Court Opinion

ID: 9625294
Source: CourtListenerOpinion
Date Created: 2023-08-22 07:35:28.718602+00
Date Added: 2024-06-11T18:06:05.634295
License: Public Domain

Wedell, J.
(concurring in part and dissenting in part): I agree the lessor, appellee, breached the exclusive covenant. However, in view of appellants’ theory of their action as unequivocally disclosed by both the petition and the trial record, I cannot agree appellants are entitled to recover for loss on fixtures and equipment.
Appellants, of course, could not recover for loss of anticipated profits. That was no part of the damages claimed. The damages they sought to recover were (1) loss they sustained in the operation of the business and (2) loss on fixtures. The loss on fixtures constituted not direct but consequential damages. Manifestly, loss on fixtures was not recoverable so long as the business was a going concern. Such loss would be recoverable, under the theory of this action, only in the event it were first established that the income from the business was insufficient to cover the cost of operation and next, if it were further established, that the loss sustained in operating the business was caused by the breach of the covenant. No other theory could be evolved from their petition.
The original petition clearly alleged the breach caused them to operate at a loss; that the breach was the sole and exclusive cause for their financial insolvency. In order to make their theory doubly clear appellants asked they be granted, and were granted, leave to amend the petition at the end of paragraph two by adding “. . . which was operated at a profit until the breach of plaintiffs’ lease by the defendant as hereinafter set out.”
The trial court sustained the demurrer on the grounds appellants’ evidence was too speculative and conjectural to show the breach was the cause for operating at a loss. It sustained the demurrer for the further reason that any verdict for damages a jury might render on the evidence adduced would be based on speculation and conjecture.
*166Was that ruling proper? Specifically stated, the first question is did appellants establish by other than speculative and conjectural evidence that their operating loss was caused by the appellee’s breach? At the outset it is well to bear in mind this was not an old established business which had been operating at a profit over a period of time. This was a new business in a new locality. It is common knowledge many months, and sometimes years, are required to establish a solvent business in a new locality. There was not the slightest evidence this bakery business in this new locality, assuming it was properly operated, reasonably could be expected to operate without some loss within the brief period it existed. It was operated only from May, 1950, to the latter part of November, 1950, a period of not to exceed seven months. The fact it may have operated with some loss was not in itself evidence appellee’s breach was the proximate cause of the loss.
No book records were kept of the amount of merchandise sent to this store from appellants’ other bakery. There was no separation of the cost of making all the products at their other bakery and the cost of the particular products delivered to this store. Appellants kept only a record of the amount of the sales at this store. They testified that amount was insufficient to make it pay. That testimony, alone, however, does not prove the small sales by appellants were caused by appellee’s breach of the exclusive covenant. There was no evidence whatever concerning the amount by which appellants failed to make operating expenses on this particular part of their business. Ducoin, appellant, was asked, “Do you have any record of what that store cost you by itself?” The answer was, “No, sir.”
The petition alleged they operated at a profit until the exclusive covenant was breached. Appellants failed completely to prove this crucial fact in their lawsuit. In fact, in answer to this court’s inquiry on oral argument they conceded with commendable frankness that they did not prove their business was operated at a profit before the breach.
The petition further alleged if Moses had not sold bakery products appellants would have sold the bakery products which he sold. The evidence disclosed Moses sold, exclusive of bread which he had a right to sell under appellants’ lease contract, only cellophane wrapped products.
*167The petition also alleged if Moses had not been permitted to sell bakery products that fact “. . . would have made the plaintiffs operate at a profit.” In an enlargement of the allegation the petition further stated that Moses sold approximately $25.00 worth of bakery products per day.
What was appellants’ testimony on that vital subject? Moses, their own witness, testified he sold only from $40.00 to $60.00 worth of cellophane wrapped bakery products per month and that his profit thereon ranged from 28% to 33%%. On the basis of 28% of $40.00 and 33%% of $60.00, Moses made a daily profit of only about thirty-seven or sixty-seven cents per day on the cellophane wrapped products he sold. But this evidence fails to show appellants suffered even that small loss in operations by reason of appellee’s breach. Appellant’s testimony is burdened with the unwarranted presumption that customers who desired to purchase cellophane wrapped products would have purchased unwrapped similar products from appellants. As previously stated there was no testimony which tended to prove such a presumption. The presumption constitutes pure speculation.
Other speculative features of this case might be mentioned but I shall not pursue them.
From an early date this court has adhered to the established doctrine that damages recoverable for breach of contract are only those which are shown to be the direct and proximate result of the wrong complained of; that the cause of such damage may not be left open to speculation and conjecture (Walrath v. Whittekind, 26 Kan. 482; Altman v. Miller, 128 Kan. 120, 276 Pac. 289; Myers v. Shell Petroleum Corp., 153 Kan. 287, 303, 110 P. 2d 810; 15 Am. Jur., Damages § 51) and that damages which are remote, contingent, and speculative are not proper elements upon which to base the cause or extent of injury. A few of our cases are Hogan v. Santa Fe Trail Transportation Co., 148 Kan. 720, 727-729, 85 P. 2d 28, 120 ALR 521; Myers v. Shell Petroleum Corp., supra, p. 303; McCracken v. Stewart, 170 Kan. 129, 223 P. 2d 963.
It is true that in the instant case the appellant Ducoin testified that, except for the Moses sales, he believed he would have been able to operate at a profit. Concerning similar testimony in the McCracken case, supra, this court aptly said:
“This court has consistently held that damages cannot be established by statements of a witness based on mere opinion without regard to specific facts or knowledge upon which their opinions were based. Damages cannot be based on mere conjecture or speculation. See Town Co. v. Leonard, 46 Kan. *168354, 26 Pac. 717. Before one may recover damages for loss of profits to an established general business, occasioned by the wrongful acts of another, it must be made to appear the business had been in successful operation for such period of time as to give it permanency and recognition, and that it was earning a profit which may reasonably be ascertained or approximated. See States v. Durkin, 65 Kan. 101, 68 Pac. 1091. The prospective earning capacity that plaintiff lost as a result of this accident is too remote, speculative and uncertain as based on his mere opinion to be recoverable.” (p. 136.)
On the record before us it appears far less speculative to believe it probably was the small volume of appellants’ sales of their own products that caused them to operate at a loss rather than to believe the loss was caused by appellee’s breach of the lease contract. It must be remembered appellants did not prove they operated at a profit before the breach, as they alleged. They did not prove by evidence other than of a most speculative character that, except for the breach, they would have remained financially solvent. Any verdict a jury might have rendered for operating loss on the basis of this record would have been based on pure guesswork. On this record appellants are not entitled to recover damages for loss of operating costs or for loss on fixtures, which latter loss would be recoverable only if it first had been shown appellee’s breach caused appellants to operate at a loss.
I think the district court had a clear understanding of the theory of appellant’s action, as reflected by the petition and the trial record; that it carefully analyzed the testimony and properly sustained the demurrer.
Price, J., joins in the foregoing concurring and dissenting opinion.