119 Neb. 325 | Neb. | 1930
This was an action brought in the district court for Lincoln county iby the plaintiff, appellant, against the defendants, appellees, to recover damages claimed to have been sustained by reason of the breach of a written contract of sale between the parties dated September 18, 1926. The pleadings disclose that the parties entered into a contract of sale at that time whereby the plaintiff agreed to sell the defendants 1,000 barrels of flour at $7.45 a barrel to be delivered at North Platte “on or before May 1, 1927, on directions to be furnished by the buyer.” It is also conceded that the defendants ordered out and received 250 barrels of this flour. However, they failed and neglected to furnish shipping directions for the remaining 750 barrels of flour as required by the contract and thus prevented the performance thereof by the plaintiff, seller. This written contract of sale included an agreement by the parties thereto- as to the manner in which the amount of damages suffered, in the event of a breach of the contract by either of them, should be determined. The express terms of this instrument covering this subject are as follows:
“Paragraph 3. As to any of the above wheat flour remaining unshipped by reason of ¡buyer’s breach or default, seller shall recover from buyer liquidated damages as follows: (a) A sum equal to 4‡ multiplied by the number of bu. of wheat required to make such unshipped flour, figuring 4% bu, to the bbl. of flour; plus (b) a sum equal to 1‡ multiplied by the said number of bu., which sum shall be calculated for each 30 days, or fraction thereof, intervening between date hereof and date of breach; plus (c) amount of decline, if any, per bu., from date hereof to date of breach, in highest closing price, at Mpls., of number 1 Northern Spring wheat, multiplied by said number of bu. In case of a rise in such price of such wheat between said dates, instead of a decline, seller shall recover the sums at (a) and (b), above, less a sum determined by*327 multiplying amount of such rise, per bu., by said number of bu. such prices on date hereof and date of breach being taken to ascertain amount of decline or rise per bu. Any carrying charges paid by buyer to seller on such wheat flour only shall also be deducted from seller’s said recovery. If there is neither rise nor decline in such price seller shall recover the sums at (a) and (ib) above, less such carrying charges paid, if any.”
“Paragraph 6. But if specifically written on face hereof that buyer shall furnish shipping directions, buyer shall be obligated to notify seller of date, or dates, for shipment, which shall not be later than ‘shipping datealso quantity and (if within style of package, if any specified, is not desired) package, or assortment, wanted, and he shall take out (without previous request) all of within goods as aforesaid, and his failure or refusal so to do shall give seller right, as to any of within goods remaining unshipped by reason thereof, to either: * * * (c) treat contract as broken by buyer and cancel contract (as to such unshipped goods only), at 5 o’clock p. m., Central time on ‘shipping date,’ and recover, on such unshipped goods, damages as set out in paragraph 3, construing date of such cancelation to be date of breach.”
An analysis of the pleadings of the parties herein, and of the record made at the trial in the district court, discloses that the real issue presented in this case is the contention on behalf of the plaintiff, seller, that the provisions of the contract quoted are valid and enforceable as constituting liquidated damages; while the defendants, buyers, in their argument in this court, contend that these provisions amount to and constitute a penalty and as such are unenforceable. The defendants’ pleadings, however, present even a narrower issue. Therein they admit the execution of the contract sued on, the continued ability and readiness to perform the same on the part of the plaintiff, the breach thereof by themselves, which they do not attempt to justify, save and except as they deny that damages were occasioned thereby in excess of nominal damages, one cent, which they expressly admit. On this issue the trial
The record discloses that ample competent evidence was tendered by the plaintiff to support the allegations of the-petition and to justify a recovery as prayed, should the legal question involved be determined in its favor. It will be noted that the district court, as a matter of law, expressly held the contractual provisions quoted unenforceable as being a penalty.
The Nebraska “Uniform Sales Act,” which is carried in the Compiled Statutes for 1922 as sections 2470 to 2549,. inclusive, duly adopted and approved April 25, 1921, is the. controlling legislation on this subject. As a valid enactment by our legislature, its terms supersede any conflicting-principle in our judicial decisions previously pronounced. It may be said that the original source of this legislation is. the ‘rSale of Goods Act” which was duly adopted by the parliament of Great Britain in the year 1893. The provisions of this act, it may be noted in passing, while containing exceptions and variations, are substantially similar-to our present statute on that subject. As a result of this. British legislation a movement in the United States toward uniformity of laws relating to commerce, which was national in its scope, resulted in the adoption of uniform sales-acts, in terms identical with our own, in the following of' our sister states on the dates named: Alaska, January 2, 1914; Arizona, April 1, 1907; Connecticut, July 17, 1907;. Idaho, January 1, 1920; Illinois, June 29, 1915; Iowa, April 25, 1919; Maryland, June 1, 1910; Massachusetts, January 1, 1909; Michigan, April 22, 1913; Minnesota, June 1, 1917; Nebraska, April 25, 1921; Nevada, April 1, 1915;. New Jersey, May 7, 1907; New York, September 1, 1911;.
In substance, all of the terms of the contract of sale here in dispute were before the supreme court of Ohio in the case of Sheffield-King Milling Co. v. Domestic Science Baking Co., supra. That court cited as controlling in the case before it sections 8444 (3) and 8451 of their Code, which are identical with sections 2533 (3) and 2540, Comp. St. 1922, which are as follows:
Section 2533 (3) : “Where there is an available market for the goods in question, the measure of damages is, in the absence of special circumstances, showing proximate damages of a greater amount, the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted, or, if no time was fixed for acceptance, then at the time of the refusal to accept.”
Section 2540: “Where any right, duty or liability would arise under a contract to sell or a sale by implication of law, it may be negatived or varied by express agreement or by the course of dealing between the parties, or by custom, if the custom be such as to bind both parties to the contract or the sale.”
The Ohio court in the casé last above referred to sustained the contract and a recovery thereunder on behalf of
It is to be noted that the terms of our statute expressly authorize the parties to a sales contract, or agreement to sell, “where any right, duty or liability would arise under a contract to sell or a sale by implication of law, it may be •negatived or varied by express agreement.” It may be said “to vary” means to change to something else. In determining the force and effect of this statute it is to be noted that similar language, when standing alone and applied to other subjects, has been held to justify and authorize almost any change without limitation. Merchants Loan & Trust Co. v. Northern Trust Co., 250 Ill. 86. So. far as
“It must be noted that this contract was not silent on the subject. It contained an ‘express agreement’ touching the ‘liability.’ It provides that the basis of settlement shall be ‘the actual difference between the highest closing price cf No. 1 Northern wheat in Minneapolis on the date of sale and date of cancelation as shown by the “Minneapolis Market Record,” figuring four and one-half bushels of wheat for every barrel of flour, the buyer to reimburse the seller for carrying the wheat at the rate of one cent per bushel per month from date of sale to date of cancelation, plus two cents per bushel for buying and reselling the wheat, and two cents per bushel to cover loss of profit, if any, and inconvenience to seller resulting from failure of buyer to* take out flour as per contract.’
“It i§ apparent from this language that the parties themselves contemplated that the plaintiff should not be required to speculate upon the price of wheat, whose fluctuating character must have been well known to both, but that the transaction should proceed on the idea that the plaintiff should purchase a sufficient quantity of wheat on the day of sale. Not only this, but it is apparent from the contract that the parties themselves contemplated that this wheat should not be at once manufactured into flour, but should be held or ‘carried’ until near the time when the plaintiff would be required to manufacture the flour from it. Otherwise the provision as to the highest closing price of No. 1 Northern wheat on the date of sale, and the provision to reimburse the seller for carrying the wheat at one cent per bushel per month and two cents for buying and reselling the wheat, would be whoPy unnecessary and meaningless. Under the clause, ‘and two cents per bushel to cóver loss of profit, if any,’ the plaintiff waived any claim.
“We think that a consideration of the whole instrument forces the conclusion that the contract did not provide for, and the parties did not contemplate, a direct sale of the flour as an ordinary commodity, as it might have done if the parties had so desired; but it provided for, and they*334 contemplated, the purchase of the wheat at once and the future manufacture and delivery by the plaintiff of the amount of flour within the period covered by the terms of the contract. With these steps in contemplation the parties contracted that defendant should reimburse plaintiff for any loss on account of the purchase of the wheat in case defendant refused to take the flour, or ‘fails to furnish directions for shipment.’ The parties in this case were fully competent to contract. Each was fully able to consider and provide for his own interest. It is not claimed that there was any fraud or circumvention in connection with the negotiation, and we can conceive of no injustice, or inequity, in the enforcement of the terms of a contract thus made, which contemplated the purchase by the seller of sufficient wheat to supply the commodity to foe manufactured and delivered thereafter during a period of a number of months. The parties agreed that wheat, the thing from which the flour was to be made, should be the basis upon which to calculate damages. They could, of course, have agreed that the flour should be such basis, but they did not do so. That was a matter for them to agree about. They did not fix an arbitrary lump sum which might turn out to be wholly inequitable, but fixed a method, the chief element of which was the price of wheat from which the flour was to be made, a matter not within the control of either. In this situation when the plaintiff proved it had performed the terms of the contract on its part, had purchased the necessary wheat, and showed the damages that had accrued on the basis agreed on, it was entitled to recover.” Sheffield-King Milling Co. v. Domestic Science Baking Co., 95 Ohio St. 180.
This language is applicable to the proceedings in this case and we adopt it as controlling. In so doing we follow, not only the dictates of reason, but the express commands of our statute which directs uniformity, and the object of it was to secure for everyone the possibility of knowing his rights and obligations at all times and all places in connection with every transaction in which he engages which pertains to or is governed by the “Uniform Sales Law.”
“In Russell Miller Milling Co. v. Bastasch, 70 Or. 475, relied on by defendant in error, it is held: Tn an action for a breach of contract to purchase flour, a custom of the plaintiff on purchases for future delivery of setting aside a quantity of wheat sufficient to be manufactured into the flour ordered cannot be considered, where the parties are not shown to have contracted with reference to it and no knowledge of it is imputed to the defendants in either pleadings or evidence.’ That was an ordinary suit for damages and did not involve the question made here as to liquidated damages or penalty. In the case we have here, it will also be noted, the plaintiff does not assert a ‘custom’ but an express contract, in which the parties are ‘shown to have contracted with reference’ to the basis of settlement.” It follows therefore that the district court, in denying plaintiff recovery of liquidated damages grounded by the contract in suit, erred. The judgment of the district court is therefore reversed and the cause remanded for further proceedings in harmony with this opinion.
Reversed.