« AnteriorContinuar »
tures have been made by the contractor in the construction and repair of river dams, bridges, and roads belonging to the corporation, for the driving and hauling of timber, and upon timber partially prepared for delivery under the contract, and a sale of the corporate property, tree and discharged from the contract, is made under a decree of the court, directing it to be offered for sale both subject to and free from the contract, the contractor is entitled to compensation and reimbursement as aforesaid out of the assets of the company, although he afterwards purchases the corporate property and obtains the benefit of such improve
ments. 4. When a contract is broken, it is the
duty of the injured party to minimize the loss and injury, when it is practicable to do so, by a reasonable outlay of money ;
but such outlay is to be allowed him as a part
of his damages.
under bis contract for cutting logs
this series, to wit, the note on Recovery for | receive compensation therefor if that other puts services on contract interrupted by sickness or an end to the performance either before it bedeath, appended to the case of Parker v. Ma- gins or while it is in progress, the first party, comber, 16 L. R. A. 858, and the note on Effect though able and willing to proceed, cannot reon contract of the death of a party thereto, ap- cover the stipulated compensation, but only pended to the case of Drummond v. Crane, 23 damages for a breach of the contract; and such L. R. A. 707.
damages will, in general, consist of his outlay In addition to these notes, the reader also already incurred and the profits he would have should consult the note to Lenoir v. Linville realized had he been permitted to finish the Improv. Co. 51 L. R. A. 146, on Effect of the work; or, in case the compensation is divisible, appointment of a receiver or an assignee for he may recover for the work already performed, creditors of a corporation on the compensation and damages for being prevented from completof officers, agents, or employees for unexpired ing his contract. Hambly v. Delaware, M. & v. term of employment, to which this note is, in R. Co. 21 Fed, 541. a sense, supplementary.
It is a misapprehension of law to suppose
that the death of one of the contracting parties II. Breaches of contracts in general. puts an end to a contract in course of perform
ance. For a breach after, as well as before, the if a survey of the decisions as to what in death of such party, his estate will be liable general constitutes a breach of contract calling to respond in damages. Smith v. Wilmington for the performance of services with incidental Coal Min. & Mfg. Co. 83 Ill. 498. expenditure on the part of the employing party, Generally speaking, contracts bind executors ignoring the circumstance that such employer and administrators, though not named. Where, was a corporation and the contract came to an however, personal considerations are of the end by its insolvency and civil death, be made, foundation of a contract, as in cases of printhe following citations will exemplify the cur- cipal and agent, master and servant, the death rent of the authorities, and disclose the under- of either party puts an end to the relation, and, lying principles which prevail.
in respect of service after death, the contract It is familiar law that "if, at the time of is dissolved, unless there is a stipulation to the making the contract, the thing promised be contrary. Farrow v. Wilson, L. R. 4 C. P. possible in itself, it is no excuse for nonper
744. formance that its performance became subse- It is the general rule that death does not quently impossible from causes beyond the con- absolve one from his contracts; but an exceptrol of the promisor." Southern Bldg. & L. tion to this rule is that, when performance of Asso. v. Price, 88 Md. 155, 42 L. R. A. 206, a contract depends upon the continued exist. 41 Atl. 53.
ence of a person or thing, if such person or Where the obligation of a contractor requires thing perish before the contract is performed, an expenditure of a large sum in preparation to the impossibility of performance terminates the enable him to perform his contract, and a con- contract. Yerrington v. Greene, 7 R. I. 589, 84 tinuous readiness to perform it, the law implies Am. Dec. 578. a duty in the other party to do whatever is nec- Where a contract creates between the paressary to enable him to comply with his prom- ties to it merely a personal relation, the death ise or covenant. United States v. Speed, 8 Wall. of either party dissolves that relation. Howe 77, 19 L. ed. 449.
Sewing Macb. Co. v. Rosensteel, 24 Fed. 583. If a construction contract requires payments When the performance of a contract depends to be made on account from time to time as upon the continued existence of a person or the work progresses, and such payments are not thing, and such continued existence is assumed made, the contractor is justified in stopping as the basis of the agreement, the death of the work, and may recover for what he has done. person, or destruction of the thing, terminates Stringtown & B. Turnp. Road Co. v. Riley, 8 the obligation. People v. O'Brien, 111 N. Y. Ky. L. Rep. 267.
1, 2 L. R. A. 266, 7 Am. St. Rep. 684, 18 N. E. Where one agrees to perform a service or 692 ; Lorillard v. Clyde, 142 N. Y. 456, 24 L. R. work for another, which necessarily requires A. 113, 37 N. E. 489. time and progress in its performance, and is to Death, or a disability which renders perform
the amount necessary to compensate him for had been annulled by the court. Modified his services and outlay, when he has been and affirmed. prevented from completing his contract, to
The case sufficiently appears in the opincharge up his entire outlay on all the work
ion. done, and credit all sums received on account thereof, when it is shown that all the work Messrs. C. W. Dailey, Taylor Morwas profitable so far as executed, and that rison, Benjamin A. Richmond, P. J. the accounts cannot be separated.
Crogan, W. E Maxwell, and L. D.
Strader for appellants. (Dent, J., dissents.)
Messrs. Hubbard & Hubbard, A. G.
Dayton, Ira F. Robinson, and William (April 1, 1904.)
C. Clayton for appellees.
Thompson from a decree of the Circuit of the court: Court for Tucker County overruling excep This is a somewhat complicated and a tions to a commissioner's report settling the hotly contested case, which has been in this amounts which should be allowed under a court on a former appeal. As then passed contract of the defendant corporation, which upon it is reported in 46 W. Va. 56, 33 S. ance impossible, discharges a contract to capi-, of such contract, so as to justify the other talize an enterprise and look to it for reim party thereto in treating it as at an end with. bursement when the capitalist is to manage the out an attempt to put the contractor in default undertaking, since it involves his personal serv by performing on its part. New England Iron ice and skill. Marvel v. Phillips, 162 Mass. 399, Co. v. Gilbert Elev. R. Co. 91 N. Y. 153. 26 L. R. A. 416, 44 Am. St. Rep. 370, 38 X. E. A contract with an author to write a book 1117.
for publication in a particular series of works Contracts for personal services must be treat- issued periodically by the publishers is not ed as entire, and not divisible; hence, there can abrogated by the abandonment of the series bebe but one breach and one recovery upon de-fore the work is completed, when the author is fault, no matter if the wages are payable by in: able and willing to perform. Planché v. Colstalments or at stated periods. Barnes Bros. burn, 5 Car. & P. 38, 8 Bing. 14. v. Black Diamond Coal Co. 101 Tenn. 354, 7 S. W. 498.
III. The measure of damages in such cases. A servant wrongfully dismissed in the middle of his term may either treat his contract of It is frequently difficult, in administering the employment as rescinded and bring indebitat's law, to apply a proper rule of damages, and the assumpsit, or he may sue on the contract; but decisions upon the subject are not harmonious. he cannot do both. Goodman v. Pocock, 15 Q. The cardinal rule undoubtedly is that the one B. 576.
party shall recover all the damages which have One employed by a mercantile firm for a year been occasioned by the breach of the contract upon a fixed salary, and whose employment is by the other party. But this rule is modified terminated within the year by the insolvency by two others : The damages must flow directly and bankruptcy of his employers, is entitled to and naturally from the breach, and they must prove his claim for damages against the estate be certain both in their nature and in respect in bankruptcy, and to participate in the dis of the cause from which they proceed. Specutribution thereof, for his right of action is im- lative, contingent, and remote damages, not mediate upon the breach of his contract, and directly traceable to the breach, are excluded, -the bankruptcy is no defense. Re Silverman, damages only are allowed which the parties 101 Fed. 219.
are fairly supposed to have contemplated on For admission to proof in bankruptcy a claim contracting as naturally flowing from its violanecd not arise before the adjudication, nor need tion. Rochester Lantern Co. v. Stiles & P. the coutract upon which it arises be broken be Press Co. 135 N. Y. 209, 31 N. E. 1018. fore the bankruptcy; it is sufficient that the The safest rule of damage, and the one supbreach and the bankruptcy be coincident. To ported by the general current of authorities, in some extent, bankruptcy operates as a breach cases where a contractor is prevented by the of the bankrupt's contracts. Bankruptcy may acts of the other party from performing his be treated as a breach of the bankrupt's con contract, is the difference between the cost of tracts analogous to a complete repudiation of doing tire work and what the contractor was to a contract before the time to perform arises, receive for it, making reasonable deduction for or to a complete disabiement from performing the less time engaged, and for release from the the contract. The test of provability is this:
care, trouble, risk, and responsibility attending If the bankrupt at the time of his bankruptcy,
a full execution of the contract. United States by disabling himself from performing the con
v. Speed, 8 Wall. 77, 19 L. ed. 449. tract, or by repudiating its obligation, could
But this rule is but one aspect of a more gen. give the other party the right to sue at once eral one. The primary measure of damages is for damages, to be assessed either at law or in the amount of the contractor's loss, and that equity, then such other party may prove his loss falls under two heads,-actual outlay and damages in bankruptcy on the ground that the anticipated profits. United States v. Behan, bankruptcy is equivalent to disablement and 110 U. S. 338, 28 L. ed. 168, 4 Sup. Ct. Rep. 81. repudiation. Re Pettingill, 137 Fed. 143.
Where a contractor injured by the oppage An assignment by an insolvent contractor to of a contract elects to rescind it, he can retrustees for creditors of all his effects, includ- I cover only the value of his services actually ing the contract, is not per se an abandonment performed as upon a quantum meruit, not dam
E. 125, where the nature of the controversy statement of such expenditures under the and the history of the transactions out of contract until the entry of the decree of Auwhich it arose are substantially set forth. gust 4, 1893, showing allowances to him for It was impossible there, as it is here, to his time, labor, and all sums paid by him give in detail, or even enumerate, all that for the time and labor of others, and exis contained in the old record of more than pended by him in equipment and material 700 pages, to which nearly 300 pages have necessary to carry out such contracts, all since been added.
sums paid for cutting, hauling, skidding, After the case was remanded to the cir- and driving logs, timber, and tanbark, all cuit court for further proceedings accord reasonable sums paid subcontractors by reaing to the principles announced by this coạrt son of the obligation of their contract, and upon the former appeal, it was referred to all other items reasonably and necessarily a commissioner with directions to report, paid by him in part performance of the confirst, what would be a just and reasonable tract, allowing him interest upon the sums compensation to Albert Thompson for labor so expended, and crediting said account with and money necessarily expended in part per. all sums paid to him by said company or formance of his contract; second, upon the its receiver, or realized from the sale of any request of any interested party, to make a materials or equipments; and, third, the
ages for a breach of the contract either for jury must, therefore, ascertain what it would outlay or loss of profits; but, when he elects probably have cost them to complete the con.' to go for damages for the breach of the con- tract over and above the materials on hand ; intract, the first and most obvious damage to be cluding the value of the marble required, the shown is the amount which he has expended on labor of quarrying and preparing it for use, the faith of the contract, including a fair al- the expense of transportation, superintendence, lowance for his own time and services. If he and insurance against all hazards, with every chooses to go further, he may claim for the other expense incident to the fulfilment of the loss of anticipated profits, subject to the rules undertaking. The aggregate of these expendi. of law as to the character of the profits which tures is to be deducted from the amount which may be thus claimed. Ibid.
would be payable for the performance of this The general rule is well settled that a party | part of the contract according to the prices to a contract where labor is to be performed, therein stipulated, and the balance will be the upon the breach of that contract by the other damages which the jury should allow. Masterparty, has two remedies open to him. He may ton v. Brooklyn, 7 Hill, 61, 42 Am. Dec. 38. sue upon the contract and recover damages for The rule which precludes the allowance of its breach, or he may ignore the contract and profits by way of damages for the breach of an sue for labor and services rendered and ex- executory contract is not a primary rule, but a penses incurred from which he has derived no deduction from the more general and fundabenefit. Hemminger v. Western Assur. Co. 95 mental rule which requires damages in all cases Mich. 355, 54 N. W. 949.
to be shown by clear and satisfactory evidence When by the act of the other party one who to have been actually sustained. By the comhas contracted to cut, haul, and deliver logs is mon law damages for a breach of contract must prevented from proceeding with his contract, be proved to a certainty, not left to speculation the rule of damages for the breach is to ascer- or conjecture; and this excludes anticipated tain the profits he would have earned had he profits, although there is nothing in their gone on and completed his contract. If, how- nature which per se prevents their allowance. ever, this rule cannot be applied from the pe- Profits which would certainly have been realized culiar nature of the contract, as, for instance, but for the breach are recoverable ; those which where a fixed time for its continuance is not are contingent or speculative are not. Griffin v. agreed upon, nor is a definite quantity of logs Colver, 16 N. Y. 489, 69 Am. Dec. 718. to be delivered under it, a different rule of dam- A plaintiff is entitled to recover the expenses age applies. In such a case preparatory work, incurred by him in preparing to perform a condone as a necessary preliminary to the perform- tract which without his fault the defendant has ance of the contract, may be allowed for to the put an end to, where the expected profits under extent of its reasonable cost. Brent v. Parker, the contract are too speculative to admit of 23 Fla. 200, 1 So. 780.
clear and direct proof. O'Connell y. Rosso, 56 In what was pronounced a leading case upon Ark. 603, 20 S. W. 531. the subject of damages for breach of contract The general rule in regard to damages which by preventing performance (Vide, United States may be recovered for a breach of a contract is • v. Speed, 8 Wall. 77, 19 L. ed. 449; United that remote or consequential damages are not
States v. Behan, 110 U. S. 338, 28 L. ed. 168, allowed if not traceable solely to the breach, 4 Sup. Ct. Rep. 81) Beardsley, J., stated the or if incapable of exact computation ; but any rule of damage in the case of a construction necessary expense which one of the contractors contract where the defendants stopped the work incurs in complying with the contract is rein the midst of its performance from lack of coverable. Bryan v. Southwestern R. Co. 41 funds to pay. I think, he says, the plaintiffs are
Ga. 71. entitled to recover the amount they would have
Where two parties lawfully contract upon realized bad they been allowed fully to execute good consideration, and one is ready and willtheir contract. The defendants are not to gain ing, and makes preparation, to perform on his by their wrongful act, nor is that to deprive part, but is prevented from so doing by the the plaintiffs of the advantages they had se- other, he can recover all damages sustained in cured by the contract, and which would have consequence of that other's default, including resulted to them from its performance. The his necessary expenses in making preparation.
amount due Thompson for work and labor sales of property used by him in the perperformed and money expended in the pros- formance of said work as equipments, such ecution of the contract under the direction as horses, wagons, locomotives, cars, steel of the receiver until June 23, 1893, when the rails, etc. Upon exceptions sustained by work was suspended by order of the court, the court, the amount so found was reduced and the amount due him for expenditures, to $84,794.91 and a decree entered therefor. work, and labor from the 23d day of June, Of this amount, about $48,000 is principal. 1893, until the 4th day of August, 1893, and the balance interest. Numerous excep when the sale of the property of the Black. tions to the report, urged in the court water Boom & Lumber Company was con below and overruled, are insisted upon here, firmed.
and there is much difference of opinion as to The commissioner reported that there was the true interpretation of the former decidue Thompson as of the 12th day of June, sion of this court. For the appellants it is 1901, $85,642.02, returning with his report insisted that, under the principles so ana full statement of all sums paid out and nounced, the item of $14,749.34, mentioned expended by Thompson in the prosecution of in the opinion at page 65 of 46 W. Va., said work, and all sums paid to him on ac- page 128, 33 S. E., which, without interest, count thereof, as well as the proceeds of the ' was originally $12,399.63, for work done on
Kenwood Bridge Co. v. Dunderdale, 50 III. App. | recovery reduced from the contract price by 581.
the damages sustained by the employer in conWhere loss of profits cannot be proved, the sequence of his inability to complete the full plaintiff in an action upon the breach of a con- term of service. This rule, he says, is equitable, tract is entitled to recover the expenses and and should be applied in such cases. The outlay he incurred in preparing to perform on servant is not to be regarded as violating his his part. Athletic Baseball Asso. V. St. Louis contract because sickness or death prevents his Sportsman's Park & Club Asso. 67 Mo. App. | fulfilling it. His failure is his misfortune, not 653.
his fault. The employer should neither gain por One who contracts with another to furnish lose by it. The rule is just to both. It needs no materials and build therewith a structure at a vindication, for it is so well grounded in good stipulated price, and who is prevented from sense as to commend itself. It is a common. completing his work by the acts of the other, sense rule, and common sense is the basis of all is entitled to recover, inter alia items of dam- just law. Clark v. Gilbert, 26 N. Y. 279, 84 age, the expense of preparing such materials Am. Dec. 189. for their destined places in the structure. If the performance of a building contract be Shulte v. Hennessy, 40 Iowa, 352.
suspended by the financial embarrassment of Where anticipated profits are too speculative the owner, and not afterwards resumed, the and uncertain to be shown by competent proof, contractor may recover, among other items of he who is entitled to recover for the breach of damage, the expense he has incurred in making a contract to furnish an ample supply of articles necessary to enable him to perform his natural gas wherewith to run his enterprise is contract. O'Connell v. Main & T. Streets Hotel entitled to recover his expenses in attempting Co. 90 Cal. 515, 27 Pac. 273. to run it and the rental value, or, in lieu there- A contractor for the construction of a road, of, the interest on the cost of his plant. Paola
whose contract entitles him to payment in inGas Co. v. Paola Glass Co. 56 Kan. 614, 54 Am.
staiments from time to time as his work proSt. Rep. 598, 44 Pac. 621.
gresses, is justified, upon default in paying the Where one contracts with a railroad to pro- instalments, in stopping further work, and has vide a water supply at a designated station at a right to recover in quantum meruit for the a stipulated monthly compensation, he under- work he has performed. Porter v. Arrowhead taking to build and maintain a tank and appa
Reservoir Co. 100 Cal. 500, 35 Pac. 146. ratus for the purpose, upon a breach of the contract by the railroad by abandoning its station IV. How corporations are dissolved. at that point, he may recover as damages the difference between the cost of such tank and A corporation may go out of existence in one apparatus and their actual value after the de- of four ways: (1) By expiration of its term of parture of the road, if he retains the property, life as limited in its charter ; (2) by act of the or the difference between such cost and the legislature repealing or annulling its charter : sum realized, if he sells for the best obtainable (3) by the judgment or decree of a court of price. New Orleans, J. & G. N. R. Co. v. Echols, competent jurisdiction dissolving it for non54 Miss. 264.
user or misuse of its franchise, or because or" When, by the terms of a contract for work some act or omission working a forfeiture; and aud labor, the full price is not to be paid until (4) by voluntary surrender of its charter. the completion of the work, and that becomes When the time limited by the charter of a impossible by the act of the law, the con- corporation expires the corporation is dead de tractor is entitled to recover for the amount facto, and no judicial determination of the fact of his labor. Jones v. Judd, 4 N. Y. 411, Ap- is needful; the dissolution in such a case is proved in Wolfe v. Howes, 20 N. Y. 197, 75 Am. declared by the act of the legislature itself. Dec. 388.
Sturges V. Vanderbilt, 73 N. Y. 384. Referring to the case of a person who has It is a well-settled principle that a dissolucontracted to labor for a definite term and is tion by forfeiture is effected only by judicial prevented by sickness from fulfilling his con- proceedings against the corporation, taken for tract, Balcon, J., of the New York court of ar- the purpose, followed by a hearing, or an oppeals, says : He should have the amount of his portunity to be heard, and a judgment rendered
logs cut by Thompson, but not delivered so, sion the court said: “Having partly exeas to entitle him to demand payment there. cuted his contracts, Albert Thompson is enfor at the time the decree of sale was en- titled to recover a just and reasonable comtered, is the only sum that can now be al- pensation for the necessary expenditure of lowed him.
labor and money under his stocking conCounsel for the appellee say this court tract, less the sums paid him; but he is regarded and treated the contract as hav- not entitled to recover the large profits ing been rescinded, and declared it to be so, claimed by him. As the sum of $14,749.34 and ordered that Thompson be put in statu is an alleged part of such expenditure, it quo,-reimbursed for all his outlay, and should not have been decreed until the true made whole. The court say, in the opin- amount thereof had been ascertained and ion:
“A partly executed executory con determined. This amount, when ascertained tract could be avoided before its final exe- and determined by reason of the adoption cution, but the executing party thereto of the stocking contract by the receiver, should be placed in statu quo, in absence of under direction of the court, and thereby fraud, by compensation in the nature of a preventing Albert Thompson from perfectquantum meruit for money and labor ex- ing his statutory lien therefor, under § 8, pended under such contract.” In conclu- Ichap. 75, Code , will be a prior lien thereon. National Pahquioque Bank v. First and franchises of a corporation by consent and Nat. Bank, 36 Conn. 325, 4 Am. Rep. 80. authority of the legislature, and the subsequent
In cases of dissolution of a corporation as a foreclosure of such mortgage, and sale of the consequence of insolvency, nonuser, misuser, or mortgaged property and franchise, work a dissome other cause of forfeiture of the corporate solution of the corporation. Combes v. Keyes franchises, it is well settled that dissolution (Combes v. Milwaukee & M. R. Co.) 89 Wis. does not take effect until judicially decreed. 297, 27 L. R. A. 369, 46 Am. St. Rep. 839, 62 Sturges v. Vanderbilt, 73 N. Y. 384.
N. W. 89. In the absence of a governing statute a cor- A transfer by a corporation, although it is poration aggregate, chartered for an unlimited not shown to be insolvent, of all its property, time, may, by the concurrent consent of the which suspends and terminates the regular state which created it and its stockholders, be business of the grantor, and is made and acdissolved. Revere v. Boston Copper Co. 15 Pick. cepted with that purpose and intention, has the 331.
practical effect to dissolve such corporation, A company not incorporated for any de- and subject it to a forfeiture of its charter at terminate time, and in its nature perpetual, the instance of the state, since it voluntarily cannot dissolve itself, and terminate its own strips itself of all its property and assets, and existence at its own will, by a bare notice to becomes incapable, and intends to be and stay the executive department of the state which unable, to perform its corporate duties. Cole v. chartered it. Ibid.
Millerton Iron Co. 133 N. Y. 164, 28 Am. St. A corporation does not cease to exist until its Rep. 615, 30 N. E. 847. dissolution is effected in a manner provided by When the charter of a corporation gives its law. Taylor v. Holmes, 14 Fed. 498.
cerditors a direct action against its stockholdA corporation may surrender its charter to ers, but only after its dissolution, the courts the sovereign power, but there must be some will treat such dissolution as effected so as to definite act of surrender and an acceptance by give a creditor his remedy against a shareholder the sovereign. Mere nonuser of its powers is if the stockholders have done all in their power no surrender of them, nor does it warrant a to dissolve the corporation. Slee v. Bloom, 19 court in presuming an abandonment of its fran- Johns. 475, 10 Am. Dec. 273. chise. Ibid.
After a corporation has been stripped of all The adoption by stockholders of a resolution its property, and for a quarter of a century has that the corporation be dissolved does not failed to exercise any corporate franchise, elect terminate the corporate existence. New York any officers, or maintain any office, a surrender Marbled Iron Works v. Smith, 4 Duer, 362. of its franchise will be presumed. Combes v.
To effect the dissolution of a corporation by Keyes (Combes v. Milwaukee & M, R. Co.) 89 resolution of stockholders, either the state must Wis. 297, 27 L. R. A. 369, 46 Am. St. Rep. 839, accept a surrender of the charter, or else a 62 N. W. 89, Citing Brandon Iron Co. v. Gleacourt must decree dissolution. Ibid.
son, 24 Vt. 228. A corporation may dissolve itself and end its corporate existence by voluntarily surrender- V. When dissolution is not effected. ing its franchise to the state, but the state must accept to complete the dissolution. Combes The only modes known to the common law of v. Keyes (Combes v. Milwaukee & M. R. Co.) dissolving a corporation were, by the death of 89 Wis. 297, 27 L. R. A. 369, 46 Am. St. Rep. all its meinbers; by the act of the legislature ; 839, 62 N. W. 89.
by a surrender of the charter accepted by the The dissolution of a corporation is not volun- government; or by a forfeiture of the franchise, tary when, becoming embarrassed and unable which could only take place upon a judgment to continue business, its creditors force a re- of a competent tribunal in a proceeding in be. ceivership, and the corporate assets turn out to half of the state. Neither a court of law, nor be insufficient to meet its liabilities, merely be- a court of equity, had jurisdiction to decree the cause its officers consent to such dissolution. forfeiture of a corporate charter, or the dissoGriffith v. Blackwater Boom & Lumber Co. 46 lution of a corporation at the suit of an inW. Va. 56, 33 S. E. 125.
dividual. Folger v. Columbian Ins. Co. 99 Mass. The mortgaging of all the property, assets,' 267, 96 Am. Dec. 747.