| Or. | Apr 4, 1911
Dissenting Opinion
dissents.
A brief history of the case pertaining to this contract is as follows: The contract having been fully performed in 1905, in 1906 before the time for delivery arrived, plaintiff brought an action and recovered judgment for $4,000 for the April and May payments of that year: Krebs Hop Co. v. Livesley & Co., 51 Or. 527" court="Or." date_filed="1908-12-17" href="https://app.midpage.ai/document/krebs-hop-co-v-livesley-6900785?utm_source=webapp" opinion_id="6900785">51 Or. 527 (92 Pac. 1084). Thereafter no hops of the crop of 1906 having been delivered to defendants, they brought suit against plaintiff for an accounting, and to offset and stay the enforcement of the judgment for $4,000, resulting in a decree in favor of Krebs Hop Company. On appeal to this court, Mr. Justice Slater, having been a counsel, did
The principal point relied upon by defendants for the reversal of this case is their contention that the contract out of which this action arose is an entire contract, and, plaintiff having obtained certain judgments against defendants on account of their alleged breach thereof, it is barred and estopped from recovering anything in this action. That the contract being an entire contract, the plaintiff, on account of the breach thereof on the part of defendants, may recover but once on account of such breach, and that the measure of damages for the breach of the contract, assuming that defendants were guilty of such breach, is the difference between the contract price and the market value of 400,000 pounds of hops on March 24, 1906, the date on which defendants gave notice that the contract was abrogated. From this contention it seems that defendants assumed they could, by their own acts or declarations, terminate the contract without the aid or consent of the other party, naming the remedy plaintiff should pursue. It appears defendants sought to cancel the contract, but plaintiff refused to acquiesce therein, or to permit defendants to rescind. As stated in L. S. & M. S. Ry. Co. v. Richards, 152 Ill. 59" court="Ill." date_filed="1894-06-19" href="https://app.midpage.ai/document/lake-shore--michigan-southern-railway-co-v-richards-6965856?utm_source=webapp" opinion_id="6965856">152 Ill. 59, 80 (38 N. E. 773, 777: 30 L. R. A. 33):
“It is well settled that, where one party repudiates the contract and refuses longer to be bound by it, the injured party has an election to pursue either of three remedies: (1) He may treat the contract as rescinded, and recover upon quantum meruit so far as he has performed; or (2) he may keep the contract alive for the benefit of both parties, being at all times himself ready and able to per*580 form, and at the end of the time specified in the contract for performance, sue and recover under the contract; or (3) he may treat the repudiation as putting an end to the contract for all purposes of performance, and sue for the profits he would have realized if he had not been prevented from performing.”
The plaintiff in this casé has elected to rely upon the second remedy — to keep the contract alive for the benefit of both parties, being at all times himself ready and able to perform, and at the end of the time specified for performance, sue and recover.
“An effort has been made in many cases by the purchaser to relieve himself from the contract of sale before the time fixed for performance by giving notice that he would not be ready to complete the agreement, and in these cases it has been insisted that the damages should be estimated as at the time of giving notice; but the English courts have justly denied the right of either party to rescind the agreement, and have adhered to the day of the breach as the period for estimating damages.”
And in Kadish v. Young, 108 Ill. 170" court="Ill." date_filed="1883-11-20" href="https://app.midpage.ai/document/kadish-v-young-6962196?utm_source=webapp" opinion_id="6962196">108 Ill. 170, 176 (43 Am. Rep. 548):
“If a party is not compelled to accept the declarations of the other party to a contract that he will not perform it, as a breach, it must logically follow that he is under no obligation to regard that declaration for any purpose, for, as we have seen, the theory in such case, as laid down by Cockburn, C. J., in Frost v. Knight (L. R. 7 Exch. 111) is: ‘He keeps the contract alive for the benefit of the other party, as well as his own. He remains subject to all his own obligations and liabilities under it, and enables the other party, not only to complete the contract, if so advised, notwithstanding his previous repudiation of it, but also to take advantage of any supervening circumstance which would justify him in declining to complete it.’ ”
“It cannot be laid down as a universal rule that, where by agreement an act is to be done on a future day, no action can be brought for a breach of the agreement till the day for doing the act has arrived.”
But from this it by no means follows that the injured party is compelled to bring action immediately upon the breach of the contract, as appears to be insisted upon in the case at bar, and thereby be deprived of his option of either of the three remedies named. In other words, in such cases the right of option is given to the injured party, and not to the party in the wrong: Roehm v. Horst, 178 U.S. 1" court="SCOTUS" date_filed="1900-05-14" href="https://app.midpage.ai/document/roehm-v-horst-95279?utm_source=webapp" opinion_id="95279">178 U. S. 1 (20 Sup. Ct. 780: 44 L. Ed. 953" court="SCOTUS" date_filed="1900-05-14" href="https://app.midpage.ai/document/roehm-v-horst-95279?utm_source=webapp" opinion_id="95279">44 L. Ed. 953).
“A contract to do several things at different times is divisible in its nature, and an action will lie upon each default. * * But when a party has distinct demands or existing causes of action growing out of the same contract or resting in matter of account, which may be joined and sued for in the same action, they must be joined; they constitute an entire cause of action or demand; and if they be split up and a suit be brought for a part only, and subsequently a second suit for the residue, the first action, if determined on the merits, will be a bar. This is not to be carried so far as to bar an action on the*582 contract because judgment has been obtained against the party who failed to perform for a tort resulting from the breach. * * But it is entire claims only which cannot be divided within this rule; those which are single and indivisible in their nature. The cause of action in the different suits must be the same. The rule does not prevent, nor is there any principle which precludes, the prosecution of several actions upon distinct causes of action. * * Perhaps as simple and safe a test as the subject admits of by which to determine whether the case belongs to one class or the other is by inquiring whether it rests upon one or several acts or agreements. In the case of torts each trespass, conversion, or fraud gives a cause of action, and but a single one; in respect to contracts, express or implied, each affords one and only one cause of action. The case of a contract containing several stipulations to be performed at different times is no exception; although an action may be maintained upon each stipulation as it is broken before the time for the performance of the others the ground of action is the stipulation which is in the nature of a several contract.” 1 Sutherland, Damages (2 ed.) § 110.
Quoting from, noteworthy cases of this State on this feature, Justice Burnett,- in Southwell v. Beezley, 5 Or. 458, ruled that, “the question whether a contract is entire or separable, is often of great importance. -Any contract may consist of many parts, and those may be considered as parts of one .whole, or as- so many distinct contracts, entered into at one time and expressed in the same instrument, but not thereby made one contract. No precise rule can be given by which this question in" a given case may be settled. Like most other questions of construction, it depends to some extent upon the intention of the parties, and this must be discovered in each case by considering the language employed and the subject-matter of the contract,” citing 3 Parsons, Contracts, 517.
In Tenny v. Mulvaney, 8 Or. 129" court="Or." date_filed="1879-07-15" href="https://app.midpage.ai/document/tenny-v-mulvaney-6893951?utm_source=webapp" opinion_id="6893951">8 Or. 129, where the contract provided for the cutting and delivery at Mulvaney’s mill of 1,000,000 feet of merchantable logs within a year, at
“As to whether this contract is entire or severable is a question of construction, which depends upon the intention of the parties, to be ascertained from the language employed and the subject-matter of the contract. If the part to be performed by one party consists of several distinct and separate items, and the price to be paid by the other is apportioned to each item to be performed, or is left to be implied by law, such a contract will generally be held to be severable.”
While in Oliver v. Oregon Sugar Co., 42 Or. 276" court="Or." date_filed="1902-12-22" href="https://app.midpage.ai/document/oliver-v-oregon-sugar-co-6899156?utm_source=webapp" opinion_id="6899156">42 Or. 276 (70 Pac. 902), we note Justice Bean says:
“The beets were to be paid for by the ton, and when the quantity delivered by either of the classes of cars specified was ascertained the contract was thereby so far performed that the rights and obligations of the parties with reference to such car loads were fully fixed and established. Whether a contract is entire or severable is a question of construction, depending upon the intention of the parties, to be ascertained and determined from the language employed, the subject-matter, and the surrounding circumstances.”
And in Longfellow v. Huffman, 55 Or. 481" court="Or." date_filed="1909-11-15" href="https://app.midpage.ai/document/longfellow-v-huffman-6901479?utm_source=webapp" opinion_id="6901479">55 Or. 481 (104 Pac. 961), wherein the contract is similar to the one at bar, Chief Justice Moore, in disposing of the question, remarks:
“The trial court evidently proceeded on the theory that the contract sued on was entire, and that the plaintiff's failure to tender the value of the lambs raised in the year 1905 worked a forfeiture of all his rights to this increase, thus authorizing the defendants to rescind the agreement, for which reason a verdict for the latter was directed. The legal principle thus adopted is amply supported by reputable authority. (Citing authorities.) * * This court, however, is committed to a different rule announced by Mr. Justice Prim in Tenny v. Mulvaney, 8 Or. 129" court="Or." date_filed="1879-07-15" href="https://app.midpage.ai/document/tenny-v-mulvaney-6893951?utm_source=webapp" opinion_id="6893951">8 Or. 129, 137.”
See, also, Barnes v. Leidigh, 46 Or. 43" court="Or." date_filed="1905-01-09" href="https://app.midpage.ai/document/barnes-v-leidigh-6899759?utm_source=webapp" opinion_id="6899759">46 Or. 43 (79 Pac. 51).
“Various tests have been suggested for determining whether the judgment recovered in one action is a bar to a subsequent action. ‘The principal consideration is whether it be precisely the same cause of action in both. * * And one great criterion of this identity is that the same evidence will maintain both actions.” Kitchen v. Campbell, 2 W. Bl. 827.
“It is not a test of the right of a plaintiff to maintain separate actions that all the claims might have been prosecuted in a single action.” Perry v. Dickerson, 85 N.Y. 345" court="NY" date_filed="1881-05-31" href="https://app.midpage.ai/document/perry-v--dickerson-3603384?utm_source=webapp" opinion_id="3603384">85 N. Y. 345 (39 Am. Rep. 663).
Application of the rule does not depend upon any technical consideration of the identity of the form of action, but upon matter of substance. Brunsden v. Humphrey, 14 Q. B. Div. 141.
“If different allegations are required in the pleading and different evidence on the hearing, the cause of action is not split.” Stark v. Starr, 94 U.S. 477" court="SCOTUS" date_filed="1877-05-18" href="https://app.midpage.ai/document/stark-v-starr-89496?utm_source=webapp" opinion_id="89496">94 U. S. 477, 485 (24 L. Ed. 276).
To the same effect, see Gentry v. Pacific L. Co., 45 Or. 233" court="Or." date_filed="1904-06-20" href="https://app.midpage.ai/document/gentry-v-pacific-livestock-co-6899627?utm_source=webapp" opinion_id="6899627">45 Or. 233 (77 Pac. 115); La Follett v. Mitchell, 42 Or. 465" court="Or." date_filed="1902-08-11" href="https://app.midpage.ai/document/la-follett-v-mitchell-6899200?utm_source=webapp" opinion_id="6899200">42 Or. 465 (69 Pac. 916: 95 Am. St. Rep. 780). The stipulation as to the sale of the crop of hops of 1908 in the contract sued upon is in the nature of a several contract, and the former judgment is not a bar to this action.
“Nothing would seem to be plainer than that while the contract is still subsisting and unbroken the parties can only be compelled to do that which its terms require.”
All other errors deemed of importance were settled in the former actions referred to.
The judgment of the lower court is affirmed.
Affirmed.
Rehearing
On Petition for Rehearing.
[118 Pac. 165.]
delivered the opinion of the court.
Defendants petition for a rehearing upon the point involving the measure of damages. For a statement and former opinion of the case, see 114 P. 944" court="Or." date_filed="1911-04-04" href="https://app.midpage.ai/document/krebs-hop-co-v-livesley-6902223?utm_source=webapp" opinion_id="6902223">114 Pac. 944.
Prior to the last date for the delivery of 100,000 pounds of hops for the year 1908, according to the terms of the contract, plaintiff sent the following letter to defendants:
“Salem, Oregon, Oct. 8, 1908.
“Messrs. T. A. Livesley & Co.,
“Salem, Oregon.
“Dear Sirs: Our contract with you, dated 25th August, 1904, for the sale of one hundred thousand pounds of hops of the growth of the years 1905 to 1909, inclusive, provides, as you are aware, that we shall deliver the hops not later than October 15th, f. o. b. cars Independence or f. o. b. boat at Murphy’s Landing. In 1905 we delivered the hops on board boat at Murphy’s Landing at your request. The contract does not state whether we or you have the option of delivering on board cars or on board boat, but in any event we are willing to deliver the hops this year wherever you may designate. Kindly therefore let us know at once by return mail whether you desire the hops delivered on board cars at Independence or on board boat at Murphy’s Landing, so that we may provide the cars or boat for delivery as you may desire. We have this year one hundred thousand pounds of hops of the kind and quality described in the contract, and we hope you will be pleased with the same. Inviting your immediate response, we are,
“Yours truly,
“Krebs Hop Company.,
“By Leonard Krebs, vice president.”
“Oct 15th, 1908.
“Krebs Hop Co.,
“Salem, Oregon.
“Gentlemen: We have received your registered letter of the 8th inst. You are aware that we do not regard this contract as in force. You also know that we do not think it is our business to say whether you should deliver the hops, if the contract were in force, at Murphy’s Landing or at Independence. We decline to recognize the contract in any way. We are in the market however to buy hops, and to pay the market price for such hops as we wish. We have no objection to buying your hops independently of any contract. If you have 100,000 pounds of hops of the growth of 1908, and the same are prime Oregon hops, and if you wish to sell them to us subject to our inspection, we are willing to buy this quantity of hops of said uality from you, and will pay you for the same, f. o. b. cars at Independence, Oregon, eight cents per pound, provided you deliver the same not later than the 25th day of October, 1908, and if you accept this offer, give us notice at once on what day you will have the same ready for inspection.
“Yours truly,
“T. A. Livesley & Co.”
It was admitted by defendants in the pleadings that on the 15th day of October, 1908, hops of the kind and quality described in the contract were worth in the market at the time and place of delivery the sum of seven cents per pound, and no more, and upon the trial the difference between this price and the contract price (14 cents) was taken as the measure of damages.
In the case at bar the plaintiff chose and the trial court applied the third rule. In Havemeyer v. Cunningham, 35 Barb. (N. Y.) 515, in an action of damages for the breach of a contract to sell an invoice of sugar, brought by the vendee against the vendor for failure to deliver the sugar, it was held that the rule of damages for not delivering the sugar was the difference between the contract price and the market value on the day of delivery, and that this rule could not be varied by an offer of defendants to sell to the plaintiff at a price below the value on the day of delivery. Mr. Justice INGRAHAM, at page 522 of 35 Barb. (N. Y.), says:
“The plaintiffs had a right to a delivery of the property purchased at the stipulated price, and the defendants could not relieve themselves from the consequences of their refusal to deliver by an offer to sell at a higher price, although less than the subsequent market value. Such an offer, if accepted by the plaintiffs before the time of performance arrived, might have exposed them to the charge of having abandoned the first contract.”
The rules of damages apply with equal force to both buyer and seller, and Krebs Hop Company had the right to demand and receive the stipulated price upon a delivery of the hops which were tendered by it, according to the terms of the contract, and defendants had no right to any advantage to be gained by offering to make a new contract. It has been held that where a new contract is made by the parties in regard to the same subject-matter, which entirely supersedes the first contract, no action can be maintained on a ground of a breach of the first contract: Consumers’ Cotton Oil Co. v. Ashburn, 81 F. 331" court="5th Cir." date_filed="1897-05-25" href="https://app.midpage.ai/document/consumers-cotton-oil-co-v-ashburn-8859062?utm_source=webapp" opinion_id="8859062">81 Fed. 331 (26 C. C. A. 436); note, 35 Cyc. 615. In the last mentioned case, it was claimed that there was a contract of September 13, 1893, for sale by the company to Ash-
“The jury in this case are instructed, as a matter of law, that where a contract has been made between two persons, and at a subsequent period another contract,having reference to the same subject-matter, but changing the relations of the first contract, is entered into, the last contract controls or rescinds the first, though there be no such effect expressed between the parties. * *”
To which the court added:
“* * You will determine whether or not, at the time of making the second contract, it was the intention of the parties making the contract to waive or modify the first contract, and whether it was the intention of the parties to make a new. contract, separate and independent of the first, and without any relation thereto.”
In regard to this modification of the instruction requested, it is said:
“The question was, and is here, what was the legal effect of the second contract on the first? Did the second supersede, abrogate, and take the place of the first contract as a matter of law ? If the legal effect of the second contract, referring to and covering the same general subject-matter as the first contract, was that it took the place of the first contract, then the intention of the parties is not material. We think the effect of the second contract was, as contended for by the counsel for the company, that it superseded the first entirely. * * When he entered into the second contract, he lost all rights he might have claimed under the first. If he desired to insist upon his rights under the first contract, he should have stood by it, insisting on its performance, and not have made a subsequent arrangement.”
“Nor does the fact that in making his second contract the relator protested that he had rights under the first better his position. If he had any such rights and desired to maintain them, he should have abstained from putting himself in a position where he voluntarily took advantage of the second opportunity to secure the work. A party cannot avoid the legal consequences of his acts by protesting at the time he does them that he does not intend to subject himself to such consequences. In the case of Bank of United States v. Bank of Washington, 6 Pet. 8" court="SCOTUS" date_filed="1832-01-24" href="https://app.midpage.ai/document/the-bank-of-the-united-states-v-the-bank-of-washington-85758?utm_source=webapp" opinion_id="85758">6 Pet. 8 (8 L. Ed. 299), certain payments had been made to the first bank upon a decision by the court below, with notice that the payer intended to take the case to the Supreme Court of the United States, and would expect the payee (the Bank of the United States) to refund the money, if that court should reverse the decision of the court below and hold that it was not due. The court said: ‘No notice whatever could change the rights of the parties, so as to make the Bank of the United States responsible to refund the money.’ The whole case of this relator is covered by Gilbert v. United States, 8 Wall. 358 (19 L. Ed. 303), in which this court through Mr. Justice Miller, said: ‘If the claimants had any objection to the provisions of the contract they signed, they should have refused to make it. Having made it and executed it, their mouths are closed against any denial that it superseded all previous arrangements.’ ”
The offer of defendants contained in the letter, as its terms indicate, was a proposal to make a new contract, concerning the same subject-matter embraced in the original contract, and we do not think the plaintiff was required to accept the same or be governed thereby. It could not make the new contract without danger of further complicating the issues in a prospective action.
We adhere to our former opinion.
Affirmed: Former Opinion Approved.
Lead Opinion
delivered the opinion of the court.