Summary
recognizing that a person is not required to do a vain and useless act, such as giving notice of a condition to another party who already had actual notice of the condition
Summary of this case from Ronald Adams Contr. v. Miss. Transp. Com'nOpinion
No. 31505.
January 28, 1935.
1. ASSIGNMENTS.
Parol and written equitable assignments are of equal validity, and any order, writing, or act which makes an appropriation of a debt or funds amounts to an "equitable assignment" thereof.
2. ASSIGNMENTS.
Open account may, while in suit, be assigned by oral agreement upon sufficient consideration, so as to pass equitable title to assignee.
3. LANDLORD AND TENANT.
In landlord's action against sublessee for rent, sublessee could not claim lack of privity of contract where bill and evidence showed complete equitable assignment of lessee's interest to landlord.
4. APPEAL AND ERROR.
Ground upon which case is based cannot be shifted on appeal, but reasons for ground can be shifted.
5. APPEAL AND ERROR.
Party who makes mistake in trial court as to law of his case is not estopped on appeal from invoking true legal principles.
6. APPEAL AND ERROR.
On appeal from judgment for landlord against sublessee, landlord held not estopped to rely on equitable assignment on ground that theory on which cause was tried and on which it was briefed in Supreme Court was merger and subrogation, where at trial and on appeal landlord maintained that he had succeeded to rights of lessee, but gave different reasons for his position.
7. EQUITY.
Nonjoinder of necessary party may be reached by demurrer, provided absence appears on face of bill, but, if absence does not so appear, absence must be shown by plea or answers of defendant, and, unless nonjoinder is a matter indispensably essential, it must be raised in trial court to be reviewed on appeal.
8. LANDLORD AND TENANT.
Landlord held not precluded from recovering rent against sublessee on ground that lessee's assignee was not made party, where it did not appear what assignee's interest in lease was, and lessee's assignment was not admitted in evidence.
9. LANDLORD AND TENANT.
Sublessee of filling station could not defeat plaintiff's recovery of rent on ground that lot on which station was located was owned by plaintiff's grandfather, where plaintiff was in possession and control of lot as landlord and lessee and sublessee recognized plaintiff's right to lease premises.
10. LANDLORD AND TENANT.
Landlord's title cannot be disputed by tenant or subtenant.
11. EQUITY.
New parties complainant may be added at any time.
12. LANDLORD AND TENANT.
Landlord held not precluded from recovering rent from sublessee because of failure to notify sublessee of lessee's default, where sublessee had notice of lessee's default and sublessee was not prejudiced by failure to give notice.
13. LANDLORD AND TENANT.
Where lessee of filling station agreed to pay forty dollars per month for five years and sublessee agreed to pay as rent one cent per gallon of gasoline sold, evidence of amount of gasoline sold for ten months held to form sufficient basis for calculation of damages in lessor's suit for rent against sublessee.
14. CONTRACTS.
Where contract is continued for sufficient portion of time to show that party seeking damages for breach thereof would derive reasonable net amount from earnings, there is sufficient certainty to form basis for recovery.
15. DAMAGES.
Damages for breach of contract are such as parties may have reasonably expected to follow from breach, and damages are "speculative" when cause is uncertain, and not when amount is uncertain.
APPEAL from chancery court of Leflore County.
HON. R.E. JACKSON, Chancellor.
Bill by W.M. Yandell, Jr., against the Shell Petroleum Corporation. From a decree for complainant, defendant appeals. Affirmed.
Gardner, Denman Gardner and Frank E. Everett, Jr., all of Greenwood, for appellant.
The mere approval of a sublease contract, which is true in case at bar, creates no privity of contract between such parties.
Road Improvement Dist. v. Mobley Constr. Co., 48 A.L.R. 456; Huntsville Ry. Co. v. Corpening, 12 So. 295; Jones v. Miss. Farms Co., 76 So. 880; Wood v. Brewer, 66 Ala. 570; Alexander v. Ala. Western R. Co., 60 So. 295; Police Jury v. Alexandria Gravel Co., 83 So. 316; Land Title Guaranty Co. v. Lynchburg Foundry Co., 80 So. 142.
Appellee seeks to have the court to make a contract between appellee and appellant to take the place of the contract entered into at a prior date and having a different consideration between appellee and John E. Fant, without any request or prayer for reformation of said contract.
Goff v. Jacobs, 146 Miss. 817; Martin v. Partee, 121 Miss. 482; Sutton v. Cannon, 135 Miss. 368; Pieri v. Sevier, 145 So. 97; Bradley v. Howell, 161 Miss. 352.
In this case there were two complainants who have no sort of community of interest and whose rights are separate and apart and who made separate contracts, which contracts were for different considerations and for different amounts and are entirely separate.
47 C.J. 54, sec. 110; Miss. Digest 365, sec. 85.
A misjoinder of complainants, if it appear on the face of the bill, may be taken advantage of by demurrer; otherwise, it should be pleaded.
Harding v. Cobb, 47 Miss. 599; Champlin v. McLeod, 53 Miss. 484; Cook v. Ligon, 54 Miss. 652; 3 Miss. Digest 365, sec. 85; Yates v. Council, 137 Miss. 381.
The decree is based upon damages so indefinite and uncertain that it is only an estimate or speculation.
Y. M.V. Railroad Co. v. Ragsdale, 46 Miss. 458; Crystal Ice Co. v. Holliday, 64 So. 658; Y. M.V.R.R. Co. v. Consumers Ice Power Co., 109 Miss. 47; Young v. Cureton, 6 So. 352; Jackson v. Doll, 33 So. 207; Southern Railway v. Coleman, 44 So. 837; Dickerson v. Finely, 48 So. 548; Bromberg v. Eugenotto Const. Co., 50 So. 314; Long v. Kaufman Co., 55 So. 348.
Fant had no interest in this suit whatever either as a claim against Shell or as a debt owing to Yandell, and consequently has nothing to assign.
There is not only a misjoinder of Fant who has no interest which was properly raised by demurrer, but there is a nonjoinder of Adams who acquired all of Fant's rights by assignment and consequently is an essential party. There is no equitable assignment of any sort from Adams to Yandell by joinder or any other means, and Adams is the only person to whom Shell might be responsible, if at all.
An essential element of an equitable assignment is that it must be based on a valuable consideration moving from the assignee.
Hinkle Iron Co. v. Kohn, 128 N.E. 113, 5 C.J. 909.
The test of an equitable assignment is an inquiry whether or not it makes an appropriation of the fund, so that the debtor would be justified in paying the debt or the assigned part to the person claiming to be the assignee.
5 C.J. 909.
A party complainant can have relief only on the case made out by his bill of complaint, and — parties must therefore recover or defend upon the issues which they have respectively presented in their pleadings, or not at all.
Griffith's Chancery Practice, secs. 30, 58, 166 and 565.
Alfred Stoner, of Greenwood, for appellee.
It should be remembered that the complainant sued all of the parties that he knew in the transaction. He leased the property to Mr. Fant and on the very same day he approved, ratified and entered into the sub-lease to the Shell Petroleum Corporation. Complainant knew of no other parties to the transaction. Of course, Mr. Fant might have been made a party defendant, but it makes no difference in equity whether he appears in the case as plaintiff or defendant so long as he is a party.
Griffith's Chancery, sections 138, 615.
Mr. Fant was only a nominal party and yet in equity, he was entitled to have his liability to Yandell discharged pro tanto. Of course, Yandell could not have sued the Shell Petroleum Corporation directly because there was no privity of contract, but we confidently submit that in equity could reach the Shell Corporation through Fant.
Allen v. Grenada Bank, 155 Miss. 91, 124 So. 69; Wilczinski v. Smith, 110 Miss. 251, 70 So. 347; 21 C.J. 666, 667, 668.
On appeal misjoinder or nonjoinder of parties cannot be taken advantage of in the absence of proper plea seasonably filed.
Payne v. Stevens, 125 Miss. 583, 88 So. 165; Campbell v. Farmer's Bank, 127 Miss. 668, 90 So. 436; Sec. 515, Code 1930; Aven v. Singleton, 132 Miss. 256, 96 So. 165; Griffith's Chancery Practice, sec. 147.
Adams is out because the law puts him out, and therefore, Yandell, Fant and the Shell Corporation are all of the parties that the law required to be joined.
An open account may, whilst in suit, be assigned by an oral agreement, upon a sufficient consideration, so as to pass an equitable title to the assignee.
Pass v. McRea, Coffman Co., 36 Miss. 143; 5 C.J. 909.
It is no objection to a decree that it is nominally in favor of one defendant against another, where it is substantially in favor of plaintiff.
21 C.J. 669, 670.
Appellee filed his bill in the chancery court of Leflore county against appellant to recover the balance of rental due him by John E. Fant (who joined appellee in the bill) under a lease contract theretofore entered into by appellee and Fant by which appellee leased to Fant for a term of five years what is commonly known as a filling station in the city of Greenwood, at a monthly rental of forty dollars. The bill charged that appellant had become liable therefor by virtue of the terms of a sublease of the filling station by Fant to appellant, and the dealings of all the parties under the two leases, against which liability appellee offered to credit the balance due on an indebtedness he was due appellant of three hundred forty-two dollars with interest. There was a trial on bill, answer, and proofs, resulting in a decree in appellee's favor for the sum of one thousand dollars, with interest, against which the court credited the balance due by appellee to appellant on his indebtedness of three hundred forty-two dollars with interest. From that decree appellant prosecutes this appeal.
Appellee and John E. Fant entered into a written contract on the 21st day of December, 1929, by the terms of which it was provided that appellee should erect a filling station for the service of automobiles with gasoline and other petroleum products. The station was to be erected on a lot in North Greenwood, appellee was to equip the station for service, and Fant was to pay him forty dollars a month rental. The lease was for a term of five years, and provided that Fant should have the right to sublease the station to appellant. Appellee equipped the station in accordance with appellant's requirements. He purchased from appellant the necessary gasoline tanks and pumps, including an underground storage tank, for which he agreed to pay appellant the sum of three hundred forty-two dollars in monthly payments of fourteen dollars and twenty-five cents, to secure which he gave a deed of trust on the equipment. Fant subleased the station to appellant, which sublease took place about the same time as the lease from appellee to Fant. This lease was also for a period of five years, and provided that appellant should pay Fant, as rental, the sum of one cent per gallon on all gasoline sold by appellant on the premises during each preceding month, and further agreed to operate the station in a businesslike manner and endeavor to promote and increase sales. As a step in the sublease appellant required appellee to consent to the subleasing. This consent was given in writing and provided that the subleasing was by appellee's consent, and, in addition, that "the undersigned agrees that in the event the lessor defaults in any of the covenants of the lease under which said lessor acquired rights in and to the above described premises, to notify the Shell Petroleum Corporation at Shell Building, St. Louis, Mo., of such default; said Shell Petroleum Corporation shall have thirty days after the receipt of such notice to make good at its option, such default on the part of said lessor, and further agree that so long as Shell Petroleum Corporation thereafter complies with the terms of the original lessee its rights in and to the property this agreement shall be valid and remain in full force and effect."
The lot on which the station was located was not the property of appellee, but that of his grandfather, W.M. Yandell, Sr., but appellee was in charge and control of it. The grandfather was dead, and his estate was being administered.
Appellant operated the station with Fant in charge for about six months. Fant then assigned his interest in the lease to one Adams, who operated it awhile. Its operation covered in all a period of ten months; then it was closed and has not been in operation since.
The transfer from Fant to Adams was not introduced in evidence. It was offered by appellant and objected to by appellee; it was not pleaded by appellant. There was nothing in the evidence to show that the appellee knew of it until the trial, although he knew that Adams was operating the station.
Appellee testified that during the ten months of the operation of the station appellant paid him the forty dollars per month rental which Fant had agreed to pay; that the one cent a gallon rental appellant agreed to pay Fant was sufficient for that purpose. There was some conflict in the evidence on this point, but the court was justified in believing appellee's testimony.
The ground of appellee's recovery was that appellant breached its lease contract with Fant by closing and ceasing the operation of the station, and by reason thereof became liable to him for the monthly rental provided for in the contract — one cent a gallon on gasoline that would have been sold in the station for the balance of the term — and that appellee succeeded to Fant's rights to the extent of forty dollars a month for the balance if sufficient to pay that amount.
Appellant contends that there was no privity of contract between appellee and it; that it neither expressly nor impliedly promised to make good any default in Fant's rental payments to appellee to the extent of the rental payments it might be due Fant. In other words, appellant's contention means that the right and title, if any, in what it was due Fant, was in Fant, and the appellee had no right or title thereto. Concede that the legal title was in Fant, it is manifest from the bill in which Fant joins, also from his testimony as a witness in the case, that his entire beneficial interest — all but the bare legal title — had been turned over to appellee for the purpose of paying his monthly rentals to appellee so far as such interest might go. In other words, the bill and the evidence show a complete equitable assignment of Fant's interest to that extent. The bill avers that it belongs to appellee, and Fant testified that he wanted appellee to have it. "Parol and written equitable assignments are of equal validity. Any order, writing, or act which makes an appropriation of a debt or funds amounts to an equitable assignment thereof." 5 C.J., 911, 912. An open account may, while in suit, be assigned by an oral agreement, upon a sufficient consideration, so as to pass the equitable title to the assignee. Pass v. McRea, Coffman Co., 36 Miss. 143. To illustrate: A owes B one hundred dollars, and pays the debt with a note he holds against C for the same amount, payable to order; he delivers the note to B without indorsing it; C defaults in payment; both A and B join in a suit at law on the note against C, asking a judgment in B's favor. We are inclined to the view, although we do not so decide because it is not necessary, that that would operate as a transfer of A's legal title in the note to B; certainly it would constitute a transfer of his entire beneficial interest.
Appellant argues that to permit appellee to rely on equitable assignment would be an abandonment of the theory on which the cause was brought and tried in the court below and on which it was originally breifed in this court, which was merger and subrogation; that the case tried in the court below must be the case tried on appeal; that an appellate court will not review a case which might have been tried in the court below but which was not actually tried. It is true that that is the case; it is sustained by numerous decisions of our court, as well as courts of appeal generally (Griffith's Chancery Practice, sections 676, 677, and cases in the notes); but it does not apply here. Both in the court below and in this court appellee planted his right to recover on the ground that he had succeeded to the rights of Fant. It is true that he has given different reasons for his position, one of which, suggested by this court, is equitable assignment. The ground upon which a case is based cannot be shifted on appeal, but the reasons for the ground can be shifted as often as the party may choose. Appellant was not misled as to the facts relied on by appellee; those are set out in the bill and shown by the evidence. If appellant was misled, it was as to the governing principles of law relied upon by appellee. If a party makes a mistake in the trial court as to the law of his case, he is not estopped on appeal from invoking the true legal principles.
Another contention of appellant is that appellee could not proceed without making Adams a party. Fant had transferred his interest in the lease to Adams before appellant breached its contract with Fant. If Adams had any interest in the matter, it was not shown by the bill and exhibits; it developed in the evidence during the trial. As above stated, when the assignment by Fant of his interest in the lease to Adams was offered in evidence by appellant, it was objected to by appellee and was not admitted, although the contents of it were read. It is true, as contended by appellant, that the nonjoinder of a necessary party may be reached by demurrer, provided the absence of the party appears on the face of the bill. As just stated, nowhere in the bill or exhibits was it shown that Adams had any interest in the subject-matter of the litigation. If the absence of a necessary party does not appear on the face of the bill, then it must be shown by plea or answers of the defendant, and, unless the nonjoinder be a matter indispensably essential, it must be raised in the trial court, without which it will not be reviewed on appeal. Griffith's Chancery Practice, section 147, and case notes.
Appellant cannot defeat a recovery on the ground that the lot on which the station was located was not owned by appellee, but by his grandfather. Appellee was the landlord; he was in possession and control of the lot. Both appellant and Fant recognized appellee as having the right to lease the premises. Neither a tenant nor a subtenant can dispute the title of the landlord. Wilson v. Peacock, 111 Miss. 116, 71 So. 296; Stier v. Surget, 10 Smedes M. 154. Furthermore, during the trial appellee offered to amend his bill by adding as parties the executors of the will of his grandfather, to which offer appellant objected. They were not made parties. New parties complainant may be added at any time. Griffith's Chancery Practice, sections 140 and 146 and case notes.
It was not shown that appellee, as provided in his written consent that Fant sublease the station to appellant, notified appellant of Fant's default in the payment of the monthly rental. The evidence in the case, however, fairly interpreted, showed that appellant had notice of Fant's default; that it knew when it permanently closed the station for operation that thereafter Fant was in default; that during the operation of the station Fant, as well as appellee, looked to the rentals Fant was to receive from appellant to pay rentals to appellee. Appellee was not required to do a vain and useless thing. Appellant was not in any wise prejudiced by appellee's failure to give the notice; it lost nothing by it.
Appellant contends lastly that damages attempted to be proven for the breach of the contract were too vague and speculative to be the foundation of a judgment. The evidence showed that during the ten months the station was operated it showed the following sales of gasoline: February, three thousand six hundred gallons; March, four thousand gallons; April, five thousand nine hundred ninety gallons; May, four thousand five hundred gallons; June, four thousand one hundred fifty gallons; July, four thousand four hundred twenty-eight gallons; August, three thousand seven hundred gallons; September, two thousand eight hundred twenty-five gallons; October, two thousand five hundred gallons; November, two thousand four hundred forty gallons. The evidence tended to show that, if the business had been continued in accordance with the contract for the balance of the five-year period, the sales would have averaged from two thousand five hundred to three thousand five hundred gallons per month. The court fixed the amount at two thousand five hundred gallons; and one cent a gallon, the commission Fant was to receive, amounts to twenty-five dollars a month. The court therefore decreed the damages for the breach of the contract at twenty-five dollars a month. We think the evidence formed a sufficient basis for a calculation of the damages. Where a contract is entered into and continued for a sufficient portion of the time to show that the party seeking damages for a breach thereof would derive a reasonable net amount from the earnings, there is a sufficient certainty to form a basis for recovery. Beach v. Johnson, 102 Miss. 419, 59 So. 800, 801, Ann. Cas. 1914D, 33. "The rule that damages which are uncertain or contingent cannot be recovered does not apply to an uncertainty as to the value of the benefit or gain to be derived from performance, but to an uncertainty or contingency as to whether any such gain or benefit would be derived at all." Beach v. Johnson, supra. The damages for a breach of a contract are such as the parties may have reasonably expected to follow from the breach. The damages are speculative when the cause is uncertain, not when the amount is uncertain. 17 C.J. 756; Yazoo M.V.R.R. Co. v. Fisher Bros., 102 Miss. 702, 59 So. 877; Thorne v. True-Hixon Lbr. Co., 167 Miss. 266, 148 So. 388. Here there was no uncertainty as to the cause. The uncertainty consisted of the amount of damages, and the evidence was sufficient as the basis of the finding of the court.
We do not understand Crystal Springs Ice Co. v. Holiday, 106 Miss. 714, 64 So. 658, to declare a contrary principle. The court simply held in that case that the plaintiff's mere opinion as to the number of cars of ice he would have sold and the amount of profit he would have made was incompetent, but that it took the facts on which the opinion was based to show the damage.
Affirmed.