Home Pattern Co. v. W. W. Mertz Co.

86 A. 19, 86 Conn. 494, 1913 Conn. LEXIS 46

• Court: Supreme Court of Connecticut
• Decided: March 11, 1913
• Status: Published

Opinion

Thayer, J.

The contract into which the plaintiff and defendant entered for the sale of certain patterns was an executory one. The finding is that it was within the contemplation of the parties that the goods to fill the orders were to be manufactured by the plaintiff. Under the contract there was to be an original delivery of goods worth $300, net stock, two years after the making of the contract; and thereafter there were to be monthly shipments of goods of an average net cost price of $20, upon standing orders, during the five years and three months of the contract. After the plaintiff had manufactured the patterns to fill the original order, including the standing order for March, 1910, the defendant repudiated the contract. The plaintiff, as appears by its letters, which are a part of the finding, refused to acquiesce in this repudiation, and, pursuant to the contract, shipped these goods to the defendant. The plaintiff claimed that it was entitled to recover the contract price of these goods. The court held that the renunciation constituted a breach of the contract, that the title to the goods had never passed from the plaintiff to the defendant, and that, if it had passed, there could be a recovery for no more than nominal damages, because there was no evidence that the plaintiff notified the defendant that the plaintiff or the carrier held the goods as bailee for the defendant.

The contract was a New York contract, made in that State and to be performed in that State. Its construction and the rights of the parties are, therefore, to be determined by the law of that State; but the remedy is to be pursued in accordance with the laws of this State. Illustrated Postal Card & Novelty Co. v. Holt, 85 Conn. 140, 143, 81 Atl. 1061.

The repudiation of the contract without the acquiescence of the plaintiff did not put an end to the contract. The plaintiff could still treat it as subsisting and, notwithstanding the notice of repudiation, assume that the defendant would perform its part of the contract when the time for such performance should arrive. Had it chosen to consent to the renunciation, it might have done so and brought an action at once for breach of the contract, but there can be no anticipatory breach of a contract by one party without the acquiescence of the other. A breach by one party alone can only occur after the time for performance has arrived. Frost v. Knight, L. R. 7 Exch. 111, 112; Johnstone v. Milling, L. R. 16 Q. B. D. 460, 467; Wells v. Hartford Manilla Co., 76 Conn. 27, 35, 36, 55 Atl. 599; Kadish v. Young, 108 Ill. 170, 183; Bernstein v. Meech, 130 N. Y. 354, 358, 29 N. E. 255. The repudiation of the contract was not, therefore, a breach of it, and the plaintiff, having declined to acquiesce, was bound to tender performance when the time for delivery of the goods arrived. This it did, and the goods were received in New York by the carrier designated by the defendant. The defendant, by the express terms of the contract, was to pay the freight on the goods from the place of shipment. When the goods were thus received by the carrier, and the bill of lading had been forwarded to the defendant, the plaintiff had fully performed its contract with respect to those goods. The delivery to the railroad was delivery to' the defendant, and the title thereby passed to the defendant. Vogt v. Schienebeck, 122 Wis. 491, 496, 100 N. W. 820. The defendant refused to receive the goods from the carrier when they reached Torrington. This did not revest the title in the plaintiff. There is no finding that the defendant returned the goods to the plaintiff, or that they are not now in the possession of the carrier. If they were returned, and the plaintiff received them back, it could not now recover the contract price without notice to the defendant that it holds them as the defendant’s bailee. If they are now in the hands of the bailee whom the defendant designated in the contract, it had all the notice which the statute requires when it received the bill of lading. We think that, upon the facts appearing upon the record, the title to these goods had passed to the defendant, and that the court, in its judgment, should have allowed the plaintiff to recover the contract price of the same. Sales Act (Public Acts of 1907, Chap. 212), § 63.

The plaintiff claimed that it was entitled to recover the contract price of the goods manufactured and delivered after the 19th of February, the date of the first shipment. The contention is based upon its claim that the finding should be so corrected as to show that the contract was not broken until August 18th, 1910. We cannot, from the two letters which are referred to as supporting this claim, say that the breach of the contract did not occur until the time claimed. It would appear from the finding that the plaintiff was endeavoring to persuade the defendant to go on with the contract until the date mentioned, and that the defendant all the time refused to do so, and refused to accept the goods, of which the plaintiff had notice. There are other facts than the two letters, manifestly, which must be taken into account in determining whether the court’s refusal to find this fact as claimed by the plaintiff was erroneous. The finding cannot, therefore, be corrected as claimed. This removes the foundation of the plaintiff’s claim to recover the contract price of these goods; for if the goods were manufactured after the contract was broken it cannot recover for the cost of their manufacture. It could not thus enhance the damages accruing from the breach of contract.

The Sales Act (Public Acts of 1907, chapter 212), § 64, states the measure of the plaintiff’s damages for the defendant’s breach of contract, except as to the goods sold and delivered. It is “the estimated loss directly and naturally resulting, in the ordinary course of events, from the buyer’s breach of contract.” And, as the goods were to be manufactured and expense incurred by the plaintiff, the defendant was hable “for no greater damages than the seller would have suffered if he did nothing towards carrying out the contract or the sale after receiving notice of the buyer’s repudiation. . . . The profit which the seller would have made if the contract . . . had been fully performed” was to “be considered in estimating such damages.” The court finds that there was “no evidence at all as to how many patterns the defendant would have sold during the life of the contract, or, except the contract, ... as to how many it would have been bound to pay for,” and held that because of this lack of proof the plaintiff was only entitled to the profit which it would have made under circumstances the most favorable to the defendant under the contract. It was of course impossible for the plaintiff to prove the precise number of patterns which the defendant would have sold during the five years and three months of the contract, had it given proper attention to the agency as it contracted to do. Under the court’s holding it was assumed that not a single pattern would have been sold or damaged, and that the defendant would have been permitted to return at cost price, as discards, all of the patterns which it received from the plaintiff, except the last six months shipments, and these it was assumed would have been returned at seventy-five per cent, of the cost price, leaving only $30 worth of goods on which the plaintiff was entitled to a profit of seventy per cent., or $21, which was the amount of the judgment. The circumstances thus assumed hardly represent what would have occurred “in the ordinary course of events” had the defendant performed in good faith its part of the contract. In the ordinary course of events some sales would have been made. The parties so expected, or the contract would not have been made. The court finds that there probably would have been sales, and that there would probably have been damaged patterns. Goods sold, and damaged patterns, could not have been returned, yet the judgment proceeds upon the ground that all goods received by the defendant would have been returned.

Under the Sales Act the damages are to be “estimated.” It does not say that the plaintiff shall recover the profits which he would have made had the contract been fulfilled. These are to be “considered” in estimating the damage. The right of action accrues at the time the contract is broken. A plaintiff who has acquiesced in an anticipatory repudiation of a contract may recover damages for the breach before the time of performance arrives, or years before the time at which the contract is to terminate. In such cases the jury must estimate as best they can what the future situation is likely to be. Williston on Sales, § 587. They have the right to consider what would have happened in the ordinary course of things. The plaintiff excepts to the court’s refusal to find as requested, that, in the ordinary course of business, the defendant would have shipped back enough patterns to have reduced the plaintiff’s gross profits twenty per cent., and the court has certified the evidence upon which the plaintiff bases its claim for this correction. That evidence does not warrant the correction requested; but it shows that there was evidence tending to prove the number of discarded patterns which would have been returned by the defendant, based upon several years’ experience by the plaintiff in selling under such contracts to several thousand agents. The plaintiff made no claim to recover for profits on goods which would have been sold by it to replace those sold by the defendant, nor for profits on those which it admitted would probably have been returned as discards. There was evidence also from which the court found the cost of producing the patterns, and the profits, gross and net, to be derived by the plaintiff from every fifteen patterns to be delivered under the contract, excluding the discards and the returns at the end. This certainly furnished some basis for an estimate of the plaintiff’s damages. It would also seem contradictory to the finding that there was no evidence at all as to the number of patterns which the defendant would receive and be bound to pay for under the contract. We think that the court erred in the application of the rule which it seems, correctly, to have adopted for the assessment of damages on this part of the case.

As there must be a new trial, it is unnecessary to consider the plaintiff’s claims for changes in the finding further than has been done already.

There is error and a new trial is ordered.

In this opinion the other judges concurred, except Hall, C. J., who concurred in the result, but died before the opinion was written.