Alexander Hamilton Institute v. Hart

180 Wis. 90 | Wis. | 1923

Doerfler, J.

Does the evidence in the case show a mutual rescission of an executory contract? The jury found that the twenty-four text-books had been returned by the defendant and that they were accepted by the plaintiff, and the judgment in part is based upon the theory that such finding of the jury is conclusive, under the evidence in the case, to support a mutual rescission. An executory contract in writing may be rescinded by an oral contract and such rescission may be by express agreement of the parties or may be inferred from the acts of the parties. 6 Ruling Case Law, p. 922, § 306. If the text-books were returned to the plaintiff in an effort on the part of the defendant to rescind the contract, and .if the intention of the defendant to rescind was made plain to the plaintiff, and if the plaintiff either expressly accepted such books and the offer of rescission, or so conducted itself as to be inconsistent with a continuation of the contract, or was guilty of acts or of a failure to act from which it could reasonably be inferred that the books were accepted in accordance- with the defendant’s offer, then a rescission resulted and the original contract was ended. 2 Black, Rescission, secs. 521, 527, 531. Whether or not there is a rescission being generally a question of intent, ordinarily forms an issue for a jury to determine. 2 Black, Rescission, sec. 534. It has also been held that in order to support the cancellation or rescission of a written contract by an oral contract the evidence must be clear, positive, and above suspicion. 6 Ruling Case Law, p. 922, § 306; Falls v. Carpenter, 21 N. C. 237, 28 Am. Dec. 592.

The - contract between the parties was entered into in good faith. In the note under the signature, which under the holding in International Textbook Co. v. Mabbott, 159 Wis. 423, 426, 150 N. W. 429, became a part of the contract, it was expressly provided that the contract is not subject to revocation, and that no reduction or allowance will be made on account of -refusal or inability to enter upon or continue the course. While it is settled by the authorities that such provision will not bar a mutual cancellation, nevertheless the same may be a persuasive force in determining whether or not, under the evidence, such a cancellation was in fact effected. It is conceded by the defendant that early in the month of July, 1920, he had concluded,’for reasons personal to himself, not to carry out this contract, and that he expressly, in a letter to the plaintiff, pleaded for a release from his obligation. To this and other communications of the defendant the plaintiff in a clear and unmistakable manner expressed itself adversely to the granting of defendant’s request in any event, and the defendant was informed that the contract would not be canceled or revoked.

On the 5th day of November, 1920, defendant claims that he -returned the twenty-four text-books to the plaintiff at Jersey City, New Jersey, by express. The express receipt referred to in the statement of facts purports to- have been issued to the Goodrich Rubber Company of Milwaukee, and while such receipt bears evidence-of the consignment of one package of books to Jersey City, New Jersey, there is no evidence in the case that the plaintiff maintained its place of business there or that it ever received or accepted these books. The express receipt, while referring to one package pf books, does not identify the same by title nor as being the same books which under the agreement had been transmitted to the defendant by the plaintiff. Neither is there any evidence in the case that the expressage had been paid.

The defense of rescission was interposed by the defendant and it was incumbent- upon him to establish the same by a clear preponderance of the evidence. There being no evi■dence to establish either the receipt of these books by the plaintiff or the acceptance of the same, such defense must necessarily fall, and we therefore bold tha.t_there-w.as no credible evidence to support the answer, of the jury to the third question of the special verdict.

Was the evidence introduced by the defendant to prove that the course of instruction outlined in the contract with respect to the delivery of lectures by prominent business men of Milwaukee competent, and, if competent, is there any evidence in the case to show that such provision was not complied with? The defendant, when called upon his adverse examination, made it clear that the various branches of service included and set forth in the contract referred to written lectures, directions, and correspondence. The note under the contract, .with which the defendant was familiar, provided that “no modifications or conditions except as herein expressed in writing will be recognized.” Plaintiff conducted what is known as a correspondence school, and the purpose of such school was to give instruction by written or printed communications. Such being the case, and in view of the express provisions of the contract and of the note forming a part thereof and of the defendant’s understanding of what the service consisted, the oral testimony referred to was clearly incompetent and tended to add to, modify, or vary the terms of a written agreement. But assuming, nevertheless, the competency of such evidence, there is no testimony in the case to establish a breach of such alleged oral agreement. Defendant admitted that two or three of the lectures had been delivered in the spring of 1920, and that owing to the warm weather these lectures were discontinued for a time, with the intention of resuming them later. In the letter to the plaintiff written by defendant on October 12, 1920, the defendant stated: “As you may know, employees of the Goodrich branch here met jointly during the spring, but the classes were discontinued during the warm weather, the intention being to resume this fall. Probably this will be done, but I cannot see my way clear to continuing.” Nothing whatever in the evidence tends to show that the defendant discontinued the course of instruction on account of any failure on the part of the plaintiff to furnish the oral lectures. On the contrary, it appears that no objection was made to the failure to deliver lectures during the summer months in the year 1920, and that he understood that the lectures would be resumed in the fall. The refusal on the part of the defendant to carry out his agreement was based upon his alleged inability, for financial reasons, to make further payments. Therefore there is no evidence whatever to support the answers of the jury to the second and fourth questions of the special verdict.

Plaintiff contends that the contract is entire and indivisible and that its measure of damages is the contract price. In International Textbook Co. v. Martin, 82 Neb. 403, 117 N. W. 994, in a similar case, the. court held:

“The contract is entire, and, upon defendant’s refusal to perform and subsequent to the maturity of all the monthly payments, plaintiff ought to recover the consideration defendant agreed to pay it unless defendant can show some facts that reasonably and definitely tend to mitigate plaintiff’s damages. Those facts should be pleaded by defendant and proved by him.”

In 2 Sedgwick, Damages (9th ed.) § 612, it is said:

“The principle upon which these cases rest seems to be that the whole contract price is to be given, because it is impossible to show with the required certainty any pecuniary outlay which the plaintiff has been saved by the breach. The school must continue in session with its entire corps of instructors, although a scholar is withdrawn.”

Similar rulings have been made in every jurisdiction where the question has arisen, as far as we have been able to find, excepting in Michigan.

The organization of a correspondence school and the manner of conducting its business is quite familiar to every one. Enrolments of students are solicited in various parts of the country, and arrangements' for the conduct of the school and the employment of instructors and supervisors are accordingly made. No substantial benefit inures to the school by the dropping out of a student; on the contrary, it results in a financial loss.

The defendant having failed tn show farts that can reasonably and definitely tend to mitigate plaintiff’s damages, the plaintiff is entitled to a recovery of the full amount.

Plaintiff’s counsel contend that “The covenants in the contract are independent, not to be performed within the same period of time, hence failure of one party to perform his covenants cannot be relied upon as a defense by the other.”

The rule is stated in 9 Cyc. 642, as follows:

“In contracts containing executory considerations or mutual promises, that is to say, in which a promise on the one side is given in’ consideration of a. promise on the other, the mere promise, and not the performance of it, constitutes the consideration, strictly so called; and the obligation of the one promise may be quite independent of the performance of the other. . . . Where by the terms of the contract the time to perform the covenant on the one side is to arrive, or may arrive, before the time for- the performance of the covenant on the other side, the former is not dependent on the latter. So where one party contracts to do work, and another to pay a stipulated price for the same, and the labor is capable of a just division and apportionment,. these stipulations will be considered independent, and a full performance not as a condition precedent to any right of action, unless it is expressly so stipulated or is strongly implied.” See also'numerous cases cited in note.

An examination of the contract in the instant case discloses that the defendant agreed to pay a stipulated sum, namely, $136, in consideration of his enrolment as a student in plaintiff’s course of instruction. For the accommodation of the defendant, evidently, the privilege was extended to make these payments in seventeen monthly instalments. The provision which enabled the defendant to pay the total consideration in instalments, however, did not change his obligation with respect to the nature of his covenant, and if it be deemed an independent covenant in the one instance it must also be so deemed in the other. In consideration of the promise of the defendant to pay, the plaintiff enrolled the defendant as one of its students, and, by way of an independent covenant, agreed to furnish the instruction in accordance with the terms of the contract. The perform-anee of defendant’s covenant as to time was extended over a period of seventeen months, while the performance of plaintiff’s covenant included a period of two years. Thus we have clearly established a promise on the one side, given in consideration of a promise on the other, and the mere promise, and not the performance of it, constitutes the consideration.

The other element included in the citation from Cyc., above referred to, which is a distinguishing characteristic of a contract with independent covenants, is also clearly present in the instant case, as is shown by the difference in point of time within which the several promises are to be performed. But as it has already been held by what has heretofore been said that the note under the signature becomes a material part of the contract, a reference thereto clearly stamps this contract as one containing independent covenants, for it provides, among other things, that if any part of the balance remains due and unpaid for sixty days the entire balance becomes immediately due and payable, and that the contract is not subject to revocation, and that no reduction or allowance will be made on account of the refusal or inability on the part of the defendant to complete his course. The provisions of this contract, therefore, bring it under the class of contracts containing independent covenants.

It is not intended by what has been said herein that this would have left the defendant remediless had he pleaded or shown a failure on the part of the plaintiff to carry out its contract, in which event plaintiff’s damages might have, been mitigated or have been reduced by an offset or .countet-claim. Therefore there is no other conclusion to be arrived, at excepting the allowance of plaintiff’s claim.

By the Court. — The judgment of the lower court is reversed, and the cause is remanded with directions to enter judgment for the plaintiff for the sum of $104 and interest, together with the costs and disbursements of the action.