Ramsey v. Holmes Electric Protective Co.

PmuEv, J. 1. It is contended on behalf of the appellant that the plaintiffs’ claim is based wholly upon the loss of prospective profits, and that the contingencies were so numerous, and the uncertainties so great, that prospective profits could not be allowed as damages; and it rested its defense in this regard upon the ground that the right of the plaintiffs to use the office of the telegraph company for their business wTasthat of mere licensees, and might be terminated at any time, as it was in fact in October, 1886, and that no business such as the one in question had ever been established or carried on in Milwaukee, and the profits that might be made depended largely upon the skill and fidelity of the persons operating the business, and the confidence the public might have in their integrity and ability. If this contention could be sustained, and the defendant violated the contract, the plaintiffs would still be entitled to nominal damages, at least. By the contract the defendant was to solicit and procure the orders and subcontracts of customers, and the plaintiffs were certainly entitled to receive fifty per cent, of the gross sum that might be realized by performing those already secured. To the extent that profits were realized in the execution of these contracts, three in number, damages might and should be awarded to [183] the plaintiffs; and their claim in this respect rests on a plain and reasonable foundation, and is not fairly subject to the objections of the defendant. After the revocation of the license to use the office and facilities of the telegraph company where the plaintiffs were employed on salaries as clerks, there was no joint action of the parties in respect to selecting or securing by the plaintiffs a new office and other facilities for carrying out the contract. The evidence does not show that the plaintiffs were ready and willing, or offered, to make any other provision in this respect, but said they would sue the defendant. Probably such failure on their part, after reasonable notice and opportunity to perform, might have been treated as a withdrawal from the contract on their part, and as ground for rescinding it. It does not seem reasonable to hold that the defendant alone was entitled or bound to select and procure another office and other facilities. It was their duty • to provide these, but both parties were entitled to be consulted in respect to their character and location. The subject matter of the contract was such that any unreasonable delay would operate as a violation of the defendant’s contracts with its customers, who were entitled to prompt and continuous service. On the other hand, the defendant would be in fault if it withdrew from the contract, and entered into another with the télephone company, without notice and reasonable opportunity to the plaintiffs to secure other means or facilities on their part for performing the contract. After the alleged breach of the contract on the part of the defendant, and while operating under its new contract with the telephone company, the defendant secured, prior to the commencement of this action, five other customers and like subcontracts, and still others thereafter, before the expiration of the three years stipulated duration of the contract between the parties, and in performing these contracts the plaintiffs claim, and [184] have been allowed, damages for the supposed profits made by the telephone company as in some sense a criterion by which the profits which the plaintiffs might have made •may be estimated. Whether this claim can be sustained is a question open to considerable doubt, and which we will not now determine, as it was not very fully discussed at the argument. In the case of Howard v. Stillwell & B. Mfg. Co. 139 U. S. 199, the subject of prospective profits as damages is fully considered, and many cases on the subject are cited. The evidence shows that the plaintiffs went about other pursuits after their license to use the office and facilities of the telegraph company was terminated, and ■ the evidence upon which to make an assessment of profits was very meager. It is evident that it would have cost the plaintiffs much more to carry out their contract in any other room or place than that where they were then employed on salaries by the telegraph company. The proper measure of damages would not in any event be fifty per cent, of the gross receipts from such contracts. That portion thereof which could be fairly called “profits” would be that which would remain after deducting the cost and expense of performing the contract on their part. These observations in respect to the number of contracts upon which the plaintiffs may recover substantial damages, as well as in respect to the rights and duties of the parties when the license of the plaintiffs to use the office and facilities of the telegraph company was revoked, are made with a view to elicit further discussion upon the new trial in respect thereto, which we grant upon other grounds, and not with a view of concluding the parties. 2. Evidence was tendered to show the fair cost and expense of performing the contract in question in respect to all the subcontracts mentioned, and was excluded. Without resting our conclusion in respect to the ruling of the court upon the examination of Mr. McLeod, we refer to the [185] offers to prove by Mr. Weller, manager of the telephone company, who testified that he was familiar with what it would cost to run the business which plaintiffs had undertaken. The court refused to permit him to testify what were the legitimate expenses of carrying it on, -whether it would be necessarj'- to employ an electrician to care for the galvanometer, what would be a reasonable amount for the care of that instrument — whether it would be necessary to employ a line man and a night watchman, and whether, under Mr. Weller’s management of the business contemplated by the contract, there had been any profits. The exclusion of the evidence thus offered was error. If admitted, it would have had a material bearing on the question of what ought to have been allowed as profits by way of damages. The burden of proving what profits had or might have been realized was on plaintiffs. They could not recover as profits the entire half of the gross receipts. The court properly instructed the jury to this effect, but the defendant was denied the benefit of this ruling by the exclusion of the evidence offered by it, tending to show what profits the plaintiffs had really been deprived of. The plaintiffs had no right to assume that gross receipts were the measure of profits that were or might have been gained, and it was their duty to have produced proper evidence on that subject. A careful examination of the case fails to show that they offered any evidence on this point at all, beyond proof of gross receipts. It is plain that these rulings are erroneous, and that the plaintiffs failed to produce evidence justifying so large a recovery. 3. The court left it to the jury to give a verdict not only as for profits on all the subcontracts mentioned for the three years during which the contract between these parties was to continue, but for the five years thereafter, during which period the plaintiffs had an option to extend the contract. There is no proof tending to show that the [186] plaintiffs ever exercised this option, or elected to make the contract operative beyond its legal term. This mere option as to the five years mentioned was not a contract, but might have been made one by the choice or election of the plaintiffs; and, in the absence of any proof showing that this option was converted into a contract, no recovery can be had for future profits, as damages, which might be realized after the expiration of the three years named in the contract. 4. It was error to permit the plaintiffs to read in evidence the letter written November 22,1888, after this action was commenced, by Roome, the defendant’s general manager, to the plaintiffs, proposing to enter into another contract with them on more favorable terms, and to remove the system from the telephone company, and in which he said: “ I am sure that, if you take hold of it, you can malee it a success, and, as you are aware, I am very sorry that it was ever taken out of your hands.” This letter was a written statement made to the plaintiffs, not while he was performing any act for the defendant company, or as a part of any communication which it was his duty to make for the company as its manager. It was not within the scope of his authority to make statements, oral or written, in relation to past transactions of the defendant, and with which it did not appear that he had any present concern. It is easy to understand that this letter may have had a prejudicial effect on the rights«of the defendant. That it was improperly admitted is clear. Mechem, Agency, § 539; Randall v. N. W. Tel. Co. 54 Wis. 140; Mil. & M. R. Oo. v. Finney, 10 Wis. 388; Livesley v. Lasalette, 28 Wis. 41. For these reasons the judgment of the superior coui*t must be reversed. By the Court.— The judgment of the superior court of Milwaukee county is reversed, and the cause is remanded to that court for a new trial.