Worthington & Co. v. Gwin

119 Ala. 44

• Court: Supreme Court of Alabama
• Decided: July 1, 1898
• Status: Published

Opinions

BRICKELL, C. J

This action Avas instituted by appellee to recover damages for the breach of a mining contract entered into betAveen appellants and appellee’s assignor. By the terms of the agreement, which Avas in the form of a Avritten proposition by Thomas H. Dunn and the acceptance thereof by appellants, appellee Avas to “strip, quarry and deliver one quarter of a mile of the out-crop [ore], commencing at a point nearest the Birmingmam Mineral Railroad, at 50 cents (fifty cents) per ton of 2240 lbs., weight to be ascertained from furnace company receiving the ore, such furnace company weighing the ore in the usual manner. Ore to be paid for on the 20th day of each month for the ore shipped on the previous month. The 50 cents per ton to be my whole compensation for mining, quarrying and delivering said ore on board cars. You to loan what rails I need for delivering ore on board cars. Said rails to be returned Avhen job is completed. The ore is to be stripped up to a face of from 10 to 15 feet as I may prefer to do. I will commence work on the 8th and put on a force of 12 or 15 teams, and commence the delivery of the ore as soon thereafter as practicable. The said ore is to be mined and put on board the cars free of foreign substance and in a manner satisfactory to the furnace company receiving the same.” The principal breach assigned is, that “defendants ordered plaintiff to cease mining ore under said agreement.” There are other assignments, among which is one averring that defendants “caused the railroad company not to furnish the plaintiff with cars on which to load ore mined and to be mined under said agreement.” The damages claimed consisted of the loss of profits which would have been earned if plaintiff had been allowed to carry out the contract, and also the loss sustained by reason of his purchase of a “large quantity of rails, tools, implements and fixtures in and about carrying out said agreement.” The overruling of the motions to strike out the averment by which the last mentioned damages were claimed, and the averment that defendant had caused the railroad company not to furnish cars,[did not constitute reversible errors. If the averment that defendant caused the railroad company to refuse to furnish cars was insufficient as an assignment of a breach of the contract, the defect could have been taken advantage of by demurring to this assignment of breach without demurring to the whole complaint, and in such case it is discretionary with the trial court whether to strike the averment constituting the defective assignment, or to put the defendant to his demurrer, and its refusal to grant the motion to strike is not revisable on appeal, unless it affirmatively appears that defendant was prejudiced thereby. — Columbus & West. R’y Co. v. Bridges, 86 Ala. 448. The damages for the breach of a contract of this character, when its full performance is prevented by the one party without fault on the part of the other, may consist of one or the other of two items: first, the profits that would have been realized by the full performance, and second, if there would not have been any profits, or if theproof fails to show what would have been the amount, the reasonable expenditures made, and loss of time, less the value of the material on hand. — Danforth & Armstrong v. Tenn. & Coosa R. Co., 93 Ala. 620; United States v. Behan, 110 U. S. 344. Both items are not, of course, recoverable, since the profits would necessarily include the expenditures for tools, etc., less their value at the time the work on the contract ceased. Plaintiff’s expenditure for tools, implements, fixtures, etc., was, therefore, a proper element of damages,’ and while both the elements claimed were not recoverable, defendant was able to protect himself by request for appropriate charges.

The contract contains a provision that “the said ore is to be mined and put on board the cars free of foreign substance and in a manner satisfactory to tbe furnace company receiving the same.” In view of the subject-matter of the contract, we think it was the manifest intention of the parties, by the use of the words employed, not to impose an obligation on the plaintiff with respect to the manner in which the ore ivas to be taken from the ground or loaded on the cars, but simply to require him to furnish on board the cars ore free from foreign substance, other than such as was contained in the vein of ore, and satisfactory in this respect alone to .the furnace, company to which it might be shipped. Thus construed, this clause of the contract was sufficiently complied with by furnishing such ore irrespective of the manner in which it was taken from the ground and loaded on the cars. The defendants sought to justify their action in causing plaintiff to cease work under the contract by a plea averring that “plaintiff failed to mine said ore and piit it on board the cars free from foreign substance.and in a manner satisfactory to the furnace company receiving the same.” A demurrer to this plea having been overruled, defendant replied thereto that he had mined ore under said contract for a period of twelve months, during which timé he had delivered to defendants 18,000 tons of ore, and defendants had received and paid for the same amount without any complaint except as to a very small quantity of the ore; that a short time after ■ plaintiff began work under the contract defendant complained of one car of the ore delivered and refused to pay for the saíne, but plaintiff continued to furnish ore under the contract, and defendant accepted and paid for the same, for a long time thereafter, when further complaint was made; and that plaintiff was at all times ready and willing to mine and deliver ore according to said contract and to rectify any ’ mistake or failure on his part. The overruling of defendant’s demurrer to this replication is assigned as error.

The principal question presented by these pleadings is, whether the fact that a small quantity of the ore delivered by plai ntiff was not free from foreign substance and satisfactory to the furnace company receiving it, operated as a discharge of the whole contract and authorized defendant to terminate it. The effect of a breach of a contract upon the rights and liabilities of the parties depends upon the nature of the agreement. If the contract be entire in the sense that each and all its parts are interdependent, so that one part cannot be violated without violating the whole, a breach by one party of a material part wall discharge the whole at the option of the other party; but if the contract be severable, susceptible of division and apportionment, the amount to be paid by the one party depending upon the extent' of performance by the other, the mere failure to perform a part of the contract in strict compliance with its terms will not of itself necessarily authorize the party injured to refuse further performance. — Wharton on Contracts, §580; 7 Am. & Eng. E'ncy. Law, (.2d Ed.), 150; Johnson v. Allen, 78 Ala. 391. Whether a particular contract is entire or severable depends on the intention of the parties to be determined'from the language employed and the subject-matter. In the contract sued on plaintiff obligated himself to mine and load on the cars all the ore within a given territory, the ore to be satisfactory to the furnace company to which it might be shipped, but the time and amount of the deliveries, and the time of the completion of the contract were left unfixed, and necessarily the aggregate price to be paid for full performance was. not named. No particular amount of ore was to be furnished each month, and a failure to furnish any ore in any one month would not, of itself,amount to a breach of the contract. • The defendant’s obligation was simply to permit plaintiff to mine all the ore within the territory named, and to pay on the 20th of each month a specified sum for each ton delivered during the previous month. There is nothing in the contract to indicate an intention of the parties that the right of plaintiff to make successive shipments of ore until the contract was completed should be dependent on the mere fact that each and every ton previously mined and shipped was free from foreign substance and satisfactory to the furnace company receiving. it, and had been accepted by defendants. The contract was, in its nature, severable and not entire, and the rights and liabilities of the parties are to be determined according to the principles applicable to such contracts. Not every breach of such a contract by the one party will authorize the other to abandon the contract and refuse further performance on his part. The circumstances attending the breach, the intention with which it was committed, and its effect on the other party and on the general object sought to be accomplished by the contract, must be considered in determining whether or not the breach will operate as a discharge. If the circumstances are such as manifest an intention on the part of the party in default to abandon the contract, or not to comply with its terms in the future, or if, by reason of the breach,, the object sought to be effected is rendered impossible of accomplishment according to the original design of the parties, the breach, will operate as a discharge of the whole contract unless waived; but no such result follows from a mere breach of a severable contract unattended with such circumstances or such effect. The right to claim a discharge of the whole contract depends, not on whether the act constituting the breach was inconsistent with the terms of the contract, but whether it was inconsistent with an intention to be further bound by its terms, or whether the breach was such as to defeat the purpose of the contract. The mere fact that a small quantity of the ore delivered to defendant was not free from foreign substance and satisfactory t.o the furnace company receiving it, did not give defendants' any right to forbid plaintiff to continue mining ore under the contract. — Blackburn v. Reilly, 47 N. J. Law, 290; Cohen v. Platt, 69 N. Y. 348; Scott v. Kittaming Coal Co., 89 Pa. St. 231; Mersey Steel & Iron Co. v. Naylor, 9 App. Cas. 434; Lake Shore & M. S. R. Co. v. Richard, 30 L. R. A. notes; 7 Am. & Eng. Encyc. of Law, (2d Ed.), 150. Against the natural and ordinary injury flowing from such breach, defendants had an adequate protection and remedy — the refusal to receive and pay for the unsatisfactory ore, or their action for the breach in this respect. If any extraordinary injury arose therefrom, the effect of which was to defeat the purpose of the contract, the pleadings fail to show it, and it cannot be inferred from the.nature and subject-matter of the contract. It results that the demurrer to .the replicatioh was properly overruled. If the plea be construed as averring that plaintiff failed to furnish a'tvy ore that was free from foreign substance and satisfactory to the furnace company, the replication denies the averment by alleging that defendant accepted and paid for 18,000 tons without complaint, and avers facts which negative any intention on the part of plaintiff in furnishing the ore complained of to be no longer bound by the terms, of the contract, and there is nothing in the pleadings or in the contract itself to indicate that defendants were so injured by the defaults admitted in the replication as to render it unjust to 'hold him to the obligation to accept such future deliveries as should comply with the contract..

From what has already been said, the correctness of the charges given at the request of plaintiff, and of the oral charge of the court, may be determined. Most of them assert the proposition that the mere fact that a few cars of the ore mined and shipped were not free from foreign substance and satisfactory to the furnace company, if the circumstances showed no intention to no longer comply with the terms of the contract, did not of itself authorize the defendants to terminate the contract; and this proposition is in accord with the principles above announced. It is true, in predicating plaintiff’s right to a verdict upon the insufficiency of the evidence to reasonably satisfy the jury that plaintiff intended to abandon the contract or no longer comply with its terms, they ignore the effect the defaults may have had upon’ the defendant and the object sought to he accomplished by the contract, and would, perhaps, be erroneous on this account if the nature of the contract and its subject-matter were such that, considered in the light of t'he evidence, it could reasonably be inferred that the injury to defendants caused by the defaults defeated the purpose of the contract; but the record furnishes no ground for such inference. Charge 9 asserts a correct proposition. Tlíe mete expression by the furnace company of dissatisfaction with the ore would not authorize a termination of the contract. It is only t'he actual existence, not the mere expression, of dissatisfaction, regardless of its reasonableness, that can have this effect, and it was for the jury to say whether this dissatisfaction did exist as a fact, or whether it was expressed as a mere pretext. Electric Light Co. v. Elder Bros., 115 Ala. 138. The charges- requested by appellants were propérly refused. Appellee had a right under the. contract to mine all the outcrop ore within t'he described territory hack to a face of fifteen feet, and this right was not'affected by the fact' that he had mined some ore beyond the territory described, or mined in some places within the territory hack to a face of more than fifteen feet. If there were some places within the territory not mined back to snch a face, appellee had a right to mine them to the extent stipulated in the contract, notwithstanding a face of more than fifteen feet was reached in other places-, and this right was not exhausted by the fact that the ore mined outside the territory and beyond the stipulated face, added to that mined within the territory and the fifteen feet facing, was equal in amount to all the ore that could have .been properly mined in accordance with the terms of the contract.

Many of the assignments of error relate to evidence concerning the quality of the ore. If, by the questions relating to .the quality of the ore, it was intended to elicit evidence as to the-amount of metallic iron contained therein, they called for irrelevant testimony, a'nd the objections thereto should have been sustained. But it does not clearly appear that such was the intention, and such evidence was not elicited by the questions. Both parties treated the last clause of the contract as meaning that the ore should be free from foreign substance, and in this respect only satisfactory to the furnace company receiving it, and the court, at the request of appellee, charged that it Avas immaterial what Avas the quality of the ore itself. These assignments of error are not, therefore, well taken. The declarations of the superintendent of the furnace company receiving the ore, made Avhile receiving it, tending to show that it was satisfactory, Avere competent and material. Testimony as to the amount expended by appellee for rails for the side-track Avas also relevant on the question of damages. The testimony tends to show that the expenditure for this purpose was necessary, and this expenditure was one element of damages recoverable in the event no loss of profits was proven. As stated above, appellant could have protected himself by requesting an appropriate charge. We are unable to perceive the relevancy of the testimony of McCormack, the general manager of the Tennessee Coal & Iron Co., to which all the ore was shipped, that he wanted plaintiff “to take a contract at a reduced price with the Tennessee company, at less than 50 cents a ton.” The evidence was doubtless offered on the theory that the willingness of the furnace company which had received the ore-mined by plaintiff under this contract, to employ him to mine ore under a contract with it at a less price, ivas evidence tending to show that all the ore shipped by plaintiff ivas satisfactory to said furnace company, but we are of the opinion no such inference can reasonably be drawn from the evidence, and that the court below" erred in admitting it. With this exception, ive find no error in the record.