Case Title: Spence v. Allen

Citation: 199 Or. 255, 260 P.2d 949

Docket Number: 

State: oregon

Court: Oregon Supreme Court

Date: 1953-09-10T00:00:00Z

Document:
Reversed and remanded September 10, 1953.
Asa L. Lewelling of Salem argued the cause and filed a brief for appellant.
Geo. A. Rhoten of Salem argued the cause for respondent. On the brief were Rhoten & Rhoten, and Lawrence Brown.
*256 Before LATOURETTE, Chief Justice, and WARNER, ROSSMAN, LUSK, TOOZE and PERRY, Justices.
REVERSED AND REMANDED.
PERRY; J.
This is an action for damages for breach of a contract entered into between the plaintiff, R.A. Spence, and the defendant, Thomas W. Allen, which is in words and figures as follows:
The plaintiff by his complaint alleged the contract and the breach thereof. The defendant admitted the written agreement and alleged the termination thereof as of the 1st day of August, 1950, basing his right of termination upon fraud and misrepresentations of the plaintiff. After the parties had adduced their evidence, the defendant moved the court for a directed verdict upon two grounds: First, that the statement in the contract "it is further understood that this agreement is contingent upon the present source of supply, or some satisfactory substitution thereof being available for one year after this date" is a condition precedent to the creation of liability and it was incumbent upon the plaintiff to allege and prove that there was a source of supply for the period of one year, the plaintiff having *260 neither pleaded nor proved this matter; and second, that the plaintiff had failed to prove any damages by reason of the breach of the contract of lease. The motion of the defendant was sustained and plaintiff appeals.
1, 2. It is a general proposition of law that whenever a plaintiff's right of action depends on a condition precedent then the plaintiff must allege the fulfillment of the condition or a legal excuse for its nonfulfillment. 17 CJS 1168, Contracts, § 537; Clerin v. Eccles, 98 Or 345, 193 P 1045. A "condition precedent" and a "condition subsequent" are defined in 1 Restatement of the Law, Contracts, 359, ch 10, § 250, as follows:
We are of the opinion that the provision for a continuous source of supply of useable merchandise for a period of one year is a condition that would relieve the defendant from his obligations under the contract should that condition arise. No penalty attaches to the failure of the plaintiff to provide the merchandise upon this contingency happening. This provision is solely for the benefit of the defendant and subject to his option should that condition arise. It is, therefore, a condition subsequent, to be relied upon by way of defense.
The damages sought to be recovered in this case as pleaded are general damages arising from the *261 failure of the defendant to carry out the terms of the contract of lease.
The defendant admitted the execution of the agreement and its abandonment after his commencement upon the performance thereof, pleading justification therefor, the fraud and misrepresentations of the plaintiff.
3. It is a general principle of law that if an agreement is alleged together with the breach thereof, damages are presumed to flow from this breach, and, in the absence of anything else, nominal damages will be awarded. Rainier v. Masters, 79 Or 534, 542, 155 P 1197, 154 P 426; 1 Sedgwick on Damages, 9th ed, 179, Nominal Damages, § 106.
There is, however, evidence in this case that the breach of the agreement by the defendant resulted in substantial damage to the plaintiff.
Since there is to be a retrial of this cause, we will comment on the plaintiff's offered exhibit 13. This exhibit consists of an agreement between the defendant and Pyroxylin Products, Inc., an Illinois corporation, for the exclusive sales and distribution by the defendant of certain products formerly sold to and distributed by the plaintiff, Ralph A. Spence. The agreement as entered into on the 14th day of September, 1949, shows upon its face that the defendant was taking over and using the trade names of the Pyroxylin products used by plaintiff and under the plaintiff's operational business name of "Glassweave Manufacturing & Supply Co.", and that both Pyroxylin Products, Inc., and the defendant desired `the continuation of the sale and distribution of products made by Pyroxylin' under the lease agreement of plaintiff and defendant. Further it is an agreement by Pyroxylin Products, Inc., to the *262 best of their ability to supply the defendant all of their product required in the business operation of the defendant. Should the issue arise as to the availability of this particular product or that defendant was misled into believing that plaintiff manufactured "Pyroxylin", this exhibit would become material.
The judgment of the lower court is reversed and remanded for further proceedings in conformity with this opinion.