122 Wash. 220 | Wash. | 1922
—Appellant acquired the right to use the trade-mark “Carolene” for a canned product of skimmed milk and cocoanut oil, and on April 1, 1920, entered into a contract with respondent Canyon Milk
At the time of the making of the contract, respondent was operating a milk condensery at Enumclaw and this contract replaced a similar one made a short time previously for the manufacture of the product in a plant at Snohomish; both plants being controlled by the same individual. The contract recites that the product was a new one in the territory west of the Rocky Mountains, and that it was contemplated that a market might be there established. The evidence shows that, when the product was first placed upon the market, it sold rapidly and in comparatively large quantities, and the sales continued to increase until the bad product hereinafter mentioned reached the consumers. This result was obtained by an extensive advertising and sales campaign put on by the appellant.
The first Carolene supply came from Snohomish and gave satisfactory results, each sale being followed by orders for increased quantities. The product of the Enumclaw plant, however, did not prove so satisfactory. For some reason which no one has been able to explain, a great deal of this product was inferior, and in many cases practically worthless, and as the season advanced the proportion of bad product increased, so
In the meantime respondent milk company made a common law assignment for the benefit of its creditors in favor of the respondent Seattle Merchants’ Association, and appellant entered into a stipulation with the latter respondent by which any manufactured product on hand could be used for replacement of bad milk without prejudice to either party as to its rights under the contract.
Appellant sued for damages upon three main items, viz.: loss of profits; the sums expended by it in advertising and other preliminary expenses; and damages to the value of the label “Carolene,” for which appellant held a license. Appellant recovered judgment for $185.95 as the balance due it for expense of replacement over and above the sums due respondent for Carolene supplied.
The first question is whether the appellant is entitled to recover for loss of profits which it would have made had the contract not been breached by the furnishing of an inferior article. The rule is that special damages by way of anticipated profits arising from the breach of a contract in furnishing an inferior article may be recovered when such damages are the natural and proximate result of the breach and can be said to be such as may be presumed to be within the contemplation of the parties and which the evidence establishes with reasonable certainty. Cannon v. Oregon Moline Plow Co., 115 Wash. 273, 199 Pac. 39.
Whether the present case comes within the rule must depend upon its particular facts. The trial court found that the business of the appellant did not amount to an established business; that it was highly speculative and experimental and depended upon the
In Andreopulos v. Peresteredes, 95 Wash. 282, 163 Pac. 770, the rule of the case of States v. Durkin, 65
The appellant, however, argues that if it is not entitled to recover for loss of profits, then it is entitled to recover the sums expended by it in establishing the market, such as advertising and other preliminary expenses. The general rule is that all necessary expenses incurred by a party in complying with the terms of a contract may be recovered as damages in an action for the breach thereof. 17 C. J. 800; Webster v. Beau, 77 Wash. 444, 137 Pac. 1013, 51 L. R. A. (N. S.) 81. The present case is not within that rule because here the money expended by the appellant in placing the product upon the market was not done in complying with the terms of the contract, since the contract did not require the appellant to do anything, but only gave it the right to purchase.
Appellant further claims the right to recover dam
The judgment will be affirmed.
Parker, C. J., Holcomb, Mackintosh, and Hovey, JJ., concur.