Krebs Hop Co. v. Livesley

• Decision Date: 04 April 1911
• Parties: KREBS HOP CO. v. LIVESLEY et al.
• Court: Oregon Supreme Court

114 P. 944

59 Or. 574

KREBS HOP CO. v. LIVESLEY et al.

Supreme Court of Oregon

April 4, 1911

Appeal from Circuit Court, Marion County; George H. Burnett, Judge.

Action by the Krebs Hop Company against T.A. Livesley and John J Roberts, copartners, doing business as T.A. Livesley & Co. From a judgment for plaintiff, defendants appeal. Affirmed.

McBride J., dissenting.

This is an action for damages by the Krebs Hop Company against T.A Livesley & Co., on account of the failure of the latter to perform certain conditions of the following contract, during the year 1908: "Salem, Oregon, August 25th, 1904. In consideration of one dollar, the receipt whereof is hereby acknowledged, Krebs Hop Company, a corporation doing business under the laws of the state of Oregon, sells, and T.A Livesley & Co., copartnership, buys five hundred thousand pounds of prime Oregon hops, subject to inspection by T.A Livesley & Co., or their authorized agent, at the agreed price of fourteen cents per pound, said hops to be the product of and to be grown on the Krebs Hop Company, Buena Vista farm, better known as the Henderson W. Murphy farm, situated on the west bank of the Willamette river, being about three miles S.E. of Independence, in Polk county, Oregon, on the left-hand side of the wagon road, going from Independence to Buena Vista, the said purchaser to have the preference and right of selection over all other contracts. Said hops to be delivered as follows: One hundred thousand pounds (100,000) of the growth of 1905, one hundred thousand pounds (100,000) of the growth of 1906, one hundred thousand pounds (100,000) of the growth of 1907, one hundred thousand pounds (100,000) of the growth of 1908, and one hundred thousand pounds (100,000) of the growth of 1909, f.o.b. cars Independence, Oregon, or f.o.b. boat Murphy's landing, not later than October 15th of each of the above years. In case there are not a sufficient amount of prime hops grown on the above-described farm to fulfill said contract, the seller agrees to deliver hops of like quality grown elsewhere in fulfillment of said contract. This contract is not transferable without the written consent of both parties hereto and to be binding upon the assigns, executors and administrators. The buyers agree to pay the purchase price in the following manner, to wit: Two thousand dollars ($2,000.00) between the first and fifteenth of April of each year and two thousand dollars ($2,000.00) between the first and fifteenth of May of each year and six thousand dollars ($6,000.00) between the first and fifth of September of each year and the balance, four thousand dollars ($4,000.00) on delivery and acceptance by the buyers of said hops, each year, during the life of this contract, cultivation advances to bear interest at the rate of 6 per cent. Witnessed by Krebs Hop Company, Sellers, By Conrad Krebs, Pres. T.A. Livesley & Co., Buyers. [ Corporate Seal.]"

Plaintiff alleges that it is a corporation; that the defendants are partners, and, after setting out the contract in extenso, alleges in substance that in previous years the defendants designated the place of delivery, where the hops were accordingly delivered; that, in order to ascertain where it would be expected to make such delivery on October 15, 1908, plaintiff notified defendants it had 100,000 pounds of hops ready for delivery, and requested to know the place defendants desired same to be delivered, to which notice defendants replied by letter, refusing to designate either place or point of delivery, stating that they did not regard the contract as in force, and declining to recognize the same in any way. Plaintiff further alleges that it duly complied with and performed all the conditions of the contract on its part to be kept and performed, and that it was, on the 15th of October, 1908, and prior thereto, ready and willing to deliver 100,000 pounds of prime Oregon hops, grown in 1908 on the premises described in the contract, to defendants at either of the places mentioned, and had defendants named such place of delivery and attended thereat to receive the hops, would have tendered and delivered same. But because of the wrongful conduct of the defendants plaintiff was unable either to deliver or tender delivery of said hops. That defendants wrongfully failed, neglected, and refused to receive said hops, and to pay plaintiff therefor according to the terms of said contract, or at all, and that upon said date hops of the kind and quality described in said contract were worth in the market, at the time and place of delivery, 7 cents per pound, and no more.

The defendants by their answer put in issue all the allegations of the complaint, except the incorporation of plaintiff, the partnership of defendants, the execution of the contract, and the market value of the hops on October 15, 1908, in addition thereto setting up seven affirmative defenses as follows: (1) In bar, the sale of the hopyard to Ladd & Bush, and the assignment of the payments to accrue thereon; that thereby the plaintiff made default in the contract, for which default the defendants, on the 24th day of March, 1906, rescinded the contract. (2) In estoppel, that plaintiff, after the execution of the contract, conveyed the hopyard and assigned the contract without the knowledge of defendants, and abandoned and retired from the contract, and that by reason thereof defendants themselves retired from and rescinded the contract. (3) Plaintiff's breach of the contract in the year 1906 in not delivering or offering to deliver any hops during that year. (4) In estoppel, all the matters set forth in the second and third defenses. (5) Plaintiff's claim that hops were worth but 7 cents per pound should not be heard, because defendants offered to pay 8 cents per pound therefor, for which plaintiff refused to sell. (6) The recovery of the judgment on the contract of August 25, 1904, in the action brought by plaintiff against defendants in

January, 1908. (7) Defendants pleaded in estoppel judgment in the action commenced in January, 1908. Krebs Hop Co. v. Livesley, 104 P. 3.

Trial was had, resulting in a judgment in favor of plaintiff for $7,000, from which defendants appeal.

Wirt Minor and Wm. M. Kaiser, for appellants.

Carson & Brown, for respondent.

BEAN, J. (after stating the facts as above).

A brief history of the cases pertaining to this contract is as follows: The contract having been fully performed in 1905, in 1906, before the time for delivery arrived, plaintiff brought an action and recovered judgment for $4,000 for the April and May payments of that year. Krebs Hop Co. v. Livesley & Co., 51 Or. 527, 92 P. 1084. Thereafter no hops of the crop of 1906 having been delivered to defendants, they brought suit against plaintiff for an accounting, and to offset and stay the enforcement of the judgment for $4,000, resulting in a decree in favor of Krebs Hop Company. On appeal to this court, Justice Slater, having been of counsel, did not sit, and the court being equally divided, the decree of the trial court was affirmed. Livesley & Co. v. Krebs Hop Co., 107 P. 460, 112 P. 1. As to the crop of 1967, plaintiff obtained a judgment against defendants for $6,000 damages for failure to perform. Krebs Hop Co. v. Livesley & Co., 104 P. 3.

The principal point relied upon by defendants for the reversal of this case is their contention that the contract out of which this action arose is an entire contract, and, plaintiff having obtained certain judgments against defendants on account of their alleged breach thereof, it is barred and estopped from recovering anything in this action. That the contract being an entire contract, the plaintiff, on account of the breach thereof on the part of defendants, may recover but once on account of such breach, and that the measure of damages for the breach of the contract, assuming that defendants were guilty of such breach, is the difference between the contract price and the market value of 400,000 pounds of hops on March 24, 1906, the date on which defendants gave notice that the contract was abrogated. From this contention it seems that defendants assumed they could, by their own acts or declarations, terminate the contract without the aid or consent of the other party, naming the remedy plaintiff should pursue. It appears defendants sought to cancel the contract, but plaintiff refused to acquiesce therein, or to permit defendants to rescind. As stated in L., S. & M.S. Ry. Co. v. Richards, 152 Ill. 59, 80, 38 N.E. 773, 777, 30 L.R.A. 33: "It is well settled that, where one party repudiates the contract and refuses longer to be bound by it, the injured party has an election to pursue either of three remedies: (1) He may treat the contract as rescinded, and recover upon quantum meruit so far as he has performed; or (2) he may keep the contract alive for the benefit of both parties, being at all times himself ready and able to perform, and at the end of the time specified in the contract for performance sue and recover under the contract; or (3) he may treat the repudiation as putting an end to the contract for all purposes of performance, and sue for the profits he would have realized if he had not been prevented from performing."

The plaintiff in this case has elected to rely upon the second remedy--to keep the contract alive for the benefit of both parties, being at all times himself ready and able to perform, and at the end of the time specified for performance, sue and recover. [ 1] Upon reason and authority one party cannot, by any act or declaration, destroy the binding force of a contract. Kadish v. Young, 108 Ill. 170 176, 43 Am.Rep. 548; 24 Am. & Eng.Ency. of L. 1084. As stated by Sedgwick on Damages (6th Ed.) 340: "An effort has...