Arthur v. Saunders

COLLIER, C. J. It is an undeniable principle, that where money has been paid by the plaintiff to the defendant, upon a contract which is afterwards rescinded, either in consequence of the nature of the contract, or by consent, or by the act of the defendant, — then, as the consideration has failed, the plaintiff is entitled to recover back his money, in an action for money had and received. But to sustain the suit on this ground, it is necessary that each party should be placed in statu quo, if it be practicable ; therefore, where the plaintiff has purchased a horse or other chattel, with a warranty, which the defendant has broken, if the plaintiff would rescind the contract, he must return, or offer to return, the horse or other chattel, jn a reasonable time. The necessity of making a [628] return, in order to a disaffirmance of the contract, has not been considered as of universal application. In Hancock vs. Tanner & Evans, (4 Stew. & Por. R. 262,) the plaintiff in error agreed, in consideration that the defendants had advanced to him a sum of money, that he would deliver to them a certain quantity of cotton — he delivered a part of it, but not so much as was of equal value with the money advanced. The defendants brought an action, to recover of the plaintiff, for the failure to comply with his contract. The plaintiff insisted, that as the defendants had not disposed of the cotton delivered, as by their contract they had undertaken to do, that he was not liable, on his special contract, or in indebitatus as-sumpsit, for the difference between the value of the cotton delivered, and the money received. The court disallowed his defence, and said that no action could have been sustained on the special contract, as the defendants in error had performed their agreement differently from its terms, and that they were entitled to “ resort to the money counts for a recovery.” Here is a direct authority in favor of the present action. It was not considered necessary that the cotton should have been returned to the seller before suit brought. On this point, it is not improbable, that the court was influenced by the consideration. that the nature of the subject was such, that the purchaser could not be expected to keep it, any longer than was necessary to find for it an advantageous market — and further, that the seller could not have been injured by the failure to return it, as he could have been allowed its full value, in admeasuring the extent of the recovery against him. [629] Without examining farther the case cited, we are willing to abide by it, — and the consequence is, that the judgment must be affirmed.