Court Opinion

ID: 3986749
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:42:52.293606+00
Date Added: 2024-06-11T13:53:47.296991
License: Public Domain

I concur in the result on the ground that neither by evidence nor by findings of fact was it shown what damages with any degree of certainty were sustained by the defendant on its counterclaim, except the conclusion that the defendant sustained damages in the sum of $2,000 as the result of plaintiff's breach of the contract. What the nature, character, or extent of the damages were was not found. But the disposition of the case lies deeper than that.
An order was given by the defendant at Salt Lake City to the sales agent of the plaintiff, whose home office was in Chicago, for the purchase of 7,500 combination wallets and dime banks at the agreed price of $10,875, 24,500 circular letters at the agreed price of $367.50, and 144,000 printed cards at the agreed price of $620, or a total agreed price of $11,862.50. The order as given and when accepted at the home office at Chicago constituted one contract. The goods when manufactured were to be delivered to six different banks at different towns or cities, one in Utah, one in Wyoming, and four in Idaho, including a bank at Boise, for which bank, 9,000 letters, 53,000 cards, and 2,750 wallets, at an aggregate price of $2,437.50, were to be manufactured and delivered. The order was given November 21, 1928. To be binding it required acceptance by the plaintiff at its home office. The next morning, according to the testimony of Bennett, the vice president of the defendant and who on its behalf had given the order, he, at Ogden City, sent a telegram to the sales agent of the plaintiff at Salt Lake to "cancel work on order until I can get in touch with you. 'Phone me promptly on your return." On the evening of that day, or in the morning of the next, the 23d, the sales agent at Salt Lake called Bennett by phone, at which time a meeting between them was arranged for the evening of the 23d. By the terms of the telegram, the whole order was canceled until further arrangements were made. On the *Page 333 
evening of the 23d, according to the testimony of Bennett, the whole of the order was reinstated, except as to the goods to be manufactured for and shipped to the bank at Rock Springs, Wyo., and at Boise, Idaho; the goods as to the Rock Springs bank, because of a strike at Rock Springs; the goods for the Boise bank, because of claimed misrepresentations of the sales agent as to statements made by officers or agents in charge of the bank at Boise of the desirability of the goods and because the defendant but recently having taken over the bank at Boise, and until matters could be more definitely checked up and additional arrangements made, no goods were to be manufactured or shipped to either of such banks. According to the testimony of Bennett, the strike at Rock Springs having been suppressed, the order, within a few days, about the 26th, for the manufacture and shipment of goods to that bank was reinstated; but as to the bank at Boise, until the exchange of the bank had been more completely effected, which was thought to be not until some time in February or March, it could not be determined whether any goods for that bank were desired, and, until then, no additional or definite arrangements could be made for the manufacture or shipment of goods to that bank, and that no such further arrangements had been made.
According to the testimony of the plaintiff, the order of November 21st, as originally signed by the defendant for approval by the plaintiff, was received by the plaintiff by air mail in Chicago on November 23d, and on that day was accepted by it by noting on the order that it was accepted, and five or six days thereafter writing the defendant an acknowledgment and receipt of "your order of the 21st for 7,500 combination wallets and dime banks, 24,500 letters and 144,000 cards," constituting the whole of the order as signed, including the goods to be manufactured for and shipped to the Boise bank, and informing the defendant that "all these items are now being prepared and will be shipped as promptly as possible." No reply was made to that by the defendant. The plaintiff gave testimony to *Page 334 
show that, when it received and accepted the order and wrote the defendant of such acceptance, it had neither notice nor knowledge that the original order of November 21st as received by it had in any particular been canceled or modified. However, the court found that, by the telegram sent by Bennett on the morning of the 22d to the sales agent and the negotiations had between them on the evening of the 23d, the order was canceled or modified before the plaintiff in Chicago received and had accepted the order, and that knowledge of and notice to the sales agent of the cancellation or modification was notice to the plaintiff; and thus the court found that the order as to the goods to be manufactured and shipped to the bank at Boise was canceled and had not been reinstated.
Let it be assumed, as held by the prevailing opinion, that the evidence, though in conflict, was sufficient to support the finding so made, and that notice in such particular to the sales agent was notice to the plaintiff; and let it further be assumed that, when the manufactured goods were delivered to the Boise bank December 15, 1928, they, as found by the court, were not accepted by the defendant, notwithstanding it had not informed the plaintiff that it declined to accept the goods, until more than a month thereafter, and in the meantime the goods stored in the bank in the original packages as delivered. All the other goods manufactured for and shipped to the other banks were accepted by the defendant. The court so found, the defendant so alleged, and so was it undisputably shown by the evidence. On January 21, 1929, the defendant sent plaintiff a check in the sum of $9,160, in full payment of all of the goods manufactured and delivered, except the goods delivered to the Boise bank. In reply to that, the plaintiff, on January 23d, acknowledged receipt of the check as "on account of our bill of $11,862.50. We do not know why you did not include $2,437.50 additional" for goods and supplies shipped to Boise. In reply to that, Bennett, on January 25th, wrote the plaintiff that there was no order for the goods shipped *Page 335 
to the Boise bank, that it was expressly understood between the defendant and the sales agent that no work was to be done on the goods for that bank until a further and an additional order was given by the defendant for such goods, that none had been given, that the shipment sent to that bank was intact and in its original condition and asked to be advised what disposition should be made of them. In reply to that, the plaintiff, on January 30th, wrote the defendant that it had no knowledge of any understanding had between the defendant and the sales agent and insisted on payment in full of the bill; and that, if not paid by February 15th, the matter would be placed in the hands of plaintiff's attorneys for collection.
This action was commenced August 20, 1929, to recover the balance claimed to be due amounting to $2,437.50. On October 1, 1929, the defendant filed an answer denying there was anything further due the plaintiff, alleged that the order for the goods at the Boise bank had been cancelled, and the original order in such particular modified before the plaintiff had accepted the order. The defendant by its answer further alleged that:
"Defendant accepted delivery of all goods shipped to the various banks save and except those shipped to the Pacific National Bank of Boise, but as to the latter shipment, defendant, upon the arrival of said goods, refused to accept delivery thereof and immediately notified plaintiff of said refusal.
"That defendant paid plaintiff in accordance with the terms of said order for all goods so ordered or accepted by it and the amount herein sued upon represents the purchase price for those goods so manufactured and shipped to Boise and which were not accepted by defendant."
The defendant also filed a counterclaim in which it, in substance, alleged that the plaintiff was engaged in the business of initiating, promoting, and carrying to a successful conclusion service campaigns for the purpose of educating the public as to the advantage of opening savings accounts, and at the request of purchasers to print circular letters and cards and manufacture a combination wallet and *Page 336 
dime savings bank; that, to make such campaigns successful, the plaintiff agreed to furnish experienced operators throughly versed in banking and particularly relating to savings accounts and who were to manage the campaign and to be in the purchaser's bank during banking hours to meet customers and explain to them the advantage of savings accounts, after banking hours to contact students of public schools, workers in mines, industrial plants, and similar institutions and hold public meetings to educate the public as to the advantage to be derived from savings accounts; that the sales agent advised the defendant that by putting on the campaigns "it was feasible and practical to increase the savings accounts in the various banks," aggregating 11,500 new accounts; that when the letters and cards arrived at the various banks they were promptly mailed out by each bank in accordance with the plan as outlined by the plaintiff, "except the Pacific National Bank at Boise, Idaho, which said order had previously been countermanded," and that each of the other banks performed every duty required of it with respect to the campaign; that "the plaintiff failed and neglected to keep and perform its part of said agreement in this — that instead of furnishing five experienced operators, plaintiff sent out five inexperienced, immature young men, who knew nothing concerning banking or savings accounts, who had had no previous experience as managers of such campaigns," failed to do any work after banking hours, held no meetings, and made no contact with people on the outside; that they failed to conduct the campaign for a period of thirty days for each 1,000 wallets furnished, had not performed their duties diligently or faithfully, and, instead of obtaining approximately 11,500 new accounts as the result of the campaigns, there were obtained not in excess of 1,200 new savings accounts, and, by reason of such failures and delicts, "practically all of said wallets so purchased could not be used and became and are worthless"; that the plaintiff expended $9,160 for the purchase of materials as a part of such campaigns, and, "because *Page 337 
of the breach of said agreement on the part of the plaintiff and its failure to put over said campaigns successfully, said money so expended as aforesaid was of no effect, and that defendant suffered damages in the sum of Nine Thousand One Hundred Sixty ($9,160.00) Dollars," for which amount, together with interest, judgment was prayed against plaintiff.
While the defendant in its letter of January 25th, after it, as alleged and as found by this court, had accepted all of the goods furnished and delivered by the defendant at all of the banks, except the Boise bank, and without objection or complaint had paid the full purchase price thereof, and after the plaintiff had inquired of the defendant why it had not paid for the goods delivered to the Boise bank, stated that the order in such particular had been canceled, and, in general terms, that representations made by the sales agent in connection with the campaigns were misrepresented, yet, not until the defendant filed its counterclaim was there any notice given or complaint made to the plaintiff of any of the delicts or breaches set forth in the counterclaim. It is not contended that the counterclaim related to the goods shipped to the Boise bank where no campaign was had or conducted. The delicts and breaches set forth in the counterclaim related to the goods delivered to and accepted by the defendant prior to December 15, 1928, at the various banks other than the bank at Boise and where campaigns had been conducted by the plaintiff at each bank for a period of thirty days, at some places a little over a month, from about the middle of December, 1928, to about the latter part of January, 1929, when all the campaigns were concluded. A reply was filed putting in issue all the allegations of the counterclaim, except the order or contract as set forth in the prevailing opinion and the acceptance and payment by the defendant of the goods manufactured for and delivered to all of the banks except payment of the goods delivered to the Boise bank, and specifically denied all of the delicts and breaches set forth in the counterclaim. *Page 338 
The question thus is whether on the pleadings and the record the defendant was entitled to maintain its alleged counterclaim. We have a statute, Comp. Laws Utah 1917, § 5158, of the "Uniform Sales Act" which provides:
"In the absence of express or implied agreement of the parties, acceptance of the goods by the buyer shall not discharge the seller from liability in damages or other legal remedy for breach of any promise or warranty in the contract to sell or the sale. But if, after acceptance of the goods, the buyer fails to give notice to the seller of the breach of any promise or warranty within a reasonable time after the buyer knows, or ought to know of such breach, the seller shall not be liable therefor."
Such provision frequently has been before the courts, and it uniformly has been held:
"That the purpose of the provision is to prevent the buyer from retaining the goods and using them, failing to give notice of any breach of the original agreement to the seller until hehas been sued for the purchase price, and then setting up affirmatively a defense by which it is sought to wipe out all of the original purchase price and demand an affirmative judgment for an additional sum against the seller."
Uniform Laws Annotated, vol. 1, Sales Act, p. 184, and cases cited under section 49, corresponding with the section of our statute, and Supplement 1929, p. 114, and cases cited. (Italics added.)
The proposition is well put by the Tennessee court in the case of Wildman Mfg. Co. v. Davenport Hosiery Mills, 147 Tenn. 551,249 S.W. 984, 986, that:
"The purpose of this section, indeed, seems apparent, viz. to prevent the buyer from interposing belated claims for damages (too often a mere afterthought) as an offset to a suit begun by the seller for the purchase price."
The provision is applicable not only to warranties, but also to a "breach of any promise or warranty in the contract." Supplement 1929, Uniform Laws Annotated, Sales Act, p. 115; 2 Williston on Sales (2d Ed.) 1261. *Page 339 
The alleged breach set forth in the counterclaim relates to the promise or agreement contained in the order or contract and referred to in the counterclaim, that "B.T. Moran, Inc., (the plaintiff) agrees, without additional charge, to furnish an operator to manage purchaser's campaign for a period not to exceed thirty days for each thousand wallets ordered." It is that stipulation or provision which the defendant by its counterclaim alleges the plaintiff failed to perform and breached. It was a material part of the contract directly relating to and connected with the sale and purchase of the combination wallets and dime banks and the printing of the circulars and cards for which the whole of the money consideration amounting to $11,862.50 was to be paid, and was just as much "a promise" as any other stipuation in the contract, and a failure to perform it, "a breach of a promise" contained in the contract rendering the plaintiff "liable in damages," to the same extent as the breach of any other promise or agreement contained in the contract, or a breach as to the quality or quantity of the goods or of a warranty express or implied, providing notice was given as by section 5158 provided.
An allegation of the giving to the seller reasonable notice of a breach, as provided by the section in question, is in such case essential to a cause of action for damages; and a failure to give such notice precludes any claim for damages for a "breach of any promise or warranty in the contract." Uniform Laws Annotated, Sales Act, p. 186; Supplement 1929, p. 115, and cases there cited.
The counterclaim does not contain any allegation of the giving of any notice with respect to any of the delicts or breaches set forth in the counterclaim and upon which it is founded, nor any excuse or ground, either in law or fact, for not having given it. The absence of such an allegation, under the authorities, is fatal to the defendant's cause and precludes any relief thereunder. Such an allegation being an essential to the defendant's cause — a prerequisite without which no claim for damages may be asserted after acceptance *Page 340 
of the goods — is not cured by evidence, findings, or verdict. However, there is neither evidence nor findings that such a notice was given. So far as disclosed by the record no such notice was given, nor any claim for damages made, until the filing of the counterclaim, eight or nine months after the goods were accepted and more than six months after the purchase price without objection was fully paid and the campaigns concluded. To treat or regard the filing of the counterclaim as a sufficient notice is to fly in the very teeth of both the spirit and letter of section 5158 requiring the giving of notice as by its mandatory provisions provided. In support of the right to maintain the counterclaim, the defendant cites the cases ofDetroit Vapor Stove Co. v. Weeter Lumber Co., 61 Utah 503,215 P. 995, 29 A.L.R. 659, and Detroit Vapor Stove Co. v.Farmers' Cash Union, 61 Utah 567, 216 P. 1075. But for the reasons heretofore stated the cases do not support the contention. They rather make against the defendant, especially the first-sighted case wherein was considered the section in question.
I thus am of the opinion that the judgment awarding the defendant damages should be reversed. Since it is to be reversed, I think it proper to express opinions also as to other assignments considered in the prevailing opinion. I think error was committed in admitting in evidence a copy of a telegram claimed to have been sent by Bennett to the sales agent without a sufficient foundation having been laid to admit secondary evidence of the contents of the telegram. Whether the telegram filed by Bennett with the telegraph office or company for transmission, or whether the telegram transmitted and delivered to the sales agent (when there is no dispute as to the contents of the telegram), is to be regarded as the best evidence of its contents, depends upon circumstances. Some authorities hold that a telegram filed with the telegraph company is the best evidence, and that a copy may be put in evidence only upon a showing that the filed telegram is lost or destroyed or is beyond the jurisdiction of the court. Smith Furniture Co. v. Peter Volz, *Page 341 205 Ill. App. 379; Smith  Whiting v. Easton, 54 Md. 138, 39 Am.Rep. 355. On the other hand, the general rule is stated to be that, if the person sending the telegram takes the initiative and the telegram company considered to be his agent, the telegram delivered at its destination by the telegraph company to the sendee is regarded the original and the best evidence of its contents, if there is no dispute as to contents (note, 8 Ann. Cas. 270; 10 R.C.L. 910), and on proof that the telegram was sent, and as sent and delivered was lost or destroyed or was beyond the jurisdiction of the court or otherwise unavailable secondary evidence of its contents may be received. The same rule in such respect prevails in regard to telegrams as to other writings permitting secondary evidence of their contents when a proper foundation is laid that the original is lost or destroyed or otherwise cannot be produced. 2 Jones Comm. on Evid. (2d Ed.) 1471. That the copy here put in evidence was not the best evidence of the contents of the telegram is clear enough. The only foundation laid for its admission in evidence is this: Bennett having testified that he, after signing the order of November 21 and after talking over the telephone with the cashier of the Boise bank and on the morning of the 22d, sent a telegram to the sales agent canceling the order, counsel for the defendant inquired of counsel for the plaintiff. "Do you have in your possession a telegram dated November 22d 1928, from E.G. Bennett to E.A. Waugh (the sales agent)?" Counsel for the plaintiff replied, "We have not." Thereupon counsel for the defendant resumed his direct examination of Bennett and asked him if Exhibit 2 (a claimed copy of the telegram) was "a copy of the telegram to which you refer." The witness answered that it was, that it was a copy from his files and a copy of the telegram sent on the morning of November 22. The copy was thereupon offered and admitted in evidence over the objection of the plaintiff on the ground, among other grounds, that it was not the best evidence and that a proper foundation had not been laid to admit it. Thereafter the *Page 342 
witness further testified that on the evening of November 23 he had a conversation with the sales agent in Salt Lake City in which the agent asked him why he had canceled the order, to which the witness replied because of misrepresentations made by the agent that officers of the bank at Boise desired the goods, and that after the witness had signed the order he learned that the representations were not true; and that a meeting for the evening of November 23 was arranged over the telephone after the sales agent "had received my telegram." No claim is made that the telegram was directly sent to the plaintiff. The claim is that it was sent to the sales agent. No showing is made that the telegram or a copy thereof was transmitted to the plaintiff. On the contrary, evidence was given to show that the plaintiff had neither knowledge nor notice of any cancellation or modification of the order as given by the defendant on November 21, until the letter from Bennett on January 25, 1929, declining acceptance of the goods shipped to the Boise bank. No evidence was adduced to the contrary, nor any claim made, that any notice was given the plaintiff as to any cancellation or modification of the order, except the notice to or knowledge possessed by the sales agent and imputable to the plaintiff. In such circumstance mere inquiry of counsel for the plaintiff when the witness was on the stand whether the plaintiff had possession of a telegram sent by Bennett to the sales agent and counsel for the plaintiff replying that it had not, and without any showing of any kind that neither the telegram filed with the telegraph company nor the telegram transmitted and delivered to the sales agent could not be produced or was not available, in my opinion, was not the laying of a sufficient foundation to admit the copy in evidence, especially when no timely or reasonable notice was given the plaintiff to produce the telegram, if such a telegram was in the possession of the sales agent, or that its production was otherwise available to the plaintiff on reasonable notice to produce it. In other words, no attempt whatever was made by the defendant to *Page 343 
procure either the telegram claimed to have been filed with the telegraph company or the telegram claimed to have been transmitted and delivered to the sales agent, and no showing whatever made that neither was available to the defendant or could not be produced. It is said that, if error was committed in admitting the copy in evidence, no harm resulted, for the reason that there was other sufficient evidence to show that the order as to the goods to be shipped to the Boise bank was canceled or modified by the agreement made between Bennett and the sales agent on the evening of the 23d. One of the material questions as to plaintiff's cause was whether the cancellation or modification of the order was had before the order was accepted at the home office by the plaintiff and before it became a completed contract. If by competent evidence, it had been shown that the telegram in question was transmitted and delivered to the sales agent on the morning of the 22d, then it might well be argued that the order was canceled before the plaintiff, as shown by its testimony, had accepted the order. On the other hand, if the order was not canceled or modified until the evening of the 23d, then it is more doubtful whether the cancellation or modification was had before the order was accepted by the plaintiff on the 23d as shown by its evidence. The telegram, therefore, had considerable probative value in determining whether the order was or was not canceled or modified before the plaintiff had accepted it, and may have been one reason, even the chief reason, inducing the finding that the order was canceled before it was accepted by plaintiff. Though, on the record now before us, it be considered that erroneously admitting a copy of the telegram in evidence was not of prejudicial effect, still, on a retrial of the case, the copy of the telegram, unless a better foundation is laid for its admissibility, should not be admitted, and the trial court should so be advised.
There is still a further point on which I find it necessary to express views not in harmony with the prevailing opinion. *Page 344 
The point relates to the parol evidence rule with respect to the evidence received as to the character, experience, and qualifications of the operators to manage and conduct the campaigns. As is seen by the contract, the plaintiff agreed "to furnish an operator to manage purchaser's campaign," etc. The defendant, over the objection of the plaintiff, was permitted by parol to show the character, experience, and qualifications of the operators to be furnished. That, it is claimed, varied the terms of the contract, and hence was improperly received. I do not think so. The term "operator," as used in the contract, is not self-descriptive or explanatory. The term, as used in the contract, has no defined meaning in law, nor any popular or fixed meaning. It has rather a particular or special meaning as applied to the context or subject-matter to which it relates. How the parties regarded it, or understood the sense in which the term was used, can only be made evident by parol. To permit that is not to vary the terms of the contract itself, but only to explain the term and the sense in which the parties used the term and understood it. The evidence did not add anything to the contract itself; it only explained an undefined term. I thus think no error was committed in admitting the evidence in such particular. 22 C.J. 1109.
While, as indicated, I concur in the order reversing the judgment, I do not concur in the order that the case be remanded for a new trial only as to the counterclaim. I think the whole case should be remanded for a new trial with leave to the parties or to either of them to amend the pleadings as they may be advised. The judgment below was that the plaintiff take nothing by its complaint, that it be dismissed and the defendant given judgment against the plaintiff in the sum of $2,000. There was but one judgment and the appeal taken was from the whole of the judgment. The appeal involved the whole of the issues, those presented by the complaint as well as those presented by the counterclaim, and by assignments alleged errors are presented for review involving both. On a review and consideration of both, the *Page 345 
conclusion is reached that no prejudicial error was committed by the court below denying the plaintiff relief on its complaint, but that error was committed in awarding judgment in favor of the defendant on its counterclaim. By the prevailing opinion the court thus by a final adjudication sets at rest that portion of the judgment dismissing plaintiff's complaint and remands the other portion for a new trial. In view of the issues it is doubtful whether in a law case the court may properly do that. However, though such power be assumed, yet the wisdom or propriety of exercising it, on a review of assignments as here, is another thing. The power to make an order and the wisdom or propriety of exercising it in a given case involves two distinct functions. Here the foundation of plaintiff's cause, as presented by its complaint, as well as that of the defendant presented by its counterclaim, grew out of one and the same contract, the same transaction, the same subject of the action. The cause of action presented by the counterclaim was one falling within the provision of Comp. Laws Utah 1917, § 6576, subd. 1, "a cause of action arising out of the transaction set forth in the complaint as the foundation of the plaintiff's claim, or connected with the subject of the action." Were the case one where the plaintiff's cause rested upon one contract and the defendant's cause by counterclaim on another separate and distinct contract, I could see some basis justifying a splitting of the issues, rendering a final judgment of the one and a new trial of the other, for in such case there would be different transactions and different subject-matters. But where, as here, the cause of action presented by the complaint and that presented by the counterclaim arise out of the same transaction and connected with the same subject of the action, I do not see the propriety of a final adjudication of the one and the granting of a new trial as to the other — giving to the one two bites at the cherry and to the other but one. This is not a case where the plaintiff failed to prove his cause by sufficient evidence, nor where by the great or manifest weight *Page 346 
of the evidence the plaintiff was not entitled to prevail on the issue presented by its complaint, nor where the plaintiff in no event was entitled to prevail on such issue. As is seen, one of the material questions is as to whether by competent evidence it was shown that the order as to the goods to be manufactured and delivered to the Boise bank was modified and notice given the plaintiff before its acceptance of the order and before the order became a binding contract. Admittedly, the evidence with respect thereto is in direct conflict and of such character as to justify a finding either way, and hence there was sufficient evidence to justify the finding, though it be against the apparent preponderance of the evidence, that before acceptance of the order by the plaintiff, the order in the particular indicated was modified. If, on a new trial, the defendant may strengthen its cause on its counterclaim, it is not to be assumed that the plaintiff, if given an opportunity, may not also on a new trial strengthen its cause, or induce a finding in its favor on the issue presented by its complaint. Since the one party is given an opportunity to do so, I see no good reason why the other should not be given the same opportunity, especially since the point of law urged and relied on by the plaintiff in the court below, that after the order given and signed by the defendant had left the hands of the sales agent he had no authority to cancel or modify it, is on the appeal held against the plaintiff, that on a new trial it may be able to give further evidence which may induce a finding in its favor even on the theory of the defendant; and because the error admitting the copy of the telegram in evidence may have induced the finding that the order was canceled before it was accepted by the plaintiff.
I thus think justice is better reflected by remanding the whole cause for a new trial on all the issues.