Buckstaff v. Russell & Co.

THAYER, Circuit Judge, after stating the case as above, delivered the opinion of the court. The principal contention on the part of the plaintiffs in error, who were the defendants below, is that the trial court should have allowed the jury to determine whether they had used “fair and honoraole means” to determine if the engines, boilers, and pumps worked satisfactorily, and whether, after the use of such means, the defendants were in fact dissatisfied with the machinery in question, and had duly notified the plaintiff company to that effect. It is urged, in substance, that the contract on which the suit is founded gave the defendants the right, if they were dissatisñed with the machinery after a fair and honorable trial thereof, to rescind the agreement for the purchase of the same, upon due notice to the plaintiff, and to demand a. return of such part of the purchase money as had been paid, and the payment of all such damage as had been sustained In consequence of the attempt to make use of the machinery. The trial court did refuse to submit the aforesaid issue to the jury, but we are unable to say that its action in that regard was erroneous. Assuming, but not deciding, that the contract in question was of such a nature that it did authorize the defendants below to rescind the agreement, if they were in fact dissatisfied with the machinery after a fair trial thereof, although there was no reasonable ground for such dissatisfaction, yet we are of opinion that the record discloses that such light of rescission under the provisions of the contract liad been lost. It was shown on the trial that the defendants continued to use the engines, boilers, and their appurtenances for 3-¿- years after they claimed to have notified the plaintiff company of their election to rescind the agreement because óf their dissatisfaction, and that at the end of that period they sold all of the machinery, and appropriated the proceeds to their own use. Such conduct on the defendants’ part, which was proven without objection, amounted, we think, to an abandonment of the contract right of rescission, and remitted the defendants to their common-law right to recover such damages as they had sustained, if, in point of fact, the engines and boilers lacked the prescribed amount of horse power, or were not as economical as they ought to have been in the consumption of coal. The trial court appears to have taken that view of the case, and to have instructed the jury on that theory. It is suggested, arguendo, that, inasmuch as the abandonment of the contract right of rescission by the use and sale of the machinery took place after this suit was instituted, the plaintiff company cannot take advantage of such use and sale as an answer to the plea of rescission, and that the testimony tending to show such use and sale was immaterial and incompetent. It is a sufficient answer to this suggestion to say that the testimony was received without objection. and the defendants thereby admitted its relevancy and competency, and should not be allowed to now urge that it ought to have been excluded. Furthermore, one of the acts constituting an abandonment of the contract right of rescission, to wit, the use of the machinery as their own after the notice of rescission had [614] been given, was not wholly done and performed subsequent to the commencement of the action. The proof shows that the defendants used the machinery as their own, after giving notice of their election to rescind the contract, for two or three months before the present suit was filed. They continued to so use it thereafter for several years, until it was sold. We think, therefore, that upon the issue as to whether the contract right of rescission had been lost, the plaintiff below had the right to show that the defendants, after giving notice of rescission, had used the machinery for several months before the present suit was brought; that they had at no time ceased to use it, and had eventually sold it, and appropriated the proceeds. These undisputed facts clearly demonstrated that the contract right of rescission had been lost, and was no longer available to the defendants as a defense. It matters not, we think, that some of the acts evidencing an intention to abandon the contract right of rescission were committed after the suit was filed. It is well settled that a plaintiff is not confined in his reeovthose damages which had become manifest, and which he could have shown on the day his suit was commenced, but that he may recover those which have become apparent subsequently, up to the day of the trial. For like reasons we think that the plaintiff company was entitled to show that by a course of conduct which began before the suit was filed, and continued thereafter, the defendants had, in an unmistakable manner, manifested an intention to retain the machinery in controversy, and to abandon their alleged right of rescission. The view taken of the question last considered renders it unnecessary to notice any of the assignments of error relative to the measure of damages. Counsel concede, as we understand, that the rule for the assessment of damages was correctly applied by the trial court, provided the defendants had lost their right of rescission, and could only claim compensation because the engines and boilers were deficient in horse power, and consumed too much fuel. We are satisfied that the defendants were only entitled to demand damages for the breach of the last-mentioned warranties, and that the rule for estimating the damages, in case a breach of these warranties was established, was correctly stated by the trial court. In any event, it is now immaterial whether the instructions on this subject were technically correct, since the jury found that the warranties in question were not broken, and that no allowance on account of a breach thereof ought to be made. It is further urged in the brief that some evidence offered by the defendants was erroneously excluded. The testimony to which this assignment relates was, in the main, calculated to show that prior to the execution of the contract in suit the plaintiff company was advised that the boilers, engines, and other machinery which it proposed to furnish were being contracted for by the defendants for the purpose of operating a factory for the manufacture of paper, which was to be provided with paper-manufacturing machines having a capacity to manufacture from 10 to 12 tons of paper daily. The object of offering this proof seems to have been to lay [615] the foundation for raising an implied warranty on the pa,rt of the plain (iff company that the engines and boilers which it proposed to furnish would generate sufficient power to work such a plant in all of its departments successfully, and the necessary amount of steam to cook the paper. The trial court ruled, in substance, that, inasmuch as the kind, amount, and size of machinery agreed to be furnished were specifically described in the agreement, and inasmuch as certain express warranties with respect to its capacity were incorporated into the agreement, no other warranties would be implied. It accordingly exeludéd the oral statements and representations made by the parties prior to the execution of the contract, on the theory that they were merged therein. In so .ruling no error was committed. The action of tine trial court in that respect was substantially in accordance with the views of this court as expressed in the case of Hotel Co. v. Wharton (decided at the present term) 79 Fed. 43. Finding no error iri the record of which the defendants below are entitled to complain, the judgment of the circuit court is hereby affirmed.