Hochster v. De La Tour

A courier was hired in April 1852 for a three-month tour starting on 1 June 1852. On 11 May 1852 his employer wrote that he had changed his mind. The courier sued on 22 May, before the starting day, and the Court of Queen's Bench held that the action was properly brought.

Quick Revision

Citation note: the neutral citation and the ER and E & B references above are printed in the judgment text. No AIR or SCC citation applies.

Parties

Albert Hochster — plaintiff (the party who brought the action); a courier engaged by the defendant for a tour of the continent of Europe.

Edgar Frederick De La Tour — defendant; the traveller who engaged Hochster and later declined his services.

Procedural History

1. The plaintiff's declaration (the written statement of his claim) alleged an agreement (a promise enforceable by law) made on 12 April 1852. The writ was dated 22d May 1852.
2. The defendant filed four pleas. Each denied one part of the claim, and issue was joined on each.
   • Plea 1: the defendant did not agree or promise in the manner and form alleged.
   • Plea 2: the plaintiff did not agree with the defendant in the manner and form alleged.
   • Plea 3: the plaintiff was not ready and willing, and the defendant did not absolve, exonerate or discharge him from being ready and willing.
   • Plea 4: the defendant did not refuse or decline, and did not wrongfully absolve, exonerate, discharge, break, put an end to or determine his promise.
3. The trial was before Erle J. at the London sittings in the last Easter Term. The defendant's counsel objected that there could be no breach before 1 June 1852.
4. The judge held the contrary view but reserved leave to enter a nonsuit (a judgment ending the case against the plaintiff) on that objection. The other questions went to the jury, which gave a verdict for the plaintiff.
5. In the same Term, Hugh Hill obtained a rule nisi (a provisional order to show why a step should not be taken) to enter a nonsuit or arrest the judgment.
6. In last Trinity Term (the rule was argued on 10 June, note 1), Hannen showed cause against the rule. Hugh Hill and Deighton argued in support of it. The Court reserved its judgment.
7. 25 June 1853: Lord Campbell C.J. delivered the judgment of the Court. Judgment was given for the plaintiff.

Facts

1. The declaration alleged that on 12 April 1852 the defendant made an agreement to employ the plaintiff as a courier.
2. The employment was to start on 1 June 1852 and last three months certain. The plaintiff was to travel with the defendant on the continent of Europe.
3. The wages were 10l. per month of service. The plaintiff was to be ready to start with the defendant on 1 June 1852.
4. At the trial it appeared that the plaintiff was a courier. In April 1852 the defendant engaged him on the terms in the declaration.
5. On 11 May 1852 the defendant wrote to the plaintiff that he had changed his mind and declined his services.
6. The defendant refused to pay the plaintiff any compensation.
7. The plaintiff began the action on 22d May 1852. The writ was dated that day.
8. Between starting the action and 1 June, the plaintiff obtained an engagement with Lord Ashburton. The terms were equally good, but the engagement did not start until 4 July.
9. The declaration alleged that the plaintiff was always ready and willing to serve until the defendant refused to perform and discharged him from the agreement.

Issues Raised

1. A and B agree that B will employ A as a courier from a future day. May B renounce the agreement before that day, so that A can sue at once for damages (money compensation)?
2. Must A, who was ready and willing to perform until B renounced, wait until the day fixed for the employment before suing?
3. Can there be a breach of the agreement, giving a right of action, before the day for performance has arrived?
4. Does it make a difference that the writ was issued before 1 June 1852?
5. Does the difficulty of calculating damages before the day for performance bar the action?
6. Is the declaration, which alleges breach by renunciation before 1 June 1852, sufficient?

Arguments Contended

For the plaintiff (Hannen, showing cause against the rule):

• The breach alleged is that the defendant refused to employ the plaintiff before 1 June. The averments of readiness and willingness (being ready and willing to perform) run only until the defendant refused.
• The issues were taken on those averments and were proved. So there was no ground for a nonsuit.
• The real question on the record is whether in law a contract can be broken before the day for its performance comes.
• The defendant's counsel would probably rely on Leigh v. Paterson, Phillpotts v. Evans and Ripley v. McClure. None of them supports the defendant.
• In Leigh v. Paterson, the defendants agreed to deliver goods in December. On 1 October they announced that they would not deliver.
• The Secondary (a court officer) ruled that damages were the difference between the contract price and the market price on 1 October. That ruling was held wrong.
• It is wrong on principle. The defendants could not by refusing force the plaintiffs to buy goods before they needed them.
• Damages depend on the market price when the goods ought to have been delivered.
• Phillpotts v. Evans was, as far as the decision went, a precisely similar case. Dicta of Parke B. in it favour the defendant, as counsel admitted.
• In Ripley v. McClure, Parke B. gave the considered judgment of the Court of Exchequer. He said a refusal to accept the goods before the cargo arrived was not a breach and was only a retractable expression of intention.
• Counsel said it would seem from the form of the expressions that Parke B. did not mean to decide that a refusal which cannot be retracted is no breach.
• Suppose one party gave notice that he refused to go on, and the other acted on it and made himself unable to perform. That refusal could never be retracted.
• In Cort v. Ambergate Railway Company, this Court decided after considering the cases that the plaintiff could recover in that situation. He could recover even though he was no longer able to perform.
• Cort was a contract under seal to make and supply iron chairs. The purchasers discharged the vendors from making them, and the vendors' action was held maintainable.
• In Cort the writ was issued after the time for receiving the chairs. Had the writ in this case been issued on 2 June, Cort would have been directly in point.
• The question is whether it makes any difference that the writ was issued before 1 June. The dicta of Parke B. cannot be taken as universally applicable.
• In a contract to marry at a future day, a marriage by the man before that day is a breach (Short v. Stone). The reason is that the marriage is a final refusal to go on.
• The reason is not that the man has made performance impossible, because the first wife might die before the day.
• On a contract to assign a term of years on a future day, a previous assignment to a stranger is a breach (Lovelock v. Franklyn).
• While the engagement lasted, the plaintiff had to keep himself free and prepared to travel on 1 June. The defendant told him he would not go on so that the plaintiff might act on that information. The plaintiff was then entitled to engage himself to another, as he did.
• In Planche v. Colburn, the author contracted to write a work for The Juvenile Library, a publication. He was held entitled to recover when the publication was discontinued.
• The time for completing that contract had not arrived, because it would arrive a reasonable time after the author finished the work. The author never finished it.

For the defendant (Hugh Hill and Deighton, in support of the rule):

• In Cort v. Ambergate Railway Company, the writ was taken out after the time for completing the contract. That case is consistent with the defendant's position.
• The defendant's position is that an act which legally disables a party from completing the contract is a breach. This is because the parties impliedly agree to keep themselves legally capable of performing.
• An announcement of an intention to break the contract when the time comes is only an offer to rescind (to cancel the contract).
• Until it is retracted, the announcement is evidence that the other side need not be ready and willing. If not retracted, it is evidence of a continued refusal when the time for performance comes. Until that time it may be retracted.
• Phillpotts v. Evans and Ripley v. McClure state this doctrine.
• If the plaintiff adopts the defendant's notice, which in legal effect is an offer to rescind, he must adopt it altogether. Whether there had been an exoneration (a release from the contract) would then be a question of fact for the jury.
• In Phillpotts v. Evans, damages were the market price when the contract ought to have been completed. If a refusal before that time were a breach, such damages could not be ascertained.
• The plaintiff himself might have intended not to go on. No one can tell what intention is.

Remarks from the bench during argument:

• Lord Campbell C.J.: it would certainly have been cruelly hard for an author to be obliged, before seeking redress, to compose a work he knew could never be published.
• Crompton J.: when a party announces that he will not fulfil the contract, the other side may take him at his word and rescind (cancel) the contract.
• Crompton J. added that rescission implies that both parties agree the contract is at an end as if it never existed. He was inclined to think the other party may instead say the contract is at an end from now. That party would hold the other liable for the damage sustained and would make that damage as small as possible by using his liberty well.
• Crompton J.: this is the principle of the cases on the measure of damages for a servant's wrongful dismissal, which were all considered in Elderton v. Emmens.
• Coleridge J.: the plaintiff might have died before 1 June, in which case he would have gained nothing had the contract gone on.
• Lord Campbell C.J.: the jury should take all contingencies into account in assessing damages.
• Crompton J.: that objection would apply equally to a servant's action for dismissal before the end of his term. That action may be brought immediately on the dismissal (note 3 to Cutter v. Powell).

Court's Reasoning

The judgment does not number its paragraphs. The steps below follow the order of the judgment of the Court, delivered by Lord Campbell C.J.

Judgment of the Court, delivered by Lord Campbell C.J.

1. Noted: The question is on a motion in arrest of judgment (a motion to stop judgment being entered).
2. Noted: A and B agree that B will employ A on and from a future day, for a period, to travel abroad as a courier. A is to receive a monthly salary.
3. Noted: B refuses and renounces the agreement before that day, and A was ready and willing until the renunciation. The question is whether A may sue before the day.
4. Noted: The defendant's counsel argued very powerfully that the plaintiff had to stay ready and willing until the day of actual employment. The alternative was to dissolve the contract and give up all remedy. On that view there could be no breach, and no right of action, before that day.
5. Held: It "cannot be laid down as a universal rule" that no action lies for breach of an agreement to do an act on a future day until that day has arrived.
6. Noted: A man promises to marry a woman on a future day, and before that day marries another woman. He is at once liable to an action for breach of promise of marriage (Short v. Stone).
7. Noted: A man contracts to grant a lease from a future day for a term, and before that day grants a lease to another for the same term. He may be sued at once (Ford v. Tiley).
8. Noted: A man contracts to sell and deliver specific goods on a future day, and before the day sells and delivers them to another. He is at once liable to the first buyer (Bowdell v. Parsons).
9. Noted: One reason given for such an action is that the defendant has made performance impossible before the day.
10. Noted: That does not necessarily follow. The first wife may die, a surrender of the lease might be obtained, and the defendant might buy back the goods.
11. Noted: Another reason is that the contract creates a relation between the parties in the meantime. They impliedly promise that neither will do anything prejudicial to the other that is inconsistent with that relation.
12. Noted: A man and woman engaged to marry are affianced (bound to each other by the engagement) during the period before the wedding. In the same way, traveller and courier were engaged to each other from the day of hiring until the employment was to begin.
13. Held: It seems a breach of an implied contract if either renounces the engagement in that period.
14. Noted: This reasoning accords with the unanimous decision of the Exchequer Chamber in Elderton v. Emmens. This Court has followed that decision in later cases.
15. Noted: The declaration states much more than a passing intention that the defendant may repent of. It could be proved only by evidence that he had utterly renounced the contract or had done an act making performance impossible.
16. Noted: Suppose the plaintiff has no remedy unless he treats the contract as in force until 1 June 1852. Then until that date he must take no employment that interferes with his promise to start with the defendant.
17. Noted: He must also be fully equipped as a courier for a three-month tour of the continent.
18. Held: It is "much more rational, and more for the benefit of both parties" that after the renunciation the plaintiff is free to treat himself as absolved from future performance. He keeps his right to sue for damage from the breach.
19. Why: Instead of staying idle and spending money on useless preparations, he may seek service with another employer. That service goes in mitigation of damages (a reduction of the loss claimed).
20. Noted: It seems strange that a defendant who renounced the contract and declared he would never act under it can object that faith is given to his assertion. He is also left no chance to change his mind.
21. Noted: If the plaintiff is barred from a remedy by taking an engagement that conflicts with starting on 1 June, he is prejudiced by trusting the defendant's word.
22. Held: It would be more consistent with principle to stop the defendant from saying he had not broken the contract when he declared that he entirely renounced it.
23. Noted: Suppose the defendant had sailed for Australia when he renounced. He could then not physically employ the plaintiff in Europe in June, July and August 1852. On decided cases the action could have been brought before 1 June.
24. Noted: The renunciation may rest on other facts, to be given in evidence, which would equally have made the defendant's performance impossible.
25. Held: A man who wrongfully renounces a contract he deliberately made cannot fairly complain if the injured man sues at once for damages.
26. Held: It "seems reasonable to allow an option to the injured party, either to sue immediately, or to wait".
27. Why: The injured party may wait until the time for the act, holding the contract as still binding for the future. This option "may be advantageous to the innocent party, and cannot be prejudicial to the wrongdoer".
28. Held: The argument that damages are hard to calculate before 1 June is no bar. The same argument would apply equally to an action before 1 September, when the three months would end.
29. Why: In either case the jury would be justified in looking at everything that had happened, or was likely to happen, to increase or reduce the loss. This runs down to the day of trial.
30. Noted: The Court finds no decision contrary to its view.
31. Noted: Leigh v. Paterson shows only one point. A seller of goods to be delivered at a set time says beforehand that he cannot deliver because he has sold them. The buyer may then measure damages by the market when delivery was due.
32. Noted: If the goods were specific, the action could have been brought earlier. It could be brought as soon as the seller sold and delivered them to another (Bowdell v. Parsons).
33. Noted: Phillpotts v. Evans was a similar case. The only question there was how to calculate damages for breach of a contract to sell and deliver wheat.
34. Noted: The Court there held that the plaintiff was entitled to damages by the state of the market when the wheat was to be delivered. It proceeded on the rule in Startup v. Cortazzi, where no question arose about suing before the delivery day.
35. Noted: Parke B., whose dicta carry very great weight, said in Phillpotts v. Evans that no action would then have lain. In his view the plaintiffs had to wait until the delivery time to see whether the defendant would then receive the wheat.
36. Noted: Parke B. may have supposed that the defendants' notice did not amount to a renunciation.
37. Held: If he thought that after a renunciation the plaintiffs had to carry on performing and incur expense and loss before having any remedy, the Court "cannot agree with him".
38. Noted: In Ripley v. M'Clure it is said that, on a contract to sell and deliver goods, a refusal to receive them before the delivery day is not necessarily a breach.
39. Noted: The Court there gave no opinion on whether the other party has a remedy if one party renounces before the day. It held only that an unretracted refusal is evidence of a continual refusal down to and including the time for performance.
40. Noted: The only other case cited that the Court thinks it necessary to notice is Planche v. Colburn. It appears to be an authority for the plaintiff.
41. Noted: There the defendants engaged the plaintiff to write a treatise for a periodical. He began it, but the publication was abandoned before he finished it and before it would have appeared in print.
42. Noted: Without completing the treatise, he sued for breach of contract. The defendants objected that he could not recover on the special contract because he had not completed, tendered and delivered the treatise.
43. Noted: Tindal C.J. said that the defendants not only suspended but actually put an end to The Juvenile Library, and so had broken their contract with the plaintiff.
44. Noted: The declaration had counts for work and labour. The plaintiff still kept his verdict on the count framed on the special contract.
45. Held: That shows the Court in Planche v. Colburn thought the plaintiff could treat the renunciation as a breach and sue for it. He did not have to treat the contract as still binding him to perform his own part first.
46. Held: Suppose a renunciation dispenses with a condition that the other party must perform in the meantime. Then there is no reason to make the other wait for the day before suing.
47. Held: The only ground on which the condition can be dispensed with is that the renunciation may be treated as a breach of the contract.
48. Held: Upon the whole, the declaration is sufficient.
49. Noted: The Court is glad its opinion may be reviewed in a Court of Error (a higher court that reviews a decision for legal error), because the question is on the record.

Authorities

• Short v. Stone, 8 Q.B. 358: followed as an example. A man who marries another woman before the day fixed for marrying the plaintiff is at once liable for breach of promise. Plaintiff's counsel cited it for the point that the marriage is a final refusal to go on, not an impossibility.
• Ford v. Tiley, 6 B. & C. 325: followed as an example. A man who grants a lease to another before the day fixed may be sued at once.
• Bowdell v. Parsons, 10 East, 359: followed as an example. A seller of specific goods who sells and delivers them to another before the day is at once liable. Also used to explain Leigh v. Paterson.
• Elderton v. Emmens, 6 Com. B. 160 (Exchequer Chamber, reversing 4 Com. B. 479; affirmed in the House of Lords as Emmens v. Elderton, 4 H.L. Cas.): the Court relied on the unanimous decision of the Exchequer Chamber and had followed it in later cases. Crompton J. mentioned it in argument for the cases on a servant's wrongful dismissal.
• Leigh v. Paterson, 8 Taunt. 540: distinguished. It shows only that damages are measured by the market when the goods should have been delivered. Plaintiff's counsel argued the opposite ruling of the Secondary was wrong.
• Phillpotts v. Evans, 5 M. & W. 475 and 477: distinguished. It concerned only the calculation of damages for wheat. The Court disagreed with the dictum of Parke B. so far as it required a plaintiff to go on performing after a renunciation.
• Startup v. Cortazzi, 2 C.M. & R. 165: noted as the rule on which Phillpotts v. Evans proceeded. No question arose there about suing before the delivery day.
• Ripley v. M'Clure (also spelled Ripley v. McClure), 4 Exch. 345 (also given as 4 Exch. 359 in the argument): distinguished. It gave no opinion on the right to sue after an early renunciation. It held that an unretracted refusal is evidence of a continual refusal until the time for performance.
• Planche v. Colburn, 8 Bing. 14: treated as an authority for the plaintiff. The plaintiff kept his verdict on the special count after the publication was abandoned. Tindal C.J. is quoted in the report as saying the defendants had broken their contract.
• Cort v. Ambergate Railway Company, 17 Q.B. 127: cited only in argument. Plaintiff's counsel said it would be directly in point if the writ had issued after 1 June. Defendant's counsel said it fits his position because the writ there was taken out after the time.
• Lovelock v. Franklyn, 8 Q.B. 371: cited only in argument by plaintiff's counsel. A previous assignment to a stranger of a term of years is a breach of a contract to assign on a future day.
• Cutter v. Powell, 6 T.R. 320: cited only in argument, in note 3, by Crompton J. A servant may sue at once on dismissal.
• Also cited in footnotes: Goodman v. Pocock, 15 Q.B. 576 (note 3); Smith's Leading Cases, 8, 20 (note 3).

Judgement

1. The Court held that the declaration is sufficient.
2. The Court gave judgment for the plaintiff, Albert Hochster.
3. The judgment does not state any order as to costs.

Legal Principle / Ratio

When one party renounces a contract to do an act on a future day, the other party may treat the renunciation as a breach. He need not wait for the day fixed for performance before suing. He may also choose to wait.

Key holding: "it seems reasonable to allow an option to the injured party, either to sue immediately, or to wait".

Critical Analysis

Analysis based on the judgment text.

• The Court rests its holding on the option given to the injured party. It says the option cannot prejudice the wrongdoer, but the judgment does not address a wrongdoer who retracts the renunciation before the injured party acts.
• The judgment gives two reasons for earlier cases: impossibility and an implied promise not to harm the relation. It does not say which reason decides this case.
• The judgment says the declaration states more than a passing intention. It does not set out a test for how clear a renunciation must be.
• The judgment says damages may be assessed by looking at all that happened down to the trial. It does not say how this works where the plaintiff takes other work before the day, apart from noting that it goes in mitigation.
• The Court notes that its opinion may be reviewed in a Court of Error. The judgment does not record any later history.

Significance

• The case holds that a renunciation before the day for performance may be treated as a breach.
• It shows that a breach can occur before the due date.
• It gives the injured party an option to sue at once or wait.
• It shows that the injured party may seek other work and reduce the loss.

Exam-Important Points

• Rule: where one party renounces an executory contract before the due day, the other may sue at once. Trap: the Court did not say the action must be brought at once.
• Rule: the injured party has an option — sue immediately or wait for the day of performance.
• Rule: the injured party is freed from the duty to stay ready and willing once the contract is treated as broken. He may seek other service, which goes in mitigation of damages.
• Rule: no universal rule bars an action before the due day. Examples: marrying another, granting a lease to another, selling specific goods to another.
• Trap: the damages difficulty is no bar. The same difficulty would exist before 1 September.
• Trap: the Court disagreed with the dictum of Parke B. in Phillpotts v. Evans. It distinguished Leigh v. Paterson and Ripley v. M'Clure as cases on damages or on evidence.
• Result: judgment for the plaintiff on a motion in arrest of judgment. No costs order is stated.

Prepared from the full text of the judgment. The judgment text has no numbered paragraphs, so no paragraph numbers are cited; the report is (1853) 2 E & B 678.