Shadbolt & Boyd Iron Co. v. Topliff

Cassoday, J. This case is peculiar, in some of its features. 1. The firm of Shadbolt, Boyd & Co., of Milwaukee, wrote the defendants, of Cleveland, November 1, 1887, to the effect: “ Please enter our order for all steel bow sockets for the year 1888 ” at the terms therein named: The defendants wrote at the bottom of such order the 'words, “ Accepted, subject to all unavoidable or unforeseen causes,” and signed the same. Here was a general order which implied a promise to receive and pay for all such bow sockets as the firm might order for the year and upon the terms therein named, and a general acceptance which implied a promise to fill all such orders as should be made, subject — 518 — to the conditions therein named. In other words, the writing embodied the mutual promises of the one party to the other, and hence was based upon a good and valuable consideration, and hence was binding upon the respective parties. 2. It is contended that neither the complaint nor the evidence shows that the plaintiff corporation was or is a party to such written contract. The dissolution of the firm, the incorporation óf the plaintiff, and the transfer of all the assets and property of the firm to the plaintiff by the firm, January 14, 1888, appear to be sufficiently alleged and proved. Upon this point the court charged the jury: “ The point is made that this bill of sale did not, in terms, assign this contract. It may be true that there is not a word in the bill of sale which accurately and legally describes this executory contract; but it is so obvious, upon the face of the paper, that there was a manifest intent to sell the whole business, as well as the whole property of the concern, that I shall hold as a matter of law, and so instruct you, that this bill of sale was intended to and did in fact transfer this contract in question from the former firm to the newly-formed corporation. And, if it were not so, still it is true the new corporation took the contract and claimed it from that time forward as its own, without objection from the former firm. It must have been without objection on their part, because every member of the former firm was a member of the new corporation. And I therefore charge you, as a matter of law, and dispose of this question once for all, that this contract was, so far as it was competent for the parties to do so, assigned by the firm who made it to the corporation who succeeded that firm.” 1 This part of. the charge appears to be fully — 519 — justified by the pleadings and the evidence,, and hence the exceptions to particular portions of it are overruled. 3. It is contended that the defendants never consented to such substitution of the plaintiff company in place of the old firm, and hence were not bound to fill any such orders made by the plaintiff. The court stated to the jury, in effect, that the defendants “ might have declined to deal with this new corporation upon the contracts made with the old firm,” had they seen fit to' do so, but that they had not. It appears that upon the organization of the plaintiff company, and for' about two months thereafter, it used the old billheads or letter heads of the firm, and stamped thereon the words, “ Shadbolt Boyd Iron Co., successors to,” so that the whole billhead read, “ Shadbolt & Boyd Iron Co., successors to Shadbolt, Boyd & Co.;" that at the expiration of such period the plaintiff got up new billheads or letter heads, with the name of the corporation and the names of its officers thereon, including its president, vice-president, secretary, and treasurer, and that thé defendants thereupon, and long before they refused to fill any of such orders, received numerous copies of such new billheads or letter heads, as well as such old billheads so stamped, and filled the plaintiff’s orders for such bow sockets written thereon. Upon this point the court charged the jury as follows: “ All the evidence is to the effect that after the change of the plaintiffs from a copartnership into a corporation they always signed their communications, ‘ Shadbolt & Boyd Iron Co.; ’ that their billheads also indicated that a change had been made; and that after the first two or three months their — 520 — billheads indicated that they had been formed into a corporation, because they gave, not merely their corporate name, but the names of their officers as well, and stated facts upon every billhead and letter head entirely at variance with the idea of the continuance of the old firm as a mercantile firm. Whatever objections they made from the beginning to the end of the business, they never did object that the plaintiff was a corporation. They always made their objections upon some other ground. So that I charge you, as a matter of law, that they did consent .to this change, and did waive their right to object by reason of this change, and that they are as liable to the Shadbolt & Boyd Iron Company, upon the facts of this case, as they would have been if the firm had remained Shadbolt, Boyd & Co. I take the responsibility of making this decision and relieving you from any responsibility upon it, because to me the evidence is too clear for dispute, and because the evidence upon which I base this opinion is all of it written evidence,— unmistakable, unambiguous, written evidence,— which it is the duty of the court to construe, and not to send to the jury.” These statements are fully justified by the undisputed evidence. It is admitted that September 8, 1888, the plaintiff ordered the defendants to send to one of its customers in Ohio a certain number of such bow sockets; that September 17, 1888, the defendants answered the letter covering such order, and therein objected to filling such order on the ground that it did not come within the terms of the contract as understood by the parties, but nowhere objected on the ground that such order was made by the plaintiff company instead of the old firm; and among other things the defendants therein stated: “You also told the writer, when he called upon you later on, after contract had been made, that we could count on S. B. Iron Co. for as many as they had taken during 1887 from Topliff & Ely.” — 521 — It is conceded that the call which the writer of that letter so made upon the plaintiff was in March, 1888, or in June, 1888. Thus it appears that the defendants were expressly “ told ” as early as June, 1888, that they had been doing business with the “ S. B. Iron Col instead of the old firm, so that the defendants not only had'the constructive notice by way of the billheads and letter heads mentioned, but also actual notice, as early as June, 1888. Besides, the jury expressly found that the defendant knew, in fact, at the time he refused to fill further unfilled orders, that the plaintiff was a corporation. 4. It appears that the defendants and the Topliff & Ely Company, a corporation of Elyria, Ohio, the only manufacturers of such patented bow sockets, entered into an agreement April 2, 1888, whereby it was agreed, in effect, that such bow sockets should thereafter be sold by them, respectively, at prices to be fixed by a committee therein agreed upon, and for no less; provided, however, that such agreement should not include or prohibit either party from filling or complying with any former contract; that in pursuance of such agreement the manufacturer’s price of such bow sockets was increased in July, 1888, ten cents on each set, and September 2, 1888, another increase was made, of ten cents on each set, making a total increase of twenty cents on each set over and above the price named in the contract upon which this action is based. The result was that the plaintiff was thereby enabled to sell such bow sockets so ordered from the defendants at a lower price than the price so fixed by such committee; and so it happened, in September, .1888, that dealers in Ohio, who had previously purchased of such manufacturers, ordered of the. plaintiff a large number of such.b.ow sockets, and thereupon the plaintiff ordered the defendants to ship, in the aggregate, 1,248 sets of such bow- sockets directly to such Ohio dealers, which the defendants refused to do, on the ground — 522 — that such orders were not within the scope of the contract, and not within the contemplation of the parties thereto at the time of making the contract. Upon this point the court charged the jury that “there has been some discus-’ sion as to whether or not the defendants were required to fill some of the orders that were sent to them. There was a concern called the Hamilton Buggy Company, that made an order which they refused to fill, — T do not know upon what ground except that it was too large an order. There was another man, by the name of Cooper, for whose benefit the plaintiff made an order, and directed the goods to be delivered to him. The plaintiff had a perfect right, in the ordinary course of business, to order goods delivered direct to customers. It was not necessary that all goods should be sent to Milwaukee and then sent off again. It is the ordinary course of business, as doubtless some of you understand, for wholesalers or jobbers, when they are ordering goods from a factory, to order them to be shipped direct to their customers, and there is ordinarily no objection to that.” We are constrained to hold that it was error for the court to thus charge the jury, as a matter of law, that the defendants were bound, under the contract, to fill such orders. In an action for the breach of an executory contract for the sale and delivery of personal property, the damages should be limited to such as may naturally or, according to the usual course of things, fairly and reasonably arise from such breach of the contract itself, or from such breach committed under circumstances in the contemplation of both parties at the time of making the contract. Certainly, such may be fairly regarded as the result of the English cases. Hadley v. Baxendale, 9 Exch. 341; Horne v. Midland R. Co. L. R. 7 C. P. 583, L. R. 8 C. P. 131; Elbinger v. Armstrong, L. R. 9 Q. B. 473; Hobbs v. L. & S. W. R. Co. L. R. 10 Q. B. 111; McMahon v. Field, 7 Q. B. Div. 594; Hamil — 523 — ton v. Magill, L. R. 12 Ir. 202; Borgnis v. Nugent, 15 Q. B. Div. 85. These adjudications differ somewhat in the language employed, but it is believed that the\' are all to substantially the same import. This coui’t has repeatedly sanctioned such proposition. Candee v. W. U. Tel. Co. 34 Wis. 471; Walsh v. C., M. & St. P. R. Co. 42 Wis. 23; McNamara v. Clintonville, 62 Wis. 211; Thomas, B. & W. Mfg. Co. v. W., St. L. & P. R. Co. 62 Wis. 649. The contract in the case at bar is silent as to where the defendants wrere to ship the bow sockets. Shadbolt, Boyd & Co.,, at the time of making the contract, were doing business in Milwaukee. They simply directed the defendants to enter their order. The question is whether, in making the contract, the parties contemplated that such shipments should be made by the defendants to wheresoever and to whomsoever the plaintiff might direct. The contract in this regard is uncertain and ambiguous. Thus, BRett, L. J., in one of the cases cited, speaking of the three phases of the rule of damages, as laid down in the leading case, said in effect that whether the damage claimed was the probable consequence of the breach, or “ whether it was in the contemplation of the parties when the contract was made,” were rather questions of fact for a jury, than of law for the court, to determine. 7 Q. B. Div. 595., Other cases cited are of a similar import. Whenever, as here, the contract is silént or ambiguous, it must necessarily be a question for the jury, upon legitimate evidence. Nilson v. Morse, 52 Wis. 240; Swanke v. McCarty, 81 Wis. 112; Dana v. Fiedler, 12 N. Y. 40, 62 Am. Dec. 130. We must hold that the giving the portion of the charge last quoted was error. 5.' As indicated, the contract was “ for all steel bow sockets for the year 1888.” Upon that point the court, among other things, charged the jury “ that the words ‘ all steel bow sockets’ mean ‘all that we shall require or buy or use — 524 — for the year 1888.’ And the words ‘1888’ mean from, the first day of January, 1888, to the last day of December of that year. It does not include part of 188J, and does not terminate until the end of 1888. . . . The plaintiff brought this suit on the 12th day of February succeeding the year 1888, and his damages are limited to the loss of business and profits down to that time, and may not be extended beyond it. If he anticipated further damage or loss, he had his option to wait and bring his suit later, so as to include such anticipated damages or losses. . . . It was. his right, upon the narrowest construction "of his contract, to be supplied at the end of the year with the amount of stock which he usually carried on hand. And upon my construction of the contract it was his right to have on hand at the end of the year as large a lot of bow sockets as he had a reasonable expectation of being able to sell at a profit.” As indicated, the contract was made two months before January 1, 1888. As we construe it, Shad-bolt, Boyd & Co. were at liberty during those two months to commence ordering such bow sockets as might be necessary for their prospective trade to commence January 1, 1888, and to end December 31, 1888; but neither they nor the plaintiff, as their successor, had, any right under the contract to order such goods during the year 1888 for the trade of 1889. It is true, as indicated in another portion of the charge, that “ the year 1888 ” are words of limitation so far as the plaintiff is concerned; but such limitation was confined to the period in which sales of the goods so ordered were to be made by Shadbolt, Boyd & Co. and the plaintiff as. their successor, but not as-.the period in which their orders for such goods were-, to-, be. made. For these reasons we think the particular portions of the charge last quoted were erroneous in allowing damages for losses in the plaintiffs trade between. December 31, 1888,. and February 12, 1889, on the theory that the plaintiff, under — 525 — the contract, had the “ right to have on hand at the end of the year as large a lot of bow sockets as he had a reasonable expectation of being able to sell at a profit.” 6. If the defendants failed to fill orders for such bow sockets, properly made by the plaintiff under the contract, then the plaintiff is entitled to all legitimate damages resulting from such breach. It is conceded that the verdict includes some damages for such bow sockets never ordered by the plaintiff. The theory upon which such damages are claimed is that the defendants, by letter dated October 1, 1888, declined to fill two specific orders from the plaintiff to ship directly to certain Ohio dealers, and also wrote to the plaintiff, “We shall ship no more sockets on any of your unfilled orders.” It is contended that this was an express refusal by the defendants to further perform their contract. The expression used may, however, be fairly construed as applicable only to prior outstanding and “unfilled” orders; and for aught that appears they may all have been orders to ship directly to outside dealers, and not to the plaintiff itself, and which, as indicated, the defendants claim did not come within the scope of the contract. The difficulty with such contention is the uncertainty as to loss of profits on bow sockets never ordered by the plaintiff, and which the evidence fails to show that the plaintiff had an opportunity of selling. Remote, contingent, uncertain, and speculative damages are excluded by all well-considered adjudications. Bradley v. Denton, 3 Wis. 557; Brayton v. Chase, 3 Wis. 456; Shepard v. Milwaukee G. L. Co. 15 Wis. 318, 82 Am. Dec. 679; Thomas, B. & W. Mfg. Co. v. W., St. L. & P. R. Co. 62 Wis. 642; Poposkey v. Munkwitz, 68 Wis. 322; Griffin v. Colver, 16 N. Y. 489, 69 Am. Dec. 718; McKinnon v. McEwan, 48 Mich. 106, 42 Am. Rep. 458. Upon reviewing the authorities upon this subject the late Mr. Justice Lamae, speaking for the whole court, in Howard v. S. & B. Mfg. Co. 139 U. S. 206, well said: “The grounds — 526 — •upon 'which the general rule of excluding profits in estimating damages rests, are: (1) That in the greater number of cases such expected profits are too dependent upon numerous uncertain and changing contingencies to constitute a definite and trustworthy measure of actual damages; (2) because such loss of profits is ordinarily remote, and not, as a matter of course, the direct and immediate result of the nonfulfilment of the contract; (3) and because,-most frequently, the engagement to pay such loss of profits in case of default in the performance is not a part of the contract itself, nor can it be implied from its nature and terms. . . . But it is equally well settled that the profits which would have been realized had the contract been performed, and which have been prevented by its breach, are included in the damages to be recovered in every case where such profits are not open to the objection of uncertainty or of remoteness, or where, from the express or implied terms of the contract itself or the special circumstances under which it was made, it may be reasonably-presumed that they were within the intent and mutual understanding of both parties at the time it was entered into.” By the contract the plaintiff’s assignors entered their general order for bow sockets, as indicated, to be followed by specific orders from time to time. The defendants can only be held liable, upon the principles mentioned, for their failure to fill such specific orders as were rightfully made under the contract, or for the loss of profits on sales which the plaintiff had the opportunity of making and would have made had not the defendants in advance refused to fill any more such orders. • By the Court.— The judgment of the circuit court is reversed, and the cause is remanded for a new trial.