Oklahoma Fire Ins. Co. v. Ross

• Decision Date: 11 November 1914
• Docket Number: (No. 5325.)
• Citation: 170 S.W. 1062
• Parties: OKLAHOMA FIRE INS. CO. et al. v. ROSS.<SMALL><SUP>†</SUP></SMALL>
• Court: Texas Court of Appeals

Page 1062

170 S.W. 1062

OKLAHOMA FIRE INS. CO. et al. v. ROSS.^†

(No. 5325.)

Court of Civil Appeals of Texas. Austin.

November 11, 1914.

Error to District Court, McLennan County; Tom L. McCullough, Judge.

Action by Harvey B. Ross against the Oklahoma Fire Insurance Company and others. Judgment for plaintiff, and defendants bring error. Reversed and rendered as against defendant J. W. Beasley, and modified and affirmed as against defendant insurance company.

Sleeper, Boynton & Kendall, of Waco, and Burwell, Crockett & Johnson, of Oklahoma City, Okl., for plaintiffs in error. Witt & Saunders, Scott & Ross, and E. J. Clark, all of Waco, for defendant in error.

KEY, C. J.

Harvey B. Ross brought this action against the Oklahoma Fire Insurance Company and J. W. Beasley, and sought to recover both actual and punitory damages for the breach of a contract entered into by Ross and Beasley, parties of the first part, and the insurance company, party of the second part. The answers of the defendants contained general and special exceptions, general denials, and certain special pleas, the particulars of which it is unnecessary to state. There was a jury trial, which resulted in a verdict and judgment for the plaintiff, Ross, against both of the defendants for $6,667 actual, and $2,500 punitory, damages, and the defendants have brought the case to this court by means of a writ of error.

While the defendants in the court below are plaintiffs in error, and the plaintiff in the court below is defendant in error, in this court, in this opinion that unnecessary and confusing transposition of the parties will be disregarded, and the word "plaintiff" will refer to Ross, who was the plaintiff in the court below, and the word "defendants" will refer to the insurance company and Beasley, who were defendants in that court.

After giving the case long and careful consideration, we have reached the conclusion that, as between the plaintiff and the defendant Beasley the judgment should be reversed and here rendered for the latter; and, as between the plaintiff and the insurance company, the judgment for punitory damages should be reversed and rendered for the insurance company, and the judgment for actual damages as against that defendant should be affirmed.

Dealing with the Beasley branch of the case first, we deem it proper to say that while the plaintiff charged in his petition that Beasley had entered into a conspiracy with the insurance company to oust the plaintiff from his employment as an agent of the insurance company, and had aided and abetted in accomplishing that result, there was an entire failure to prove the existence of any such conspiracy, or that Beasley aided or abetted in ousting the plaintiff from his employment, and therefore the court should have instructed a verdict for Beasley. By the terms of the contract hereinbefore referred to, Ross and Beasley were employed by the insurance company as agents to represent that company in the state of Texas, and Ross sued the insurance company for a breach of that contract, alleging, in substance, that, without legal excuse, the company had discharged him before the expiration of the contract. Now, while Beasley was a party to that contract, he was a party in the same sense that Ross was, and rested under none of the obligations that were imposed upon his codefendant, the insurance company; and therefore we think the trial court should have sustained the exceptions which presented the question of misjoinder of causes of action. However, as we have concluded to reverse and render the case in favor of Beasley, the action of the trial court in overruling the exceptions referred to is now immaterial, in so far as he is concerned.

Turning to the other branch of the case as to the insurance company, conceding that the court should have sustained the exception referred to, we have reached the conclusion that the case ought not to be remanded for another trial upon the question of actual damages, because there is no reason to suppose that a retrial between the plaintiff and the insurance company, limited to the question of the breach of the contract and actual damages, would result in a more favorable finding for the insurance company than the verdict which has already been rendered for actual damages. True it is, the insurance company assails that finding and charges that it is unsupported by testimony, but we have reached a different conclusion. At the time of its breach the contract had about four years to run; by its terms the plaintiff was to receive a salary of $125 per month, his traveling expenses, and 2½ per cent. commission on all premiums forwarded to and accepted by the insurance company. It is also true that by agreement of the parties and the charge of the court, the question of the plaintiff's right to recover for salary was eliminated from the case, and the measure of damages thereby limited to the profits the plaintiff would have made out of the commissions on premiums. In the very nature of things, the amount of such profits is, to a considerable extent, speculative, but the authorities hold that that fact will not prevent a recovery. In this case it was shown that after the insurance company had discharged the plaintiff it ceased to do business in Texas on the ground that it was not profitable so to do. But there was testimony tending to show that Ross and Beasley were building up a business at the time the former was discharged; that it was largely through his efforts that the business referred to had been obtained, and we cannot say that the jury was not justified in reaching the conclusion that, if the plaintiff had not been discharged, the business would probably have been successful and attained such proportions as that during the remaining four years the plaintiff would have earned as commissions the amount awarded him as actual damages.

It is also insisted by the insurance company that the case should be reversed because of a misjoinder of causes of action, in that the plaintiff sued for a breach of the contract and also for slander founded upon certain slanderous charges made against the plaintiff at and subsequent to the breach of the contract. Counsel for Ross contend that the plaintiff's petition did not seek a recovery for slander, and that the matters referred to were set up in the petition for the purpose of showing malice on the part of the defendant in discharging the plaintiff in the manner and under the circumstances alleged in the petition. The trial court seems to have adopted the latter view, and did not submit to the jury the question of slander, but did submit the questions of conspiracy between the two defendants, of breach of the contract and actual and punitory damages. Therefore if it be conceded (which we do not decide) that the plaintiff had no right to join in the one action against the insurance company the right to recover upon contract and also for slander, we do not think the case should be remanded for another trial because of the action of the court in overruling exceptions to the petition presenting that point. Inasmuch as the court held that no recovery was sought on the ground of slander, and did not submit that issue to the jury, it would seem that the result was the same as if the court had sustained the exceptions referred to.

It is also contended that error was committed in permitting the plaintiff to introduce testimony tending to sustain the slanderous charges referred to, which consisted, in substance, of the charge that the plaintiff had fraudulently padded his expense accounts and had thereby committed a fraud upon the insurance company, for which reason he had been discharged. If it be conceded that the testimony referred to was not admissible, we see no reason to suppose that it had any influence with the jury in determining whether or not the insurance company had breached the contract, and the amount of actual damages the plaintiff was entitled to recover for such breach. Doubtless that testimony was considered by the jury and spent its full force in determining the question and of the amount of punitory damages; but, as we have concluded to reverse and render upon that issue, we hold that the insurance company is entitled to no further relief because of the admission of that testimony.

In conclusion, we deem it proper to make a few observations concerning our rulings upon the question of punitory damages, and the failure to make a case against Beasley. It is well settled, as a general rule, that punitory or exemplary damages are not recoverable for the breach of contract. There are some exceptions to that rule where the breach occurs in such manner as to constitute a tort; but tortious conduct committed after the breach of the contract, no matter how malicious or inexcusable, will not form the basis for recovery of punitory damages for a breach of contract. Aside from the testimony given by the...