141 P. 732 | Ariz. | 1914
Action for the alleged breach of a contract. There was a prayer for judgment in the sum of $3,707.03. The appellant set up a counterclaim in the action based on a breach of the contract sued on, and prayed for-judgment in the sum of $614. The case was tried to a jury, which returned a verdict in favor of appellee in the sum of $1,425.51; judgment thereon being given accordingly.
It is claimed that there was a want of capacity in the plaintiff to maintain the action because he was a member of the Pioneer Meat Company, which entered into the contract in question, and that the firm had not filed any certificate of partnership, as required by title 51, Revised Statutes of Arizona of 1901.
Observe that the action is not maintained by the persons composing the partnership, but is maintained by an individual who became vested with the ownership of all the property of such firm before the suit was brought. The chapter cited does not declare that a contract made by such a partnership is invalid and unenforceable by reason of its failure to comply with the statute; but the penalty attached by the statute for such failure is a legal incapacity to maintain an action by the persons transacting business as a copartnership under a fictitious name, or a designation not showing the names of the persons interested as partners. There is no disability to make contracts or have transactions; but the disability attached is a want of capacity to maintain any action upon or on account of any contract made and transactions had in their partnership name until they have first filed the certificate required. Upon compliance with the statute the disability is removed, and the removal of such disability relates back to embrace any contract or transaction had prior to the compliance, and of course comprehends all such contracts and transactions subsequent thereto. We must determine, therefore, if the statutory disability attaches to an assignee of such firm, even though such assignee be a member of the firm within the inhibition of the law.
The good faith of this transaction, in which one member of the firm sold all of his interest in the firm’s property to another member, is not questioned. The provision in the statute prohibiting the maintenance of an action by such a partnership does not preclude the assignment of a claim held by the partnership, nor does it prevent the assignee of any such claim from maintaining an action thereon in his own name. Cheney v. Newberry, 67 Cal. 126, 7 Pac. 445; Wing Ho v. Baldwin, 70 Cal. 194, 11 Pac. 565. That such assignee was a member of the firm is immaterial. Gray v. Wells, 118 Cal. 11, 50 Pac. 23; Trudel v. Butori, 19 Cal. App. 584, 127 Pac. 76.
It appears that the firm did file a certificate in an attempt to comply with the law, and, while it is unnecessary for us to pass upon its sufficiency in this case, we might observe en passant that the record discloses a substantial compliance with the requirement of the statute in this behalf. There is no merit in this point. We shall now have surcease of it and pass on to others.
By the contract McFadden obligated himself to deliver to the Pioneer Meat Company, at its slaughter-house about three miles hitherward of Globe, 300 head of cattle, with the privilege on his part of delivering up to 400 head. The kind and quality of the cattle, and the price per pound to be paid therefor, were specified in the contract. Deliveries were to be made as follows: September 20 to October 1, 1912, 75 to 125 head of cattle. October 20 to November 1, 1912, 75 to 125 head of cattle. November 20 to December 1, 1912, 75 to 125 head of cattle. The first delivery was duly made and accepted, and the controversy here arose over the second one. There was no attempt to make the third delivery.
One of the specifications of the contract was that the cattle delivered were to be good, fat, beef cattle, ready for immediate use, and this specification is the axis on which the alleged breach of the contract revolves.
It appears that on November 1, 1912, the appellant delivered to the Pioneer Meat Company at its slaughter-house near Globe about 86 head of cattle, and the delivery was refused
Of course the company was not bound to receive or pay for the cattle delivered, if they were not of the kind and quality specified in the contract. The contract having been broken, the person injured by the breach ought to be placed, as far as money can do it, in the same position as he would have been in if the contract had been filled. Where the carrying out of the contract would give one of the contracting parties the use or enjoyment of a particular thing, and he has lost it (without fault on his part), the damages he should be entitled to would be the value of that which he has lost. The important question we have to deal with is: What is the principle upon which the damages in such a ease are to be assessed ?
In the leading ease of Hadley v. Baxendale, 9 Exch. 341, the general rule on this subject is stated as follows:
“Damages recoverable on a breach of contract are measured by the actual loss sustained, provided such loss is what would naturally result as the ordinary consequence of the breach, or as a consequence which may, under the circumstances, be presumed to have been in the contemplation.of the parties as the probable result of a breach. ’ ’
This case is the polar star to which the courts of both England and America have looked for guidance in ascertaining the true rule as to the measure of damages for breach of contract. It is often referred to by Sedgwick and by Sutherland in their treatises on Damages, and Mr. Lawson cites it as the leading case which has been followed in all the courts of the United States.
In cases where actual loss is sustained, the basic idea then is compensation. But how shall we arrive at a just and fair compensation to which an injured party is entitled in a suit for the breach of a contract for failure to deliver personal property of a stated quality sold at a specified price, and for a particular use ? It is most important to consider this, for it is the vital factor in the case.
The general rule is that the measure of damages is the difference between the contract price and the market price at the time and place fixed for the delivery. This general rule, however, must not be taken as one subject to no exception or modification. What if there should be no market at the time and place fixed for delivery? Can the seller, omitting to do that which his contract obligated him to do, thus escape liability to respond in actual damages to the other party ? Mr. Benjamin, after reviewing a number of authorities, says:
“It is submitted that these decisions establish the following rules in cases where goods have been bought for the purpose of resale, and there is no market in which the buyer can readily obtain them:
“I. If, at the time of the sale, the existence of a subcontract is made known to the seller, the buyer, on the seller’s default in delivering the goods, has two courses open to him: (1) He may elect to fulfill his subcontract, and for that purpose go into the market and purchase the best substitute obtainable, charging the seller with the difference between the contract price of the goods and the price of the goods substituted. (2) He may elect to abandon his subcontract, and in that case he may recover as damages against the seller (a) his loss of profits on the subsale, and (b) any penalties he may be liable to pay for breach of his subcontract; but, if
“II. If, at the time of the sale, the existence of a subcontract is not made known to the seller, a knowledge on his part that the buyer is purchasing with the general intention to resell, or notice of the subcontract given to him subsequent to the date of the contract, will not render him liable for the buyer’s loss of profits on such subcontract; the buyer may either procure the best substitute for the goods as before and fulfill his subcontract, charging the seller with the difference in price, or abandon the subcontract and bring his action for damages, when the ordinary rule, it would seem, will apply, and the jury must estimate, as well as they can, the difference between the contract price and the market value of the goods, although there is no market price, in the sense that there is no place where the buyer can readily procure the goods contracted for.
“III. In every case the buyer, to entitle him to recover the full amount of damages, must have acted throughout as a reasonable man of business, and done all in his power to mitigate the loss. ’ ’ Benjamin on Sales, 6th Am. ed., sec. 1327.
Mr. Elliott says that: “Where there is an available market, the measure of damages, ordinarily and in the absence of special circumstances, is the difference between the contract price and the market or current price of the goods at the time or times when they ought to have been delivered, or, if no time was fixed, then at the time of refusal to deliver. This contemplates a fair market, and, if no market exists at the place, the value at the market nearest available, plus the cost of transportation, is generally taken in its place.” Elliott on Contracts, sec. 5108.
In support of the text the author, among other cases, refers to Gaunt v. Ralston Purina Co., 198 Fed. 60, 117 C. C. A. 168, where the measure of damages for breach of the seller of a contract for sale of grain to be delivered at a certain place was stated to be the difference between the contract price and the market price of the same quality of grain at the place of delivery at the time of breach, if there was a market price at such time and place, and, if there is no market, the difference between the contract price and what it cost the buyer to procure the grain delivered there from the most accessible market where the buyer purchased the same in a reasonable and diligent manner.
It was said in the case of Cahen v. Platt, 69 N. Y. 348, 25 Am. Rep. 203, speaking on this subject in an action by the seller:
“The general measure of damages in such a case is the difference between the contract price and the market price at the time and place of delivery. This measure is adopted as one that will generally give complete indemnity to the seller. He can dispose of the commodity contracted to be sold at the market price, and his damage will be the difference between the price thus obtained and the price he would have received if the contract had been performed. Evidence as to the price need not be confined to the precise time when the contract was to have been performed. It may sometimes be impracticable to show the price at the precise time, and hence evidence of the price for a brief period before and after the time may be given, not for the purpose of establishing a market price at any other time, but for the purpose of
The Pioneer Meat Company was engaged in the wholesale and retail meat business at Globe. The contract called for the delivery at the slaughter-house of the company of good, fat cattle, ready for immediate use. The animals were thus designated for the special purpose for which they weré needed to supply the trade of the company, and the ordinary consequences of a failure to have the cattle for the intended use must be held to have been within the contemplation of the parties to the contract. The evidence discloses: That at the time the contract was broken there were no cattle to be had at the place of delivery or at Globe. That there was no market for cattle at Globe. That buyers were offering 6 and 7 and cents per pound for such cattle, but none were procurable. That the firm, in order to supply its trade and keep its business going, procured 228 head of cattle in the Gila Valley in the vicinity of Globe, and paid 6% cents per pound for 131 head, and less than 6 cents per pound for the balance. The difference in the price paid, with transportation expenses of the cattle substituted added, and the price under the contract, amounted to the sum of $3,251.03. It appears that the demands of the firm’s business and the situation of the cattle market required it to procure the substituted cattle in the manner pursued. We think, under the circumstances of this case, that the firm was justified in avoiding so far as it could the consequences of the breach and procuring the most available substitute in the manner open to it; indeed, it was perhaps the duty of the firm so to do. And in procuring the substituted cattle by the method pursued, there does not appear any lack of good faith in the transaction, nor is there any want of reasonable diligence and dispatch apparent in the premises on the part of the firm. The verdict of the jury has so determined.
The court took the view that the plaintiff should have a reasonable time to go into the market and substitute other cattle in the place of those not delivered under the contract, and, in substance, instructed the jury that the measure of damages would be the difference between the contract price and the market value of property of the same kind and quality at the place of delivery and within a reasonable time after the contract should have been performed, but, in the event that there is no market value of such property at the time and place of delivery, then the measure of damages is the difference between the contract price and the market value at the nearest market from the place of delivery, not to exceed, however, the actual price paid by the plaintiff for the cattle he substituted for those not delivered under the contract.
In actions for breaches of contract, the circumstances of each ease must determine what measure of damages should apply, having in view always the giving actual compensation for actual loss. Slaughter v. Marlow, 3 Ariz. 429, 31 Pac. 547.
When the property contracted for is not readily obtainable on the market at the place of delivery under the contract, it has been held that the purchaser may recover the difference between the agreed price and the actual cost of procuring similar property by due diligence. Vulcan Iron Works Co. v.
The principle just stated seems to have been recognized by the appellant, for he requested, and the court gave to the jury, the following instruction, to wit:
“You are hereby further instructed that it is the duty of the plaintiff, where a defendant has committed a breach of a contract to deliver property at a certain time and place, by reasonable diligence to lessen damages that might be incurred by him by reason of such breach. Therefore, if you find from the evidence that the defendant, McFadden, did commit a breach of his contract by failing to deliver cattle of the kind and quality mentioned in the contract set forth in plaintiff’s complaint herein, and that the plaintiff, by reasonable diligence, could have procured in the vicinity of Globe, where said cattle were to be delivered, other cattle of the same kind and quality as those mentioned in the contract, and at no greater cost and prices than mentioned in the contract, then, and in that event, the plaintiff in this case cannot recover anything more than nominal damages.”
The theory of this instruction is that the appellee was involved in a matter dictating good faith and due diligence. So he was, and if, in the exercise of good faith, and with due diligence, he procured in the open market, in the vicinity of Globe, cattle to substitute for those contracted for, and he did not pay more than the market price, we fail to recognize any principle that would preclude him from recovering as damages for the breach of the contract the difference between the price paid and the contract price.
In view of the evidence disclosing that cattle were not obtainable at the place of delivery or at Globe, that there was a good demand for them at the time and place of delivery, and buyers were offering 6, 7 and l1/^ cents per pound, and cattle were not readily obtainable at that price, and that the plain
While generally the measure of damages ought to be fixed at the time of the breach of the contract, it is not a procrustean rule which the peculiar circumstances of a particular case may not justify some modification thereof. The firm did the best it could to remedy the default of the seller and save the damages as far as possible on account of its business. The prayer was for damages in the sum of $3,707.03, and the verdict was- for $1,425.51, and we cannot say it was not justified by either the law or the facts.
Other alleged errors have been pointed out; but, upon a careful consideration of the entire record, we do not feel that there is any matter presented which would justify a reversal of the judgment, nor such as to invite a more .extended review.
Judgment affirmed.
CUNNINGHAM and ROSS, JJ., concur.
Application for rehearing denied.
NOTE.—On tie question of the measure of damages for breach of a contract for the sale of an article having no market price, see note in 57 L. R. A. 193.
As to the duty to prevent or reduce damages on breach of contract for sale or purchase, see note in 52 L. R. A. 259.