Mark v. Stuart-Howland Co.

• Decision Date: 25 January 1917
• Citation: 226 Mass. 35,115 N.E. 42
• Parties: MARK et al. v. STUART-HOWLAND CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

226 Mass. 35

115 N.E. 42

MARK et al.

v.STUART-HOWLAND CO.

Supreme Judicial Court of Massachusetts, Suffolk.

Jan. 25, 1917.

Exceptions from Superior Court, Suffolk County; Lloyd E. White, Judge.

Action by Cyrus Mark and others against the Stuart-Howland Company, tried with cross-action by defendant. Verdict in each case for plaintiffs, and plaintiffs and defendant except, and defendant files a petition to prove that part of the exceptions disallowed by the court, on which a commissioner was appointed, and on his report that part of the case came before the Supreme Judicial Court. Defendant's petition to establish exceptions denied, its exceptions sustained, and plaintiffs' exceptions overruled.

In the first case, tried in the superior court before Lloyd E. White, J., the jury found in favor of Mark. In the second case the jury found for Mark, the judge allowing the jury to deduct 5 per cent. claimed by defendant, and both plaintiff and defendant alleged exceptions. The court allowed a part of Stuart-Howland Company's exceptions and disallowed others, and Stuart-Howland Company filed a petition to prove that part of the exceptions disallowed by the court. On the petition to prove exceptions, a commissioner was appointed, and on his report that part of the case came before the full court (Supreme Judicial Court). In the petition to prove exceptions the petitioner (Stuart-Howland Company) sought to have incorporated in the bill certain remarks and conduct of the presiding judge as to a settlement of the controversy between the parties.

Whipple, Sears & Ogden and Herbert Parker, all of Boston (Jas. M. Hoy, of Boston, of counsel), for petitioner.

Dunbar, Nutter & McClennen, of Boston (J. Butler Studley and Jacob Kaplan, both of Boston, of counsel), for Mark Mfg. Co.

RUGG, C. J.

The action of Mark and others, who will hereafter be called the plaintiffs, was brought first. The declaration is in two counts, the first to recover damages for breach of a written contract dated May 25, 1908, and the second upon an account for goods sold and delivered to the Stuart-Howland Company, who will hereafter be called the defendant. The defendant answered, pleading first, a general denial, and second, in recoupment that, although the defendant had complied with the terms of the contract of May 25, yet the plaintiffs on December 12, 1908, had violated the terms of that contract by refusal to fill and order given by it to the plaintiffs, and thereafter refused to carry out the contract and repudiated it to the great loss of the defendant. The second is a cross-action brought by the defendant against the plaintiffs. The declaration in this action contains one count for damages arising from the general breach of the contract of May 25, 1908, one for loss of profits from December 12, 1908, to the end of the contract term, and a third for damages for delays in shipments of its orders given to the plaintiffs under the contract. The cases were tried together.

The contract provided in substance for the appointment of the defendant as the exclusive agent for the New England States for the plaintiffs entire line of rigid iron conduit for a period of two years, with a privilege of written cancellation by either party on sixty days' notice, and an absolute privilege of cancellation on the part of the defendant by giving written notice. The plaintiffs quoted ‘a discount of 50, 4/10 s & 5’ from its regular published list, the price, however, to be raised or lowered according to market conditions, but the defendant always to be allowed a 5 per cent. preference below the price quoted by the ‘Associated Manufacturers.’ The controversy centers about an order given by the defendant to the plaintiffs on December 12, 1908, for twenty-five carloads of conduit, to be shipped to Boston unless otherwise directed, ‘prices not to be higher than last shipment.’ There was evidence tending to show that the order was not intended for immediate delivery nor delivery before January 1, 1909. On October 27, 1908, the plaintiffs had written the defendant withdrawing all outstanding prices on conduit and submitting a schedule of higher prices for goods to be shipped after December 31, 1908. The chief issue between the parties was whether upon all the evidence the plaintiffs were bound to accept the defendant's order of December 12 at the lower price, or whether they were justified in refusing to accept it unless at the higher price. There was much correspondence over this order and there were efforts at compromise of the differences. These were without avail and in May, 1909, the plaintiffs brought their action.

The plaintiffs asserted at the outset and continued constant in the position that they were not obliged to accept the order except at the higher price. The defendant, on the other hand, persistently maintained its position that the plaintiffs were obliged to accept the order at the lower price. There is nothing in the auditor's report, in the reported testimony, in the correspondence as printed in either brief, or in the conduct of the parties, to indicate that either ever receded from the initial position taken. On the contrary, although there were offers of concession, the evidence seems plain that each continued to assert the soundness of the original contention put forward. Under these circumstances the jury were instructed, subject to the defendant's exception, that if, while the parties were considering their disagreement as to the meaning and interpretation of the contract and the rights and obligations arising from it, ‘they both got sick of the bargain and there was a mutual abandonment of the contract, then neither is from that time further bound by it * * * then one cannot be said to have violated the contract more than the other.’ As an abstract proposition of law this is correct. There are two objections to giving it as an instruction. The first is that abandonment of the contract had not been pleaded by either party. A general denial puts in issue only those facts which the plaintiff must aver and prove in order to establish a prima facie case. Friedenwald Co. v. Warren, 195 Mass. 432, 434, 81 N. E. 207;Amsinck v. American Ins. Co., 129 Mass. 185, 188. Abandonment of a contract as a defense is by way of confession and avoidance and not a direct denial of any element essential to the proof of the plaintiffs' main case. Where the defense rests on a rescission or mutual abandonment of a contract, the issue is whether the contract has ceased to have legal existence or has been terminated by reason of events occurring subsequent to the inception of the contract. It is a distinct and substantive ground of defense which ‘must be alleged in the answer according to the provisions of the Practice Act, if a defendant seeks to avail himself of it in order to defeat a recovery on a contract.’ Fogg v. Griffin, 2 Allen, 1, 8. See Parker v. Lowell, 11 Gray, 353, 358;Pike v. Witt, 104 Mass. 595, 598;Wheaton v. Nelson, 11 Gray, 15;Grinnell v. Spink, 128 Mass. 25; and Hight v. Bacon, 126 Mass. 10, 30 Am. Rep. 639.

It is reversible error for the judge in his charge, for the first time so far as appears, to suggest a ground of exoneration for breach of contract, which was not open under the pleadings, as to which the course of the trial does not seem at all to have been directed, and to permit the jury to surmise, in the absence of evidence, whether this might not be a good way to dispose of the case. Plummer v. Boston Elev. Ry., 198 Mass. 499, 516, 84 N. E. 849.

The second objection to the instruction is that there was no evidence to which it was applicable. The plaintiffs have argued that the defendant must have known that it had no right to demand under the contract the acceptance and fulfillment of its order of December 12, and expected that the plaintiffs would refuse it, and that, by insisting upon the filling of that order, it abandoned the contract. There is nothing to indicate that the trial proceeded upon this basis or that the defendant did not give its order of December 12 in good faith. A contract may be abandoned by conduct as well as by words. There is no basis for contending that an abandonment has arisen when both parties continue in good faith to assert contrary rights arising from a diversity of opinion as to the construction of the contract. It cannot be said to have been harmless error to permit the jury to speculate as to an abandonment when there was no evidence to warrant a finding that the contract had been abandoned. Kerr v. Shurtleff, 218 Mass. 167, 171, 105 N. E. 871.

It is necessary to consider questions which may arise on a new trial. Where a defendant pleads in recoupment and also brings a cross-action for the same matters, it is the correct practice for the judge to require him to elect at the close of the evidence whether he will proceed on the answer in recoupment or on the cross-action (Cox v. Wiley, 183 Mass. 410, 413, 67 N. E. 367;Hebert v. Dewey, 191 Mass. 403, 407, 77 N. E. 822), although the earlier practice seems to have been to permit him to rely on both (Cook v. Castner, 9 Cush. 266;Star Glass Co. v. Morey, 108 Mass. 570). Against the exception of the defendant the court hardly would have the right to direct...