C.B. Foster Co. v. Fulton Mills , 139 Miss. 490 ( 1925 )

^* Headnote 1. Sales, 35 Cyc., p. 596; On measure of damages for breach of contract for sale and purchase of goods to be manufactured, see notes in 52 L.R.A. 254; 57 L.R.A. 204, 4 L.R.A. (N.S.) 740; 24 R.C.L. 117. Appellee, Fulton Bag Cotton Mills, a Louisiana corporation, brought this action in the circuit court of Harrison county against appellant, C.B. Foster Co., a Mississippi corporation, to recover damages for a breach of contract between the parties consisting of appellant's refusal to order out and receive from appellee as provided in said contract ten thousand burlap bags, and recovered a judgment from which appellants prosecute this appeal.

At the conclusion of the evidence the court directed a verdict for appellee for the difference between the contract price of the bags and their market price on the date of the breach of the contract. There was no question as to the liability of appellant. In other words, that appellant had breached the contract involved could not under the evidence be questioned. The only question before the court was as to the true measure of damages for the breach of the contract.

The controlling facts out of which the question arises were as follows: Appellee contracted with appellant to manufacture for and sell the latter fifty thousand burlap bags described as (using the language of the contract) "fifty thousand new ten oz. thirty-six-inch cut thirty-four-inch burlap bag, hemtop, printed on one side, two colors." The contract was made August 6, 1920, shipment of the bags was to be made by appellee to appellant, twenty thousand October 1, 1920, twenty thousand November 1, 1920, ten thousand December 1, 1920. The price to be paid by appellant was one hundred twenty dollars and twenty-five cents per thousand. The burlap was not to be manufactured by appellee, that was already on hand. Appellee was to manufacture out of the burlap for appellant the bags in the condition above described. Appellant accepted and paid for the first two installments of bags, aggregating forty thousand, but breached its contract to take the last installment of ten thousand. These ten thousand bags at the time of the breach had never been manufactured by appellee. By the tacit consent of appellant, appellee had delayed the manufacture of these bags until appellant was ready to receive them. On July 9, 1921, when the contract was breached by appellant, appellee had not manufactured the bags, but had on hand for that purpose the necessary burlap. The evidence is indefinite in the record as to how much it would have cost appellee to manufacture the ten thousand bags. Appellee's evidence showed that at the date of the breach of the contract by appellant the difference between the contract price of the bags and their market price manufactured as provided in the contract was fifty-three dollars and twenty cents per thousand.

Was the proper measure of damages the difference between the contract price and the market price of the manufactured bags at the time of the breach of the contract, or was it the difference between the contract price and the market price of the burlap necessary for the manufacture of the bags? It is only actual damages appellee sued for and is entitled to recover. The criterion is full compensation for the breach of the contract. As we view the evidence, appellee got more than that when he got the difference between the contract price of the bags and their market price in their manufactured state at the time of the breach of the contract. The excess amount recovered by appellant consisted in the difference in the market price of the raw burlap and the necessary cost of manufacturing the same into the bags. Appellee had not manufactured the bags. It had not incurred that expense. It was not to incur it until the appellant was ready to receive the bags. Therefore appellant's judgment is excessive to the extent of the cost of the manufacture of the bags. The evidence leaves it uncertain as to what that was. However, the evidence plainly shows that fifty-three dollars and twenty cents, the amount with which appellant was credited, was not the market price of the raw burlap when the contract was breached but was the market price of the manufactured bags.

Reversed and remanded.