Dugan v. Anderson

Miller, J.,

delivered the opinion of the Court.

We have to deal in this case simply with the questions of law presented by the two exceptions contained in the record. The jury have passed upon the conflicting testimony.

The suit was instituted by the appellee against the appellant on the 5th of January, 1871, and was tried in October of that year. No question arises upon the pleadings. The plaintiff’s ground of action as presented by his first prayer is, in substance, that in the summer of 1870 a contract was entered into between the parties, by which the defendant agreed to employ the plaintiff as clerk in his store at a salary of not less than $1,500 per annum until the 1st of March, 1871, and then to receive him as partner in his business for one year certain, and allow him one-third of the profits; that in pursuance of this promise and agreement by the defendant, the plaintiff gave up his then situation and employment, in which he was receiving $2,000 per annum, and entered into the service of the defendant as proposed, and continued therein until discharged and removed therefrom by the defendant; that the plaintiff, before the institution of this suit, offered to continue to serve the defendant until the 1st of March, 1871, and then to become a partner in the business under the agreement aforesaid, but the defendant, before suit brought, denied there was any such agreement between himself and the plaintiff, and refused to permit the plaintiff to *582 continue in his service until the 1st of March, 1871, and required him to leave his employment, and forbade him to be and remain in the store in which said business was conducted, and denied he was entitled to become a partner therein from that date, and refused to receive him as such when that time should arrive. The prayer, after leaving to the jury to find these facts,, and also that the defendant did not at any time before the 1st of .March, 1871, retract his action towards the plaintiff and offer to receive him again into his employment until that period, and then to admit him as partner in the business as aforesaid, asserts, as a legal proposition resulting therefrom, that the plaintiff was entitled to institute the suit at the time it was brought, and to recover as for a breach of the entire contract above-required to be found.

The defendant’s first prayer denies the right of the plaintiff to recover damages for the alleged refusal of the defendant to take the plaintiff into partnership on the 1st of March, 1871, under the contract alleged and sought to be set up, because the action was instituted prior to that time. The proposition thus announced by the defendant’s prayer is a denial of the law of Hochster vs. De la Tour, 20 English L. and Eq. Rep., 157, and of the English cases that have followed and sanctioned that decision. That case was decided in 1853, and gave rise to a controversy in the English Courts in which their most-eminent Judges have participated. It may be doubted whether the controversy is yet ended and the law of England in respect thereto finally settled. No decision upon the subject has yet been made by the House of Lords. The latest decision in the highest Court to which the question has been taken, is that of Frost vs. Knight, decided in the Exchequer Chamber on the 8th of February of the present year. That case was heard before and'decided by Chief Justice Cockburn and Byles, Keating and Lush, Judges, who, without dissent, reversed the judgment of the Court of Exchequer by Chief Baron Kelly and Channell, B., and sustained and affirmed the law of Hochster vs. De la Tour.

*583 The principle of this decision in cases to which it has been held applicable, is, that there is a breach of the contract when the promissor repudiates it and declares he will no longer be bound by it. It is said the promissee has an inchoate right to the performance of the bargain whieli becomes complete when the time for performance has arrived. In the meantime he has a right to have the contract kept open as a subsisting and effective contract. Its unimpaired and unimpeached efficacy may be essential to his interests. His rights acquired under it may be dealt with in various ways for his benefita and advantage. Of all such advantages the repudiation of the contract by the other party, and the announcement that it never will be fulfilled, must of course deprive him. It is therefore quite right to hold that such an announcement amounts to a violation of the contract in omnibus, and that upon it the promissee, if so minded, may at once treat it as-a breach of the entire contract and bring his action accordingly. The contract having been thus broken by the promissor, and treated as broken by the promissee, performance at the appointed time becomes excluded, and the breach, by reason of the future non-performance, becomes virtually involved in the action as one of the consequences of the repudiation of the contract; and the eventual non-performance may therefore, by anticipation, be treated as a cause of action, and damages be assessed and recovered in respect of it, though the time for the performance may yet be remote. It is obvious that such a course must lead to the convenience of both parties, and though decisions ought not to be founded on grounds of convenience alone, they yet tend strongly to support the view that such an action ought to be admitted and upheld. By acting on such a notice of the intention of the promissor, the promissee may in many eases avert, or at all events materially lesson the injurious effects which would otherwise flow from the non-fulfilment of the contract; and in assessing the damages for breach of performance, a jury will of course take into account whatever the plaintiff has done or has had the *584 means of doing, and, as a prudent man, ought in reason to have done, whereby his loss has been, or would have been, diminished.

This in substance is the reasoning upon which such actions have been sustained by the English Courts. Most masterly arguments have been made at bar in this case, founded both in reason and authority, urging us on the one hand to adopt, and on the other to repudiate this as the law of Maryland. All the authorities discoverable by the research of eminent counsel, have been presented, reviewed and pressed upon our attention. But we do not feel ourselves justified in deciding a question of this importance, unless it be clearly presented by the record, and becomes essential to the determination of the very case before us. When so presented we shall be prepared, as it will be our duty, to determine it. But in the present record there is a question beyond and outside of Hochster vs. De la Tour, that is decisive of this case, and upon which in our opinion its decision must rest. The law of Hochster vs. De la Tour, relates simply to cases where there is a pre-contract for future services, or the performance of some act or duty at a future period, and where performance cannot be commenced, and was not by the contract contemplated, until that period arrives, and where the promissor prior to that time announces his intention not to abide by the contract. But in this case performance of the contract had been commenced and the plaintiff was discharged by the defendant and prevented from further executing it; and suit Avas not brought until after this discharge, though before the time for performance of that part of the contract relating to the partnership had arrived. The defendant broke up the contract Avliile it was being performed by the plaintiff, and the action was not commenced until after this breach. In this respect there is a broad distinction between the case before us and that of Hochster vs. De la Tour. It is an ancient and familiar rule of laAv that only one action can be maintained for the breach of an entire contract, and the judg *585 ment, obtained by the plaintiff in one suit may bo pleaded in bar of any secojjfl proceeding. Sedgwick on Damages, 224. But the difficulty is to determine in what cases the contract is entire. Jn, determining this question the Courts must be guided by a respect to general convenience, and by the good sense and reasonableness of the particular case. Where an agreement embraces a number of distinct subjects, which admit of being separately executed and closed, the general rule is that it shall be taken distributively, and each subject be considered as forming the matter of a separate agreement after it is so closed. In one sense the contract before ns-was in its nature and terms separable and apportionablc, that is, its separate parts, the services as clerk, and the partnership, were capable of separate execution, and must have been performed consecutively in order of time. But in respect to the intention of the parties gathered from the facts presented by the plaintiff’s prayer, it was in our.opinion to be entire and indivisible. The consideration for the plaintiff’s action in entering into it was not merely that he should be employed until the 1st of March, 1871, at a salary, but that he should be so employed and be taken as a partner at that time for a year certain. The latter was as much a part of the consideration promised hint for entering the service of the defendant as the former, and the conduct of the defendant as stated in the prayer, in our judgment, constituted a breach which gave an immediate right of action and entitled the plaintiff to recover damages, in the language of his prayer, as for a breach of the entire contract.

Such, in our opinion, is the true construction of this contract and the right of the plaintiff ensuing upon its alleged breach. The case bears a close analogy to that of Masterton & Smith vs. Mayor, &c., of Brooklyn, 7 Hill, 61 , where the plaintiffs contracted, in January, 1836, with the defendants to furnish all the marble necessary for a certain public building then about to be erected by the defendants for .which they were to pay a specified sum in instalments as the work pro *586 gressed. The plaintiffs entered into the performance of this contract and furnished marble thereunder until July, 1837, when the defendants suspended operations on the building and refused further to perform on their part, The contract could not have been fulfilled by the plaintiffs, even if they had been allowed to prosecute the work without interruption, before 1842. In 1840 they brought an action against the defendants founding it upon the breach which occurred in 1837. The action was not only sustained as well brought at that time, but the plaintiffs were allowed to recover in respect to so much of the contract as remained wholly unperformed at the time of the breach, the difference between what the performance would have cost them and the price the defendants had agreed to pay, estimating the former by the price of labor and materials at the time of the breach. All the Judges held that the contract being broken before the time of full performance the plaintiffs might elect to consider it in that light, and were not bound to wait till the period had elapsed for the complete performance of the agreement nor to make successive efforts of performance in order to recover all their damages, but might regard the contract as broken up so far as to absolve them from making further efforts to perform and recover full damages as for a total breach. So in Clossman vs. Lacoste, 28 Eng. L. & Eq. Rep., 140, where an agreement was made that the plaintiff should enter into the employment of the defendant for the sale of wines on commission, the agreement to continue for five years, $nd the defendant guaranteeing the plaintiff ¿£600 per annum as a minimum revenue from the business during the continuance of the agreement, it was held that the plaintiff might sue in any one year during the continuance of the agreement for breaches in any former year, but if there was an entire dismissal from the service before the expiration of the agreement, the plaintiff ought to include in one action the whole gravamen lie would- suffer by such breach of contract. The present case, in our judgment, falls within the rule of these *587 decisions and others of similar import, and the law of Hochster vs. De la Tour is not necessarily involved in its determination. It follows there was no error in the rulings rejecting’ the defendant’s first prayer and granting the first prayer of the plaintiff, in so far as the legal propositions they contain are concerned.

The record shows two special objections were taken in the Court below to the plaintiff’s first prayer, on the ground there was no evidence to support certain facts thereby left to the finding of the jury. In reference to these, it suffices to say that we have examined the testimony embodied in the exceptions, and are satisfied there is proof from which the jury might have found, or legitimately inferred, the facts of which it is thus objected there was no evidence. What has already been said, also demonstrates the correctness of the ruling rejecting the defendant’s seventh prayer. No objection was made in argument to the granting of the plaintiff’s third prayer, that the defendant had no right to terminate the contract merely because he believed it would not be profitable ; and this ruling is undoubtedly correct. The plaintiff’s second prayer, that if the jury found the facts stated in his first prayer, then he is entitled to recover, unles the jury shall find that the acts of the defendant towards him therein set forth, were occasioned by some substantial incompetency or unfitness or misconduct on the part of the plaintiff, occurring after the inception of the contract, or by reason of the defendant’s acquiring after that time, knowledge of some unfitness or disqualification of the plaintiff to perform the contract on his part, unknown to the defendant at its inception, was granted, but Avith the qualifications contained in the defendant’s third, fourth, fifth and sixth prayers, Arhich Avere also granted. The defendant’s eighth prayer, as to the measure of damages for the breach of the contract in refusing to take the plaintiff into partnership on the 1st of March, 1871, AAas likewise granted. In respect to the law of the case, save in regard to the disputed questions already decided, *588 it was stated as favorably for the defendant as he could have asked. We find no error in the rulings in this particular; and this disposes of the second exception.

The first exception was taken to the ruling allowing a question to be asked the witness Bird, and the admission of his answer thereto as evidence to go to the jury. Whether this ruling, aS stated in the record, was matter of pure discretion in the Court below, irreviewable here, is a question we do not propose to decide. If the revisory power belongs to this Court, still in matters of this kind it must appear the ruling was manifestly wrong, and has occasioned substantial injustice. The general rule is that the plaintiff first adduces evidence to support the issue which he is bound to prove, reserving his right to rebut his adversary’s proof if he establishes a prima fade case with respect to the issues which lie upon him. If however, the plaintiff at the outset thinks fit to call any evidence to repel the defendant’s case, he will not in general be permitted to give further evidence in reply, for if such a privilege were allowed to the plaintiff, the defendant in common justice might claim the same, and the proceedings would run the risk of being extended to a very inconvenient length. 1 Taylor on Evidence, sec. 357; Sharswood’s Starkie on Evidence, 552. But in deciding upon the admissibility of evidence called in reply, regard must be had to the circumstances of the individual case, and considerable latitude will necessarily be granted to the judge in the exercise of his discretion. 1 Taylor on Evidence, sec. 359.

It appears that the plaintiff after offering evidence tending to establish the ■ contract alleged, proved that he faithfully and efficiently, in all particulars, discharged his duties under it as long as he was allowed to execute it. He also proved that the engagement of the defendant to take him into his employment, first at a salary, and then to receive him as a partner, was absolute and not in any way dependent upon defendant’s wanting him or not, or of his being satisfactory to the defendant, that he was not taken on trial, and his being *589 taken into partnership was not to be a matter of contingency; that defendant knew his qualifications and habits perfectly, having been intimate with him for many years, and knew what his position with Neale, his former employer, was, and what salary he was receiving from Neale and what Neale’s opinion of him was, and expressly waived in advance all claim to make the continuance of his employment and the taking him into partnership dependent upon his being found satisfactory. He further proved he was in every way competent for the duties he assumed to discharge, and discharged them faithfully and fully. All this testimony came from the plaintiff himself as a witness, and in our opinion it does not amount to such anticipation of the proof to be offered in defence on the ground of his bad habits and incompetency, as ought, in the proper exercise of a sound discretion by the Court, to preclude him from replying to the specific proof adduced by the defendant in that particular. That proof was in substance, that while the plaintiff was in the employ of Neale (where he had been since 1861) he was in the habit of drinking, and was more or less under the influence of liquor much of his time during that period, so as to render him unfit for business, and incapable of discharging his duties, and was negligent and inattentive. The plaintiff was allowed without objection (and properly so) to reply to this by offering evidence tending to show that while he was at Neale’s, he attended to his duties diligently and faithfully. Up to the time he left Neale he had been for many years in the employment of the witness Bird. We see no good reason why he should not be allowed to prove in reply to this proof of bad conduct, bad habits and incompetency, that all the while he was in Bird’s employ, where he continued up to the very day he went into the employment of Neale, that he was capable, efficient, attentive to his business and of unexceptionable habits. No stringent rule of evidence or practice forbids it. Nor did this proof in its entirety, coming down as it does to the very day he left Bird and went to Neale, relate to a *590 period so distant and remote from that in respect to which the defendant had offered proof of incompetency and bad habits, as to make it altogether irrelevant and therefore inadmissible on that ground. We cannot therefore reverse the ruling in this exception. v (Decided 21st June, 1872.)

Judgment affirmed. ^