Ross, J., IN CURTIS v. SMITH ET AL.

48 VT. 116, 120.-1875.

THE plaintiff had contracted to put in certain wing walls around the bakery of the defendants, at a specified price per yard. Before the time arrived for the plaintiff to commence putting in the wing walls, the defendants notified him not to proceed under the contract, and thereby terminated it. The plaintiff gave evidence which satisfied the jury that before he received the notice terminating the contract, he had done work in quarrying stone to be used in building the wing walls. The stone were not quarried on the land of the defendants, and they received no benefit therefrom. The court allowed the plaintiff to recover for this labor under the common count for labor done and performed. In this we think there was error. The defendants did not contract with the plaintiff for this labor, but for the wing walls completed. The plaintiff, in quarrying stone from his own quarry, was not at work for defendants, but was at work for himself, getting out material that he might or might not use in the erection of the wing walls. The stone when quarried belonged to the plaintiff, and he could put them to any use he saw fit. The plaintiff had performed no labor for the defendants, or that had enured to their benefit under the contract. At most, he had only performed labor with the expectation that he could make it available in enabling him to perform his contract with the defendants. The gravamen of his complaint as developed in the evidence is, that he has not been allowed to realize this expectation by reason of the act of the defendants in wrongfully terminating the contract. If he would recover for this, he should declare upon the contract specially, and for the breach thereof of which he now complains.1

WELLSTON COAL CO. v. FRANKLIN PAPER CO.

57 OHIO ST. 182.-1897.

MINSHALL, J.-The action below was brought by the Wellston Coal Company to recover of the Franklin Paper Company $333, the difference between the contract price for certain coal delivered by the plaintiff under a contract claimed to have been wrongfully broken by the defendant, and the market price at the time of the deliveries, with interest. The action is not on the contract, but on what, at

Accord, Hosmer v. Wilson, 7 Mich. 294 (1859), where plaintiff contracted to build an engine to order for defendant and the latter countermanded the order after part of the work had been done by plaintiff and upon plaintiff's material.

common law, would be termed a general assumpsit on quantum valebant. The facts, about which there is no dispute, are correctly stated in the brief of the plaintiff. On August 7, 1890, plaintiff and defendant made a written contract, by which defendant, for the term of one year, agreed to take its entire supply of coal from plaintiff at the rate of $1.90 per ton of 2,000 pounds, on the cars at Franklin, Ohio, which, after deducting freight, would net the plaintiff $1 per ton. The demand for such coal was greater during the late fall and winter months of each year, when plaintiff's business would be active, and less during the spring and summer months, at which times its business would be dull. The sum of $1 per ton for the coal was the market price, outside of freight charges, for coal of the kind mentioned in the contract, during the summer of 1890, and at the time the contract was made. Plaintiff and defendant were familiar with the ups and downs of the coal trade, and knew that the market price of such coal would be higher during the fall and winter months; and they both understood that defendant would require, for its manufacturing operations during the entire period covered by the contract, a large amount of such coal, which, taken by defendant during all the year covered by the contract, would give plaintiff an assured sale for that amount of coal during the dull season. Such contracts for the year's supply of coal were usually made by manufacturers with coal shippers during the summer, and were advantageous to both parties.

These facts were known to both plaintiff and defendant, who contracted with reference to them; and plaintiff would not have made the contract whereby it agreed to supply coal during the fall and winter months at the contract price, which would be less than the market prices, except for the fact that it would supply the defendant coal at the same price for the balance of the year, when the price would be about the same as the contract price, and, the demand then being small, it would not otherwise be able to sell the coal. During the month of September, 1890, the market price of this coal, outside of freight charges, was $1.05 per ton; and from October 1, 1890, to February 1, 1891, such market price was $1.15 per ton. After February, during the rest of the year covered by the contract, the market price was the same as the contract price. During the period of time from August 1, 1890, to May 13, 1891, when the contract was broken by the defendant, plaintiff furnished defendant, during September and October, 1890, in all, 2,5621⁄2 tons of coal, for which it was paid the contract price; while, if the same coal had been sold at the market prices when delivered, plaintiff would have received $333 more for it. About May 13, 1891, defendant wrongfully broke the contract, and refused to take any more coal from plaintiff. The contract did not bind the defendant to take any specified quantity of coal per month, but the average number of tons per month taken before the contract was broken, was 4344 tons; and, if it had continued to take coal under the contract at the same average number of tons for the balance of May

and the months June and July, the plaintiff would have made a total profit for that time, under the contract, of $304.22.

The question is as to the measure of damages to which the plaintiff is entitled in a case like this. It, as before stated, is not on the contract, but for the value of the coal delivered at the market price, before the contract was wrongly terminated by the defendant, less what had been paid therefor; i. e. the contract price. The plaintiff requested the court to charge the jury that it was entitled to recover, for the coal delivered prior to the repudiation of the contract by the defendant, its market value when the deliveries were made, and is not limited to the price specified in the contract. This the court refused to do, and directed the jury to find a verdict for the plaintiff for nominal damages only. The general rule is that, when full performance of a contract has been prevented by the wrongful act of the defendant, the plaintiff has the right either to sue for damages, or he may disregard the contract, and sue as upon a quantum meruit for what he has performed. The plaintiff has pursued the latter course; and it seems well settled, both on reason and authority, that he had the right to do so. 2 Sedg. on Dam. (8th Ed.) 654; Chamberlin v. Scott, 33 Vt. 80; McCullough v. Baker, 47 Mo. 401; Kearney v. Doyle, 22 Mich. 294; Buffkin v. Baird, 73 N. C. 283; U. S. v. Behan, 110 U. S. 338, 4 Sup. Ct. 81; Merrill v. Railroad Co., 16 Wend. 586; Clark v. Mayor, etc., of New York, 4 N. Y. 338.

But it is claimed, on the authority of Doolittle v. McCullough, 12 Ohio St. 360, that the contract price must still be the measure of the plaintiff's recovery. There are many expressions in the opinion in that case that seem to support this view, and much of the reasoning is to the same effect. But all that is there said must be taken as said with reference to the facts of that case. The rule there stated may be regarded as a proper one in a case where, as in that case, it appears from the claim of the plaintiff that the breach of the contract by the defendant worked no loss, but a benefit, to him, on the ground, as appears, that, had he been required to complete the work, he would have suffered a much greater loss; for, if the least expensive part of the work could not have been done without loss, it follows that the doing of the remaining part, under the contract, would have resulted in a still greater loss. The action upon a quantum meruit is of equitable origin, and is still governed by considerations of natural justice. Hence, when one has performed labor or furnished material under a contract that is wrongfully terminated by the other party before completion, the question arises whether the party not in fault should be confined to the contract for what he did, or to a quantum meruit; and this must depend upon whether the act of the other party in terminating the contract works a loss or not to him, regard being had to the contract. If it works no loss, but is in fact a benefit, as in the case of Doolittle v. McCullough, there are no considerations of justice requiring that he should be compensated in a greater sum for what he did than is stipulated

in the contract. These considerations exercised a controlling influence in the case just referred to. The plaintiff had a contract with the defendant for the making of certain excavations in the construction of a railroad. He was to receive for the entire work II cents per cubic yard. He had performed the least expensive part of the work when the contract was wrongfully terminated by the defendant; and on this part, by his own showing, he had suffered a loss. The proof showed that the performance of the remainder, being hard-pan, would have cost him a great deal more. It was then evident, as the court observed, that he had sustained no loss, but a benefit, from the termination of the contract by the defendant.

But in the case before us the facts are very different. They are in fact just the reverse. The contract was for the delivery of coal at a price generally received during the dullest season of the whole year. The defendant received the coal during the season when the market was above the contract price. He had the benefit of the difference between the market and the contract price; but when the dull season arrived, and the advantages of the contract would accrue to the plaintiff, the defendant repudiated it. The difference between the two cases is thus apparent. In the case before us, justice and fair dealing require that the defendant, having repudiated the contract, should pay the market price for the coal at the time it was delivered. In the former case, as the repudiation of the contract by the defendant did not enrich him to the loss of the plaintiff, there were no considerations of justice on which the plaintiff could claim more than the contract price for what he had done under the contract. The object in allowing a recovery of this kind is not to better the condition of the plaintiff under the contract, were it performed, but to save him from a loss resulting from its wrongful termination by the defendant, or, in more general words, to prevent the defendant from enriching himself at the expense of the plaintiff by his own wrongful act. The real test in all cases of a plaintiff's right to recover as upon a quantum meruit for part performance of a contract, wrongfully terminated by the defendant, depends upon the consideration whether the defendant is thereby enriched at the loss and expense of the plaintiff. If so, then the law adds a legal to the moral obligation, and enforces it. Keener, QuasiCont. 19, and chapter 5, passim. And, while the action is not on the contract itself, yet it is so far kept in view as to preclude a recovery by the plaintiff where he would necessarily have lost more by performing the contract, for the consideration agreed upon, than he did by being prevented from doing so. In this view, the case of Doolittle v. McCullough was rightly decided, and, when limited to its facts, may well stand as authority in all similar cases. Judgment of the circuit court and that of the common pleas reversed, and cause remanded for a new trial.1

'Accord, Connolly v. Sullivan, 173 Mass. 1 (1899); Clark v. Manchester, 51 N. H. 594 (1872).

Restitution by Plaintiff.

OWEN v. BUTTON.

210 MASS. 219.—1911.

RUGG, C. J.—*** The fourth count of the plaintiff's declaration set forth a sale of a wood business by the plaintiff to the defendant, the consideration for which was the assignment of a note and mortgage and the conveyance of certain real estate and a cash payment with the further allegation of performance by the plaintiff and breach by the defendant in failing to pay the cash and make a valid conveyance of the real estate. The third count was upon an account annexed, certain items of which were for the same property which constituted the subject of sale alleged in the fourth count. At the trial the plaintiff waived the fourth count, and elected to go to trial upon the third count.

The evidence was uncontroverted to the effect that the plaintiff had sold and delivered to the defendant the wood business and the property connected therewith, and had received from the defendant as partial consideration a note and mortgage of some third person, and that the plaintiff had retained this note and mortgage and had collected money due upon it, and had not returned or offered to return it to the defendant before bringing suit. As to other items of property and cash alleged to constitute the consideration for the sale, the evidence was conflicting. But upon the showing made by the plaintiff it is plain that he could not recover upon an account annexed for prop

LIMITATION OF RECOVERY WHERE PLAINTIFF HAS FULLY PERFORMED. Where plaintiff has fully performed, his measure of recovery is the sum fixed by the contract, and not the reasonable value of what he has done. In Fells v. Vestvali, 2 Keyes 152 (1865), (N. Y. Ct. of Appeals), defendant contended that "the complaint was quantum meruit and that the plaintiff could not recover in an action of quantum meruit by proving an express contract, that there was a fatal variance between the complaint and the proof." The court said: "After the complete performance of an express contract, there is no reason why a recovery may not be had under this form of pleading. The only effect in such a case of proof of an express contract fixing the price is that the stipulated price becomes the quantum meruit in the case. It is not a question of variance, but only of the mode of proof of the allegations of the pleading." See also Porter v. Dunn, 61 Hun (N. Y.) 310 (1891); same case, on appeal, 131 N. Y. 314 (1892). For further citations, see 9 Cyc. 685 (note 5), 686 (notes 6-9) ; 2 Smith's Leading Cases, (8th Amer. ed.) 33; 4 Ency. Pleading and Practice 923 (note 1), 921 (note 1). There seems to be no present valid reason why, if the plaintiff has fully performed, the value of what he ought to have received is allowed to him, while if he has only partly performed, he is allowed the value of that which he has given. See the criticism in Williston's Wald's Pollock on Contracts, p. 337; Keener Quasi-Contracts, p. 301; Woodward Quasi-Contracts, p. 415.

CONTRACT UNDER SEAL. By the weight of authority, the fact that the broken contract was under seal does not prevent the plaintiff from recovering upon a quantum meruit, where the defendant is in default. Weaver v. Bentley, I Caines (N. Y.) 47, (1803); Ballou v. Billings, 136 Mass. 307 (1884) ; Amer. Life Ins. Co. v. McAden, 109 Pa. St. 399. Contra, Western v. Sharp, 14 B. Mon. (Ky.) 178 (1853).

WOODRUFF'S CASES-12