A Treatise on the Law of Sale of Personal Property

renounce his repudiation,' and have the goods upon payment of the price. He will also be entitled to the benefit of changes in the market value at the time of ascertaining the damages.3

$1709. Measure of damages if seller does treat it as a present breach.-But while the seller is thus not obliged to treat the repudiation as a present breach, he may do so, and if he does he may proceed to recover his damages as for a total breach of the entire contract. The measure of damages in such a case will be the difference between the contract price and what it would have cost him to produce and deliver the goods according to the contract, in addition, of course, to payment

whereby the plaintiffs agreed to sell and the defendant to buy five thousand bags of sugar, at a specified price, to be shipped during the following June or July from Holland to New York or Baltimore. Before the contract had been performed or the time for performance had expired, the defendant stated to the plaintiffs that he did not intend to carry out the contract and would have nothing to do with it, whereupon he was notified by the plaintiffs that they would dispose of the sugar elsewhere and would hold him resposible for any loss. This action was soon after brought. It was held by the circuit court, and affirmed by the circuit court of appeals, that the plaintiffs were justified in treating the unequivocal refusal of defendant to perform as a present breach of the contract, if they chose so to do, and their right of action for damages would not be prejudiced thereby. In the opinion of the court this right to elect whether to treat the contract as terminated or as still existing, with a present right of action in case it is considered terminated, is sup

ported by the "overwhelming preponderance" of authority.

1 See ante, § 1090. But he may not do this where the seller, in reliance upon the repudiation, has changed his position, as by reselling the goods to another person. Windmuller v. Pope (1887), 107 N. Y. 674, 14 N. E. R. 436.

2 Stokes v. Mackay (1895), 147 N. Y. 223, 41 N. E. R. 496.

3 See Kadish v. Young, supra. 4 Masterton v. Mayor of Brooklyn (1845), 7 Hill (N. Y.), 61, 42 Am. Dec. 38; Mechem's Cases on Damages, 141; Tahoe Ice Co. v. Union Ice Co. (1895), 109 Cal. 242, 41 Pac. R. 1020; Hale v. Trout (1868), 35 Cal. 229; Philadelphia, etc. R. Co. v. Howard (1851), 54 U. S. (13 How.) 307; Burrell v. New York Salt Co. (1865), 14 Mich. 34; Goodrich v. Hubbard (1883), 51 Mich. 62, 16 N. W. R. 232; Atkinson v. Morse (1886), 63 Mich. 276, 29 N. W. R. 711; Leonard v. Beaudry (1888), 68 Mich. 312, 36 N. W. R. 88; Fell v. Newberry (1895), 106 Mich. 542, 64 N. W. R. 474; Barrett v. Veneer Works (1896), 110 Mich. 6, 67 N. W. R. 976; Industrial Works v. Mitchell (1897), 114 Mich. 29, 72 N. W. R. 25.

for what had already been delivered at the time of the repudiation.

This loss of profits is regarded as the direct and natural result of the breach of contract, and may be recovered as general damages without resorting to special allegations.1

§ 1710.

As of what date, however, the damages are to be estimated, the authorities are not agreed. In Masterton v. Mayor of Brooklyn,2 to which reference has already been made, it was held by the majority of the court that "where the contract, as in this case, is broken before the arrival of the time for full performance, and the opposite party elects to consider it in that light, the market price on the day of the breach. is to govern in the assessment of damages. In other words, the damages are to be settled and ascertained according to the existing state of the market at the time the cause of action arose, and not at the time fixed for full performance. The basis upon which to estimate the damages, therefore, is just as fixed and easily ascertained in cases like the present as in actions predicated upon a failure to perform at the day." Judge Beardsley, on the other hand, was of opinion that the damages should be estimated as nearly as possible as of the dates when performance would have been due.

§ 1711. —. In a leading English case it was said by Brett, J., that "although the plaintiff may treat the refusal of the defendant to accept or to deliver the goods before the day for performance as a breach, it by no means follows that the damages are to be the difference between the contract price and the market price on the day of the breach. It appears to me that what is laid down by Cockburn, C. J., in Frost v. Knight involves the very distinction which I am endeavoring

1 Tahoe Ice Co. v. Union Ice Co. supra [citing Burrell v. New York Salt Co., supra; O'Connell v. Hotel Co., 90 Cal. 515; Ennis v. Buckeye Pub. Co., 44 Minn. 105; Shaw v. Hoffman, 21 Mich. 151; Masterton v.

Mayor of Brooklyn, supra; Laraway v. Perkins, 10 N. Y. 371].

27 Hill (N. Y.), 61, 42 Am. Dec. 38; Mechem's Cases on Damages, 141.

3 Roper v. Johnson (1873), L. R. 8 Com. Pl. 167, 4 Moak's Eng. 397.

4 L. R. 7 Ex. 111, 1 Moak's Eng. 218.

to lay down, viz., that the election to take advantage of the repudiation of the contract goes only to the question of breach and not to the question of damages; and that, when you come to estimate the damages, it must be by the difference between the contract price and the market price at the day or days appointed for performance, and not at the time of breach."

§ 1712. The same rule is declared by Mr. Mayne in his work on Damages: "Even when the plaintiff has exercised his option of treating the contract as rescinded [broken ?] before the time for its completion has elapsed, and has commenced his action before that time, the damages will still be calculated with reference to the date at which it should have been carried out. In other words, the contract will be treated as rescinded for the purpose of suing upon it, and as existing for the purpose of calculating the damages."

In Sedgwick on Damages it is suggested that this rule is proper where the contract is divisible and the successive breaches have occurred before the action is brought; but where the contract is indivisible, and a present refusal is to be treated as an entire breach, then, "if the periods specified in the contract have not arrived before the trial of the cause, any effort to fix the rights of the parties at those various times must be mere matter of conjecture, and probable expense is neither a precise nor a safe direction for a jury."

The English rule seems to be sustained by the greater weight of reason and authority.3

§ 1713. Treating contract as rescinded and recovering quantum valebat.-The seller, moreover, instead of treating the buyer's repudiation as a present breach of the contract merely, may regard it as a total rescission of the contract, and recover the reasonable value of what he has already furnished and the buyer has accepted, as though there had been no contract. Thus where there was a contract for the supplying of

16th Eng. ed. 179.
28th ed., vol. II, p. 314.

3 See Goodrich v. Hubbard (1883), 51

Mich. 62, 16 N. W. R. 232. Contra,
Fail v. McRee (1860), 36 Ala. 61.
4 Wellston Coal Co. v. Franklin

coal throughout the year at a uniform rate per ton, though the coal in some seasons was worth more than the price fixed, and the buyer, after getting the benefit of the rate during the season when coal was high, repudiated it at the time when the price was lower, it was held that the seller might treat the repudiation as a rescission and recover the market price of the coal furnished though in excess of the contract price.1

Paper Co. (1897), 57 Ohio St. 182, 48 N. E. R. 888 [citing Chamberlin v. Scott, 33 Vt. 80; McCullough v. Baker, 47 Mo. 401; Kearney v. Doyle, 22 Mich. 294; Buffkin v. Baird, 73 N. C. 283; United States v. Behan, 110 U. S.

338; Merrill v. Railroad Co., 16 Wend. 586: Clark v. Mayor of N. Y., 4 N. Y. 338].

1 Wellston Coal Co. v. Franklin Paper Co., supra.

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