Pittsburg Sheet Manufacturing Co. v. West Penn Sheet Steel Co. , 201 Pa. 150 ( 1902 )

Opinion by

Mb. Justice Fell,

This action was brought to recover damages for the breach of a contract to deliver 700 tons of sheet steel. The liability of the defendant on the contract made by its agent was determined adversely to it when the case was here before. See 197 Pa. 491. The main contention at this trial was as to the assessment of damages.

When the contract was made, the defendant was informed that the sheets were bought by the plaintiff to fill orders which it had accepted. After delivery was refused by the defendant, the plaintiff went into the open market and purchased all the sheets that it could obtain, and then in order to fill its subcontracts it bought steel bars and had them rolled into sheets. A part of the bars were rolled by a third party, Zug & Company. As to these sheets the plaintiff was allowed to recover the difference between the contract price and the cost of the bars plus the price paid for rolling them into sheets. The plaintiff rolled 354 tons of bars in its own mill, and in the statement of claim it charged the defendant with the cost of the bars, the expense of rolling which included the operating expenses of the mill and the wear and tear of machinery, and to these added a manufacturer’s profit of §5,900. The instruction permitting a recovery for the last of these items, the manufacturer’s profit, gives rise to the only assignment of error that need be considered.

The default of the defendant in delivering the sheets, contracted for, left the plaintiff to its election to go into the market and purchase the best substitute obtainable to fill its subcontracts, charging the defendant with the difference in price; or to abandon its subcontracts and bring an action for damages for the loss of profits on the subsales and for the penalties for which it was liable. The object of the law is to compensate the party injured. He is entitled to this and nothing more, and in all cases compensation must be limited to the loss actually sustained. If the buyer purchases goods in place of those contracted for at less than the market value and thus reduces the loss, he can recover only the actual loss: Arnold v. Blabon, 147 Pa. 372 ; Theiss v. Weiss, 166 Pa. 9. Where he manufactures the goods the rule must be the same. The question is not what he might have made by the resale of the goods purchased, or by the sale of those manufactured by him, but what will compensate him for the loss arising from the seller’s default.

While the instruction on the subject was erroneous, it does not make a new trial necessary. The verdict was for the whole of the plaintiff’s claim, with an allowance of §1,000 interest. The error may be corrected by deducting the amount of the item for which recovery was improperly had, with a proportionate part of the interest allowed. This would reduce the verdict to §20,643, and for this amount with interest from date of the verdict judgment is now entered.