Dexter-Portland Cement Co. v. Acme Supply Co.

Holt, J.,

delivered the opinion of the court.

The plaintiff in error was plaintiff in the court below. The defendant in error was defendant there, and so for convenience the parties will be designated as they were in the trial court.

For some years prior to the institution of this action the plaintiff had been a cement manufacturer, with its plant located at Nazareth, Pennsylvania, and the defendant had been a dealer at Newport News, handling large quantities of cement, lime, plaster and other building material, and, as such dealer, had been the representative or agent of the plaintiff for the sale of its cement in Newport News and Hampton.

The plaintiff filed its notice of motion for judgment on February 11, 1921, claiming $1,018.09 to be due from the defendant with interest from the 31st day of July, 192Ó. This indebtedness was evidenced by certain protested checks of the defendant and a small balance on account. It grew out of two specific work sale contracts numbered 3228 and 3229, which contracts are not otherwise involved in this litigation. These claims were not denied and judgment therefor went without protest.

Defendant did, however, claim offsets amounting to $4,195.00. They are set up in detail in a plea filed on March 3, 1924, and grew out of transactions known as specific work sales contracts and an open order contract.

Whenever the defendant secured an order to furnish cement to a particular contractor for a particular piece of work, it, on the strength thereof, would place an order with the plaintiff for material necessary. This was a specific work sale contract and differed in its terms from those contracts in which the defendant bought cement for its own use to be sold by it at retail from its warehouse or otherwise as it might see fit. This last contract was an open order contract.

Three contracts of the first class are set out in the plea. One numbered 1,211 bore date of October 20, 1919, and it is charged that the defendant failed to supply 343 barrels of cement at the contract price of $2.73, and that such failure entailed a loss of $1.25 a barrel, or $428.75.

Two other contracts of this class, numbered 1,407 and 1,408, were entered into on February 5, 1920. The cement in this instance was to be furnished to Harwood and Moss, contractors. The price agreed upon was $2.83 a barrel. There was a shortage here of 750 barrels. The loss claimed was $1.25 a barrel or $937.50.

The last of these contracts, numbered 1,460, bears date April 19, 1920, and is known as the street railway contract. The price agreed upon was $2.95 a barrel. There was a shortage of 445 barrels, which, on a like basis of calculation, entailed a loss of $555.00.

In addition to these items there was an open order contract of date July 9, 1920, numbered 2,974 for ten ears of cement. The contract price being “$3.33 for 1st car — balance at market price at time of shipment.” Of this order only one car was shipped. It is said that, assuming that the cars were of average capacity, there was a shortage here of 1,818 barrels and that in this instance, also, aloss of $1.25 a barrel, or of $2,272.50, was suffered.

In due course these issues were submitted to the jury which returned a verdict for the plaintiff in the full amount claimed in its notice. None of the offsets were allowed by it. This verdict the defendant moved to set aside as being contrary to the law and the. evidence. That motion the trial court sustained to the extent that it did allow in full every offset claimed in the defendant’s plea and it is in this form that this ease comes before us for consideration.

Pour errors are assigned. They are:

“1. To the court’s refusal to grant the plaintiff’s motion to reject the plea of set-off.

“2. To certain rulings of the court on the evidence offered.

“3. To the refusal by the court to grant plaintiff’s instructions Nos. 2, 3, 4, 6, 7 and 8 as offered; to the amendment to instructions 3 and 4 and the giving of the same as amended; to the granting of the defendant’s instructions Nos. 1, 2, 3, 4, 5 and 6.

“4. To the granting of the defendant’s motion to set aside the verdict of the jury as rendered and entering up final judgment over against the plaintiff, in the sum of $3,171.82 with interest as above.”

Assignment No. 2 deals with alleged errors on the part of the trial court as to rulings on the evidence offered, but since no bill of exception was taken as to any ruling of the court on the evidence, this need not be noticed. Walters v. Norfolk & Western Railway Co., 122 Va. 149, 94 S. E. 182.

Likewise assignment No. 3 need not be discussed. Since the verdict of the jury was in favor of the plaintiff for its full claim, it cannot complain of any supposed error of the trial court with reference to the instructions. Fox v. Mason, 139 Va. 667, 124 S. E. 405.

The first and fourth assignments involve the same proposition; namely, that the trial court in entering up the judgment on matters set out in the plea applied an improper measure of damages, in that under this plea and the evidence no damages could be recovered at all. These assignments for convenience will be considered together.

It probably sufficiently appears from the plea itself that the damages claimed and therein set up arise out of unrelated contracts in no wise connected with those on which the motion for judgment rests. All that they have in common is that the buyer and seller were in each instance the same. If it be that this does not sufficiently appear from the plea itself it is made clear by the evidence in the case. The substance of this defense is that plaintiff did not furnish cement contracted for with reasonable promptness, in fact that it did not furnish it at all, and that the defendant was forced to supply its customer from stock on hand or from that purchased in the open market at prices not shown. In many instances loss is based upon estimated profit on sales never completed. It is said that this loss always was at the least $1.25 a barrel. The evidence is that it was in most cases greater. Just how great it is difficult to say from the testimony. But this evidence does strongly tend to support the charge that there was a loss which varied from sale to sale and was always more than $1.25 a barrel.

Damages which are wholly uncertain cannot be made certain by the adoption of some arbitrary standard of loss and by charging that loss, at least, was in every instance sustained. We think that the damage here shown is unliquidated and arises out of contracts independent of those set out in plaintiff’s motion.

The difference between set-off, common law recoupment and statutory recoupment admir.aVy appears in a note by Prof. Lile, 7 Va. Law Reg. 332. That statement is:

“Set-Off.

“Common Law Recoupment.

“1. Arises out of some transaction dehors the transaction sued on.

“1. Arises out of the contract sued on.

“2. The demand must be liquidated.

“2. Amount need not be liquidated.

“3. May not only repel plaintiff’s claim, but (in Virginia) judgment for the excess may be recovered over against the plaintiff. (Va. Code, section 3304.)

“3. May only repel plaintiff’s claim (in whole or in part) — no recovery over.

“4. Must be specially pleaded, or account thereof filed with the plea. (Va. Code, 3298.)

“4. May be shoAvn under- the general issue.

“5. Maybeused,though plaintiff’s action is on a sealed instrument.

“5. Will not avail where plaintiff’s action is on a sealed instrument.

“Statutory Recoupment.

“With these may be contrasted statutory recoupment under Code, section 3299 — often miscalled ‘plea in the nature of a plea set-off. ’ This plea bears no resemblance whatever to a set-off, but is a mere enlargement of the common law right of recoupment:

“1. Arises out of the contract sued on (never out of a transaction dehors the contract, as in the case of set-off. —Am. Manganese Co. v. Manganese Co., 91 Va. 272, [21 S. E. 466]). '

“2. Amount need not be liquidated.

“3. May not only repel plaintiff’s claim (as in common law recoupment), but defendant may have recovery over against plaintiff for the excess. This is one of the chief purposes and advantages of the statutory proceeding.

“4. Must be specially pleaded (the’ statute so declares, section 3299) and cannot be availed of under the general issue.

“5. May be used though plaintiff’s action is on a sealed instrument. This is another advantage of the statutory recoupment over recoupment at common law.

“6. May be based on equitable (as distinguished from legal) grounds.”

This court recently had occasion to consider this question in the case of Baker v. Hartman, 139 Va. 612, 124 S. E. 425 — a case very much in point. The first paragraph of its syllabus sustained by the text and by authorities cited is as follows:

“In the instant case plaintiff sold defendant three carloads of potatoes. The first two cars were paid for before the last car was purchased, each sale being an independent transaction, with no connection save that the purchaser and seller were the same in each instance. Defendant refused to pay for the third and last car unless plaintiff would allow certain damages claimed to have been sustained by reason of the bad quality of the potatoes shipped in the first two cars. On motion by plaintiff to recover the amount due on the last car, the court refused to allow defendant to plead by way of set-off damages sustained by it in the purchase of the other two cars.”

We have seen that unliquidated damages arising out of independent transactions make up in their entirety the claims of the defendant. Under the authorities cited they are not in this case proper matters of set-off nor of common law or statutory recoupment.

It follows that the judgment of the court below must be reversed and final judgment entered here in accordance with the verdict of the jury which is the sum sued for with proper interest. This is without prejudice. The defendant may hereafter take such steps to enforce its rights as appear necessary and proper.