Linder v. Cooley

This is an appeal by the defendant, Morris Cooley, from a judgment in favor of the plaintiff, Reynold Linder.

The action is based on a written contract dated October 12, 1960, between plaintiff and his then partner, one William J. Cairns, producers of charcoal by the kiln method, and the defendant, a producer and wholesaler of charcoal. The agreement, in material part, provided that Linder and Cairns would sell and defendant would buy all charcoal produced

During the 30-day period from December 15, 1960, to January 15, 1961, plaintiff delivered 37.2 tons of charcoal which fell short of the contractual minimum quantity. Thereafter and until June 15, 1961, he delivered monthly quantities of charcoal which defendant accepted and paid for. On June 15, 1961, defendant advised plaintiff that he would not take any further deliveries of charcoal.

Plaintiff sued defendant for damages for loss of anticipated profits. The complaint alleged a total breach by defendant on June 15, 1961, and alleged performance on the part of plaintiff except insofar as performance was prevented by defendant’s failure to have trucks available at the plaintiff’s kilns when the charcoal was ready for loading. The defense was that plaintiff breached the contract on January 15, 1961, by failing to deliver 50 tons of charcoal during the preceding 30-day period; and that defendant had exercised his option and cancelled and terminated the contract as of that date. Defendant also cross-complained for damages for plaintiff’s alleged breach. Plaintiff’s answer to the cross-complaint set up the affirmative defense of justification or excuse on the theory of prevention of performance by defendant’s failure to have trucks available timely when notified that the charcoal was ready. The pretrial order did not enlarge the issues framed by the pleadings. At the time of trial only two amendments to the pleadings were requested and permitted by the court. At the inception of trial defendant’s pleadings and the pretrial order were amended to correct the date of plaintiff’s alleged breach. After the evidence was in, plaintiff's pleadings and the pretrial order were amended to include as an additional issue that defendant had waived any breach on the part of plaintiff by continuing his own performance under the contract until June 15, 1961. No request was ever made by plaintiff to amend his pleadings or the pretrial order so as to show any breach on the part of defendant other than the total breach of June 15, 1961, as pleaded in his complaint.

Defendant's motions for judgment notwithstanding the verdict and for new trial were denied. The following language appears in the order of denial:

“Defendant may not without objection permit a case to be tried on a theory beyond the pleadings and pre-trial order and then claim the unfavorable verdict as error.

“Let the pleadings and pre-trial order be deemed to have been amended to conform to the proof. ’ ’

Prom the judgment entered on the verdict, defendant appeals on the grounds of (1) error in giving an instruction, and (2) insufficiency of the evidence.

The instruction challenged by defendant is predicated in substantial part upon language taken from the decision in Unruh v. Smith, 123 Cal.App.2d 431 [ 267 P.2d 52 ]. We do not deem it necessary to here analyze the instruction or the charge to the jury as a whole for the purpose of showing that the interpretation placed thereon by defendant cannot be sustained, for the reason that defendant waived any error therein. The record discloses that after the jury had been charged and retired for the purpose of deliberation, the following colloquy between court and counsel took place:

“The Court: Gentlemen, in chambers before resuming this afternoon counsel indicated that they were each satisfied with the proposed instructions that the Court stated it intended to read. The Court wishes to inquire if you are still satisfied with the instructions for the purpose of the record. I take it that you are, Mr. Soares f

“Mr. Soares: [Counsel for plaintiff] Well, I didn’t think there was enough instructions on waiver. I didn’t-I am satisfied with them, I am just commenting on them. I didn’t think there was adequate to cover.

“Mr. LaRose': [Counsel for defendant] We will stipulate that if there is any error in the instructions to it having been waived by us. ’ ’

It is clear from the court’s comment that counsel for defendant had any opportunity in chambers to complain of the instruction before it was given to the jury and had a second opportunity, in open court, to complain immediately after the jury was charged. He failed to do so but instead expressly waived any error.

On this appeal, defendant makes several arguments in an

“In view of the fact that counsel for the city stated ‘the city . . . has no objection to your honor stating at the present time the law as to the ease to be applied by the jury, ’ the city is not now in position to challenge the propriety of giving such instructions.” (Italics added.)

The Supreme Court had no difficulty in that ease in finding counsel’s waiver in respect to the giving of instructions binding on the defendant city.

Turning to defendant’s argument relating to the form of the waiver, it has long been established in this state that section 283 of the Code of Civil Procedure “. . . does not invalidate an oral stipulation made in open court.” (Lyons v.

In Webster v. Webster, 216 Cal. 485 [ 14 P.2d 522 ] at page 489, the Supreme Court said: ‘1 Such a stipulation made in open court constitutes ‘not only an agreement between the parties but also between them and the court, which the latter is bound to enforce, not only for the benefit of those interested, but for the protection of its own honor and dignity.’ ”

Substantially the same language appears in Barendregt v. Downing, 175 Cal.App.2d 733 , 736 [ 346 P.2d 870 ].

In Reclamation District v. Hamilton, 112 Cal. 603 , 610 [ 44 P. 1074 ], it was said that if the party admits making the verbal stipulation, it is as binding upon him as if it had been entered in the minutes.

And in Smith v. Whittier, 95 Cal. 279 , 287 [ 30 P. 529 ], section 283 of the Code of Civil Procedure was construed to mean that when an attorney enters into an agreement for the purpose of binding his client, “. . . there shall be such a record thereof as will preclude any question concerning its character or effect, and that the extent of the agreement may be ascertained by the record,-if oral, that it shall be entered in the minutes, and if written, that it shall be filed with the clerk."

In Cathcart v. Gregory, 45 Cal.App.2d 179 [ 113 P.2d 894 ], and in Johnston, Baker & Palmer v. Record Machine & Tool Co., 183 Cal.App.2d 200 [ 6 Cal.Rptr. 847 ], it was held that stipulations of counsel made in open court in the presence of their clients and taken down by the court reporter, but neither reduced to writing nor entered on the minutes of the clerk, bound the litigants.

In our case the stipulation was made in open court, taken down by the court reporter who transcribed her notes, acted upon by the adverse counsel and the court, and the fact that it was, in fact, made is not questioned. It therefore falls within the ambit of the authorities hereinabove cited and is binding upon defendant.

Defendant next contends that the amount awarded as damages for loss of profits exceeded the maximum which the evidence demonstrated plaintiff could have earned upon full performance of the remainder of the contract. This contention is sound.

Defendant first snipes one shot with the total recovery as

At the time of contracting plaintiff’s business was a new venture. But the record discloses ample evidence that defendant totally breached the contract on June 15, 1961, that there then remained approximately 4 months of the contractual term, and that the maximum production capacity of plaintiff’s kilns was 90 tons of charcoal per month. There was evidence, corroborated in every detail, of the expenses of production, and that, on the basis of a 90-ton per month production at the contract price of $43.50 per ton, plaintiff’s profits would have been $14.50 per ton. By the contract defendant obligated himself to purchase plaintiff’s entire output. This evidence provides a satisfactory and sufficiently accurate yardstick by which plaintiff’s anticipated profits for the unexpired period of the contract may be measured. It is clear that defendant’s breach deprived plaintiff of profits calculated at $14.50 per ton for his potential production of 360 tons or a total of $5,220.

We are thus brought to a consideration of the actual amount of the verdict. The jury assessed damages of $7,540 or the sum of $2,320 in excess of the amount the evidence, viewed in the light most favorable’ to plaintiff, will sustain. On appeal, plaintiff insists that the case was tried on the theory that defendant had breached the contract sometime early in the year of 1961 • that evidence was adduced on the theory of partial breaches by defendant prior to June 15, 1961, and

There is, however, no issue of partial prior breaches raised by the pleadings, either as originally drafted or as amended at time of trial. A perusal of the entire record of the trial clearly shows that plaintiff at no time claimed damages for partial breach, or any damages other than for loss of anticipated profits after defendant’s total breach of June 15, 1961. True, plaintiff's evidence showed that, throughout the term of the contract, defendant failed to make trucks available at the kilns promptly; that the kilns could not be unloaded, sometimes for three or four days; that the nonavailability of trucks when the charcoal was ready tied up the kilns and impeded plaintiff’s production; and that plaintiff had made frequent complaint thereof to defendant, without avail. This evidence is pertinent to the issue raised by the pleadings of whether plaintiff’s own breach by his failure to deliver at least 50 tons of charcoal during the 30-day period ending January 15, 1961, was excused or justified by prevention of performance by the conduct of defendant. It was incumbent upon plaintiff to establish excuse or justification of his defective performance not only to sustain any recovery on his complaint but to defeat the cross-complaint interposed by defendant. It is settled in California that the theory of the case by trial doctrine will not be invoked where evidence pertinent to an issue outside the pleadings is relevant to an issue which is pleaded and is before the court (Lein v. Parkin, 49 Cal.2d 397 , 400-401 [ 338 P.2d 1 ]; Miller v. Peters, 37 Cal.2d 89 , 93 [ 230 P.2d 803 ]).

The theory of the case by trial doctrine is “. . . subject to the qualification that evidence which is relevant to an issue actually raised by the pleadings cannot be considered as authorizing the determination of an issue not presented.” (Freeman v. Gray-Cowan, Inc., 219 Cal. 85 , 87 [ 25 P.2d 415 ].) The implied finding of the jury that plaintiff was entitled to compensatory damages for breaches occurring prior to June 15, 1961, was not responsive, either to any issue framed by the pleadings and pretrial order as amended at time of trial, or to the theory upon which the case was tried.

It is not necessary to consider the form, sufficiency or timeliness of the order sua sponte of the trial court made at the hearing on the motion for new trial purporting to amend the pleadings and pretrial order to conform to proof for, as has been shown, the reason ascribed to such order fails. Legal basis therefor wanting, the order was erroneous.

Conley, P. J., and Stone, J., concurred.