LAW.coLAW.co

ANDERSON v. HILTON & DODGE LUMBER COMPANY

Supreme Court of Georgia1905-01-27
121 Ga. 688

Summary

Holding. The judgment dismissing Anderson's breach of contract claim by special demurrer is reversed. Anderson stated a valid cause of action for damages arising from the defendant's breach of the agreement to allow him to operate a mill and cut timber, as such profits were within the parties' contemplation; however, his counter-claim for damages based on breach of an agreement to lend money is insufficient as a matter of law.

Anderson contracted with Hilton & Dodge Lumber Company to sell timber and purchase lumber cut from that timber at specified prices. Anderson also expected to operate a mill on the property to process the timber. When the defendant refused to allow Anderson to operate the mill, Anderson sued for lost profits that would have resulted from the mill operation. The trial court dismissed the case by special demurrer.

The appellate court held that Anderson stated a valid cause of action for breach of contract. The court rejected the defendant's demurrer, finding that a plaintiff need not allege in pleadings whether a contract is in writing, and that damages for lost profits from the mill operation were foreseeable and within the contemplation of the parties when they made their agreement. However, the court clarified that Anderson could not recover both lost profits and the business operating expenses, particularly the costs of moving the mill on and off the property.

The court separately addressed the defendant's counter-claim for breach of an alleged agreement to lend money or make advances. The court found this claim legally insufficient, holding that damages for failure to lend money are rarely recoverable and only under peculiar circumstances. The defendant failed to allege the specific facts necessary to recover, such as inability to obtain credit elsewhere or that the lender knew the money was needed for a specific purpose precluding immediate repayment.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether a plaintiff must allege a contract is in writing to enforce rights under contracts required to be in writing
  • Whether lost mill operating profits are recoverable damages for breach of a timber sale and processing contract
  • Whether moving and removing a mill are recoverable business expenses versus unrecoverable costs of conducting business
  • What showing is required to recover damages for breach of a promise to lend money

Procedural posture

Anderson appealed from a trial court judgment sustaining the defendant's special demurrer to his complaint and counter-affidavit.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Lamar, J.

(After stating the foregoing facts.) The objections raised by the special demurrer could have been cured by amendment. The parties have argued only the controlling question. It would be unprofitable to consider each of the many special grounds of the demurrer. We shall therefore consider only the points which the bill of exceptions indicates were involved in the decision by the trial judge. Moss v. Fortson, 99 Ga. 496.

A party is not obliged to set out in his pleadings the evidence on which he relies. The failure to allege that a contract is in writing raises no presumption that it exists only in parol. It is now well settled in this State, that, where proceedings are brought to enforce’ rights arising under agreements required to be in writing, the failure to allege that the contract was in writing can not be taken advantage of by demurrer. Taliaferro v. Smiley, 112 Ga. 62 (3), 66; Draper v. Macon Company, 103 Ga. 661.

The plaintiff agreed to sell certain timber to the defendant at a certain price. It also agreed to buy from him lumber cut therefrom at a certain price. The damages arising from the breach of the contract to sell Q , the breach of the contract to buy were recoverable, and the measure of damages in such cases is clearly defined. But treating the counter-affidavit as pleading, seeking to set up a cause of action for the damages resulting from the plaintiffs refusal to permit the defendant to operate the mill and cut the timber sold for that purpose, it was not demurrable. Anderson was not suing to recover profits which were dependent on some other enterprise entered into because he* happened to have this contract. He sued for the profits which would have been the immediate result of his operating a mill which the plaintiff had agreed he might operate when it stipulated that he should cut the trees and saw them into lumber for purposes of sale. He was suing for damages in contemplation of the parties when the contract was made. Civil Code, § 3798; Stewart v. Lanier Co., 75 Ga. 582; Waycross Co. v. Offerman Co., 114 Ga. 731; Kenny v. Collier, 79 Ga. 744.

Of course, the plaintiff is not entitled to recover for the profits and also, the expenses in conducting the business. Moving "the mill to the land or removing the mill from the land were not expenses incurred in carrying out a contract between two parties, such as those included in Civil Code, § 3806. Nor are they expenses to which a party was put by reason of a tort referred to in Civil Code, §3908. But the expenses of moving and removing the mill were a necessary part of the cost of conducting defendant’s business and by the expenditure of which he expected to make the profit for which he sued. They are no more recoverable than would be the expenses of paying his employees while the mill was actually in operation.

The mortgage did provide that the property thereby con- , veyed should be security for any advances thereafter made to the defendant by the plaintiff. It is alleged, that an agreement to lend was violated, and that the defendant was damaged by the company’s failure to advance money as agreed. But the defendant does not state enough to warrant a recovery on the ground that there had been damage to his credit by failure to pay the check. Nor does he allege enough to entitle him to recover for a breach of the agreement to lend. There have been cases in which such suits have been maintained, but they are extremely rare, and, in view of the nature of money, must be. One dollar in legal tender is worth no morq than another. The price of money is the principal and the legal or contract rate of interest. Hence the circumstahces must be peculiar in which a person is entitled to damages because of a failure to lend as promised. No injury will flow from such a breach the same amount can- be borrowed from another on the same terms. If there is a mere contract to lend, and no date is. named for the maturity of the loan, repayment is due immediately. Damages for failure to receive that which would have to be at once returned would be nothing; though the circumstances might be such as to change this rule if the lender knew that the money was intended for some purpose which precluded the idea of immediate repayment. But it is evident that the nature of the transaction is such as to afford no room for the implications which so often supply the omitted terms in many other contracts. There must be something definite. The contract must be supported by a consideration. It must be mutual. Swindell v. Bank, 121 Ga. post. And it must be made to appear that the borrower had been unable to obtain a like sum upon like terms. It would further be necessary to show definitely and distinctly that the damage (other than that arising from having to pay a higher rate of interest) was in comtemplation of the intending lender at the time he made the agreement to lend. The counter-affidavit in the present case did not state a cause of action for the alleged breach of the contract to lend money or make advances. Blue v. Capitol Bank, 145 Ind. 518; Gooden v. Moses, 99 Ala. 230; McGee v. Wineholdt, 63 Pac. 571; Kelly v. Fahrney, 97 Fed. 176; Equitable Loan Co. v. Ware, 26 S. W. 276 (2, 3); Lowe v. Turpin, 37 L. R. A. 233.

Judgment reversed.

All the Justices concur.