Oahu Ry. & Land Co. v. Waialua Agric. Co.
| Decision Date | 10 March 1905 |
| Citation | 16 Haw. 520 |
| Parties | OAHU RAILWAY AND LAND COMPANY v. WAIALUA AGRICULTURAL COMPANY, LIMITED. |
| Court | Hawaii Supreme Court |
OPINION TEXT STARTS HEREEXCEPTIONS FROM CIRCUIT COURT, FIRST CIRCUIT.
Syllabus by the Court
A written agreement contained several distinct matters of agreement, among others an agreement to buy coal for a term of years at a price named; also an agreement for leasing land for a rental to be arranged as stated. Held: The two transactions are so disconnected in their nature that a claim for rent of the land cannot be recouped in an action for the price of coal; nor can a claim for the reasonable value of the use of the land be set off, since it is unliquidated.
An agreement that defendant “will from time to time lease to” plaintiff certain lands when not required for immediate uses of defendant, “such leasing to be upon the following terms and conditions: The rental shall be arranged with” plaintiff “upon the basis of a minimum fair percentage of the total rental paid by” defendant “for such lands as a whole-a corresponding reduction in rent to be made when any portion is so occupied by” defendant does not contemplate execution of leases, the words “lease” and “leasing” being used to mean letting. Held: The rental agreement means that the percentage shall be not according to acreage but values of land held by the parties, and was intended to put the rent on the basis of the lowest reasonable estimate of the values of the respective acres of land in its unimproved condition.
Ballou & Marx for plaintiff.
Castle & Wilhington for defendant.
HARTWELL, J., AND CIRCUIT JUDGES DE BOLT AND PARSONS IN PLACE OF FREAR, C.J., AND WILDER, J.
The action was brought to recover $4,800 and interest, balance of the agreed price of coal sold by the plaintiff to the defendant under an agreement of October 12, 1898, in which the defendant agreed to buy coal of the plaintiff for a term of years for a specified price. The answer admits the sale and purchase but denies that any balance is owing and sets up “by way of set off or counter claim” a claim for rent of portions of the upper lands of Kawailoa, which under the same agreement the plaintiff had used, showing a balance of $11,856.08 in favor of the defendant, for which it asks judgment. In the answer as finally amended there are four counts. The first, second and fourth are based on the agreement claiming that it meant that the rent should be proportioned to the number of acres used by the plaintiff as compared with the acreage of all of the upper lands of Kawailoa, and sets forth the number of acres used by the plaintiff, which varied from year to year. The entire upper lands of Kawailoa were hired by the plaintiff of the Bishop Estate for a fixed annual rental. The third count, claiming the same sum as the reasonable value of the land used by the plaintiff, appeared in a second amended answer. To the answer as first amended the defendant demurred on the ground that the claims were unliquidated and that none of them arose out of the same transaction and therefore could neither be set off nor recouped. The court overruled the demurrer, regarding the claim as recoupment, and also overruled the plaintiff's demurrer to the finally amended answer containing the third count for reasonable value of the use of the land, which demurrer was based on the grounds of the first demurrer, and also on the ground that the first, second and fourth counts showed no cause of action. Exceptions were allowed to the overruling of each demurrer.
If the defendant's rental claim can either be recouped or set off then the pleading was good and the demurrer ought not to have been sustained.
We cannot, however, sustain the plea as recoupment, because the two transactions are entirely distinct and separate from each other, although provided for in the same instrument. The defendant's agreement to buy coal at stated prices could not be a consideration for its agreement to let land to the plaintiff. It was the defendant which agreed to buy the coal, and not the plaintiff which agreed to sell. The defendant presents no claim for breach of an agreement by the plaintiff to sell coal. Neither of the agreements for buying coal or letting land in any way depends upon the other. “Where a contract, though entire in its form, relates to several distinct and independent acts to be done at different times, it is divisible in its nature, and an action of assumpsit will lie on each default.” 1 Story on Cont., Sec. 25 d. Recouping is allowed only in matters arising out of and connected with the transaction upon which the plaintiff's action is brought. For instance, a defendant in an action for the price of goods furnished may recoup damages for breach of warranty or for fraud or negligence “growing out of and relating to the transaction in question.” Dushane v. Benedict, 120 U. S. 637. So in an action for the agreed price of making anything for the defendant, the latter may recoup loss caused to him by use of defective material or from defective workmanship. But, as stated in Erickson v. Volcano Co., 13 Haw. 430, “the very idea of a set off is that it is a debt growing out of a separate transaction from that sued on.”
The case then resolves itself into considering whether the rent can be set off either under the first, second and fourth counts, which can be done if the agreement is construed as prescribing a definite sum for rental or can be set off under the third count for the value. We construe the agreement- however, as requiring the plaintiff to pay for...
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