Horst v. Roehm

84 F. 565 | U.S. Circuit Court for the District of Eastern Pennsylvania | 1898

DALLAS, Circuit Judge.

1. The position taken by the defendant in his letter of June 27, 1896, and again upon the trial, is untenable. His contracts with Horst Bros, were not annulled by the dissolution of that firm, nor by the assignment of one partner’s interest therein to his co-partners. To hold otherwise, it would be necessary to maintain that any dissolution of a commercial partnership, accompanied by a division of its executory contracts, would work their extinguishment, and the statement of such a proposition is, I think, its sufficient refutation. Of course, the other contracting party may, notwithstanding dissolution and regardless of the terms thereof, hold all the partners upon a partnership contract; and, on the other hand, the contractual rights of the latter continue to be enforceable, though only by action (as in this instance), in the name of all, to the use of such of them as, by agreement among themselves, may be entitled to the proceeds of recovery. The judgment in Bank v. Hall, 101 U. S. 43, is not opposed to this view of the law. » The conclusion there reached was based, primarily and mainly, upon the actual nonexistence of an asserted contract, and what, at the close of the opinion, was said respecting “the change of the firm,” who, “if, in fact, there were * * * a contract,” had been one of the parties to it, was unnecessary to the decision. But, aside from this, the facts of that case distinguish it from the present one, and the later decisions of the same court, hereafter cited, require that it shall be distinguished. Without pausing to point out the details oí their dissimilarity, it will suffice to observe that, in the case referred to, the substance of the rating was that a new party could not be imported into the contract there asserted, whereas, in the case now under consideration, as already said, the parties are still, both as to liability and right, precisely the same as those by whom the contract was originally made. “Rights arising out of a contract cannot be transferred if they are coupled with liabilities, or if they involve a relation of personal eoniidenee such that the party whose agreement conferred those rights must have intended them to be exercised only by him in whom he actually confided.” This statement of the law was adopted bv the supreme court in Arkansas Val. Smelting Co. v. Belden Min. Co., 127 U. S. 379, 8 Sup. Ct. 1308. No statement more favorable to the defendant could be made, but the rule it embodies cannot avail him. The liability of all the members of the plaintiff firm continued after dissolution to be precisely what it had been before, and there is nothing whatever in the contracts to indicate that they “involve a relation of personal confidence” between the defendant'and Paul R. G. Horst, the person who assigned to his co-partners. It was on the allegation that such confidence existed in fact that the defendant based his defense upon this poini; and in support of this allegation the defendant testified, in general terms, to the effect that he had been influenced, or perhaps induced, to con-trad. with the plaintiffs, by his reliance upon the judgment and fail-dealing of Paul E. G. Horst, but the admission of this testimony was duly objected to by plaintiffs’ counsel, and was received subject to that objection, and with reservation of judgment upon it. I have no doubt that it was irrelevant, and consequently I have excluded it from consideration, and have made no finding of fact with reference to it. As already indicated, 1 am of the opinion that “personal confidence,” to preclude the transfer of rights arising out of contract, must he involved in the nature of the rights themselves, so that the party whose agreement conferred those rights must have intended them to be exercised only by him in whom he actually confided. If, from the nature of the subject, personal confidence he not implied, the fact, if conceded, that the personal participation of one of several contractors in carrying out the contract had been actually relied upon would he of no consequence whatever. Delaware Co. Com’rs v. Diebold Safe & Lock Co., 133 U. S. 473-488, 10 Sup. Ct. 399.

2. This case is within the rule laid down in Hochster v. De La Tour, 2 El. & Bl. 678, and the other English cases cited in Dingley v. Oler, 117 U. S. 502, 6 Sup. Ct. 850. In the case last mentioned the supreme court, after remarking that the rule referred to had been followed by the courts of several of the states, hut had been denied by the supreme judicial court of Massachusetts, declined to decide; whether or not it should be maintained “as applicable to the class of cases” to which the’one then before it belonged. The facts of that case were somewhat peculiar, and it is not quite clear that the court’s declination to pass upon the applicability of the doctrine of Hochster v. De La Tour to it implied a doubt as to the propriety of its application in a case so plainly within that doctrine as is that now presented. But, assuming the broad question to have been left open by the supreme court, I think that upon the preponderance of authority, as well as upon sound reasoning, it must be held that a right of action had accrued to the plaintiffs, with respect to all the contracts in question, at the time this suit was brought. There can be no doubt that this would be so under the law of England, and a diversity in the law, as administered on the two sides of the Atlantic, concerning the consequence to result from an absolute repudiation by one party of a commercial contract of this kind, is greatly to be deprecated. Norrington v. Wright, 115 U. S. 206, 6 Sup. Ct. 12. In my opinion, the argument of the court in Daniels v. Newton, 114 Mass. 530, was well and sufficiently answered by Judge Lowell in Ding'ey v. Oler, 11 Fed. 372. What is there said need not be repeated at length, but I may remark that I concur with that learned judge in thinking that the several state decisions cited by him (to which others might be added), as in conflict with Daniels v. Newton, are “founded in good sense, and rest on strong grounds of convenience, however difficult it may be to reconcile them with the strictest logic.” Since the decision of Dingley v. Oler, the circuit court of appeals for the Sixth circuit has, in two cases (in both of which Dingley v. Oler was cited), stated the law to be that, “where a contracting party gives notice of his intention not to comply with the obligation of his contract, the other party may accept this as an anticipatory breach of the contract, and sue for damages, without waiting until the time mentioned for the completion and fulfillment of the contract by its terms. * * *” Brewing Co. v. Bullock, 8 C. C. A. 14, 59 Fed. 87; Lumber Co. v. Alley, 43 U. S. App. 175, 19 C. C. A. 599, and 73 Fed. 603. In the absence of any controlling solution of the question by the supreme court, I do not hesitate to adopt this statement, supported, as it is, by the judgment of Judge Lowell, in Dingley v. Oler, as well as by the English authorities, and by the judgments of the courts of several of the states.

3. On behalf of the defendant it has been contended that “assuming that the action can be maintained, the measure of damages must be restricted to the loss, if any, upon the deliveries which should have been made prior to the bringing of the suit.” I cannot yield assent to this proposition. It conflicts with the principle that the measure of damages in every case must be such as, when applied, will result in ascertainment of the sum necessary to make good the entire loss sustained by reason of the act or default which constitutes the cause of áction. The plaintiffs were, by the act of the defendant, prevented from making the deliveries called for by the contracts. It is this anticipatory denial and obstruction of the right to deliver, not a tender and refusal, which is the ground of suit, and the measure which might otherwise have been applicable is therefore wholly inappropriate. The law of damages is not comprised in a set of arbitrary rules. Where a contract has been broken or a wrong has been committed, compensation must be made. This is the underlying principle, and any standard or measure which does not accord with it cannot be applied, but some other, which is fairly compensatory to the one party, and not unjust to the other, must be resorted lo. Carroll-Porter Boiler & Tank Co. v. Columbus Mach. Co., 3 U. S. App. 633, 5 C. C. A. 190, and 55 Fed. 451. In this case the plaintiffs have shown that they could have made subcontracts for the delivery of the hops, according to their contracts with the defendant; and, whatever might be the rule in a case in which this could not be shown, I am of opinion that where;, as in this instance, that fact appears, the difference between the price at which such subcontracts could have been obtained and the price named in the contracts between the parties is manifestly the amount of the loss actually suffered, and therefore must be the correct measure of the'damages recoverable. Hinckley v. Steel Co., 121, U. S. 264, 7 Sup. Ct. 875; Mining Co. v. Humble, 153 U. S. 549, 14 Sup. Ct. 876. There was some variance in the evidence respecting the price at which subcontracts could have been obtained. The evidence on behalf of the plaintiffs was that on October 24,1896, the price for the crop of 1896 would have been 7-J cents per pound, and for the crop of 1897 Docents per pound. But the evidence for the defendant tended to show, as to each crop, that the price would have been greater. In my findings of fact I have not accepted the extreme position of either side. I do not think I would have been justified in relying wholly upon any part of the evidence, and my conclusion was arrived at after carefully considering the whole of it, and giving to every portion of it the weight lo Which T believed it to be entitled. I have had in mind lire right of the plaintiffs to compensation, but have also been especially solicitous to avoid doing injustice to the defendant. Tt is ordered that judgment be entered, as of this date, in favor of the plaintiffs, and against the defendant, in the; sum of $10,118.30.