Sunny South Grain Co. v. Webb-Sumner Oil Co. , 20 Ala. App. 311 ( 1924 )

This was an action by the appellant against the appellee to recover damages for the breach of an alleged contract to ship 200 tons of cotton seed cake alleged to have been sold by appellee to appellant for delivery during February, 1921.

The trial was by the court without the intervention of a jury. The court found that there was a breach of the contract, and awarded the plaintiff (appellant) nominal damages only, holding that the damages claimed were speculative. As there was no cross-appeal by the appellee to test the correctness of the court's finding against the appellee on the facts, the only question presented for review here is, What is the rule for the admeasurement of damages for the breach of the contract?

The second count in the complaint alleged that there was a contract by defendant to ship to plaintiff 200 tons of cotton seed cake at a specified price and averred the breach of the contract, and that the plaintiff was engaged in manufacture and sale of grain feeds, and that this was known to defendant, and that at the time of the purchase the plaintiff notified defendant it was buying this cake to grind and resell as cotton seed meal, and to use in its business of manufacturing and mixing grain feed. The plaintiff averred that as a proximate consequence of defendant's failure to ship the 200 tons of cotton seed cake it was forced to buy cotton seed meal on the open market at a price greatly in excess of the price it had contracted to pay the defendant for the cotton seed cake, and that plaintiff lost the profits it would have made in the resale of the cake as meal. The plaintiff claimed damages for the idleness of its plant by reason of the delay in getting cotton seed meal and by reason of the failure of the defendant to ship the cake.

The ordinary rule is, where the vendor has failed to deliver to the purchaser goods sold, the measure of damages, if the purchase price has not been paid, is the difference between the market value of the goods at the time and place of delivery and the contract price, together with interest. McFadden Bro. v. Henderson, 128 Ala. 233, 29 So. 640; Bell v. Reynolds, 78 Ala. 511, 56 Am. Rep. 52; Watson v. Kirby, 112 Ala. 436, 20 So. 624. But this rule does not apply where the purchaser cannot readily go into the market and supply himself with the desired goods by paying the difference in price, if any. McFadden v. Henderson, supra.

Cotton seed meal is made by grinding cotton seed cake. Where the cake could not be purchased on the market, the plaintiff was entitled to purchase the nearest substitute (cotton seed meal) at the market price, and the measure of his damages was the difference in the market price of the meal, less cost of freight and grinding, and the contract price of the cake.

Where there is no market in which a buyer may obtain similar articles purchased, he may purchase on the market the best substitute obtainable, using reasonable care and diligence, and recover of the seller the difference between the price of the goods substituted and the agreed contract price. 24 R.L.C. 336, p. 7.

It is the duty of the buyer to do all that he reasonably can to mitigate the loss, and where the goods are not obtainable in the market where delivery was to be made, he should exercise reasonable diligence to obtain them elsewhere. 35 Cyc. (VII) pp. 640, 641.

"If the buyer cannot obtain the goods contracted for in the market, he may recover for his actual loss resulting therefrom, as for a loss sustained by reason of the necessity of putting up with inferior goods, and by the enhanced price he is obliged to pay in some other market." 35 Cyc. (VII) pp. 641, 642.

"Only such damages as are the natural and probable result of the breach can be recovered, unless the special circumstances from which the special damages would arise were known to the seller at the time the contract was entered into, and may reasonably be considered as within the contemplation of the parties at the time of the contract." 35 Cyc. (VIII) pp. 642, 643.

In Alabama Chemical Co. v. Geiss, 143 Ala. 591, 39 So. 255, the court, speaking through Simpson, J., says:

"For the breach of a contract to sell and deliver personal property, the measure of damages is the difference between the agreed price and the price at which similar property could be purchased in the market, and that losses, sustained by the purchaser, by reason of his failure to realize profits on contracts which he entered into on the faith of receiving the personal property bought, are too remote, conjectural, and speculative to be recovered."

The conduct of a mill business such as plaintiff was engaged in is necessarily subject to so many contingencies as to render it impracticable to determine what, if any, profits might have accrued from it during any given period when its operation was suspended. So the general profits which the plaintiff's mill would have made during the time it was forced to remain idle were so largely a matter of conjecture and speculation that they are not recoverable. Watson v. Kirby, 112 Ala. 436, 20 So. 624; Bixby-Theirson Lumber Co. v. Evans, 167 Ala. 431, 52 So. 843, 29 L.R.A. (N.S.) 194, 140 Am. St. Rep. 47; Bromberg v. Eugenotto Cons. Co., 162 Ala. 359, 50 So. 314; Dickerson v. Finley,158 Ala. 149, 48 So. 548. The damages claimed for loss of profits while the mill was idle were not proven, and were not provable or recoverable.

The trial court found for the plaintiff and awarded nominal damages. If the plaintiff was entitled to recover, the damages to be awarded would under the evidence necessarily have exceeded the award of 1 cent.

The judgment of the circuit court is reversed and the cause remanded.

Reversed and remanded.