Court Opinion

ID: 6816510
Source: CourtListenerOpinion
Date Created: 2022-07-23 19:01:55.421401+00
Date Added: 2024-06-11T16:03:54.133329
License: Public Domain

UPON REHEARING.
June 24, 1926.
Christian, J.,
delivered the opinion of the court.
In order to properly discuss the questions raised upon this rehearing, it is necessary to make a brief statement of the facts out of which this controversy arose.
The Dexter-Portland Cement Company is a large manufacturer of cement at Nazareth, Penn., and the Acme Supply Company, Incorporated, handles large quantities of builders’ supplies, including cement, for sale in Newport News, Virginia, and the adjacent territory. For several years prior to this suit the Acme Supply Company, Incorporated, represented the Dexter-Portland Cement Company in this' territory, and their dealings were mutually satisfactory.
Beginning in the spring of 1920 there was a serious ear shortage upon most of the railroads of the country, and shippers of cement, with others, were alloted cars upon a percentage basis. These transportation restrictions produced a shortage of cement and the demands of the building trades could not be supplied, *769therefore the price of cement advanced considerably by reason of its scarcity. The cement manufacturers had sufficient cement to meet the demand, but could not get cars for its transportation.
In this condition of affairs the Acme Supply Company, Incorporated, had six specific work contracts for cement with the Dexter-Portland Cement Company, and in June, 1920, placed an open order contract with it, which was accepted upon the terms therein contained. The Acme Supply Company, Incorporated, did not receive as much cement as it needed, and was constantly writing to the Dexter-Portland Cement Company to make larger shipments. To these requests the Dexter-Portland Cement Company replied and claimed that it was shipping upon these contracts the pro rata number of cars that were due thereon.
About July 1, 1920, two of these specific contracts were completed and for which there was due $1,018.09 to the Dexter-Portland Cement Company. The Acme Supply Company sent its checks for this cement, but before they were collected stopped payment thereof. It, however, deposited the amount in one of the national banks of Newport News, and wrote the Dexter-Portland Cement Company complaining that it was not shipping upon its unfilled contracts, because of the .price, and was using the ears received to ship upon higher price current orders. Some correspondence took place between the parties, and finally the Dexter-Portland Cement Company revoked all of the specific work contracts between them, upon the ground that stoppage of payment of the cheeks, in its opinion, impaired the Acme Supply Company's credit, and justified their revocation as provided in the contracts.
The Dexter-Portland Cement Company filed its notice of motion in the Corporation Court of Newport *770News to recover the above amount due from the Acme Supply Company, Incorporated. The parties hereafter will be referred to as plaintiff and defendant, the positions occupied in the trial court. The defendant admitted the amount due the plaintiff, but tendered a plea of set-off against this claim amounting to $4,195.00. The plaintiff moved the court to reject the plea, which motion the court overruled, and ordered the plea filed, to which action the plaintiff excepted. There was a jury trial upon the issue thus presented. The jury found for the plaintiff and against the defendant. Upon motion of the defendant the verdict of the jury was set aside, and the court by virtue of section 6251, Code 1919, proceeded to enter judgment for the full amount of defendant’s claim, less the amount admittedly due the plaintiff. To this action of the court the plaintiff also excepted.
The five contracts set out in the plea of set-off were separate and distinct; unrelated and unconnected with the claim of the plaintiff or with each other. Under the common law practice in England and Virginia, the court was without jurisdiction to hear and determine these causes of action in a single suit. By early statute, which is now embodied in section 6144, Code 1919, an exception was made to this rule of practice, where the plaintiff’s demand and the set-off at law are both, in the nature of debts. Wattman v. Yost, 22 Gratt. (63 Va.) 595.
Thus we find the rule of established practice in Virginia to be, that the courts have authority to entertain pleas of set-off . only, where the demands on both sides are in the nature of debts. A demand for unliquidated damages cannot be set-off against an ascertained demand, nor can demands for unliquidated damages be set-off against each other, and the cross *771demand must appear in the nature of a debt from the plea. Christian v. Miller, 3 Leigh (30 Va.) 78, 23 Am. Dec. 251; Bunting v. Cochran, 99 Va. 558, 39 S. E. 229; Webster v. Couch, 6 Rand. (27 Va.) 519.
The counter demands set up in the plea are based, first, upon the open order. It provided that the price should be the market price of. cement at the time of delivery, and shipment was made dependent upon car supply. Second, the specific work contracts fixed the purchase price of cement at from $2.73 to $2.93 per barrel. The cement could be used only upon the jobs designated in the contracts, and the shipments were to be made as provided in one contract before the 30th of June, 1920, and in the others unless extended by the seller - before December 30th. For the breach of each of these contracts the usual measure of damages was the difference between the contract price and the market price of cement at the time that delivery should have been made. In the early case of Christian v. Miller, supra, the court held that where the defendant’s demand arises out of the breach of a contract to deliver a quantity of corn at a future day, it is strictly a demand for unliquidated damages and therefore not. a proper set-off. This case which holds that damages for breach of contract for future delivery of goods are unliquidated has never been overruled.
The pleader in order to make the breach of these contracts in the nature of a debt, and not unliquidated damages,, alleged in the plea of set-off that there was no market for cement in Newport News on account of the disorganization of transportation, and that it had to withdraw cement from the retail stock in its warehouse to supply eement on the contracts breached. The defendant could not by its proof make an unliquidated claim liquidated. Whether damages *772are liquidated or unliquidated depends primarily upon the terms of the contract itself. Bouvier’s Law Dictionary “Liquidated Damages.”
It is true that the Supreme Court has held that to constitute a valid set-off it is not necessary that a fixed price should be agreed on for an article sold and to be delivered. If the damages do not lie in mere opinion or judgment, but can be readily ascertained by calculation or computation, they may be set-off against a liquidated demand. An examination of the cases in which this rule was enunciated will show that it is not an exception to the general rule heretofore stated. In the case of Tidewater Quarry Co. v. Scott, 105 Va. 160, 52 S. E. 835, 115 Am. St. Rep 864, 8 Ann. Cas. 736, the plaintiff sued for a debt. When the plaintiff took possession of the quarry the defendant had thereon a quantity of prepared stone and coal at the quarry which the plaintiff sold and used. The defendant had two remedies (1st) an action of tort for damages for the conversion of the material or (2nd) an action of indebitatus assumpsit for goods had and received. The court held if the defendant elected to waive the tort and rely upon the implied contract to pay the value of the goods, it might be set-off against the plaintiff’s demand.
In the case of New Idea Spreader Co. v. Rogers & Sons, 122 Va. 54, 94 S. E. 351, the defendant sold under contract twenty-six manure spreaders which the plaintiff had agreed to deliver at a specific price and for which defendant was entitled to receive $19.50 each by way of profit. The contract was breached and plaintiff refused to ship the spreaders. The amount due could have been recovered as a certain demand in an action of assumpsit, therefore was in the nature *773of a debt, and tbe defendant had the right to plead his demand as a set-off.
The United Cigarette Mach. Co. v. Brown, 119 Va. 815, 89 S. E. 850, L. R. A. 1917F, 1100, presented this state of facts in the plea of set-off. The Winston Company, of which Brown was the largest stockholder, controlled and managed the same, had agreed to furnish the United Company Briggs Machines at a certain price, and gave the latter the exclusive right of sale of these machines except within the United States. Brown breached this contract and sold several machines in Canada and other foreign countries. The cost of the machines was not a matter of dispute between the parties, nor the price at which Brown sold them in foreign countries, so that the appellant’s damages were a matter of mere computation and calculation, therefore was a proper offset or claim in the nature of a ■debt due it from Brown, who was seeking to recover dividends due him and unlawfully withheld by the appellant.
The case of Richardson Company v. Whitney L. Co., 116 Va. 490, 82 S. E. 87, shows when unliquidated damages became a matter of calculation or computation, and therefore the subject of a plea of set-off. This was a case where the vendor sold to the vendee lumber; it furnished part of the lumber according to contract, but failed to deliver other lumber according to agreement. The vendee bought in the open market the lumber necessary to complete the contract. Upon suit by vendor to recover for lumber delivered, the vendee filed a plea of set-off for the amount it had to pay for lumber not delivered under the contract. The-plea of set-off was rejected because for unliquidated damages, this was reversed. Judge Harrison in the opinion of the court stated the rule of law in substance as follows: *774When a vendor fails or refuses to deliver property, the measure of damages is usually the difference between the contract price and the market price at the time and place of delivery, with interest, and the vendee for his own protection has the right under the circumstances to buy the goods in the open market, and charge the difference in price to the vendor’s account. In such ease the law implies a promise on the part of the vendor to repay the money which the vendor has been compelled to pay for him, and for it indebitatus assumpsit will he. The liability of the vendor, whether technically liquidated or not, is so far suspectible of definite proof as to be a valid set-off against a money demand asserted by the vendor against the vendee. The right to maintain indebitatus assumpsit for a claim is a test in favor of its allowance as a set-off, and not whether the demand is liquidated or unliquidated.
 The rule of law that an unliquidated claim may be plead as a set-off where the plaintiff asserting the demand is insolvent or a nonresident of the State applies only to equity practice, and is based upon the equitable principle of chancery jurisdiction that the defendant- is without adequate remedy at law. This rule has no application to a suit at law. Bunting v. .Cochran, supra. Nor does section 6084, Code, authorize the transfer of purely legal action to the chancery side of the court because of the nonresidence of the plaintiff and in order that the defendant may assert a demand as a set-off that is not pleadable in an action at law.
■  We do not think that the plaintiff waived its exception to the action of the court in permitting the defendant to file its plea of set-off by going to trial upon .the issue thus'made, nor from the fáct that it excepted to certain evidence as too speculative and uncertain to justify recovery, but failed to.bring this ruling upon the evidence before this court.
*775If the evidence was too speculative or uncertain to sustain a verdict, it would unquestionably be a claim for unliquidated damages, and is preserved in the exception to the action of the court in setting aside the verdict, and entering judgment for the defendant, especially where the jury had found that the evidence was insufficient to prove the defendant’s case. By virtue of section 6251 the court is given no greater control over the verdicts of juries than it had before its enactment, and the condition of its exercise of the power to enter judgment for the defendant, notwithstanding the verdict, depends upon there being certain and suffix cient evidence in the case to decide it upon its merits. Kendricks v. City of Norfolk, 139 Va. 702, 124 S. E. 210;
A demand is not liquidated even if it appears that something is due, unless it also appears how much is due, and it is not liquidated when it is admitted that one of two or more sums is due. If there is a genuine controversy as to what is due, that is to say which of said sums is due, it is still an unliquidated demand; Nassoiy v. Tomlinson, 48 N. Y. 326, 42 N. E. 715, 51 Am. St. Rep. 695. In this case it is argued, and has been elaborately argued, that the damages aie uncertain even if it be admitted that damage at all had been inflicted, and in considering this proposition it was of course necessary to consider all questions that were in-s volved in determining whether the damages were liqui-r dated or unliquidated. Thus, in the petition for the writ in the instant case, the plaintiff in error quotes from New Idea Spreader Co. v. Rogers & Sons, supra, as follows:
“If the amount of the claim of the defendant is so unliquidated that it cannot be ascertained by computation or calculation from definite data supplied by the evidence, and lies in mere opinion, where the amount *776to be settled rests in the discretion, judgment or opinion of the jury, such claim cannot be set-off under the statute, section 3998 of the Code 1904.”
The defendant’s manager in this case testified that there was no market for cement in Newport News, and that it had cement in its warehouse for its retail trade, some of whieh it had bought from another manufacturer, and if it had not been forced by the plaintiff’s breach of its contract to supply its warehouse cement upon those contracts it would have made at least $1.25 per barrel thereon, and that was the amount of damages it should recover from the plaintiff. It purchased its cement from the manufacturers at wholesale, and Beal’s opinion and judgment of whether there was a market in Newport News and the amount it would have made on its cement by retail sale did not justify an exception to the rule of law that the measure of damages in case of breach was the difference between the agreed price and the market price at the time of delivery.
■  There is certainly nothing in the open order contract to show that any other measure of damages” than that ordinarily fixed by law for the breach of delivery of the cement sold was in contemplation of the parties. While in the specific work contracts it does not appear whether the defendant sold the cement to the purchasers from it at a specific price, or market price at the time of delivery, therefore, the contracts between the defendant and its purchasers were collateral to the contracts between the parties to this suit and cannot furnish a different measure of damage for breach of these contracts. In the case of Trigg v. Clay, 88 Va. 330, 13 S. E. 434, 29 Am. St. R. 728, the plaintiff was allowed to recover the profits lost upon resale of the lumber, because the defendant knew it had been *777resold and delivery was to be made at a point where other lumber could not be purchased for plaintiff’s customer.
But Judge Lewis dissented from the opinion of the court making this exception to the general rule as to the measure of damages.
The evidence in this case is such that the jury would have to base its verdict upon judgment or opinion, therefore, whether the damages sought to be recovered are denominated unliquidated damages or speculative profits, they do not partake of the nature of a debt, nor are capable of calculation or computation, hence the court could not enter judgment thereon.
For the reasons above set forth our former judgment is affirmed.

Reversed.