Krum v. Mersher

Opinion, Mr. Justice Green : We think the learned court below was in error in their interpretation of the clause of the contract which subjected its obligatory force to the will of the grantees. The language of this portion of the agreement is certainly inartistic and indeed uncouth, but it is not unintelligible. It is practically conceded in the charge that “ Krum & Peters had a right to give up the lease if they in good faith believed it could not be made to pay.” We agree with this, but, as we understand the charge, this is not the question upon which the case was given to the jury. On the contrary, the court said, “I say to you that when this lease was given up in June, 1884, if it is proved that at that time, by ordinary diligence and ordinary business enterprise and capacity it might have been made to pay a profit, Mr. Mersher majr recover, because there is implied in this agreement a covenant or understanding that they shall work it in an ordinary workmanlike manner.” And again:. “If the plaintiff has satisfied you that the quarry when the lease was given up, was of such a kind and the material was of such a quality, and the quarry itself was of such a character as to be workable with profit, the plaintiff can recover..... If you consider all the evidence on that question and you are [25] convinced that the quarry could have been worked with profit at the time it was given up, the plaintiff can recover.’’ The same idea was repeated at the close of the charge where it was ..characterized as the main question. According to this view of the defendants’ obligation, it did not depend in any degree upon their own estimation or belief as to their ability to work the quarry at a profit, nor even upon the actual results of the best and most faithful efforts they could put forth with whatever capital or facilities they possessed. Instead of that, the crucial test of liability as stated to the jury was the possibility of the quarry being worked at a profit with ordinary diligence by anybody or by any means. That of course is a mere question of opinion to be proven by witnesses who would testify as to their belief on the subject, and who might thus induce a jury to find according to their belief as to what could be done with the quarry. Such opinions as this are easily obtained from willing friends of the interested parties, as unhappity is the case in too many other kinds of cases. They cost nothing to the witness. He does not go through the hazardous ordeal of actually conducting at his own expense the practical operations concerning which he testifies. He ventures nothing but an opinion and in that he assumes no risk. Upon reading the testimony in this case we find it was tried upon this principle precisely. Witnesses were examined on behalf of the plaintiff to prove that the quarry could be worked at a profit and they gave their opinions to that effect. It was proved most clearly for the defence that in point of fact no profit was made, but on the contrary a heavy loss, and there was no proof in the case that in reality any profit was made, yet the jury were instructed that if they found that the quarry could be worked at a profit the plaintiff was entitled to recover. But the agreement provided for a very different standard of liability. The language is, “Should the quarry prove a failure that no proceeds should be in hands of the second party, or that they would abandon the quarry, believing that the quarry would not be a paying one or a profitable one to them in their estimation, and if the quarry had not netted any clear profit to the second party at abandoning said quarry, then the second party shall not be responsible for any further payment, and this [26] agreement shall be null and void and of no effect.” All this verbiage simply means that if Krum & Peters made no profit and believed that the quarry was not a profitable one to work they could abandon the quarry and the contract was a nullity. In other words, the test of their right to terminate the contract, was the fact that they had made no profit, and their belief that the quarry was not a profitable one to work. It was conceded they had made no profit, and the proof was most ample, that they believed the quarry to be an unprofitable one to work, and they did actually abandon it and surrendered the lease. Now according to the terms of their contract they were entitled to have their liability tried by these tests. Did they make no profit and did they really believe the quarry an unprofitable one? If so they were not liable and there could be no recovery. They had an undoubted right to contract in that way if the other party were willing, as he certainly was. The books abound with authorities which prove this, but a simple reference is sufficient: Singerly v. Thayer, 108 Penn. St. 291. In a contract for an elevator, the words were “ warranted satisfactory in every respect.” The court below charged the jury that if they were of the opinion that the elevator was reasonably fit for the purpose for which it was intended and the defendant ought to have been satisfied with it, the verdict might be for the plaintiff. We held that this was error. The fair inference from the contract was that the elevator was to be satisfactory to the defendant, and while it could not be rejected for mere caprice, yet a bona fide objection by him to its working was a sufficient defence. The present Chief Justice said, speaking of the charge of the court below, “ In other words it may have been wholly unsatisfactory to him, yet if the jury thought he ought to have been satisfied he was bound to accept it. In effect, that is, it need not have operated to his satisfaction in any respect, but to the satisfaction of the jury which might be called to pass on the rights of the parties. .....He did not agree to accept what might be satisfactory to others, but what was satisfactory to himself. This was a fact which the contract gave him a right to decide. He was the person negotiating for its purchase. He was the person who was to test it and to use it. No other persons could intelligently determine whether in every respect he was satisfied [27] therewith.” The foregoing reasoning applies with a still greater force to the present case. Krum & Peters were the persons who were to work the quarry. It was they who were to pay all the expenses and incur all the risk. This they must do in anjr event, and hence they would be most anxious to provide for a means of extrication from what might prove to be a ruinous loss. For that very reason they stipulated for an absolute privilege to terminate the contract if they made no profit and believed the quarry unprofitable to work. They did not choose to be subject to the opinions of others in this most important matter, and in this they were wise. Doubtless they knew, as nearly all men in the business world do, that the making of profits — on paper — is an affair of the simplest and easiest character. Thousands of men of good business capacity are being constantly led on to loss and great numbers to ruin, by the seductive array of profits, on paper, which are never realized. Against the possibility of having their obligation to continue a losing contract, to depend upon the easily obtained and loosely formed opinions of strangers, they took care to provide by their agreement, and they are now entitled to the protection for which they bargained. Of course they could not from mere caprice and without reason say they were losing, and thus terminate the contract. But that is a very different matter from being obliged to submit to the mere opinion of strangers, whether witnesses or jurors, on the question of a possible profit in conducting their operations. These views sustain the second, third and fourth assignments of error. We also sustain the fifth, as we do not see the relevancy of the testimony there offered and admitted, and we are unable to discover any evidence of bad faith on the part of the defendants. Judgment reversed.