Carterville Coal Co. v. Covey-Durham Coal Co.

Mr. Justice Brown delivered the opinion of the court. As we have said in the statement prefixed, this cause turned largely in the court below on the construction given to the agreement of March 10,1909. That agreement was and is treated in a puzzling and inconsistent manner by the parties to this controversy. The plaintiff sued for coal sold to the defendant and stated its claim in that way; hut it now says that it sold no coal to the defendant. It says in its argument: ‘ ‘ The plaintiff entered suit in the Municipal Court against defendant for the sum of $3,897.40, the proceeds due plaintiff for collections made by defendant as its agent from third parties. ’ ’ It certainly used inapt language in its “statement of claim,” which answers to a declaration, to express this idea, and as no “collections” of any “proceeds” were shown to have been made by “the defendant as the agent of the plaintiff,” what warrant was there for the peremptory instruction to the jury under this theory? Again the plaintiff says in its argument: “It was not intended to sell the coal to the company and to create the relation of debtor and creditor, but only to make the defendant herein the agent of the plaintiff to take orders for the coal and authorize the defendant herein as agent to collect and account for the proceeds of the coal.” And again, that “the Court’s review” of the documents and dealings involved “will show that the Covey-Durham Coal Company was the agent of the Carterville Coal Company to sell its coal on commission within a certain exclusive territory and to collect for the coal which was delivered to said third persons, deduct its commissions for its services and remit its principal, the Carterville Coal Company, the amount as shown by the bills rendered to them at net prices, etc.” This theory of the plaintiff carried to its logical conclusion is on the present record as destructive to the plaintiff’s right to recover as it is of the defendant’s asserted set-off, if indeed it is not more so. On the other hand, the defendant in insisting that each of the forty-nine orders and acceptances is a distinct, severable and separate contract, and that the contract of March 10,1909, is negligible, is urging a theory which if not fatal to, certainly renders very doubtful its right of set-off of the unliquidated damages which it is claiming as an aggregate amount for the combined defaults of the plaintiff. But neither of the positions taken is sound. The contract of March 10, 1909, is something more than an agency contract, because whatever else it does or does not do, its words and the construction put upon them by both parties render the Covey-Durham Coal Company liable to the Carterville Coal Company for the coal shipped by the latter to third parties on the orders of the former. If it is a contract of agency it is a “del credere” agreement, making a “del credere” agency, which since Grove v. DuBois (1 T. R. 112) in 1785, when Lord Mansfield decided that such an agreement was enforceable and absolute, making the broker or agent liable to the principal in the first instance, without reference to “proceeds collected,” has been a very commonly used device in mercantile proceedings. On the other hand, however inconsistent with the theory on which the “Statement of Claim” was originally made, the position of the plaintiff later taken was indubitably sound. It was that the contract of March 10, 1909, could not be left out of account in this litiga - tion; that the transaction and defaults, if they existed, in connection with the forty-nine orders introduced, could not be treated without reference to it, but that unless it could be shown that the March 10th contract had been abandoned, the entire scope and course of the business must be considered in connection with it, and that it must be held to have bound together and in a sense unified the transactions. One of the errors strenuously insisted on by the defendant is that while under the “pleadings” the defendant was entitled to open and close the case, it was denied that right. It would seem on the authority of the cases cited in defendant’s argument, so far as an analogy can be traced between the more informal proceedings and practice of the Municipal Court and the practice and pleadings at common law, to have merit in its claim; but we hold the error, if it was committed, too technical and really immaterial to warrant a reversal on that ground. We should not deem it worth while even thus briefly to allude to it if it were not that the raising of the question and the insistence on it emphasize a criticism we feel disposed to make of tne conduct of the case hitherto, which we hope will not apply to the new trial which, for reasons hereinafter stated, we feel compelled to order. Too much attention was paid to manoeuvring for position and too great insistence made on the exclusion of evidence which might have thrown light on the really vital questions at issue, namely: What did the contract of March 10, 1909, mean in the minds of the parties who made it? Was it broken? If it was, by whom first? Also, if it was so broken first by the plaintiff, what damages resulted to the defendant? The agreement in question is said by the defendant (a) To be no contract because wanting in mutuality. (b) If a contract, then abandoned by the plaintiff, in the bringing of this suit “for goods sold and delivered.” (c) If a contract, then even if the form of the suit did not estop the plaintiff from insisting on it, yet asserted by the defendant to have been abandoned by both parties before the transactions which are sued for herein, (d) If a contract and not abandoned, then unambiguously a contract of purchase and sale, (e) If a contract and ambiguous, then to be construed by and in the light of the intention of the parties as expressed by the utterances of their representatives and by their acts under it. Of these propositions we find no difficulty in negativing the first two (a and b) and the fourth (d). We think that in what was expressed and implied in the document of March 10, 1909, there was a valid contract ; and although the plaintiff took a strange course, to our minds, in “stating his case,” there came out in the procedure, before the actual trial began, the agreement prior to the “deliveries;” and the difference between a liability on a del credere agency and on a direct purchase is not, we must hope, so great that under the reformed and summary practice of the Municipal Court, designed and supposed by many to be so great an improvement on the forms of the common law, a mistake in the form of the “statement” is irremediable. Nor do we need to advert to the third proposition of the defendant (c) except to say that while there is no evidence whatever now in the record to sustain it, and much that would seem definitely to negative it, the defendant was, by what we hold to be an erroneous ruling on evidence, prevented from introducing alleged admissions of the plaintiff’s president and managing agent, and we are unwilling unnecessarily therefore to foreclose the defendant’s right to assert hereafter anything which it is conceivably possible, even if improbable, might be proven by such admissions. But with the fifth proposition of defendant (e) we can see no reason to disagree, and if it is correct we think that the court below seriously erred in excluding the evidence which it was stated would show the construction of the contract by the plaintiff. That it was ambiguous and in a sense designedly so, is in our opinion clear. It looks to us like a del credere agency contract rather than one of purchase and sale. It differs from the one discussed in Finch & Co. v. Zenith Furnace Co., 146 Ill. App. 257, but it is “like a mermaid, ” as was that. The parts are changed in position and the result is different. The quotation used in the Zenith Go. case might be inverted perhaps in speaking of it, and we might say “prima pristis, postrema hominis facies!” But it is one of those contracts anent which Mr. Justice Burton, now of the U. S. Supreme Court, when sitting in the U. S. Circuit Court of Appeals for the Sixth Circuit, justly remarked: “Hardly any two contracts raising the question of sale or agency are so near alike as to make an opinion construing one an authority in another. It matters little what the parties call such agreements. .Whether the result is a sale or an agency must depend upon the meaning and intent of the instrument as a whole.” Miles Medical Co. v. Park & Sons Co., 90 C. C. A. 579, 164 Fed. 803. On such contracts evidence as to how by word or deed they have been construed by the parties to them is material and admissible. A corporation must act and speak through its officers and agents; and we think that the court below erred in rejecting the testimony concerning alleged statements of the plaintiff’s president and business manager, and then instructing the jury for the plaintiff. We think it very doubtful at best whether the deposition taken in St. Louis on a stipulation ought not to have been sent to the clerk of the court. We do not think that the cases cited by the plaintiff’s counsel go to the length of holding, as they urge, that it might be withheld from the clerk and consequently altogether withheld from being read by the defendant at the trial. But even if the defendant had no right to the filing or reading of the deposition, it had a right to prove anything in the nature of admissions made by Burr for his Company concerning the intention and meaning of the contract of March 10th which it could prove by a witness who heard them made. It made no difference that these admissions, if there were any, were taken down and sworn to after-wards. That they were made, and especially to or in the presence of a representative of the defendant, was the important thing in this phase of the matter. The contention of plaintiff, apart from the alleged incom.petency of Mr. Burr to admit anything for the Company, seems to be that the offered witness was only forbidden to say what he knew only from reading the deposition, but this is not what the record shows. The court having refused to require the deposition to be filed, or to allow a carbon copy to be read, erred in ruling that as a consequence no oral testimony could be heard of anything which Burr said while giving his deposition and which made a part of said deposition. This was a non sequitur. That Burr’s alleged 11 admissions’’ may not be conclusive when received, that the court may perhaps after they are heard still feel compelled to rule that the construction of the agreement is for the court, is possible; but it was error to exclude the testimony without hearing and considering it, and because of that error an instructed verdict cannot be allowed to stand. There is, however, another serious error in our opinion which as imperatively requires reversal. We do not think the court, while holding, as it evidently did, the contract of March 10th to be one of a del credere agency (a conclusion which on the record as it now stands seems to us a correct one), should have stricken out and refused all evidence on the clause in the defendant’s ‘1 Amended Statement of Set-off and Counterclaim,” filed July 10,1911, which alleged damages to its business by reason of the defaults of the plaintiff in its relations with it. If the agreement of March 10th is on another trial held to be abandoned or to be no contract or to be a contract simply of purchase and sale, or if in any form the forty-nine orders, acceptances and partial deliveries are held to be severable, separate and distinct transactions, we do not wish to be understood hereby as laying down any rule of damages to be applied; but if the said agreement is held again to constitute a del credere agency, and to have bound the transactions involved in this cause together, then, in the interest of speeding the cause, we state the following to be our opinion as to the evidence which would be competent to prove damages on the claim of set-off, if a default in its obligations rendering the plaintiff liable on the set-off should be first proven: First. Evidence of what direct expenditure the defendant had been obliged to make or loss to stand in filling any of the orders on which it had made itself liable, or in paying damages for a default therein. Of course in this item only those sums could be allowed which had been actually expended or lost because of some legal liability under which the defendant had come. ; Second. Evidence of the amount of “commissions” provided for by the agreement of March 10,1909, which the defendant had not received but would have received if the plaintiff had not so indefensibly defaulted. Third. Evidence of any further direct pecuniary damage to the defendant by reason of loss of business or of business standing through the defaults of the plaintiff. Conjectural, remote, speculative damages could not be recovered; but if the defendant offers to prove damages that are the direct and natural result of the breach and are not problematical, he should be allowed to try to do it, whatever the difficulty it may be reasonably foreseen he will have in succeeding. By the ruling of the court striking out the clause in question from the amended statement of claim, the defendant would have been foreclosed from any such attempt, however the other questions in the case had been decided. It will be seen that we do not agree with either party in the matter of the rule of damages on the set-off, if the plaintiff should be found liable for a set-off; but we do not think it necessary to discuss further the question or to attempt to show in detail the fallacy of the “market price” theory put forward by the defendant. There is but one other matter we think it necessary to mention. The plaintiff makes much of the contract of March 10,1909, making the deliveries subject among other conditions to “car supply.” It did make them so subject, but if a default or delay in deliveries was attributable to lack of “car supply,” it was for the plaintiff so to prove, and to show self-serving letters of the plaintiff stating that a scarcity existed is manifestly not sufficient. We think, moreover, that evidence is competent as tending and aiding to construe the contract of the custom of the coal district involved in these transactions concerning the furnishing of cars as between the plaintiff and defendant. We speak of this because the defendant says in its argument that there was testimony to such a custom, and the plaintiff says it was stricken out. Deference to the record shows it at least very doubtful if the statement that there was a custom as described was stricken out. In any event, we think evidence of a custom, if it exists, competent, as we have said. The judgment of the Municipal Court is reversed and the cause remanded to that court. Reversed and remanded.