Todd v. Gamble — 51 N.Y. St. Rep. 619

Majority

p. 619

Albert W. Todd et al., Resp’ts, v. James Gamble et al., App’lts.

(Supreme Court, General Term, First Department,

Filed January 13, 1893.)

Headnote

1. Contract — To manufacture — Delivery, when excused.

In case a vendor agrees, by executory contract, to manufacture goods to be delivered from time to time, as ordered by the vendee, to be paid for on each delivery, and the vendee, after having accepted and paid for a part, gives notice that he will not receive and pay for the rest, the vendor may recover damages for breach of the contract without manufacturing or tendering the remainder of the goods.

U. Same — Breach—Damages.

In such case the measure of damages is the difference between the contract price and the actual value of the goods; which may be shown by the market price, or if there be none, by the cost of production.

•3. Same — Market price — Burden of proof.

Where the only evidence on the question of market value was the testimony of one of the plaintiffs, who testified to facts which would authorize a finding that there was no market value, but admitted that on a former trial he testified to the market value of the goods at the time the contract was made ,Held, that the witness being an interested one, his credibility was for the jury, and that the question as to whether there was a market value was one for the jury, and it was error to refuse to charge that the burden was on plaintiffs to prove that it had not before evidence of the cost of production could be received or considered by the jury.

Appeal from a judgment entered upon the verdict of a jury in an action to recover damages for breach of contract

This action was brought to recover damages for defendants’ failure to receive and pay for silicate of soda, to be manufactured and delivered under an executory contract

The plaintiffs were engaged, in this state, in the manufacture and sale of silicate of soda, which is used in manufacturing laundry soap, in which business the defendants were engaged in the state of Ohio. The parties entered into a written contract by which the plaintiffs agreed to thereafter deliver, and the defendants to receive, free on board the cars at the city of New York, all the American silicate of soda of the plaintiffs’ regular standard make which the defendants should use in their business between March 1, 1887, and March 1, 1888, for one dollar and ten cents per hundred pounds.

Under this contract, the plaintiffs delivered 150 barrels of soda in March, and 200 in April, 1887, containing 192,808 pounds, which were accepted and paid for. April 22, 1887, the defendants notified the plaintiffs that nó more silicate of soda

p. 620

would be received under the contract. It was conceded on the trial, that between the date last mentioned and March 1, 1888, the defendants purchased from other manufacturers and used in their business 1,582,468 pounds of American silicate of soda,

Frederick R. Kellogg, for app’lts; Albert B. Boardman, for resp’ts.

The existence of the contract, and that it was broken by the defendants, were facts conceded on the trial, as was also the quantity of American silicate of soda which defendants purchased of manufacturers other than the plaintiff, ^tnd used in their business during the term for which the contract ran. In case a vendor agrees, by an executory contract, to manufacture goods, to be delivered from time to time, as ordered by the vendee, to be paid for after each successive delivery, and the vendee, after having accepted and paid for a part, gives notice that he will not receive or pay for the rest, the vendor may recover damages for the breach of the contract without manufacturing or tendering the remainder of the goods. Windmuller v. Pope, 107 N. Y., 674 ; 12 St. Rep., 292 ; D ingley v. Oler, 11 Fed. Rep., 373 ; Ripley v. McClure, 4 Exch., 345. In such a case the vendor is not entitled to elect between several remedies, as in case of a sale of goods in existence and identified, or in case goods are manufactured before the contract is rescinded, but he is confined to recovering the difference between the contract-price and the actual money value of the property at the time and place appointed for their delivery. Windmuller v. Pope, supra; Borries v. Hutchinson, 18 C. B. (N. S.), 445. This rule of liability, as well as the one above stated for ascertaining the amount of the liability, seems to be acquiesced in by the learned counsel for both parties tó this litigation. Both agree that when an ex-ecutory sale is made of articles having a market-value, which the vendee refuses to accept, the measure of his liability is the difference between the contract-price and their actual value, which the law deems equivalent to their value in the market. But, if the subject of the sale has no market-value, the measure of the vendee’s liability is still the difference between the contract-price and the actual value of the goods, the actual value being a factor in each case in determining the question of damages. When the value of the article cannot be determined by what it will sell for in the market, it must be ascertained in other ways, sometimes by showing the cost of production.

In this case the court ruled that the measure of the defendants’ liability was the difference between the contract-price and the cost of production, impliedly holding that, under the evidence, there was no question of fact as to whether the goods had or had not a market-value. The court was requested to charge that the jury could not consider the cost of producing the soda unless they found that it had no market-value, which was refused and an exception taken. The defendants also requested the court to rule and charge that the burden was on the plaintiffs to show that the silicate of soda had no market-value, before evidence of the cost of production could be received or considered by the jury,

p. 621

which was also refused and an exception taken. Thus the court determined, as a matter of law, that the article was without a market-value. We think this was error. One of the plaintiffs was the only witness called in their behalf on this question, who testified to facts which would have authorized the jury to have found that the goods had no market-value, but he admitted that, on a former trial, he testified to the market-price of the article at the time the contract was made, and for six months following. The witness being an interested one his credibility was for the jury. The evidence of Mr. Lincoln, taken on the former trial, was admitted on the last one, in which he stated the market-prices of silicate of soda between March 1, 1887, and March 1, 1888. The burden was on the plaintiffs to show that the article had no market-value, and under the state of the evidence disclosed by the record, whether it had or had not such a value was a question of fact for the jury, and not one of law for the court. In New York & Maine Granite Paving Co. v. Howell, 7 St. Rep., 494 , damages were sought to be recovered from a vendee for refusing to accept paving granite. The plaintiff insisted that the actual value of the goods was to be ascertained by proving the cost of production, while the defendants contended that their market value was proof of actual value. The trial court held, as a matter of law, that the granite had no market value, and refused to submit that question, as one of fact, to the jury, which was held to be error.

The judgment and order should be reversed and a new trial granted, with costs to abide the event.

O'Brien and Barrett, JJ., concur.