cultivate the land could not be had on the market, or, if they could be had, that the buyer was unable to buy them, and that such facts were within the knowledge of the seller.14 So, where the warranty is as to the breeding qualities of an animal it is generally held that loss of profits which might have been made if the animal had been fit for such purpose is too speculative to be recoverable, though in a few cases damages of this character have been allowed.15 547. Mitigation and Enhancement of Damages.-The general rule of damages that the plaintiff must take reasonable steps to prevent loss from the breach of contract by the defendant and a fortiori must not by his own negligence enhance the damages 16 has been applied in actions for breach of warranty.17 Thus, where whisky barrels are sold by a manufacturer, if the buyer with knowledge that they are defective and unfit for the purpose intended of holding and storing whisky should nevertheless use them for such purpose he could not recover as damages the value of the whisky lost on this account, but the mere fact that the buyer knew that a few of the barrels were defective does not necessarily render him negligent in using the remainder if they are not openly defective, so as to prevent his recovery for whisky lost by their use.18 So a buyer who has placed potatoes purchased with warranty of quality with others and discovers that the whole lot is beginning to rot on account of the defective quality of those warranted should use reasonable diligence to separate the rotten from the good potatoes.19 Also a purchaser of an apparatus warranted to be free from defects assumes the risk of loss or injury if, after discovering the defect and being notified by the manufacturer of the way to remedy it at slight cost, he continues the use of the apparatus without remedying the defect or notifying the manufacturer that he has not done so.20 It has been held that if a first class boilermaker makes a boiler for a manufacturer to be used for certain purposes, and delivers it with a patent defect, he is liable to the manufacturer for the damages paid by the latter to his employees for injuries resulting from the defect, although the manufacturer was negligent to the extent of rendering him liable to his employees in using the machine without inspection, as the buyer did not owe the same duty to the seller to inspect the boiler to discover defects as he 14. Wiggins v. Jackson, 31 Okla. 292, 121 Pac. 662, 43 L.R.A. (N.S.) 153. 15. Note: 43 L.R.A. (N.S.) 153-154. 16. See DAMAGES, vol. 8, p. 442 et seq. 17. Poland v. Miller, 95 Ind. 387, 48 Am. Rep. 730; Cedar Rapids, etc., Ry., etc., Co. v. Sprague Electric Co., 280 Ill. 386, 117 N. E. 461, L.R.A. 1918B 200 and note; Sapp v. Brad field, 137 Ky. 308, 125 S. W. 721, 136 A. S. R. 291; Northern Supply Co. v. Wangard, 123 Wis. 1, 100 N. W. 1066, 107 A. S. R. 984. Note: 34 L.R.A. (N.S.) 699. 18. Poland v. Miller, 95 Ind. 387, 48 Am. Rep. 730. 19. Northern Supply Co. v. Wangard, 123 Wis. 1, 100 N. W. 1066, 107 A. S. R. 984. 20. Cedar Rapids, etc., Ry., etc., owed to his employees, and could rely as against the seller on his warranty that the boiler was not defective.1 Ordinarily the question whether the seller has been negligent in using the article for the purpose intended is one for the determination of the jury. 548. Warranty of Title; General Damages. In case of a breach of a warranty of title in the conveyance of real estate, the rule adopted in most jurisdictions is that the measure of damages is the consideration paid with interest from the time of eviction, and this rule is held in a number of jurisdictions to apply as regards a warranty of the title to chattels, as the rule of damages in both cases should be the same,* and this has been held true though the price paid was greater than the value. For this reason it has been held, in the case of a sale of corporate stock where judgment was recovered against the buyer by the true owner for the value of the stock and the dividends received by the buyer thereon which was satisfied by a surrender of the stock and dividends, that the seller was not liable for such amount but only for the price paid to him by the buyer with interest. On the other hand it is said that the rule as to land stands on peculiar reasons, which were thought to control the usual measure of damages in the personal action of covenant, which is held to lie on a warranty. And on principle it would seem that the buyer should be permitted to recover as general damages the difference in the actual value of the chattel and the price if unpaid or the actual value of the chattel if the price has been paid, and this is the view taken in a number of cases. This is merely carrying out the general rule that the buyer is entitled to recover as general damages the difference between the actual value of the article and what it would have been worth if it had been as warranted. So where a single bill of chattels is sold and title fails as to a portion, the measure of damages is, according to the better view, the difference between the value of the entire quantity and the value of 8 5. Note: 53 Am. Rep. 788. 6. Morgan v. Hendrie, 34 Colo. 25, 81 Pac. 700, 7 Ann. Cas. 935. 7. Gant v. Hunsucker, 34 N. C. 254, 55 Am. Dec. 408. 8. Hoffman v. Chamberlain, 40 N. J. Eq. 663, 5 Atl. 150, 53 Am. Rep. 783; Cary v. Gruman, 4 Hill (N. Y.) 625, 40 Am. Dec. 299; Gant v. Hunsucker, 34 N. C. 254, 55 Am. Dec. 408. But see Case v. Hall, 24 Wend. (N. Y.) 102, 35 Am. Dec. 605. Note: 53 Am. Rep. 788. 9. Hoffman v. Chamberlain, 40 N. J. Eq. 663, 5 Atl. 150, 53 Am. Rep. 783. See supra, par. 532, as to general rule. the remainder.10 Where the buyer has not in fact lost the enjoyment of the chattel the damages recoverable by the buyer for breach of the warranty of title cannot, it has been said, exceed the damages he has actually suffered.11 Where a judgment is recovered by the true owner against the buyer for the value of the chattel, some authorities take the view that the buyer must satisfy such judgment in order to recover its amount from the seller on his warranty of title, otherwise he is only entitled to recover nominal damages.12 The reason given for this is that the judgment against the buyer only establishes a liability and may never be enforced, and the true owner may still resort to third persons through whose hands the chattel passed including the seller and recover its value from them irrespective of his judgment against the buyer.18 If, however, he has paid such judgment it would seem that he would be entitled to recover of the seller the amount thereof, subject probably to the qualification that the judgment does not exceed the price paid in jurisdictions where such price is the limit of general damages. 14 Where the buyer has resold the chattel it has been held that he cannot sue his seller until he has refunded to the subpurchaser.15 Ordinarily if the buyer is compelled to pay an incumbrance the amount so paid may be recovered.16 549. Special Damages.-Special damages, consequential on the failure of title, have in some cases been recognized as a proper element of recovery for breach of the warranty.17 So on principle, and it has been so held, the expenses reasonably incurred by the buyer in unsuccessfully defending an action by the true owner to recover the chattel, notice of which was given the seller, may be recovered as special damages. 18 Thus it has been held that if the buyer unsuccessfully defends the title against an action brought by a third person, of which the seller had notice, the buyer is entitled to recover from the seller, as part of his damages, a reasonable fee paid his attorney for making the defense. 19 On the other hand if the buyer unsuccessfully and 10. Hoffman v. Chamberlain, 40 N. J. Eq. 663, 5 Atl. 150, 53 Am. Rep. 783. Note: 7 Ann. Cas. 939. 11. Salle v. Light Ex'rs, 4 Ala. 700, 39 Am. Dec. 317. 18, 126 N. W. 1013, Ann. Cas. 1912B 1337. Notes: 7 Ann. Cas. 939; Ann. Cas. 1912B 1340. 17. Note: 7 Ann. Cas. 940. 12. Burt v. Dewey, 40 N. Y. 283, 45 S. E. 394, 97 A. S. R. 220; St. 100 Am. Dec. 482. Note: 16 Ann. Cas. 64. Anthony, etc., Elevator Co. v. Dawson, 20 N. D. 18, 126 N. W. 1013, Ann. Cas. 13. Burt v. Dewey, 40 N. Y. 283, 1912B 1337; Balte v. Bedemiller, 37 100 Am. Dec. 482. 14. Note: 7 Ann. Cas. 938. 15. Note: 16 Ann. Cas. 63. 16. Sargent v. Currier, 49 N. H. 310, 6 Am. Rep. 524; St. Anthony, etc., Elevator Co. v. Dawson, 20 N. D. Ore. 27, 60 Pac. 601, 82 A. S. R. unreasonably resists the recovery by the true owner his right to recover the expenses of so doing has been denied; 20 and the buyer should give notice to the seller of the pendency of the suit by the true owner so as to enable him to elect or decide whether and to what extent the suit shall be defended.1 Ordinarily the measure of damages against the original seller cannot be increased by reason of liabilities subsequently incurred by the buyer on account of independent warranties of the same property to later purchasers. In such a case each sale is a separate transaction; and each seller is liable for his contract, and to the extent thereof, but he cannot enlarge his prior seller's obligation beyond that fixed by law. For this reason it has been held that where the buyer is sued by his purchaser and damages recovered against him including the costs of the suit and an attorney fee, the amount is not recoverable by him against his seller even though the latter was given notice of the action and asked to defend, as any other rule would operate to pile up indefinitely, when each remote subpurchaser sues his seller, the liability of the original seller."3 XV. RESCISSION OF SALE GENERALLY General Principles 550. In General.-The same principle which requires the assent of both parties to the making of a contract of sale requires as a general rule their mutual assent to its rescission. Thus, a railroad company through its authorized agent contracted for the sale of a stated number of "tons" of old iron rails for future delivery, the agreement though not expressly so stated being for long tons. The company unnecessarily notified the buyer of the confirmation of the sale, sending with the notice a copy of a resolution of its directors in which the tons. were referred to as short tons. The buyer immediately replied that the contract called for long tons, a delivery of which would be expect ed, and requested a reply. The company made no reply to this letter. It was held that this did not show a rescission of the contract, or estop v. Dawson, 20 N. D. 18, 126 N. W. 1013, Ann. Cas. 1912B 1337; Balte v. Bedemiller, 37 Ore. 27, 60 Pac. 601, 82 A. S. R. 737. 20. Note: 20 L.R.A. (N.S.) 493. 1. Note: 20 L.R.A.(N.S.) 493. 2. Smith v. Williams, 117 Ga. 782, 45 S. E. 394, 97 A. S. R. 220. Note: 7 Ann. Cas. 940. Brunswick, etc., R. Co., 115 U. S. 29, 5 S. Ct. 1061, 1160, 29 U. S. (L. ed.) 341; McAllister-Coman Co. v. Matthews, 167 Ala. 361, 52 So. 416, 140 A. S. R. 43; Oklahoma Vinegar Co. v. Carter, 116 Ga. 140, 42 S. E. 378, 94 A. S. R. 112, 59 L.R.A. 122; Unexcelled Fire-Works Co. v. Polities, 130 Pa. St. 536, 18 Atl. 1058, 17 A. S. R. 3. Smith v. Williams, 117 Ga. 782, 788. 45 S. E. 394, 97 A. S. R. 220. 4. Utley v. Donaldson, 94 U. S. 29, 24 U. S. (L. ed.) 54; Wheeler v. New Notes: 12 A. S. R. 831; 94 A. S. R. 119; 30 L.R.A. 40 et seq. the company from holding the buyer liable thereon. In another case it was held that the refusal of the buyer to accept the goods when delivered would not work a rescission of the sale, and that on his subsequent bankruptcy, the seller could not by any acquiescence in the buyer's earlier refusal work a rescission so as to prevent the articles from passing to the trustee in bankruptcy. On the other hand it is competent for the parties, as in case of other contracts, to rescind or annul a contract of sale by mutual consent,' and this may be done by an oral agreement though the contract is in writing; and a mutual rescission may be inferred from the conduct of the parties clearly evidencing their intention to treat the contract at an end. Under the old rule of the common law a contract under seal could not be abrogated except by a contract under seal, but the trend of the modern decisions is to permit the parties to a sealed instrument to abrogate it by a verbal or written agreement not under seal.10 One party to an executory contract of sale may, as in case of other contracts,11 by neglecting or refusing to perform the contract on his part, place it in the power of the other party, where he is not also derelict, to avoid it or not at his pleasure. The breach of one party may in such case be treated by the other as an abandonment of the contract authorizing him, if he chooses to do so, to disaffirm it; and thus the assent of both parties to the contract is sufficiently manifested, that of the one by his neglect or refusal to perform his part of the contract, and of the other by his suing, not for the breach, but for the value of the goods delivered or payment made by him under the contract, as if it had never existed.12 That goods bought in another state for resale are fraudulently marked as to quality so as to make them unsalable under a statute of the state where the order was given does not authorize the buyer to rescind the contract and return them to the seller, if they comply with the order as given.13 551. Default of Seller Generally.-The absolute refusal of the seller to deliver in accordance with the terms of an executory contract 5. Wheeler v. New Brunswick, etc., R. Co., 115 U. S. 29, 5 S. Ct. 1061, 1160, 29 U. S. (L. ed.) 341. 6. Murphy v. John Hoffman Co., 215 N. Y. 185, 109 N. E. 101, L.R.A. 1916A 634. 7. Tomlinson v. Roberts, 25 Conn. 477, 68 Am. Dec. 367; Bacon v. Sondley, 3 Strob. L. (S. C.) 542, 51 Am. Dec. 646. 9. Florence Min. Co. v. Brown, 124 U. S. 385, 8 S. Ct. 531, 31 U. S. (L. ed.) 424. 10. See CONTRACTS, vol. 6, p. 915. 11. See CONTRACTS, vol. 6, p. 925 et seq. 12. McAllister-Coman Co. v. Mathews, 167 Ala. 361, 52 So. 416, 140 A. S. R. 43. Note: 30 L.R.A. 40 et seq. See the following paragraphs. 13. Loveland v. Dinnan, 81 Conn. 111, 70 Atl. 634, 17 L.R.A. (N.S.) 8. Bryan v. Hunt, 4 Sneed (Tenn.) 543, 70 Am. Dec. 262. As to modification of written contracts of sale by a subsequent oral agreement, see supra, 1119. par. 218. |