Hall & Spencer v. Stewart

Day, J.

The defendant resides at Council Bluffs, and the plaintiffs at Crestón. During the season of 1878, the defendant had a large quantity of ice in store at Council Bluffs. On the fifteenth day of April, 1878, the plaintiffs and the defendant entered into a written contract, wherein it was agreed that the defendant should fill all orders for ice the plaintiffs might send him, in lots not less than one. car load of ten tons, when accompanied by the money, or bank certificates, or railroad company receipts; the ice to be sold by the first day of November, at the following minimum prices: for ice sold during April and May, five dollars per ton; that sold during June and July, six dollars per ton; and that sold in the following months, seven dollars per ton. The defendant reserved 'the right to fill what orders he might receive in territory not worked by the plaintiffs. The defendant was to be at the expense of loading and packing, and the plaintiffs were to be to all the other expenses of traveling, advertising, telegrams, etc. Stewart was to retain all the money for sales, and when the ice was all sold, was to deduct five dollars per ton and divide the remainder equally between himself and the plaintiffs. The plaintiffs agreed to handle no other ice except a small quantity which they had at Crestón, for retail purposes, and if any of the ice remained unsold on the first day of November, to pay for it at the rate of $5.00 per ton. It was further agreed that on or after the fifteenth day of July, the defendant should have the right to call upon the plaintiffs for bonds, to indemnify him against loss by reason of their failure to perform their part of the contract, and that if they should fail to furnish bonds, which should be satisfactory to the defendant, within ten days after the deposit of notice to them in the office of any telegraph line in Council Bluffs, having a place of business in Crestón, the defendant should have the right to cancel the contract.

On the fifteenth day of July, 1878, the defendant' placed in the telegraph office at Council Bluffs, a dispatch, signed by himself, and addressed to the plaintiffs at Crestón, as follows: “I now demand indemnifying bond as per our contract.” On the 26th day of July, the plaintiffs tendered a bond in the penal sum of $3,000, executed by themselves as principals, and by I. Ingersoll, John Wilson, and A. B. Havens, all of Leavenworth City, Kansas, sureties. On the same day, the defendant, through his attorneys, refused to accept the bond on the ground of insufficiency of the penalty and non-residence of the sureties, and lack of satisfactory evidence of their pecuniary responsibility, and notified both the plaintiffs and their attorneys that defendant considered the contract at an end, and would proceed as though no such contract had ever been made.

1. CONTRACT: conditions: breach of: damages. I. The plaintiffs introduced testimony tending to show that prior to July 26, they procured and sent in orders for ice, which the defendant did not fill, and that ^ie defendant sold ice within the territory worked" by plaintiffs. As pertinent to this testimony, the plaintiffs asked the court to instruct the jury as follows: “ If the jury shall find, from the evidence, that the plaintiffs, after the making and delivery of the contract on April 15th, 1878, between the plaintiffs and defendant for the delivery of ice upon orders originating with the plaintiffs, complied with all the terms and conditions of said contract on their part, if up to and including the fifteenth day of July, 1878, under all the circumstances surrounding the transaction, the plaintiffs had done and performed all that could reasonably háve been required of- them in the execution of the contract, and the jury shall further find that the defendant, prior to said 15th day of July, 1878, in violation of the terms and conditions of said contract, sold and shipped ice by the carload to customers of the plaintiffs, and into territory then being worked by the plaintiffs, then, and thereafter, the defendant had no right to demand bonds of indemnity from the plaintiffs under the terms of said contract. In other words, “one party to a contract cannot complain of a failure to perform by the other, if his own breaches have contributed to defeat the purposes of the contract.”

The refusal to give this instruction, the plaintiffs assign as error. If the defendant violated his contract before the time that he was authorized to call upon the plaintiffs for indemnity, he became thereby liable for the damages which his breach occasioned. The plaintiffs, also, it may be conceded, were thereby exonerated from proceeding further with the contract, and discharged of all liability to damages for a refusal to proceed. But they were not authorized to refuse to go further with the contract, and then recover damages as though they had performed it. They agreed absolutely that in the event of their failure to furnish satisfactory bond upon demand, the contract might be canceled. If they desired to continue the contract in force, and to recover damages for any breaches by the defendant after the 26 th day of July, it was their duty to execute a bond as they agreed, notwithstanding the fact that the defendant may have rendered himself liable for damages for failures occurring before the 15 th day of July. The contract could be continued in force only by executing the bond as agreed. Of course, if the contract should be canceled in strict accordance with its provisions, there could be no further breaches of it.

2. — : breach of bond: liability of surety. II. The plaintiffs assign as error the refusal of the court to instruct, in substance, that the penalty named in the bond not measure nor limit the liability of the plaintiffs, nor their sureties, but that, under the terms and conditions of the bond, the sureties were liable to the defendant for all the damages he might sustain. That this instruction was properly refused, see Sweem v. Steele, 5 Iowa, 352; S. C., 10 Id., 374.

3. — : —: — : right to demand. III. In the second instruction, the court after calling the attention of the jury to the several covenants on the part of the plaintiffs, instructed them as follows: “Now the defendant was entitled to a bond in an amount sufficient to afford him a reasonable security for all damages, which might result to him from a failure by plaintiffs to perform any one, or all of these covenants. Ho also had a right to demand that the bond should be executed by parties, as sureties for the plaintiffs, who were amply responsible, pecuniarily, for the amount of the bond. He also had the right to demand that the sureties should be so situated as that he could pursue his remedy against them, should a right of action accrue upon the bond, without unreasonable trouble, expense, or delay. Tou are, then, to consider, in determining whether defendant rightfully terminated the contract, the amount and character of the property in question, the price at which plaintiffs were to take1 what should "remain unsold at the end of the season, the demand in the market for that kind of property, the penalty of the bond tendered, which is $3,000, the 'pecuniary condition of the parties who signed it, as sureties, the fact that they resided in another State, whether the defendant had any knowledge of them and their conditions, and the like circumstances. And if you believe, from all the circumstances, the defendant, in rejecting the bond, did no more than a man of reasonable prudence and care-, in the conduct of his own business, would have done under like circumstances, it will be your duty to find that the termination of the contract by him was rightful.”

4. PRACTICE : instruction : duty of party. The plaintiffs object, that instead of confining the deliberations of the jury to the circumstances named in this instruction, they should have been told that before defendant could demand a bond, or declare a breach of the contract for the failure to furnish it, the defendant must show that there had been a failure on the part of the plaintiffs either to take orders, or be at the expense of traveling, advertising, or telegraphing, or selling above the minimum price, and that it was reasonably certain there would be a failure to dispose of sufficient ice to hold the defendant harmless at the end of the season. In this position, the appellants are clearly in error. The object in requiring the bond was to secure indemnity for breaches which might occur after July 15 th. The fact that no breaches had occurred before that time, would not affect the right of the defendant to demand a bond. His right to demand a bond on or after July 15th, is fixed absolutely by the contract. The plaintiffs also complain of this instruction, because the court does not direct the jury that the contract itself furnishes indemnity to the amount of plaintiffs’ share in the profits on • all sales made during the season, which amount was to remain in defendant’s hands during the season. This fact may well have escaped the attention of the court, as it did probably that of plaintiffs’ counsel, during the trial. If the plaintiffs desired specific reference to this fact, they should have requested an appropriate instruction thereon.

5. — : — : error without prejudice. IV. The plaintiffs complain of the following instruction: “ If you find that the contract was rightfully terminated, this would dispose of all questions with reference to sales made by the defendant after July 26th, and to any orders for ice obtained by plaintinffs after that date, and not filled by the defendant. But if you do not find that it was rightfully terminated, your inquiry with reference to sales by defendant in territory worked by plaintiffs, and orders Obtained by or originating with them, and not filled by defendant, must relate to the whole period between April 15th, the date of the contract, and the first of November.”

. The plaintiffs object that this instruction does not give the jury the correct rule of damages in the event they should find that the contract was not rightfully terminated on the 26 th of July. This instruction does not attempt to give any rule of damages. It simply directs the jury to what sales their inquiry must relate. A court cannot in one instruction embrace all the law applicable to a case, and it is no ground of objection to an instruction that it does hot do so. ■ Besides, the jury must have found that the contract was rightfully terminated; and hence, if the court had even given an incorrect rule of damages in the event the jury should find the contract was not rightly terminated, the error would have been without prejudice.

6. CONTRACT: breach of: failure to : furnish bond. V. The plaintiffs complain of the giving of the following instruction: “Under the terms and conditions of the contract, sued on, the defendant was not required to have anything to do with drawing up the bond ^perejn pr0yided for, nor to inform the plaintiffs what stipulations he wished in it. The contract fixed what the bond was to be, and a failure on the part of the defendant to answer any request from plaintiffs that he would draw up a bond, or to inform plaintiffs what stipulations he wished in it, in no way excuses the plaintiffs for a failure to furnish such bond when properly demanded, if they did so fail to furnish such’ bond.”

It is claimed that this instruction was not applicable to the issues nor the testimony, and that it was calculated to mislead. The instruction unquestionably embodies a correct presentation of the law. It may have been drawn to meet positions taken by the counsel in argument, and if it was, it was correctly given. If no such position was taken, it clearly could not have worked any prejudice.

7. — : — : damages: liability for. YI. The plaintiffs complain of the giving of the following instruction: “ If, at any time while the contract was in the defendant- sold any of the ice which plaintiffs had the right at the time of the sales to sell under the contract, in the territory being worked by them, this would constitute a breach of the contract. If they have shown by the evidence that defendant did make such sales to the persons named in their petition, or any of them, in territory worked by them while the contract was in force, and hme fwriher shown that-said parties making the purchases woxdd, hut for the act of the defendant ,in selling to them, have purchased through them, they are entitled to recover from defendant the same proportion of the money received by defendant on account' of such sales, as they would be entitled to had they made the sales themselves.” It is claimed that the italicised portion of this instruction is erroneous. We think it is correct. The plaintiffs have not sustained damage on account of sales made by defendant in their territory, unless the parties to whom the sales were made, would, but for the sales, have purchased of plaintiffs. It is claimed, also, that this instruction is in conflict with the ninth instruction given. This position is also erroneous. The ninth instruction simply informs the jury what sales are to be regarded as made by the defendant.

8. — : —: limit of recovery. YII. The plaintiffs complain of the 10th and 12th instructions to the -jury, because they limit the amount of plaintiffs’ recovery on account of sales made by defendant in plaintiffs’ territory, during the continuance of tlie contract, to one-half of the profits upon the ice actually delivered. The plaintiffs claim that they are entitled to one-half of the profits on the ice sold, whether delivered or not. In our opinion, these instructions, as applied to the evidence in the case, are correct. Surely the defendant should not be required to pay one-half of the profits on sales contracted, notwithstanding the fact that the vendees may have failed to receive and pay for it.

Till. It is urged, lastly, that the verdict is not sustained by the evidence. .Without attempting to set out or discuss the evidence, we are of opinion, that under the instructions of the court, which we approve, the evidence fully sustains, the verdict. We discover no error in the record.

Affirmed.

Case Details

Case Name: Hall & Spencer v. Stewart

Court Name: Supreme Court of Iowa

Date Published: Jun 13, 1882

Citation: 58 Iowa 681

Court Abbreviation: Iowa