Argument for Plaintiff in Error. assumpsit for the recovery of the reasonable value of certain wheat alleged to have been sold and delivered to defendant by plaintiff, while the cause of action stated in the reply is the alleged breach of a specific contract. The evidence to support the theory of the reply would have been inadmissible to sustain the averments in the complaint, and vice versa. Distler v. Dabney, 23 N. W. Rep. 335. II. The plaintiff must plead and prove a rescission of the contract, or such facts as entitle him to treat it as rescinded. Riddell v. Blake, 4 California, 264; Thayer v. White, 3 California, 228; O'Rielly v. King, 28 How. Pr. 408; Shultz v. Christman, 6 Mo. App. 338; Clay v. Hart, 49 Texas, 433. In this action he has done neither. III. In order to rescind a contract for the sale of land on the ground that the vendor cannot perform it because he has no title to the land, it is necessary for the vendee to aver and show an outstanding paramount title in another; Thayer v. White, 3 California, 228; Riddell v. Blake, 4 California, 264. There is no averment in the pleadings of a paramount title in the United States, or in any other person; nor is there any evidence to support such an averment, had it been made. IV. The Supreme Court of the territory, it will be observed, based its ruling on the doctrine laid down by this court, first, in the case of Railway Co. v. Prescott, 16 Wall. 603, approved in Railway Co. v. McShane, 22 Wall. 444, 462, and adhered to in Northern Pacific Railroad v. Traill County, 115 U. S. 600. All that can possibly be claimed for the principle enunciated in these cases, and all ever intended by this court, it is respectfully submitted, is simply this: that until the company has complied with the provisions of the above proviso and paid into the Treasury of the United States the cost of surveying, selecting and conveying the lands claimed, the United States may withhold the evidence of a legal title already vested in virtue of a present grant, in order to protect its lien for the cost of surveying, selecting and conveying the lands, and that in such case, until patent does issue, the lands shall not be subject to state or territorial taxation. Argument for Plaintiff in Error. But the rule does not affect a case like this, where it appears affirmatively that the lands have been earned by the construction of the road and its acceptance, and that the party derives title through a deed from the railroad company, and it is not shown that the costs of survey have not been paid. V. The legal title of the United States to the public lands may pass as well by an act of Congress in the words of a present grant as by a patent; and the act granting lands to the Northern Pacific Railroad Company is a grant in præsenti; Wilcox v. Jackson, 13 Pet. 498; Rutherford v. Greene, 2 Wheat. 196; Stoddard v. Chambers, 2 How. 284; Meegan v. Boyle, 19 How. 130; Railroad Co. v. Smith, 9 Wall. 95; Schulenberg v. Harriman, 21 Wall. 44; Langdeau v. Hanes, 21 Wall. 521; Leavenworth, Lawrence & Galveston Railroad v. United States, 92 U. S. 733; Barney v. Dolph, 97 U. S. 652; Simmons v. Wagner, 101 U. S. 260; Van Wyck v. Knevals, 106 U. S. 360; Kansas Pac. Railway v. Dunmeyer, 113 U. S. 629; Walden v. Knevals, 114 U. S. 373; St. Paul & Pac. Railroad v. Northern Pacific Railroad, 139 U. S. 1; Wisconsin Central Railroad v. Price County, 133 U. S. 496; United States v. Missouri, Kansas &c. Railway, 141 U. S. 358; Deseret Salt Co. v. Tarpey, 142 U. S. 241; Sioux City &c. Land Co. v. Griffey, 143 U. S. 32; New Orleans Pacific Railway v. Parker, 143 U. S. 42. VI. The pleadings are destitute of any allegation as to the rescission of the contract, and no rescission by agreement is proven. The evidence is conflicting, but plaintiff's evidence, if uncontradicted, would not establish an agreement to rescind. Dial v. Crain, 10 Texas, 444; Pratt v. Morrow, 45 Missouri, 404; S. C. 100 Am. Dec. 301; Thurston v. Ludwig, 6 Ohio St. 1; S. C. 67 Am. Dec. 328. In any event, the question as to whether plaintiff had complied with his part of the contract, as also whether there was a rescission of the same, were questions of fact for the jury under the instructions of the court, and it was grave error in the court in directing a verdict for plaintiff. VII. Plaintiff paid the wheat on the contract for the purchase of the land. He received possession of the land from the defendant under the same contract. It is also admitted Opinion of the Court. that the use of the land while held by the plaintiff under the contract was of the value of $2127. If the plaintiff is entitled in this action to rescind the contract, or treat it as rescinded, and recover the value of the wheat paid on the contract, he should deduct the value of that which he received under it. Moyer v. Shoemaker, 5 Barb. 319; McIndoe v. Morman, 26 Wisconsin, 588; Baston v. Clifford, 68 Illinois, 67; Cobb v. Hatfield, 46 N. Y. 533; Burg v. Cedar Rapids and Missouri Railroad, 32 Iowa, 101; Masson v. Bovet, 1 Denio, 69; S. C. 43 Am. Dec. 651; Fratt v. Fiske, 17 California, 380. Mr. John B. Allen for defendant in error. MR. JUSTICE SHIRAS, after stating the case, delivered the opinion of the court. Numerous errors have been assigned to the rulings of the court below. The first has to do with a question of pleading. The plaintiff declares in assumpsit for the value of a certain amount of wheat by the plaintiff sold and delivered to the defendant. To this the defendant answered, setting up the execution of a so-called wheat note and a chattel mortgage to secure it, and alleging that "all the wheat delivered to defendant by plaintiff was delivered and received as payment on said note and not otherwise." In this answer no mention was made of any contract for the sale of land. The plaintiff, by way of replication, made a full statement of the contract for the sale of the land, alleging performance on his part, and default on the part of the defendant. He averred that after he, the plaintiff, had so performed said contract by the delivery of the wheat to the defendant, he duly demanded that defendant should convey the land to the plaintiff, as by his bond he had undertaken to do; that the defendant neglected and refused so to do, and still neglected and refused to grant and convey said land to the plaintiff by any good and sufficient deed, and that said defendant had no title to one parcel of the land described in the bond, and that since the making of the contract defendant was not the owner or seized in fee or Opinion of the Court. at all of said land. He further alleged that the wheat mentioned in his complaint or declaration, except an excess thereof over the requirements of said bond, was the purchase price of the land; and that, by reason of defendant's neglect and refusal and inability to perform the said contract, the defendant became and was indebted to plaintiff for the reasonable value of said wheat, and that such demand constituted the cause of action in the complaint pleaded. In disposing of the contention of the plaintiff in error that the pleadings disclose a departure by the plaintiff below from the cause of action set forth in his complaint, and a resort to a new and different cause of action in his replication, we are, of course, entitled to regard the allegations of fact contained in the complaint and replication as true. It would, therefore, appear that there was a contract whereby the defendant below was to grant and convey unto the plaintiff certain tracts of land by a good and sufficient deed of conveyance, in consideration whereof the plaintiff was to deliver to the defendant twelve thousand bushels of wheat; that the plaintiff performed his part of the contract by delivering the said wheat, which was received by the defendant; that the plaintiff thereupon demanded of the defendant a conveyance of the land; that defendant neglected and refused to grant and convey said tracts of land by any good or sufficient deed; and that, as to one of the tracts, the defendant had no title to convey. Upon such a state of facts it seems plain that the plaintiff had a right to treat the contract as at an end, and to bring an action to recover the value of the wheat he had delivered to the defendant, and such other damages as he might have suffered by reason of that failure of the latter to perform his part of the contract; and, a fortiori, that he might waive any demand for consequential damages, and confine his claim to a demand for the value of the wheat. In the latter event he might well assert his claim by a count alleging the delivery and receipt of the wheat, a consequent duty on the defendant to pay its value, and a demand for the same. Under the ordinary system of pleadings, an action of Opinion of the Court. assumpsit would lie to recover back purchase money paid upon a contract of sale which has been rescinded. Smith expresses the doctrine, in his note to Cutter v. Powell, (2 Leading Cases, 30, 7th American edition,) thus: "It is an invariably true proposition that whenever one of the parties to a special contract not under seal has, in an unqualified manner, refused to perform his side of the contract, or has disabled himself from performing it by his own act, the other party has thereupon a right to elect to rescind it, and may, on doing so, immediately sue on a quantum meruit for anything he had done under it previously to the rescission." The learned author sustains his proposition by citing Withers v. Reynolds, 2 B. & Ad. 882; Planché v. Colburn, 8 Bing. 14; Palmer v. Temple, 9 Ad. & El. 508. Well-considered American cases are to the same effect. Eames v. Savage, 14 Mass. 425; McCrelish v. Churchman, 4 Rawle, 26; Baston v. Clifford, 68 Illinois, 64; Stahelin v. Sowle, 87 Michigan, 124. It is, however, contended that, under the code of Washington, a different rule prevails, and the case of Distler v. Dabney, 23 N. W. Rep. 335, decided by the Supreme Court of that State, is cited. That decision was made after the trial of the present case, and while the appeal from the Supreme Court of the Territory of Washington was pending in this court; but it is claimed that, under the doctrine of Stutsman County v. Wallace, 142 U. S. 293, when, pending an appeal from a territorial court to the Supreme Court of the United States upon a question of local law, the Territory is admitted as a State, and the Supreme Court of the new State reaches an opposite conclusion upon the same question, the later decision will be followed by the Supreme Court of the United States. It does, indeed, appear that, in the case of Distler v. Dabney, the Supreme Court of the State of Washington has construed the code of that State as meaning that the plaintiff's complaint must contain his real cause of action, and that he cannot be permitted to meet matter set up in the answer by resorting, in his replication, to a new cause of action inconsist VOL. CXLVII-23 |