138 Ky. 372 | Ky. Ct. App. | 1910
Opinion op the Court by
Reversing.
“Memoranda of agreement, made this 22d day of March, 1905, by and between the Miller’s Creek Lumber Company, composed of W. C. Taylor and Bruce C. Taylor, of Menifee county, Kentucky, and J. W. Clay and M. C. Clay, of Montgomery county, Kentucky, parties of the first part,- and G. W. Tate, of Somerset, Kentucky, party of the second part, witnesseth: That the said first party, for and in consideration of the covenants hereinafter expressed and the payments to be made as herein stated, sell and agree to deliver as hereinafter stated to the second party all of the sound, merchantable, white oak rawlogs 14 inches and up in diameter, to be cut from the timber now standing on the tract of land of said first party purchased by and through them from the Beattyville Mineral Timber Company, as per deed of the 15th of March, 1905, located on Big Sinking creek, in Lee county, and lying east of the Flahaven line, containing 2,243 acres, more or less. And it is understood that all of the sawlogs of the above description contained in the above-described boundary of land are to be cut and applied ou lliis contract as hereinafter stated. The above logs to be cut from 9 to 16 feet as may be agreed on
. “Delivery. — The said first party hereby agrees to deliver the aforesaid logs to one of the two different mill sets, the location of which is to be agreed on hereafter; and the said'first party to furnish the mill sites for the said two sets.
“Measurement. — All logs to be measured by Doyle’s rulé, from the small end and marrow way, for the sound timber and lumber they may contain, and, unless otherwise agreed hereafter, each party is to have its scaler to make measurement of all logs as they are to be delivered' by the- second party, which joint measurement and inspection is to be final. •
“Prices. — The said second party agrees to pay the first party as full consideration therefor at the price of $9.00 per M ft.
“Terms. — Being cash payments to be made on or before the 15th day of each month for all logs taken up during the previous month.
“It is hereby agreed that the said party is to make a good and sufficient bond for the performance of this contract. It being further agreed between the parties of this contract that the second party will not operate, or in any manner interest himself, directly or indirectly, in a store on or near the lands of the first party, or upon the lands of the Simcoe Land Company, the said party to have the exclusive right and privilege. Executed in duplicate, this 22d day of March, 1905.
“Miller’s Creek Lumber Company, By W. C. Taylor, Treas.
“Gh W. Tate.
“Witness: Gr. A. Roy.
“E. W. Watts.”
“We, tlie undersigned, personally guarantee the faithful performance of the above contract, and further guarantee that the cutting and delivering of logs shall begin on or before June 1, 1905.
“AY. C. Taylor.
“Bruce C. Taylor.
“M. C. Clay.
“J. Will Clay.”
It appears from the averments of the petition that after the above contract was made G-. W. Tate became a partner of AY. A. Nunnelly in the firm of Tate & Nunnelly, and that-for a valuable consideration Tate assigned the above contract and his rights thereunder to that.firm; that in 1905 Oscar Tate and J. C. Parker became members of the firm, of Tate & Nunnelly, the name of which was changed to that of the Pulaski Stave Company, following which G-. W. Tate and the firm of Tate & Nunnelly assigned and transferred the contract in question, and the mill, machinery, and other property of the firm, to the Pulaski Stave Company. On January 1,-1906, the Pulaski Stave Company, by proper articles executed and recorded as required by law, became duly incorporated, and in so doing retained as its corporate name the name it had borne as a partnership. To the corporation thus created the contract made by G-. AY. Tate with the Miller’s Creek Lumber Company, and all rights thereunder of the Pulaski Stave Company and the partners composing same, together with all property owned by the firm, was assigned and conveyed. It is averred in the petition that G-. AY. Tate executed a bond with approved security for the faithful performance of each duty and undertaking assumed by him in the contract with the appellee Miller’s Creek Lumber Company, and that he and his
The petition then proceeds to charge that the appellee Miller’s Creek Lumber Company violated the contract in question in the following particulars: (1) That it delivered to appellants at their mill site only 600,000 feet of the 4,000,000 feet of logs on the land described in the contract; that the logs so delivered were of a quantity and value inferior to those called for in the contract, and also to the other logs remaining on the land, and were not worth exceeding $7 per M feet, which was $2 per M less in value than allowed by the contract; but the logs thus received appellants paid for at $9 per M feet, expecting to be reimbursed, and being assured by appellee Miller’s Creek Lumber Company that they would be reimbursed, for the loss of $2 per M feet, in settlements to be made for other logs of the size and quality required by the contract, and which by its terms appellee obligated itself to deliver, but did not in fact deliver; that by the alleged overpayment to appellee of $2 per M feet upon the inferior logs thus delivered them by it, and for which, it was further alleged, the latter agreed to account in settlements to he made for other and better logs to be thereafter delivered, but were never delivered, appellants claimed to have sustained a loss and been damaged in the sum of $1,200, for which judgment was prayed in the petition. (2) It was in substance further alleged in
With respect to the contract made by Tate with the Roy Lumber Company, it was further averred in the petition that it was made solely with reference to and because of the contract with‘the appellee Miller’s Creek Lumber Company, and but for same would not have been made, and that the latter was fully advised of that fact. We have not referred to another claim of damages made in the petition, viz., that of $1,500 for labor and expense incurred by appellant in moving and setting up its mill at the Bald Rock fork. It was not entitled to recover this item, and also, by way of damages, the profits that would have been made by it from the contract with appellee Miller’s Creek Lumber Company, had the latter complied with its terms. At any rate it is unnecessary to consider this claim, as it was on appellee’s motion stricken from the petition by the circuit court, to which ruling no exception seems to have been taken by appellant. Appellees’ motion to strike also went to other parts of the petition as to other items of damages claimed; but, except as to the item of $1,500 referred to, it was overruled, as was also a motion then made by appellees to require appellant to elect whether it would prosecute the- action as to the appellee Miller’s Creek Lumber Company, or the individual appellees, as guarantors.
Following the action of the court .upon these motions, appellees filed answers to which appellants filed a reply. At the succeeding term of the court appellants filed an amended petition, in which it was in substance, alleged that the individuals whose names appear to the guaranty at the. foot of the contract made by Gr. W. Tate with the appellee Miller’s
This amendment also set out with greater particularity the contract between Gr. W. Tate, appellant’s assignor, and the Roy Lumber Company as to the sale to that company of “butt cut white oak logs, 22 inches and over in diameter, ” to be delivered to it by appellee Miller’s Creek Lumber Company out of the logs it was to furnish under its contract with Tate; that the contract between Tate and the Roy Lumber Company, was consented to by appellee, and that it delivered for G-. W. Tate, the Tate & Nunnelly Stave
The same amendment corrected certain alleged errors in the original petition, by alleging that at the date of the contract between G-. W. Tate and appellee Miller’s Creek Lumber Company the former had in writing contracted to good and solvent parties 550.000 staves at $54 per thousand, and that following the incorporation of the appellant Pulaski Stave Company it contracted to good and solvent parties 500.000 staves at $54 per thousand, and later made a contract with another equally good and solvent party to furnish him all the staves it could get at market prices prevailing when delivered; that, if appellee had complied with its contract, appellant would within two years have sold under its contracts mentioned all the staves it could have made from the logs appellees’ contract required it to deliver it at '$65 per thousand; that of the 550,000 staves contracted to be sold by Gr. W. Tate, of which appellant, by the assignment to it of appellee’s contract, became the beneficiary appellee only delivered logs enough for appellant to make 180,000 staves; and that if appellant had been furnished by appellee the logs for the remaining 370,000, required to complete the 550,000 stave contract, appellant would have mude on the whole $16 per thousand, or $5,920, but that by ap
After the amended petition was filed appellees renewed their motion to require appellant to elect, and, the motion being sustained, appellant excepted to the ruling of the court, and elected to prosecute the action against the appellee Miller’s Creek Lumber Company, whereupon it was dismissed by the court as to the other appellees, and to this ruling-appellant likewise excepted. The appellee Miller’s Creek Lumber Company then filed a demurrer to the petition as amended, which the court sustained. An exception was taken by appellant to this ruling, and it thereupon filed a second amended petition, more specifically setting forth the several assignments of the contract between G-. W. Tate and the appellee Miller’s Creek Lumber Company, whereby the appellant Pulaski Stave Company became the ultimate owner and beneficiary thereof, appellees’ procurement of and consent to each assignment, and its partial compliance with the contract by a delivery of some of the logs to each of the assignees, and receiving- of them payment therefor. The last amendment also set out with greater particularity the execution by G“. W. Tate to appellee, and its acceptance, of the-bond with sufficient security required of him by the-contract with appellee for the faithful performance-of his part thereof, and alleged his and his several.
After the filing of the second amended petition, appellee Miller’s Creek Lumber Company insisted upon its demurrer to the petition as finally amended, and the demurrer was again sustained by the court. Appellants excepted to the ruling, and refused to plead further, whereupon judgment was entered dismissing the action at their cost, from which judgment and the several rulings sustaining the motion to elect and demurrer, this appeal is prosecuted.
We have set forth with unusual minuteness the many facts alleged in the petition and amendments as constituting appellant’s several causes of action, in order that the questions of law presented for review may the better be understood. Our first conclusion is that the circuit court erred in sustaining the motion to elect. The contract and guaranty were clearly assignable. Being a mere logging contract of the ordinary kind, no reason is perceived why it could not be as well performed by one person or corporation as another ; and it seems to be well settled that a contract' is generally assignable, unless forbidden by public policy or the contract itself, or its provi
But if it were conceded that we are mistaken in cur construction of the contract and as to its assignability, upon yet another ground we would be compelled to hold that the liability of the appellees thereon was unaffected by its assignment; for it is averred in the petition, as amended, that the appellees, both the Miller’s Creek Lumber Company and its guarantors, not only knew of the assignments of
The case of Arkansas Valley Smelting Co. v. Belden Mining Co., 127 U. S. 379, 8 Sup. Ct. 1308, 32 L. Ed. 216, cited by appellees as sustaining the contention that the contract in question was nonassignable, does not in our opinion conflict with the conclusion we have expressed. While it was held in that case that the contract, which was one to deliver ore, was not assignable because involving personal confidence, it appears that it was assigned by the beneficiary without the consent of the other contracting party, and that as soon 'as the latter received notice of the assignment it refused to deliver any ore
Appellees’ contention that suit on the contract and guaranty could not be joined in the same action rests upon the theory that it was necessary for the appellants to first sue on the contract, apart from the guaranty, and establish a breach thereof, in which event, and upon a failure to collect of the appellee Miller’s Creek Lumber Company by execution, if not otherwise paid, the damages, if any, recovered for the breach of the contract, suit might then be maintained upon the guaranty to fix the liability of the guarantors therefor. This view of the matter is not tenable. The attitude of the guarantors to the contract under consideration is not that of assignors, but more nearly akin to that of sureties; for the guaranty is a part of thé contract, and therefore the guarantors are primarily liable for its breach. The action is not one to enforce the contract, as in the case of Marshall v. Peck, 1 Dana, 610, relied on by appellees, but to recover of the appellee corporation and its sponsors, the guarantors, damages for its failure to perform it, and not only so, but also for the corporation’s total inability to perform it; the latter aided
The right to sue the appellees jointly is conferred by sections 24, 26, 27, Civ. Code Prac. There is a distinction between a guaranty executed simultaneously with the principal contract and one subsequently made and based upon a separate consideration and where the contract and guaranty are executed simultaneously a joint action will be permitted against the principal and guarantor; but it is otherwise if they are not simultaneously executed, for in such case the principal and guarantor should be separately sued. 20 Cyc. 1484; Tucker v. Shiner, 24 Iowa, 334; Gale v. Van Arman, 18 Ohio, 336. We are further told in 20 Cyc. 1450, that there is also a distinction between an absolute and conditional guaranty. In the first the guarantor is bound immediately upon the failure of the principal to perform the com tract, without further steps being taken; while in the case of a conditional guaranty proof of the insolvency of the principal is necessary. Manifestly the guaranty in the case before us is an. absolute guaranty, and the liability of the guarantors attached immediately upon the principal’s breach of the contract.
We are further of opinion that the circuit court erred in sustaining the demurrer. The petition, as
Appellees’ counsel- are in error in this contention. Even though an improper measure of damages were relied on, that fact could not justify the court in sustaining the demurrer. It must not be overlooked that appellants are claiming special damages for certain violations of the contract; that is, it is claimed that when the contract in question was made it was entered into with reference to and in contemplation of’ other contracts then and thereafter made by appellant, whereby they were to sell and deliver at certain agreed and market prices to other parties the staves they expected to manufacture of the timber purchased of appellees, that these several contracts were known to appellees when they contracted with appellant, and that appellees, in violating their contract with appellants, compelled them to violate the contracts they had made with others, thereby causing them to lose the profits they would have made by performing such contracts. As said in 13 Cyc. 34, 35, quoting from the leading ease of Hadley v. Baxen
Under the facts alleged in the petition, the plea of special damages was proper; but whether appellants should be permitted to recover the special damages claimed, or ordinary damages as for an ordinary breach of the contract, is a matter that must be determined upon a trial of the case in the court below,
For the reasons indicated, the judgment is reversed, and cause remanded, with directions to the lower court to overrule the motion to elect and the demurrer to the petition, that the case may be tried in conformity to the opinion.