Tillis v. Calvine Cotton Mills, Inc.

111 S.E.2d 606 (1959) 251 N.C. 359

William A. TILLIS, Sr.
v.
CALVINE COTTON MILLS, INC., a Corporation, and Leon Salkind.
CALVINE COTTON MILLS, INC., a Corporation,
v.
William A. TILLIS, Sr.

No. 247.

Supreme Court of North Carolina.

December 16, 1959.

Clayton & London, Charlotte, for Calvine Cotton Mills, Inc., appellant.

Carswell & Justice and Richard E. Thigpen, Jr., Charlotte, for William A. Tillis, Sr., appellee.

MOORE, Justice.

This is the fourth time this case has been here. See Tillis v. Calvine Cotton Mills, 236 N.C. 533, 73 S.E.2d 296; Tillis v. Calvine Cotton Mills, 238 N.C. 124, 76 S.E.2d 376, and Tillis v. Calvine Cotton Mills, 244 N.C. 587, 94 S.E.2d 600.

At the close of the evidence Calvine moved for judgment of involuntary nonsuit. The court properly overruled the motion. Parties to an executory contract for the performance of some act or services in the future impliedly promise not to do anything to the prejudice of the other inconsistent with their contractual relations and, if one party to the contract renounces it, the other may treat renunciation as a breach and sue for his damages at once, provided the renunciation covers the entire performance to which the contract binds the promisor. Pappas v. Crist, 223 N.C. 265, 268, 25 S.E.2d 850; Edwards v. Proctor (Proctor v. Edwards), 173 N.C. 41, 43-44, 91 S.E. 584. Tillis gave testimony of a contract, breach thereof, and damages. "In a suit for damages for breach of contract, proof of the breach would entitle the plaintiff to nominal damages at least." Bowen v. Fidelity Bank, 209 N.C. 140, 144, 183 S.E. 266, 268.

Calvine contends that Tillis alleged a contract with Salkind and Calvine, testimony at the trial showed only a contract with Calvine and this is a fatal variance that justifies nonsuit. We have carefully examined the cases cited by appellant in support of this proposition. They correctly state the law with respect to the factual situations therein presented but are not germane to the case at hand. In the case at bar, if there had in fact been a contract in which Calvine and Salkind were jointly bound, Tillis might at his option have sued both or only one. G.S. § 1-72. "Under statutory provisions * * * authorizing actions to be brought against any one or more of the parties to a joint contract, proof of a several contract is not fatal, although a joint contract is alleged." 17 C.J.S. Contracts § 576, p. 1214. Under the facts in the case sub judice the existence of Salkind as a party is not essential to any material element of the entire contract between Calvine and Tillis. Therefore, the variance complained of is not ground for nonsuit.

There was also motion for nonsuit of the counterclaim of Tillis in the claim and delivery action. The court was in error in overruling this motion. The counterclaim is bottomed upon the breach of the hauling contract. It alleges as completely the breach of the contract as does the independent suit. And it states in part that Tillis was "damaged in the amount of not less than $1200.00 per month by reason of the wrongful conduct on the part of the plaintiff (Calvine) in breaching the contract * * *." The counterclaim is in every particular the same suit as the independent action theretofore filed by Tillis to recover for breach of contract. Calvine's reply properly alleged that a suit was pending on the same cause of action. The court should have dismissed the counterclaim. McIntosh, North Carolina Practice and Procedure, 2d Ed., section 1236(4), Vol. 1, p. 671.

Even if the counterclaim could be construed as a cause of action for damages for deprivation of the use of the tractor-trailer, the result is the same. There is no evidence as to damages in this respect other than the evidence relating to the breach of the contract. Furthermore, Tillis may not recover damages for breach of the contract involving the use of the equipment and at the same time recover damages for being deprived of its use in other connections. To permit him to do so would constitute double damages since, in the contract upon which he relies, the constant use of the tractor-trailer was contemplated in the hauling for Calvine.

It is true that Tillis alleged in his counterclaim that he was damaged in the sum of $200 per month for "deterioration in the use of the tractor-trailer." Upon the facts in this case deterioration in use by Calvine is not an element of damages. The tractor-trailer cannot be returned. If upon a new trial it should be determined by the jury that Calvine was not the owner and was not entitled to the possession of the equipment, the measure of damages for the wrongful taking is the value of the tractor-trailer at the time it was seized by the sheriff, with interest. G.S. § 1-230 and G.S. § 1-475. Universal C. I. T. Credit Corp. v. Saunders, 235 N.C. 369, 371, 70 S.E.2d 176; C. I. T. Corporation v. Watkins, 208 N.C. 448, 450, 181 S.E. 270. Attention is directed to the evidence in the case at bar that the tractor-trailer was sold under foreclosure by a mortgagee thereof to satisfy a debt due by Tillis. If true, judgment in favor of Tillis in this action should be reduced by the amount of the mortgage indebtedness, not to exceed the amount for which the equipment sold at the foreclosure sale. That is true for the reason that Tillis has had the benefit thereof in discharge of or as a credit on the indebtedness due by him to the mortgagee. The determination of the facts here discussed is, of course, for the jury. If Tillis is so advised, he may move to amend his answer in the claim and delivery suit so as to make proper allegations with reference to matters discussed in this paragraph.

While Tillis was testifying in his own behalf, his counsel propounded to him the following hypothetical question:

"Q. Now, based on your experience in the business of hauling goods in your own equipment, do you have an opinion satisfactory to yourself as to what net profits you would have made from your contract with Calvine Cotton Mills to haul from 85,000 to 90,000 pounds of unfinished cotton goods from Charlotte to Niantic, Connecticut, per week and return trips of 20,000 pounds each trip for these three trips a week that you would make up there, of finished cotton goods going to West Virginia, Kentucky and North and South Carolina on your return trip to Charlotte, had you been allowed to perfrom that contract for the period of a year?"

Calvine objected and the court overruled the objection. This is the basis of Calvine's twelfth assignment of error. Tillis answered: "Yes, from $30,000 to $31,000 a year." The court erred in overruling the objection.

In connection with the twelfth assignment of error, we also consider and discuss the seventy-fourth assignment. This relates to the court's instruction to the jury with reference to damages and the measure of damages in this case. The court instructed the jury as follows: "When two parties have made a contract, which one of them has broken, the damage which the other party is entitled to receive in respect to such breach of contract should be such sum as may fairly and reasonably be considered either arising naturally, that is according to your account of things, from such breach of contract, or such as may reasonably be supposed to have been in contemplation of both parties at the time they made the contract as the probable result of the breach of it." As a general statement of law, the instruction is correct. This was the only rule given for the direction of the jury on the question of damages. Its fault lies in its inadequacy as a specific guide for the jury in considering the evidence at the trial. It is necessary that the court state the law arising on the various phases of the evidence. Wilson v. Wilson, 190 N.C. 819, 821, 130 S.E. 834.

"The general rule is that a party to a contract, who has been injured by the breach, is entitled as compensation therefor to be placed, in so far as this can be done by money, in the same position he would have occupied if the contract had been performed, and where the breach of contract consists in preventing its performance, the party injured, on proper proof, may recover the profits he would have realized had the contract not been breached.

"``The amount that would have been received if the contract had been kept and which will completely indemnify the injured party is the true measure of damages for its breach. * * * Where one violates his contract he is liable for such damages, including gains prevented as well as losses sustained, which may fairly be supposed to have entered into the contemplation of the parties when they made the contract—that is, such as might naturally be expected to follow its violation; and they must be certain, both in their nature and in respect to the cause from which they proceed.' Winston Cigarette Machine Co. v. Wells-Whitehead Tobacco Co., 141 N.C. 284, 53 S.E. 885, 887, 8 L.R.A.,N.S., 255." Chesson v. Kieckhefer Container Co., 215 N.C. 112, 115, 1 S.E.2d 357, 358.

Where the action is for gains prevented by breach of contract, the plaintiff must show by the greater weight of the evidence that he was ready, willing and able to perform on his part and if he fails to do so, he may not recover substantial damages but may recover only nominal damages. Baird v. Ball, 204 N.C. 469, 168 S.E. 667 (headnote). For the breach of an executory contract plaintiff may recover only such substantial damages as can be ascertained and measured with reasonable certainty. Perkins v. Langdon, 237 N.C. 159, 171, 74 S.E.2d 634. "* * * (D)amages must be certain, and this certainty which is required does not refer solely to their amount, but also to the question whether they will result at all from the breach." Winston Cigarette Machine Co. v. Wells-Whitehead Tobacco Co., 141 N.C. 284, 290, 53 S.E. 885, 887, 8 L.R.A., N.S., 255. Absolute certainty is not required but evidence of damages must be sufficiently specific and complete to permit the jury to arrive at a reasonable conclusion. Unruh v. Smith, 1954, 123 Cal. App. 2d 431, 267 P.2d 52. Ordinarily the measure of damages for breach of an executory contract for transporting goods, where the breach prevents plaintiff from hauling the goods, is the revenue plaintiff would have received for the services less the costs and expenses of transporting the goods.

If any of the factors involved in revenue and costs are estimated, the estimates must be based on facts. Goforth v. Smith, 1952, 206 Okl. 394, 244 P.2d 304. A witness will not be permitted to give a mere guess or opinion, unsupported by facts, as to the amount of damages arising upon a breach of contract. The amount of damages is the ultimate issue to be determined by the jury. It is incumbent upon the plaintiff to present facts, as to all reasonable factors involved, that the jury may have a basis for determining damages. Rankin v. Helms, 244 N.C. 532, 94 S.E.2d 651; Norwood v. Carter, 242 N.C. 152, 87 S.E.2d 2, 50 A.L.R. 2d 608.

In the Rankin case, supra, plaintiff sued defendant contractor for damages for breach of contract in construction of a residence and alleged that the construction was not completed and some of the work had not been done according to contract. Plaintiff was permitted to testify that defendant was indebted to him in a specified amount without having offered evidence of the cost of completing the building and without factual basis for the testimony. The court said: "It is manifest that plaintiff's answer * * * is, if not a mere guess, a statement of his mere opinion or conclusion as to the amount of damages he has suffered, where no proper basis for the receipt of such evidence has been shown." [244 N.C. 532, 94 S.E.2d 656.] In the Norwood case, supra, plaintiff, a widow, sued defendant for breach of his contract to provide for her needs during the rest of her life. She had conveyed a tract of land to defendant in return for his promise to so provide for her. Defendant had breached the contract. Referring to damages the court said, quoting from 25 C.J.S. Damages § 28, p. 496: "However, where actual pecuniary damages are sought, there must be evidence of their existence and extent, and some data from which they can be computed. No substantial recovery may be based on mere guesswork or inference; without evidence of facts, circumstances, and data justifying an inference that the damages awarded are just and reasonable compensation for the injury suffered." [242 N.C. 152, 87 S.E.2d 5.]

We assume that some factual basis was laid for determining the total revenue which might have been reasonably expected under the contract in the instant case, though the freight rates, the routing and destination of goods to be hauled on the trips south are somewhat nebulous. According to the evidence, plaintiff had one tractor-trailer combination which could make one and one-half trips per week. Another would be required. He relied on Kilgo Transfer Co., Inc., a common carrier of freight by truck, to furnish the additional equipment and drivers. Would Kilgo share profits with Tillis as to this extra service? This question is unanswered. There is no evidence as to the costs and expenses involved in the hauling of the goods. In order to arrive at a reasonable conclusion, the jury must hear facts with reference to the cost of wages, equipment repair, reserve for equipment replacement, gasoline, oil, greasing and servicing equipment, the charge to be paid for the use of I. C. C. rights of regular carriers through which Tillis must have operated, license and property taxes, tolls, social security taxes, cargo and liability insurance, workmen's compensation insurance and other similar costs. Besides, the 30 cents per hundredweight to be deducted for discharge of Tillis' indebtedness to Calvine must either be added to costs or subtracted from revenue.

There is another matter related to damages which must be considered. The case was tried on the theory that Tillis would devote his time as a driver. He is required by law to exercise reasonable diligence to minimize damages. Chesson v. Kieckhefer Container Co., supra, 215 N.C. at page 114, 1 S.E.2d 357. He testified that he was and remained employed during the year following the breach of the contract. His earnings during this period should be deducted from any damages which might be recovered by him in this action.

The matters discussed in the five preceding paragraphs were not adequately explained to the jury either in giving the contentions or in applying the law to the evidence. G.S. § 1-180. The hypothetical question was inadmissible for no proper factual basis had been laid therefor.

Since there must be a new trial, we advert to one final matter involved on appeal. Over the objection of Calvine, counsel for Tillis was permitted to question Salkind at great length concerning the merger of Calvine Cotton Mills, Inc., with another corporation, the interest of Salkind in Calvine and the resultant corporation, the names of the stockholders in the resultant corporation, the present stockholders, what interest Calvine had in corporations in Connecticut and elsewhere and many other similar matters. In addition, the court, over objection of Calvine, permitted counsel for Tillis to argue these matters at length to the jury and to make statements, such as: "Now there is more confusion about these companies than anything I have ever heard in my life. * * * They have testified, Mr. Salkind, about Calvine Mills and Calvine Cotton Mills, and Smitherman Mills, and Marshall Mills and Botany, which is a conglomeration that would take a Philadelphia lawyer to figure out and it would take more than nine years. * * * What was the purpose of picking up everything that a mill had after it was sued and moving it over to another mill and issuing the same kind of stock that they had in that mill? Why was that necessary? What was the purpose of it? What were they doing it for? That is something in a thousand languages." The evidence adduced by the interrogations referred to and the argument of counsel were not pertinent to the issues in these cases and were prejudicial. "* * * (I)f the only effect of the evidence is to excite prejudice or sympathy, its admission may be ground for a new trial * * *." Stansbury, North Carolina Evidence, sec. 80, p. 143; Shepherd v. W. T. Mason Lumber Co., 166 N.C. 130, 81 S.E. 1064.

Tillis contends that the evidence in question was competent to show the interest and bias of Salkind. Proof that he was president and stockholder of Calvine would have sufficed for this purpose. There was no allegation of fraudulent conveyance of property to defeat creditors. Yet the line of questioning suggests strongly some wrongdoing on the part of Calvine and Salkind and is calculated to deprive them of a fair and impartial trial.

As to both cases there must be a

New trial.

HIGGINS, J., took no part in the consideration or decision of this case.