Appeal from Order of the Court of Common Pleas, Civil Division, of Lebanon County, No. 2101, 1982.
James J. Kutz, Harrisburg, for appellants.
Terry S. Hyman, Harrisburg, for Wedgewood, appellees.
James F. Carl, Harrisburg, for Good, appellees.
Wieand, Beck and Cercone, JJ. Beck, J., concurs in the result.
[ 368 Pa. Super. Page 481]
The significant issue in this appeal involves application of the doctrine of election of remedies. Where the owner of a diner business has affirmed a refinancing arrangement by commencing and litigating successfully an action for damages against the agent who negotiated the transaction negligently and in breach of his fiduciary duty, may the owner thereafter disaffirm and rescind the transaction in a separate action against the other party to the transaction. We hold that he cannot and reverse the final decree which allowed rescission and restitution.
The doctrine of election of remedies is best described and defined in an Annotation entitled "Election: Rescission or Damages" appearing at 40 A.L.R. 4th 627, at pp. 630 and 631.
[ 368 Pa. Super. Page 482]
An election of remedies has been defined as the act of choosing between two or more different and coexisting modes of procedure and relief allowed by law on the same state of facts. The phrase has also been used in a more restrictive sense to denote the doctrine that the adoption, by an unequivocal act, of one of two or more inconsistent remedial rights has the effect of precluding a resort to the others. The doctrine has frequently been regarded as an application of the law of estoppel, on the theory that a party cannot, in the assertion or prosecution of his rights, maintain inconsistent positions, and that where there is a choice of two remedies which proceed upon opposite and irreconcilable claims of right, the one taken must exclude and bar the prosecution of the other . . . .
It is a general rule that a person defrauded in a sales or other contract has a choice of remedies; he may rescind the contract and recover what he has paid, or he may affirm the contract and recover damages for the fraud and deceit practiced upon him. Once such a person has made a binding election of one remedy over the other, however, he will be precluded from thereafter maintaining an action on the other . . . .
(footnotes omitted). See also: 25 Am.Jur.2d, Election of Remedies §§ 1, 2, 27. The reason for applying the rule is that rescission, an equitable remedy, involves a disaffirmance of the contract and a restoration of the status quo; whereas, the recovery of damages, which is a legal remedy, involves an affirmance of the contract. A party who has been defrauded can either rescind the contract or he can affirm the contract and recover damages. To allow him to do both would be to allow a double remedy for the same wrong.
Pennsylvania is in accord. Thus, as early as 1847, the Supreme Court said in Pott's Appeal, 5 Pa. 500, that ". . . precedent has established the wholesome principle that distinct remedies cannot be used concurrently or alternately, ...