Case Name: Hunter versus Land
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1875-11
Citations: 81 1/2 Pa. 296
Docket Number: 
Parties: Hunter versus Land.
Judges: Before Agneav, O. J., Sharswood, Williams, Mercur, Gordon, Paxson, and Woodward, JJ.
Reporter: Pennsylvania State Reports
Volume: 81 1/2
Pages: 296–302

Head Matter:
Hunter versus Land.
1. An affidavit of claim in an action of assumpsit averred that defendant had entered into a contract of partnership with plaintiff, and had afterwards, without plaintiff’s consent, dissolved the partnership, and that in consequence defendant was indebted to him in $4000. He filed, a declaration in all the common counts, laying his damages at $10,000. Defendant afterwards filed an affidavit of defence denying the allegations of the claim, and 'afterwards pleaded the general issue. Plaintiff, by leave of Court, filed an amended declaration, averring specially but substantially as in his claim, and laid the damages at $10,000. Held, that the amendment introduced no new cause of action; the claim gave notice of the cause of action. _ , •
_ 2. The generality of the first declaration was a sufficient cause for amendment.
3. In estimating the damages for a breach of a contract of partnership by dissolution, the jury may take into consideration the probable profits of the partnership, and the reasonable and probable pecuniary loss sustained by the plaintiff by its dissolution.
November —, 1875.
Before Agneav, O. J., Sharswood, Williams, Mercur, Gordon, Paxson, and Woodward, JJ.
Error to the Court of Common Pleas, No. 2, of Allegheny County, of October and November Term, 1875, No. 202.
This was an action of assumpsit, brought June 2d, 1872, by Benjamin-H. Land against Thomas J. Hunter.
The affidavit of plaintiff’s claim was as follows:
That in April,, 1871, the defendant entered into partnership with plaintiff, who was then residing in Texas, to buy and sell horses. The terms were that the plaintiff was to come North, make the purchases and sales, and have the entire management of the business; the defendant to furnish the capital, not less than $4000 for the first year, and $3000 for the second year; profits and losses to be equally divided. In pursuance thereof, the plaintiff came to Pennsylvania, with defendant, who paid his expenses; and on their arrival there procured stabling, etc., for the prosecution of the business, the defendant advancing plaintiff $500. In J une, 1872, the plaintiff, with the approval of the defendant, went to Canada, and purchased five horses, relying on remittances from defendant to pay for them. In consequence of the failure of defendant to remit funds, the plaintiff was compelled to relinquish the purchase, and abandon the business. He returned to Pennsylvania. The defendant declined to-continue the partnership, or advance money, as he had agreed, and, without the knowledge or consent of defendant,, published, in September, 1872, in the Pittsburgh newspapers,, a notice of the dissolution of their partnership. The plaintiff averred that he has always been desirous to continue the-business, according to the terms of the agreement, but by reason of the refusal of the plaintiff so to do, he has lost', large gains and profits, and has been kept out of employment, and by the conduct of the defendant, inducing him to-enter into the partnership, and to abandon profitable situations in Texas, he has sustained great damage, etc.
He further averred, that the $500 advanced to him by defendant, except about $40, were applied to expenses, which, defendant was bound to pay. This affidavit Avas filed June-20th, 1872. On the 29th of June, the plaintiff filed a declaration in the common counts, viz., for goods sold and delivered, for work and labor, for money lent, for money had and received, and paid, laid out and expended, and on an account stated, and laid the damages at $10,000.
On the 22d of July, the defendant filed an affidavit of defence, viz.:
Defendant met plaintiff in Texas, in 1871, who. regre* sented that he was without means but was familiar with the horse-dealing business, and could make money by buying and selling horses if he had capital; defendant upon these representations agreed to advance plaintiff money, “ but only according to circumstances from time to time as he thought besthe then paid plaintiff’s hotel bill, his expenses to Pittsburgh, amounting to $130, and there advanced him $500, with which he went away to buy horses, but was absent so long without accomplishing anything that defendant lost confidence in him, but at his solicitation permitted him to go to Canada, but defendant finding that money could not be made by buying horses there and fearing loss, telegraphed him to return about June 21st, 1871, but he did not return till September. On his return to Pittsburgh defendant tried to obtain a settlement with him, but could not obtain one; that all the time and trouble there would be in buying five horses and would be fully compensated by the $500 advanced to him, and leave a large balance. Defendant denied that plaintiff lost any profits on the horses he bought or might have bought in Canada, and the plaintiff is indebted to him in the sum of $130, for money advanced to pay his bills, and the balance of the $500, after deducting his expenses and his share of losses, would be at least $425, making plaintiff’s indebtedness to defendant to be at least $550.
On the 25th of November, 1872, defendant pleaded nonassumpsit, with leave, etc.
On the 8th of January, 1874, plaintiff by leave of the Court filed an amended declaration, to the filing of which defendant took an exception. The declaration in the first count set out an agreement with defendant by which he was to enter into partnership with plaintiff in dealing in horses for the term of four year’s, the defendant to furnish plaintiff with money .as capital in the business, from which large profits would be made, to be equally divided between them, and the plaintiff, relying on defendant’s promises, performed long journeys and expended large amounts of money about the partnership, and about buying and selling horses, and performed much labor, etc.
The breach averred was that the defendant refused to enter and continue in the partnership, to furnish the capital, to repay the money advanced and expended by plaintiff, or to pay for his labor.
The second count set out substantially as in the first, and averring that large profits would have been made if the defendant had kept his agreement.
The breach was as in the first count, and in addition, the loss of profits ; and the damages were laid at $10,000.
The defendant pleaded specially that the plaintiff and defendant were partners “ when the several transactions, made the basis of this action, took place,” and that there had been no settlement between them, and that there was “.a large amount coming from the plaintiff’ to the defendant for money paid out by the defendant for the plaintiff', upon a settlement between them.”
On the trial, March 24th, 1875, before White, J., the plaintiff testified as to the making the contract of partnership, etc., and offered to 'prove, by himself and another witness, that a large profit could have been made if the defendant had furnished the capital, and the probable amount of the profits.
Also, that plaintiff was offered employment in Texas at remunerative compensation at the time of entering into partnership, which he refused -in consequence of the propositions of the defendant. The defendant objected to the offers, they were admitted by the Court, and several bills of exception sealed.
The plaintiff gave evidence in accordance with the offers.
The defendant gave evidence in answer to plaintiff’s case.
The trial ended March 27th.
The evidence in the paper-book was very meagre, e©ntaining, besidea some letters, very indefinite extracts from the testimony. It appeared, in remarks of Judge White in ruling a question of evidence, that the testimony was altogether contradictory, the plaintiff' testifying to a partnership for five years, and the defendant to a partnership at will.
None of the evidence returned in the paper-books gave any circumstances by which the damages could be definitely measured.
The plaintiff’s point was: “ If the jury believe that there was an agreement between the plaintiff and the defendant to go into partnership in the business of buying and selling horses, with capital to be furnished by the defendant, and that such partnership was, by the agreement, to continue for the term of five years, or other definite time, and that the defendant afterwards' refused to enter into such partnership, or having entered into the partnership under the agreement, he, without good cause, dissolved the partnership before the expiration of the time agreed upon, then the plaintiff is entitled to recover in this action the damages he has sustained by such breach of the contract, and that the measure of such damages are the profits that would have accrued to the plaintiff from the partnership business if it had been carried on for the time agreed upon by the parties.”
This point was affirmed subject to tbe charge.
The defendant’s third and sixth points with their answers were:
3. Even if the jury should find from the testimony that there was an agreement for a partnership for a definite time, yet they cannot find damages for the plaintiff in any prospective or speculative profits that might have been made by buying and selling horses under the partnership.
Answer: As a general rule a jury cannot allow for uncertain, prospective or speculative profits. But in estimating the damages in this case, you may take into consideration the probable profits the plaintiff would have realized under this partnership, in view of all the facts and contingencies mentioned in the charge.
6. The jury cannot make an- allowance of damages in favor of the plaintiff upon the basis of a calculation of profits in the business.
Answer: This point has been virtually answered in the charge and in the answer to the third point. In estimating the plaintiff’s damages the jury may take into consideration the probable profits of the partnership.
The Court charged:
“ If you believe from the evidence that the partnership between plaintiff and defendant was for no definite or specified time, the defendant had a right to dissolve it at any time, and for so doing the plaintiff would have no cause of action; but if the partnership was for a period of five years, the defendant would have no right, without the consent of the plaintiff,nr without good cause, to dissolve it; and the fear that it would not be profitable would not be a good or sufficient cause to justify the defendant in dissolving it.
“That a partnership was formed ; that the defendant was to furnish the capital and the plaintiff to devote his time and talents to the business ;■ that the defendant furnished $500 to plaintiff, all of which was expended in sundry expenses by, plaintiff; that plaintiff went to Canada and purchased six horses, paying in full for ODe and depositing $10 on each of-the others; that the defendant refused to furnish any more money, and wrote to plaintiff’ to quit, and that plaintiff wanted to go on with the business, are facts undisputed.
“ The defendant denies that the partnership was to continue for any definite period of time, and says that, after proper inquiries, hé became satisfied that there was no profit to be made at the business, and, therefore, he dissolved the arrangement. -
“ The first question for you to settle is, what were the terms of the partnership ? And I say to you, if you find from, the evidence that the partnership was to continue for the period of five years, and that the defendant wrongfully, or without the consent of plaintiff', refused to furnish the capital to continue the business and dissolved the partnership, the plaintiff is entitled to your verdict.
“ The next question is the amount of plaintiff’s damages.
“ The partnership was formed in view of probable profits. It was based on a capital of four or five thousand dollars, to be invested in buying and selling horses. It might or might not continue five years. The death of either party would terminate it. The partners might have difficulties which would end in a dissolution. It might or might not be profitable, depending on various contingencies, good luck, disease, and accident to the stock, the state of the market, etc. One car-load of horses might have yielded a good profit, and the next proved a serious loss. All these and other contingencies, which you will readily call to mind, are to be taken into coribideration in determining the question of probable profit and the amount. And in view of all these facts and considerations you will determine what was the reasonable and probable pecuniary loss sustained by the plaintiff in consequence of the defendant dissolving the-partnership.
"In addition to the $500 it is admitted that the defendant advanced to the plaintiff some money in Texas, paid his expenses to Pittsburgh, and advanced a small amount after arriving here. If the money was advanced as a loan, to be paid back by the plaintiff' in any event, the defendant has a right to set off that amount in the action. If advanced with the understanding that it was to be a part of the expenses of the firm, to be paid out of the profits, or to be paid out of the plaintiff’s share of the profits, then as no profits were realized it is lost or sunk. But if you find that the business would have been profitable, all these expenses must be deducted from the profits before any dividend could be made to the partners.”
The verdict was for the plaintiff for $500.
The defendant took a writ of error.
He assigned for error: allowing an amended declaration to be filed ; the admission of the evidence objected to, and, in several specifications, the instructions of the court.
8. M. Raymond and O. B. M. Smith, for the plaintiff in error.
As to the measure of damages: Actual compensation for actual loss, the measure to be furnished by the contract itself: Sedgwick on Measure of Damages, 200. The amount of compensation is to be regulated by direction of the Court: Id., 201; Rose v. Story, 1 Barr, 190. Profits are not to be compensated: Sedgwick, 69. The damages must be a proximate cause of the injury; possible loss is not ground for compensation: Adams Express Company v. Egbert, 12 Casey, 360; Pittsburgh Coal Company v. Foster, 9 P. F. Smith, 365.
W.- W. Thompson and J. C. Lazear, for defendant in error.
The damages for breach of a contract of partnership are the profits that would have accrued from its continuation: 1 Parsons on Contr., 195; Sedgwick on Damages, 73-76, 93, note 1; Bagley v. Smith, N. Y. Rep., 489. Profits which are the direct and immediate fruits of the contract are part of the contract itself, entering into and forming a part of its very elements: Masterton v. Brooklyn, 7 Hill, 68; Fessler v. Love, 12 Wright, 411; Pittsburgh Coal Company v. Foster, 9 P. F. Smith, 369 ; Hoy v. Gronoble, 10 Casey, 10 ; Wolf v. Sludebacker, 15 P. F. Smith, 463 ; Penna. R. R. v. Dale, 26 P. F. Smith, 47; Hanover R. R. v. Coyle, 5 Id., 396; Penna. R. R. v. Butler, 7 Id., 338.

Opinion:
Judgment was entered in the Supreme Court, November' 1875.
Per Curiam :
After a careful examination of this case we do not discover that any substantial error was committed on the trial in the Court below. Clearly the amendment was proper. It introduced no new cause of action. The affidavit of claim gave notice of the cause of action intended to be relied on. The generality of the declaration, which set forth no sufficient specification of the real cause of action, was in itself a reason for the' amendment. We see no error in the measure of damages stated by the Court. That the evidence was vague and wanting in the precision which would enable the jury to approximate the real loss with accuracy was a ground of argument to reduce the amount, but as the ease was submitted, and without a full report of the evidence before us, we cannot say it was wholly insufficient to warrant the verdict rendered.
Judgment affirmed.