25 W. Va. 64 | W. Va. | 1884
The first question presented by this record is: Did the circuit court err in permitting the defendant to file the two special pleas against the objection of the plaintiff? They wore drawn under section 5 of chapter 126 of the Code of West Virginia which is in these words:
“In any action on a contract, the defendant may file a plea alleging any such failure in the consideration of the contract, or fraud in its procurement, or any such breach of any warranty to him of the title to real property or of the title or soundness of personal property, for the price or value whereof he entered into the contract, as would entitle him either to recover damages at law from the plaintiff, or the person under whom the plaintiff claims, or to relief in equity, in whole or in part, against the obligations of the contract; or if the contract be by deed alleging any such matter existing before its execution, or any such mistake therein, or in the execution thereof, as would entitle him to such rélief in equities; and in either case alleging the amount to which he is entitled by reason of the matters contained in the plea. Every such plea shall be varified by affidavits.”
This act has been in force in Virginia and in this State from April 15, 1831. Its object was evidently to' save litigation by enabling parties to settle in certain cases all matters in controversy in one suit; and to effectuate this purpose it has been when necessary very properly construed liberally (Watkins v. Hopkins, 13 Grat. 748, 749); but I do not see how it can be construed so as to include the ease attempted to he set up in these two special pleas. This is an action on a contract; and if the defendant has a right to file these two special pleas under this section, it can only be because these special pleas “allege a failure in the consideration of the contract sued upon, such as would entitle him to recover damages at law from the plaintiff.” The contract sued upon was an agreement that for divers chattels (organs) by the plaintiff sold and delivered to the defendant at his special instance and request, the defendant would pay the plaintiff a certain sum when requested. These special pleas allege that the real agreement, the basis of the action, was that “in consideration of the defendant becoming the agent of the
Stript of all surplusage these special pleas allege, that the contract sued upon was that in consideration that the defendant ■would be at the expense of introducing in a certain territory certain organs of the plaintiff’s manufacture, it would sell to him at fixed prices its organs according to the first special plea, so long as the defendant chose to carry on the business of selling organs in this territory, or according to the second special plea till the first of January, 1883. And this agreement the plaintiff broke by refusing to sell these organs to the defendant after April 22, 1882, whereby the defendant was damaged in specified amounts. In setting out the substance of these special pleas I have omitted all the statement of the pleas about the plaintiff having agreed to engage the defendant as its exclusive agent for the sale of its organs in said territory. For these special pleas show, that there was no understanding, that the defendant should be in any sense the agent of the plaintiff, but simply that the plaintiff would sell him organs at certain specified prices. The plaintiff' could not make an agreement, that the defendant should be the only person who should sell these organs
The special pleas allege no failure in whole or in part of the consideration of the contract as stated in the declaration, but they allege that the defendant was induced to make the contract sued upon by reason of a certain contract or agreement made by the plaintiff with the defendant long prior to the making of the contract sued upon. Now, section 5 chapter 126 of our Code authorizes the defendant to file a special plea only when there is a failure of the consideration of the contract sued upon, and under it the defendant cannot set up the failure of the plaintiff to comply with another obligation on his part, which was not the immediate consideration of the contract sued upon, but was only an inducement for the defendantto enter into the contracts, which were sued upon by the plaintiff, and the consideration of which did not fail in whole or in part. Th'e circuit court therefore erred in permitting the defendant to file these two special pleas; for, as we will presently see, the defendant had no right at
In the case before us the evidence clearly showed, that the plaintiff did not agree to furnish to the defendant organs at any fixed or stipulated prices, as alleged in each of the special pleas, but simply agreed to furnish him with organs as needed by him for re-sale hr the specified territory, no price being agreed upon. This was in law the equivalent of agreeing to furnish organs at a fair and reasonable price, which might vary from time to time; and the evidence shows it did so vary. This is a material variation from the contract alleged in the special pleas. The contract as proven further differed most materially from the contracts as alleged in cither of these special pleas as to the time, during which by the agreement the plaintiff was to furnish these organs to the defendant, as we will presently show.
The jury, we think, did not base their verdict on the issue joined on either of these special picas, but must have rendered it on the general issue; and the allowance made by the jury to the defendant as an abatement to the plaintiff’s demand, which was fully proven, must have been based solely on the general issue and on the recoupment of the defendant’s damage under his notice, that he would ask for such recoupment. If we find that they were justified by the evidence in allowing the recoupment to the extent to which they did allow it, we can not reverse the judgment of the circuit court because of the error of the court in permitting these two special pleas to be filed; for in such case this error would not have been prejudicial to the plaintiff below, who is the plaintiff in error also. But had the jury a right under
At common law the defendant had a right to recoup the plaintiff’s damages in a few instances, when the reduction claimed sprang immediately from the claim relied upon by the plaintiff. This was denominated a recoupment. This right was anciently confined within very narrow limits and was indeed little if anything more than a mere right of deducting from the amount of the plaintiff’s recovery, on the ground that his damages wore really not as great as alleged. This remedy of recoupment was of very limited application and was originally so trammeled by technicalities, that it was of but little use, and the term recoupment for a time became obsolete; yet the principle was always retained. Recently not only has the term recoupment been revived, but the doctrine has sprung into new life. The rigid rules of the common law, which so restricted this right, have yielded to the advance of civilization, and a new vigor has been infused into this remedy; and it is now hold that the defendant may recoup generally, whenever the demands of both parties spring out of the same contract or transaction; and it opens in this country generally the entire contract or transaction, so far as is necessary to determine the plaintiff’s right to damages and the amount of the defendant’s cross-claims.
The defense of recoupment differs from set-off in several important particulars. First, it is confined to matters arising out of and connected with the transaction or contract, upon which the suit, was brought; secondly, it has no regard to whether the claim be liquidated or unliquidated ; thirdly, if the defendant’s claim exceeds the plaintiff’s, he can not in that action recover the balance which was due to him. (Ward v. Fellers, 3 Mich. 281; Railroad Co. v. Jameson, 13 W. Va., 837-838). The instances and extent, to which the defendant can exercise this right of recoupment, are to a con-
“The rule of recoupment has come to us from England accompanied with the remark, that when the quality of the work done at a stated price is to be impeached, notice of the defense is proper. (Lord Ellenborough, C. J., and Lawrence, J., in Barton v. Butler, 7 East 479). Counsel had complained of surprise and Buller, J., had refused to allow the defeiise, while Lord Kenyon had allowed it; and the re-marles mentioned seems to have been thrown out, first, as a reply to the counsel, and, secondly, as possibly tending to reconcile conflicting decisions of the judges. Theyjrroba-bly led' the chancellor to say in Reab v. McAlister, that he considered a like defence perfectly just and equitable when the plaintiff has notice of it. In Ives v. Van Epps, 22 "Wend. 157, the point was raised, but it wast not thought necessary to decide it. I then said notice may be necessary; but added that the rejection of the evidence was no part of the want of it. The question has never been much thought of so far as I can discover, nor do I find it has ever become necessary’ to decide it in any of the cases where it has been mooted. In no English case except Barton v. Butler, 7 East 479, is the idea of notice suggested. Other decisions have gone forward without any attention to it. (King v. Boston, 7 East 481, note a, A. D., 1789; Farnsworth v. Garrard, 1 Camp. 28, A. D., 1807; Okell v. Smith, 1 Stark. Rep. 107, A. D., 1815; Pountton v. Baltimore, 9 Barn. & Cress. 259, A. D., 1829; Allen v. Cameron, Tyrwh. 907, Cr. & Mees. 832, S. C., A. D. 1833; Strut v. Blay, 2 Barn. & Adolph. 450, A. D., 1831; Recognizing Connard v. Gillis, 7 East 480, 481 and see Cousins v. Baddow, 1 Gale 305.)
“These cases belong to two classes; one where the defense was partial and the other where it was total. The want of notice was equally disregarded in both. Mr. Leigh in his late book on Nisi Prius (vol. 1 p. 79) delcares the rule in Barton v. Butler, in these words: ‘The defendant should (though he*85 need not) give notie.e to the plaintiff of the intended defense ; for otherwise he may have given to complainant a surprise, as he may only come prepared to prove the agreement for a specified sum.’ I presume he means to be understood as saying that the defendant may or may not give notice at his pleasure; but if he gives none the court will listen more readily to a motion for a new trial on the ground of surprise. That any judge or writer ever intended to lay down the rule as one of pleading I do not believe. There is no color in precedent or principle for saying that a defense striking directly at the whole cause of action need be pleaded in an action of assumpsit ; and there is still loss ground for saying that a partial defense — matter merely to mitigate damages — should bo pleaded. A partial defense can never according to our cases be introduced by a plea, and the universal rule both in England and this State is; that where a matter can not be pleaded it may be given in evidence. (Herkemer Manufacturing annd Hydraulic Co., v. Small, 21 Wend. 273, 277; Wilmarth v. Babcock, 2 Hill 194, 196.
“[ am satisfied that to require notice of a defense by way of recoupment in any case would be a departure from principle, from precedent, and all the analogies of pleading. The truth is as remarked by Mr. Justice Bronson in Butterman v. Pierce the doctrine of recoupment is of recent origin. It would not have been surprising therefore, after the remarks in Barton v. Butler, 7 East 479, had some judges required a plea or notice. The cases fluctuated for some time both in England and in this State on the question of whether the doctrine itself should be received into the law. About as much has been said on the point of notice in one country as in another; but not enough in either to give any serious countenance to the idea that it is necessary. On the whole I am satisfied that the plaintiff’s contract having been broken as to time, formed a good ground for claiming damages by way of recoupment; and that the defense was admissible under the general issue.”
This opinion was rendered in May, 1843, and though a majority of the court held, that “ evidence by way of recoupment is not admissable, unless notice of the defence be given, but if notice of the defence is given, evidence by way of re-
“ Although it may never have been directly and necessarily decided that the defendant must give notice of his intentions to recoup damages, it has often been assumed by the courts of this State that notice must be given ; and such appears to be the general opinion of the profession. Very few cases have fallen under my observation where the defence was attempted without notice. If it must be regarded as an open question, then upon principle, I think notice should be.roquired. The defendant often has an election either to bring a cross action or set up his claim by way of recouping damages; and without a notice the plaintiff may be surprised on the trial by a defence which he is wholly unprepared to meet. There can be no hardship on the defendant in requiring him to give notice, while a different rule would be likely to -work injustice. I am aware that notice is not necessary when the defence goes to the whole consideration of the promise on which the plaintiff sues. Such a defence shows the plaintiff has no cause of action, and is fairly covered by the plea ot non assumpsit. But it is not so when, as in this case, the de-fence admits the plaintiff has a right to sue, and seeks to recoup damages on the ground that the plaintiff has failed to perform some stipulation in the contract which was obligatory upon him. In such case'notice must be given. But the defence seems to have been rejected on the ground that it was not, in its own nature, admissable. The want of notice was not mentioned in the court below. On this ground I agree that the judgment should be reversed.”
These are the views of the New York courts. See Van Epps v. Harrison, 5 Hill 63. The Mayor, &c., of the city of Albany v. Trowbridge and others, 6 Hill 71; Trowbridge v. The Mayor of Albany, 7 Hill 430. It seems to me, that those
The defence of recoupment should never be set up by a plea. If the defence struck directly at the whole cause of action, it might be made under the plea of non assumpsit. If it were a
It was because of decisions of this character that the act of 1831 was passed, which allows special pleas in cases of this sort. The cases named, in which special pleas are allowed, include certain eases, in which, according to the views I have expressed, the facts might have been given in evidence as a defense under the general issue of non assumpsit accompanied with notice to the plaintiff. I do not understand this act of 1831 allowing special pleas in certain cases, where the defence is recoupment, to exclude the defendant from- making this defence under the general issue of non assumpsit accompanied with notice thereof to the plaintiff.
Applying the law as thus stated to this case, it seems clear that the defence, which the defendant sought to set up by special pleas, could properly have been set up under the general issue of non assumpsit accompanied with notice to the plaintiff of what damages the defendant sought to recoup. The circuit court therefore did not err in permitting the defendant to file the notice of recoupment, when he pleaded non assumpsit. The notice was perhaps not as explicit as it might have been, yet the object of giving it being to prevent surprise on the part of the plaintiff by the introduction of certain evidence by the defendant, and as it is apparent from the record, that the plaintiff was in no manner surprised by want of explicit notice and did not object to any evidence on
"Was the verdict otherwise wrong? The arrangement, under which the defendant purchased the organs, for the price o; whim this suit was brought, was made by a verbal conversation between the agent of the plaintiff’ and the defendant. No other person was present; and this agent and the defendant differ considerably as to what passed in this conversation. Neither pretended that any formal contract was made. The agreement between them is to be deduced from this conversation and from the long correspon •deuce between them. The most important letters between them are set out at length in the statement of the case. The defendant in his evidence represents, that from this conversation between him and the agent of the plaintiff the agreement can be deduced, that the plaintiff should employ the defendant as its agent to introduce the organs of the plaintiff’s ■manufacture in'a certain specified territory, and in doing so was to buy from the plaintiff organs for re-sale in this territory, and in consideration thereof the plaintiff agreed, that he would constitute the defendant his exclusive agent to sell the organs of the plaintiff’s manufacture in this specified territory; but he did not pretend to say that any of the organs, which were to be sold, were to be sold by the defendant for the plaintiff, but they, the defendant himself stated, were to be his own organs purchased of the plaintiff. And he did not pretend to say that in this conversation the price, which he was to pay for the organs, was fixed. He states that this arrangement was to continue for so long a time, as the defendant should be successful in selling the organs, which can legally mean only that it was to continue during the pleasure
The evidence of the defendant himself shows, that in no proper or legal sense of the term was he to be the agent of the plaintiff to sell his organs ; for the defendant was to sell none, which ho had not previously purchased, and which did not belong absolutely to him as their owner. So the agreement, that he was to have the exclusive right to sell those organs in a certain territory, in its legal effect amounts to nothing; for the plaintiff could not legally confer on the defendant a monopoly of the business of selling organs in the specified territory. The defendant did not in his testimony pretend, that the plaintiff had any patent for the organs he was manufacturing; and therefore of course any one had a right to manufacture them and to sell them in the specified territory. Ór if no one else manufactured them, any one who purchased them of the plaintiff’s manufacture had a perfect right to sell them in this specified territory or anywhere else. If the plaintiff had been the patentee of these organs, it might perhaps have conferred on the defendant the exclusive right to sell them in this specified territory, (Birdsall v. Perego, 5 Blatch. 251); but not being the pat-entee it certainly had no right to confer on the defendant the exclusive right to sell these organs in a specified territory.
The jury might have found it difficult to determine, what was a reasonable notice to be given by the plaintiff to the defendant, before it terminated the arrangement between them. A reasonable notice would have been such time, as would have enabled the defendant to deliver all organs he had sold to purchasers in this territory and complete any contracts with proposed purchasers, which might have been in-compl ete, when th e n oti ce w as given, and all o w the agents of th e defendant to see again persons whom they had seen before, and to whom they had recommended these organs, and ascertain whether or not they would purchase. But it would not include any time to allow the defendant’s agents opportunity to visit persons they had not before seen, in order to
As soon as the plaintiff in violation of its contract without any reasonable notice to the defendant of its purpose to do so put an end to their arrangements by its letter dated the 22nd of April, 1882, the defendant on April 27, 1882, telegraphed to the plaintiff to ship to the defendant at Clarksburg ten of its organs at once and canceled all other orders. The jury had a right to conclude from this, that the defendant thought that ten organs were enough to supply persons, to whom he had sold organs, or those whom he w7as then by his agents chaffering with for the sale of organs, or those persons whom his agents had a reasonable prospect of selling to, aud that if that number were furnished him, the time it would take to dispose of and deliver them would be the reasonable time, to which he was entitled, before the arrangement between him and the plaintiff could under this contract be terminated. But instead of supplying these ten organs, as in my judgment if was hound to do, as the time required to dispose of them was not more than the reasonable notice of the terminating of the contract, to which the defendant was entitled, and which the plaintiff by not objecting thereto had tacitly agreed to give, the plaintiff furnished the defendant but three of .them, and with no good excuse neglected to furnish the other seven. That the plaintiff regarded this order for ten organs as reasonable, the jury had a right to infer from the fact, that the plaintiff made no complaint, that the number was unreasonably great, and had written but a few days before to the defendant: “If you want some stock to keep you going till you fix elsewhere, telegraph us on receipt of this and we will endeavor to supply your wants.” The plaintiff sent but three of the organs .telegraphed for in answer to this letter; and in sending these three with no objection to the number ordéred they showed they deemed the ten a reasonable number. Had the seven
A calculation of the amount of the plaintiffs claim as compared with the verdict of the jury will show, that the jury by their verdict actually recouped against the plaintiff’s claim as the damages of the defendant arising from the breach of the contract about $325.00 only. So that the plaintiff had no right to complain of the verdict; and the court did not err in refusing on the plaintiff’s motion to grant a new trial. The defendant at one time also moved the court to grant him a new trial; but he afterwards wisely withdrew this motion. It seems to me, that neither party had any reason to complain of the verdict. It was about as near right as verdicts generally are, when damages have to be assessed. The reason doubtless, why both parties were dissatisfied, was, that each thought the evidence established a different case from that which the jury had a light to think, and which, I presume, did think it established.
According to the plaintiff’s view of what was proven by the evidence he had at any time the right to put an end to the arrangement with the defendant without any previous notice. If this view of the'plaintifl’s were correct, his conduct would not. have been a breach of his contract, and the defendant of course would have no right to recoup any damages against his claim. But such an understanding of the real agreement between the parties would be a very unreasonable one, as by it the defendant was required to spend a large amount of money in establishing a business, which by the contract, as thus interpreted, the plaintiff had a right to
On the other hand the defendant regarded the evidence as proving that the arrangmont was, that the plaintiff was bound to furnish him with whatever organs he might want as long as he might choose to continue in the business of selling organs, while he could discontinue the business whenever he pleased without notice to the plaintiff. This would have been a most unreasonable contract and one, which it would require strong evidence to show that the plaintiff had made. The letters which passed between the parties satisfied the jury doubtless, that this was not the contract between them. If that had been the contract, the defendant would have had the right to recoup the damages caused by his inability to deliver the' organs, which he had sold or contracted to sell or had then a prospect of selling to known persons, and perhaps, as it is claimed, for the loss he incurred by the improper breaking up of his business, provided such losses were not merely speculative and entirely uncertain.
There is a great diversity of views between the counsel for the plaintiff and the counsel for the defendant as to the measure of damages, if the defendant’s views of what was the contract had been established by the evidence. The counsel for the plaintiff insists, that the $700.00 damages claimed in the first special pica cannot bo allowed, because they are not the fair, natural and proximate result of the breach of the contract complained of by the defendant, that no allowance of damages could be made because of the supposed profits that might have been realized by carrying on the business of selling these organs, and cites Howe Machine Company v. Bryson, 44 Iowa 159, Wilson Sewing Machine Company v. Sloan, 50 Iowa 367, and McKinnon v. McEwan, 42 Am. 458, and Washburn v. Hubbard, 6 Lans. 11 to sustain this position. The counsel for the defendant on the other hand insists, that the defendant is entitled to the benefit of his contract; that in its breach by the plaintiff he was entitled to the profits, which he would probably have realized from this contract, had it not been broken by the plaintiff; and that the value of the contract may be ascertained by the judgment or opin
I need express no opinion upon what would have been the proper measure of damages, had the defendant’s view of what was the contract between the parties been sustained by the evidence in the opinion of the jury. The view, which I think the jury took of the contract, makes it much less difficult to determine the true measure of the defendant’s damages by reason of the breach thereof. I have stated what I deem the true mode of measuring this damage. It is not contingent upon future bargains or speculations or a future status of the market or upon the profits which might be made out of continuing the business of selling organs, but is based on the reasonable supposition, that, when this contract was broken by the plaintiff, the defendant by previous bargains or otherwise had then an opportunity of disposing of and delivering in all probability about seven organs, the sale of which, if sold at the prices at which he was selling them, would have brought him $350.00 more than the price he was to give for them. There is in this no element of conjecture or speculation; and this mode of measuriugthe damage from the breach of the contract, if it was such a contract, as I think the jury from the evidence thought it was, is not in conflict with the views of oven the counsel for the plaintiff, as above expressed.
But in his brief the counsel for the plaintiff in error in reference to the claims set up in the special pleas for $121.00 damages, saj^s: “The only possible claim for damages, the defendant could insist upon, is the amount of loss resulting from failure to send the ten organs telegraphed for; and no loss on this account can be allowed, unless itis held, that the plaintiff by filling a part of the order made itself liable for the whole, and that if it did make itself so liable, the measure of damages is the difference.between the price, at which the plaintiff ought to have furnished them, and the price at which the defendant could have procured them. The difference upon the evidence most advantageous to the defendant would not have exceeded six dollai’s per organ or $42.00 altogether.”
The rule hero laid down for the measure of damages is on-
The court did not err in excluding from the jury evidence of a usage prevailing between manufacturers of musical instruments and their agents, whereby agencies could be discontinued or terminated at the pleasure of either party, unless expressly otherwise agreed. The agencies, which were thus to be terminated by either party without notice, as proposed to be proven, were not agencies but contracts, whereby the manufacturer furnished the purchaser with whatever of his musical instruments he might'need for resale in a certain district of country, into which the purchaser undertook to have such musical instruments introduced. Now as I understand the law, a usage to be admissible to explain the intent of parties in a contract must not only be so well settled, so uniformly acted upon and of such long continuance, as to raise a fair presumption, that it was known to both contracting pai’ties, and that they contracted in reference to and in conformity with it, but it must not control the express intention of the parties nor the interpretation and effect, which result from an established rule of law applicable to it, nor be inconsistant with a rule of the common law on the sam e subject. And such usage of a trade, in order that it may be regarded as incorporated into a contract, must be certain, general, known, reasonable and not repugnant to the contract nor to the rules of law. See Randall v. Smith, 68 Me. 106; S.
Tlie evidence,'which was rejected by the court in this case, was introduced to establish a usage, which fell far short of these requirements of the law. I need not stop to point out the many defects in the usage attempted to be proven. That it would be a very unreasonable usage, I have already shown; and this alone would condemn it and justify the court in excluding it from the consideration of the jury.
It was urged, that the agreement in this case between the plaintiff and defendant proven by the evidence was void, because it was not, as required by the statute of frauds, in writing, it being “an agreement that was not to be performed within a year. (Code, ch. 98th, sec. 1, clause 7.) But the agreements contemplated by this provision of the statute of frauds are such, as by their terms or by the understanding of the parties when entered into were to have their performance postponed a year or more, and not such, as might or might not chance to be performed within that time. (Jordan v. Miller, 75 Va. 442, 450; Chaffee v. Benoit, 60 Miss. 34; McPherson v. Cox, 90 U. S. 404, 416; Blakeney v. Good, 30 Ohio State 350, 362; Niagara Insurance Co. v. Greene, 77 Ind. 590, 593.) As this agreement did not, when entered into, have its performance postponed a year or moi’e, but might or might not continue one year or more at the option, to be afterwards exercised, of either party on reasonable notice to the other party, it did not come within the statute of frauds and was not by it required to be in 'writing.
It is also insisted by the counsel for the plaintiff in error, that the circuit court erred in refusing to act upon the instructions offered by the plaintiff after the conclusion of the arguments of the counsel on both sides before the jury. This refusal was based by the court on the eleventh rule of the court, which provides, that instructions offered at this stage of the case would not be entertained or considered by the court. This is a reasonable rule intended to facilitate the business of the court and to guard both the court and the counsel on the opposite side from injuries, and the enforcement of such reasonable rule by the circuit courts should be upheld by
For these reasons the judgment of the circuit court of January 30, 1884, must be affirmed; and the defendant in error must recover of the plaintiff in error his costs in this Court and thirty dollars damages.
ARRIRMED.