181 Mo. App. 611 | Mo. Ct. App. | 1914
This is a suit for damages accrued to plaintiff through the breach of a contract of partnership to share the profits in land. Plaintiff recovered and defendant prosecutes the appeal.
It appears plaintiff owned a certain lot of land in the city of St. Louis, situate at the southeast corner of Eugenia and Twenty-first streets, together with the building thereon. The property was encumbered by a deed of trust in favor of Nicholls, trustee, for the principal sum of $16,006. Considerable interest had accumulated on the deed of trust and, indeed, the note therein secured was more than a year past due and the condition therefor broken. The entire amount due on the note and interest secured by the deed of trust was $17,174. Besides ‘this, there were then due on the property taxes to the amount of about $1200: The property had a rental value of $1624 a year. Plaintiff owned the legal title to the property, but conveyed it to Nicholls, the trustee, for the purpose of securing the loan thereon, and by the terms of the deed of trust,
The evidence tends to prove, and the jury so found the fact to be, that defendant verbally agreed with plaintiff that he would attend the trustee’s sale and buy the property in, provided it did not sell for more than $18,000, and that the parties would “be partners” in the profits which might be realized on a re-sale of the same. In other words, defendant agreed to bid enough on the property at the trustee’s sale to pay off the mortgage, including the interest, of $17,174 and if' need be bid as high as $18,000 for the property and take title thereto in himself. Thereafter the property ■should be sold and he, defendant, and plaintiff divide the profits realized on such re-sale, after deducting thp .amount of defendant’s investment. Two days thereafter, November 17th, defendant attended the sale, but made no bid on the property whatever. The property was sold under the deed of trust and purchased by another at the price of $17,175, or one dollar more than the amount necessary to pay the note and interest against it. Defendant says that, while he agreed to buy the property, he agreed to bid only the amount of the mortgage — that is, $17,174 — and that he omitted to buy it because another bid more than such amount.- The evidence concerning the value of the property varies,; For defendant, one witness says it was worth from twentyrO-ne to twenty-two thousand dollars, while othr
It is argued that, as the agreement between the parties was in parol, the court should have directed a verdict for defendant because of the Statute of Frauds. The argument is that, as the statute applies to the purchase as well as sale of real property, plaintiff should not be entitled to recover, in the absence of an agreement in writing between her and defendant touching the same. It is clear that the instant case is not within the statute, for the suit proceeds on a breach of a contract of partnership between the parties, whereby they were to share the profits arising from the sale-of land. Here, though plaintiff owned an equity— that is, a right of redemption — she was to forego- that entirely, and this, too, without acquiring any interest whatever in the land through the sale that was made. By the agreement she was to become entitled to share-the profits realized by a resale of the property on the part of defendant after he had acquired the title from the trustee.' Though the defendant was to acquire the title to the land, the agreement obviously contemplated 'no more than a sharing of the profits to be realized. If no profits were made, then the parties took nothing, save defendant held the land to compensate his investment, and it may be that both would suffer loss.
Cyc., Vol. 20, p. 237 thus states the rule with respect to such sharing of profits: “It is generally held' that agreements to share profits and losse's arising from the purchase and sale of real estate are not contracts for the sale or transfer of interests in land and need not be in writing.”
Mr. Browne,, in his work on the Statute of Frauds (5 Ed.), Sec. 263a says: “When, for instance, the defendant promises the plaintiff to buy land for himself' —the plaintiff, whatever his advantage from having the defendant make the purchase, acquiring no inter
The Supreme Court of Pennsylvania says, “An interest in contingent profits, arising from a sale of real estate, to be made thereafter, does not amount to an interest in the land itself, within the meaning of the Statute of Frauds.” [Benjamin v. Zell, 100 Pa. St. 33. See, also, to the same effect Snyder v. Wolford (Minn.) 22 N. W. 254.] In the case last cited, the court, speaking of the transaction says, “It manifestly did not contemplate that plaintiff should have any estate er interest in the land, or be interested in any way in the transaction, unless upon a sale there should be a profit, and then only in the profit, and to the extent of one-half thereof.” [See, also, Vaught v. Hogue, 32 Ky. Law 1061, 107 S. W. 757; see also Wiedemann v. Crawford (Ky.), 134 S. W. 495.]
Here, plaintiff asserts no interest in the land because of the contract, nor does she pursue defendant because he refused to take the land as such, but rather for that he breached his contract to launch a partnership with her with a view of realizing profits which she should share equally with him and which breach entailed the loss of the partnership funds contributed by her toward the launching of the partnership. On such a state of facts the Statute of Frauds is without avail. Moreover, even if the contract were within the Statute of Frauds, full performance on the part of plaintiff removed it therefrom in the instant case. It appears she relied upon the contract with defendant and made no effort to obtain a loan on the property, but permitted it to be sold, so that he might purchase it under the agreement. In this she fully performed all of the conditions imposed upon her part and such removes the case from the operation of the statute entirely. [See Root v. Burt, 118 Mass. 521; Cape Girardeau, etc. R. Co. v. Wingerter, 124 Mo. App. 426, 101 S. W. 1113; Chenoweth v. Pacific Express Co., 93
The evidence shows there was $17,174 encumbrance on the property — that is, the note, and interest against it and about $1200' taxes. There is nothing whatever tending to prove the probable profits that, might be realized on a re-sale of the property, but both parties introduced evidence touching the value of the equity of redemption, which plaintiff lost by virtue of the trustee’s sale under the mortgage. On the measure of damages, the court instructed the jury that if the issue be found for plaintiff, they should assess her damages at such a sum as appeared from the evidence to be the difference between the amount of the encumbrance, including interest and taxes, and the reasonable market value of the property, on the date of the sale, November 17, 1909. It is arg;ued this, instruction was error, for it is said it permitted plaintiff to recover the value of her property, without regard to the bargain revealed in the contract between the parties, which, at most, entitled plaintiff to but one-half of the profits to be realized on a re-sale. It is urged that, in a suit on a contract and for its breach, the law intends to compensate only for the benefits of the bargain of which defendant’s breach deprived plaintiff. There can be no doubt that such is the general rule, but there are eases revealing variations therefrom where it sufficiently appears the damages suffered were essentially within the contemplation of the parties as a natural sequence from the breach at the time the contract was made. The contract here declared upon stipulated for an equal division of the profits realized on a re-sale of 'the property, and by its terms plaintiff was to perform her part through permitting the property to be sold at trustee’s sale and defendant to purchase it there at a price not exceeding $18,000. After the purchase, a re-sale was to be made and the profits, divided between the parties. Plaintiff relied upon de
"Whatever may be said of the rules for the admeasurement of damages, it is fundamental that the idea involved therein is to compensate the loss sustained. [See Nicholas v. Kelley, 159 Mo. App. 20, 139 S. W. 248.] Here, the suit does not proceed on the theory that plaintiff is to be compensated on the basis of probable profits to be realized, for it seems to recognize the difficulty to be encountered in endeavoring to show such
The full scope of this rule has long been recognized in this State, as will appear by a study of the case of Clark v. Marshall et al., 34 Mo. 429. There, .the defendants, abstractors, undertook to furnish plaintiffs, who were probable purchasers thereof, with information concerning the number of feet remaining-unsold in Kingsbury’s Addition to St. Louis. The abstractors reported that 1200 feet of the property re
Other cases in our Supreme Court reflect the same • principle, as will appear by reference to Moore v. Mountcastle, 72 Mo. 605. There the plaintiff and the defendant entered into a contract in Tennessee where- ■ by the plaintiff undertook to come to Cass county, Missouri, and improve and cultivate the defendant’s’ farm for five years, under ah arrangement whereby-the profits of the venture were to be shared. After the plaintiff journeyed from Tennessee -to Missouri^
So, too, in the case of Hammond v. Beeson, 112 Mo. 190, 20 S. W. 474, it appeared the plaintiff had contracted to perform certain services with teams and workmen for the defendant. The plaintiff prepared to proceed with the work, incurred expenses thereabout and was kept in idleness for a few days, when the defendant breached the undertaking. The court declared the plaintiff was entitled to recover for all of these expenses incurred and the time lost on the faith of the defendant’s promise, and that this right obtained in addition and even separate and apart from his right to recover the probable profits on executing the contract. [See, also, Ragland v. Conqueror Zinc Co., 136 Mo. App. 631, 118 S. W. 1194.]
In the same view Mr. Sedgwick, in his work on Damages, Vol. 2 (9 Ed.), Sec. 616 says, if the plaintiff cannot or does not prove that any profits would have been earned by a full performance, he may nevertheless recover the expense of the partial performance.
The principle under consideration is not only illustrated but strikingly developed by a great master of the law in the case of United States v. Behan, 110 U. S. 338, 28 L. Ed. 168, 4 Sup. Ct. 81. Mr. Sedgwick, in his work on Damages (9 Ed.), Vol. 2, Sec. 616, gives the following synopsis of that case:
‘ ‘ In this case the claimant was the surety for one Roy upon a contract between Roy and the United States
“ ‘The prima-facie measure of damages for the breach of a contract is the amount of the loss which the injured party has sustained thereby. If the breach consists in preventing the performance of the contract, without the fault of the other party, who is willing to perform it, the loss of the latter will consist of two distinct items or grounds of damage, namely: first, what he has already expended toward performance (less the value of materials on hand); secondly, the profits that he would realize by performing the whole contract.' The second item, profits, éannot always be •recovered. They may be too remote and speculative in their character; and therefore incapable of that clear and direct proof which the law requires. But when, in the language of Chief Justice Nelson,- in the case of Masterson v. Mayor of Brooklyn, they fire “the direct and immediate fruits .of the contract,’:’ they are'
“ ‘The rule as stated in Speed’s case is only one aspect of the general rule. It is the rule as applicable to a particular ease. As before stated, the primary measure of damages is the amount of the party’s loss; and this loss, as we have seen, may consist of two> heads or classes of damages — actual outlay and anticipated profits. But failure to prove profits will not prevent the party from recovering his losses for actual outlay and expenditure. If he goes also for profits, then the rule applies as laid down in Speed’s case, and his profits will be measured by “the difference between the cost of doing the work and what he was to receive for it,” etc. The claimant was not bound to go for profits, even though he counted for them in his petition. He might stop upon showing of losses. The two heads of damage are distinct, though closely related. When profits are sought, a recovery for outlay is included and something more. That something more is the profits. If the outlay equals or exceeds the amount to be received, of course there can be no profits.’ ”
Further on in the opinion in. that case, Justice Bradley invokes the principle of estoppel, and points out that it does not lie in the mouth of a defendant
Probable profits in a business form a legitimate element of damages, where their extent can be shown with reasonable certainty. [Stewart v. Patton, 65 Mo. App. 21; Manter v. Truesdale, 57 Mo. App. 435; Howard v. Stillwell and Bierce Mfg. Co., 139 U. S. 199.] But though such be true, where such profits are purely speculative, contingent and conjectural, no recovery can be had with respect to them. [See Taylor v. Maguire, 12 Mo. 313; Callaway Min., etc. Co. v. Clark, 32 Mo. 305; Stewart v. Patton, 65 Mo. App. 21, 65.] The
The instant case affords cogent reasons, and the law ample remedy, for compensating the- amount contributed by plaintiff to the venture, which, but for dedefendant’s breach, might have yielded a profit. The case.is at least analogous to, if not one of, those which -proceed for a breach of- a contract to launch a partner.ship. - Judge Story, in his Equity Jurisprudence, says, iin speaking of cases of this character — that is, suits for the breach of an agreement to launch a partnership — that an action will lie at law-for damages therein for that the transaction is not so much a partner
The case of Gale v. Leckie, 2 Starkie Rep. 107, is similar to this one, in that it was a suit on a contract and for damages because of its breach between the parties, who were to divide the profits pertaining to a book to be printed. The plaintiff was a printer and the defendant agreed to prepare manuscript of a book entitled “An Historical Inquiry into.the Balance of Power in Europe,” to be printed by the plaintiff. The work was to be published at the expense of the plaintiff and the profits divided between the author and the publishers. Manuscript was furnished by defendant, and plaintiff proceeded with the printing until 336 pages were completed, when the defendant declined to sup
In Skinner v. Tinker, 34 Barb. (N. Y.) 333, it appeared the plaintiff was a dentist pursuing his profession in Brooklyn and defendant a dentist practicing at Havana, Cuba. The parties agreed to enter into a partnership for the practice of dentistry at Havana, to begin some time in October or November thereafter. Here is a plain contract to launch a partnership and, relying upon it, the plaintiff sold his business in Brooklyn and executed a bond not to further practice his profession there. Shortly thereafter he was notified by defendant that he would not consummate the agreement and enter into the partnership with him in Cuba. In a suit for the breach of the contract the jury awarded the plaintiff a recovery of $4000, and this was affirmed on appeal, though nothing whatever appeared tending to show the value of the bargain. The court declared the plaintiff was entitled to such damages as he had sustained up to the time the contract to launch the partnership was breached by the defendant in Cuba writing the plaintiff that he would not keep the obligation. The court said, too, the plaintiff was not entitled to prospective damages —that is, in that case, damages which might ensue after the breach.-
The case of Eastman v. Dunn, — R. I. —, 83 Atl. 10'57 presents a striking similarity to this one. There, the plaintiff was- the holder of an option for a twenty- ■ year lease with the option of purchase of a piece of ground whereon he hoped to erect a moving picture theater at a cost of $10,000. Failing to secure the necessary funds to erect the theater, he commenced negotiations with the defendants, a few days before the option expired, to take it over. The agreement was
Other partnership cases reflecting the same principle are as follows: Ball v. Britton, 58 Tex. 57; McNeill v. Reid, 9 Bing. 68; Reiter v. Morton, 96 Pa. St. 229; see also Nurse v. Barns, T. Raym. 77.
The instruction was proper in the circumstances of the case and the judgment should be affirmed. It is so ordered.