Washington Cranberry Growers' Ass'n v. Moore
| Decision Date | 21 February 1922 |
| Docket Number | 16418. |
| Citation | 204 P. 811,117 Wash. 430 |
| Court | Washington Supreme Court |
| Parties | WASHINGTON CRANBERRY GROWERS' ASS'N v. MOORE. |
Appeal from Superior Court, Pacific County; H. W. B. Hewen, Judge.
On rehearing. Judgment affirmed.
For former opinion, see 201 P. 773.
Welsh & Welsh, of So. Bend, for appellant.
John L Langenbach, of Ilwaco, for respondent.
This cause was reargued before the court en banc on January 25 1922. Deeming ourselves fully advised in the premises, and a majority of the judges being of the opinion that the cause was correctly disposed of by the decision of Department 2 reported in (Wash.) 201 P. 773, the judgment is affirmed for the reasons therein stated and as therein directed.
For the reason that I think the opinion in this case states an unsound principle of law, I am forced to dissent.
Upon the question whether the contract under consideration is void as against public policy, or the provisions of the state Constitution in regard to monopoly and trusts, or under the Sherman Anti-Trust Act, there may be a very serious question and that the contract should be held void there is supporting argument in the recent decisions of the United States Supreme Court in the cases of American Column & Lumber Co. v. U. S. (decided December 19, 1921) 257 U.S. 377, 42 S.Ct. 114, 66 L.Ed. 284, and Federal Trade Commission v. Beech Nut Packing Co. (decided January 3, 1922) 257 U.S. 441, 42 S.Ct. 150, 66 L.Ed. 307. But I am not so much concerned with that question as with the other question decided in this case, and am willing to assume that the contract is a valid and enforceable one.
It is elementary, and will be conceded to be the general rule by every one hearing it stated, that courts of equity will not enjoin the breach of contracts. Where the contracts provide for liquidated damages, or, if not so providing, the damages can be ascertained which will compensate for the breach, the party not in fault will be left to sue for such damages, or he may compel specific performance. Where a contract provides for liquidated damages, specific performance is not available in some jurisdictions, but after a consideration of this question with our recent case of Asia Investment Co. v. Levin (Wash.) 204 P. 808, we are committed to what seems to us to be the better rule; that although the contract agrees upon liquidated damages, still, upon a breach by one party, the other party has the option of suing for the recovery of such damages, or in equity to enforce specific performance. But there are certain classes of cases in which courts of equity will not order specific performance, one of those classes being where the equity court would be compelled to take over and conduct the business, or to engage in such constant supervision of the execution of the details of the contract as to be a burden upon the court. In those cases the party to the contract against whom the breach has occurred is relegated to his action at law for damages, and it is to avoid such action that injunctions are sought which will indirectly have the effect of, at least, partially compelling performance.
But courts of equity will not beat around the bush in this manner unless the law action for damages is not sufficient, and they hold that where the contract provides for liquidated damages such damages are sufficient. Of course, within this rule fall those cases where the party committing the breach is insolvent, it being apparent that an action at law against him for breach of his contract would furnish inadequate relief, so, in insolvency cases, we find courts of equity enjoining the breach of contracts where the court cannot order specific performance.
No language more explicit or definite could have been used to create a stipulation for liquidated damages. The provision meets all of the requirements that have been set down by this court as constituting a provision in a contract one for liquidated damages. We, therefore, have a case where the parties themselves have left nothing to be decided in an action at law against the grower, except the question of whether he has or has not breached his contract. The damages flowing from such a breach, if it is established, have been absolutely determined, and the courts are uniform in holding that such a determination by the parties constitutes adequate compensation for the breach. In this case, however, the court in substance says that the provision for liquidated damages is without effect, and that a breach of the contract will be enjoined, although the parties themselves have determined upon the measure of damages.
This court should not substitute its judgment as to whether damages are adequate or inadequate, contrary to the judgment of the parties to the contract themselves, who have formally agreed that damages in a certain amount are adequate, such agreement as to the amount of damages having been made in full view of all the purposes which the contract was seeking to accomplish, and the indefiniteness of the amount of damages a breach might occasion.
When the parties have agreed on the amount, it will not do for this court to say that it is inadequate. No stipulation for liquidated damages is set aside for that reason, but may be set aside for the reason that they are so excessive as to amount to a penalty. The parties knew as well as this court:
'That it is impossible to fix and estimate the actual damage sustained in event the grower shall fail to abide by the agreement and the damages are only estimated.'
Yet this is the situation in nearly all cases where liquidated damages are agreed upon. The parties knew as well as this court that they desired 'to protect the respondent and the other growers which it represented in accomplishing the purposes of the undertaking,' for in the contract they said:
'The grower fully understands that the purposes, among others, of this agreement is to maintain and increase to its greatest efficiency the association * * * and to accomplish this * * * he agrees that he will not sell * * * his fruit to any other firm, etc., * * * and it is * * * agreed that inasmuch as it is impossible at this time to fix and estimate the actual damage * * * such damages are estimated and agreed upon as $1 per box * * * which sum shall be allowed in any action brought * * * to recover damages for the breach of this agreement.'
What did they mean? Were they so incompetent to contract for themselves and to unfamiliar with the subject-matter with which they were dealing and so unskilled in expressing their ideas that this court will say their language is futile and rewrite the contract as it thinks it should have been? To do so is to violate too many sacred rules of contracts.
The decision is based upon the case of Harris v. Theus, 149 Ala. 133, 43 So. 131, 10 L. R. A. (N. S.) 204, 123 Am. St. Rep. 17, and others noted in connection with that case in 10 L. R. A. (N. S.) 204. It seems to me that those cases can be clearly distinguished from the case at bar. The majority of them are cases in which either a professional or business man has sold out his practice or business, and has agreed with the purchaser not to resume business or practice in competition with the purchaser, for a certain definite period of time. In such cases the courts have enjoined the seller from committing a breach of his contract.
The exception to the rule in that class of cases has always been recognized as sound. The principal case of Harris v. Theus, supra, was a case where the seller of certain lands agreed not to engage in a certain business within 10 miles of the place, so long as the purchaser should be engaged in that business.
In the case of Diamond Match Co. v. Roeber, 106 N.Y. 473, 13 N.E. 419, 60 Am. Rep. 464, a contract was made by the seller with the purchaser that he would not, within any time during the next 99 years, engage in the manufacture of friction matches, except in certain specific territories, and breach by the seller was enjoined. The court said:
Ropes v. Upton, 125 Mass. 258, was a case where the parties were partners, and one sold to another his interest and good will, and agreed not to carry on business in the same place, and on attempting to do so was enjoined.
Heinz v. Roberts, 135 Iowa, 748, 110 N.W. 1034, was an agreement by an attorney who sold his practice and represented that he would not practice his profession within certain...
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