Court Opinion

ID: 8178080
Source: CourtListenerOpinion
Date Created: 2022-09-09 22:23:56.790539+00
Date Added: 2024-06-11T16:40:03.710297
License: Public Domain

PoeeenbaRGER, Judge,

(dissenting) :

I am unable to concur in the conclusion adopted by a majority of the members of the court. In my opinion, the procedure to which they have committed themselves subordinates substantial right and justice to a bare technicality: If the ruling had any foundation in a statute, I would, of course, acknowledge its supremacy. But it is of judicial origin and its correctness has not been universally admitted. It has never been recognized in this state, and the decisions in other jurisdictions are only persuasive authority here. Whether the weight of authority favors it may well be doubted. Originally, all authority was against it. Since 1850, the trend has been in its favor, but it stands upon fallacious and unsound reasoning. That the wages for the whole term of nine months, less any sum the plaintiff might have- earned at similar employment, in the same community, within the same period, by the exercise of diligence, or did actually earn within that period, anywhere or in any way, could have been recovered in a single action, is conceded by all authorities. Such an action could have been brought immediately upon the refusal of the board to permit the plaintiff to teach, or at the expiration of the term contemplated by the contract. The additional right to sue for the installments, as of the dates at which they would have become due and payable, on the theory of constructive service, accepted in some jurisdictions, or separate and distinct breeches of the contract, as of the times at which the installments would have become due, giving a right of indemnity for each separate breach of such character, is accorded in some states and denied in others, the latter asserting the doctrine of a single and entire breach for which only one action can be maintained. '
The constructive service theory advanced by Lord Ellen-borough in Gandell v. Potigny, 4 Camp. 375, has been accepted and extensively applied in this country. Marx. v. Miller, 134 Ala. 347; Moss v. Land Co., 93 Ala. 269; Ramey v. Holcombe, 21 Ala. 567; Liddell v. Chidester, 84 Ala. 508; Gardenhire v. Smith, 39 Ark. 280; Champion v. Hartshorne, 9 Conn. 564; Hitchens v. School Dist., 62 Alt. 897; Rogers v. Barham, 8 Ga. 190; Hichman v. Motor Car Co., 151 Mich. 214; Isaaca *621v. McAndrew, 1 Mont. 437; Madden v. Porterfield, 53 N. C. 166; Stewart v. Walker, 14 Pa. St. 293; King v. Steiren, 44 Pa. St. 171; Rye v. Stubbs, 1 Hill L. (S. C.) 384; Watts v. Todd, 1 McNull. L. (S. C.) 26; Congregation v. Peres, 1 Coldw. (Tenn.) 620; Jones v. Jones, 2 Swan (Tenn.) 605; Dunn v. Hereford, 1 Wyo. 206; McGuffin v. Coyley, 2 U. C. L. B. 308. But it has been repudiated as unsound in the country of its origin. Smith v. Hayward, 7 Ad. & El. 544; Goodman v. Pocock, 15 Q. B. 576. Nevertheless, many of the American courts adhere to the doctrine of several and successive actions for breeches of contracts for services, containing covenants or promises to pay in installments, some saying constructive service is only a fiction set up as a means of working out just results, and others, that the doctrine of constructive service may consistently be rejected without abrogation of the rule allowing successive action for installments. The best exposition of the latter theory is found in McMullan v. Dickinson Company, 60 Minn. 156, 51 Am. St. 512.
As the character of the contract involved in that case affords better means of illustration of the operation of the two rules, than those usually found either in the decided cases or the course of business, it having been one for service throughout a long period of time, about thirty years, the facts upon which the decision rests are here briefly stated. The defendant, a corporation, by a written contract, employed the plaintiff as its general manager, at a salary of $1500.00 per year, payable in monthly instalments of $125.00, from and after the date of the contract, as long as he should own in his own name 50 shares of the capital stock of the corporation, fully paid up, and the business of the corporation should be continued, not exceeding the term of the existence of the corporation, the charter of which gave it right of life for thirty years. The contract was dated February 25, 1892. Having complied with all conditions and performed the service contemplated until October 23, 1893, the plaintiff had been then discharged and dismissed without cause. Having recovered, in one action, his salary to March 1, 1894, amounting to $512.00, he brought a second one for his salary for the months of March *622and April, 1894, in bar of which the defendant plead the former recovery. A demurrer to this plea was sustained and the plea rejected. Prom the order -thus holding the plea insufficient and rejecting it, an appeal was taken, on which the order was affirmed.
The gist of the decision, sustained by a well considered and logical opinion, is set forth in the syllabus of the ease as follows: “The liability of the master to the servant is not an absolute liability for wages for constructive service during the balance of the term, but a contingent liability of indemnity for loss of wages. This liability • accrues by installments on successive contingencies, each of which consists in the failure of the servant, without his fault, to earn, during an installment period, the amount of wages which he would have earned had the contract been performed, and the deficiency is the measure of damages. The original breach is not total, but the failures to pay the 'successive installments constitute successive breaches, and successive actions may be maintained for the recovery of the installments of damages as they accrue, if any. This is the rule of damages usually allowed under the fiction of constructive service, but that fiction is rejected as false and inconsistent with that rule, while the rule itself is retained. ”,
The opinion is a vigorous denial of the correctness of the theory of legal singleness and indivisibility of the breach of such a contract, effected by the refusal of the employer to allow performance by the employee, and demonstration of the fallaciousness of some of the argument given in support of the proposition. Such of it as exposes the contradiction inherent in the constructive service theory is approved, but its applicability to the allowance of successive actions for damages, on the theory of several and distinct breaches, is denied and refuted. Allowance thereof no more encourages idlenesson the part of the discharged employee than limitation to a single action; for, in neither ease, is the servant required to present himself for work daily. In neither, does he seek recovery of wages, on the theory of either actual or constructive service. He goes for damages in each, founded upon the wrongful discharge only. In each, the measure of the damages *623is the amount of wages or salary agreed to be paid, less what the plaintiff has actually earned or could have obtained in similar employment. In each, he must avail himself of any opportunity he may have to mitigate the damages by similar service, and the defendant carries the burden of proof of such opportunity. This alleged economic reason for entirety of breach and singleness of right of action, in such cases, suggested in Howard v. Daly, 61 N. Y. 362 and so strongly urged in James v. Allen County, 44 Ohio St. 226 and Glass Co. v. Stoehr, 54 Ohio St. 157, obviously has no application after the elimination of the theory of constructive service.
What remains of the argument is little more than an arbitrary declaration of the courts, that the discharge or renunciation of the contract can afford only one cause of action. Of* course, public policy, as well as equitable considerations, forbids the splitting of actions. One controversy over a single matter suffices. Two or more work an unnecessary consumption of the time of the courts, intensify and prolong controversies, involve waste of the time and resources of the litigants and militate against social peace and harmony. But these considerations are manifestly subordinate to the contract rights of the citizen, and afford no justification for abatement thereof. Indivisibility of a single cause of -action is wise and just, and should be rigidly observed, but the classification of causes respecting singleness should be so made as to avoid infliction of hardship and oppression or production of absurd results. In the absence of legislation, the classification is a court function and a mere matter of procedure. In the exercise of this right, some courts have declared the cause of action arising upon a breach of such a contract as is involved here single, Olmstead v. Bach and Myers, 78 Md. 132; Keedy v. Long, 71 Md. 385; Closeman v. Lacoste, 28 Eng. L. & Eq. It. 140, while others assert the contrary. See the long list of •cases first cited.
Injustice of the single action rule, in both the practical and legal senses of the term, is forcibly demonstrated by Canty, J. in McMullan v. Dickinson Co., 60 Minn. 156, 158, in this language: “By this charter the life of this corporation is thirty years-. If the action is commenced immediately after the *624breach how can prospective damages be assessed for this thirty years, or for even one year ? To presume that the discharged, servant will not be able for a large part of that time to obtain other employment, and award him large damages, might be grossly unjust to the defendant.' Again the servant is entitled to actual indemnity, not to such speculative indemnity as must necessarily be given by awarding him prospective damages. His contract was not a speculative one and the-law should not make it such.” It is said entirety of the-breach and cause of action is a logical sequence of entirety of the contract, but logic alone does not determine the character of laws. Primarily, it is formal rather than practical and often ignores the most vital elements of wise and just conduct. Conditions, more than theories, determine the form and operation of laws. That such a contract as this imposes more than-one obligation upon the employer is obvious.' One is to permit the service throughout the entire stipulated period, others, to pay for the service at the end of each installment period. He may violate any of the latter without breaking the former and the servant may sue him as often as he breaks them. If the agreement were entire and indivisible, this would be an impossibility. In -the absence of a provision for periodical payments, there could be no right of action for wages actually earned, until all the service contracted for should have been performed; Omstein v. Yahr, 119 Wis. 429. So a contract providing for periodical payments is severable, while one stipulating for a single payment for the whole service is indivisible and entire in all respects. Though unlike and different in class, while in full operation, it is said such contracts are exactly alike when broken. That is a palpable non sequitur. What rule or principle of law confers upon the employer power .to alter the form, force or effect of the contract, by his. own act and that a wrongful one? To permit him to do so violates a maxim basic and fundamental in both law and equity. Both sternly and uniformly deny to any man the-fruit or benefit of his own wrong. Imperious judicial declaration of likeness, impossible except for the effect accorded a. wrongful act, is no justification of manifest departure from an all-prevading legal principle. In form and effect, the con*625tract, as made, in operation and without breach other than non-payment, is divisible. How does it become indivisible and entire in all respects? By the sole act of the employer? He may break it, but he alone can no more change its character than he alone could have made it. No such right in him is judicially recognized. The court itself' endeavors to make the alteration, founding its action partly on his wrong, in violation of the maxim to which reference has been made.''
Nor can he by his own act, destroy the contract. He can wrongfully terminate the relation of master and servant, but that is not the contract. It is only a thing stipulated or provided for by the contract. His wrong in doing so confers upon the injured party right of rescission or abrogation of the agreement, but, until he does rescind, it remains in force. If he sees fit to sue on it for his damages, he elects to keep it in force, not to destroy it, and, in doing that, he subjects himself to the burden, and exténds to the defendant the benefit, of another invariable and fundamental principle of law and equity. He cannot accept or hold the benefit of it in any manner or degree without taking upon himself all of its burdens. He must give as well as take. He remains under all the obligations the contract imposes upon him and extends to the defendant all the benefits it confers upon the latter. He' can no more partially continue the contract in force by an action on it or otherwise, than he can partially rescind it. If either party, after an opportunity to escape from the obligation of the contract, elects to stay within it for any purpose, he is in for all. For the proposition that the injured party has an absolute right to keep a contract fully alive, after renunciation thereof by the other party, there is authority of the highest character. In Frost v. Knight, L. R. Exch. 111, (1 Moak, 218) Cockburn Ch. J. said: “The promisee, if he pleases, may treat the notice of intention,” (not to perform the contract), “ as inoperative, and await the time when the contract is to be executed, and then hold the other party responsible for all the consequences: but in that case he keeps the contract alive for the benefit of the other party as well as his own. He remains subject to all his own obligations and liabilities under it, and enables the other party not only to *626complete the contract, if so advised, notwithstanding his previous repudiation of it, but also to take advantage of any supervening circumstances which would justify-him in declining to complete it.” The doctrine is affirmed by an unbroken line of authority. Leigh v. Patterson, 8 Taunt. 540; Phillpotts v. Evans, 5 M. & W. 275; Ripley v. McClure, 4 Exch. 859; Cort v. Ambergate, 6 Eng. L. & Eq. 230; Hochester v. De La Tour, 20 Eng. L. Eq. 157; Kadish v. Young et al., 108 Ill. 170; Roebling’s Sons Co. v. Fence Co., 130 Ill. 660.
These decisions only define the right of the injured party, in the case of notice to him of intention on the part of the other, not to perform the contract, given before the time of performance has arrived. The status of the contract, after an action upon it for damages for the breach has been brought, is not therein defined. But they emphatically give the injured party the right of election and deny power in the wrong-doer to abrogate or alter its obligation. ' If the contract does not survive, how does it sustain an action? There is no becission. The action is founded upon its terms, not upon an implied promise to reimburse for money expended, materials furnished or work done, under it, as in the case of rescission; and its terms and provisions constitute the basis of ascertainment of the damages. Neither the election to sue nor the action itself abates anything from the contract. The declaration affirms it and adheres to it. Only refusal or failure of performance is complained of. The contract continues to operate and bind the defendant, else he would not be bound. It, not merely his wrongful act, is the foundation of the action. If it were not, the cause of action would have to be treated as having arisen ex delicto, from a mere tort. Continuance of the obligation through the action and beyond it to the end of the term, is the basis of allowance of damages and imposition of the reciprocal duty of mitigation, .when the action'has been brought before arrival of the time for performance or the end of the period of service contracted for.
In case of renunciation or default on the part of the employer, the employee has an universálly acknowledged right .of election as to whether he will rescind, .whether he will sue on the contract, whether, in that event, he 'will sue immediate*627ly after the default, or await tbe time of performance or the exniration of the contract period. Being faultless, he may take any legal course he may choose to pursue. The contract has a main or principal obligation, but it has others of a minor character and severable. All are broken. It is entirely practicable to sue for a breach of the separable minor stipulation. Why should the courts bar that course ? To shield the wrong doer from the costs and annoyance of several suits ? He could have protected himself from that by omission of the minor stipulations from the contract, when he made it. Is it to save time to the courts? They are provided for the purpose of administering the law and awarding just and legal rights.
A severable contract is not a separate or independent one. To say a contract is severable necessarily implies union of its parts, but not an indissoluble union. Separate and independent contracts are wholly disconnected. Any complete contract, consisting of several parts, is, in some sense, entire, but many such contracts are severable, and they are severed or separated for remedial purposes, the very purpose for which severance here is denied. The severance is made to enable the courts to do justice between the parties. “The great weight of modern authority is to the effect, however, that a contract to do several things at several times is divisible in its nature because, although the agreement is in one sense entire, the performance is several, and an action will lie for the breach of any one of the stipulations, each of them being considered in respect to the remedy as a several contract. ’ ’ 23 Cye. 444. Thus, Maryland, denying right of successive actions on a contract of employment, stipulating for periodical payments, holds several suits on the same bond for different breaches may be maintained and that a recovery for one default on it does not bar a second action on it for another breach. Orendorff v. Orendorff, 48 Md. 298. Likewise, Indiana holds: “Although a mortgagee, holding several notes secured by' the same mortgage, which mature at. different times, and one of which is due, may foreclose -as to all, yet he may institute his suit to foreclose alone as to the note due-, and if he do not prosecute but one such suit at the same term of Court, he shall recover costs in each, successive foreclosure. *628A judgment of foreclosure on one sucb note can not be pleaded as a bar to a subsequent suit on the same mortgage to enforce payment of another note, because said notes may properly be considered as so many successive mortgages, and successive, causes of action.” Crouse v. Holman, 19 Ind. 31. In Badger v. Titcomb, 15 Pick. (Mass.) 409, the court held, after reviewing the English authorities, that “A contract to do several things at several times is divisible in nature, and an action of assumpsit lies upon every default. ’ ’ Anciently, in England, no action was allowed on a contract for money payable in installments, until the last one became due. Beckwith v. Nott, Cro. Jac. 504; Rudder v. Price, 1 H. Bl. 547; Siddall v. Rawcliffe, 1 Cromp. & M. 487. Later the courts departed from the rule, held such contracts divisible and allowed as-sumpsit for installments. Cooke v. Whorwood, 2 Samed. 337; Rudder v. Pierce, 1 H. Bl. 547. As to when two actions for matters growing out of the same contract may be maintained, the authorities are not uniform. In Hartley v. Harman, 11 Ad. & Ell. 798, and Goodwin v. Pocock, 15 Q. B. 576, right to recover wages earned under a service contract, in an action for wrongful dismissal, was denied. In Perry v. Dickerson, 85 N. Y. 345, it was allowed. The right to do this was asserted in Howard v. Daly, 61 N. Y. 369, but the Maryland court, in Keedy v. Long, 71 Md. 385, denies it.
The constructive service theory of recovery was not rejected in England until 1850. Finding that theory contradictory and illogical, the court, in rejecting it, enunciated the extreme doctrine now in question, without any inquiry as to whether the contract was severable, and solely upon the fallacious suggestion of the economic reason to which reference has been made. In the mean time, the doctrine of the-early English cases had been followed in most of the jurisdictions of this country. As has been shown, the reason for the English departure has no application to successive actions for damages and, for such purpose, the contract is divisible in nature. To deny the right of division to the party not. in fault gives to the wrong-doer the benefit of his wrongful, act. It allows him to introduce an enormous element of uncertainty into the estimate of the damages, one so great that: *629some courts decline to allow any beyond the date of the trial. Gordon v. Brewster, 7 Wis. 355; Fowler v. Armour, 24 Ala. 194. It is equally unjust to the defendant. Often the issue is whether there was any employment and the defendant, to test that question, must hazard everything on the issue. If he fails, he may be required to pay an enormous sum for nothing. An action for damages for an installment would enable him to test that question and, on losing, to tender the employment, and thus obtain the services in return for his money, or put an end to the damages. Refusal to perform a contract, under an erroneous impression as to its obligation, does not deny, to the party so refusing, the benefit of the contract. Armstrong v. Ross, 61 W. Va. 38; Bannister v. Coal & Coke Co., 63 W. Va. 502. Why should a refusal, under a mistake as to whether one has been made at all, work such ruinous consequences as sometimes ensue from such action, in this class of cases? Ordinarily, such contracts are made for short periods of time, but they may be for long periods as in McMullan v. Dickinson Co.
Procedure ought not to be characterized by such technicalities as unnecessarily work hardship and injustice. This harsh rule so operates and, besides it is not well founded in precedent and has not been settled with due regard to fundamental principles or the results of its operation.
Judge Miller joins in this dissent.