Houston & Tex. Cent. Ry. Co. v. Mitchell

• Decision Date: 01 January 1873
• Parties: THE HOUSTON AND TEXAS CENTRAL RAILWAY COMPANY v. CHARLES MITCHELL.
• Court: Texas Supreme Court

38 Tex. 85

THE HOUSTON AND TEXAS CENTRAL RAILWAY COMPANY

v.CHARLES MITCHELL.

Supreme Court of Texas.

1873.

1. A proposition in writing to deliver a specific article “ not to exceed two hundred tons,” and with no other stipulation as to quantity, payment to be made on the delivery of designated installments, which is accepted in writing, confers no right upon the party accepting to enforce delivery to the limit mentioned, and leaves it optionary with each party to avoid the agreement on giving notice to the other, at any period during the time of delivery.

2. Under such an agreement, the party making the proposition is not bound to deliver, and the one accepting is not bound to pay, to full amount of the limit.

3. The measure of damages under such a contract is the contract price of the amount delivered before notice to stop delivery, and such actual damage as may result from notice to stop.

4. The party who seeks redress against another for the breach of contract is bound to use due diligence himself in preventing, as far as possible, the loss by reason of the breach.

APPEAL from Harris. Tried below before the Hon. James Masterson.

The appellee sued for the entire contract price of two hundred tons of prairie hay, at $22.50 coin per ton, alleged by him to have been cut and stacked in fulfillment of his contract, and tendered for delivery to appellant's agent and by him refused, and which was never received or used by appellant. The contract will be found copied at length in the opinion of the court.

The petition alleged that appellee, in good faith, carried out the contract, by buying a mowing machine and employing a large number of laborers, to cut the hay and stack it in ricks near the line of the road; that he cut two hundred tons and stacked it as agreed on, and made a tender of it to the duly authorized agent of the company, who accepted the tender for the company; that the company, according to contract, upon the tender of the hay expressly agreed and promised, and then became liable, to pay him $4,500 coin, the contract price of the hay so cut and tendered, but that payment has since been refused; wherefore he prays judgment for the whole price and interest.

Appellant answered, first, by a general denial of the facts alleged; second, that the pretended agent had no authority to make or approve such a contract, and no authority to accept tender of performance; and, third, that John E. Garey was the agent authorized to make such a contract; that he had accepted appellee's proposal at the time alleged, but that shortly afterwards it was found that prairie hay near the railroad was so parched and burned by the summer heats that it was not suitable to be used; and that before appellee had cut any hay, and before he had incurred expenses in procuring laborers, said Garey notified appellee that the hay would not be needed, and that he should not proceed under the contract; that appellee then claimed that he had bought a mowing machine, and wished to proceed to cut the hay, whereupon said Garey offered to pay the appellee for the machine, and all other expenses he had then incurred; but that appellee refused so to do, and that, conspiring with others to wrong defendant, pretended and claimed to have the right to proceed and make money from his contract; and that if he ever did cut the hay, or tender any to any person, it was not received by, or known to any person authorized to act for appellant; and that if said agent did pretend to accept such tender of it, he acted without authority, and conspired with appellee to wrong and defraud appellant.

Appellee then amended his petition by way of replication. He denied the allegations made in the answer, especially denying that the contract was rescinded by Garey; and alleged, “that some time after he had entered into said contract, * * and after he had cut a large amount of said hay, and incurred an expense and outlay in the purchase of a mowing machine and other implements, and horses, mules and wagons, and in hiring laborers, and purchasing supplies, etc., necessary to carry out said contract, amounting to not less than $1,500, said John E. Garey called on him, and requested him to let him have possession of said contract, for the purpose of bringing it down to Houston to show it to the directors of the railway, in order that he might counteract some erroneous impressions regarding it;” that he (Garey) had been written to about it, and wished to explain it, etc., and that appellee refused to let him have it, “informing the said Garey that he intended to go on and complete said contract.” Further, he denied that “said hay was parched and burnt up by the sun;” “on the contrary, alleges that said hay was cut from an inclosure, which had not been grazed or trampled by the cattle, and was in better condition, and was in all respects better than ordinary prairie hay;” and that appellant, at the time the contract was made, well knew the condition and character of prairie hay, the seasons, etc. He also alleged that there was no delay in the execution of the contract; “that in a very short time after making the same, and with no other delay than was necessary to prepare, he set about complying with his contract in good faith, and in a short time he cut and stacked and delivered said hay, to wit, two hundred tons, in accordance with his contract, and tendered the same to defendants;” and that in so doing he was compelled to incur “additional expense and outlay of not less than $750.” He denied all charges of conspiracy to wrong or defraud; avers that he acted in good faith, and fully complied with contract, and incurred great expense, outlay, embarrassment, labor and trouble, and that defendant acted in bad faith, etc.

The presiding judge, among other charges, gave the following, viz.:

“3. After a contract is made, it is binding on all the contracting parties, and cannot be rescinded by one of the contracting parties without the consent of the other; and the party violating the contract is liable in damages for the breach of said contract.”

“6. If the plaintiff cut the hay, as he alleges, and if he offered to deliver it, but was prevented by the defendant from actually delivering it, by the refusal on part of defendant's agent; and if afterwards, without gross negligence on plaintiff's part, said hay was destroyed, he will nevertheless be entitled to recover.”

Upon the issues thus presented, the jury found for appellee the full amount of the contract, amounting to $5,094, for which judgment was rendered.

Gray & Botts, for appellant.

First. As to the construction of the contract. We contend that the time, purpose and meaning of it, was to give appellee the privilege of cutting hay to the extent it might be needed by appellant, deliverable in quantities of twenty-five tons at a time, to be paid for as delivered, not to exceed two hundred tons in all; and while he was not bound to deliver the full quantity, unless he found it convenient to do so, neither was appellant bound to receive more than it needed; of course, however, subject to reasonable notice of withdrawal by either party.

It will be difficult to resist the conclusion that the parties so understood the contract at the time it was made. On the construction of contracts, we refer generally to the elementary works, and to Swisher v. Grumbles, 18 Tex. 177;Haldeman v. Chambers, 19 Tex. 39;Dorr v. Stewart, 3 Tex. 479.

But it was argued, and the court so charged, that a contract once made was a mutual transaction, which could not be rescinded without the assent of both parties. This is undoubtedly true, as a general proposition, but certainly cannot apply when the contract itself provides for such a contingency, as we contend this one does.

Second. As to the effect of notice to desist and refusal to carry out the contract by appellant. If we are wrong as to the true construction of the contract giving a right to rescind it, then we submit that the notice and refusal was a breach of it, which instantly gave appellee the right of action for damages thereby incurred, but not the right to proceed and increase the damages by way of a speculation. The distinction between the right to rescind and the effect of claim of such right, being, in fact, a breach of the contract, does not appear to have been perceived by counsel for appellee nor by the court.

We submit that the mutuality of the contract ceased instantly upon the breach of it, when right of action for damages then incurred accrued to the appellee, and none whatever for his subsequent proceedings, pretended to be in fulfillment of a violated contract.

Even in cases of overseers or employees, the doctrine asserted by appellee is not sustained by former decisions of this court. There are many cases showing that immediately on the breach of such contracts right of action for damages accrues, and of course the supposed continuity or mutuality of contract ceased.

Meade v. Rutledge, 11 Tex. 52-54, is against the special court doctrine of Smith v. Lipscomb, and establishes our view. So do the cases of Hassell v. Nutt, 14 Tex. 266; Nations v. Cudal, 22 Tex. 252; and Dorr v. Stewart, 3 Tex. 479.

It was also held that where the contract is divisible, and performance is prevented by the death of the obligor, there should be an apportionment and recovery for the value of part performed. McMullen v. Kelso, 4 Tex. 237.

This illustrates the principle involved, though not directly in point, on the facts of this case. But the doctrine is well settled that the effect of the abandonment of a continuing contract by the obligor is to give the right to the obligee to recover for the part then performed, and damages. Hillyard v. Crabtree, 11 Tex. 263; Carrol v. Wield, 26 Tex. 148; Sedg. Measure Damages, 215 and note.

Third. As to the measure of damages for the breach of the contract. We submit that it is undeniable law, in cases of...