152 Ill. 59 | Ill. | 1894
delivered the opinion of the court:
It is insisted in this court that the evidence is insufficient to sustain the verdict and judgment. The right and duty of this court to review the facts are placed upon two grounds: First, that under section 2, article 6, of the constitution, which provides, “the Supreme Court shall consist of seven judges, and shall have original jurisdiction in cases relating to the revenue, in mandamus and habeas corpus cases, and appellate jurisdiction in all other cases,” the provisions of section 89 of the Practice act, restricting the power of this court to the consideration of questions of law, only, and prohibiting the assignments of error calling in question the judgment of the Appellate Courts upon questions of fact, are unconstitutional and void.
We have so frequently held the act valid that it would seem to be no longer an open question. But if it -was, the correctness of former holdings in this regard is clearly authorized by the provisions of section 11 of the same article of the constitution. It is there provided, that after the year 1874 inferior Appellate Courts, of uniform organization and jurisdiction, may be created by the legislature, to which such appeals and writs of error as the General Assembly shall provide may be prosecuted, “and from which appeals and writs of error shall lie to the Supreme Court in all criminal cases, and cases in which a franchise or freehold or the validity of a statute is involved, and in such other cases as may be provided by law.” Under this provision the legislature was authorized to vest such courts with appellate jurisdiction in all such cases as, in the legislative discretion, were deemed proper.
In four classes of cases,—that is, criminal cases, and those involving a franchise or freehold or the validity of a statute,—the legislature is prohibited from rdaking the determination of such Appellate Courts final. In such cases appeals and writs of error must be allowed to the Supreme Court. In all other cases in which such courts are given jurisdiction bjr statute it is left by the constitution discretionary with the legislature to make the judgments of those courts final, or to provide for further appeal or writ of error, as in the legislative discretion" shall be deemed proper. It necessarily follows, that since the creation and organization of the Appellate Courts the jurisdiction of this court to review the final judgments of those courts, except in the four classes of cases enumerated in the constitution, is subject to the restrictions created by the legislature, and it follows that we are precluded from the consideration of any assignment of error questioning the determination of the Appellate Court upon questions of fact.
At the close of plaintiff’s evidence in chief, the defendant moved the court to instruct the jury to return a verdict in its favor, upon the ground that the evidence was insufficient to maintain the cause of action set forth in the declaration, which was overruled. The motion was in the nature of a demurrer to the evidence, and if defendant desired to avail itself thereof it should have abided by it. Instead of doing this it introduced evidence in its behalf, and submitted the cause to the jury without renewing its motion, thereby waiving the error, if error there was, in the decision of the court. (Joliet, Aurora and Northern Railway Co. v. Velie, 140 Ill. 59.) The defendant, however, by its instructions 1, 2 and 3, refused by the court, sought to raise the same question. By these instructions the court was asked to instruct the jury, first, the evidence was not sufficient to sustain a verdict for plaintiff; second, there was a variance between the proof and cause of action stated in the declaration; and third, ■ that the evidence did not show an abandonment of the contract by the defendant, and the verdict should therefore be for the defendant.
Instructions taking the case from the jury should only be given where the evidence, with all the legitimate and natural inferences to be drawn therefrom, is wholly insufficient, if credited, to sustain a verdict for the plaintiff. (Simmons v. Chicago and Tomah Railroad Co. 110 Ill. 340; Purdy v. Hall, 134 id. 298; Pullman Palace Car Co. v. Laack, 143 id. 242, and cases cited.) Where there is evidence tending to sustain the issues in behalf of the plaintiff, the weight to be given thereto must be submitted to the jury, and when their finding of fact has been approved by the trial and Appellate Courts, no question of the sufficiency of the evidence to support the verdict can be raised in this court. It will be proper, therefore, to so far examine the evidence as to enable us to determine whether there'was evidence tending to support the plaintiff’s cause of action, as alleged in his declaration.
In the discussion which will follow, it will become apparent that we are of opinion that there was evidence tending to sustain plaintiff’s cause of action, as alleged, and that therefore said instructions were properly refused. Whether the evidence, when considered together, is sufficient to maintain the plaintiff’s case, is a question which does not fall within our province to determine.
The principal question to be determined in this case arises upon the second and third instructions given at the instance of the plaintiff,-as follows :
2. “If the jury believe, from the evidence, that 'the defendant, by its acts and conduct, showed an intention not to be bound by said contract, then said Richards, Maynard & Co. had the right to treat said -contract as abandoned by said defendant, and to bring suit for the recovery of damages at any time thereafter, unless you believe, from the evidence, that the defendant company receded from such intention not to be bound, prior to the time when said plaintiff chose to treat said contract as abandoned by the defendant. An intention can only be knowm by acts, conduct or declaration. Your inquiry in this connection is, first, did defendant, by act and conduct, violate the substantial terms of the contract, and commit breaches in substantial provisions thereof; second, did such acts and conduct, if you believe, from the evidence, they existed, warrant the conclusion that they would be continued, and that it was the intention of the defendant to continue such acts and conduct.
3. “If the jury believe, from the evidence, that the defendant railway refused to and did not live up to its said contract in its substantial provisions, and refused to perform it according to its terms, and abandoned the same without the fault of Richards, Maynard & Co., and that defendant prevented Richards. Maynard & Co. from performing the substantial provisions of said contract according to its terms, then the plaintiff is entitled to recover; and it is not necessary that Richards, Maynard & Co. should have been prevented from performing said contract by physical force, in order to give them the right to treat said contract as abandoned by the defendant railway, and to recover damages from said defendant company in this suit. If the jury believe, from the evidence, that said defendant railway refused to and did not live up to its said contract, and refused' to perform it according to its terms, and if you believe, from the evidence, that defendant defeated the substantial object of the contract, or rendered it unattainable by proper performance on the part of the firm of Richards, Maynard & Co., and that defendant prevented Richards, Maynard & Co. from performing the said contract according to its terms, as above suggested, then the jury may find for the plaintiff, and assess the damages at such a sum as they believe, from the evidence, that the plaintiff has suffered by reason of such breach.”
Bearing upon the same proposition, more or less directly, the court gave to the jury, at the instance of the defendant, its seventh, twelfth, sixteenth and seventeenth instructions, as follows:
7. “You are instructed that if the defendant committed breaches of the contract, still, if, from the evidence, you believe that such breaches did not defeat the substantial objects of the contract, or render it unattainable by proper performance on the part of the firm of Richards, Maynard & Co., then the plaintiff cannot recover, and your verdict must be for the defendant. ’
12. “The jury are instructed, as a matter of law, that a mere failure or refusal of the defendant to pay to plaintiff, or the firm of Richards, Maynard & Co., any sum of money demanded by him or them, and claimed to be on account of services previously rendered by said firm under the contract in question, can not be construed or treated as an abandonment of the said contract by the defendant, entitling the plaintiff or his said firm to maintain the present action, which is solely for the recovery of such profits as might have accrued to the plaintiff or his firm, if, on their part, said contract had been fully executed continuously for the period limited by said contract.”
16. “The jury are further instructed, as a matter of law, that in order to entitle the plaintiff to recover in this case, it is necessary for him to establish, by a preponderance of evidence, that he and the firm of Richards, Maynard & Co. were by the acts of the defendant prevented from the performance, of said contract on their part, or that the execution of the said contract on their part was interrupted by, and as the legitimate consequence of, the acts of the defendant, in disregard Of its obligations under said contract.
17. “The failure of the defendant to pay, when demanded, any moneys due and owing to plaintiff under the contract was not such an act or omission, in itself,' on the part of defendant, as to prevent the plaintiff completing the contract.”
Upon an examination of the evidence for the purpose of determining the propriety of the instructions, it will be found that it tends to prove that shortly after the plaintiff’s firm had, in pursuance of the contract, constructed and equipped their transfer house and commenced the weighing and transfer of grain therein, controversies arose between the parties as to the proper construction of the contract, the rights of the plaintiff and the duties and obligations of the defendant thereunder. It was claimed by the defendant that it was not required by the contract to deliver to the plaintiff’s firm, to be by them weighed and transferred, all of the grain received by the defendant from western railroads for transportation to the east over its lines, but that it had the option to deliver, to be thus weighed and transferred, only such grain as it chose to deliver, and had the right to divert from plaintiff’s transfer house, and was at liberty to transfer and weigh, all or such part of the grain received by it from western railroads as it thought proper, by other modes, and, acting on that interpretation of the contract, it did in fact withhold large amounts of grain from the transfer house, and had the same transferred by other methods, thereby depriving the plaintiff’s firm of a considerable portion of the business to which they were entitled by the terms of the contract. And also, that soon after the transfer house was open, and during all the time it was in operation, the defendant claimed the right under the contract, and adopted and persisted in the practice, of using the weights obtained from the plaintiff’s firm for other purposes than that of billing the property weighed to its destination,— that is to say, by giving away such weights to the western railroads over which the property had been brought to Chicago,—thus placing it out of the power of plaintiff’s firm to make sales of such weights to western railroads and others, and thereby depriving the firm of practically the only source of profit secured to them by the contract. It will also appear that the evidence tends to show that other differences arose as to the amount to be paid by the defendant on account of the expense of transferring through the transfer house, and as to the basis upon which the cost thereof should be computed, etc.
The construction placed upon this contract, in respect of the matters of difference before mentioned, by this court in Lake Shore and Michigan Southern Railway Co. v. Richards, 126 Ill. 448, relieves us of the necessity of again construing it. We there held that both the giving away of weights to the western railroads, and the refusal of appellant company to deliver to plaintiff’s firm, for weighing and transfer, all grain received by it for transportation from western railroads, were violations of its contract. It was there found that the market value of the weights was seventy cents per car, and that the appellant had given away to western railroads the weights of 12,357 cars transferred and weighed by plaintiffs, in violation of the contract. It was also found that many other cars had been transferred and weighed by other methods than through the transfer house of plaintiffs; that 1267 of such cars were transferred on track by appellant in January, February and March, 1885, alone, in violation of the contract. That bill was filed on June 5, 1886, and asked, among other things, a reformation of the contract. The court, by its final decree, refused to reform the contract, but held it to be valid and binding between the parties in the form in which it was executed.
There can be no question that on June 5, 1886, and prior thereto, the evidence tended to show that the defendant was then guilty of breaches of the contract as it was then held to be subsisting and binding between the parties. Aside from the large amount of business diverted by appellant from the transfer house of the plaintiffs, which it was bound to furnish them under the contract as then construed, of the 24,700 carloads of grain and seed which appellant delivered to and permitted to be weighed and transferred through the transfer house, the weights of 12,357 cars, or fifty per cent of the entire business done, was given away by the defendant, in violation of its covenants.
We need not pursue this branch of the case farther. But to these may be added other breaches of the contract by the defendant, which the evidence tends to show, namely, its refusal to pay the transfer charges or expenses, and its refusal to be bound by the stipulations of the contract providing for a submission to arbitration of all differences between the parties in respect of the spirit, meaning or execution of the contract.
It admits of no argument that the principal consideration upon which plaintiff’s firm undertook to build, equip and operate their transfer house was the privilege given them of weighing and transferring all grain and seed delivered by western roads to the defendant for transportation eastward over its lines, and the right secured to them to control the weights of the grain thus transferred, and make sale of them to whosoever might desire to purchase. It was clearly contemplated that the sale of such weights should be the source of profit to plaintiffs, and, as the result shows, was practically their only source of profit from the business. During the time the transfer house was in operation there is no complaint that they did not keep and perform their agreements. By the wrongful act of the defendant in giving away the weights, more than one-half of the legitimate profits of the business actually done was taken from them, and by the wrongful diversion of business they were deprived of large profits to which they were entitled under their contract. By the wrongful act of the defendant they were deprived of a very large proportion of the substantial consideration upon which the contract was entered into by plaintiffs.
The evidence tends to show that the defendant, after the fifth of June, 1886,—the date of filing the bill in the case referred to,—manifested and declared its intention to persist in the future in the same course of conduct and to insist upon the same construction of the contract. May 13, 1886, the attorney to whom the matter had been referred by the defendant, in reply to a note enclosing an itemized statement of account, refused to allow, under the contract, for weights given away by defendant, and-expressly said, “under the contract the company is not bound to deliver grain to Richards except at its option.” On June 9, 1886, the defendant’s western division superintendent wrote to plaintiffs, acknowledging receipt of statement of May, 1886, for cost of grain and seed transferred, and disallowing the account, hut re-stating the same in accordance with the interpretation of the contract previously insisted upon by the defendant. On June 11, 1886, plaintiff’s firm replied, noting the refusal contained in the letter of June 9, re-stating the balance due, and notifying the defendant that unless the same was paid by twelve o’clock M., June 16, plaintiffs would be compelled to suspend operations, etc. On the same day the attorney of the company, to whom the matter had been referred, wrote the plaintiff’s firm that the company could not change the position taken in the letter of the superintendent, and the letter of May 13, 1886, before mentioned. It thus appears that as late as June 11 the company was insisting that under the contract it was not bound to deliver grain to the transfer house of plaintiff’s firm except as it chose to do so, and was likewise denying its liability, under the contract, for the weights it had given away, and for transfer charges, etc. No change occurring in the attitude of the parties, plaintiff’s firm closed their house on June 16, and notified the defendant accordingly.
As early as September 11, 1885, the plaintiff’s firm addressed a communication to the president of the defendant company, asking for an arbitration of the differences between them, under the contract, and naming a person to represent the plaintiff’s firm, and again, on March 29, 1886, made a like demand and named an arbitrator to act for and on behalf of the plaintiff’s firm. The defendant company declined to submit the matters in difference to arbitration.
The correspondence before referred to, as well as other facts shown, may be' fairly said to show a fixed determination on the part of the defendant company, after June 5, 1886, to persist in and continue the same breaches of its contract in the future of which it had theretofore been guilty,—that is, to persistently pursue a course of conduct which would deprive plaintiff’s firm of much the larger portion, if not all, of the substantial benefits of the contract. If it might, at its option and will, give away one-half of the weights of cars actually transferred, as it claimed the right to do, it might give them all away. If it was optional with the defendant to deliver for weighing and transfer only such cars of grain received by it from western roads for transportation east over its lines as it might choose, and divert the business from the transfer house at will, the contract ceased to be operative and binding on the defendant. Such construction, in effect, was a repudiation of that part of the contract to be kept and performed by the defendant, and was a denial of the right of the plaintiff to have and demand the substantial benefits of the contract as it existed between the parties.
That the breaches of the contract which the evidence tends to establish were such as would justify a rescission thereof by Richards, Maynard & Co., and enable them to recover upon quantum meruit or quantum valebant, so far as they had actually performed, does not admit of question. The relief sought is not upon that principle. The law is familiar that upon rescission of the contract the recovery is confined to the value of the services, etc., rendered, and that damages for the breach, for the loss of expenditures or of profits, would not be allowable. United States v. Behan, 110 U. S. 338.
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 : He may treat the contract as rescinded, and recover upon quantum meruit so far as he has performed; or he may 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 in the contract for performance, sue and recover, under the contract; or 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. In the latter case the contract would be continued in force for that purpose. Where, however, the injured party elects to keep the contract in force for the purpose of recovering future profits, treating the contract as repudiated by the other party, in order to such recovery the plaintiff must allege and prove performance upon his part, or a legal excuse for non-performance. As said by'Lord Coleridge in Freeth et al. v. Burr, (L. R.) 9 C. P. 208: “In cases of this sort, where the question is whether the one party is set free by the action of the other, the real matter for consideration is, whether the acts or conduct of the one do or do not amount to an intimation of an intention to abandon and altogether refuse performance of the contract.” His lordship then adds: “I say this in order to explain the ground upon which I think the decisions in these cases must rest. There has been some conflict among them. But I think it may be taken that the fair result of them is as I have stated, viz., that the true question is, whether the acts and conduct of the party evince an intention no longer to be bound by the contract.”
It is insisted by appellant that to authorize one party to treat the contract as renounced and abandoned by the other, the breach must have been such, in effect, as to prevent performance by the injured party, or render the further execution of the contract by him impossible. It appears to be the theory of counsel for appellant, that in order to entitle the plaintiff to recover future profits under the contract, the breach by the defendant must have been of a condition precedent to be performed on its part, and which rendered the contract incapable of execution by the other, or some act or conduct on the part of the defendant amounting to a physical obstruction or prevention of performance by the plaintiff. This contention does' not commend itself either upon considerations of good conscience or convenience, and it will be found not to be sustained by the weight of authority. It would seem to be inequitable, and promotive of no good purpose, to require a party to continue in the performance of a contract notwithstanding the refusal of the other party to be longer bound by it. ■ The effect, in many cases, must be great loss to the plaintiff, without any corresponding benefit to the defendant; or, if it be ultimately held that the plaintiff is entitled to recover •his expenditures and for his labor in performing, the amount to be paid by the defendant will be greatly enhanced, while the plaintiff would of necessity take the hazard of increased loss in the event of the defendant’s insolvency. It would seem to be reasonable and just, upon the repudiation of the contract by one party, that the other be held justified in ceasing performance, stopping expenditure, and thus curtailing the damages which the other partjr would be ultimately liable to pay, and to permit recovery, once for all, of the damages that the injured party will sustain by the non-performance of the other party, the locus penitent-ice- being kept open until the injured party elects to treat the contract as abandoned by the other and brings suit as for non-performance.
While the decision should not be made to rest upon grounds of convenience to the parties, however just and equitable, (which, in view of the decided cases, need not be done,) yet the defendant should not be heard to complain, if, after acts and declarations evincing a clear determination to be no longer bound by or to perform the contract on his part, the other party treats it as abandoned by him. As said in Frost v. Knight, 7 Exch. 111: “It is obvious that such a course must lead to the convenience of both parties, and though we should be unwilling to found our opinion upon ground of convenience alone, yet the latter tends strongly to support the view that such an action ought to be admitted and upheld. By acting upon such notice of the intention-of the promisor, and taking timely measures, the promisee may in many cases avert, or, at all events, materially lessen, the injurious effects which would otherwise flow from the non-fulfillment of the contract.” See, also, Hosmer v. Wilson, 7 Mich. 304 ; cases infra.
The right of the plaintiff to have kept his transfer house in operation and to have been ready at all times to perform on his part, and, under the construction of the contract given in Lake Shore and Michigan Southern Railroad Co. v. Richards, supra, to have recovered, from time to time, his damages for breaches thereof, or, at the end of the term, sued to recover damages for all breaches, is not questioned in this proceeding. The plaintiff, however, in good conscience, while seeking to recover what he is entitled to under the contract, should do that which would be of least injury to the defendant, and if the defendant had repudiated the contract, so as to deprive the plaintiff of the substantial benefits arising from performance, it ought not to complain that a course was pursued least prejudicial to it.
The question here presented has not been directly involved in any of the cases heretofore considered by this court. In the cases of Fox v. Kitton, 19 Ill. 519, McPherson v. Walker, 40 id. 371, Chamber of Commerce v. Sollitt, 43 id. 519, Follansbee v. Adams, 86 id. 13, and Kadish v. Young, 108 id. 170, the questions involved were determined upon principles analogous, in some respects, to those which must control in this case. In Kadish v. Young, supra, a contract was made for the future delivery of grain. On the day succeeding the making of the contract the purchasers gave notice to the seller that they would not be bound by it, and the question was, whether such notice created a breach of the contract, and imposed on the seller the obligation to re-sell the barley on the market, or make a fonvard contract for the purchase of other grain, of like amount and time of delivery, within reasonable time after the notice, and if he sold, to credit the purchaser with the amount of the sale, or give him the benefit of such forward contract, or whether, notwithstanding the notice, the seller had the legal right to wait until the day of delivery under the contract, and then re-sell and charge the purchaser with the difference, and it was held that the seller was not bound to act upon the notice, but was entitled, notwithstanding, to tender, etc., on the day for delivery fixed by the contract. In the opinion by the late Mr. Justice Scholfield the authorities were reviewed, and the cases of Cort v. Ambergate, etc. Railway Co. 6 Eng. L. and Eq. 280, Hochster v. DeLatour, 20 id. 157, Frost v. Knight, (L. R.) 7 Exch. 111, Roper v. Johnston, (L. R.) 8 C. P. 167, (4 Moak, 397,) and other English and American cases, are commented upon, approved and held not to be in conflict with Lee v. Patterson, 8 Taunt. 540, Philpot et al. v. Fvans, 5 M. & W. 475, Ripley v. McGlure, 4 Exch. 230, and other cases, in which it is held that a party to a contract to be performed in the future cannot create a breach by merely giving notice that he will not perform. It will be found, upon examination of Kadish v. Young, that the learned writer clearly recognized the doctrine that the party receiving the notice might have acted upon it, and accepted and treated the contract as broken.
In Fox v. Kitton, supra, the question was whether, when a party agrees to do an act at a future time, and before the time for performance arrives declares he will not keep his contract, but repudiates it, the other party may act on such declaration and treat the contract as at an end, and on the authority of Philpot v. Evans, and Hochster v. DeLatour, it was held that he might do so. It will be found, also, in McPherson v. Walker, and Chamber of Commerce v. Sollitt, that Cort v. Ambergate Railway Co., Hochster v. DeLatour, and other English and American cases holding the same doctrine, are cited with approval, and relied upon as sustaining the decision in those cases.
Before proceeding to an examination of the cases referred to, it is proper to notice other Illinois cases supposed to have some bearing upon the question under consideration. Selby v. Hutchinson, 4 Gilm. 319, was a case of rescission, merely." It was there said: “In order to justify an abandonment of the contract, and of the proper remedy growing out of it, the failure of the opposite party must be a total one,—the object of the contract must have been defeated or rendered unattainable by” the misconduct or default of.the other party. In the subsequent case of Leopold v. Salkey, 89 Ill. 412, also a case of rescission, the language of Selby v. Hutchinson is commented upon, and it is said that case “is not understood as laying down the rule that, to justify an abandonment of a contract, the opposite party must have failed to discharge every obligation imposed on him, but simply that matters which do not go to the substance of the contract, and the failure to perform which would hot render the performance of the rest a thing different in substance from what was contracted for, do not authorize an abandonment of the contract, for when the failure to perform the contract is in respect to matters which would render the performance of the rest a thing different in substance from what was contracted for, so far as we are advised, the authorities all agree the party not in default may abandon the contract.”
It may be true that there are cases where the party would be justified in rescinding the contract, thereby putting an end to it for all purposes, where he would not be justified in treating it as renounced by the other party, which we are not called upon to decide. Yet it will be found that, under the rule as stated in these cases, as explained in the later case, the party will be entitled to recover future profits. The court, in these cases, was called upon simply to determine whether the facts there presented warranted rescission, and laid down the rule applicable to such facts, without, as a matter of course, intimating a distinction between the case there being considered and cases like that under consideration here.
- In the case of Palm v. Ohio and Mississippi Railroad Co. 18 Ill. 217, the question presented to the court was, whether the failure to pay the consideration for the work agreed to be done, according to the terms of the contract, was such an act as would authorize the other party to treat the contract as renounced and bring suit for future profits, and the court held that it was not. The court say: “In this case we have a contract for the manufacture and delivery of sixteen engines, each to be paid for on delivery, without any expression or intimation that the parties expected or intended that any extraordinary consequences were to follow if the money was not paid when due. All that the contract provides is, that so much in money and so much in bonds shall become due upon the delivery of each engine. By its terms it simply gives-the party a cause of action for that amount. * * * The contract provides for no other penalty or liability, and the law imposes no other, except, perhaps, that this-violation of the contract by the defendant in failing to make the payment may justify the plaintiffs in treating the contract as rescinded.” Or they could go on and complete the contract, and at the end recover the amount due thereunder. There was in that case no refusal to receive locomotives under the contract, nor were plaintiffs forbidden to complete it, nor was it in any way put out of their power to do so.
Very many of the cases before referred to have been decided since the Palm case, which, it must be remarked, cites no authority sustaining the view of that case contended for by appellant in this case. The learned judge who wrote in the Palm case says: “I have examined all the authorities referred to by counsel, and have made diligent search myself, but have found no case where the plaintiff has been allowed to recover for losses sustained by not being permitted to complete the contract, unless he has been prevented from going on with his work by the positive affirmative act of the other party, or where the other party has neglected to do some act without which the plaintiff could not, in the nature of things, go on with his contract.” After giving instances of conditions precedent, the learned judge holds, as before said, that the failure to pay would not authorize the plaintiff to treat the contract as abandoned by the defendant unless payment, in a specified time and manner, was by the contract made a condition precedent to performance by the plaintiff.
The case of Christian County v. Overholt et al. 18 Ill. 223, is similar in its facts to the Palm case, and is decided upon the same principle. In that case it is said : “The plaintiffs could only recover for prospective profits where they have been prevented from going on, either by some affirmative act of the defendant, as, by being ordered to desist from further work, or by the omission to perform some condition precedent to the further prosecution, as, to furnish or do something necessary to its further progress.” The breach there alleged was a failure to pay an installment as it fell due under the contract, and the case was disposed of upon the authority of the Palm case.
Stress is laid by counsel upon the words, “prevented from going on.” It is apparent from the language of the court, especially in the Overholt case, that physical prevention was not contemplated, for the illustration given shows that at least an order to desist from the work would be a prevention, within the meaning of the term as used. While in those cases there was no failure to perform a condition precedent, or a legal prevention from going on with the work under the contract, which would authorize the plaintiffs to treat the contract as repudiated by the other party and sue for prospective damages, and the court so held, still the cases clearly recognize that where there is a failure to perform a precedent condition, or there is a legal prevention of performance by one party, the other may treat the contract as abandoned by him and bring suit for future profits or prospective damages. The same language—i. e., that the party suing must be “prevented” from performance,—• has been used in numerous cases, but wherever the attention of the court has been directly called to the sense in which the word has been used, it has been held not to mean that there must be physical prevention, but that any acts, conduct or declarations of the party evincing a clear intention to repudiate the contract and to treat it as no longer binding are a legal prevention of performanee by the other party. Thus, in Hosmer v. Wilson, supra, it was held that an absolute refusal of the defendant to accept the manufactured article when it should be completed was to be considered in the same light, as respects the plaintiff’s remedy, as an absolute, physical prevention by the defendant,—citing in support, Cort v. Ambergate Railway Co. supra; Derby v. Johnson, 21 Vt. 21; Clash v. Marsiglia, 1 Denio, 317; Hochster v. DeLatour, supra.
In Cort et al. v. Ambergate Railway Co. supra, the plaintiffs contracted to supply the defendants with 3900 tons of iron chairs to be used in railway construction. They manufactured and delivered various quantities of chairs from May, 1847, until December, 1849, when the defendants informed plaintiffs that they did not want any more and not to send any more, leaving 2113 tons undelivered, whereupon plaintiffs brought suit to recover damages, including loss of profits. It was objected that to entitle the plaintiffs to recover they should have proved that the chairs had been made and had been tendered in the manner provided by the contract, or at least before the bringing of the suit, etc. In delivering the opinion of the court, Lord Campbell, C. J., said: “We are of opinion that the jury were fully justified,' ■ from the evidence, in finding that the plaintiffs were ready and willing to perform the contract, although they never made and tendered the residue of the chairs. In common sense, the meaning of * * * readiness and willingness must be, that the non-completion of the contract was not the fault of the plaintiffs, and that they were disposed and able to complete it if' it had not been renounced by the defendants. What more can reasonably be required by the parties for whom the goods are to be manufactured?” And after showing that if, after having accepted a part, the defendants resolved not to •accept the balance, the effect of compelling the plaintiffs to proceed with the manufacture and tender of them would be the enhancement of the damages the defendants would be required to pay, his lordship proceeds : “Upon the last issue, was there not evidence that the defendants refused to accept the residue of the chairs? If they had said, ‘Make no more for us, for we will have nothing to- do with them,’ was not that refusing to accept or receive them according to the contract? But the learned counsel for the defendant laid peculiar stress upon the words” (of the plea) “ ‘Nor did they prevent or discharge the plaintiffs from supplying the residue of the chairs and from the further execution of the contract. ’ We consider the material part of the allegation which the last plea traverses, to be, that the defendants refused to receive the residue of the chairs. But, assuming that the whole must be proved, we think there is evidence to show that the defendants did prevent and discharge the plaintiffs from supplying the residue of the chairs and from the further execution of the contract. It is contended that ‘prevent’ here must mean obstruction by physical force, and in answer to • a question from the court we were told it would not be a preventing of delivery of goods if the purchaser were to write in a letter to the person who ought to supply them, ‘Should you come to my house to deliver them I will blow your brains out.’ But may I not reasonably say that I was prevented from completing a contract by being desired not to complete it? Are there no means of preventing an act from being done except by physical force or brute violence?” After reviewing and commenting upon cases cited, it is then held that the plaintiffs were entitled to a verdict on pleas traversing allegations that they were ready and willing to perform the contract, that the defendants refused to accept the residue of the goods, and prevented and discharged the plaintiffs from manufacturing and delivering them.
Without further quotation from cases, it seems clear, both upon principle and by authority, that where one party to an executory contract refuses to treat it as subsisting and. binding upon him, or by his acts and conduct shows that he has renounced it and no longer considers himself bound by it, there is, in legal effect, a prevention of performance by the other party, and it can make no difference whether the contract has been partially performed or the time for performance has not yet arrived ; nor is it important whether the renunciation be by declaration of the party that he will be no longer bound, or by acts and conduct which clearly evince that that determination has been reached and is being acted upon. It would seem clear, on principle, that a mere declaration of the party of an intention not to be bound, or acts and conduct in repudiation of the contract, will not, of themselves, amount to a breach, so as to create an effectual renunciation of the contract, for one party cannot, by any act or declaration, destroy the binding force and efficacy of the contract. (Kadish v. Young, supra.) As said by Bowen, L. J., in Johnston v. Milling, 16 Q. B. Div. 460 : “Its real operation appears to be to give the promisee the right of electing either to treat the declaration as hrutum fulmén, and holding fast to the contract to wait till the time for its performance has arrived, or to act upon it, and treat it as a final assertion by the promisor that he is no longer bound by the contract, and a wrongful renunciation of the contractual relation into which he has entered. * * * If he does so elect, it becomes a breach of contract, and he can recover upon it as such.”
Upon the election to treat the renunciation, whether by declaration or by acts and conduct, as a breach of the contract, the rights of the parties are' to be regarded as then culminating, and the contractual relation ceases to exist, except for the purpose of maintaining the action for the recovery of damages. These views are amply sustained by numerous decided cases.
In Hochster v. DeLatour, 20 L. and Eq. 157, the plaintiff contracted to enter into the service of the defendant as a courier, and in such capacity attend him in travels about the continent of Europe, the service to begin on June 1, and continue for at least three months, at fixed monthly wages, but before the first of June, although the plaintiff was ready and willing to perform, the defendant renounced the contract and signified his determination to the plaintiff no longer to be bound by it, and the plaintiff, before the time for performance had arrived, brought assumpsit to recover his damages for the breach. It is there said, that “it is surely much more rational and more for the benefit of both parties that after the renunciation of the agreement by the defendant the plaintiff should beat liberty to consider himself absolved from any future performance of it, retaining his right to sue for any damage he has suffered from the breach of it. * * * The man who wrongfully renounces a contract into which he has deliberately entered, cannot justly complain if he is immediately sued for a compensation in damages by the man whom he has injured, and it seems reasonable to allow an option to the injured party either to sue immediately, or to wait till the time when the act was to be done, still holding it as prospectively binding, for the exercise of the option, which may be advantageous to the innocent party and cannot be prejudicial to the wrongdoer.” And it was then held that, after the defendant had signified his determination not to be bound by the contract, the plaintiff was entitled to bring his action immediately, and was not obliged to wait until after the day for the performance to begin had arrived.
In Frost v. Knight, supra, the defendant had promised to marry the plaintiff upon the death of his father. While his father was still living he repudiated the engagement and announced his intention not to fulfill his promise. The plaintiff, without waiting for the death of the father, at once brought her action to recover damage for the breach, and the court there say: “The promisee, if he pleases, may treat the notice of intention as inoperative, and await the time when the contract is to be executed, and then hold the other party résponsible for all the consequences of non-performance. But in that case 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. On the other hand, the promisee may, if he thinks proper, treat the repudiation of the other party as a wrongful putting an end to the contract, and may at once bring his action as on a breach of it; and in such action he will be entitled to such damages as would have arisen from the non-performance of the contract at the appointed time, subject, however, to abatement in respect of any circumstances which may have afforded him the means of mitigating his loss.”
The case of Freeth v. Burr, supra, already quoted from, is an instructive case, and fully sustains Hochster v. DeLatour, and other cases of like tenor before cited. It is there said that the test of whether there is a renunciation or not is, “whether the acts and conduct of the party evince an intention no longer to be bound by the contract.” In Mersey Steel and Iron Co. v. Naylor, 9 Q. B. Div. 648, Jessel, M. R., re-affirms and approves the doctrine of Freeth v. Burr, and holds that the question of whether there has been a renunciation of the contract by the defendant is a question of fact, to be determined by the consideration of the nature of the breach and the circumstances under which it occurred. The case, however, went off upon the holding that the circumstances were not sufficient to evince a determination on the part of the defendant to put an end to the contract and to be no longer bound by it. The decision was affirmed by the House of Lords on appeal; Lord Selbourne there saying: ‘You must look at the actual circumstances of the case in order to see whether the one party to the contract is relieved from its future performance by the conduct of the other. You must examine what .that conduct is, so as to see whether it amounts to a renunciation, to an absolute refusal to perform the contract, such as would amount to a rescission if he had the power to rescind, and whether the other party may accept it as a reason for not performing his part; and I think that nothing more is necessary in the present case than to look at the conduct of the parties, and see whether anything of that kind has taken place here.” See, also, Roper v. Johnstone, (L. R.) 8 C. P. 167; Ex parte Stapleton, (L. R.) 10 Ch. Div. 586; Planche v. Colburn, 8 Bing. 14; Danube and Black Sea Railway Co. v. Xenos, 13 C. B. (N. S.) 825.
The principle seems to have found general recognition by the courts of this country, a few, only, of which need be noticed. In Masterson v. Mayor of Brooklyn, 7 Hill, 61, the plaintiffs undertook and partially performed their contract with defendants to furnish material, etc., for the construction of the city hall. By order of the defendants the work was indefinitely suspended, and the plaintiffs brought suit to recover damages, including future profits. The principle announced in the English cases before noted is approved. Beardsley, J., there said: “The party who is ready to perform is entitled to full indemnity for the loss of his contract. He should not be made to suffer by the delinquency of the other party, but ought to recover precisely what he would have made by performance. This is as sound in morals as it is in law. * * * The plaintiffs were not bound to wait till the period had elapsed for the complete performance of the agreement, nor to make successive offers of performance, in order to recover all their damages. They might regard the contract as broken up, so far as to absolve them from making further efforts to perform, and give them a right to recover full damages as for a total breach. ”
The case of Hosmer v. Wilson has been already cited.
In Derby v. Johnson, supra, after holding that by the order of the defendants to discontinue the work the plaintiffs were prevented from further performance, it is said : “The plaintiffs might, in addition, in another form of action, have recovered their damages for being prevented from completing the whole work. In making these claims the plaintiffs would be acting upon the contract as still subsisting and binding; and they might well do so, for it doubtless continued binding on the defendants.”
In Hinckley v. Pittsburg Steel Co. 121 U. S. 264, the defendant agreed to purchase from the plaintiff steel rails, to be drilled as the defendant might direct. The defendant refused to give the directions, and at his instance the rolling of the rails was postponed until after the time of delivery, when the defendant refused to accept any rails under the contract. It was there said : “The defendant cofítends that the plaintiff should have manufactured the rails and tendered them to the defendant, and, upon his refusal to accept and pay for them, should have sold them in the market at Chicago, and held the defendant responsible for the- difference between what they would have brought on such sale and the contract price. But we think no such rule is applicable to this case. This was a contract for the manufacture of an article, and not for the sale of an existing article. By reason of the facts found as to the conduct and action of the defendant, the plaintiff was excused from actually manufacturing the rails, and the rule of damage applicable to the case of the refusal of a purchaser to take an existing article is not applicable to a case like the present."
In Haines v. Tucker, 50 N. H. 307, the defendants agreed to purchase of the plaintiffs 5000 bushels of malt, and to receive and pay for the same at the rate of 1000 bushels per month. Although plaintiffs were prepared to deliver the 1000 bushels per mouth, the defendants called for and received less than 1000 bushels during the first three months. The plaintiffs informed defendants that they were prepared to furnish the malt according to the terms of the contract, and requested them to receive the same at the rate of 1000 bushels per month, which the defendants refused to do. The undelivered malt, not utilized by plaintiffs themselves, was sold on the market, and plaintiffs brought assumpsit against the defendants to recover damages for a breach of the contract, and it was there held, following Cort v. Ambergate Railway Co. supra, and other cases, that the conduct of the defendants amounted to an unqualified renunciation of the contract, and that after such renunciation it was no longer necessary that the plaintiffs should hold themselves in readiness to perform, or to go to the trouble and expense of offering what had already been refused.
In Smith v. Lewis, 24 Conn. 624, the doctrine as announced in Cort v. Ambergate Railway Co. was approved and followed, and again re-affirmed in the same case. (26 Conn. 110.) In these cases the holding was, that under a contract containing mutual .and dependent covenants, a refusal on the part of the defendant to perform obviated the necessity of performance, or tender of performance, on the part of the plaintiff, after such refusal. See, also, United States v. Behan, supra; Crabtree v. Messersmith, 19 Iowa, 179 ; Holloway v. Griffith, 32 id. 409; Dugan v. Anderson, 36 Md. 567; Burtis v. Thompson, 42 N. Y. 246; Howard v. Daly, 61 id. 362; Smoot’s case, 15 Wall. 36; Dingley v. Oler, 117 U. S. 503.
It follows that, upon principle and authority, we are of opinion that instructions 2 and 3, when considered together, as they must be, announced the law to the jury correctly. „ The objection that the jury were thereby left to determine what were the “substantial provisions of the contract,” is, in view of the course of the trial and facts proved, obviated by instructions 7, 12, 13,16 and 17, given for appellant. By the seventh, as will be observed, the jury were told, that if the defendant committed breaches, still, if they did not defeat the substantial objects of the contract, or render it unattainable, by proper performance, on the part of Richards, Maynard & Co., then the plaintiff could not recover. By the twelfth they were told that the mere failure or refusal of the defendant to pay the plaintiff or his firm any sum of money demanded and claimed to be due on account of services rendered under the contract, could not -be construed as an abandonment of the contract by the defendant, such as would entitle the plaintiff or his firm to maintain the present action. By the sixteenth the jury were told, as a matter of law, that to entitle the plaintiff to recover in this case it was necessary for him to establish, by a preponderance of the evidence, that he and Richards, Maynard & Co. were, by the acts of the defendants, prevented from performing said contract on their part, etc. By the seventeenth they are again told that a failure to pay money due and owing to the plaintiff under the contract was not such an act or omission, in itself, on the part of the defendant, as would prevent the plaintiff fróm completing the contract. And by the thirteenth instruction given on behalf of the defendant the jury were told, that if they believed, from the evidence, that the plaintiff’s firm closed their transfer house for the reasons stated in their letter of June 11, 1886, to Mr. Amsden, namely, for refusal to pay their claim of $2592.95, and their account for the month of May, 1886, “and for no other reason,” then the plaintiff could not recover and the verdict must be for defendant. So by the eleventh instruction given on behalf of defendant the jury were told, that in determining whether the damages arising from any breach of the contract by the defendant can be ascertained and compensated for, they were not to take into consideration any refusal of the defendant to submit any differences between it and Richards, Maynard & Co. to arbitration; that the refusal to submit matters in dispute to arbitration was not such a breach of the terms of the contract as to warrant a recovery for such breach.
It seems clear, therefore, under the facts proved, that the question submitted to the jury was, whether the acts and conduct of the defendant showed a fixed determination to be no longer bound by the substantial provisions of the contract upon its part. As already seen, the consideration moving to Richards, Maynard & Co. for entering into the contract was the stipulation, on defendant’s behalf, to deliver, to be weighed and transferred through their house, all grain received by it from western roads to be transported east over its lines, that it could control, and that practically the only benefit to be derived by Richards, Maynard & Co. from the contract was by the sale of weights of grain thus transferred. The evidence tended to show that the railroad company had repudiated its liability to perform this part of its contract, and its duty, under the contract, to use the weights derived from plaintiff’s firm only in billing the grain to destination, but gave the same awray, so as to deprive plaintiff’s firm of the profits it would derive by the sale of such weights.
From what has preceded, no extended discussion will be necessary of the point made that there was a variance between the special count of the declaration and proof. It was alleged “that on the 16th day of June, 1886, the defendant abandoned the contract on its part, neglected and refused to perform the same, and refused, without any reasonable or just cause, to be bound by the same,” etc. As already shown, the effect of the position taken by and the conduct of appellant was a denial of its obligation to perform the substantial parts of the contract on its part.
. In connection with this point it will be proper to notice the contention that in the suit brought June 5, 1886, before referred to, the plaintiff recovered damages for all the breaches of the contract up to the bringing of that suit, and that, therefore, such breaches, being merged in the judgment in that cause, could not subsequently be made the occasion, by Richards, Maynard & Co., for treating the contract as abandoned by appellant. In bringing that suit the plaintiff undoubtedly treated the contract as subsisting, and had not then elected to treat- it as abandoned by the defendant and to sue for prospective damages. The suit was brought, and recovery had for actual breaches to the time of bringing it. We are not required to determine the question thus presented. If it should be conceded that the plaintiff’s claim in bringing that action is inconsistent with his right to show such breaches in this proceeding, it could not affect the result. Subsequently to the bringing of that action, as already shown, the railroad company refused to recede from its previous position, both in respect of its obligation, under the contract, to deliver cars to Richards, Maynard & Co., and to observe its contract in respect of the use to be made of the weights, and the evidence tends to show that at the time Richards, Maynard & Co. closed their transfer house, appellant was denying its liability under the contract, and evinced a clear intention not to be bound by its provisions.
It is urged, however, that there was here only a partial breach, arising from a difference in the construction of the contract, and that there was at no time a repudiation or renunciation of the contract by appellant,—that it was at all times desirous of keeping it in force and performing it. These are, as a matter of course, questions of fact, which are conclusively settled by the judgment of the Appellate Court; but in view of the instructions asked and refused, which sought to' take the case from the jury, it may be remarked that the evidence tended to show a repudiation by the railway company of th.e substantial provisions of the contract, which formed the consideration for the execution of it by plaintiff’s firm. It was not enough, to show that there was no repfidiation of the contract obligation by the appellant, to prove that appellant was furnishing some cars to be transferred through plaintiff’s transfer house, whereby plaintiff was partially receiving the benefits he claimed under the contract. The correspondence between the parties, before and after the 5th of June, 1886, shows that appellant was not delivering cars of grain to be transferred through the transfer house because it recognized any obligation on its part to do so, but claimed, and acted on such claim, that it was only bound to deliver such cars as it saw proper. In other words, it refused to be bound by the provision of the contract requiring it to deliver cars to plaintiff’s firm. Under the construction of the contract upon which it had acted and was proposing to continue to act, it was under no obligation to deliver any cars to be transferred by plaintiff’s firm, thus absolutely repudiating its contract liability to do so. True, it had not altogether ceased to deliver some cars to be thus transferred, but they were not delivered because of any contract liability to do it, but at their convenience and option. Its persistence in this course of conduct had been shown by its repeated refusal to submit the matters in dispute to arbitration, under the contract. The president of the company wrote, in reply to the demand of plaintiff’s firm for arbitration: “I have to say, that this company having at all times faithfully performed its obligations under said contract, I do not consider there are any matters calling for arbitration,” and declining the request for arbitration. While it is undoubtedly true that refusal to arbitrate would not, under the provisions of this contract, justify the plaintiff in treating the contract as renounced by appellant company, yet such refusal, and the correspondence in respect of the matter, tend to show the persistency with which appellant refused to be bound by the contract.
It is also objected that the court erred in the admission of testimony. First, that appellee was permitted to prove the cost of the transfer house, etc. It is a sufficient answer to say that it does not appear the .evidence was objected to.
It is, however, said, that the court erred in refusing to give the fifth instruction for appellant, which was, in effect, that no recovery could be had for the cost or value of the transfer house and its equipments, in this action. This instruction might with propriety have been given, but its refusal was not error.- At the beginning of the hearing, before the jury, counsel for the plaintiff stated that he did not attempt to show the breaches for the purpose of recovering for them, but for the purpose of showing, .simply, a breach of the contract which entitled the plaintiff to abandon the further performance of it and sue for damages for loss of future profits, when the following colloquy occurred : Mr. Jewett, (for defendant) : “In other words, there is nothing but the claim for future profits in this case.” Mr. Pence, (for plaintiff): “That is all there is in this case.” Later, and at the close of plaintiff’s testimony, the plaintiff sought to show what the transfer house was worth “standing there useless for the purpose for which it had been erected,” to which an objection by the defendant was sustained. This all took place in the presence of the jury, and would leave no question in the mind of any intelligent person as to the damages sought and allowed to be recovered. It seems clear that the jury could not have understood that they were to take anything into consideration other than the profits to be derived from-the transfer of grain under the contract, and they were, in effect, so told by the fourth instruction given at the instance of plaintiff.
On the trial of the cause certain letters written, one by Mr. Blodgett and one by Mr. Clark, commendatory of plaintiff’s method of transferring grain, etc., were offered and read in evidence, over the objection of defendant. That these letters were incompetent scarcely admits of question, and it is difficult to perceive upon what principle they were admitted. That the error was a harmless one is equally apparent. It was not controverted that the Richards method, so called, accomplished the purpose, nor was there any pretense that it was a failure, so that the plaintiffs did not perform their contract.
Other points are made in argument, which, in view of the length of this opinion, seemingly made necessary by the very ingenious and able argument of the learned counsel, it must suffice to say have been carefully considered and are not .deemed of such gravity as to warrant further discussion.
Finding no prejudicial error in this record, the judgment of the Appellate Court will be affirmed.
Judgment affirmed.
