LONG BEACH DRUG CO v. UNITED DRUG CO (1939)

On petition for rehearing it is urged that this court should permit relief by way of accounting to determine the damages, if any, which the plaintiff claims to have suffered by the alleged breach of the contract. The plaintiff has apparently misconceived the effect of the decision. It holds that equitable relief is not appropriate, as entailing well nigh impossible supervision of performance of the contract by the court. ‘For this reason,’ it is said, ‘if no other, the court would be constrained to deny equitable relief and to leave the parties to assert their legal rights under the contract.’

Although the equitable remedy is not available to plaintiff, nevertheless the contract sued upon is valid and sufficiently certain to warrant the trial court in entertaining a plea for the recovery of damages (see cases cited in opinion). The complaint, while praying for ‘all just and proper relief’, was not framed in the alternative to seek the legal remedy for breach of the contract as a whole. It does ask, in connection with the prayer for injunctive relief, that an accounting be had and that an award be made to cover damages suffered over a specified period by plaintiff because of defendant's breach of the negative covenant of the contract. This, however, is not an assertion of plaintiff's full legal right, i. e., the right to seek damages not only for breach of the negative covenant (the covenant not to sell to other stores in Long Beach), but also for breach of the affirmative covenant (revocation of the exclusive agency and refusal to sell to plaintiff).

Under present code procedure, which permits a party to litigate his right to legal and equitable relief in the same action, and by amendment to ask a change of remedy, there appears to be no reason why plaintiff, if so advised, should not apply for permission to amend its pleading. Farnsworth v. Hunter, 11 Cal.2d 27, 77 P.2d 840; Peters v. Binnard, 219 Cal. 141, 25 P.2d 834; Pascoe v. Morrison, 219 Cal. 54, 25 P.2d 9; Ahlers v. Smiley, 163 Cal. 200, 124 P. 827; 10 Cal.Jur. p. 10, sec. 7; Note 22 C.L.R. p. 208. Whether the plaintiff is entitled to damages, or to what extent, is not here intimated. That is a matter to be proved upon trial of the issue. If such trial be permitted, under amended pleadings, evidence may be adduced as to the extent of plaintiff's alleged damage, if any, by reason of defendant's refusal to sell to it, and also by reason of defendant's sales to other stores; likewise as to defendant's damage, if any, by reason of plaintiff's alleged failure to support its products.

It would seem that so far as the right to seek this additional relief is concerned, it is immaterial whether in the final analysis the contract be construed as a contract of agency, or as a contract of sale and purchase. Kelly-Springfield Tire Co. v. Bobo, 9 Cir., 4 F.2d 71; Reiter v. Anderson, 87 Cal.App. 642, 262 P. 415. Construed as a contract of agency, even though it is patently not an agency coupled with an interest and is therefore revocable, nevertheless the power to revoke does not necessarily confer the right to revoke, and in the event of a wrongful exercise of the power, the principal must answer in damages. Boehm v. Spreckels, 183 Cal. 239, 248, 191 P. 5; Roth v. Moeller, 185 Cal. 415, 197 P. 62; Capital Nat. Bank v. Stoll, 220 Cal. 260, 30 P.2d 411; Stoll v. Stoll, 5 Cal.2d 687, 56 P.2d 226; Kelly-Springfield Tire Co. v. Bobo, supra. Construed as a contract of sale and purchase, a breach thereof gives rise to an action for damages (Hacker, etc., Co. v. Chapman Mfg. Co., 17 Cal.App.2d 265, 61 P.2d 944; Pease v. Lindsey, 129 Cal.App. 408, 18 P.2d 717). The fact that the amount of damage may not be susceptible of exact proof or may be uncertain, contingent, or difficult of ascertainment does not bar the recovery. Hacker v. Chapman etc. Co., supra; Caspary v. Moore, 21 Cal.App.2d 694, 70 P.2d 224.

The petition for a rehearing is denied.

PER CURIAM.

CURTIS, HOUSER, and EDMONDS, JJ., voted for a rehearing.