226 F. 173 | 8th Cir. | 1915
Railway Company on a contract in which the plaintiff agreed to manufacture and sell to the defendant an eledtrical generator and certain accessories, at the agreed price of $3,736. The contract is in the form of a proposal from plaintiff to defendant, and an acceptance by defendant. When plaintiff had completed the machinery, and had it ready for shipment, it asked for shipping directions. For one cause and another such directions were delayed. Finally the Manhattan Company decided to put in another system based on a supply of electric current from water power. It had negotiations with the plaintiff looking to the abandonment of the contract, and the supplying by plaintiff to defendant of extensive machinery, whose purchase price amounted to some $10,000, to be used in installing this later system. Finally, however, the defendant did not purchase its machinery for this new plant from plaintiff. It also declined to accept the machinery covered by the contract, and asked to be released therefrom upon what is referred to in the correspondence as a cancellation charge. This led to a complete disagreement between the parties, and the present suit was brought, resulting in a judgment in favor of the plaintiff for the full contract price. All the assignments of error are based upon the claim that the trial court adopted an erroneous measure of damages and refused to permit the defendant to introduce what would have been competent evidence if another measure of damage had been entertained. The theory of the plaintiff which was adopted by the trial court was that the contract provided for the manufacture of a special article which had no market value. The machinery has never been accepted, and is held at plaintiff’s factory at Schenectady, N. Y. Plaintiff, however, insists that it holds the property, subject to defendant’s order, and is entitled to recover the full purchase price. Defendant, on the other hand, insists that the articles covered by the order are staple articles, having a recognized market value and a ready sale; and that the proper measure of damages is the difference between such market price and the contract price. It offered 'to prove these facts, but was denied the right to present evidence of that kind by the trial court, to which an exception was saved.
We think this was error. The measure of damages for the breach of a contract of sale of personal property is the difference between the market and the contract price. This rule applies to manufactured articles when they are staple and have a known market value and a ready sale. Kingman v. Western Mfg. Co., 92 Fed. 486, 34 C. C. A. 489; Malcomson v. Reeves Pulley Co., 167 Fed. 939, 93 C. C. A. 339; 2 Sedgwick on Damages, § 752, p. 1568 (9th Ed.); Williston on Sales, § 564. The only reason for applying a different rule to manufactured articles is that sometimes they are made for a special purpose, and have no value except to the person who intends to apply them to that purpose. If he rejects them in violation of his contract, there, is no market in which the maker can easily sell them in the usual course of trade. At the time when the rule was first developed in regard to manufactured articles, such articles were usually made
The judgment is reversed, with directions to grant a new trial.