Macan v. Scandinavia Belting Co., 264 Pa. 384

Macan v. Scandinavia Belting Co.

264 Pa. 384 | Pa. | 1919

Opinion by

Mr. Justice Frazer,

A judgment was entered on a verdict for plaintiff in a suit to recover damages for breach of an exclusive sales-agency contract, and defendant appeals. The defenses were (1) the contract was rightfully terminated because plaintiff failed to perform his part; (2) plaintiff transferred, or assigned, the contract to a corporation known as the Macan Jr. Company, of which plaintiff was president and a stockholder, and if a right to damages accrued they belonged to the company and not to plaintiff; and (3) the question involving the merits of the claim were determined in favor of the present defendant in a former proceeding between defendant and the Macan Jr. Company, a corporation (258 Pa. 266).

The contract in question was entered into in 1912 between plaintiff individually and the Scandinavia Belting Company, whereby the former was given the exclusive right to sell belting for the latter in certain designated territory, there being a provision that the agreement should continue in force "while the agent, does an annua] total sale of $40,000.” The contract was turned over to the Macan Jr. Company, a corporation formed by plaintiff with others, and business transacted thereunder until May 1,1914, at which time defendant rescinded the contract, alleging as reason for such action failure of the agent to sell the required amount of belting and that he had dealt in other brands of textile belting, contrary to *390the terms of the agreement. At that time a balance was due the Scandinavia Company on a book account for belting purchased, and suit was instituted against the Macan Jr. Company to collect the unpaid amount, to which a counterclaim was interposed for damages, based on alleged wrongful rescission of the contract. The answer of the Scandinavia Company was that George C. Macan, Jr., individually, was the owner of the contract and not the Macan Jr. Company, consequently there could be no set-off by the company for damages for breach of its terms. The trial judge charged the jury they must be satisfied the Macan Jr. Company was the assignee and owner of the contract, otherwise they need not consider the case further, so far as the set-off was concerned, and if they found the agreement had not been assigned to the corporation a verdict in favor of plaintiff should be returned, the amount of its claim being admitted. The jury found for plaintiff with the statement attached to the verdict that defendant’s claim was disallowed for the reason they did not believe the Macan Jr. Company was the owner of the contract. The court struck out this part of the finding and entered a verdict generally for plaintiff. The present action by Macan individually for damages for breach of the contract followed the termination of that case, and it is now contended the former proceeding is conclusive as to the merits of the controversy, and further that plaintiff, by his testimony in that case in which he stated the contract had been assigned to the Macan Jr. Company, was estopped from taking a position in this proceeding inconsistent with his contention there.

It will be observed, in the first place, the parties to this action are not the same as in the former proceeding. Macan is here suing in his individual capacity, while the previous action was against the Macan Jr. Company, a corporation. Although Macan was a large stockholder in the company, this fact did not make him a party to the action within the rule requiring, inter *391alia, identity of parties to make a judgment in one proceeding res judicata in another. A corporation has a separate entity or existence, irrespective of the persons who own its stock, and this rule is not altered by the fact that the greater portion or even the entire issue of stock happens to be held by one person: Monongahela Bridge Co. v. Pittsburgh, etc., Traction Co., 196 Pa. 25; Rhawn v. Edge Hill Furnace Co., 201 Pa. 637; Kendall v. Klapperthal Co., 202 Pa. 596; Goetz’s Est., 236 Pa. 630. Further, it does not appear that the merits of the case, that is, whether or not there was in fact a wrongful breach of the contract by defendant, were adjudicated in the first proceeding. The finding of the jury in that case, in view of the statement attached to the verdict and stricken out by the court below, indicates the merits of the case were not considered by them in that proceeding, but, on the contrary, their conclusion was based on the ground that in their opinion the Macan Jr. Company was not the assignee or owner of the contract; to establish this result, consideration of the record in that case was proper: Follansbee v. Walker, 74 Pa. 306; Weigley v. Coffman, 144 Pa. 489; Pittsburgh Constr. Co. v. West Side Belt R. R., 227 Pa. 90.

The fact that plaintiff testified in the previous proceeding to having transferred the contract to the Macan Jr. Company does not estop him from taking a contrary position in the present action. Apparently he intended to make such assignment, and fully believed he had made a valid transfer and vested in the Macan Jr. Company full power to exercise all rights and privileges under the agreement. The verdict of the jury in the action against the corporation, however, established he was mistaken in this and that, in fact, no valid transfer had been made. His acceptance of the verdict and judgment as binding upon him and subsequent treatment of the contract as his own should not subject him to criticism. His present attitude is consistent with the law as laid down in that case where his testimony was in harmony with his *392action in making what he believed to be a valid assignment of the contract to the corporation. Defendant in the present case, rather than plaintiff, might justly be accused of taking inconsistent positions,' inasmuch as in the other case the defense to the set-off was that no transfer of the contract had been made and any rights therein must be enforced by the present plaintiff. The court and jury having agreed with this view, defendant is not now in a position to escape liability under the contract by taking a position contrary not only to its previous contention, but also in opposition to the view of the court in sustaining such contention. Furthermore, the mere fact that plaintiff testified as a witness in the former action does not estop him, if he sees fit, from now taking a position contrary to his statement made in that case. The record of the other proceeding is not received in evidence on the theory that it conclusively establishes the facts testified to by the witness, so as to constitute an estoppel, but only as evidence of a declaration or admission by the witness that the facts were as stated, and affects merely his credibility: Becker v. Phila., 217 Pa. 344; Hess v. Vinton Colliery Co., 255 Pa. 78.

Defendant finally argues that the damages suffered by plaintiff are speculative and uncertain to such extent they cannot form the basis of a finding in favor of plaintiff. The measure of damages in a case of this class is the value of the contract at the time of its breach, and if it reasonably appears that profits would be realized if the contract were carried out, and that the loss of such benefits necessarily followed the breach, their amount may constitute the true measure of damages: Wilson v. Wernwag, 217 Pa. 82; Press Pub. Co. v. Beading News Agency, 44 Pa. Superior Ct. 428; and it has been held that where an agent agreed to sell his principal’s goods within a certain district for a fixed period and before the expiration of the time the principal declared the contract at an end without sufficient cause, the agent may show the extent and volume of the business done in the terri*393tory under both his agency and that of his successor as bearing upon the question of damages: Pittsburgh Gauge Co. v. Ashton Valve Co., 184 Pa. 36. The contract in this case provides it should remain in force so long as the agent’s sales amount to the sum of $40,000 annually. Whether sales were made to this extent is one of the issues the jury found in favor of plaintiff and the only question, so far as the measure of damages is concerned, is whether there was evidence upon which a finding of damages could reasonably be based. Defendant admits the gross profits made from sales in the territory included in the agreement, covered by the years 1914 to 1917 inclusive, were approximately $5,000 a year on a total average sale of $43,267 annually. Out of this amount the evidence shows salesmen were paid $3,000, and for traveling expenses $2,000, which latter amount, plaintiff claimed, would have gone to him. Plaintiff testified that in 1912 he made a profit of $7,000 on gross sales of $34,679.67 and in the following year a profit of $6,663.03 and that the cost to him of doing business was comparatively small as the belting was handled in connection with the sale of other mill supplies to the same customers. The verdict was conservative under the evidence, and while, in the nature of the case, the amount of profits was necessarily uncertain, the law does not require absolute certainty of data upon which they are to be estimated. All that is required is such reasonable certainty that damages may not be based merely upon speculation and conjecture: Wilson v. Wernwag, supra; Hillsdale Coal & Coke Co. v. Penna. R. R. Co., 229 Pa. 61, 68.

The judgment is affirmed.