Seward v. Pennsylvania Salt Manufacturing Co.

78 Pa. Super. 319, 1922 Pa. Super. LEXIS 107
CourtSuperior Court of Pennsylvania
DecidedMarch 3, 1922
DocketAppeal, No. 239
StatusPublished
Cited by3 cases

This text of 78 Pa. Super. 319 (Seward v. Pennsylvania Salt Manufacturing Co.) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Seward v. Pennsylvania Salt Manufacturing Co., 78 Pa. Super. 319, 1922 Pa. Super. LEXIS 107 (Pa. Ct. App. 1922).

Opinion

Opinion by

Kellee, J.,

Defendant (appellee), having contracted to sell and deliver to plaintiff (appellant), one-hundred tons of hydrate alumina per month, from March to December, 1916, inclusive, at four cents per pound, f. o. b. Natrona, Pa., in bags, refused to perform the contract, and this action for damages followed. The measure of damages in such circumstances is ordinarily the difference between the contract price and the market value at the time or times and place of delivery, with interest: Sales Act of 1915, P. L. 543, section 67 (3) p. 562; and where, as here, the contract is to be performed in installments, the damages for the breach must be measured as of the time when each installment was due: 17 Corpus Juris 850; 24 R. C. L. 72, 73 ; 2 Sedgwick on Damages (8th ed.), section 737, p. 430. The breach was “a continuing one, or a succession of breaches,” during the ten months in which the defendant was bound to deliver the hydrate alumina: Honesdale Ice Co. v. Lake Lodore Imp. Co., 232 Pa. 293, 301; and plaintiff was entitled to “recover the difference between the contract and the market price. [322]*322[value] as of the date of the breaches”: Shreve v. Brereton, 61 Pa. 175, 185. This was recognized as the general rule in Morris v. Supplee, 208 Pa. 253, p. 258, though not applicable in that case because of its special circumstances, which are not here present. See also Williston on Sales, p. 991; Brown v. Muller, L. R. 7 Exch. 319.

At the first trial of the case the plaintiff’s only proof of market value was evidence of the price for which he himself had contracted to resell twenty-five tons of the March delivery, and the prices at which defendant had supplied its other customers during the months in question. On appeal to the Supreme Court judgment for the plaintiff in substantial damages was reversed and a new trial granted, the court saying, through Mr. Justice ’Walling : “These sales [of the defendant] were individual transactions in comparatively small amounts, not at all corresponding to that here in question, nor shown to have been made in the open market, and not sufficient to establish the market value especially of such quantities. Hydrate alumina is manufactured at other chemical works, but there was no evidence as to the price for which it there sold, or as to its general selling price in open market.” After stating that the plaintiff had proved no actual damages and therefore the verdict could not be sustained upon that basis, if there were no available market, the opinion concluded: “In brief, unless the proof shows the subject of the contract had a market value and that greater than the contract price at the time of delivery, so as to bring the case within the general rule above stated the plaintiff can recover only nominal damages. The court erred in treating the evidence as sufficient to justify a finding of market value, and for that reason a new trial must be granted”: Seward v. Pa. Salt Mfg. Co., 266 Pa. 457. The Supreme Court did not say that the evidence received was inadmissible, but that it was not sufficient to justify a finding of market value. Accompanied by other and more comprehensive evidence on the subject, the whole might be [323]*323sufficient to prove a market value in excess of the contract price and justify a verdict for substantial damages. The Supreme Court, likewise, did not hold that the market value could, only be established by proof of the general selling price of the commodity in quantities approximating the contract, but on the contrary distinctly said: “Of course it may not at all times be possible to establish a general selling price and in such cases actual market value may be shown by proof of facts and circumstances, fixing,, to a reasonable degree of certainty, the amount the property would bring if offered at ordinary sale (B. P. Ducas Co. v. Bayer Co., 163 N. Y. Supplement 32, 40), but the evidence here does not justify such a finding.” p. 462.

To supply the lack of proof referred to in the opinion, the plaintiff, on the second trial, offered to prove that no hydrate alumina was, or could be, imported into this country during the period of the contract; that it was manufactured and sold by only three concerns in this country, including the defendant, the other two being the Aluminum Company of America and Merrimac Chemical Company, the last named being the owner of the American patent and the others, licensees under it; that the Aluminum Company of America used practically its entire output for manufacturing aluminum in its own factories, selling less than one-half of one per cent of such output, and had refused to state whether it would have accepted an order of this size. He proved that Merrimac Chemical Company sold only ten per cent of its output, using the rest in its business, and offered to prove that he had submitted the contract to that company and it would not accept it for delivery in 1916. He offered to prove every sale made by all three of these concerns, and their respective prices, during the contract period, the largest of the defendant being for one hundred tons, deliverable over a period of six months (July to December, inclusive), in carload lots of twenty tons each, at seven cents per pound, f. o. b. Natrona, [324]*324•with the option to deliver more at the same price, if the buyer’s needs exceeded that quantity, with many others ranging from five tons to twenty tons (aggregating as high as fifty-five tons to one purchaser), at prices substantially in excess of the contract price; the largest sale of the Aluminum Company of America (outside of sales to the Merrimac Company, being for six and one-half tons; and the largest of the Merrimac Company being for five and one-half and twelve and one-half tons respectively; that these sales were all of them at prices in excess of the contract price, and showed an increasing value or rising market for hydrate alumina; that a comparison of the sales in smaller quantities with the larger ones above referred to showed no considerable difference between them as to the price per pound, and established a general selling price for the commodity higher than the contract price and also a higher actual value; that the buyers of the larger quantities before making their purchases from defendant had secured quotations and made inquiries as to the prevailing market prices and based upon the results of such inquiries and their own purchases would testify that the market value of hydrate alumina in quantities covered by the contract in suit was at the time of the several breaches from five and a half to seven cents a pound, or one and a half to three cents per pound above the contract price; that the sales of the Merrimac Chemical Company, made after March, 1916, were at higher rates than the contract price and the twelve and one-half ton sale made in December, 1916, was very much higher, to wit, eleven cents per pound; that the market price, during the period of the contract, as shown by the Oil, Paint and Drug Reporter’s quotations (that being a standard publication giving prices, quotations, etc., in the chemical trade), was largely in excess of the contract price.

The court below, under its construction of the Supreme Court’s ruling on the first trial, rejected the offers and refused to admit any evidence ás to sales unless [325]*325they were in quantities approximately as large as the entire quantity covered by the contract in suit, and there being no such sales, restricted the verdict in favor of the plaintiff to nominal damages. Plaintiff appealed.

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Related

McKinney Estate
64 Pa. D. & C.2d 195 (Crawford County Court of Common Pleas, 1973)
Clabby's Estate
162 A. 207 (Supreme Court of Pennsylvania, 1932)
Seward v. Pennsylvania Salt Manufacturing Co.
80 Pa. Super. 207 (Superior Court of Pennsylvania, 1922)

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Bluebook (online)
78 Pa. Super. 319, 1922 Pa. Super. LEXIS 107, Counsel Stack Legal Research, https://law.counselstack.com/opinion/seward-v-pennsylvania-salt-manufacturing-co-pasuperct-1922.