Sidor som bilder
PDF
ePub

man, 70 S. W. 403, 24 Ky. Law Rep. 980. | ty was to repair a part of the switch or apWe see no reason why this rule should not apply in this case. Judgment affirmed.

FRANKFORT & C. RY. CO. et al. v. JACKSON. (Court of Appeals of Kentucky. May 6, 1913.) 1. FRAUDS, STATUTE OF (§ 50*)-AGREEMENT NOT TO BE PERFORMED WITHIN ONE YEAR. An oral contract between the owner of a coal elevator and a railroad, continuing in force a written contract for switching coal to the elevator so long as the owner remained in the coal business and continued to get coal over the railroad, was not within the statute of frauds, since it might be performed within one year.

[Ed. Note.-For other cases, see Frauds, Statute of, Cent. Dig. §§ 75-77; Dec. Dig. § 50.*] 2. CONTRACTS (§ 242*)-VALIDITY-IN GEN

ERAL.

Where a written contract between the owner of a coal elevator was certain, mutual, and based upon a consideration, a verbal renewal contract merely continuing the contract in force made all its provisions a part of the renewal contract which therefore was not void for uncertainty, lack of mutuality, or want of consideration.

[Ed. Note.-For other cases, see Contracts, Cent. Dig. § 1127; Dec. Dig. § 242.*] 3. ASSIGNMENTS (§ 19*)-PROPERTY ASSIGNABLE-CONTRACT OF PERSONAL NATURE.

The verbal renewal of a written contract between the owner of an elevator and a railroad, whereby the railroad was to deliver coal on a switch as long as the owner remained in the coal business and continued to get coal over the railroad, was a personal contract with the owner, ending when he ceased to do business, and not the subject of sale or assignment, nor running with the property.

[Ed. Note.-For other cases, see Assignments, Cent. Dig. §§ 28-31; Dec. Dig. § 19.**] 4. DAMAGES (§ 120*)-BREACH OF CONTRACTEFFECT OF PROVISIONS OF CONTRACT.

On a breach of a railroad's contract to deliver coal at an elevator as long as the owner remained in the coal business and continued to get coal over the railroad, which was only incidental to and did not destroy the business, but only impaired its value, the owner was not entitled to recover anything for the depreciation in the market value of his property, but the measure of his damages was limited to the depreciation or loss in the net income derived from his business up to the time he disposed

of it.

[Ed. Note.-For other cases, see Damages, Cent. Dig. §§ 291-305; Dec. Dig. § 120.*] 5. CONTRACTS (§ 275*)-CONSTRUCTION-REPAIR OF SWITCH.

Under a contract between the owner of a

proach, damages recoverable by the owner, himself willing and ready to perform his part on refusal of the railroad to perform its part because the switch was out of repair and dangerous, should be diminished by whatever sum it would have cost him to put his part of the switch in such condition as would make it safe. [Ed. Note.-For other cases, see Damages, Cent. Dig. §§ 115, 116; Dec. Dig. § 60.*]

Appeal from Circuit Court, Scott County. Action by J. P. Jackson against the Frankfort & Cincinnati Railway Company and others. Judgment for plaintiff, and defendants appeal. Reversed, and new trial granted.

Benj. D. Warfield, of Louisville, Emmett M. Dickson, of Paris, for appellants. Bradley & Bradley, of Georgetown, for appellee.

CARROLL, J. On December 27, 1902, the appellee, J. P. Jackson, and the Frankfort & Cincinnati Railway Company, hereafter called the F. & C., entered into a written contract, by the terms of which the F. & C. agreed to deliver coal at an elevator previously erected and owned by Jackson in the city of Georgetown. The contract stipulated that "the said Jackson agrees to provide a suitable approach from the track of said company to the elevator in accordance with the plans of said company's engineer and submitted to the general superintendent of said company, said Jackson furnishing all necessary material and labor for the construction of said approach at his own expense. After said approach is built the said company agrees that it will furnish at its own expense the necessary switch and turnout fixtures and rails and lay the track on the approach to and on the elevator. Upon completion of the approach and when the same is ready for use, the said company coal as may be shipped over its line of railagrees to place on the elevator such cars of way to said J. P. Jackson for unloading in said elevator without cost to said Jackson and it agrees to place on said elevator cars shipped over other railroads to said J. P. Jackson without extra charge except the usual switch charges for switching other cars received from other roads on its own switches. In consideration of the facilities so afforded it for unloading cars, the said company agrees to pay to said Jackson half of the cost to him of the material and labor expended by him in the construction of the said approach from its track to said elevator, said repayment to be at the rate of 15 cents per ton of coal handled over the Frankfort & Cincinnati Railway Company from Paris or Frankfort and consigned to said

coal elevator and a railroad, by which each was to keep a part of the approach or switch in repair, and the repair of one part alone would accomplish nothing, it was the mutual duty of each to make repairs according to the contract and the owner complaining of the railroad's breach should manifest his ability Jackson and unloaded on said elevator. and readiness to repair his part of the switch. [Ed. Note.-For other cases, see Contracts, Cent. Dig. § 1207; Dec. Dig. § 275.*] 6. DAMAGES (§ 60*)-BREACH OF CONTRACT REDUCTION OF DAMAGES.

Under a contract between the owner of a coal elevator and a railroad, whereby each par

* * When the amount so proposed to be refunded by the said company shall have been paid to said Jackson, the structure and material composing same, located on the right of way of said company, shall become and remain the property of said company,

and shall be maintained at its cost and ex-1 of the written contract "it was mutually pense, but until that time it shall be main- agreed and understood between the plaintiff tained by said Jackson. It is agreed that and the said defendant F. & C. that said the rails and fastenings on the entire struc- contract was renewed according to its terms ture, being furnished by said company, shall for another period of five years, and the be and remain its property and shall be plaintiff agreed to handle its coal over the maintained by it. * It is further road of said defendant when it could be so agreed by the parties hereto that this con- obtained," and that under this verbal contract and license given herein shall continue tract both parties continued to act as they for a period of five years with the privilege had under the written contract until Novemof renewing the same upon such terms as ber 1, 1909, when the L. & N. under its purthe parties may agree on." This contract chase took control and charge of the F. & C. was carried out in a manner satisfactory to He further averred that the L. & N., after both parties during the five years of its ex- its purchase, performed the contract until istence, and at the expiration of the five December, 1909, when it refused to deliver years it was renewed, as claimed by Jack-coal to the elevator upon the ground that the son, under a verbal contract entered into approach was unsafe and dangerous, and between him and Harper, president of the F. that by this breach of its contract the fair & C. In respect to this renewal Jackson market value of his property was diminishtestified that the agreement was that the ed in the sum of $2,175 and his business terms and conditions of the written con- damaged in the sum of $5,000. tract, except so much as related to the repayment to him by the F. & C. of one-half of the cost, which had been satisfied, should continue in force as long as he continued in business and would handle coal at his elevator that came over the line of the F. & C. Harper testified in substance that in the conversation he and Jackson had respecting the renewal of the contract he told him "we will just go on and continue business in the same way," and also that "as long as he was in business there we would continue to set up those cars as we had done before." It is further shown without contradiction that from the expiration of the written contract in December, 1907, until November, 1909, both the parties transacted business in the same manner as they did under the written contract, and we may therefore say at this point that, when the written contract expired, it was verbally agreed between Harper and Jackson that the terms and conditions of the written contract, with the exception noted, should continue in force as long as Jackson remained in the coal business, and handled coal in the manner contemplated by the written contract. In November, 1909, the F. & C. sold and conveyed its property to the Louisville & Nashville Railroad Company, hereafter called the L. & N., and by the terms of this contract of sale and purchase the L. & N. assumed all existing contracts of the F. & C. as well as all existing liabilities incurred by it. Very soon after the L. & N. obtained possession of the tracks and property of the F. & C. a controversy arose between the L. & N. and Jackson as to the rights and liabilities of the parties under this contract, with the result that the L. & N. refused to deliver coal at Jackson's elevator. The causes that brought about this controversy will be stated more at length later on. In 1911 Jackson brought this suit against the F. & C. and the L. & N. to recover damages for a breach of the verbal contract entered into between himself and Harper. He averred in his petition that at the expiration

After making various motions and demurrers, the L. & N., for answer to the petition, denied that there had been any renewal of the written contract between Jackson and the F. & C., and affirmatively averred that the elevator and approaches to the same, except so much of the approach as was constructed upon the right of way of the F. & C., and excepting the rails and fastenings on the structure, were the property of Jackson, and it was his duty and obligation under the contract to keep that part of the approach owned by him in repair, which he failed to do, and by reason of this failure his part of the approach had become unsafe and dangerous for use by engines and cars, and engines and cars could not be transported over the approach without great danger to life and property, and for this reason, as well as because the written contract had never been renewed, or, if renewed, was void for uncertainty, and because lacking in mutuality without consideration, as well as within the statute of frauds, it refused to deliver cars of coal to the elevator. In reply Jackson, while admitting that he was the owner of the elevator and approach thereto, except that part located on the right of way of the F. & C., and under a duty to keep the same in repair, except as to the rails and iron fixtures, denied that the structure or any part of it owned by him was out of repair or that for this reason the L. & N. refused to deliver cars over it. He further averred that, if any repairs were necessary on his part of the structure, "he was at all times ready and willing and able to make said necessary repairs thereon, but that the L. & N. made no claims that repairs were necessary, and did not assign this as a reason for refusing to deliver coal until long after it had broken its contract."

After the pleadings had been made up, there was a trial of the case before a jury and a verdict for Jackson in the sum of $1.675, and from the judgment on this verdict this appeal is prosecuted.

son

[ocr errors]
[ocr errors]

*

It is earnestly insisted by counsel for ap- its right of way and the duty of Jackson to pellant that the petition was fatally defec- | maintain and keep in repair the remainder tive, in that it stated that the verbal con- of the structure, and that it was the further tract should continue for a period of five duty of the L. & N. to maintain and keep in years, and so was in violation of that section repair on the entire structure the rails and of the statute of frauds providing that "no iron fixtures attached thereto. The evidence action shall be brought to charge any per- shows that the coal elevator was built before upon any agreement which is the approach or trestle connecting it with not to be performed within one year from the F. & C., and that the approach was built the making thereof unless the promise, con- to better facilitate the delivery of coal to tract or agreement * or some memo- the elevator, although it was not indispensarandum or note thereof be in writing and ble to the use of the elevator for the purpose signed by the party to be charged therewith, intended, and that the approach was about or by his authorized agent." If the case 500 feet long, and in some places several feet were here on the demurrer to the petition high. It is also shown that soon after the as amended alone, we would say that it at- L. & N. purchased the F. & C., and before or tempted to state a cause of action within the about January 1, 1910, the L. & N. delivered section of the statute of frauds quoted, and its first car of coal at the elevator in the was therefore nonenforceable; but we think same manner as the F. & C. had been doing, the other pleadings and issues in the case but the trainmen complained of the unsafe cured this defect, and, as the judgment must and dangerous condition of the approach, be reversed for other reasons, it does not and thereupon the L. & N. declined to put any seem necessary to further notice this objec-engines or cars on it until it was repaired tion.

[1] Although as before stated the petition relied on a renewal contract that was prohibited by the statute of frauds, and therefore not enforceable, the contract really made between Jackson and Harper, as testified to by both of them, was not within the statute of frauds, as it only provided that the contract should continue in existence as long as Jackson remained in business, and therefore might have been performed within a year. Stowers v. Hollis, 83 Ky. 544; Howard v. Burgen, 4 Dana, 137; Dickey v. Dickinson, 105 Ky. 748, 49 S. W. 761, 20 Ky. Law Rep. 1559, 88 Am. St. Rep. 337; Fain v. Turner, 96 Ky. 634, 29 S. W. 628, 16 Ky. Law Rep. 719.

[2] Nor do we think the renewal contract was void for uncertainty, lack of mutuality, or want of consideration. The written contract was not deficient in either of these respects; and, as the verbal contract merely continued in force the written contract, all the provisions of the written contract are to be treated as a part of the verbal renewal contract.

and made safe for their carriage. Within a short time after this, some engineers and bridge inspectors for the L. & N. examined the approach carefully, and they and many other witnesses qualified to speak on the subject testified that the approach was in such condition as that it would be dangerous to life and property to attempt to haul engines and cars over it, and these engineers estimated that it would cost to put Jackson's part of the approach in safe condition and good repair something over $1,000, and about the same amount to put in good condition and repair that part of the approach owned by the L. & N.

Jackson, who was at once notified of the estimates that had been made, testifies that he was able, ready, and willing to make the repairs on his part of the structure, but the evidence does not show that he made any effort of any kind looking towards making the repair after he was informed what it would cost, nor did the L. & N. make any repairs on its part of the structure, although its officers testify that it was also willing, ready, and able to put in repair the part owned by it. Neither party having made any repairs, no coal was delivered over the approach to the elevator after the one car that has been mentioned. It is also in evidence that in January, 1910, and before the L. & N. had declined to deliver any cars over the approach, or at any rate before it was known that it had refused to do so, Jackson sold

Passing what we may call the preliminary legal questions raised by counsel, and coming to what we conceive to be the real issues in the case, we will consider the rights and liabilities of the parties under the renewal contract, the questions relating to the unsafe and dangerous condition of the structure, the duty and obligation of the parties in respect thereto, and the measure of damage Jackson his elevator property, including his part of was entitled to recover if the L. & N. committed a breach of the contract. It is agreed that about one-half of the approach to the elevator, and over which cars had to be carried from the railroad to the elevator, was located on the right of way of the F. & C., and that the other part of it was on ground owned or acquired by Jackson, and that it was the duty of the L. & N. to maintain and

the approach, for $4,500, and retired from the coal business; but the purchaser, upon learning that the L. & N. would not deliver coal to the elevator, declined to take the property, and, when it was again offered for public sale some time in the spring of 1919, it only brought $2,825. The evidence further shows that this difference in the price was caused by the refusal of the L. & N. to de

purchaser at once took down the part of the approach he had bought and that the L. & N. took down its part.

After the evidence was in, the court instructed the jury, in substance, that if they believed that Jackson and Harper agreed to continue the written contract in force as long as Jackson remained in business and got his coal over the F. & C., and that the L. & N. repudiated this agreement and refused to carry out its terms, and they further believed that Jackson was ready, able, and willing to carry out his part of said agreement, then they should find for him the damages he sustained by reason of such failure, not exceeding $2,175, as damage to his property, and not exceeding $5,000 as damage to his business, and that the measure of damage to which Jackson was entitled in the event the jury found for him was "the depreciation, if any, in the fair market value of said real estate, caused by defendant's failure to carry out the said agreement, if there was such an agreement; and the measure of damages to the business is the depreciation in the net income of said business, if any, caused by defendant's failure to carry out said agreement." Counsel for the L. & N. asked the court to instruct the jury in substance that the L. & N. had the right to refuse to deliver cars to the elevator until it was put in a safe condition for use, but the court refused to give any instructions on the subject of repairs or any instructions except those we have indicated.

[3] It will be observed that the contract relied on was in effect and indeed in terms that the F. & C. would continue in effect the written contract as long as Jackson remained in the coal business and continued to get coal over the F. & C., and that no time was fixed when the renewal contract should expire, it being optional with Jackson to continue it in force as long as he remained in the coal business and received his coal over the F. & C. It will also be observed that the renewal contract did not provide that it should remain in force as long as the coal business was carried on at this elevator by persons who were willing to get their coal over the F. & C., or that Jackson might sell or assign his rights under it. We therefore think the renewal contract was a personal contract with Jackson to be continued as long as he remained in business and received his coal over the F. & C., and that, when he ceased to do buisness, the contract ended. It was neither the subject of sale nor assignment, nor did it run with the property.

[4] Assuming now that this contract was broken by the L. & N., and passing for the moment the subject of repairs, the question presented is, What was the measure of damage to which Jackson was entitled? In our opinion, Jackson, under this contract, was not entitled to recover anything for the depreciation in the market value of his property by reason of the failure of the L. &

ness

N. to deliver coal at his elevator. The meas-
ure of his damage was limited to the de-
preciation or loss in the net income derived
from his business, caused by the failure of
the L. & N. to carry out the agreement. As
before stated, the contract had no fixed time
It could be terminated at any time
to run.
by Jackson. It was entirely voluntary with
him whether he continued in the coal busi-
a day or a year, and manifestly it
would be unfair to allow him to recover for
the permanent depreciation in the market
value of his property when he might, the
day after the judgment was rendered, con-
clude to abandon the coal business entirely.
If he did this, as he might have done and
had the right to do, the result would be
that the L. & N. would be required to com-
pensate him for the permanent depreciation
in the value of his property, although by his
abandonment of the coal business he had
forfeited his right to secure any damages for
loss thereafter occurring. This case furnish-
es an apt and striking illustration why the
complaining party in a case like this should
not be allowed to recover damages for any
depreciation in the value of his property.
Here, long before the suit was brought, Jack-
son voluntarily abandoned the coal business,
and thereby ceased to have any rights grow-
ing out of the contract, or any right to re-
cover damages for its breach, and yet, under
the instructions of the court, he was allowed
compensation for the depreciation in the
value of his property for all time to come.

In support of the view that the instruction was correct, we are referred to the cases of Yellow Poplar Lumber Co. v. Rule, 106 Ky. 455, 50 S. W. 685, 20 Ky. Law Rep. 2006, and Kelly v. Peter & Burghard Stone Co., 130 Ky. 530, 113 S. W. 486, and Louisville & Nashville R. Co. v. Cox, 145 Ky. 667, 141 S. W. 389. held that where an employer for a valuable consideration entered into a contract with an employé to give him employment at a specified compensation for a period of time not fixed in the contract, and therefore we might say an indefinite period of time, the employé might in one suit recover all the damages to which he was entitled, although the damages beyond the date of the trial were of course a most uncertain quantity. We have also been referred to the case of Bridgeford & Co. v. Meagher, 144 Ky. 479, 139 S. W. 750, holding that where an employé made a contract for a definite period with his employer that he might recover damages for a breach of the contract by the employer covering the whole period of the contract of employment, although the suit was brought and the trial had before the expiration of the contract period. But those cases-and there are many others like them-are not apIn suits like plicable to the case before us. the ones we have referred to the breach of the contract involved, and destroyed everything out of which the transaction between

In these cases it was

the parties arose. There was nothing left of the thing that was the basis of the contract; but here the contract between Jackson and the F. & C. was a mere incident to his business, and did not involve the whole of it. True, it may have been a material and important part of his business, but nevertheless the handling of coal over the approach was merely a facilitating incident in connection with his business. In other words, the failure of the L. & N. to carry out the contract did not destroy the coal business of Jack son; it only impaired its value. Notwithstanding the failure to deliver cars over the approach, he might yet have carried on his business; and so the injury by the breach of contract was to his business and not to his property.

class of cases with sufficient care, and we turn to a consideration of cases involving the breach of independent covenants which do not go to the whole consideration of the contract, but are subordinate and incidental to its main purpose. The remedy for the breach of such covenants is compensatory damages for the profits lost or the injuries sustained during the continuation of the breach prior to the commencement of the action. It does not avoid or put an end to the contract, nor does it authorize the recovery of damages for its total breach."

Another instructive case is that of Obermyer v. Nichols, 6 Bin. (Pa.) 159, 6 Am. Dec. 439. In that case Nichols had leased a mill to Obermyer for four years, and covenanted in the lease to build a house adjoining the mill and to make certain improvements after the commencement of the term. The tenant took possession and the lessor broke his covenants. In holding that the measure of damage to which the tenant was entitled was the diminution in the rents and not the total rent, the court said: "I entirely agree with the charge of the court below that, the defendant in that suit having enjoyed the mill and premises demised, the covenants on the part of the landlord were minor and subordinate, and did not go to the essence of the contract so as to defeat the rent in toto,

in case they were not performed; but that the jury were at liberty to defalk in damages from the rent whatever they might think just and conscientious for the repairs negWhere a cove

nant goes only to part of the consideration

may be paid for in damages, it is an inde

on both sides, and a breach of such covenant

pendent covenant."

This view is well expressed in the case of the Union Pacific Railway Company v. Travelers' Insurance Co., decided by the federal Circuit Court of Appeals for the Eighth District, and reported in 83 Fed. 676, 28 C. C. A. 1. In that case a hotel was built on the line of railway under an agreement with the railway company that it would stop passenger trains at the hotel for meals. The railroad company, after complying with this contract for some time, refused to stop its trains at the hotel, and the proprietor brought suit against the railway company for damages, and was awarded by the lower court the depreciation in the market value of his property for hotel purposes, which the court found to be the entire cost of the prop-lected to have been made. erty. On appeal to the Circuit Court of Appeals that court ruled that the measure of damage to which the hotel man was entitled was the diminution in the earnings of the hotel, caused by the railway company's breach of contract, between the time of the breach and the bringing of the suit. In distinguish ing the case from that class of cases like the Yellow Poplar Lumber Company and Peter & Burghard Stone Co. Cases, the court said: "They are cases in which the covenants upon which they were brought went to the whole consideration of the contract; cases in which the failure to perform the covenants in suit deprived the plaintiffs of the chief or the entire value of the contracts, and rendered their further existence useless to them. Thus the entire consideration for an agreement to pay for personal services is the covenant to devote the skill and ability of the employed to the service; the whole consideration for the conveyance of a farm for the support of the grantor is the covenant of the grantee to furnish that support; the entire consideration for the performance of a contract of grading, which is to be paid for in money, is the promise to pay money; and the real consideration for the erection and maintenance of the elevator at Dubuque was the covenant of the railroad company to furnish grain for it to handle, and to pay for its

We regard the rule announced in these cases as sound when applied to the facts of this case, and therefore hold that Jackson was not entitled to anything for the diminution in the market value of his property.

The next question that suggests itself is: For what length of time should Jackson be allowed to recover damages for loss sustained to his business? The instructions did not fix any time during which Jackson should be compensated for his business loss, but left it to the jury to give him damages on this account for an unlimited and indefinite period of time. This was error. Under a contract like this that might, as we have said, be voluntarily abandoned by Jackson at any time, he should not have the right to recover damages for an estimated business loss that he might never be entitled to. Or, to state it differently, under the instructions, the jury might have awarded Jackson damages for the depreciation in the net income of his business for five or ten years or indeed any length of time in their discretion, although Jackson may have voluntarily retired from the business within a month after the verdict was returned; and, in fact, he did vol

« FöregåendeFortsätt »