Fontaine v. Baxley, Boles & Co.

Bleckley, Chief Justice.

The facts are stated in the official report.

1. One of the objections urged to the tliird plea was the want of mutuality in the contract which that plea sets up and alleges. Grant that this objection would have been good if any question as to its binding force had arisen upon the contract before either party had partly performed it, yet after Fontaine had in pursuance of the agreement gone to New York and opened there the contemplated business, he had performed so far that it would be a fraud in the other party to repudiate the contract. This would satisfy the requisites both of mutuality and of the statute of frauds, as that statute stands expressed in the code, §§1950, 1951. If the other party had desired to renounce the agreement and throw it off', notice to this effect should have been given to Fontaine before he had incurred trouble and expense in complying with it on his part. . The cases are numerous in which a mere proposition may be withdrawn before it is acted upon to the hurt of another, but cannot be withdrawn afterwards. Reducing this agreement to the rank of such a case as that, there would be no want of mutuality after Fontaine went to New York and opened business. And if this would serve to bind the other party to supply and deliver to Fontaine such cross-ties as he might sell in conducting his business, Fontaine would be equally bound to order and receive the whole of them from this particular party, to the exclusion of all others. While he did not expressly promise to do so, such was the fair import of the agreement, according to its tenor and spirit. There can be no doubt that the terms of such an agreement would raise a just expectation on the part of him who engaged to supply and deliver as many cross-ties as the other might need, that -the latter would order and receive from him all he needed. It must be remembered, in behalf of both these contracting parties, that cross-ties are not a commodity of general commerce; that they are neither to be procured at all times in the market by one wishing to buy them, nor to be disposed of readily and quickly by one wishing to sell them. On the contrary, demand must prearrange for supply, and supply before becoming abundant must prearrange for demand. Here was a mutual arrangement by which certainty of supply was sought to be secured on the one hand, and certainty of demand on the other. The measure of both was to be one and the same, to wit, the quantity (not exceeding so many in each month) which Fontaine could succeed in pre-engaging to his customers within the period of one year. Such an arrangement was, in its nature, calculated to be mutually beneficial; one of the parties undertaking to make or find a market for this non-commercial or extra-commercial article, to the extent of his ability, and the other undertaking to supply it up to a given limit. We think the objection of the want of mutuality was not well taken.

2. Another objection to the same plea was, that it sought to recoup damages for the breach by the plaintiffs of their stipulations in the contract alleged, when the action was in no wise based on that contract, but purported to be simply an action for the price of cross-ties sold and delivered. As a mere technical point this objection seems well founded, but if the ties sued for were actually sold and delivered in pursuance of the general contract set forth in the plea, the plea can be made sound as one of recoupment by amendment, and it can be amended at any time. The difference between recoupment and set-off is no longer of much importance. By section 8261 all claims ex contractu may be joined, and the defendant may set up as a defence all claims of the same nature with the plaintiff’s demand. Section 2909 defines recoupment, and the next section distinguishes it from set-off. The scheme of the code is to recoup where both parties rely on the same contract, and set off where they urge different contracts. But in as much as unliquidated damages resulting from breaches of contract may be set off the same as liquidated damages, there is no longer any substantial difference between recoupment and set-off which requires to be noticed in pleading. Of what importance is it that a plea misnames a defence, if it clearly appears that the defence is good, or would be good if rightly named ? Correctly denominating defences is matter of form only. Here the plea was upheld by the court below, and to reverse the judgment because the damages were not pleaded as set-off, but as recoupment, would be over-technical. What has such a trifle to do with justice ? The defence ought to prevail and would prevail if established by evidence competent to sustain either sort of plea.

3. Two objections made to the'same plea, in so far as it seeks to recover expenses incurred by Fontaine in performing the contract on his part, were, first, that the expenses were not recoverable at all; and, secondly, that the plea fails to set forth an itemized account of the same. “ Any necessary expense which one of two contracting parties incurs in complying with the contract may be recovered as damages.” Code, §2950. This answers the first objection, or would do so- were these damages all that the plea sought to recover. So treating it for the present, we can hold that it is good in substance. But as it was demurred to specially for failure to specify in detail the items of expense, we also hold that in that respect it is defective, and that it should be ameuded so as to give the adverse party reasonable notice of the substantial items or particulars constituting the claim. The spirit of our system of pleading requires each party to set. forth his demand fully, plainly and distinctly, so that it may be met and controvei-ted in open light and not groped after and grappled within the dark. We shall see presently that in order to have his expenses allowed him even after the plea is amended, Fontaine must abandon his claim to other items of damage which the plea seeks to recover.

4. It is manifest that, according to the terms of the contract alleged in the plea, Fontaine was to establish and conduct business in New York at his own expense. This being so, he could not charge the other party with the expense thus incurred, and also with the full damages otherwise sustained on account of the breach or breaches of contract alleged. To entitle him to the latter damages, his expenses should be treated as an investment made by himself in the business out of which his profits in trade were to come. It would be absurd to allow him these profits on the business which he had secured, and at the same time reimburse him for the cost of establishing the business or for the cost of conducting it. He must abandon damages of the one class or those of the other, the two orders of damages being incompatible elements of one and the same measure of compensation. If expenses are -to be recovered, profits are not, and vice versa. He must elect before or at the trial which class of damage he will go for, and the best mode of electing would be to strike from the plea any and all claim to the class he renounces.

5. The objection to the plea that damages claimed on account of lost or defeated profits are speculative and too remote, is not well taken in so far as the plea squares with the description and conditions laid down in the fifth head-note. It may be difficult to support the plea by evidence, but should it be done, there will be no obstacle to a recovery for want of certainty or proximateness in these damages. The contract alleged fixed the price which Fontaine was to pay, and the difference between that and the prices which he would have received would accurately measure his loss in each instance,' making, of course, any proper deduction for freights, etc.

6. We have examined the evidence carefully touching the disputed item in the plaintiffs’ account for storage, and think the verdict as to that was correct. Fontaine was fairly chargeable with it.

We hold, however, that the contract set up in the third plea was provable by parol evidence, and that the court erred in ruling to the contrary. In arriving at this conclusion we have to disregard the amendment to that plea, which seems to allege that the contract or some memorandum of it, signed by the plaintiffs, was in writing. This we do because the amendment was evidently abandoned. It should have been stricken in so far as these allegations are concerned. We are aware that we somewhat strain the case on this point of practice in order to do justice, but we deem this allowable.

The ci'oss-bill of exceptions complains only of the judgment overruling the demurrer to the third plea, the plea which has been in view under all the preceding heads of this opinion. That judgment is affirmed, with direction that the plea be so amended touching the claim for expenses incurred by the defendant, Fontaine, in New York, as to give the plaintiffs reasonable information of the substantial particulars constituting the claim.

Judgment reversed. Oncross-bill, affirmed with direction.