Cornelius v. Lytle

Opinion by Henderson, J., This action arises out of the breách of a contract for the leasing of a farm containing 267 acres owned by the defendant which the plaintiff agreed to work on shares according to the terms set forth in the lease. Possession was to have been delivered to the plaintiff April 1, 1908, but the lessor was unable to give possession, he having been restrained by an injunction obtained by the tenant of the preceding year. The plaintiff lived about twenty-five miles away and in anticipation of carrying out his undertaking bought additional stock necessary for the profitable use of the farm and moved from the place he then occupied to the new location. Being denied possession he leased a farm of fifty acres a few miles from the larger place and worked that for the current year. Having no place nor use for so large an equipment he was com — 400 — pelled to sell a considerable part of his stock at a sacrifice and his claim was for this loss and for the profits which he would have made on the place of which the defendant failed to deliver possession. The court admitted evidence of the value of the bargain to the plaintiff in the working of the farm for a year and rejected evidence offered by the defendant to show the profits from the fifty acre farm which the plaintiff worked. The material questions raised by the assignments of error relate to the measure of damages as established by the court. The appellant contends that inasmuch as the failure to give possession of his farm was not willful and the result of his own act the plaintiff is only entitled to compensation for the reasonable expenditures to which he was subjected because of the defendant’s default, in accordance with the doctrine stated in M’Clowry v. Croghan, 31 Pa. 22; Bartram v. Hering, 18 Pa. Superior Ct. 395, and other cases along the same line of adjudication in which a contract to lease is likened to a contract for the sale of land with respect to the measure of damages for a breach arising from the refusal of the lessor or vendor to perform. Of these cases Dumars v. Miller, 34 Pa. 319; Hertzog v. Hertzog, 34 Pa. 418; Bowser v. Cessna, 62 Pa. 148; and Rineer v. Collins, 156 Pa. 342, arose out of parol contracts for the sale of land. M’Clowry v. Croghan, 31 Pa. 22; Walter v. Transue, 17 Pa. Superior Ct. 94, and Sausser v. Steinmetz, 88 Pa. 324, arose on parol agreements for leases for a term of five years. None of them involves a contract like that on which the plaintiff’s action is founded. His agreement was not only for the occupancy of the farm for the term but included the prosecution of a business in the result of which the defendant was equally interested. The enterprise necessarily involved the use of machinery, horses, cattle and generally speaking the outfit employed in the cultivation of a large farm. It is a business the outcome of which can be calculated with reasonable certainty based on the experience of men engaged in the same pur — 401 — suit. When, therefore, a person enters into an agreement to furnish a prospective tenant a farm on which to carry-on his business and the lessee on the strength of this promise prepares for the work by the outlay of money in the enlargement of his capacity for successfully prosecuting it, no convincing reason is presented why the party who fails to perform his part of the undertaking should not be liable for damages for the loss which the innocent party has sustained by reason of the failure of the other party and which grow immediately and directly out of the broken contract. This was the principle applied in Hoy v. Gronoble, 34 Pa. 9, which was an action for the breach of a contract with the plaintiff to work the defendant’s farm on shares. The plaintiff was permitted at the trial in the court below to prove what he could have made on the farm if he had been allowed to proceed under the agreement and this instruction was affirmed on appeal the court holding that the plaintiff was entitled to what he would have made immediately out of the contract. Damages of this character are considered to be in the immediate contemplation of the parties when the contract is made. The profits are part of the bargain itself— they are the thing provided for by the terms of the contract. Steel v. Frick, 56 Pa. 172, was an action for damages on a lease where the lessor failed to give possession. The court below instructed the jury that if the lessee was prevented from enjoying the premises either by the act of the lessor or his want of right or power to give possession then the tenant would be entitled to recover whatever damages he sustained, and if the jury believed that he was deprived of possession by the want of power in the landlord to give possession he was entitled to recover and this instruction was sustained. The case of Wolf v. Studebaker, 65 Pa. 459, is another case for damages occasioned by the failure of the landlord to give possession on a contract by which the defendant leased her farm to the plaintiff to be worked on shares. The plaintiff offered evidence to show the damage sustained — 402 — by him in consequence of the breach of contract. The principal question in the case was whether the defendant could show what the plaintiff had earned in other kinds of work’ with’ his team during the year in mitigation of damages. It was held that this was not competent, but the right of the plaintiff to recover for the breach was not controverted. The rule of damages for a breach of contract declared in Hadley v. Baxendale, 26 Eng. L. & Eq. 398, that where two parties have made a contract which one of them has broken the damages which the other party ought to receive in respect to such breach of contract should be such as may fairly and reasonably be considered, either arising naturally, according to the usual course of things, from such breach of the contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract, as the probable result of the breach of it, was held in Fleming v. Beck, 48 Pa. 309, to be entirely sound and this was the rule applied in Wolf v. Studebaker, 65 Pa. 459. The case of Hoy v. Gronoble, 34 Pa. 9, was cited in Pennypacker v. Jones, 106 Pa. 237, as holding that profits may be recovered where they are part and parcel of the contract itself entering into and constituting a portion of its very elements; something stipulated for, the right to the enjoyment of which is just-as clear and plain as to the enjoyment of any other stipulation; and both Hoy v. Gronoble and Wolf v. Studebaker were cited with approval in Wilson v. Wernwag, 217 Pa. 82, in support of the conclusion there reached that profits may be recovered for the breach of a contract whenever they are susceptible of proof and that the injured party has the right to demand and receive from the defaulting party full compensation for the loss he has sustained by the breach of the contract. It was there laid down that when the evidence shows with a reasonable certainty the profits which have been lost by the breach of contract they should be considered damages recoverable by the injured party from the one in default, The same doctrine — 403 — was restated in Clyde Coal Co. v. P. & L. E. R. R. Co., 226 Pa. 391, and both Hoy v. Gronoble, and Wolf v. Studebaker, are there cited with other cases in support of the principle: “From these and other adjudicated cases the doctrine may be regarded as settled that for the breach of a contract damages may be recovered for loss of profits, the direct and immediate fruits of the contract itself and .ascertainable with reasonable certainty, when they are the natural result of such breach, or which, under the circumstances, the parties may have contemplated at the execution of the contract as the probable result of its breach; but damages for the loss of profits for the violation of a contract may not be recovered where they are uncertain, remote or speculative, or when they grow out of a subsequent collateral or subordinate undertaking which was entered into upon the faith of the principal contract.” We have then in a very recent case not only the statement of the general principle but the indorsement of the doctrine of the cases heretofore cited which hold that for the breach of a contract to work a farm on shares or to operate it under a lease on shares damages may be recovered for the value of the bargain. The reasonableness of such a rule is illustrated by the facts of the case before us. The plaintiff was induced to quit the farm on which he was living and move a long distance to the defendant’s property; to properly qualify himself to carry out the terms of the lease he bought additional farm implements and stock; the members of his own family provided sufficient help in addition to his own to operate a farm of the size of that leased; when he came to take possession of the premises the defendant could not remove the prior lessee and the plaintiff was without a place to use his team and stock or to furnish employment for himself and his sons, and his opportunity for profitable occupation of the same kind for that season was lost in part because the defendant did not comply with his agreement. It would be a hard rule which would turn a plaintiff onto the street under such circumstances — 404 — and deny him any recompense except the expense incident to his moving. On the second proposition we are unable to agree with the learned trial judge that it was not competent to prove the profit derived by the plaintiff from the use of the farm which he did get. Evidence would not be admissible to prove what he made in odd jobs not connected with his regular business, but the extent to which he prosecuted a like business in the same neighborhood for the same term might be shown in mitigation of damages. It appears from the plaintiff’s own evidence that the profits which he expected to make on the defendant’s farm were to be derived not only from his management of the business but also from the use of the teams and cows and farm machinery which he owned and from the labor of his children. If this supervision and labor and these teams and cows and the farm machinery were profitably used on another place it could not be logically contended that the defendant’s failure to give possession of the farm produced damage equal to all that the plaintiff might have made on that place. He could not use his labor and teams and stock on two farms at the same time, and it would be manifestly unjust to permit him to use all these agencies on one place and recover the profits of their use for the same period on another place. If the next day after the plaintiff learned that he could not get possession of the farm he intended to occupy he had secured another as large and as good in the immediate vicinity and had carried on the business on as advantageous terms, it could not be said that the loss resulting to him from the defendant’s failure to give possession was the profit which he might have made out of that farm and this for the obvious reason that he was not equipped to carry on two farms and does not pretend to have been able so to do. He could manage one farm of the size of that of the defendant but not two from anything that appears in the case. If, then, he devoted his energy, the labor of his sons and the work of his teams to the cultivation of another — 405 — farm and if this resulted profitably to him to the extent to which it was profitable he lost nothing by his failure to cultivate the defendant’s land. True it is that the farm which he got was less than one-fifth the size of that which he contracted to get and it consequently furnished a much more limited field for the exercise of his ability as a manager and for the labor of his hands and his horses; nor could he keep as many cattle there as he would have done on the larger place, but this is a matter of degree and not of quality. If he obtained employment of the same kind in the same neighborhood we think the defendant might show the extent to which such occupation was profitable in comparison with that which he would have engaged in if the defendant had carried out his promise. The testimony of Marshall Morgan was properly admitted. He had lived on the farm for many years and observed the methods of cultivation practiced by the tenants who succeeded him. Ten years had elapsed since he worked the place, and his testimony would have less weight than if he had remained there until a recent date, but his testimony discloses a sufficient familiarity with the character of the farm and the crops which it produced to make him a competent witness. The appellant’s objections go rather to the weight of his evidence than to its admissibility. We sustain the fourteenth, fifteenth and seventeenth assignments so far as the action of the court there excepted to denies to the defendant the right to show any profits which the plaintiff derived from the Mayne farm in mitigation of damages. The judgment is reversed with a venire facias de novo.