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ted, by completing and tendering them, to recover the contract price.1 His remedy is an action for the damages he has sustained by reason of not being permitted to complete the contract, and the measure of his damages will be the difference between the cost of manufacturing or producing the goods and the price he was to receive for them,2 "making reasonable deduction for the less time engaged, and for release from the care, trouble, risk and responsibility attending a full execution of the contract."
§ 1703. The same rule also was applied where there had been a contract to manufacture and supply goods as ordered by the buyer, and the buyer, after receiving and paying for part, refused to receive any more. The court, indeed, attached much importance to the fact that the goods were of a perishable nature, so that if made they might not endure until a market could be found, and for this reason held that the ordinary rule allowing the difference between the contract and the market price should not apply. The case, however, seems not in need of such distinction to bring it within the rule laid down in the preceding section.
§ 1704. Loss of profits.- If it be urged, as it sometimes is, that this rule operates to give the plaintiff damages for a loss
1 Tufts v. Weinfeld (1894), 88 Wis. (1890), 135 Pa. St. 132, 19 Atl. R. 1008; 647, 60 N. W. R. 992. Kingman v. Hanna Wagon Co. (1898), 176 Ill. 545, 52 N. E. R. 328.
Contract price not fixed —“Lowest jobbing prices."- Where the price to be paid is not fixed by the contract, but is to be the "lowest jobbing price," then the measure will be the difference between such price and the cost of production. Beardsley v. Smith (1895), 61 Ill. App. 340.
3 United States v. Speed (1868), 75 U. S. (8 Wall.) 77.
4 Todd v. Gamble (1896), 148 N. Y. 382, 42 N. E. R. 982.
2 Hinckley v. Pittsburgh Steel Co. (1886), 121 U. S. 264, 30 L. ed. 967, 7 Sup. Ct. R. 875; Mechem's Cases on Damages, 272; Chapman v. Kansas City, etc. Ry. Co. (1898), 146 Mo. 481, 48 S. W. R. 646; Black River Lumber Co. v. Warner (1887), 93 Mo. 374, 6 S. W. R. 210: American Bridge Co. v. Bullen Co. (1896), 29 Oreg. 549, 46 Pac. R. 138: Williams v. Crosby Lumber Co. (1896), 118 N. C. 928, 24 S. E. R. 800; Tufts v. Weinfeld (1894), 88 Wis. 647, 60 N. W. R. 992; Muskegon Curtain Roll Co. v. Keystone Mfg. Co.
of profits, it is to be replied that a loss of profits is always a proper subject for compensation if such a loss of profits can be shown with reasonable certainty and without resorting to speculation or conjecture. As said by the supreme court of the United States, “it by no means follows that profits are not to be allowed, understanding, as we must, the term 'profits' as meaning the gain which the plaintiff would have made if he had been permitted to complete his contract. Actual damages clearly include the direct and actual loss which the plaintiff sustains propter rem ipsam non habitam. And in a case of a contract like this, that loss is, among other things, the difference between the cost of doing the work and the price to be paid for it. This difference is the inducement and real consideration which causes the contractor to enter into the contract. For this he expends his time, exerts his skill, uses his capital, and assumes the risks which attend the enterprise. And to deprive him of it, when the other party has broken the contract and unlawfully put an end to the work, would be unjust. There is no rule of law which requires us to inflict this injustice. Whenever profits are spoken of as not a subject of damages, it will be found that something contingent upon future bargains, or speculations, or states of the market, are referred to, and not the difference between the agreed price of something contracted for and its ascertainable value or cost."
Form of repudiation,— It is not always necessary that the buyer shall, in express terms, repudiate the contract or countermand the order. Such a result may be inferred from his conduct; and where, by the contract, he is to do the first act, as, for example, to give instructions as to the manner of manufacture or to furnish the necessary directions for ship
1 Masterton v. Mayor of Brooklyn quoted with approval in Hinckley v. (1845), 7 Hill (N. Y.), 61, 42 Am. Dec. Pittsburgh Steel Co., 121 U. S. 264, 38; Mechem's Cases on Damages, 141. supra. To same effect: Tahoe Ice
2 Philadelphia, etc. R. Co. v. How. Co. v. Union Ice Co. (1895), 109 Cal. ard .(1851), 54 U. S. (13 How.) 307, 242, 41 Pac. R. 1020, and cases cited.
ment, his failure or refusal to do this may be equivalent to a repudiation.
$ 1706. Effect on seller's rights of repudiation by the buyer.- As has been seen in a previous chapter, it is not within the power of the vendee to put an end to the contract without the concurrence of the seller. The latter, if he will, may acquiesce in the buyer's act so far as to treat it as a present termination and pursue his remedies as for a present breach. Delivery or even tender of the goods is not necessary where the buyer has thus declared his intention not to receive them.
$ 1707. Seller not obliged to treat it as a present breach,- But, as has also been seen, the seller is not obliged to regard the buyer's repudiation as a present breach. He may not, indeed, thereafter proceed to do more in order to enbance his damages, but he may treat the contract as in force until the time fixed for its performance has arrived, and then have his damages ascertained as though the contract had been broken on that date.
1 See Weill v. American Metal Co. supra, was an action of assumpsit by (1899), 182 I. 128, 54 N. E. R. 1050; Young and another against Kadish Hinckley V. Pittsburgh Steel Co. and another to recover damages for (1887), 121 U. S. 264; Mechem's Cas. the breach of a contract whereby on Damages, 272,
appellees, on the 15th of December, 2 See ante, § 1088.
1880. sold to appellants one hundred 3 See Roehm v. Horst (1900), 178 thousand bushels of barley at $1.20 U.S. 1, 44 L. ed. 953, 20 Sup. Ct. R. 780, per bushel, to be delivered and paid quoted fully in notes to $ 1089, ante, for at such time during the month where other cases will be found fully of January, 1881, as appellees should collected.
elect. On the next day after the 4 Pancake v. Campbell (1897), 44 contract was made the appellants W. Va. 82, 28 S. E. R. 719; Morris v. gave notice to the appellees that they Cohn (1891), 55 Ark. 401, 18 S. W. R. would not receive the barley and 381.
comply with the terms of the con5 See ante, & 1088.
tract. The appellees, however, re6 See Kadish v. Young (1883), 108 fused to consider the contract broken, III. 170, 48 Am. R. 548; Mechem's and on the 12th of January they Cas. on Damages, 265; Roebling Sons tendered to appellants the one hunCo. v. Lock Stitch Fence Co. (1889), dred thousand bushels of barley, 130 III. 660, 22 N. E. R. 518.
which tender was refused. Within Kadish v. Young (1883), 108 III, 170, a reasonable time thereafter the ap
$ 1708. Contract kept alive for benefit of both parties.- If, however, the seller elects to treat the contract as
pellees sold the barley upon the mar- ready for delivery until such time in ket and brought this action on the January as they should elect. If apcontract, claiming as their measure pellees had then the barley on hand, of damages the difference between and had acted upon appellants' nothe contract price and the value of tice, and accepted and treated the the barley in the market on the day contract as then broken, it would. when it was to have been delivered doubtless, then have been their duty by the terms of the contract. It was to have resold the barley upon the claimed on the part of the appellants market, precisely as they did in Janthat in case of such a contract of uary, and have given appellants sale for future delivery, where, be- credit for the proceeds of the sale; fore the time of delivery, the buyer but it is obviously absurd to assume gives the seller notice that he will that it could have been appellees' not receive the property and comply duty to have sold barley in Decemwith the terms of the contract, this, ber to other parties which it was whether the seller assents thereto or their duty to deliver to appellants, not, creates a breach of the contract, and which appellants had a legal or, at all events, imposes the legal right to accept in January." duty on the seller to thereafter take In Roebling's Sons Co. v. Lock such steps with reference to the sub- Stitch Fence Co. (1889), 130 Ill. 660, ject of the contract as shall most ef- 22 N. E. R. 518, supra, a contract was fectually mitigate the damages to made between appellant and appelbe paid by the buyer in consequence lee, by the terms of which the forof the breach, without imposing loss mer agreed to sell to the latter five upon the seller. But the court held hundred tons of fence-wire, and to that a buyer cannot thus create a deliver the wire so sold between breach, before the time for perform- March 7, 1885, and July 1, 1885. On ance arrives, upon which the seller is April 29th the appellee definitely rebound to act, and if the buyer's dec. pudiated the contract by telegraphlaration is ineffectual to create a ing appellant that no more wire breach it follows that the seller is would be taken even if it were under no obligation to regard it for shipped. The appellant, however, reany purpose. “Nothing would seem fused to relinquish the contract, and to be plainer,” say the court, “than proceeded with the manufacture and that, while the contract is still sub- tender of the residue of the wire. sisting and unbroken, the parties The court held that the appellant can only be compelled to do that had a right to do so, and to hold the which its terms require. This con- appellee responsible for refusal to tract imposed no duty upon appel. accept tender. " Where one party lees to make other contracts for Jan- to a contract,” said the court, “gives uary delivery, or to sell barley in notice, before the time of performDecember, to protect appellants from ance arrives, that he does not intend loss. It did not even contemplate to perform, the other party may that appellees should have the barley treat such notice as a breach and still in force, he will do so, as has been seen," for the benefit of the buyer as well. The latter will, in general, be entitled to bring his action; or he may decline should not be increased by the to accept such notice as a breach, plaintiffs' neglect. and may insist that the contract In Zuck v. McClure (1881), 98 Pa St. shall continue in force up to the 541, the plaintiff had made two contime fixed for its final performance, tracts with the defendants, the first holding the party refusing to per- an executed contract and the second form responsible for the consequences a contract for future delivery. Suit of such refusal. One party to a con- was brought on the first, for the price tract cannot, by simply refusing to of coke sold and delivered, and the carry out his part of it, compel the defendants set up a breach of the other party to rescind it.”
second as a counter-claim. The sec. In Roth & Co. v. Taysen & Co. ond contract called for the delivery (1896) [Q. B. Div.], 73 Law Times by the plaintiff to the defendants of Reports, 628, the plaintiffs had con- all coke burned in the plaintiff's furtracted to sell to defendants a cargo naces during a certain time. The of maize, to be shipped from South plaintiff informed the defendants America according to certain speci. that he would not fulfill his contract, fications. It was expected to ar- but the defendants refused to con. rive, and actually did so, on Septem- sider the contract broken and notiber 5th. On the 28th of May pre-fied the plaintiff that they were preceding, there being a declining pared to receive the coke under the market, the buyers telegraphed the contract. The action on the first sellers repudiating the contract. An contract, to which this alleged breach unsuccessful attempt was made to of the second is interposed as a arbitrate, and on the 24th of July counter-claim, was commenced on the plaintiffs brought this action. November 29th, the refusal of plaintThe court held that damages were iff to perform the second contract to be estimated on the basis of the was given on November 19th, and market value of the maize on July the defendants' insistence upon com24th, and not in accordance with pliance was made on December 4th. the market value on September 5th, The court held that on November when the goods were actually re- 29th, when this action was comsold. The sellers had treated the re- menced, there was no breach of the pudiation as a wrongful ending of second contract, since the defendants the contract by bringing their ac- had not accepted the plaintiff's notice tion, and the buyers were entitled to of breach, such notice being a mere have their loss mitigated by any rea- matter of intention and subject to sonable means that a prudent man withdrawal until accepted by the ought to have adopted. Since the other party as a present breach. market value was still falling, an In Marks v. Van Elghen (1898, immediate resale should have been U. S. App.), 85 Fed. R. 853, 30 C.C. A. made, and the defendants' loss 208, a contract had been made
1 See ante, $ 1090.