Hochster v. De La Tour

Citation(s): 136 English Reports 1213; 6 Common Bench Reports 160

In February of 1841, Elderton was retained by a joint-stock company as its permanent attorney to handle almost all the legal matters for the company. On November 30, 1844, Elderton and the company agreed to change his compensation structure from annual billing-based to a fixed annual salary. Four months after the contract took effect, Elderton was abruptly replaced by several other attorneys without being given notice or cause.

The lower court dismissed Elderton’s breach of contract claim, reasoning that the agreement did not create an implicit promise to employ him indefinitely. The Elderton court reversed the decision, asserting that the breach was actually one of an explicit, not an implicit, promise. The Elderton court interpreted the annual salary provision to mean that the company promised to retain Elderton on an annual schedule, because the agreement promised him his salary as an annual lump sum payment.

The Hochster court cited Elderton for the principle that the party that rescinds a contract assumes responsibility for any damages sustained by the other party.

Citation(s): 115 English Reports 911, 8 Queen's Bench 358

Mary Short brought legal action against Mr. Stone for breach of his promise to marry Short within “a reasonable time.” The court observed that this promise was a mutual obligation. Short abided by her obligation by remaining single, but Mr. Stone married another woman.

By marrying this other woman, Stone altered the circumstances of their agreement and the parties’ positions. He rendered himself unable to fulfill his original promise to Short without unlawfully committing bigamy, and Short would not have been able to marry anyone else without breaching her side of the promise. Consequently, the court concluded that by marrying Ms. Collins, Stone had unlawfully dispensed of his obligation and was therefore liable for its breach.

The court in Hochster, following the reasoning in Stone, found that when De La Tour prematurely canceled Hochster’s services, he changed the circumstances of their agreement, becoming “instantly liable.” 

Citation(s): 131 English Reports 305; 8 Bingham's Common Pleas Reports 14

Planché was commissioned by the defendants to write a volume of a children’s periodical, the “Juvenile Library,” specifically focusing on costumes and ancient armor. Planché devoted considerable effort to this project, including extensive travel to personally inspect and sketch the ancient armor.

However, due to previous volumes of the “Juvenile Library” not being successful, the defendants canceled its publication. Planché, having invested significant effort without receiving compensation as outlined in the agreement, sued for breach of contract and common law claims for work and labor. At trial, the defendants failed to show that Planché entered a new agreement to publish his work independently, separate from the periodical. The jury found for Planché. The defendants appealed, seeking to set aside the judgment, but the appellate court affirmed the original judgment reasoning that the profit of his labor was unjustly unrealized.

The Hochster court cited Planché to highlight the injustice of requiring the non-rescinding party to fulfill their obligation as a prerequisite for their cause of action, especially when knowing that the other party would not uphold their obligations.

Citation(s): 108 English Reports 472; 6 Barnewall & Cresswell's King's Bench Reports 325

Ford entered into an agreement with Tiley stipulating, amongst other conditions, that Tiley would grant Ford a lease for a pub starting from December 21st, 1825 for either 14 or 21 years. The agreement further specified that if either party backed out of the agreement or took actions to prevent the execution of the lease by the necessary parties, they would forfeit £200.

However, the pub, at the time of the agreement had an outstanding lease that was not set to expire until midsummer of 1827, with the legal estate held by trustees to pay the debts and provide a lifetime annuity to a third party, Betty Tyler. Tiley joined the trustees in entering a new lease to another company beginning September 29th, 1825, just a few months prior to the agreed start date with Ford.

The jury found for the plaintiff at trial and Tiley contested, arguing that the action was premature since the outstanding lease had not expired. On appeal, the Queen’s Bench reasoned that by entering this new lease, Tiley rendered himself incapable of fulfilling his obligation; the breach occurred when he entered the new lease because Tiley had effectively prevented himself from carrying out the lease to Ford. The court affirmed the jury’s verdict, but remanded to modify the damages.

The Hochster court cited Tiley as precedent to support their ruling that a cause of action for breach of contract could be pursued immediately, even if the contract was not yet executed and set to take effect in the future. According to the Hochster court’s reasoning, a breach occurs not necessarily when the contract was set to begin, but rather when a party has rendered themselves incapable of fulfilling the agreement.

Citation(s): 103 English Reports 811; 10 East's Term Reports, King's Bench 359

Bowdell entered into an agreement to buy stacks of hay from Parsons at a predetermined price per load, which would be delivered to him by Parsons. As per the agreement, Bowdell was entitled to receive the hay as needed upon request. 

Bowdell requested the delivery of twelve stacks of hay. Upon delivery, however, Parsons only sold him one stack, despite Bowdell’s readiness to pay for all twelve, because Parsons sold the other stacks to others the day prior. Bowdell lost potential profit and was forced to buy hay at a higher price elsewhere. 

The Hochster court cited Bowdell to illustrate that there is no legal requirement to wait until the agreement is formally initiated to have a cause of action. Even if the agreed-upon actions are set to commence at a later date, the right to pursue legal action is not postponed. A cause of action is triggered as soon as the breach occurs; even if the breach occurred just one day before the agreement was set to be fulfilled, the defendant is immediately liable.