Case ID: tenn_22/html/0056-01.html
Source: Caselaw Access Project
Author: {"author": "Reese, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Porter vs. Woods, Stacker & Co.
    1. The ancient rule which prevented a party to an agreement who had not fully performed his part of the agreement, from recovery for labor beneficially performed, or materials of value furnished, has been modified. It is now well settled in England and America that after a rescission and abandonment of a special agreement, .compensation for partial performance may be recovered equal to, and limited by the value and extent of the benefit conferred.
    2. In estimating the value and extent of the benefit conferred on the defendant by the plaintiff, by a partial performance of his agreement, the damages which the defendant would be entitled to recover in an action against the plaintiff for his breach of the agreement, would enter as a necessary element in the computation in reduce-ingand in fixing the value and extent of the benefit conferred.
    3. Stacker, by special agreement, furnished Porter with castings for the manufacture of ploughs, butdid not furnish the amount stipulated, nor were all of them of good quality, and the contract was thereupon rescinded: Held, that if before the rescission of the contract, Porter was forced to purchase other castings at a higher price for the purpose of supplying his wants, which Stacker had stipulated to supply; to that extent would Porter in an action “be entitled to damages or to recoupment in a de-fence;” and whether he was in the attitude of plaintiff or defendant, the amount of claim in damages or in defence would be the same.
    4. In an action for breach of an agreement to deliver castings, the plaintiff was held not entitled to damages for delay in business caused by the non-delivery of them, nor for expenses incurred in* attempting to procure them, nor for speculative profits Blanchard vs. Eley 21, Wend. 346.
    5. The~supreme court will not reverse for an error in the charge of the circuit judge, upon an abstract proposition in reference to which there is no testimony in the record. 2 Hump. 518.
    Woods, Stacker & Co., instituted an action on the case in the circuit court of Shelby county, against Porter, to recover the value of certain castings delivered to him to be used in the manufacture of ploughs. The plaintiff declared in assumpsit, and the defendant pleaded non assumpsit, and issue was taken thereupon, and the cause submitted to a jury at the February term, 184-1, Dunlap, judge, presiding. The jury rendered a verdict in favor of the plaintiffs for the sum of $2094 75 cents.
    A motion for a new trial was made and overruled, and judgment rendered.
    The defendant appealed in error. All the material facts are stated in the opinion of the court.
    
      H. G. Smith, for plaintiff in error.
    The circuit judge ruled, that the plaintiffs failing on the special counts, might go on the general counts for the value of the castings, regardless of the special contract.
    The defendant proposed to prove the damage he had suffered by the failure of the plaintiffs to perform their contract in full, for the purpose of reducing the amount of damages claimed by them for the performance in fact. This proof the court rejected. And of this rejection the defendant complains in error.
    In an action for the stipulated price of an article sold with warranty, the vendee may use the breach of the warranty in reduction of the damages, without bringing a cross action. 2 Smith’s Lead. Cas. page 1 to 15, (21 Law Lib. 12,) 4 Wend. 483, 8 id. 109, 9 B. & C. 259, 2 B. & Ad. 456, 7 East 480,481 n.
    
    The policy of the rule is, to prevent circuity of action and lessen litigation. Such reduction is not in the nature of set off. 4Wend. 490-8, id. 115 — 18 id. 196. Damages are recoverable in a cross action for the breach of warranty; instead of bringing such action, the vendee may avail himself of those damages, in the defence of an action brought for the price. Whatever damages, therefore, the vendee might have in an action for the breach of the warranty, the same damages he may prove in reduction of the stipulated price in an action for it. And thus are the cases. 4 Wend. 483-13 id. 261, S. C. 18 id. 187 — 20 51-21 id. 21 id 342-346.
    Treating the present case as a sale with warranty, and being a sale by sample, it is such a case, whatever damages the defendant could recover in an action for the breach of the warranty, these he ought to have been allowed to prove in reduction of the stipulated price in the action for it. The inquiry then is, could the defendant recover in a cross action against the plaintiffs, the damages suffered by the breach of the warranty which he offered to prove and which were rejected?
    Defendant offered to prove the damages sustained by reason of the inferior quality of the castings delivered. The court allowed no other proof than of the value of the inferior castings, excluding proof of damage to his business by reason of the inferiority of the castings as plough metal. When a party engages to furnish to a tradesman articles suitable for his business, and delivers articles which in consequence of their unsüitableness, injure the business of the tradesman, is such injury not damage which the tradesman may recover in an action for the breach of such contract? 21 Wend. 328.
    The contract of warranty stands on the same principle as any other special contract. If damage for the breach of the warranty may be proved in mitigation in an action for the stipulated price, so may damages for the breach of a special contract for the delivery of goods, be proved in mitigation in an action for the price. 18 Wend. 187, S. C. 13 id. 261 — 20 id. 51, 21 id. 342 — 346—6 N. Hamp. Rep. 481, cited No. 32 Am. Ju. 423 — 18 Pick. 555, cited No. 49, Am. Ju. 192.
    The reason of the rule which allows the defendant to recoup damages in such cases is said to be, to avoid circuity of action and lessen litigation. Perhaps it may be traced to a principle of right other than the policy of lesseninglitigation. If a party who has done something under a special contract, but not in comformity to it, if he be entitled to compensation at all for what he has done, it is because he has conferred a benefit on the other party beyond the injury inflicted by the non-performance of the residue. See the cases cited above.
    On the special contract he can have no action, because he has not performed it. If the benefit conferred exceed the injury, the law implies a contract between the parties, which is, that the party receiving the part performance shall pay for such excess of benefit.
    Thus the present case stands — the defendant has received both benefit and injury — benefit by the part performance, injury by the non-performance of the residue. The injury or damage may be set off against the benefit, if it be such damage as the defendant could recover in an action for the breach of the contract. Is it such damage?
    The castings were of inferior quality. The defendant was allowed to prove they were of less value than the stipulated article, but the court refused to allow proof of cost of supplying their place with the good castings, which was greater than the contract price. 21 Wend.
    The quantity contracted for was not delivered. The proof was excluded of the loss of profits to the defendant, in consequence of failing to get them under the contract. 18 Wend. 154.
    The delay and defects cost the defendant several journeys— proof of this damage was excluded. 18 Wend. 187 — defendant was allowed to recoup damage for loss of profits on the hay stipulated for and not delivered, and for loss of rent — so in IS Pick. 555.
    In 20 Wend. 51 — defendant was allowed to recoup for dan> age sustained in consequence of the negligent mooring of the sloop.
    In 21 Wend. 342 defendant was allowed to recoup the cost of supplying defects in vessel and machinery.
    In 6 N. Hamp. 481, defendant was allowed to recoup what it cost to procure a completion • of the whole service, and the damage sustained by reason of the non-performance of the entire contract.
    
      Brown, for the defendants in error.
    
      Stanton, for plaintiff in error.
   Reese, J.

delivered the opinion of the court.

The defendant in error brought an action of assumpsit against the plaintiff in error. The declaration contains a count on an indebitatus assumpsit, and on a quantum valebat, and counts upon a special agreement. The defendant below, was a plough manufacturer near Memphis, the plaintiffs manufacturers of iron at Cumberland furnace, and the special agreement was to deliver to the defendant in successive years a specified quantity of castings, of a description adapted to the construction of ploughs, for which defendant was to pay a specified price. After the delivery of 59,565 lbs. of these castings, the plaintiffs failed to deliver any more; and of the quantity so delivered, a considerable portion was of inferior material, and greatly deficient in reference to the purpose for which they were purchased, and therefore the contract between the parties was rescinded. Under these circumstances, two principal questions arise, and have been discussed before us. First, as to the right of the plaintiffs, to maintain their action, they not having performed their part of the agreement. Secondly, as to the nature and extent of the defendant’s right to abate the amount of plaintiffs recovery by reason of their non-performance of the agreement on their part. That under the circumstances in which the plaintiffs present themselves, they can maintain this action, is now well settled, and has not been very seriously controverted. So early in this state as 1823, in the case of Stump vs. Estill, Peck’s Rep. 175, the principle was applied which relaxes the ancient rule, that prevented a party, not fully performing his part of a special agreement from recovering for the whole value of labor performed beneficially, or materials furnished usefully for the other party. In the case of Elliott vs. Wilkerson, 8 Yerg. 410, the case of Stump vs. Estill, received the sanction of the court, and the principiéis regarded as now well settled in England and America, that after the rescisión and abandonment of a special agreement, compensation for partial performance may be recovered, equal to, and limited by, the value and extent of the benefit conferred. And, therefore, the defendant, in such action, in the second place is entitled, by the very statement of the principle with its proper limitation, to abate the recovery of the plaintiffby the damages he has sustained on account of the non-performance of the plaintiffs’ portion of the agreement. For the plaintiff himself being entitled to recover, not on the ground of his performance of the special agreement, but for valuable materials furnished, or beneficial services rendered, and only to the extent of benefit conferred on the defendant, the defendant must be entitled in abatement, and in ascertaining the extent of such benefit, to such damages as in a cross action by him against the plaintiff, he ought to recover for the non-performance by the other of his portion of the agreement. The court in the case before us, charged the jury that the plaintiffs were entitled to recover the value of the castings, and if the castings were valueless to the defendant, as plough castings, still the plaintiffs were entitled to recover their value for any other purpose, as scrap iron or the like. “But the court also charged the jury, that in making up their verdict, they could not consider the loss or damage or expense, that the defendant had incurred in consequence of the failure of the plaintiffs to perform their part of the contract. That the defendant could only avail himself of such loss, damages or expense in a cross action against the plaintiffs.”

From what has already been said, it is seen that we must regard the latter part of this charge as erroneous, for the defendant was entitled to insist in abatement upon just such damages as in a cross action he would have been entitled to recover. But the damages claimed by the defendant, upon the facts proved in the case, or sought to be proved by the portions of a deposition set out in the record, which were rejected by the court, were not such damages as the defendant in across action would have been entitled to recover; they were for delay in business, for injury to his reputation, for speculative profits, for expense incurred in trips to the Cumberland furnace; and therefore, although the rule laid down by the court was erroneous, still as no proof was made in the case, or, in the deposition referred to, was offered to be made, which in a cross action would have constituted a proper ground fgr a recovery, we do not feel called upon to reverse the judgment upon the mere ground of this abstract error in the charge. But the bill of exceptions in another part of it, states that the defendant offered to prove the amount of damages he had sustained by reason of the inferiority of, the castings furnished by plaintiffs, and the failure on their part to perform the contract; the expense he had been put to to procure other castings, especially points, in the place of those furnished by the plaintiffs, and which was refused by the court. Now, if before the rescisión of the contract, the defendant, in order to supply omissions or defects, had to procure points or other castings at a higher price, it would constitute a just ground of abatement. It may be that, no other or different testimony than that contained in the deposition referred to, was offered or rejected, and that the statement quoted may be re-capitulatory of that rejection; if this be so, it is to be regretted, as the verdict in that case, is probably right. But the statement is general, and describes a character of evidence proper to have been heard and considered of by the jury, if it related to transactions prior to the rescisión of the contract.

We are therefore, and for this reason, constrained to reverse the judgment. In support of the principal question decided in the present case, we particularly refer to the case of Blanchard vs. Ely, 21 Wendel’s Rep. 342.

NOTE. — 1. Where one has made a special agreement to perform work for another* and furnish materials, and the work is done, and the materials furnished, but not in the manner stipulated in the contract, yet if the materials ave ot any value or benefit to the other party,he is answerable to the amount which he is benefited.

Norris vs. School District, 13 Fairf. 293. Hollinghead vs. Mactier, 13 Wend. 276.

2. Where one of the parties has departed from a special contract for the delivery of specific articles, the other may treat it as rescinded. Goodrich vs. Lofftin, J Pick. 57.

3. If a party, who is to pay for work and labor in pursuance of a special contract, be delinquent in the advancement of funds, the other party may take advantage of the omission by declaring the contract at an end. But if he treats the contract as still subsisting, he thereby waives the consequences of such default, and cannot afterwards alledge the recission of the contract by the defendant and recover on a quantum meruit, Shaw vs. Lewistown Turnpike Co., 3 Penn. 445.