Water Lot Co. v. Leonard

| Ga. | Jun 15, 1860

By the Court.

Lyon, J.,

delivering the opinion.

1. There is nothing in the first and second grounds of demurrer; because, if the declaration was defective — and we do not think it was — the objections could ha^e been cured by amendment.

The 3d, 4th, 5th and 6th grounds of demurrer are involved in the charge of the Court as given, and in the refusals to charge on the request of counsel.

2. The witness, Parr, was competent. The fact that he owned an interest in the property did not affect him with interest. The property had been sold at sheriff’s sale, as the property of the Howard Manufacturing Company, and Parr held an interest under the purchaser at that sale. That sale carried with it the covenant of the Water Lot Company to the Howard Manufacturing Company, and would enable the purchaser at such sale to recover for all injuries resulting from a breach after the sale, but the damages resulting to the Howard Manufacturing Company for breaches prior to the sale, did not pass to the purchaser by the sale; therefore the purchaser at sheriff’s sale, nor any one holding under him, could have any interest in the recovery in this suit, for this action is for damages resulting from a breach of covenant prior to the sheriff’s sale.

3. Tiie objection to the introduction of the deeds of 9th July, 1857, on the ground of discrepancy, was not well considered by couñsel. Van Leonard is called in the first, in one place, trustee of the Howard Manufacturing Company, and in the same deed, in another place, trustee of the stockholders of the Howard Manufacturing Company, which shows that the same company was referred to and intended in both cases, and if there was an apparent discrepancy, it explains itself; it certainly did not vitiate the deed. Besides, Van Leonard held the legal title in any event.

We understood the counsel for plaintiff in error, as not insisting upon the objection to these deeds for the want of an order to show that the persons who signed the deeds were authorized to make them, as no plea of non est factum had been filed, putting that fact in issue.

The remaining objections to the evidence — and they are numerous, for I believe everything was objected to by defendant’s counsel, even to testimony offered by themselves — are involved in the rulings of the Court in his charge to thejury, and may be all considered together. The same may be said of the points of error complained of by the Howard Manufacturing Company in the cross-bill of exceptions brought up by them.

The breaches assigned by the plaintiff in the Court below, in his declarations, were—

1st. That the Water Lot Company did not blast and blow out the race, or waste-way, opposite to lots 13, 14 and 15, to the width of sixty feet, and to the then depth of the raceway opposite to each or any of the other lots, as by the covenants they -were bound to do.

2d. That the said company did not finish all the eyes in said canal or reservoir, in such manner as to furnish and contain in said canal water in sufficient quantity to propel the machinery placed and erected on said lot 11 by the plaintiff, by reason whereof damage resulted.

There was much discussion as to what was the true construction of the covenant in that part on which the second breach is assigned.

4. We think the true interpretation is, that if the canal was completed, and the eyes or gates, at the mouth of the canal were so finished or constructed as to permit the water from the river to flow freely and without interruption into the canal, and the balance of the eyes so finished as to prevent the escape of the water from the canal, except as intended it should, and the race or waste-way, was blasted out— all of which the Water Lot Company covenanted they would do — except as to blasting out the race or waste-way, opposite to lots 11 and 12, which the Howard Manufacturing Company covenanted they would do, that, then, the canal would furnish and contain sufficient water to propel the machinery, etc. There was no covenant against general drought or unusual and excessive low stages of the water in the river.

The whole'of the questions made upon the pleading, other than what I have disposed of, the evidence and the charge and refusal to charge by the Court, may be reduced to two, for to that were they narrowed in the argument, and they are—

1st. Was it necessary for the plaintiff to aver and prove that they had performed their part of the covenants; that is, to blast ancl blow out the race or waste-way, opposite to lots 11 and 12 before they could recover against the defendants for their breaches of the covenants by them ?

2d. What is the measure of damages for the injuries sustained by plaintiff in consequence of the breaches ?

5. Upon the first question we had great difficulty; in fact, were so unfortunate as at last not to be able to agree upon it. The whole difficulty lies in that knotty question, whether the covenants are dependent or independent? If they are dependent; that is, if each depends on the other, the failure of the one annuls and destroys the other. Now, the proof here is, that it would not benefit the plaintiff to blast out the race-way opposite lots 13, 14 and 15, unless the race-way opposite lot 12 was also blasted out, for their machinery is on lot 11, which is above all of them, and the waste water would be equally poured on their wheel from the obstruction opposite lot 12, as that of 13, 14 or 15, or vice versa. If there was nothing between these parties; that is, if there was nothing in the agreement or deed but this part of the covenant, I should say the covenants were concurrent. To determine what is a proper construction, has always been an extremely vexed question with the Courts. I will, as briefly as possible, state some of the rules that bear on the point, that Courts have laid down to determine whether the covenants are dependent or independent:

“ When the agreements go to the whole of the consideration, on both sides, the conditions are dependent, and one of them is a condition precedent to the other. If the agreements go to a part only of the consideration on both sides, and a breach may be paid for in damages, the promises are so far independent.” Par. on Con., 2 vol., 189. “Or if this dependence is not mutual, but one of them rests upon the other by a dependence which is not equally shared .by the other; if that contract upon which this dependence rests, is broken .and defeated, the other, by reason of its dependence, is annulled and destroyed also.” “But they may be wholly independent, although relating to the same subject, and made by the same parties, and included in the same instrument. In that case, they are two separate contracts. Each party must, then, perform what he undertakes, without reference to the discharge of his obligation by the other party. And each party may have his action against the other for the non-performance of his agreement, whether he has performed his own or not.” The mutual covenants must go to the whole consideration on both sides, when the one is precedent to the other, but when they go to a part only, and a breach may be paid for in damages, the covenants are independent. The leading case on this point, is of Boon vs Eyrie, 1 H. Blk., 273. The plaintiff in that case conveyed to the defendant the equity of redemption of a plantation in the West Indies, together with the stock of negroes upon it, in consideration of ¿£500 and an annuity of ¿£160 per annum for life, and covenanted that he had good title to the plantation, was lawfully possessed of the negroes, and that the defendant should quietly enjoy. The defendant covenanted that the plaintiff well and truly performing all and everything on Ms part to be performed, he, the defendant, would pay the annuity. The action was brought for the non-payment of the annuity. Plea: That the plaintiff was not, at the time of making the deed, legally possessed of the negroes, and so had not a good title to convey. General demurrer to the plea — Lord Mansfield : “ The distinction is very clear: When mutual covenants go to the whole of the consideration on both sides, they are mutual conditions, the one precedent to the other; but when they go only to a part, when a breach may be paid for in damages, then the defendant has a remedy on his covenant, and shall not plead it as a condition precedent. If this plea be allowed, any one negro not being the property of the plaintiff would bar the action.” “ So, when it was agreed between C and I), that in consideration of ¿£500 C should teach D the art of bleaching materials for making paper, and permit him, during the continuance of a patent, which C had obtained for that purpose, to bleach materials according to the specification, and C, in consideration of the sum of ¿£250 paid, and the further sum of ¿£250 to be paid by I) to him, covenanted that he would, with all possible expedition, teach D the method of bleaching such materials, and D covenanted that he would, on or before the 24th February, 1794, or sooner, in case C should before that time have taught him the art of bleaching such materials, pay to 0 the further sum of ¿£250. In covenant by C against I), the breach assigned was the non-payment of the ¿£250. Demurrer: That it was not averred that C had not taught D the method of bleaching such materials; but it was held by the Court that the whole consideration of the agreement being that C should permit D to bleach materials, as well as teach him the method of doing it, the covenant by C to teach was but part of the consideration for a breach, which D might recover a recompense in damages, and C having in part executed his agreement by transferring to D a right to exercise a patent, he ought not to keep that right without paying the remainder of the consideration, because he may have sustained some damage by D’s not having instructed him, and the demurrer was overruled. Campbell vs. Jones, 6 T. R., 570; Stover vs. Gordon, 3 M. & S., 308; Ritchie & Atkinson 10 East, 295; Hancock vs. Reddes, Ibid, 555. See also note C., 2 Par. on Con., 41, and cases cited. See also note by Williams to Pordage vs. Cole, 1 Sanders, 319. In this note, which is a very elaborate one, nearly all the English authorities on the subject are collected and cited, and they are very numerous; by an examination of which it will be seen that there are three kinds of mutual covenants that are concurrent and dependent. They are — 1st. When two acts are to be done at the same time; 2d. When they go to the whole consideration; 3d. When a day is appointed for the payment of money, etc., and the day is to happen after the thing which is the consideration of the money, etc.

The cases of mutual covenants that are independent, are of two kinds: one I have named, and the other is, if a day be appointed for payment of money, or part of it, or for doing any other act or thing, and the day is to happen, or may happen before the thing which is the consideration of the money or other thing is to be performed.

Now, let us compare this case with these rules, and see to which class it belongs: There is nothing in the agreement requiring the two acts, which are of the same kind, in the one case, to be done at the same time; there is no dependence upon each other in that respect. The thing to be done by the defendant may as well happen before the thing to be done by the plaintiff as not; there is no dependence there. The mutual covenants to be performed, which form the subject of controversy, do not go to thp whole consideration of the covenant, but to a very small part of the same. There is, therefore, no dependence in any one of the three respects; but they fall directly within each of the two classes of independent covenants. They are, too, within the reason of independent, rather than of dependent covenants. There is no equality in the damage sustained by the plaintiff and defendant, which is a thing greatly looked to, and a very controlling one, and, in my opinion, it is the truest test of all others. Eor instance, the damage sustained by the defendant in the action is only the cost of blasting out the raceway opposite lot 12, while the damage to the plaintiff is the suspension of one-third part of his machinery for a long space of time, and a total suspension of all his machinery for several months. Besides, there is another breach of the covenant by the defendant, which forms a very serious ground of complaint, and that is the failure to so finish the gates, or eyes, as they are called in the covenant, at the mouth of the canal, that the water could flow freely into the canal and without interruption. These openings were not only not properly constructed, but there were rocks in the mouth of the canal obstructing the passage of the water.

The most serious difficulty is one that is not reached by any of the rules of construction that I have mentioned, or that is known to the books, so far as I have been able to find, • and that is the fact, that it would have done the plaintiff no good to have blasted out the waste-way opposite 13, 14 and 15 until it was blasted out opposite 12. My answer to it, however, is this: That it was unnecessary for the plaintiff to go on and blast out the waste-way opposite lot 12 until he saw that it would avail himself; for if he had gone on to do this work, it would have increased his expenses and damages, and accomplished nothing. And how can this avail the defendant? He has committed the breach of his covenant in two ways, both of which damaged the plaintiff. How can he say that there was no use in my doing this work, as the plaintiff has not done his? The work to be done by the plaintiff may have been a very small matter; it was only one-third of what defendant had to do. But whether the one way or the other; whether my answer is satisfactory or not, the authorities I have referred to are plain and clear, that the covenants are not dependent, but independent, and for the respective breaches action will lie by each, and that reason is unanswerable. And for that reason, we hold that the Court below was right in ruling, that the plaintiff need not aver and prove performance of the condition on his part to be performed in order to entitle him to maintain his action for the breaches of the defendants.

Neither party was satisfied with the rule of damages laid down by the Court. The defendant insisted that if the plaintiff was entitled to recover anything at all, it was only what would have been the cost of blasting, or blowing out the raceway finishing gates at the mouth of the canal, for the free passage of the water, according to his contract; that the plaintiff had the right to go uppn the premises and do the work himself, and so prevent such disasters to himself, and it was his own willful neglect not to do so.

The plaintiff, on the other hand, insists that he had a right to recover, not only all that he actually lost by the failui’e of the defendant to perform his contract, but all that he would have made had he been able to employ all his machinery; that is, that he was entitled to recover the profits he might or could have made from the use of all his machinery, from which he was prevented by the failure of defendant to comply with his contract. For this purpose he offered proof of the capability of the machinery, under sufficient head of water; also, the loss of capacity by the want of a sufficient head of water, the daily loss sustained in the profits which they would have derived from the employment of all the machinery, and the value of the machinery with a full head of water, and its value with such a head of water as existed.

6. The Court rejected both, holding that neither was the true measure of damages to be recovered, but that the plaintiff was entitled to recover the actual damage sustained, and that, in this case, was the interest on the value of his investment, or such part thereof as he could not employ on account of the failure of defendant, for the time that such part or the whole could not be so employed; for instance, if the whole machinery was idle in consequence, then the plaintiff could recover interest on the whole investment; if there was only a part of the machinery in action for the want of water, then interest on that portion of the investment.

We think the Court adopted the only safe and certain rule of damages that would fit the case. The rule is imaccordance with that laid down by this Court in Coweta Falls Manufacturing Company vs. Rogers, 19 Ga., 416. What the profits might have been, had the plaintiff been able to employ the whole of his machinery all the time, was a matter purely of speculation, depending on the demand, sales, costs, etc., and was properly rejected.

The profits that are recoverable, are such as are the immediate fruit of the contract, and are independent of any collateral engagement or enterprise entered into in expectation of the principal contract: 2 Par. on Contract, 461. Such was the effect of the decision in Masterson vs. Mayor of Brooklyn, 7 Hill, 61, and other cases to which we have referred. To give a familiar instance: If one agrees to deliver a quantity of bacon at a given day and place for a specified price, and fails, then, whatever profit there is in the transaction at the time when the contract is to be performed, is the measure of damages. That there may be found cases in conflict with this holding, I do not doubt; but the rule once laid down by this Court must be adhered to.

7. Neither was the cost of blasting out the race or waste-way, any criterion for a measure of the damages. The race or waste-way, opposite to lots 13, 14 and 15 belonged to the defendant, and the plaintiff had no right or permission to enter thereon to do that work. To have done so would have been a trespass on his part, to which the law will not expose him to protect the defendant from the performance of this contract.

8. We are induced to think that the Court, in his charge to the jury, considered the defendant as having covenanted against low water in the river, or rather, that his undertaking was to furnish the plaintiff with sufficiency of water to propel his machinery in all events. If so, the Court erred, according to our construction of the covenants, as already explained ; but as the proof was very clear, that there would have been sufficient water to run the machinery at all times during the total and partial suspension, had the race-way been blasted out, and the obstructions in the mouth of the canal removed, the error was immaterial. And for these reasons, we affirm the judgment.