Ward v. American Health Food Co.

Cassoday, C. J. Error is assigned because the court found as a matter of law that the contract “was fully executed by the plaintiffs on the 10th day of July, 1900.” That is the day named in the contract upon which the plaintiffs were to commence performance; and the contract expressly provides that it should continue “for the term of twelve months from ■July 10, 1900.” By the fifth finding of fact the court found that the plaintiffs commenced such performance June 19, 1900, and continued such performance “up to and including the 10th day of July, 1901.” Manifestly, by some inadvertence, the wrong year is named in the conclusion of law mentioned. At all events, such conclusion cannot overturn the language of the contract and the express finding of fact mentioned. In other words, the plaintiffs have recovered in this action the $470 per month for doing the things they agreed to do in the contract during the whole of the twelve months which terminated July 10, 1901. 2. Counsel for the defendant contend that the time when — 20 — tbe performance was to commence under tbe contract — July 10, 1900 — was, on or about tbat time, indefinitely postponed by correspondence and oral negotiations between defendant and Isaac J. Cobn, tbe soliciting agent of tbe plaintiffs in procuring the contract from tbe defendant. By tbe eighth, ninth, and tenth findings tbe court found, in effect, not only that Isaac J. Oobn never made any such agreement, but also tbat be never bad any authority to make such an agreement, and that the defendant knew tbat be was merely “acting in tbe capacity of solicitor, and was without authority to make or accept tbe contract on behalf of said plaintiffs.” Such findings of tbe court are abundantly supported by tbe evidence. 3. In and by tbe terms of tbe contract, tbe defendant reserved tbe right to cancel tbe contract August 10, 1900, by paying $92.50 additional, and giving notice in writing prior to August 10, 1900. Both complaints allege tbat tbe defendant failed to exercise such reserved right. The defendant took issue with such allegations, and alleges, in effect, tbat tbe “contract was duly annulled, discontinued, and canceled by due and sufficient notice in writing given by the defendant to the plaintiffs in due time and before tbe end of the first month.” By tbe sixth finding tbe court found tbat tbe $92.50 was not paid by tbe defendant to tbe plaintiffs August 10, 1900; that no notice in writing was given by tbe defendant to tbe plaintiffs as therein agreed; and tbat tbe defendant bad not exercised its reserved right to cancel the contract as therein stipulated. Such findings are abundantly supported by the evidence. It follows that tbe letter received by tbe plaintiffs from the defendant August 24, 1900, wherein they were told to “kindly let us know when our month expires, and cancel tbe contract thirty days from tbe extended date of tbe contract for the present,” as mentioned in finding 18J, did not have tbe effect of relieving tbe defendant from further liability on tbe contract. — 21 — 4. The defendant insists by way of counterclaim, that there was a mutual mistake in reducing the contract to writing, in that it should have been “for the term of three months from July 10, 1900,” as actually made, instead of “for the term of twelve months from July 10, 1900,” as written; and prayed a reformation of the contract accordingly. Such counterclaim was put in issue by the reply. The court, by the fifteenth finding, found that such counterclaim had not been proved and was untrue; and the evidence fully supports such finding. 5. The complaint in the consolidated action alleges, and the court found, in effect, that the plaintiffs had inserted the defendant’s cards, and continued the insertion of such cards in the manner provided for in the contract, from June 19, 1900, up to and including July 10, 1901, and that the plaintiffs had in all respects complied with the terms and conditions of the contract on their part. The court further found, in effect, that September 27, 1900, “the defendant directed the plaintiffs* in writing, to remove from all cars their cards which had been inserted pursuant to the terms of the contract,” but that “the plaintiffs refused to remove” the same. The defendant contends, in effect, that, as the contract was executory at the time such direction was given by the defendant, the giving of such direction had the effect to stop further performance on the part of the plaintiffs, and limit its further liability to damages sustained for the breach of the contract. On the other hand, the plaintiffs contend, in the language of the conclusion of law mentioned, “that the contract . . . was fully executed by the plaintiffs on the 10th day of July, 1900,” the day on which, by its terms, it was to go into effect, notwithstanding the findings of fact that the defendant’s cards were to be so inserted in cars by the plaintiffs “for the term of twelve months from July 10, 1900.” Other stipulations in the contract show that the services of the plaintiffs were to continue for the whole year; and the com — 22 — plaint alleges, and the conrt found, that such services did so-continue from June 19, 1900, “up to and including the 10th day of July, 1901.” Such finding would seem to he conclusive that at the time the defendant directed the plaintiffs “to remove from all cars their cards which had been inserted pursuant to the terms of the contract”- — September 27, 1900 — the contract was still executory for the balance of the year. But the plaintiffs further contend that the contract was fully executed July 10, 1900, because prior to that date they had procured the insertion of the requisite number of cards in the cars of the two .railways as agreed, and that, by the terms of the contract, “nonuse of space from advertiser’s act or omission is advertiser’s loss,” and hence it is argued that the defendant was bound by the contract to pay for the spaces so procured by the plaintiffs, whether the defendant used them or not. The argument is plausible; but the real question is whether the nature of the contract is such as prevented the defendant from stopping further performance on the part of the plaintiffs by the direction given September 27, 1900, “to remove from all cars their cards,” as mentioned. It appeal’s from the evidence that no particular space in particular cars was secured by the plaintiffs. As late as September 10, 1900, they wrote to the defendant as follows: “Please forward us at once 250 cards, size 11x21, as we need same for display in the box cars in Brooklyn which will shortly be placed in service.” That request was renewed September 22, 1900, “for a requisite number of cards for equipping the box cars of the Brooklyn Heights Railroad.” The defendant, under date of September 24, 1900, replied by stating “that, as we have canceled our advertising with you for the present, you will not need any cards for the box cars of the Brooklyn Heights Railroad. When we renew our cards in your cars later in the fall, we will send new cards enough to cover all of the cars that we will use.” These letters ob — 23 — viously have reference to the necessary change from open cars to winter cars. The theory that the plaintiffs had procured such “spaces” from the railways hy leases or otherwise, and then re-leased or sublet them to the defendant, cannot be maintained. “A lease is a contract for the possession and profits of land gnd tenements on the one side and the recompense of .rent or property on the other.” 18 Am. & Eng. Ency. of Law (2d ed.) 597. Here the defendant never had any possession or right to the possession of such cars, or any part of any of them. Reynolds v. Van Beuren, 155 N. Y. 120, 123, 49 N. E. 763. The case is peculiar, and it may be difficult to find adjudications in cases where the facts are similar. It has been held in Hew York: “A contract whereby one person gives another the authority, for a stated compensation, merely to use a wall of a house for advertising purposes during a specified time, does not constitute a lease, so as to create the relation of landlord and tenant between the parties.” Goldman v. N. Y. Advertising Co. 60 N. Y. Supp. 275. So it has been held in Massachusetts: “An agreement by the lessee of a building to allow a third person, in consideration of an annual payment by him, to place a sign upon the outside wall of the building for a stated time, is not a breach of a covenant in the lease not to underlet any part of the premises.” Lowell v. Strahan, 145 Mass. 1, 12, 12 N. E. 401. So it has been held in Maryland: “A contract to display advertisements in a street car, the cards being subject to the approval of the advertising company,” as here, “is one in which the other party relies upon the skill and experience of the company in making such displays, and hence is not assignable by the latter.” Eastern Advertising Co. v. McGaw, 89 Md. 72, 42 Atl. 923. In other words, it was there held that the contract was for personal services, and not even a license, much less a lease. We must hold that when the defendant directed the plaintiffs — 24 — to remove its cards, September 21, 1900, tbe contract remained executory for tbe balance of tbe year. 6. Being executory, did tbe defendant have tbe right, by giving sucb direction, to stop further performance on tbe part of tbe plaintiffs, and limit its further liability to damages sustained for tbe breach of tbe contract, as claimed by tbe defendant ? Certainly there are numerous adjudications to that effect. Courts differ as to whether an action can be maintained for sucb breach before tbe time for tbe fulfilment of tbe agreement expires. McCall Co. v. Icks, 107 Wis. 232, 83 N. W. 300; Hochster v. De La Tour, 2 Ellis & Bl. 678. But that question is not here involved, since tbe time for sucb fulfilment bad fully expired when tbe last action was brought. In tbe case last cited it was held by tbe Queen’s Bench, Lord Campbell, C. J"., presiding, “that a party to an executory agreement may, before tbe timé for executing it, break tbe agreement either by disabling himself from fulfilling it, or by renouncing tbe contract.” That rule was followed by tbe supreme court of tbe United States in a learned and discriminating opinion by Fullee, C. T., reviewing the English and American cases, and it was there, among other things, held that: “After tbe renunciation of a continuing agreement by one party, tbe other party is at liberty to consider himself absolved from any future performance of it, retaining bis right to sue for any damages be has suffered from tbe breach of it. . . . Tbe parties to a contract which is wholly executory have a right to tbe maintenance of tbe contractual relations up to tbe time for performance, as well as to a performance of tbe contract when due. As to the question of damages, when tbe action is not premature, tbe plaintiff is entitled to compensation based, as far as possible, on tbe ascertainment of what be would have suffered by tbe continued breach of tbe other party down to tbe time of complete performance, less any abatement by reason of circumstances of which be ought reasonably to have availed himself.” Roehm v. Horst, 178 U. S. 1, 20 Sup. Ct. 780. — 25 — So in an early case in Yew York the party who had employed another person to do certain mechanical work at a price agreed upon, after the work had been commenced countermanded his directions and forbade the person so employed to further execute the work; and it was held that the person so employed had no right U proceed with the work after he was so forbidden. Clark v. Marsiglia, 1 Denio, 317; American L. Ins. Co. v. McAden, 109 Pa. St. 399, 1 Atl. 256. So it has hern held in Vermont, that: “In executory contracts a party has the power to stop the performance on the other side by an explicit order to that effect, by subjecting himself to such damages as will compensate the other party for being stopped in the performance on his part at that point or stage in the execution of the contract.” Danforth v. Walker, 37 Vt. 240, followed in Davis v. Bronson, 2 N. D. 300, 303, 304, 50 N. W. 836; Gibbons v. Bente, 51 Minn. 500, 53 N. W. 756, 22 L. R. A. 80. In such cases it is held that an action cannot be maintained to recover the contract price, but may be maintained to re-cover damages for the breach of the contract. Hamilton v. McPherson, 28 3 N. Y. 72, 76, 77; Butler v. Butler, 77 N. Y. 472; Johnson v. Meeker, 96 N. Y. 93, 97; McMaster v. State, 108 N. Y. 542, 15 N. E. 417; Hinckley v. Pittsburg B. S. Co. 121 U. S. 264, 7 Sup. Ct. 875. And yet in such an action the party seeking to recover for the breach of the contract is in duty bound to make reasonable exertions to keep down the damages. Id. See, also, Roper v. Johnson, L. R. 8 C. P. C. 167; Brown v. Muller, L. R. 7 Exch. Cas. 319, 23 E. R. C. 527—530, and notes. 7. But this is not an action to recover damages by reason •of such breach of contract. As indicated, this is an action to recover the contract price on the theory of full performance. Such is the only cause of action alleged in the complaint. True, some evidence was admitted having a bearing ■upon such question of damages, but such evidence was so admitted against objections that it was inadmissible under the — 26 — pleadings. As the breach of the contract is the gist of such an action, it is necessary that the complaint allege the particular breach; otherwise it will he demurrable. A failure to allege such breach cannot be cured, even by verdict. This is elementary. 4 Ency. Pl. & Pr. 937, 938, citing numen ous cases; Abbott’s Trial Ev. (2d ed.) 634, and cases there-cited. In such cases the plaintiff is not entitled to prove a breach of contract not alleged, nor damages of a kind not necessarily resulting from the breach of contract alleged and' proved, unless they are specifically stated in the complaint. Id. Thus it is stated in one of the works cited: “The damages to be recovered upon an alleged breach of contract need not be averred where they are the necessary result of the breach complained of, but a full recovery may be had under the general allegation of damages in the complaint.” 5 Ency. Pl. & Pr. 739. “On the other hand, where the damages do not necessarily result from the breach of the contract alleged, they must be _ specially pleaded, in order that the defendant may not be taken by surprise at the trial. And in case such damages-are not specially pleaded, in accordance with this rule, evidence in regard thereto will be excluded at the trial, and the plaintiff will be confined to his general damages.” Id. 741—743. It follows from what has been said that so much of the-thirteenth findings as.bears upon such damages and is based' upon such improper evidence must be disregarded. The damages thus referred to, of course, only include such, if any, as-the plaintiffs may have sustained by reason of their being prevented by the defendant from performing the balance of the contract. 8. But the plaintiffs had fully performed the contract on-their part for two months and seventeen days before the de-. fondant directed them to remove its cards from the street cars in question. For such partial performance they are certainly entitled to recover the contract price. The price so27 stipulated in the contract is $470 per month, to he paid at the end of each month. There is nothing in the contract that can authorize a division of such monthly instalment. The result is that the plaintiffs are entitled to recover only three monthly instalments under the contract, with interest on each instalment from the time it- became payable by the terms of the contract. Eor the aggregate amount of such instalments and interest"they are entitled to judgment in this action. By the Court. — The judgment of the circuit court is reversed, and the cause is remanded with direction to enter judgment in favor of the plaintiffs and against the defendant for the amount indicated in this opinion. Cassoday, C.,J. When this case was decided, May 20, 1903, the question as to the amount of costs which the plaintiffs were entitled to recover was considered by the court, and it was then held that the plaintiffs were only entitled to recover such costs as were allowable under the statutes in actions at law on contract. The failure to consider the question in the opinion filed was the fault of the writer.