H. Muller & Co. v. Effangee Tobacco Co. 229 N.Y. 594

H. Muller & Company, Inc., Respondent, v. Effangee Tobacco Company, Appellant.

Contract —- rescission — refusal by purchaser to accept merchandise and notice of intention to rescind contract — subsequent resale of said merchandise and action by seller to replevin same constitutes acceptance of rescission and entitles parties to be restored to statu quo ante.

Muller & Co., Inc., v. Effangee Tobacco Co., 190 App. Div. 808, affirmed.

(Argued June 3, 1920;

decided July 7, 1920.)

Appeal from a judgment entered March 3, 1920, upon an order of the Appellate Division of the Supreme Court in the first judicial department, which reversed an order *595of Special Term denying a motion by plaintiff for judgment in its favor upon the pleadings and granted said motion. The complaint alleged that plaintiff’s assignor contracted to purchase from defendant certain tobacco and paid $7,000 as part of the purchase price and as stipulated damages for failure to perform. Part of the tobacco having been delivered said assignor wrote that it did not conform to the requirements of the contract and that it elected to rescind the entire contract. Defendant answered that it had sold the tobacco to another party and thereafter brought an action in replevin to recover the part delivered. While the latter action was pending plaintiff brought this action to recover the $7,000. The answer admitted the facts as alleged and set up as a separate defense that the tobacco conformed to the contract and defendant was entitled to retain the $7,000 as liquidated damages. The Appellate Division held that by selling the tobacco and then bringing its action in replevin, defendant had accepted the rescission which entitled the parties to be put in statu quo ante and entitled plaintiff to recover the money paid by its assignor.

Harry J. Ahlheim and A. Mandelbaum for appellant.

Norman S. Goetz and Leo L. Leventritt for respondent.