New Prague Milling Co. v. Fisher

2 Ohio Law. Abs. 136

• Court: Ohio Supreme Court
• Decided: January 25, 1924
• Docket: No. 18338
• Status: Published

Opinion

This action was to recoyer damages in a contract for the sale of flour which provided that the milling company was to sell Fisher 700 barrels of flour to be shipped within sixty days from March 9, 1920, on directions to be furnished by the buyer. If directions would not be furnished within the sixty days, then the contract could automatically extend for periods of thirty days at a time'-until Fisher would order out the flour or until the milling company would terminate the contract for his failure to do so. And it provided that in event of the' contract being so terminated the Milling Company would be entitled to recover the difference between the price of No. 1 Northern Wheat at the time of the termination of the contract and its date, March 9, also two cents per bushel per month during the time the wheat would be carried and four cents per bushel on the wheat necessary to manufacture the flour.

The Milling Company purchased the wheat necessary to make the flour, and in May, 1920, ground up one-half of it and shipped the flour to the defendant, which he received and paid for in August, 1920; it ground up the balance and shipped the flour to defendant, who refused to receive it, and it then sold the flour to a third party and afterwards, in October, the company terminated the contract.

The Court of Appeals held that the grinding of the then remaining half of the wheat in August, 1920, and selling the flour made from the same to another party, ended the contract. The questions are whether the contract means that the Milling Company was to buy, on the date of the contract, the wheat necessary to make the flour and carry it until the flour would be ordered by Fisher, or until the contract would be terminated by reason of his breach, and whether when the company ground up all the wheat and shipped one-half of the flour to Fisher and sold the other half to some one else, ,it could afterwards claiml the damages according to the contract, and whether the contract, in so far as damages are concerned, is illegal because such damages are a penalty, or, whether the contract is legal, the contract damages being liquidated damages.