The issue in this case is whether a party whose action for rescission in the Chancery Court was dismissed may now proceed to sue for damages in the Circuit Court.
In October 1980, the plaintiffs purchased a сondominium from Diane Darin, Della Darin, and William F. Darin in Knox County. After the closing, plaintiffs discovered a defect in the floor of the condominium which would require costly repairs. The plaintiffs first sought to have rеpairs made by the condominium association out of funds which it held, but the association declined on the basis that the defect was not covered by association guidelines. The plaintiffs filed suit in the Cirсuit Court in Knox County for rescission, or in the alternative for damages of $8,500.00. Several defendants were named, but all have been dismissed except Diane Darin and her parents.
According to plaintiffs, thе Circuit Court required that plaintiffs elect between rescission and damages. The defendants dispute this point and contend that plaintiffs made a voluntary election. The record shows only that plaintiffs filed a motion on February 11, 1982, seeking to transfer the case to Chancery Court stating: The Plaintiffs have elected to pursue their Cause under the remedy of Recission [sic].” The motion was granted by order in the Circuit Court dated March 18, 1982. In the Chancery Court, plaintiffs pursued only the remedy of rescission. The matter was tried in the Chancery Court in January 1983, and at the conclusion the Chancellor dismissed the comрlaint of the plaintiffs as well as the counter-claims of the defendants. The plaintiffs then filed a suit for damages in the Circuit Court on May 6, 1983. Upon motion by the defendants, this action was dismissed by order of the Circuit Court dated July 28, 1983.
The plaintiffs appeal from the order of dismissal in the Circuit Court, arguing that the principles of res judicata and the doctrine of election of remedies are not applicable in this casе. The defendants contend that if the action in the Circuit Court is not barred by res judicata, then the plaintiffs’ pursuit of rescission in Chancery Court amounted to an election of remedies.
The assertion of the doctrine of res judicata is misplaced in this case. In 50 C.J.S. Judgments, § 649, it is stated that “[w]here plaintiff is defeated in an action based on a certain theory of his rights ... this will not as a rule preclude him from renewing the litigation, without any change in the facts, but basing his claim on a new and more correct theоry.” The doctrine applies only to issues actually litigated. Scales v. Scales,
In the present case the issues are entirely different in the theory of rescission and the theory of breach of contract. The facts required to show one are not the same as required to establish the other. The theory of rescission denies the contract, while the theory of breach of contract affirms it. The plаintiffs are not, therefore, barred by res judicata in their suit for damages based upon the adverse judgment in their action for rescission.
The doctrine of election of remedies, however, is an entirely different matter.
An election of remedies in a fact situation must contain: (a) factors making more than one remedial form available; (b) the forms must in their theory, be inconsistent or repugnant; (c) the choice must be a wilful one, consciously made; and (d) the remedy chosen must be pursued so as to clearly indicate an irrevocаble election.
The facts of this case fall within the definition. The theory of rescission and damages for breach of contract are inconsistent. From the record, it is shown that plaintiffs moved to transfer the case to the Chancery Court in order to pursue the action for rescission, and there is nothing therein to suggest that plaintiffs did not make a conscious, willful choice. Even if, as plaintiffs claim, the Circuit Court had required plaintiffs to proceed on only one theory, it does not appear in the record and plaintiffs do not allege that the Chancery Court restricted the theоries upon which they could proceed. In fact, the Chancellor, in his finding, indicated that plaintiffs could have proceeded on a theory for damages. The Chancellor stated: “It [rescission] is not a form of relief that is always allowed and is on occasion denied even where the facts justify some other relief, such as money damages. However, money damages are not sоught before us today, and we do not consider the suit from that point of view.”
We note that the plaintiffs pursued the rescission remedy to a judgment on the merits. By any standard, this constitutes an irrevocable сhoice. See Grizzard v. Fite,
The plaintiffs rely on Montlake Coal Co. v. Chattanooga Co.,
Rule 8.05, T.R.Civ.P., now expressly allows inconsistent pleading which we believe effectively undercuts the basis for the rule announced in Montlake Coal Co. v. Chattanooga Co., supra. The rules were designed to promote judicial economy, and there is therefore no justification for permitting a plaintiff to bring several suits on different theories, one after another until ultimately he recovers or fails, when he may now plead inconsistent theоries in the same lawsuit. See, e.g., Anthony v. Tidwell,
The plaintiffs argue that the adoption of the Rules of Civil Procedure has in effect abolished the doctrine of election of remedies. It should be observed, however, that the courts of this state have consistently upheld the doctrine even after adoption of the rules. Hutchison v. Pyburn,
Rule 8.05, T.R.Civ.P., is a rule of pleading, however, and these later cases do not address the point in thе litigation at which the election must be made. In Grizzard v. Fite, supra, it was held that filing a complaint on one theory constitutes an irrevocable election so as to bar any subsequent suit on an inconsistent theory. The dissent
[Ajnother announces that, in certain types of cases at least, an election of remedies does not necessarily become conclusivе even at the time favorable judgment is taken by the complainant; and the third line holds to the middle ground that the mere bringing of suit on one remedy is not a decisive act of election, and that the suit doеs not become such, prior to judgment, unless some benefit is taken by the complainant or some detriment is suffered by the adversary party.
The seeds sown by the dissent in Grizzard v. Fite, supra, eventually bore fruit in Barnes v. Walker,
The purpose of the doctrine of the election of remedies is not to prevent recourse to any remedy but to prevent double redress for a single wrong. * *, it is a rule of convenience, if not of necеssity, that a party once submitting to jurisdiction in an action cannot withdraw that submission. But it is different where a party merely commences an action or makes a levy. Dismissal of one or release of the other, in the absence of prejudice to the adverse party, puts the whole matter in statu quo. It is no final choice, and so no election of remedies.
Certainly under our modern rules оf pleading and discovery, a party may not know the facts until discovery is completed, or even later, and to require a party to elect between inconsistent theories before the facts in the case are developed would work a great injustice. On the other hand, to allow a party to pursue one theory to judgment and then to file suit on the basis of a repugnant theory, even where the doctrine of res judicata would not bar the second suit, would frustrate the ends of justice and the established policy of judicial economy.
In the instant case, the plaintiffs contend that the Circuit Court required a choice between the claim for rescission and the claim for breach of contract. The record is silent with reference to any such requirement. Nevertheless, the рlaintiffs did not make an irrevocable election by choosing to pursue the remedy of rescission in the Chancery Court. The election was made irrevocable when judgment was entered against them. Under Barnes v. Walker, supra, the plaintiffs could have taken a non-suit at any time before judgment, or before detriment to the defendants, and proceeded with their claim of breach of contract. Further, as we have seen, there is nothing in the record to suggest that plaintiffs could not have prosecuted both claims, in the alternative, in the Chancery Court. It was left to the plaintiffs to make the choice which seemed best to them. They chose and lost.
The judgment of the court below is affirmed. Costs of appeal are adjudged against the plaintiffs.