J. Maury Dove Co. v. New River Coal Co.

150 Va. 796 | Va. Ct. App. | 1928

Crump, P.,

after making the foregoing statement, delivered the following opinion of the court.

The plaintiff in error, a corporation organized under the laws of the District of Columbia, instituted a proceeding in foreign attachment against the defendant in error, a corporation under the laws of West Virginia, as principal defendant under the attachment statutes of Virginia. The principal defendant appeared personally and thereafter the case proceeded as a common-law action instituted by the petitioner as plaintiff. A trial was had before a jury and a verdiet was rendered for the defendant coal company, upon which the court entered judgment; whereupon the plaintiff obtained a writ of error.

The plaintiff in error will be referred to as Dove Company, or plaintiff, and the defendant in error as coal company.

The errors assigned are based upon rulings of the trial court in giving and refusing instructions, in the admission and exclusion of evidence, and in overruling a motion for a new trial.

In its attachment petition the plaintiff alleged, as its cause of action, that the coal company had by written agreement bound itself to ship to the plaintiff from the Slab Fork Mines, in West Virginia, approximately 30,000 tons of coal in varying stated number of tons each month commencing with the month of July, 1926, and concluding with the month of March, 1927, at a price of $2.00 per ton, f. o. b. mines; and that the coal ordered during the first three months having been shipped, received, and paid for, the defendant refused the plaintiff’s requisitions for coal to be shipped during October and subsequent months, whereby the plaintiff had suffered a loss of $22,000.00 by reason of the difference between the contract price and the market price of the coal which the defendant had refused to ship. A copy of the contract for the sale and purchase of the coal was filed with and made part of the petition.

The defendant filed grounds of defense of some length, from which, however, it appears that coal company based its denial of any right of recovery against it upon two defenses, (1) that the contract reserved to it as the seller the right to cancel the contract whenever it had reason to believe that the credit of the buyer, the Maury Dove Company, was impaired; that the credit of the buyer had become impaired and it had so lost its right to require further execution of the contract, and (2) that the Maury Dove Company had undertaken to assign all of its properties and assets, including its right to the coal under the contract, to a third party, with a view to its final liquidation, and that such an assignment could not be made without defendant’s consent, which it had refused to give; that the October and November requisitions were for coal to be shipped to such assignee, with whom the defendant declined to deal, and that, therefore, the plaintiff “had lost, abandoned and divested itself of every and all right, interest and claim in or under said contract.”

The evidence upon the trial was very voluminous, covering, with the documentary testimony and proceedings, about two hundred pages of the printed record. It is impracticable here to do more than give such outline of the evidence as may enable this court to consider and pass upon the questions raised.

The coal contract between the parties was dated July 1, 1926, and became effective July 26th, on which date it was approved and accepted by the defendant.

The pertinent provisions of the contract are:

“Cash on or before the fifteenth day of each month for all coal shipped during the preceding month. Failure of the buyer to comply with the terms of payment shall give the seller the right to cancel this contract, but waiver of this right, in any instance, shall not prevent the subsequent exercise of it by the seller. The right is especially reserved by the seller to cancel this contract whenever the seller has reason to believe the credit of the buyer is impaired.

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“Shipments made by the seller to the buyer during any one month shall constitute fulfillment of this contract for that month and the tonnage herein contracted shall be cumulative only for such one-month period, except by mutual agreement.

“The price named in this contract is based on the price of coal, f. o. b. the mine, or mines, as of the date pf this contract. Should the total cost of production increase or decrease by reason of changes in rates paid to labor at the mines, then the price specified shall be changed accordingly during the period in which the changed labor rates are in effect. This condition means that if there is a reduction in labor costs during the terms of this contract the buyer is to have the benefit of such reduction, and if there is an increase in labor cost during tbe term of this contract the buyer is to pay such increase.

“There are no understandings or agreements relative to this contract, or its subject-matter, that are not fully expressed herein, and it is not effective until it is signed by the seller, accepted by the buyer, and approved by an executive officer of the ‘New River Coal Company.’ ”

The Dove Company had been engaged for several years prior to 1926 in the business of buying coal and fuel and selling and delivering it to consumers and others in the District of Columbia, its officers and place of business being in the city of Washington.

In the month of January, 1926, the company was largely indebted and in financial straits, and seems to have been on the verge of insolvency. A meeting of the creditors of the company was held during that month which resulted in the formation and execution of an agreement, on January 20th, to which the Dove Company was party of the first part, five trustees selected from and representing the creditors were parties of the second, and such creditors as signed the agreement parties of the third part. This agreement recited the inability of the company to realize upon its assets so as to meet its obligations promptly, and the purpose of the creditors to grant an extension of time to the end that the company might extricate itself from its financial embarrassment. This instrument is of considerable length. It is stipulated that the creditors shall, for a period of twelve months, take no steps by suit or otherwise for the collection of their debts. The officers of the company are, during that period, to continue the business, under the supervision and control of the trustees, the current claims against the company are to be paid in regular course, and the general or deferred indebtedness then existing and represented by the trustees was to be liquidated from time to time as surplus cash funds permitted such payments to be made without interfering with the regular course of business. The creditors generally accepted the agreement, among them the New River Coal Company, to whom was then due the sum of nearly $22,000.-00 for coal sold to the Dove Company prior to 1926. On February 26, 1926, Mr. Dove and two of the trustees wrote the coal company: “We enclose herewith financial statement showing the condition of the J. Maury Dove Company, which demonstrates its ability to meet its obligations promptly as they mature. This committee has control of the finances of the J. Maury Dove Company and is in a position to assure you, through its direction of the affairs of the company, that all invoices will be promptly met when due.” Other assurances to the same effect were given and the coal company continued to furnish coal from time to time, payment of which was promptly met; and in July the coal contract in issue was entered into.

The coal shipped, under the July contract, during July and August was paid for. It appears from the evidence that during the summer of 1926 several items of large amount, theretofore carried as valid and collectible claims in the assets of the Dove Company, became doubtful or worthless, again causing the company to become embarrassed. A meeting of the creditors and others interested in the company was called for September 18th in Washington. Mr. McCoy, secretary and treasurer of the coal company, attended the meeting. In his testimony he states he spent the 17th in Washington examining into the financial condition and the credit situation of the Dove Company. As to the credit he claims “absolutely it had been impaired.” At the meeting held on the 18th the affairs of the company were discussed for several hours, and McCoy testified, Mr. Snead, one of the trustees, acting as chairman of the trustees and directors, explained verbally a proposition from the American Ice Company to purchase the physical assets and properties of the Dove Company, under the terms of which the deferred creditors would get ninety cents on the dollar; that the Dove Company would be liquidated forthwith and what surplus there was would go to the stockholders of the company. Mr. McCoy and Mr. Mclntire, one of the trustees, testified for the defendant, and Mr. Dove and Mr. Snead, a trustee fq£ the plaintiff, as to what took place at the meeting, in considerable detail, differing in regard to various matters. It resulted that the creditors present assented to the tentative proposition to liquidate the company by the sale of its physical assets to the American Ice Company. McCoy testified that after the meeting he went with others to the office of Mr. Dove, the president, and the consummation of the proposition to sell out was discussed; that some one remarked that the American Ice Company would not be buying a going business, whereupon “Dove promptly said he proposed to turn over the contract with the New River Coal Company to the American Ice Company,” and he (McCoy) “promptly and emphatically informed Dove that when the J. Maury Dove Company signed the agreement of sale and liquidation with the American Ice Company, that their credit would be wiped out; that it would not have a contract with us, and that the contract would not be assigned or transferred to the American Ice Company, and the word transferred was used and not assigned.” In regard to what took place in the course of this conversation Mr. Dove gave a different account from that given by Mr. McCoy. Mr. Mclntire, who was also present, testified that McCoy made the statement in the presence of himself to Mr. Dove when the latter said that he was going to assign the New River contract, that they would not assign or transfer that contract.

The proposed sale to the American Ice Company was consummated by an agreement executed by the Dove Company and the ice company September 24, 1926. By its terms the Dove Company agreed to “sell and deliver, convey, transfer, assign and set over unto the party of the second part, or its nominee, by good and sufficient contract, bill or bills of sale, and deed or deeds of conveyance, containing correct and full legal description, all its good will, business and assets, except as hereinafter stated,” upon which follows a description of the real estate, leases, coal yards in Washington and at Rosslyn, Virginia, trucks, cars, fixtures, tools and other tangible property. Excluded from the agreement are “its cash assets, open accounts or notes receivable,” certain stock and certain securities listed in a schedule attached to the instrument. The iee company is given the right to form a new corporation to bear the name of J. Maury Dove Company, Incorporated, or any and all variations of that name which the ice company may desire to use. The Dove Company agrees that it will “upon the consummation of this agreement and the completion of the purchase aforesaid by the party of the second part, retire from all business operations and take all necessary steps to effect a full and complete abandonment and dissolution of its corporate rights, franchises and charter; that it will not, at any time after the completion of the sale and transfer, hereinbefore provided for, be or become engaged in any branch of the business of-buying or selling eoal, coke, wood, oil, or fuel of any kind, at wholesale or retail, or identified or connected therewith in any manner whatever, financially, actively or otherwise, either directly or indirectly.” Mr. Dove is to bind himself not to engage personally in any such business, and to co-operate in the organization of-a new corporation under the laws of Delaware, or some other State, to bear the name of J. Maury Dove Company, Incorporated. It is finally stipulated that upon a failure to perform these covenants and agreements the ice company may recover damages agreed to be taken as liquidated in the sum of $100.00 per day. The ice company was to pay a consideration of $200,000.00 in cash and to assume a mortgage on real estate for $40,000.00. On October 1st the provisions of the contract were complied with as far as then practicable, and the $200,000.00 was paid over to a liquidation committee, by whom it was distributed in accordance with the liquidation plans.

The new corporation — the “nominee” of the ice company — procured a charter under the laws of Delaware on September 28th under the style of J. Maury Dove Company, Incorporated, was organized on September 29th, Mr. Dove being made president. Mr. Dove testifies that the former Washington corporation did no business in the sale or purchase of coal and fuel after September 30th.

Mr. Caperton, president of the coal company, testified as to information concerning losses of the Dove Company which gave him reason to believe that the credit of the company had become impaired after July, 1926. He also stated that he met Mr. Dove in Washington on September 21st and in that interview Mr. Dove told him that “he was selling out his physical assets, that is, his plant and equipment; that he retained the bills receivable or treasury assets, and that he would liquidate the old J. Maury Dove Company as quickly as possible, certainly in three months;” that he, Dove, expected to take employment under the new company, which would be organized as a subsidiary of the American Ice Company. Caperton testifies that during the course of that conversation he said to Dove: “Maury, you have got a contract with us and if you propose to sell out I want you to cancel it — return it.” On September 25th the American Ice Company wired to the coal company a five days’notice of its “proposed purchase of the good will, business and principal assets of J. Maury Dove Company, Incorporated.” On September 28th Mr. Snead, as chairman of the executive committee of the Dove Company, wrote to the coal companjq enclosing a form of assent to the proposed sale to be executed by the coal company, adding: “The sale of the company will be formally consummated on the 30th, and distribution of the funds from the sale will be made immediately thereafter. Ninety-five per cent, in number and amount, of the creditors have agreed to this basis of settlement which was necessary in order to consummate the sale. Please execute and return the agreement immediately upon receipt in order that the committee may have same in hand at their meeting on Friday, October 1st.” In reply the coal company, by Caperton as president, wrote to the trustees of the Dove Company that, provided the current account against the Dove Company was paid, the coal company would accept eighty per cent of its deferred claim of $21,992.04, and agree to any disposition seen fit to be made of the excess over eighty per cent. October 2nd the American Ice Company wired the coal company, and on the same day wrote that “we wired you this morning as follows: This company took over properties of J. Maury Dove Company in Washington as of October 1st. Coal shipped , to them from that date is for our account and we assume responsibility for payment. Letter following — which we now confirm. We have taken an assignment of your contract with the Dove Company and trust our relations in the future will be of a most satisfactory character.” Under date of October 5th the coal company replied by letter through Caperton in which he states: “I am advised that our contract with the Dove Company cannot be assigned without our consent, all things considered we are unwilling to give such consent or to continue supplying coal under that contract.”

Mr. Dove, in his testimony, denied that McCoy had, at the meeting in Washington, made any suggestion that business relations or the contract in suit would be terminated, or that McCoy, at the conference in his office on September 18th, had said that the contract in suit would not be assigned, or that it would be terminated or cancelled upon the deal going through. Mr. Dove and others in his office testified as to a long distance conversation Dove had with Caperton on October 2nd, in which Dove complained that no shipments of coal had been made since September 24th, and explained to Caperton that credit to the Dove Company was equivalent to credit to the American Ice Company; and at the conclusion of the interview Dove immediately telegraphed to Mr. Oler, president of the ice company. In regard to this conversation Mr. Dove also testified as follows:

“Q. Now, I believe you said that in your talk with Mr. Caperton on October 2nd, you gave him references as to the credit of the American Ice Company?

“A. No. I referred to the American Ice Company for the Dove Company’s credit.

“Q. What Dove Company’s credit?

“A. The J. Maury Dove Company,-of Delaware.

“Q. That is what I mean. You referred him then to the American lee Company for the credit of the J. Maury Dove Company, of Delaware?

“A. Yes, sir.

“Q. You told him in conversation that that company was functioning, did you?

“A. No, he asked me the question. He knew nothing about the new company. I said the best thing I can do is to say that the American Ice Company stands behind it and I will have Mr. Oler furnish you the same information by wire and letter today.

“Q. You did tell him then that there was a new company?

“A. Yes, sir.

“Q. Did you tell him what the style of it was?

“A. That never came up.

“Q. You just told him that a new company had succeeded to the business of the plaintiff and that the American Ice Company would give assurances as to the credit of the new company?

“A. Correct.

“Q. Did you tell him that you were president of the new company or representing the new company?

“A. I don’t know whether I did or not. I told him I was authorized to speak for the new company, at any rate.

“Q. And it was, of course, the new company that was short of smokeless coal on that date?

“A. Yes.”

Following this telephone talk Mr. Dove went to Charleston, W. Va., and there saw Mr. Caperton on October 5th. Under date of September 29th the J. Maury Dove Company mailed to the coal company a requisition for seventy-eight cars of coal to be shipped during the month of October, at the rate of three cars a day. At the interview in Charleston, October 5th, Mr. Dove had with him a copy of the agreement of September 24th with the ice company which was shown to Mr. Caperton; he told Caperton that no actual assignment of the coal contract had been made, as the assignment had not been executed; that Oler’s telegram was wrong; Caperton, and also his counsel who was present part of the time, read the September 24th agreement and the counsel gave it as his opinion that the agreement itself operated as an assignment ,- the final result of the conversation was “that Caperton refused to go along.” Mr. Caperton was examined and cross-examined at length with reference to this-interview. He said Mr. Dove stated that the coal required was to be shipped to the new Maury Dove Company. There are some contradictions in their testimony, but they both agree that Caperton said he-had sold the October output of coal to various parties, prior to that interview — probably by October 2nd,. Caperton claiming he had a right to do so, as his contract with the old company was at an end; and he had sold the coal at from $2.00 to $2.75 a ton. Dove saw Caperton again on October 14th without result, though he then told Caperton that if it was a question of credit he was prepared to settle for coal shipped, paying-cash on invoice or in advance or otherwise. Correspondence ensued during October between counsel for the two companies as to the right of the coal company to refuse shipments of coal either on the ground of impaired credit or assignment of the contract. On November 2nd counsel for the Dove Company sent the following to the coal company:

■“ Gentlemen:

Attention Mr. Caperton.

“Acting as attorney for the J. Maury Dove Company, Incorporated, organized under the laws of the District of Columbia, and pursuant to your contract with that company of July 1, 1926, I beg to enclose duplicate Order No. 389, dated September 29,1926, together with New York Draft, No. 33,192, in the sum of 17,500.00. Please promptly execute the order mentioned.

“Likewise acting as attorney for the same company, pursuant to the same contract, I beg to hand you herewith further order No. 469 under date of November 2, 1926, together with New York draft No. 33,193 in the sum of 87,500.00, and shall likewise appreciate your prompt attention in executing this order also.

“As you have already been advised through your counsel, Mr. E. W. Knight, no assignment of the contract mentioned was ever made, and my client has waived the credit feature as typified by the remittances herewith made. The two Dove Companies have agreed upon a new contract, which will be executed within the next few days, and a copy of which will be transmitted to you at that time through your counsel, by which the provision of the contract between the Dove Company and the American Ice Company, prohibiting the former from engaging in business, is modified to the extent of requiring that company to continue in business for all of the purposes of your contract with it.

“I am of course forwarding a copy of this letter to Mr. Knight.

“Yours very truly.”

To this Mr. Caperton replied on November 4th thus:

“Dear Sir:

“Our reply to your letter of November 2nd has been somewhat delayed by the absence from town of the-writer.

“We were repeatedly advised more than a month ago-by your clients, the J. Maury Dove Company, with which we had a coal contract, and the American Ice Company, that said coal contract together with the-business and all property and assets of the Dove Company, with certain exceptions, had been assigned to the-American Ice Company, and that the Dove Company was bound to discontinue business and would be-liquidated, etc., and such liquidation was immediately-begun. We promptly notified representatives of both companies that we would not consent to the assignment,, and that we regarded the coal contract as ended.

“We cannot see that the proposed new contract between the Dove Company, which you mention, purporting to rescind or modify portions of the contract between the Dove Company and the ice company affects the situation, and we are not willing to make a. contract for the sale of coal on the terms indicated by your orders.

“Accordingly we return herewith the orders and. drafts which accompanied your letter.

“Very truly.” ’

A subsequent requisition for coal was also sent on November 27th, which was likewise refused.

The new contract referred to was executed on November 17th by the old Dove Company of the first part, the American Ice Company of the second part, and the new Delaware Dove Company of the third part, as a modification of the September 24th agreement. It states that the Delaware corporation is the nominee-of the ice company under the September 24th agreement, and the parties mutually covenant that so much of the former agreement as required the old Dove Company to retire from all business operations, to effect a complete abandonment and dissolution of its corporate rights, and to institute proceedings for its dissolution within three months, and as prohibited it from being or becoming engaged in any branch of the business of buying or selling coal and fuel, directly or indirectly, should be modified so as to permit the old company to continue in the business of buying coal of the New River Coal Company under the contract of July 1st, and to so continue until the expiration of that contract on March 31, 1927. In this modified arrangement the old Dove Company binds itself to “promptly, upon the purchase of any and all coal from the New River Coal Company as aforesaid, sell the same to the party of the third part at cost price to it; that it shall and will also continue in business for the purpose of instituting and prosecuting any suit or suits against the New River Coal Company in the event that company shall adhere to its declared purpose of not performing the aforesaid contract;” and the period for the dissolution of the old company is postponed to a period of three months succeeding March 31, 1927. The new Dove Company agrees “that it will promptly upon demand of the party of the first part place it in funds with which to make such payment accompanying order or otherwise to the New River Coal Company for any and all coal which shall be so purchased by the party of the first part from the New River Coal Company in accordance with the aforesaid contract” of July, 1926. In all other respects not modified the September 24th agreement is ratified and confirmed.

It is contended here in oral argument that this new agreement emphasizes the fact of the incapacity of the former Dove Company to continue its execution of the coal contract after September 24th, and is a further recognition of the absolute transfer of all its contractual rights under that contract to the new company, leaving the old company entirely without credit and in the position of having abandoned the contract on its part. However that might be, all inferences in that connection were for the jury to consider, together with the other evidence in the case.

The court has considered all the evidence in the record and is satisfied that the trial court did not err in submitting the issues arising upon the evidence to the jury, nor in overruling the motion to set aside the verdict.

It was urged upon the court in oral argument here that the stringent obligations imposed upon itself by the Dove Company in the agreement of September 24th contemplated the practical extinguishment of its corporate existence at once, except for purposes of liquidation, and provided for an immediate cessation by it of all business transactions, so that it was in no sense any longer a going concern, and thus exhibited an intention on the part of the company to, in fact, terminate its legal entity for business purposes so that its credit was absolutely impaired and continuance of business by it was excluded; that its officers acquiesced in this view, and considered a transfer or assignment of its assets as accomplished, because in demanding further shipments of coal they confessedly did so only in the name of the new company, and did not undertake to act for the plaintiff company, until after the modified agreement of November 17th; that this latter agreement was in effect a ratification of the assignment to the new company, as that company was to receive the coal at the exact cost price fixed by the contract, the money merely passing through the old company, in name, as a medium; that the intention of the coal company was plainly manifested prior to October 1st, to cancel the coal contract as a matter of course.

Such arguments, however, were for the jury. It is clearly a case in which the jury should determine whether the defendant had repudiated the coal contract and had just cause for so doing.

We will consider the specific assignments of érror in the sequence in which they appear in the petition.

The first error complained of is the ruling of the court in admitting as evidence the arrangement with the creditors on January 20, 1926, and other matters relative to the financial and credit situation of the Dove Company prior to July, 1926. We see no error in this ruling. These were circumstances known to both parties at the- time the coal contract was entered into. They threw light upon the meaning and intention of the parties in the contractual reference to the impairment of the buyer’s credit, and were relevant for that purpose. They in no wise contradicted or added to or altered any portion of the contract. It was pertinent for the seller to show that he gave credit in reliance upon a continuance of the restored credit of the buyer.

The second assignment is based upon the refusal of the court to permit counsel to put the following question to the witness, Caperton, upon cross-examination, viz: “And did you not know from that language that that only became operative when the completion of the sale was made, so far as your contract was concerned, by the actual assignment of your contract?” The language referred to was a provision in the September 24th agreement, which the witness had testified lie particularly noticed. The answer which the witness would have given to the question is not in the record. But the form in which the question is put would evidently have produced a discussion between counsel and the witness as to the meaning and legal effect of the language in question, and we think the court properly ruled it out.

In the third assignment complaint is made of the ruling of the court in failing to strike out answers by the witness, Mclntire, to questions concerning what was said in the conference in Dove’s office on September 18th as to what the American Ice Company was buying. The witness, McCoy, had already testified to practically the same thing, and in any event this ruling of the court could scarcely have been prejudicial to the plaintiff.

We do not think the court erred in refusing to admit in evidence the letters between counsel for the parties, mentioned in the fourth assignment. These letters, the first being dated October 14th, were written with the intention of arguing the correctness of one or more of the positions taken by the respective parties and were properly excluded.

Coming now to the law governing the consideration of the case by the jury, we are of opinion that the instructions given by the court, some of which were drawn by the learned trial judge, were clear in statement, sufficiently covered the issues in the case, amply protected the rights of both parties, and were correct in substance.

The plaintiff requested the court to instruct the jury to disregard all evidence pertaining to the financial condition or credit of the plaintiff, which the court refused. It is contended by learned counsel for the Doye Company that the evidence is insufficient to show any impairment of credit, or that the coal company cancelled the contract for any such reason; and further contended that the coal company had repudiated the contract on another ground and so waived any impairment of credit. We cannot agree with the argument along these lines. In considering such a request, or a motion to set aside the verdict upon such grounds, we should consider the testimony bearing upon the points in question, as upon a demurrer to the evidence. Morris v. Alvis, 138 Va. 149, 121 S. E. 145. The determination of this case centered around what was done and said in the period from September 17th to October 5th, with the light thrown upon the occurrences in that period by the testimony concerning the subsequent conduct, acts, and statements of the parties in interest.

The credit of the original Dove Company, as a subject involved, lay upon the very surface of the transactions during the period mentioned, would naturally have been in the minds of the parties, and according to the testimony for the defendant was to some extent the subject of discussion provoking a statement that the credit would become further impaired if the sale to the ice company was put through, and that would cause a cancellation of the coal contract. As the plaintiff subsequently sought continued credit for the new company, and hot for the contracting party, it was for the jury to determine whether or not the contract was and should be considered as cancelled and abandoned.

No formal notice was necessarily required, as under the peculiar circumstances of this case the initiation of all the transactions in question was caused by the plaintiff company. Knowledge may be equivalent to notice. Nor do we think the testimony is sufficient to raise any question of waiver. The right to take advantage of a stipulation concerning impairment of credit is not similar to that arising upon a breach by the other party of an affirmative condition in a contract of sale. It is a continuing right or contractual privilege inhering at all times in the dealings of the parties. In connection with such a stipulation, there is no breach of a specific term in the contract, which the other party overlooked in a way to mislead the party in default. Under the Virginia decisions no question of waiver could arise here. Ford Motor Co. v. Switzer, 140 Va. 383, 125 S. E. 209; Atlantic Coast Line R. R. Co. v. Bryan, 109 Va. 523, 65 S. E. 30; Security Company v. Fields, 110 Va. 827, 67 S. E. 342; Richmond Trust Co. v. Christian, ante, page 244, 142 S. E. 528. If the coal company had continued to furnish the coal during October, then the question of waiver might have arisen. The question of impairment of credit, and assignment or requirement by the original contracting buyer that the seller should accept a substituted buyer, are so interwoven in this case that the seller could rely upon both and was not put to an election. In instruction 2 given by the court the general right of recovery was plainly stated. By instructions 3, 6, C-3 and C-4 the court gave the correct law to the jury, by which they were to consider the question of impairment or loss of credit. These instructions are in accord with the instructions approved by the court in Sun Company v. Burruss, 139 Va. 279, on page 289, 123 S. E. 347, and properly guarded the rights of the plaintiff.

In the instructions 5, 7, C-l and 0-2, considered together, the court told the jury that the coal contract could be assigned, if properly and legally done, and correctly defined what were the proper and legal elements of an assignment in the case before them. It is settled law that as a general rule the obligation arising under a contract may be assigned to a third party, the assignment or transfer may be made to appear by oral statements of the parties, or by their acts and conduct. When the contract contains mutual obligations and liabilities, or involve a relation of personal confidence, it cannot be assigned by one party without the consent of the other. The contract in question here was an executory contract requiring performance on the part of the seller by deliveries made from time to time, with a right during the execution of the contract to cease performance if there was an impairment of this particular buyer’s credit, and with other mutual stipulations. It is often difficult to determine when one party to a contract has a right to transfer it to another party, so as to give him a substituted right to demand performance of the eontractee. Under the decisions in McGuire v. Brown, 114 Va. 235, 76 S. E. 295; and Eastern Corporation v. Beazley, 121 Va. 4, 92 S. E. 824, we are of opinion that the contract in the instant case was not transferable without the assent of the coal company. The duty of accepting the ice company or the new corporation as the buyer and of investigating its credit could not be “thrust upon” the seller, as said in McGuire v. Brown, supra. See also Arkansas Valley Smelting Co. v. Belden Mining Co., 127 U. S. 379, 8 S. Ct. 1308, 32 L. Ed. 246; Hardy Implement Company v. Iron Works, 129 Mo. 222, 31 S. W. 599; Paige v. Faure, 229 N. Y. 114, 127 N. E. 898, 10 A. L. R. 649. Instant demand by the new corporation, as the substituted party, for continued performance of the contract with it seems to have been made by Mr. Otey for the ice company and continued through Mr. Dove, who had been president of the old company. The effect of this and of the evidence generally was properly left to the jury. The numerous instructions offered both by the plaintiff and by the defendant in conflict with the principles embodied in the instructions given were properly refused.

Since we are of opinion to affirm the judgment of the trial court entered upon a verdict finding that the plaintiff was not entitled to recover, it is not necessary to notice the interesting questions regarding the proper measure of damages, argued at length by counsel.

We have given the ease careful consideration, and we are satisfied that one fair trial has been had upon the merits of the ease and, therefore, “substantial justice” has been afforded the litigants- — as held in Northwestern Nat. Insurance Company v. Cohen, 138 Va. 177, 121 S. E. 507.

The court deems it proper to call attention to the following condition of the record in this case. The proceedings and evidence in the trial, appearing in the printed record from page 89 to page 303, were manifestly taken from the stenographer’s transcript. It is not in any way identified nor authenticated by the trial judge. Bill of Exceptions No. 11 merely refers to “the following as the evidence,” but there is nothing to indicate what is the evidence. Such a reference does not comply with the requirement held requisite in Turner v. Smith, 143 Va. 206, 129 S. E. 367; Blackwood Coal Company v. James’ Adm’r, 107 Va. 656, 60 S. E. 90, and Pereira v. Moon, 146 Va. 225, 135 S. E. 672. As no point was made of this by defendant’s counsel, and as the court had considered and passed upon the case, and it is possible the original in the trial court may contain a certificate of the trial judge, we have not further examined into this situation.

Upon the whole case we find no error prejudicial to the plaintiff in error, and the judgment is affirmed.

Affirmed.

Case Details

Case Name: J. Maury Dove Co. v. New River Coal Co.

Court Name: Court of Appeals of Virginia

Date Published: May 24, 1928

Citation: 150 Va. 796

Court Abbreviation: Va. Ct. App.