Summary
In Tahoe Ice Co. v. Union Ice Co., 109 Cal. 242 [41 P. 1020], a contract by defendant to take the whole output of ice of plaintiff for a period of years was claimed to have been breached by defendant and the court approved the rule of damages applied in Hale v. Trout, supra, but held the rule inapplicable to this case because of the sale elsewhere by plaintiff of the ice produced for defendant.
Summary of this case from Sobelman v. MaierOpinion
Department Two
Hearing In Bank Denied.
Appeal from a judgment of the Superior Court of Nevada County and from an order denying a new trial. John Caldwell, Judge.
COUNSEL:
The evidence is insufficient to sustain the verdict. The contract must be construed so as to give effect to every part; and so construed required the ice called for by the contract to be weighed at the nearest point of delivery from the cars, and to be separated from the poorer quality contained in the ice-houses. (Civ. Code, secs. 1638, 1641; Riendeau v. Bullock , 20 N.Y.S. 976; 66 Hun, 628; Anderson v. Read , 106 N.Y. 333.) The breach of the warranties provided for in the Civil Code entitled the appellant to rescind the contract. (Civ. Code, secs. 1768- 71; Polhemus v. Heiman , 45 Cal. 573; Hoult v. Baldwin , 67 Cal. 610; Blackwood v. Cutting Packing Co ., 76 Cal. 212; 9 Am. St. Rep. 199; Murchie v. Cornell , 155 Mass. 60; 31 Am. St. Rep. 526.) It was error to allow the plaintiff to recover for profits upon a crop of ice harvested after rescission of the contract. Mere speculative profits are not allowed. (1 Sutherland on Damages, sec. 141; 3 Parsons on Contracts, 194; Wright v. Mulvaney , 78 Wis. 89; 23 Am. St. Rep. 393; Civ. Code, sec. 3300; Friend etc. Co. v. Miller , 67 Cal. 464.) It is the duty of a person who claims damages to keep down damages. (Wright v. Bank , 110 N.Y. 237; 6 Am. St. Rep. 356; Hamilton v. McPherson , 28 N.Y. 72; 84 Am. Dec. 330; Dillon v. Anderson , 48 N.Y. 231.)
Wilson & Wilson, T. C. Coogan, and P. F. Simonds, for Appellant.
Knight & Heggerty, and Thomas S. Ford, for Respondent.
The evidence was sufficient to justify the verdict. It was a question for the jury, and they found that the ice was good. (Marshall v. Keefe , 34 P. Rep. 89 (Cal., Aug. 31, 1893); Fountain v. Semi-Tropic Land etc. Co ., 99 Cal. 683.) If some of the ice was bad, that was no ground for rescission. (Vallens v. Tillmann , 103 Cal. 187; Merrill v. Merrill , 103 Cal. 291.) The ice brought full market rates, and was merchantable. (15 Am. & Eng. Ency. of Law, 306; Guernsey v. West Coast Lumber Co ., 87 Cal. 249.) The profits to have been made by performance are included in general damages for a breach of the contract. (O'Connell v. Main etc. Hotel Co ., 90 Cal. 515, 519; Masterton v. Mayor of Brooklyn, 7 Hill, 61; 42 Am. Dec. 38; Cederberg v. Robison , 100 Cal. 98, 99; Fountain v. Semi-Tropic etc. Co., supra ; Goodrich v. Hubbard , 51 Mich. 62; Laraway v. Perkins , 10 N.Y. 371.) Loss of profits caused by the defendant's wrongful act need not be specially pleaded. (Maxwell on Code Pleading, 114; Ennis v. Buckeye etc. Co ., 44 Minn. 105; Burrell v. New York etc. Co ., 14 Mich. 34; Shaw v. Hoffman , 21 Mich. 157.)
JUDGES: McFarland, J. Henshaw, J., and Temple, J., concurred.
OPINION
McFARLAND, Judge
This action was brought to recover forty-five thousand nine hundred and eighty-two dollars and ninety-nine cents damages for alleged breaches of a certain written contract between the parties. The jury returned a verdict in favor of plaintiff, and assessed the damage at twenty-three thousand one hundred and twenty-three dollars and seventy-two cents, for which amount judgment was rendered. Defendant appeals from the judgment and from an order denying a motion for a new trial.
The respondent and appellant are both corporations, and for several years prior to the commencement of this action they had both been engaged in the ice business. The respondent harvested and stored ice near Truckee, in Nevada county, where it had its ponds, ice-houses, etc. The appellant was engaged in selling ice at wholesale and retail at numerous places throughout California, Arizona, and New Mexico, and had its principal place of business at San Francisco.
On the second day of January, 1889, the respondent and appellant entered into a written contract, by which respondent sold to appellant all of respondent's crops of ice, to the extent of fourteen thousand tons per annum for five years -- commencing on January 1, 1889, and ending on January 1, 1894; and appellant contracted to pay for said ice for said five years two dollars and twenty-five cents per ton. It was provided therein "that in the event of any breach of contract by either party or neglect to comply with terms of this agreement, then the same may be terminated by either party upon its giving reasonable notice in writing to the other party"; and the clause of the contract which is chiefly important in this litigation is the following: "It is further agreed by said Tahoe Ice Company that all ice sold and to be delivered to said Union Ice Company, under this agreement, shall be good, merchantable ice, and suitable for the general trade at the points of delivery from the cars."
The parties seem to have carried out the contract in a manner satisfactory to both for the first three years; but in the third year -- 1892 -- the appellant, about April of that year, commenced complaining to respondent that the ice was not of as good quality as that provided for in the contract. However, appellant continued to receive the ice until the fourteenth day of June, 1892; but on that day it served a written notice upon respondent that, on account of the latter's alleged breach of the said contract, the appellant had elected to, and thereby did, terminate the contract; [41 P. 1021] and afterward appellant refused to receive any more ice.
This action was commenced on December 17, 1892. The damages claimed were: 1. A certain amount of money due for ice delivered and received before said notice; 2. Ice wasted by the refusal of appellant to take or pay for any more ice after said notice; 3. The difference between the price which appellant was to have paid for the ice of the crop of 1892 left in the ice-houses, and the amount which it brought at public auction after notice of the sale to appellant; and 4. The difference between what respondent should have received from appellant for the ice crop of 1893 and its actual value during that year. There was scarcely any conflict of evidence as to the amounts of the several items of damages above stated; and the verdict of the jury, so far as the sum of money assessed as damages is concerned, was clearly justified by the evidence, provided respondent was entitled to recover at all.
But appellant contends that respondent was not entitled to recover at all, because the ice furnished by respondent in 1893 was not "good, merchantable ice and suitable for the general trade at the points of delivery from the cars"; and nearly all of its testimony was directed to that point. There is some discussion by appellant as to the proper construction of this clause of the contract -- that is, as to the places at which the ice was to be "good, merchantable," etc.; but we do not understand respondent to differ with appellant on that point. The ice was loaded on the cars at Truckee as required and requested by appellant; but it was to be good, merchantable, and suitable for the trade "at the points of delivery from the cars." In the rulings of the court upon the admissibility of evidence as to the character of the ice, we see no error; therefore, the question whether the ice was of the character required by the contract was a pure question of fact for the jury. Upon that question a great many witnesses testified. Their testimony was, in a great measure, conflicting; but without stating the evidence here, which would be a useless task, it is sufficient to say that there was a Mass. of testimony to the point that the ice was good, merchantable, and suitable for the trade at the points of delivery from the cars. It appeared, incidentally, that at the time when appellant commenced to complain a new competing ice company, called the National, had come into existence, and had reduced the price of ice; and it is suggested by counsel for respondent that this reduction in the price of ice was the main reason why appellant desired to terminate the contract; but, apart from that suggestion, the evidence upon the direct subject of the character of the ice was amply sufficient to justify the verdict, and brings the case fully within the rule which governs in cases where there is a substantial conflict of evidence.
It is contended by appellant that respondent was not entitled to recover anything for profits which would have accrued to it on the ice crop of the last year covered by the contract -- 1893 -- because such profits are merely speculative, conjectural, etc. The rule, no doubt, is that profits too remote, contingent, and speculative to be brought within any safe or reasonable estimate of damages cannot be allowed -- as, for instance, profits too much depending upon fluctuations of markets and business, supposed successful speculations by the vendor with moneys that would have been realized out of the contract had it been performed, a good bargain of resale by the vendee of the thing bought if it had been delivered, etc. But such was not the kind of profit sought by and awarded to respondent; it was "a direct and natural result which the law will presume to follow the breach of the contract." (Burrell v. New York etc. Salt Co ., 14 Mich. 34, and cases there cited.) The case at bar is identical in principle, upon this point, with Hale v. Trout , 35 Cal. 229, where Sawyer, C. J., reviews the subject very elaborately. In that case there was a contract by which plaintiff agreed to manufacture upon defendants' premises, and deliver to defendants, two million feet of "merchantable and clean sawed lumber," a certain amount of the lumber to be delivered each month, so that the contract would run through two or three years; and defendants agreed to pay therefor ten dollars per thousand. The plaintiff had delivered to defendants according to the contract about three hundred and twenty thousand feet, a part of which had not been paid for, when defendants notified plaintiff that they would not receive or pay for any more lumber, because, as they claimed, the lumber delivered was not merchantable, etc. The action was brought "to recover the price of the lumber delivered but not paid for, and damages for breach of the contract by the defendants in declaring the contract at an end, and refusing to receive any more lumber under it." The court below refused to allow any prospective damages, and the judgment was reversed. The court held that the plaintiff was entitled "to recover, 1. The contract price for the lumber actually delivered and received under the contract; and 2. Upon the breach, to recover the entire damages resulting from the breach on the part of defendants in putting an end to and refusing to receive any more lumber under the contract." The opinion of the court in that case and the many authorities therein cited furnish answers to the arguments of appellant in the case at bar; and the court say: "The foregoing cases show that he [plaintiff] may so sue and recover the whole damage sustained in consequence of the breach without waiting for the time of performance to elapse, or repeating an offer to perform from month to month as the time of delivery arrives, and that the rule of damages upon the breach is the clear profit which the plaintiff would have made, [41 P. 1022] that is to say, the difference between the contract price and what it would have cost the plaintiff to manufacture and deliver the lumber according to the terms of the contract." The rule of damages thus stated was correct in that case, because there the plaintiff never owned the lumber, but merely manufactured it out of the timber of the defendants. In the case at bar the respondent harvested the crop of 1893, and at the time of the trial had sold some of it at the highest market price to other persons, and had the residue of the crop on hand; and the court instructed the jury as to the crop of 1893, that if the ice was merchantable, etc., "then the measure of damages for said year is the difference between the contract price and the value of the ice sold and left unsold." This instruction was correct, and as favorable to appellant as it could have hoped for. (Civ. Code, sec. 3311.)
Appellant was not injured by the introduction of evidence showing the harvesting, quality, etc., of the ice crop of 1893. A large part of it had been harvested when the action was commenced; and it had all been harvested, and all the facts had occurred long before the trial, which took place in the latter part of May in that year. If respondent had not harvested any crop for 1893, its damages would have been the same, although proof of them might not have been made with quite as much certainty. Respondent did nothing to increase the damages, or make them more onerous to appellant.
Appellant contends that as to the profit for 1893 the complaint is insufficient, and that evidence was erroneously admitted on that subject, because such profit was in the nature of special damages which were not specially pleaded. This contention cannot be maintained. Loss of profits which, like those claimed in the case at bar, are the direct and natural results of a contract, and which the law implies from such breach are recoverable without special allegations. (Burrell v. New York etc. Salt Co., supra ; O'Connell v. Main etc. Hotel Co ., 90 Cal. 515; Ennis v. Buckeye Pub. Co ., 44 Minn. 105; Shaw v. Hoffman , 21 Mich. 157; Masterton v. Mayor of Brooklyn, 7 Hill, 61; 42 Am. Dec. 38; Laraway v. Perkins , 10 N.Y. 371.)
We see no material errors in the instructions to the jury or in rulings upon admissibility of evidence. The exceptions to these rulings are covered by the general views above expressed. The court told the jury that certain things were "admitted." This expression should be avoided in charges to juries when there is any doubt on the subject; but in the case at bar we can see no injury to appellant from the use of the expression, for there was no doubt as to the matters to which it referred.
The judgment and order appealed from are affirmed.