Redmond v. Lilly

160 S.E.2d 287 (1968)

273 N.C. 446

Odes REDMOND, Trading as Odes Redmond Company v. Thomas LILLY, Joe L. Anderson and Slosman Corporation.

No. 274.

Supreme Court of North Carolina.

April 10, 1968.

*289 Grier, Parker, Poe & Thompson by Gaston H. Gage, Charlotte, for defendant-appellant.

Haynes, Graham & Baucom, Charlotte, for plaintiff appellee.

*290 LAKE, Justice.

The rights of the parties must be determined in accordance with the law of this State as it was prior to the adoption of the Uniform Commercial Code, the transactions out of which this action arises having occurred prior to 30 June 1967. G.S. § 25-10-101.

Under the law of this State prior to 30 June 1967, if the owner of a chattel contracted to sell it to a buyer for cash and delivered it to him in exchange for a check, believed by the seller to be good at the time it was accepted, the seller could, upon the dishonor of the check, recover the chattel from the buyer on the ground that the legal title had not passed from the seller to the buyer. Carrow v. Weston, 247 N.C. 735, 102 S.E.2d 134; Wilson v. Commercial Finance Co., 239 N.C. 349, 79 S.E.2d 908. See also 46 Am.Jur., Sales, §§ 447, 563. Legal title to the chattel not having passed to the buyer, a subsequent purchaser from the buyer, even though a purchaser for value and in good faith, could acquire no better title than the first buyer (his seller) had. Consequently, upon the dishonor of the check, the original seller, being still the owner of the chattel, could recover it from such subsequent purchaser, whether bona fide or not, or could treat such subsequent purchaser as a converter of his property and recover from him its value. Wilson v. Commercial Finance Co., supra. If, however, such seller elected to treat the transaction as a sale and to recover judgment from the buyer for the agreed purchase price, he could do so. Carrow v. Weston, supra. See also 46 Am.Jur., Sales, § 448. That is, the seller, to whom a bad check was given for the purchase price, had an election to treat the transaction as no sale, leaving title to the chattel in himself, or to treat it as a sale transferring the title to the buyer so as to make the buyer liable to him for the agreed purchase price. These alternatives are, obviously, inconsistent. The seller could not exercise both of these rights against the buyer. "A party may not ratify a sale by suing for the sale price and at the same time attack the validity of the sale." Strong, N.C. Index, 2d ed., Election of Remedies, § 1.

One, who has an election between two inconsistent rights and, with full knowledge of the facts giving rise to such rights, makes such election, may not subsequently proceed upon the contrary alternative. Carrow v. Weston, supra; Irvin v. Harris, 182 N.C. 647, 109 S.E. 867; 25 Am.Jur.2d Election of Remedies, § 7. The institution of an action by the seller against the buyer for the collection of the agreed purchase price, with full knowledge of the facts giving the seller the right to treat the transaction as no sale, is an election by the seller which he may not thereafter reverse so as to deny the title of the buyer to the goods. Williston on Sales, rev. ed., § 648b; 46 Am.Jur. Sales, § 658. See also Bruton v. Bland, 260 N.C. 429, 132 S.E.2d 910, holding that an election once made by a defrauded buyer to treat the transaction as a sale is final so as to preclude the buyer thereafter from maintaining an action for recision.

In the present action, the plaintiff has elected to sue the individual defendants (his vendees) to recover from them the balance due him upon the agreed purchase price of the goods. Having so elected, he may not, in this action, or in one subsequently brought, proceed against the individual defendants upon the theory that the sale was void and passed no title to them. As between the plaintiff and the individual defendants, his filing suit against them for the contract price vests title to the goods in them as of the time it would have vested in them had no fraud been perpetrated. The effect of the transaction, plus such election by the plaintiff, is the same as if the goods had been sold by the plaintiff to the individual defendants on credit, free from fraud. Having elected *291 to sue the individual defendants (its vendees) for the agreed price of the goods, the plaintiff may not now maintain an action against the individual defendants to recover the possession of the goods or to recover damages on the theory of conversion. 46 Am.Jur., Sales, §§ 565, 657, 658.

Having thus elected to treat the transaction between him and the individual defendants as a sale to the latter, the plaintiff may not now maintain an action for the recovery of the goods or for their conversion by a purchaser from his vendee. Such purchaser would acquire the title and right of the individual defendants (the plaintiff's vendee) and would not, by receiving, using or disposing of the goods, become liable to the plaintiff for conversion of his property, for it is not his. Obviously, such subsequent purchaser would not be liable to the plaintiff for any balance due the plaintiff from his vendee on account of the contract between him and his vendee, nor would he be under any duty, nothing else appearing, to pay over to the plaintiff any balance owing from such subsequent purchaser to his vendor (the plaintiff's vendee-debtor).

In the present action, the plaintiff has filed one complaint seeking recovery from his vendees of the balance of the purchase price and seeking recovery from the subsequent purchaser from those vendees of the value of the goods on the theory that such subsequent purchaser is a converter of them. It thus appears upon the face of his complaint against the corporate defendant that he has made an irreversible election to treat the transaction between him and the individual defendants as a sale of the goods. This being true, there appears upon the face of the complaint not merely a failure to allege some fact which is an element of a right of action against the corporate defendant, but an affirmative allegation of a fact which establishes that the plaintiff has no right of action against the corporate defendant. Consequently, the demurrer should have been sustained and the action dismissed as to the corporate defendant. This being true, it is unnecessary to consider the remaining assignments of error.

Reversed.