or lost that it cannot be restored in specie, and where its value is capable of being ascertained, a party entitled to do so may rescind a contract, by tendering the money equivalent of the property in question. There may be a rescission of contracts for the sale or exchange of personal property, which are to be executed by a delivery in parcels through a period of time, or, as sometimes expressed, where the contract is continuous. In such cases it often happens that the portions delivered are soon consumed, or disposed of, and cannot be restored. Hence many cases of this description have occurred, where, for causes accruing during the progress of execution, one party has been permitted to rescind the contract, without any restoration of what had been delivered or received under it."
The contract in this case is clearly within these exceptions. It is a contract for the sale of 2,000 cases of No. 2 Standard corn, two dozen cans to the case. Defendant had purchased this corn by this same description from the canning company manufacturing *Page 376 
same. The contract between plaintiff and defendant referred to the original purchase contract, and was subject to its terms. Defendant even contends that the contract with plaintiff was a mere assignment to plaintiff of its contract with the manufacturer. As both plaintiff and defendant are wholesale grocers, each purchased for the purpose of resale. Each sale was at a specific price per case, and not for a lump-sum. Each contract provided for a reduction in quantity of 25 per cent. without liability for damages, and a further reduction of 25 per cent. more at a liquidated damage of 10 cents per case. Only 1,500 cases were delivered under the contracts, and the purchase price was based on the amount delivered and the price per case. The price was f.o.b. factory, and delivery was to be made at any time during the season, in any quantity desired, and to be shipped to any and as many points and in as many shipments as the purchaser desired. In fact neither the plaintiff nor defendant ever had more than constructive possession of this corn, and same was shipped by the manufacturer direct to the customers of plaintiff, who in turn shipped it at different times and to widely separated points, and these customers discovered the bad condition of the corn and refused to pay for same. The plaintiff tendered back to defendant the corn thus rejected, and seeks only to make itself whole for the corn thus rejected. This was the course of dealing with the parties contemplated, and the defendant must be held to have known that one shipment of corn might prove good and satisfactory and another shipment, made at another time to another customer and place, might be worthless and be rejected. The law is correctly declared in Sigerson v. Harker, 15 Mo. 101, as follows:
"We are aware that there may be sales with warranty, when the articles sold are to be delivered, not at once, but continuously, from time to time. In such cases, the receiving of a portion of the articles which correspond with the description would not compel the *Page 377 
vendee to accept others which are deficient in quality, especially in cases where the portion received has been in any way appropriated, or placed in a condition which rendered a return of it inconvenient."
If the contract in this case is not a severable one, it would be hard to imagine one that would be. The corn was sold for the purpose of resale in varying amounts, and of necessity each resale must stand or fall on the merits of the goods, delivered on such resale. The contract was thus a severable one, and the purchaser was only required to return, or offer to return, the goods for which he was asking a return of the purchase price. The judgment should be affirmed. The opinion of the majority being, in my judgment, in conflict with the rule as declared by the Supreme Court in the case of Sigerson v. Harker, 15 Mo. 101, I ask that the cause be certified to the Supreme Court for final determination.