169 Mo. App. 479 | Mo. Ct. App. | 1913
Plaintiff sued and recovered damages for loss of a government contract to carry the mails between the stations and post office in Chillicothe.
The facts are these: The U. S. Government, desiring to let the contract for carrying the mails in Chillicothe for a term of four years, advertised for bids therefor. Under the advertisement all bids were to be submitted on government blanks accompanied hy a bond in the sum of $3000 signed either by an approved surety company or hy two or more personal sureties, in which last event, such personal sureties must be approved hy the postmaster. No bid would he considered which did not have such a bond accompanying it, and all bids must be filed with the department in Washington by 4:30 p. m. of December 6, 1910. The right was reserved to the Postmaster General to reject all bids whenever in his judgment the interests of the service required it.
Plaintiff, a young man twenty-two years old, desiring to submit a hid, obtained the proper government blanks for that purpose and took them to the defendant’s local agent, Douglass Stewart, at Chillicothe, and there executed a written hid offering to carry the mail for $1485 per year. He also signed the bond for $3000 attached to said blanks. He then signed a written application to the defendant to become his surety on this bond accompanying the hid, paid $10 on the premium, and agreed in the application that in consideration of the defendant acting as surety for him he would, in case his bid was accepted by the Govern
The local agent had no authority to execute the bond, of which plaintiff was well aware, but he received the bid, bond and application, and, after helping plaintiff to fill out and execute them, sent them by mail to defendant’s' State agent or general State agent at Kansas City, a Mr. P. 0. Draper. These papers were prepared and sent to Draper on November 28 or 29, 1910. On the second day following, the local agent received from Draper a letter, which omitting defendant’s letter head, is as follows:
“Kansas City, Mo. November 30, 1910.
Mr. Douglass Stewart,
Chillicothe, Mo.
Dear Sir:
Re Oliver D. Hicks, Bidder Screen Wagon Service Route No. --- at Chillicothe, Mo. — $3000. Bid $1,485 annually:
Yours of the 28th inst: I have forwarded the papers to Washington office for execution, as they cannot be executed here. Our Washington office takes care of all details and will execute and file the bond. You will of course remit the premium collected less your commission when making remittance for this month’s business.
Very truly yours,
P. O. Draper,
Agent,”
No further notice was received from defendant in regard to the matter, and plaintiff, thinking his bond had been executed and filed with the department, waited to hear the Government’s announcement of the successful bidder, which would be made public on or before January 18, 1911. Sometime after December 6, 1910, the time limit for filing bids, plaintiff read in a paper that the bid had been awarded to another at $1540 per year, $55 higher than his bid. He then discovered that neither his 'bid nor bond had ever been filed with the department and went to the local agent to ascertain why they had not been filed. ' The local agent, not having heard anything, wrote to Draper, the State agent, about it. Draper answered, but his letter was never put in evidence. The local agent in his testimony attempted to tell what Draper wrote, but, on a suggestion of plaintiff’s counsel, the court remarked that what passed between Draper and the local agent would not bind the plaintiff, and thereupon the defendant saved an exception but did not further offer to prove, by offering Draper’s letter or otherwise, what was done with the application for bond and the bid. Whether defendant accepted said application and then neglected to execute said bond, or ex-
As stated at the outset, the suit is for damages for loss of a government contract. Plaintiff’s failure to secure the contract is alleged to have been caused by the defendant’s undertaking and agreement, and its subsequent failure, to execute and file in the Post Office Department in Washington a bond required to be filed with plaintiff’s bid in time for the bid to be considered, or, if defendant refused to execute, to notify plaintiff of said refusal reasonably thereafter in time to have enabled plaintiff to secure a bond elsewhere and file it with the department before the time limit expired. While the petition is not thus worded in any one paragraph yet we think that, taking it as a whole, this is the basis of its complaint against defendant. If in fact the defendant refused to execute said bond and thereafter failed to notify plaintiff of its refusal, its reception of said bond and its opportunity of refusal must be alleged and shown to have been reasonably far enough in advance of the Government time limit
But should a recovery be denied on the second ground above mentioned i. e., because the damage is for loss of profits? On this feature it must be remembered that in this case the profits in question are not like those arising out of a business that is itself uncertain and dependent for success upon many unknown and conjectural elements. In the case at bar the profits did not depend on the favor of the public, the state of the market or weather, the business ability and judgment of the plaintiff, the amount of competition,
Now, in the cases denying recovery for loss of profits, it will be found that the denial of recovery is based on one of two grounds and sometimes on both, namely, 1st, because the profits were inherently uncertain, conjectural and speculative in character, or 2nd, because they were not deemed to have been within the contemplation of the parties to the contract for the breach of which damages were asked. Stated differently, the damages were refused on the first ground because they were not susceptible of proof, and on the second because they were outside of the legitimate scope of the breached contract. For authorities denying recovery on the first ground see 8 Am. & Eng. Ency. of Law (2 Ed.), p. 616, and cases cited; Callaway v. Clark, 32 Mo. l. c. 309, and many others; and on the second ground, or both, see Abbott v. Gatch, 13 Md. 314; Brigham v. Carlisle, 78 Ala. 249; Fell v. Newberry, 106 Mich. 542; Simmons v. Brown, 5 R. I. 299, 305; Griffin v. Colver, 16 N. Y. 489. Again, as above indicated, while the loss might be termed a loss of profits yet, strictly speaking, in this case the profits are really nothing more than the difference between the cost of doing a thing and the price to be received
Nor is plaintiff in this case to be denied a recovery because the profits sued for are profits to arise out of a contract collateral .or subordinate to the one breached. Because the rule in such case is that if the profits are reasonably certain of computation and are within the contemplation of the parties to the breached contract and the loss thereof arises naturally and probably from the breach, then they are recoverable. [8 Am. & Eng. Ency. of Law (2 Ed.), p. 623-4; Wallace v. Ah Sin, 71 Cal. 197; Wapoo Mills v. Commercial Guano Co., 91 Ga. 396; Fox v. Harding, 7 Cush. l. c. 523; Fairchild v. Rogers, 32 Maine l. c. 270-271; Trigg v. Clay, 88 Va. l. c. 335.] And especially is this true in this kind of a case where the very object and purpose of the dealings between plaintiff and defendant is to enable the former to secure the contract which was lost. [8 Am. & Eng. Ency. of Law (2 Ed.), p. 622, and cases cited.] Here, the plaintiff, in an application made on blanks furnished by defendant, applied to defendant to become his surety, paid the required advance payment, agreed to pay the full premium required on the whole term, and agreed that he would not have any other surety. The application is accompanied by papers which show that plaintiff’s purpose in seeking surety is to enable him to secure a certain contract, and that his bid and bond must be filed with the department by a specified time else it will be unavailing. To say that defendant can receive such application'and then fail to either act on it or notify plaintiff in time for him to secure another bond, and that when it does so fail, defendant under any
It is also urged that no right of recovery exists because the filing or agreement to file the bond with the department is ultra vires. If so, the duty still remained to return the bond, reasonably soon after execution, to plaintiff that he might file it, or, if execution was refused, to notify him of that fact reasonably thereafter. It certainly was not ultra vires for either the agent or the company to receive the application for the purpose of enabling the company to pass on it either by executing the bond or declining the risk. But was it ultra vires to file or to agree to file the bond? Certainly not for the company to do so, since the filing of the bond was not something outside of and beyond its scope, but a thing necessary to be done before the bond, would become effective. Hence the filing was within the implied powers of the company, not indispensably necessary to carry into effect the purpose of its corporate existence, but certainly appropriate, convenient and suitable, and a reasonable choice of means to that end. [10 Cyc. 1097.] Whether it was ultra vires for the State Agent Draper, to agree to execute and file the bond would depend upon the extent of the powers conferred upon him by the company. However, the defense of ultra vires was not pleaded, as it must be to be available. [Williams v. Verity, 98 Mo. App. 660, 10 Cyc. 1156; Lumber Co. v. Lumber Co., 152 Mo. App. 386.] In view of the foregoing, the damages under the peculiar circumstances of the case are not remote, uncertain or speculative, but are the natural and probable result of the alleged breach, and reasonably within the contemplation 'of the parties. If then the alleged contract and its breach have been
Was the contract properly proved? Before answering this, it will be well to ask: First, what is it that is relied upon to constitute the contract; second, what is the contract? The acts relied upon to constitute the contract are: Plaintiff’s application and his agreement therein, the payment of the $10, and Draper’s letter of November 30th receiving the whole thing and saying he would send it all to Washington for execution and filing. Now, if it were not for the statement in the letter that “the papers cannot be executed here” this might perhaps constitute a good contract on the part of the company to execute and file the bond, even if Draper had no actual authority to execute the bond, since it is the rule that as to third persons dealing with an agent the principal is bound to the extent of the apparent authority conferred and not by the actual or express authority only. [Law Rep. Co. v. Elwood Grain Co., 135 Mo. App. 10.] But this rule cannot be invoked by plaintiff because the above quoted clause of the letter removes from the agent all appearance of authority to execute, and leaves him with only the authority he actually had, if any. [Typewriter Co. v. Realty Co., 165 Mo. App. 138.] So that, unless the agent actually had authority to execute the bond or to accept it and direct its execution at Washington, there is not shown any contract to execute and file the bond. It cannot be said with certainty that because Draper’s letter says “the papers cannot be executed here” therefore Draper necessarily had no power or authority to accept said bond and direct its execution and filing in Washington. There may have been other reasons why the bond must be executed in Washington aside from a lack of power in Draper to execute. The letter also says “the Washington office takes care of all details and will execute and file the bond.” If Draper,did in fact have authority to accept said bond and direct its filing and execu
Objection was made to the introduction of the Draper letter on the ground that the signature was not proved. This objection could not prevail because it was already in evidence that Draper was the State .agent, or general State agent, and that Stewart, the local agent, was under him; that Stewart had written to him sending the papers and received the letter in reply. This was sufficient to admit the letter -without proof of the signature. [22 Am. & Eng. Ency. of Law (2 Ed.), 1256; Russell v. State Ins. Co., 55 Mo. 585, 588.] But the fact that defendant will be held to the ■specific objection made to the letter does not preclude it from making the objection at the close of the evidence (as it did by demurrer) that no power had been ■shown in Draper to agree that the bond would be executed. "Whether the letter was admissible in evidence
As stated before it is not exactly clear whether the petition relies, and recovery was had, upon an express contract made by the Agent Draper' that the . bond at all events would he executed and filed, or on the implied contract that the company would either execute and file or notify plaintiff of its refusal. It would seem that this should clearly appear.
Defendant insists that it was error to admit evidence that the personal sureties had agreed to go on plaintiff’s bond. Since the case is to be remanded it is not necessary to pass on this question. It would be better, however, to show that the surties possessed the required qualifications and that they would have gone on the bond rather than to merely show, by some one else, that they said they would.
For the reasons heretofore given, the case is reversed and remanded for a new trial.