Crittenden v. Johnston — 7 A.D. 258

Majority

p. 258

Mary E. Crittenden, Respondent, v. Robert A. Johnston, Appellant.

Headnote

Contract to conduct a boarding house ‘‘ on sha/res" — damages f&r its breach — questions for the jury.

In an action brought to recover damages for a breach of a contract under whiph the plaintiff was to conduct a boarding house business in premises of the defendant “on shares,” the court instructed the jury that,.in arriving at the amount of damages, they should consider what profits, if any, would have been made; whether the venture, the business, would have proved successful— and should award only such damages as would fairly compensate the plaintiff for her loss of prospective profits by reason of the defendant’s breach of • the agreement.

■Nothing was said by the judge in his charge as to the meaning of the words “on shares,” as used by the parties, and there was no request by the defendant upon that subject. The jury rendered a verdict in favor of the plaintiff.

'.Held, that the charge to the jury was correct;

'That ás no particular point was made upon the trial in regard to the meaning of the phrase “on shares,” the defendant could not, in the absence of a request ■ to charge upon that subject, complain that the question as to the meaning of the phrase had not been specifically submitted to the jury;

'That it was proper to allow the plaintiff to recover prospective profits;

'That where damages were the direct result of the breach of an executory contract, the mere fact that their amount was uncertain, or that it was difficult to compute them, furnished no ground for refusing damages.

• ' Appeal by the defendant, Robert A¡ Johnston, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office

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of the clerk of the county of Few York on the 10th day of FeM ruary, 1896, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 14th day of February, 1896, denying the defendant’s motion for a new trial made upon the minutes.

The action was brought to recover damages for the breach of a contract for the running of a- hotel or boarding house. In 1893 the defendant was the owner and in possession of a hotel or boarding house at Mt. St. Vincent station, in the city of Few York, known as the Forest House. The plaintiff was a woman who had for some years been engaged in keeping boarding houses. In the complaint it was alleged that the parties entered into a parol agreement in the month of-July, 1893, that the plaintiff should take possession of the Forest House, and manage and conduct it for the balance of the summer season and until about the first of Fovember of that year, and should receive for her services one-half of the net profits of the business; that pursuant to the agreement plaintiff went into the house and made some preparations to open the same and carry on the business; but that, after she had been engaged for about two weeks in preparing to open the house, the defendant refused to allow the house to be opened by the plaintiff, or to allow the plaintiff to carry on the business, and refused to carry out the agreement; and that by reason of Ms breach of the agreement she suffered damage, which she demanded judgment for. The answer was substantially a denial of the making of the agreement, and of any damages resulting from the breach thereof.

Upon the trial the plaintiff gave evidence tending to show that an agreement was made; but instead of testifying in express terms that she was to have for her services the one-half of the net profit's of the business, she testified merely that -she was to conduct the business on shares, without expressly stating the jparticular share of each. The defendant, while conceding that there was talk about her running the house for a share of the profits, denied that there was any agreement made to that effect. He testified that the talk about her conducting the business “ on shares ” involved the plaintiff’s putting in some furniture, and that she never brought the furniture, and he claimed that the agreement was not, therefore, perfected.

The damages sought to be recovered were based upon the profits

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that would have heeu made in the business, and evidence as to what, the'profits would have been was- given by both parties. The learned trial court submitted the case to: the jury upon the questions whether, the agreement was made as alleged by plaintiff,' and, if so, as to. what were the damages which she suffered by its breach; and the-verdict rendered by the jury Was for $450.

The defendant moved to dismiss the complaint upon the ground, that-there had been a failure of proof as to the making of the agreement alleged, and as, to damages. The motion was denied, and the defendant excepted. There was a motion for a new trial made upon the minutes on all,the grounds specified in section ,999 of the Code of Civil Procedure, 'which was also denied.

David & Benjamin Scharps, for the appellant.

George H. Fletcher, for the respondent.

The question as to whether the agreement was made, as testified to-by plaintiff,- was one of fact for the jury. The only,question as to the agreement itself is, whether an agreement to conduct'the business- “ on shares ” was in effect one providing that the plaintiff .and defendant should share equally in the net profits of the business. N o such question as this was suggested in express terms at the trial.. It was not suggested that there- was any variance between the agreement sworn to- by. the plaintiff and the one alleged in the complaint. The learned trial court submitted to the jury the question of fact whether .the agreement upon which the action was based was entered into. Nothing was said by him as to the meaning of the words “ on shares,”' as used by the parties, and there was no request by .the defendant upon that subject. If there had been such suggestion made,-it would very likely .have been .a question .to be determined-by. the jury, under all the circumstances, what the intention of the parties was in the use of the’ phrase “ on shares,” .and we think .the jury would have been justified, then, in finding that the meaning of the phrase 'in the contemplation of the parties was “ equal shares.”’ The .defendant cannot now. complain, in the .absence of any request on the subject, that .the question as to the meaning -of the phrase was not specifically submitted to the jury. The, jury, under

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the charge of the court, did find that the agreement alleged in the complaint was entered into by the- parties, and we see no reason to disturb the verdict on this subject.

We think the meaning of the phrase, within the intention of the parties, was “ equal shares ” of the profits of the business. There were various exceptions taken to the admission of evidence upon the question of damages, and to the charge and refusals to charge upon this subject.

In Bagley v. Smith ( 10 N. Y. 489 ), which was an action brought to recover damages for- the breach of an agreement of co-partnership by one of the co-partners, in terminating the co-partnership before the expiration of the term agreed upon, it was held that the damages recoverable were- the loss of the plaintiff’s share of the profits which the co-partnership would have made had it continued to the end of the term. And while it was conceded that there were difficulties in ascertaining and estimating such prospective profits, yet the court held that it would not refuse to make the inquiry as to such profits, especially as it was the misconduct of the defendant that rendered the inquiry necessary.

In Devlin v. The Mayor ( 63 N. Y. 8 -25), which-was an action to recover damages for the breach of an executory contract for street cleaning in the city of New York, it was said: “ The measure of damages * - * * is too well settled by authority to require discussion, and the rule adopted by the courts commends itself for its simplicity, as well as equity and good sense. It secures to the injured party as a compensation only such advantages as the parties must be deemed to have had in their minds in making the agreement, and-excludes all contingent and uncertain profits, every thing that may not reasonably be supposed to have been within the contemplation of the contracting parties, and would not naturally follow the breach. The party who has been wrongfully deprived of the gains and profits of an executory contract may recover as an equivalent,-and by way of damages, the difference between the contract-price, the amount which he would have earned and been entitled to recover on performance, and the amount which it would have cost him to perform the contract.”

And in Wakeman v. Wheeler & Wilson Mfg. Co. ( 101 N. Y. 205 , 209, 210), which was an. action to recover damages for the

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breach of an executory contract between an agent and a sewing machine company for the. sale by the agent for the company of sewing machines, it was held that prospective profits, so far. as they were provable, and which would certainly have been realized but for the defendant’s default, were recoverable as damages, although the amount was uncertain, and that the rule that damages which were contingent and uncertain could not be recovered, embraced only such as were not' the certain result of the breach, and not such as were the certain result of the. breach, but uncertain m the amount only, Earl, J., said: “ When it is certain that damages, have been Caused by a breach of contract, and the only uncertainty is as to their amount, there can rarely be good reason for refusing on account of such uncertainty any damages whatever for the breach. A person violating his. contract should not be permitted entirely to escape, liability because the amount of the damages which he has caused is uncertain. It is not true that- loss of profits cannot be allowed as-damages for a breach of contract. Xosses sustained and gains prevented are proper elements of damages. Most contracts are entered into with the view to future, profits,, and such profits. are in the contemplation of the parties, and, so far as, they can be properly proved, they may form the. measure of damage. As they are prospective they must, to some extent, be uncertain, and problematical, and yet, on that account, a person complaining of breach of contract is not to be deprived of all remedy. It. is usually his right to prove the-nature of his contract, the circumstances surrounding and following its breach, and the consequences naturally and plainly .traceable to it, and then it. is for the jury, under proper instructions as to the rules of damages, to determine the compensation to be awarded for the breach. When the. contract is repudiated the -compensation of the party complaining of its repudiation should he the value of the- contract. He has been deprived of his-contract, and should have in lieu thereof its. value, to. be ascertained by .the application of rules of law which have been laid-down for the guidance of courts and juries.” .

The court reviewed the authorities in this State, and elsewhere bearing upon this subject, and the -rules laid down in this case have never since, been questioned,

We think the case we-are considering was tried and submitted to

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the jury within the law as laid down- in the eases to which we have referred.. Evidence was given on both sides as to the circumstances surrounding the making of the agreement and its breach, and as to the amount of profits that would probably have been realized from the carrying on of the business under the agreement. The court instructed the jury that, in arriving at the amount of damages, they should consider what profits, if any, would have been made, whether the venture, the business, would have proved successful, and should award only such damages as would fairly compensate the plaintiff for her loss of prospective profits by reason. of the defendant’s breach of the agreement. The jury rendered a very moderate, reasonable verdict; a verdict fairly within the evidence. The plaintiff had been for many years in the business of conducting a boarding house, and was an expert who could give an opinion as to the probable expense incident to conducting the house, in question. The full capacity of the house, was: fifty boarders. There were twenty double rooms • and eight single rooms. Estimating, as plaintiff did,, the single rooms with board at $12 per week each, and the double rooms at $25 per week each, the total receipts per week would have been $596. And estimating the expenses as $812 per month, or about $190 per week, the net profits, per week would have been $400 or thereabouts. From August 1, 1893, to November 1,. 1893,. three months, or about thirteen weeks, the net profits, would have, been $5,200, of which plaintiff’s, one-half would have, been $2,600. These were the plaintiff’s best figures, and were based upon every room being filled all the time at a good round price per week, and very likely some expenses would have been necessary which were overlooked.

The evidence on the. part of the defendant showed an entirely different estimate of net profits. The charge- for- rooms and board was put at five to nine dollars per week, and it was said that the rooms would not have been full all the time, and that the season was practically from June first to September first. In connection- with this evidence some idea of the defendant’s estimate of the earning capacity of the house was afforded by the consideration that he asked $2,500 per year rent for the property.

The verdict of the jury was $450, which was. in effect arrived at on the: basis of the net profits for the three months, or thirteen weeks,

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being $900, or $300 per month,- or. $70 per week. The verdict was, as-we-have said, moderate, reasonable and fairly within the evidence.

- The judgment and order appealed from should he affirmed, with costs.

Van Brunt, P. J., Patterson, O’Brien and Ingraham, JJ., concurred.

Judgment and order affirmed, with costs.

Cases cited

Bagley v. Smith 10 N. Y. 489 N.Y. p. 261
Devlin v. Mayor of New York 63 N. Y. 8 N.Y. 1875-10-05 p. 261
Wakeman v. Wheeler & Wilson Manufacturing Co. 101 N. Y. 205 N.Y. 1886-01-19 at 209, 210 p. 261