Van Orman v. Puffer ( 1918 )

Ostrander, C. J.

(after stating the facts). There is no occasion for considering the fifth question, because the court’s conclusions are based upon a conceded breach of the agreement, nor the third question, unless a new trial is ordered, because the court, although admitting the agreement between McClintock and defendant in evidence, based no conclusion and no material finding upon that evidence. The first, second and fourth questions demand some discussion: although the first two are stated in an argumentative manner, they nevertheless present points upon which appellants rely.

The Victoria Hotel Company was a party to the contract with the Fred Miller Brewing Company, a contract which, by its terms, might run for ten years,. and which, so far as the record discloses, is still in force. The Victoria Hotel Company was a joint maker of the notes given to the Fred Miller Brewing Company. In their agreement they made provision for the contingencies of fire, injunctions, strikes, legal proceedings, restrictions upon the traffic in liquors and “any other unavoidable causes,” and for the®case which might arise if the hotel company premises were destroyed by fire or if, by the operation of a prohibitory liquor law, the selling of beer could not go on. In any event, wilful failure on the part of the hotel company to perform the contract after notice invited liability to pay the notes immediately and unavoidable failure to perform resulted also in immediate payment, but of the balance only after due credits were allowed.

The Victoria Hotel Company is hot a party to any other of the contracts which have been referred to. It has remained, with McClintock, liable, primarily, to the Fred Miller Brewing Company upon the notes. Presumably, it had the advantage of the money furnished by the Fred Miller Brewing Company, or of some of it. But while the outstanding notes evidence a debt of the corporation, an analysis of the agreements clearly indicates that it was not a debt of the corporation which Puffer obligated himself to pay at all events. His undertaking is that if the hotel company shall faithfully comply with the terms' of said contract, performing all of the obligations imposed upon it thereby,—

“and shall be unable to sell such a quantity of draught beer as will, under the terms of said contract, entitle it to the cancellation of the two (2) notes * * * the party of the first part will, on demand of the said Victoria Hotel Company and the parties of the second part, pay to the Fred Miller Brewing Company such a sum of money as, added to the amount to which said hotel company shall be entitled as a credit upon said notes under the terms of said contract, shall be necessary to liquidate and pay said notes according to their ■tenor and effect.”

So, that, while it appears that the Victoria Hotel Company might, at the end of the first five-year period, settle, as it did, with the Fred Miller Brewing Company and pay' it whatever sum was required to pay and cancel the first $5,000 note, and while such settlement would bind the Victoria Hotel Company and the Fred Miller Brewing Company, it -would not necessarily bind the defendant, since the hotel company might be willing to pay cash rather than sell beer, and the Fred Miller Brewing Company be willing to waive strict performance of the agreement.

We are impressed that the parties stipulated for strict performance of the contract of the Victoria Hotel Company with the Fred Miller Brewing Company, although it is not necessary to a decision that-we should go quite so far. It is not necessary because it appears that the breach of the agreement by the Victoria Hotel Company was not inadvertent, did not grow out of any mistake, but was wilful. It continued for a period of four months. There is evidence to support the finding that the result of the breach was diminished total sales of beer and, consequently, of credits to apply upon the note. The effects of the breach cannot be measured, limited, but were plainly considerable. The Fred Miller Brewing Company protested, and the Victoria Hotel Company resumed the sale of “High .Life” beer in its first floor bar. It may be assumed that it was because it is difficult to determine the effects of a breach that the contract was drawn with so much particularity. “According to the letter, and spirit” is the provision.

We think the learned trial judge committed no reversible error, and therefore affirm the judgment.

Bird, Moore, Steere, Brooke, Fellows, Stone, and Kuhn, JJ., concurred.