Theiss v. Weiss

31 A. 63, 166 Pa. 9, 1895 Pa. LEXIS 1145

• Court: Supreme Court of Pennsylvania
• Decided: January 7, 1895
• Docket: Appeal, No. 260
• Status: Published

Opinion

Opinion by

Mb. Justice Gbeen,

The plaintiff testified on the trial, very positively and directly, that he sold all the flour he bought from the defendant, to various_jBrms and individuals immediately after the contract in suit was made. He also said he was obliged to purchase the flour to fill those orders. He was permitted to prove, and did prove, the market price of flour during the time he was making the sales. He admitted however that he got most of the flour with which to fill these orders from his own firm. The defendant asked the plaintiff what the flour he thus obtained cost him, and whether he made or lost money on the flour he obtained to fill these orders. The court rejected these offers of proof; and the assignments of error to the rejection of the offers, and to what the court below said on the question of the measure of damages, give rise to the question, what is the true measure of damages applicable to the facts of this case. The court charged that it was the difference between the contract price named in the contract in suit, and the market price of the same grade of flour at the time and place of delivery.

There is no doubt that this is the general rule in cases where the vendor of goods refuses to deliver, and no part of the price has been paid. But the defendant contends that the rule is different where the vendee supplies himself with other goods, in order to fill orders which he has taken for the resale of the goods which he contracted to receive from the vendor.

In 2 Benj. on Sales, sec. 1327, the writer says, “ It is submitted that these decisions establish the following rules in cases where goods have been bought for the purpose of resale, and there is no market in which the buyer can readily obtain them : 1. If at the time of the sale the existence of a subcontract is made known to the seller, the buyer, on the seller’s default in delivering the goods, has two courses open to him : (1) He may elect to fulfill his subcontract, and for that purpose go into the market and purchase the best substitute obtainable, charging the seller with the difference between the contract price of the goods and the price of the goods substituted. (2) He may elect to abandon his subcontract, and in that case he may recover as damages against the seller, his loss of profits on the subsale, and any penalties he may be liable to pay, for breach of his subcontract. ... If at the time of the sale the existence of a subcontract is not made known to the seller, a knowledge on his part that the buyer is purchasing with the general intention to resell, or notice of the subcontract given to him subsequent to the date of the contract, will not render him liable for the buyer’s loss of profits on such subcontract; the buyer may either procure the best substitute for the goods as before, and fulfill his subcontract, charging the seller with the difference in price, or abandon his subcontract and bring his action for damages, when the ordinary rule, it would seem, will apply, and the jury must estimate, as well as they can, the difference between the contract price and the market value of the goods, although there is no market price in the sense that there is no place where the buyer can readily procure the goods contracted for. In every case the buyer, to entitle him to recover the full amount of damages, must have acted throughout as a reasonable man of business, and done all in his power to mitigate the loss.”

In the case of Kountz v. Kirkpatrick, 72 Pa. 376, the opinion delivered by Mr. Justice Agnew contains a very able and exhaustive discussion of the subject of the measure of damages, in actions by the vendee of goods, against the vendor, where delivery has been refused. The case turned upon the question of the effect of a combination, after the sale, and before delivery, by the buyer with others to put up the price of the commodit}»sold, oil, the buyer having in the meantime assigned his contract to a stranger. It was held that the assignee was not bound by the acts of his assignor, but nevertheless the rule as to the measure of the seller’s liability was shown not to be the current market price.

After stating the general rule that the true measure is the difference between the contract price and the market value (not price) at the time and place of delivery, the opinion proceeds: “Ordinarily, when an article of sale is in the market and has a market value, there is no difference between its value and the market price, and the law adopts the latter as the proper evidence of the value. . . . Value and price are, therefore, not synonymous, or the necessary equivalents of each other, though commonly market value and market price are legal equivalents.” Citing the rule as stated in Sedgwick on Damages, 4th. ed. 260, that the true measure of damages in such cases is the difference between the contract price and the market value,, and “ that this is the plaintiff’s real loss, and that, with this sum, he can go into the market and supply himself with the same article from another vendor,” the opinion further proceeds, quoting from Smethurst v. Woolston, 5 W. & S. 109, “The value of the article at or about the time it is to be delivered, is the measure of damages, in a suit by the vendee against the vendor for a breach of the contract. ... It is therefore proper to inquire into the true legal idea of damages in order to determine the proper definition of the term value. Except in those cases where oppression, fraud, malice or negligence enter into the question, ‘the declared object (says Mr. Sedgwick in his work on Damages) is to give compensation to the party injured for the actual loss sustained,’ 4th ed., pp. 28, 29, also pp. 36, 37. Among the many authorities he gives he quotes the language of C. J. Shippen, in Bussey v. Donaldson, 4 Dallas, 206, ‘as to the assessment of damages (said he), it is a rational and legal principle, that the compensation should be equivalent to the injury.’ ‘ The rule,’ said C. J. Gibson, ‘ is to give actual compensation, by graduating the amount of the damages, exactly to the extent of the loss: ’ Forsyth v. Palmer, 2 Harris, 97. Thus compensation being the true purpose of the law, it is obvious that the means empkyed, in other words, the evidence to ascertain compensation, must be such as truly reaches this end. It is equally obvious, when we consider its true nature, that, as evidence, the market price of an article is only a means of arriving at compensation; it is not itself the value of the article, but is the evidence of value. The law adopts it as a natural inference of fact, but not as a conclusive legal presumption. . . . But to assert that the price asked in the market is the true and only test of value, is to abandon the proper object of damages, viz., compensation, in all those cases where the market evidently does not afford the true measure of value.”

In Seely v. Alden, 61 Pa. 302, we said, “ If there be different modes of measuring the damages, depending on the circumstances, the proper way is to hear the evidence, and to instruct the jury afterwards according to the nature of the case.”

In Wehle v. Haviland, 69 N. Y. 448, it was held that the “ market price ” within the meaning of the rule, is the price at which the goods can be replaced, and not their retail value.

In Haskell v. Hunter, 23 Mich. 305, it was held that in an action for the non-delivery of lumber the true measure of damages is the difference between the contract price, and what it would have cost plaintiffs to procure it at the place of deliveiy, and at the time hr times when it was reasonably proper for them to supply themselves with lumber of the kind and quality they were to receive under the contract.

In the case of Arnold v. Blabon, 147 Pa. 372, which was an action by the vendor of a quantity of cork to recover the contract price of cork delivered, the defence was that the plaintiffs were bound by the contract to deliver a much larger quantity than they did, and refused to deliver the residue, and the defendant claimed that he had been obliged to procure cork to supply the deficiency at a higher price than the contract called for, and asked for a certificate of damages against the plaintiff, the court below charged as follows, “Undoubtedly if you find there was this contract as claimed here by the defendant, and if you find that the plaintiffs broke it, the defendant would have the right then to his damages, which damages are fixed; but if the defendant was able by any acts on his part to lessen his damage, he could not of course recover more than his actual damage. . . . Then comes the question whether this defendant, in obtaining these goods from other people, did lessen his damages, whether he made them any less than the difference between the price agreed upon in the contract and the market price at the date of the breach. ... If you find for the plaintiffs you will find for this amount, $151. If, on the other hand, you find for the defendant, you will give him a certificate of the amount that he actually paid out, that is the difference between the alleged contract price and the market value of that amountj 340 tons of cork, on the day of the breach of the contract, unless you find from the evidence that what he bought cost him less than that, in which case you will find for the lesser sum.” This ruling was affirmed by this court in a per curiam opinion in which we said we found no error on the part of the court.

And the ruling was manifestly correct, because, while it is true that the ordinary rule of damages in such cases would have entitled the defendant to recover the entire difference between the market value of the cork and the contract price, yet as the proof was t-hat he had supplied himself with cork at a less cost than the market price, he could recover only for his actual loss. This is in accord with all the authorities above cited and is perfectly sound law. The rule of actual compensation for the loss of the goods to be delivered, requires that the actual loss only should be allowed to be recovered..

We are therefore of opinion that the defendant should have been allowed to prove what was the actual cost to the plaintiff of the flour which the plaintiff said he bought from other parties to fill his orders. We sustain the sixth, seventh, tenth, eleventh and thirteenth assignments of error.

We do not feel that we can sustain any of the other assignments. The case necessarily had to go to the jury on the main questions of the condition of the defendant at the time he signed the contract in suit, and whether it was a mere bantering proposition, never intended to be carried into execution; and the learned court below fairly and correctly left these questions to the jury. The verdict was against the defendant and after reading carefully the whole of the testimony, we feel constrained to say that we regard the verdict as against the weight of the evidence on this latter question. The case, in its circumstances, is very much like the case of Brown v. Finney, 53 Pa. 373, which received the condemnation and reversal of this court after a verdict of $2,000 had been recovered in the court below.

The defendant in this case unfortunately and most unwisely put his name to a written proposition, and while it is manifest that he did so while considerably under the influence of liquor, it is very plain that he knew perfectly well what he was doing, and that he was not impelled to affix his signature by airy act of fraud, deceit, imposition, mistake or undue influence. On the contrary his partner, who was present, refused to become a party to such an act of drunken folly, but after that refusal the defendant did consciously and knowingly put his name to the paper, with a recklessness, and a silly disregard of consequences, which no doubt, he has bitterly regretted ever since.

Nevertheless, a calm review of the circumstances indicates clearly, as we think, that the making of the offer to sell 20,000 barrels of flour at four dollars a barrel, at the same time when he actually bought 400 barrels, in good business earnest, at four dollars and forty-five cents a barrel, and the signing of a memorandum in writing of such a sale, was never regarded or intended by either party, as more than a mere bluff or banter without any serious intention that it should be performed as a real, bona fide contract. It was perfectly evident and was abundantly proved, that the defendant, who was a small retail dealer with limited means, was utterly unable to carry out such a contract, even if the flour could have been obtained in sufficient quantity, and was also unable, without a large advance in the price, to make deliveries at the rate of 400 barrels daily for fifty consecutive days. There is very grave reason to doubt the correctness of the plaintiff’s statement that he immediately-called upon the defendant to perform the contract, in view of the defendant’s positive denial, and, what is more important, the continuance of their ordinary business relations and the customary purchases by the defendant from the plaintiff, of flour at the regular market rates which were considerably above four dollars per barrel. One of- the witnesses present, and entirely disinterested, testified that he heard and saw the whole transaction, that the defendant’s statement to the plaintiff that he would sell him the flour was made in a bantering, joking way,,and that his understanding was that the plaintiff regarded it as a joke.

But of course all of these things were matters for the consideration of the jury, and it is out of our power to change the verdict, no matter what we may think of the effect of the testimony. We do not think the court committed error in the instructions given to the jury upon these subjects, and therefore as to all the assignments of error except those which relate to the measure of damages, we dismiss them as not being sustained.

Judgment reversed and new venire awarded.