Pacific Mut. Life Ins. Co. v. Caraker

• Decision Date: 29 February 1924
• Docket Number: 14249,14250.
• Parties: PACIFIC MUT. LIFE INS. CO. v. CARAKER. CARAKER v. PACIFIC MUT. LIFE INS. CO.
• Court: Georgia Court of Appeals

121 S.E. 876

31 Ga.App. 707

PACIFIC MUT. LIFE INS. CO. v. CARAKER.

CARAKER v. PACIFIC MUT. LIFE INS. CO.

Nos. 14249, 14250.

Court of Appeals of Georgia, Second Division

February 29, 1924

Syllabus by the Court.

Upon a breach of an executory contract for services to be performed on commission, the ascertainable profits therein inuring to the benefit of the innocent party may be recovered; but where such profits are incapable of definite ascertainment an alternative remedy for the breach is the recovery, by the party aggrieved, of the necessary and legitimate expenses authorized by the contract or in contemplation of the parties at the time of its execution and incurred by him in preparing to perform, less the value of materials on hand, or, where there has been part performance, such expenses, together with reasonable compensation for services rendered, which are part of the expenses, less the profits which have already been collected as a result of such part performance are recoverable. U.S. v. Behan, 110 U.S. 338, 4 S.Ct 81, 28 L.Ed. 168; Kingman v. Western Mfg. Co., 92 F 486, 34 C.C.A. 489; Worthington v. Gwin, 119 Ala. 44, 24 So. 739, 43 L.R.A. 382.

Where the innocent party has partly performed the contract, and has earned and collected profits thereunder, which were necessarily earned as a result of the expenditures made by him in performing the contract, he cannot recover both the expenses thus incurred and the profits thus earned, but may recover such expenses, together with reasonable compensation for the services rendered, by accounting to the opposite party for the earnings which have thus already accrued as a result of his services and expenditures.

The expenses incurred in preparing to perform the contract necessarily include only expenditures for which the plaintiff received nothing of value in return, but which were consumed by him in performing under the contract.

In a suit for a breach of the contract, these alternative remedies may be joined in separate counts, and the plaintiff may recover upon either count as the evidence adduced may authorize.

An allegation in the petition that the plaintiff performed the contractual obligation resting upon him to establish agencies and subagencies throughout the territory sufficiently alleges such a part performance of the contract (which was not in writing) as would take the contract without the statute of frauds.

Where the contract sued upon provides that the plaintiff shall for a period of two years act as general agent for the defendant an insurance company, in certain designated territory, in soliciting accident and health insurance policies for the defendant, for which services the plaintiff is to receive a stipulated commission out of the premiums collected on such policies, and that the plaintiff shall establish at his own expense special agencies and subagencies throughout the territory covered by the contract, the plaintiff may, after complying with the terms of the contract, maintain a suit thereon because of the defendant's breach in discharging the plaintiff and preventing the performance by him of the contract before the expiration of the period during which the contract was to run, and, as damages resulting from the breach, may recover either his profits inhering in...