Summary
In Parke v. Frank, 75 Cal. 364 [ 17 P. 427], the court in dealing with this subject, said: "It seems not infrequently to be lost sight of in the trial courts that, in actions upon contracts, the amount of damages caused by an alleged breach is to be proved as a fact."
Summary of this case from Stephany v. Hunt Brothers CompanyOpinion
Department One
Hearing in Bank denied.
Appeal from a judgment of the Superior Court of the city and county of San Francisco, and from an order refusing a new trial.
COUNSEL:
The agency in the present case was not coupled with an interest, and was revocable at will. (Civ. Code, sec. 2356; Barr v. Schroeder , 32 Cal. 610; Hartley's Appeal , 53 Pa. St. 212; Walker v. Dennison , 86 Ill. 142; Brown v. Pforr , 38 Cal. 550; Coffin v. Landis , 46 Pa. St. 426; Peacock v. Cummings , 46 Pa. St. 434; United States v. Jarvis, Daveis, 287.)
Charles P. Eells, for Appellant.
H. C. Newhall, and Eugene N. Deuprey, for Respondents.
Though no definite period was fixed for the continuance of the agency, it is beyond dispute that it should last for a reasonable time. And though either party could terminate the agency at any time, yet he could not do so without fully indemnifying the other party for all loss. (Story on Contracts, sec. 192; Story on Agency, sec. 466; Hodgson v. Anderson, 3 Barn. & C. 482.)
JUDGES: McKinstry, J. Searls, C. J., and Paterson, J, concurred.
OPINION
McKINSTRY, Judge
[17 P. 428] The main contention of the appellant in the court below was, that the contract of agency, not being for any definite term, was revocable at the will of the principal. Appellant claims that the rulings of the superior court, alleged to be erroneous, are exemplified by the portion of its charge to the jury which reads: "No period of time was mentioned.. .. Where employment is proved, and no time is specified, the law presumes it shall last and endure for a reasonable time. What would be a reasonable time is a question for you to determine"; and by the refusal of the court, on request of defendant, to charge: "If the jury believe from the evidence that no definite time was agreed upon between plaintiffs and defendant for the contract of agency to endure, then said contract could be terminated by either party thereto at his option at any time."
The Civil Code provides: "Unless the power of an agent is coupled with an interest in the subject of the agency, it is terminated, as to every person having notice thereof, by its revocation by the principal." (Sec. 2356.)
The interest which can protect a power after the death of the person who creates it must be an interest in the thing itself, and not an interest in that which is produced by the exercise of the power. (Hunt v. Rousmanier, 8 Wheat. 174.) It may be conceded that by the section of the Civil Code a revocation by the principal terminates the agency in every case where his death terminates it; and that the plaintiffs herein had no such interest in the subject of the agency as rendered the agency irrevocable. Nevertheless, if, for a valuable consideration, the defendant agreed not to revoke the agency for a reasonable time, and in view of the circumstances and nature of the contract a reasonable time could be ascertained, he had no legal right to revoke it during such time. "Although a letter of attorney depends, from its nature, on the will of the person making it, and may in general be recalled at his will, yet if he binds himself for a consideration, in terms, or by the nature of his contract, not to change his will, the law will not permit him to change it." (Hunt v. Rousmanier, 8 Wheat. 203.) In such case, if he fails to comply with his contract, he becomes liable to the agent as such.
Even if, however, it should be conceded that under the code the principal retains the right to revoke a power at his option, in every case where the agent is not vested with an interest in the subject of the agency, this would not render illegal a collateral agreement, whereby the principal should agree for a consideration [17 P. 429] not to exercise the power for a definite period, or for a reasonable time ascertainable. In case of such an agreement, if the agency is revoked by the principal, and the agent is thereby deprived of authority further to act as such, the principal is liable in damages by reason of the breach of his promise not to recall the agency. Whether, therefore, it be considered that the defendant violated his contract by refusing to make consignments to the plaintiffs, or violated it by revoking the agency, he would be liable upon proper pleading. And in each case the rule of damages would be the same; that is, the plaintiffs would be entitled to recover the direct or approximate damages sustained by reason of defendant's depriving them of the benefits of the agency.
The court below did not err in refusing to give the instruction asked by defendant, because that instruction ignores all evidence tending to show that the defendant agreed not to revoke the agency. But the instruction given, while abstractly correct, suggests that, independent of any express promise, or implied promise arising out of the nature of the contract, the defendant had no legal right to put an end to the agency until the expiration of a "reasonable time."
There should be a new trial of the issue as to damages. It seems not infrequently to be lost sight of in the trial courts, that, in actions upon contracts, the amount of damages caused by an alleged breach is to be proved as a fact. It is impossible to ascertain from the statement for new trial upon what facts, taken as proved, the jury based their verdict for $ 4,843.90, or why the verdict was reduced by the court to $ 3,100, rather than to any other sum. We find no evidence which will sustain a judgment for either amount. This is not an action for a tort; the amount of the recovery was not to be left, upon general principles, to the "sound discretion" or "dispassionate judgment" of the jury. It is an action to recover the actual and proximate damages caused to plaintiff by a failure of defendant to perform his contract. Where there is a legal measure of damages, the jury must determine the amount as a fact; otherwise the law which so measures the damages would be of no avail. (1 Sutherland on Damages, 2.)
It is often said to be a paramount principle that the person injured shall receive compensation commensurate with his injury, and no more. By reason of the breach of his contract, if he did break it, the defendant here became liable for the full amount of damages which resulted "naturally" (that is, in usual course of things) and proximately from the breach. These were to be proved with reasonable certainty. The particulars of damages were so far capable of ascertainment, and upon the plaintiffs was imposed the obligation of proving them. The matter should not have been left to the conjectures of jurymen.
The number of shipments or quantity of machinery to be sent was not fixed by the parties, and the plaintiffs very properly made no effort to establish the profits they might have made, during any definite period, had defendant complied with his contract. From the nature of the case such damages must have been purely speculative. But there is nothing in the record to indicate but that they could have proved, with reasonable certainty, what necessary expenses they were induced to incur, by reason of defendant's promise, for the purpose of carrying out their contract with him, as distinct from their contracts, if any, with R. W. Gardner & Co., and the Lehigh Valley Emery Wheel Company; or what special damage pleaded, if any, they sustained by reason of loss of profits upon orders of defendant for machinery which the latter refused to fill, in case the evidence showed such machinery had been ordered from them by responsible third parties, or would have been sold had it been received in due course.
The plaintiffs were not entitled to recover the difference between the manufacturer's prices for machines and the enhanced prices paid by them for the purchase of machines from other persons in the East. These were independent transactions, which were not the direct consequence of the breach of the defendant's agreement, and cannot as matter of law be said to have been contemplated by him. [17 P. 430]
On the whole case, we think the interests of justice demand a new trial.
Judgment and order reversed, and cause remanded for a new trial.