124 Va. 490 | Va. | 1919
delivered the opinion of the court.
This writ of error calls in question a judgment of the Hustings Court of the city of Petersburg sustaining a demurrer to a declaration in an action of assumpsit, wherein the Atlantic Coast Realty Company was plaintiff and J. M. Townsend, executor of Wirt Robertson, deceased, was defendant.
The allegations of the declaration were as follows:
That the plaintiff had for many years been engaged in the business of selling tracts of land for customers by first improving, developing and sub-dividing the lands into building lots and small acreage parcels, so as to make the same more valuable and salable; that such sales were made by it both at public auction and private sale, and upon contracts with the owners for the exclusive right to sell, and, for compensation to be measured either by commissions or a fixed
The declaration then states that sale by Robertson referred to in the latter part of the foregoing quotation was a sale of the entire property to Chas.,S. Barrow for the sum of $80,000; and concludes thus: “and the plaintiff says that the said Wirt Robertson and the said G. Morton Townsend, his executor, have hitherto neglected and refused, and still do neglect and refuse, to pay to the said plaintiff its part of the profits which might, should and would have been derived from the sale of the said ‘Baker Property/ had the said plaintiff been permitted to improve, subdivide and sell the same in accordance with the terms of the contract above mentioned; * *”
The statute here invoked, familiarly known as the statute of frauds, provides that no action shall be brought “upon any contract for the sale of real estate, or for the lease thereof for more than a year, unless the * * * contract, * * * or some memorandum or note thereof, be in writing and signed by the party to be charged thereby, or his agent.”
The leading contention of the defendant, and the chief ground upon which the lower court sustained the demurrer, is that the contract as alleged constituted a partnership between the parties, and thus made the transaction one whereby the plaintiff, instead of becoming merely an agent to sell land for the defendant, became interested as a principal—a joint owner—with the defendant in the real estate to be sold. In no other way, of course, could it be plausibly said that the contract was one “for the sale of real estate” within the meaning of the statute.
To sustain this position, the case of Burgwyn v. Jones, 113
In the case at bar, on the other hand, the plaintiff alleges a contract of agency, claims no interest in the corpus of the property, and would clearly be entitled to none, if it did make such claim. If its contract, as it alleges it, had been in writing, no circumstances could have arisen under which it could have made any valid claim to an interest in the real estate itself. It simply bought, for an agreed consideration, the exclusive right of sale for one year, thereby acquiring “a pecuniary interest in the sale” (not in the property) for that period. If it had failed to make the sale within that time, it would have received what it bought, and the contract would have been at an end.
made to assume the relation of partners, as between themselves, when their purpose is that no partnership shall exist. There is no reason why they may not enter into an agreement whereby one of them shall participate in the profits arising from the management of particular property without becoming a partner with the others, or without his acquiring an interest in the property itself, so as to effect a change of title.”
In Jackson v. Haynie’s Admr., 106 Va. 365, 56 S. E. 148, this court in discussing the constituent elements of a partnership, said: “The principles of the law of partnership lead to the conclusion that if a trader makes an arrangement in regard to a commercial business with another, by reason of which that other becomes interested as owner in the resulting profits, while they are undivided and remain as profits, the two are partners; the general rule being that to constitute a partnership there' must be a community of interests inter sese, and that the parties should share the profits and losses. It is, however, far from being universally true that a mere participation in the profits constitutes the party a partner. At most it is true only sub modo. The same principle that leads to the general rule mentioned leads directly to the other conclusion, that a
“In the case at bar the weight of the evidence shows that no partnership was intended by the parties, nor did one result from the verbal understanding between them. It sufficiently appears that the appellee’s intestate was employed by the appellant to take charge of his mill as miller, and for his services in that behalf the deceased was to receive one-third of the profits. This interest in the profits, ■to which Haynie became entitled when they were ready to
An action on the contract here involved was first brought in the District Court of the United States for the Western District of Virginia; and, as alleged there, it was the same as stated in the declaration in this case, except that no time was specified for the duration of the agency. The defendant demurred upon the sole ground that the contract was not in writing. The district court sustained the demurrer, basing its judgment upon Burgwyn v. Jones, supra. Upon appeal to the United States Circuit Court of Appeals, that judgment was reversed, in an opinion by Judge Pritchard, concurred in by Judges Knapp and Woods. See Atlantic Coast Realty Co. v. Robertson, 240 Fed. 872, 153 C. C. A. 298. After the cause had been remanded to the district court for trial, the plaintiff asked leave to amend the declaration by inserting an averment that the sále was to be made within twelve months from the date of the contract. This leave was denied, and the plaintiff thereupon suffered a non-suit, and instituted this action in the hustings court. Upon the branch of the demurrer now under consideration, the case, as passed upon by the Circuit Court of Appeals, was identical with this one. That court, in the course of a very satisfactory opinion, said: “Thus it will be seen that the Burgwyn Case, supra, is not analogous to the case at bar. There the sole purpose of the suit was to ascertain the interest in the tract of land growing out of the partnership between the parties. Also, there was nothing in that case upon which plaintiff could reasonably contend that the agency had been established.
$ ¡K $ $ * * ¡Ü
■ “For the reasons stated, we are impelled to the conclusion that the contract, as set forth in the complaint, constitutes an agency rather than a partnership, and it neces
The first ground of the demurrer is not, in our opinion, well taken.
The learned judge of the hustings court, basing his decision solely on the first ground of demurrer, as appears from the written opinion filed with the record, made only a casual reference to the second, evidently leaning to the view, however, that the latter could not be maintained. His comment thereon was: “Of course Robertson had the power to revoke, but it is questionable, if the contract were a valid one, whether he had the right.”
No question as to rights of third persons is here involved; and there is no claim that the agency was, in a technical sense, coupled with an interest. Under the facts as alleged in the declaration, it is not denied, and it is clear, that the defendant not only had the power to revoke, but did in fact effectually revoke the agent’s authority by making, on his own behalf and independent of the agency, a sale of the subject matter of the contract. In 2 C. J., 554, it is said: “An agency is effectually revoked when the principal disposes of his interest in the subject matter of the agency in a manner inconsistent with the authority conferred, as by assignment, conveyance, contract of sale, or otherwise.” This is a familiar and settled proposition of the law of agency; but it by no means follows that such a revocation can be made by the principal as a matter of right and without liability to his agent. The latter question depends upon the character and terms of the agent’s contract. Quoting again from 2 C. J., at page 533, the following general and comprehensive statement is peculiarly
The case of Perrow v. Rixey, 119 Va. 192, 89 S. E. 101, is relied upon as sustaining the claim that the agency in the case at bar was revocable. That was a case in which the authority to sell was given by Rixey to Perrow in writing and to the following effect: “I hereby agree to sell that portion of my ‘Richlands’ farm to the west of the fence * * to any purchaser brought to me by B. F. Perrow, provided that said land nets me .$25.00 per acre cash, and provided further, that said sale is consummated within thirty days from date.” Before the thirty days expired, but also before the agent produced a purchaser, this authority was revoked, and the agent brought suit to recover commissions on the ground that he had produced a purchaser
It is true that in the Perrow Case there was in the paper conferring the power a time fixed within which it was to be exercised; and also true that this court quoted with approval the following language from the case of Brown v. Pforr, 38 Cal. 550: “We are unable to perceive how, under any circumstances, a mere limit as to the time allowed for the performance of a contract by agency to sell land can be construed into an agreement on the part of the principal not to revoke the power.” This court was then dealing with a power not supported by a valuable consideration. It was, indeed, the case of a mere offer of a contract not consummated by a legal acceptance before the revocation was declared. (See 2 Mechem on Agency, sec. 2446, cited below). All judicial opinions must be interpreted in the light of the particular facts to which they are applied; and the decision in the Perrow Case does not hold that a contract of agency, carrying the exclusive right to sell real estate, for a definite time, and based upon a valuable consideration, is revocable without liability on the principal. The three elements of (1) exclusive right of sale, (2) definite time limit, and (3) valuable consideration,
But again, on the same page, the author says: “If what the negotiations amount to is a contract of employment for the fixed period, or a binding contract that a commission will be paid if a purchaser is found within that time, the broker will usually be entitled to damages in the first case, and, usually, to the amount of his commissions in the second, if he finds a purchaser within that period, although the principal may, in the meantime, have sold the property or withdrawn it from sale.” (See p. 2039, sec. 2446).
And again, after showing that a mere offer for a fixed time does not become binding on the principal until the agent has accepted it by producing a purchaser (because “until so accepted there is no contract, the broker has promised nothing * * * he may perform or not as he pleases”), the author says: “But, as has already been seen, there may easily be cases in which the principal has so invited the broker to enter upon an undertaking requiring
The plaintiff bought from the defendant’s decedent the exclusive right to sell the property, for a period of one. year. The sole purpose of the contract was the acquisition of a profit. While there is more or less uncertainty and confusion in the aüthorities upon the general subject of profits as an element of damages in suits for breach of contract, it is safe to say that when contemplated profits constitute the sole purpose and object of the contract, and the plaintiff alleges a breach and a consequent loss of profits, he has stated a prima facie case, and is entitled to recover such amount as he can prove, with reasonable certainty, he would have made but for the breach. Of course, this general statement of the law is subject to the general qualification that if the declaration should allege such a state of facts as would enable the court to say that no profits at all could be proved, a demurrer would end the case. But when the profits claimed may reasonably, or, as in this case, must necessarily, be presumed to have been within the intent and mutual contemplation of the parties when the contract was made, the mere fact that the exact amount-cannot be calculated with mathematical certainty does not preclude a recovery. In such cases, as said in 1 Sutherland on Damages (3d ed.), sec. 60, “the injured party is entitled to gains prevented and losses sustained if he can prove them with sufficient certainty.” To the same effect
In United States v. Behan, 110 U. S. 338, 4 Sup. Ct. 81, 28 L. Ed. 168, the Supreme Court said: “The prima facie measure of damages for the breach of a contract is the amount of the loss which the injured party has sustained thereby. If the breach consists in preventing the performance of the contract, 'without the fault of the other party, who is willing to perform it, the loss of the latter will consist of two distinct items or grounds of damages, namely: first, what he has already expended towards performance (less the value of materials on hand); secondly, the profits that he would, realize by performing the whole contract. The second item, profits, cannot always be recovered. They may be too remote and speculative in their character, and therefore incapable of that clear and direct proof which the law requires. But when, in the language of Chief Justice Nelson, in the case of Masterton v. Mayor of Brooklyn, 7 Hill [N. Y.] 69, [42 Am. Dec. 38], they are ‘the direct and immediate fruits of the contract/ they are free from this objection; they are then ‘part and parcel of the contract itself, entering into and constituting a portion of its very elements; something1 stipulated for, the right to the enjoyment of which is just as clear and plain as to the fulfilment of any other stipulation’.”
The plaintiff is suing for the loss of profits which he alleges he would have realized if there had been no breach of the contract. Such profits having been the purpose of the contract, and mutually contemplated by the parties, and the circumstances alleged tending clearly to show that the same to some extent would have been realized, he is entitled to go to the jury with his case, and to recover such amount as his proof will establish with reasonable certainty.
The case chiefly relied upon to sustain this branch of the demurrer is Whitehead v. Cape Henry Syndicate, 111 Va. 193 (68 S. E. 263). In that case the gist of the decision is stated thus in the syllabus: “Pound fishing in which a party has been engaged only one month is a new' business, and the profits to be derived therefrom depend not only upon the future bargains and states of the market, but upon other contingencies, such as the run of the fish and the kind and quantity caught. Such profits are dependent upon too many contingencies and are too uncertain to furnish a sáfe guide in fixing the measure of damages for an injury to, or destruction of, such business, and hence cannot be recovered.”
The instant case might fall within the reason and influence of the case cited but for these distinguishing features: (1) The commodity dealt with in the former was a certain tract of land, while in the latter it was an uncertain supply of fish to be caught; (2) Whitehead’s business had only been
We are of opinion that the demurrer should have been overruled; and this court will enter an order to that effect, and remand the cause for further proceedings.
Reversed.