Court Opinion

ID: 9864496
Source: CourtListenerOpinion
Date Created: 2023-09-25 13:36:16.323162+00
Date Added: 2024-06-11T12:14:18.582514
License: Public Domain

THE COURT.
The petition for rehearing is denied.
It is urged in the petition that in construing the contract we overlooked the fact that appellant received a consideration for his promise to hire respondent’s truck and driver for one year. That consideration, as stated in the opinion, consisted of the purchase by respondent of the Indiana truck owned by appellant’s son-in-law. This element was not overlooked by us when construing the contract in question. We thought then, as we do now, that the mere fact that appellant received a consideration for his promise is not necessarily determinative of the scope of his contractual obligations—that the" receipt by him of the consideration agreed upon should not be given the force which appellant now claims for it. Obviously, in every binding contract the promise of the promisor must be supported by a legal consideration of some kind. In many of the contracts involved in actions such as this the consideration received by the defendant for his promise to employ the plaintiff is the executory promise of the latter to perform his part of the mutual covenants. And while it is true that here respondent’s promise to purchase the son-in-law’s truck ceased to be executory and became an executed promise when he made the purchase, it does not therefore follow, as a necessary conclusion or as a *676matter of law, that appellant’s agreement imports an implied obligation not to sell his business prior to the expiration of the year.
If the terms of appellant’s express obligations are such that an undertaking on his part not to sell his business during the year cannot be implied, then the mere fact that he received a consideration for his promise would not bind him not to sell. The consideration received by him was given in return for his promise to do something. The question therefore is: What was it that he promised to do? The nature of that promise and of the implications incident to it are not necessarily controlled by the consideration which he received. Obviously, it could not be held that appellant breached his contract if he had neglected to do something which he had not obligated himself to do, merely because he received a consideration for doing what he did agree to do; and, conversely, it cannot be held that he breached his contract if he has done something which he has not obligated himself to refrain from doing, merely because he received a consideration for doing what he agreed to do. The sole question is: What is the scope and content of appellant’s obligation? In seeking the answer to this question each and every part of the agreement, ■ including the consideration agreed to be given to appellant, its nature and its value, should be taken into account. But the consideration for appellant’s promise is only one of the elements to be considered. There may be and, as we think, there is, another and a determining factor—one which warrants the inference that appellant did not obligate himself not to sell his business. That factor, as we pointed out in the opinion, is found in the provision that appellant agrees to hire respondent’s truck and its driver only “as our business warrants.”
While we agree with respondent that the fact that appellant has received his consideration is an element to be considered in arriving at the intention of the parties, we do not agree with his claim that the receipt of that consideration, regardless of its nature or of its value, conclusively evidences an intention that appellant was not to sell his business during the term of the employment or hiring. We think we should take counsel of the character of the consideration and of its value. It may be that if *677respondent had parted with a large pecuniary consideration for the privilege of hauling the lumber for one year, it should in that case be held that it was the intention of the parties that appellant was not to discontinue his business within the year, because of the great hardship which would befall respondent if he should lose the opportunity to haul the lumber for the full period agreed upon, after having paid dearly for the privilege. But here, in view of the nature of the consideration received by appellant, the hardship would fall upon the latter if an implied obligation not to sell the business were imported into the contract. It may be presumed that the truck which respondent purchased from appellant’s son-in-law had some value, and that respondent, when he purchased it, received value for his money. Indeed, if we may assume that respondent exercised ordinary business prudence in the purchase of the truck it may be inferred that in the vehicle itself he received full value for the money paid by him for it. Unless, therefore, the other terms of the contract warrant the court in spelling out or implying a covenant on appellant’s part not to sell his business, we would not be warranted in holding that an agreement not to sell should be imported into the contract merely because respondent bought a truck at appellant’s request. In such a transaction appellant receives nothing of any substantial pecuniary value. “A right so important as that of one to sell his own property,” says the court in Pfann & Co. v. Turner Cypress L. Co., 194 Fed. 69 (cited in the opinion), “should not be denied him unless the language employed clearly conveys that intention.”
What we have said is not without support in the decisions of other courts. Thus in Kanaskat Lumber etc. Co. v. Cascade Timber Co., 80 Wash. 561 (cited in the opinion), defendant agreed to sell to plaintiff’s assignor—whom for brevity we shall refer to as the plaintiff—all logs cut by it. At the same time plaintiff undertook, as a part or the consideration moving to the defendant, to erect and maintain a shingle-mill adjacent to defendant’s railroad tracks. This executory promise to erect a shingle-mill must have become an executed promise long before the expiration of the ten-year period mentioned in the contract, for the opinion states that for six years there was a mutual per*678formance of the contract by the parties thereto. The court held that the defendant was not liable in damages in consequence of its failure to continue to deliver logs, for the reason that its obligation under the contract was no more than a promise to deliver such logs as it might cut while in pursuit of its own logging operations. In the course of its opinion the court says: “We need go no further than the contract. Its terms do not warrant us in holding that respondent is bound to deliver except as it conducts its own logging operations. A contract to so deliver, on the one hand, and a contract to build a mill at a certain place and take the logs under such conditions as are stipulated in the contract is not in contravention of any public policy, nor can we say, as a matter of law, that it involves a hardship, and would not have been entered into had appellant appreciated the force of the language employed. We would have the same right to imply into the contract an understanding that appellant was mindful of the fact that the business of logging is in a sense uncertain and subject to market fluctuations, and that a logger would not bind himself to deliver excepting as he could operate at a profit, as we would have to imply that appellant would not have entered into the contract unless upon an understanding that respondent would keep it in material for the continuous operation of its mill. To so imply would lead us into difficulties which could not be measured by any rule. . . . Counsel puts great reliance upon the words ‘the party of the second part [plaintiff] agrees to erect and keep swid mill adjacent to the track of the first party.’ They ask: Why was appellant thus bound if respondent could log and deliver at will? Appellant [evidently the court intended to say respondent] meets this argument, saying that it is no more than a stipulation to protect it from a call to deliver at some point away from its own tracks. Another answer might he that the words relied on are not to he singled out as the essence of the contract, hut they are to he construed along with the agreement to deliver cedar logs ‘as they cure reached in logging operations of the party of the first part.’ ” (Italics ours.)
It is further claimed in the petition for rehearing that respondent, as a reasonable man, could not have intended *679tha,t appellant, in the short space of three months, should put it out of his power to furnish lumber for hauling. It is said that a. construction of the contract which might lead to such a result would place respondent at the mercy of appellant. It may have been respondent’s expectation that the business would be carried on by appellant throughout the year; but even so, he cannot complain if he entered into a contract which did not obligate appellant to refrain ■from frustrating that expectation. What was said by the New York court of appeals in Jugla v. Trouttet, 120 N. Y. 21, is pertinent. There the plaintiffs, glove manufacturers in Paris, sold to defendant their New York business, at the same time agreeing to furnish him with gloves manufactured by them so long as he should continue the business so purchased. This provision of the contract was a part of .the consideration moving to the defendant for the total sum which he agreed to pay to plaintiffs upon his purchase of their business. About a year after the contract was entered into plaintiffs discontinued the manufacture of gloves. Meanwhile they had been paid a considerable part of the purchase price. The action was brought by plaintiffs to recover the balance due them on the purchase price. Defendant claimed that plaintiffs had undertaken to continue to manufacture gloves and to furnish him with them for his trade, and that when they ceased to manufacture any more gloves they were chargeable with a breach of the contract. It was held that plaintiffs’ undertaking to furnish gloves to defendant was dependent upon their continuing to manufacture them. In the course of its opinion the court says: “The terms of the agreement fairly import the intent of the parties, which is deemed within its covenants, that, so long as the defendant should continue the business so purchased by him of the plaintiffs, the latter should sell to him, and he should purchase of them, gloves for his trade, provided the plaintiffs continued to manufacture gloves. This qualification quite clearly appears by the provisions of the contract, and there is no opportunity to spell out or imply a covenant on the part of the plaintiffs to continue in the business of manufacturing, or which denied to them the right at their pleasure to discontinue the production of gloves. It may have been assumed by the parties that the making of gloves, and the *680sale to and purchase by the defendant, would be continued as long as the latter desired to carry on, in New York, the business so purchased by him, and that such expectation on his part was a leading inducement to him to make the purchase.. It is in that view that the defendant’s counsel urges that the intent to accomplish such purpose should be treated as within the covenants, and that any other view would render the contract unreasonable, and place him at the mercy of the plaintiffs. ... In the present case the contract appears to have been carefully prepared, its provisions are without doubtful import, and, although the defendant took by his purchase the good-will of the business, one essential element of which may have been the reputation of the ‘D. Jugla’ gloves, the undertaking of the plaintiffs to furnish them to the defendant was plainly made dependent upon their continuance to manufacture them, and such was manifestly the qualification of their covenant in that respect.”
In his petition for a rehearing respondent calls attention to certain authorities which, like some of those cited in his brief, are cases where the defendant, being indebted to the plaintiff, promised to pay his debt out of profits to be realized by him in some business venture. In that class of eases the defendant owes a debt which he must pay. He makes a contract which accords him the privilege of paying his debt in a certain way; but pay the debt in some manner he must. If he pays it out of the profits as he agreed to, well and good; if he does not pay his debt in the manner agreed upon—if he sells the business so that he cannot pay the debt as contemplated by his contract— then he must be made to pay it out of any assets which can be reached on execution. The debt is his, and he cannot escape paying it in some manner. Obviously those cases have no application here.
Finally, our attention is called to certain cases which respondent claims give to the so-called “requirement contracts” a construction different from that which is given them in the cases cited by us in the opinion filed herein. It is possible that the decisions which deal with that class ■ of contracts are not in entire harmony. But whether the decisions which have construed such contracts are or are not in accord is immaterial here. For, as is said in the *681opinion, quite irrespective of whether this contract is or is not analogous to the so-called “requirement contracts,’’ there are other reasons, detailed in the opinion, which lead to the conclusion that appellant’s contract did not imply an obligation not to sell his business.
A petition by respondent to have the cause heard in the supreme court, after judgment in the district court of appeal, was denied by the supreme court on June 28, 1926.