Barnes v. Black Diamond Coal Co.

• Decision Date: 13 October 1898
• Parties: BARNES et al. v. BLACK DIAMOND COAL CO.
• Court: Tennessee Supreme Court

47 S.W. 498

101 Tenn. 354

BARNES et al. v. BLACK DIAMOND COAL CO.

Supreme Court of Tennessee.

October 13, 1898

Appeal from chancery court, Hamilton county; T. M. McConnell Chancellor.

Suit by Barnes Bros. against the Black Diamond Coal Company. Decree for defendant was reversed by the court of chancery appeals and defendant appeals. Affirmed.

F. S Yager and Washburn, Pickle & Turner, for appellant.

White & Martin, for appellees.

WILKES J.

This is a suit for rents, brought by Barres Bros. against the coal company, for the months of March, April, May, June, July, and August, 1896, claimed under a lease contract. The chancellor refused any relief. The court of chancery appeals reversed the chancellor, and gave judgment for the amount claimed. The defendant coal company has appealed and assigned errors.

The court of chancery appeals find as a fact that the defendant leased the coal yard from the complainants for a term commencing April 1, 1895, and ending September 1, 1896, at a monthly rental of $30 per month. It is objected that the contract is voidable, under the statute of frauds. The court of chancery appeals report as a fact that the contract as a whole was both oral and in writing, and the terms are set out in letters between the parties. In addition, the statute of frauds was not pleaded, and this is fatal to it as a defense. Citty v. Manufacturing Co., 93 Tenn. 276, 24 S.W 121.

It is next said a contract under a by-law of the corporation could not be made for a longer time than three months without the approval of the board of directors. The court of chancery appeals find as a fact that complainants had no knowledge of such by-law. In such case, being a third person or stranger to the corporation, complainants would not be affected by its by-laws. Thomp. Priv. Corp. §§ 940, 942; State v. Overton, 24 N. J. Law, 440; Bank v. Smith, 19 Johns. 115, 124. The contract in this case was made by the president of the corporation. It appears that the letter heads used in the correspondence about the lease contain this clause: "No contract is binding with the Black Diamond Coal Company until approved by the president." This appears to have been all the notice complainants had on this feature of the case.

It is next said the matter is res judicata. It appears that, previous to the present suit, complainants brought an action for the rents of December, 1895, and January and February, 1896, and recovered $90, or at the rate of $30 per month for the three months. The rents previous to December, 1895, were paid. It is insisted this is a bar to any further action for the breach of this contract. The argument is that the contract is entire for the term, even although the rental is so much per month, and, being an entire contract, there can be but one breach and one recovery therefor. If the contract is an entirety, and not divisible, it must follow, under the authorities, that there can be but one breach and one recovery. Tarbox v. Hartenstein, 4 Baxt. 78; Railroad Co. v. Staub, 7 Lea, 397. A single cause of action cannot be split in order that separate suits may be brought for the various parts of what really constitutes but one demand. 1 Enc. Pl. & Prac. pp. 148, 153. Taking judgment by mistake for a less sum than due will not justify the plaintiff in recovering the residue in another action. Saddler v. Apple, 9 Humph. 342; 1 Enc. Pl. & Prac. 150, note; Thomason v. Rice, 1 Shannon, 70. As to when a contract is entire, and when it is divisible, is a question upon which there is a great confusion among the cases. It is said: "Whether a contract is entire or separable into several independent contracts depends upon the intention of the parties, to be ascertained from the language employed and the subject-matter of the contract." 1 Enc. Pl. & Prac. pp. 150, 152, note 1; Pollak v. Association, 128 U.S. 446, 9 S.Ct. 119; Shinn v. Bodine, 100 Am. Dec. 560; Huyett & Smith Mfg. Co. v. Chicago Edison Co. (Ill. Sup.) 59 Am. St. Rep. 278, 47 N.E. 384, and cases there cited. And again: "Common sense must be applied to each case, rather than any technical rules of construction." Leonard v. Dyer, 26 Conn. 172. The general test rule to determine whether a contract is divisible or entire is stated by Mr. Parsons thus: "If there are many parts of the contract, and some have been broken, and others not yet, as if money was to be paid on the 1st of every month for two years, and one year has expired, and nothing has been paid, the creditor may bring his action for one or more of all the sums due, and recover accordingly, and may, when the others fall due and are unpaid, sue for them." 3 Pars. Cont. (5th Ed.) 188, 189. To the same effect, see Huyett & Smith Mfg. Co. v. Chicago Edison Co. (Ill. Sup.) 59 Am. St. Rep., note on page 279 (s. c. 47 N.E. 384), where the authorities are cited and fully collated.

The distinction between the two classes of contracts is plainly stated in Coleman v. Hudson, 2 Sneed, 465, as follows: "In the former [entire contracts] the consideration is entire on both sides. It does not, either by its terms or the implied intention of the parties contemplate or admit of apportionment upon a partial failure on either side; and the complete fulfillment of the contract by either is required as a condition precedent to the fulfillment of any part of the contract by the other. A severable contract is a contract the consideration of which, by its terms,...