Case ID: sw_219/html/0554-01.html
Source: Caselaw Access Project
Author: {"author": "RASBURY, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

ALBA-MALAKOFF LIGNITE CO. v. HERCULES POWDER CO.
    (No. 8298.)
    (Court of Civil Appeals of Texas. Dallas.
    Feb. 21, 1920.
    Rehearing Denied March 20, 1920.)
    1. Sales <&wkey;404 — Buyer may confirm and RECONVENE FOR FRAUD WHEN SUED ON CONTRACT.
    The buyer has various remedies for relief from contracts induced by fraud, among which is the right to confirm the contract after knowledge of the fraud, and reconvene for damages when sued upon the contract.
    2. Sales &wkey;>418(2) — Damages of buyer reconvening FOR FRAUD WHEN SUED ON CONTRACT STATED.
    Where buyer confirms contract induced by fraud with knowledge of the fraud, and reconvenes for damages when sued upon the contract, his measure of damages is the difference at the time and place of delivery in the market value of the article actually delivered and the market value of that contracted for.
    3. Evidence <&wkey;142(l) — Price paid for other GOODS HELD NOT ADMISSIBLE TO SHOW MARKET VALUE.
    In a seller’s action for price of blasting powder, where buyer reconveyed for damages sustained because of misrepresentations as to the strength of powder, evidence as to the difference between the price paid for such powder and that paid for other powder buyer was required to purchase held inadmissible, since market value is not to be shown in that way, and such proof would show exceptional and not market values.
    4. Sales <&wkey;418(19)^lNCREASE of cost and LOSS OF PROFITS NOT RECOVERABLE FOR MISREPRESENTATIONS AS TO STRENGTH OF BLASTING POWDER.
    Mine operator, which retained* powder of inferior power to that contracted for, could not, upon seller’s action for price, recover as damages for seller’s misrepresentations as to quality of powder the increase in the cost of operating the mine and the loss of production and for profits due to the inferior quality of powder; such damages not being the natural and probable result of seller’s breach and being too remote to be definitely ascertained.
    5. Trial <&wkey;170-4TuDGMENT for plaintiff ON DIRECTED VERDICT AFFIRMED THOUGH EVIDENCE WAS SUFFICIENT TO G9 TO JURY WHERE DEFENDANT REFUSED TO AMEND.
    In seller’s action for price, where buyer reconvened for damages for misrepresentations of quality, and where there was evidence that the goods purchased were of some value, court on appeal will affirm judgment for seller rendered on a directed verdict, notwithstanding that evidence showed that goods were not of the quality represented, and that the difference in value of that actually delivered and that contracted for was considerable, where buyer relied on allegation that goods were worthless, and refused to amend pleading so as to ask judgment for the difference of the value of goods delivered and that contracted for.
    Appeal from District Court, Henderson County; John S. Prince, Judge.
    Suit by the Hercules Powder Company against the Alba-Malakoff Lignite Company. Judgment for plaintiff, and defendant appeals.
    Affirmed.
    Miller & Miller, of Athens, for appellant.
    Spence, Haven & Smithdeal, of Dallas, for appellee.
   RASBURY, J.

Appellee sued appellant in the court belo.w, alleging, in substance, that it sold and delivered to appellant, and the latter accepted, 900 kegs of blasting powder at the agreed price of $1.85 per keg or $1,665, payment of which was to be made 30 days after date of invoice, which it failed and refused to do, etc. Appellant answered, in substance, that before purchasing powder appellee was informed that it desired to use the powder for blasting lignite in its mines,' and that appellee represented and warranted its powder to be of the standard quality used for that purpose, which appellant believed and upon which it relied, but that such representations were in fact false, made to and which did deceive appellant, for that, when said powder was placed with appellant’s miners for the purpose of blasting, it was found to be inferior, in that it lacked the strength and force to perform the service that blasting powder of the standard generally used would perform under similar conditions, and was entirely worthless for the purpose for which it was sold and warranted, and as a consequence there was a total failure of consideration, in addition to which such powder, when exploded, created an abnormal volume of smoke, thereby preventing re-entry of the miners and as a consequence much loss of time. Following the allegations recited, appellant sought to recover in reconvention the following items of damage: (1) Appellant borrowed 100 kegs of Alton powder from Consumers’ Lignite Company, to be used in connection with appellee’s inferior powder, and repaid same with Alton powder, which cost $2.35 per keg, or 50 cents per keg advance over the price at which appellee warranted to deliver similar powder, and aggregating $50; (2) appellant purchased 50 kegs of powder from Texas Powder Company, paying therefor $2.35 per keg, or 70 cents per keg advance over the price at which appellee agreed to deliver similar powder, or a total of $35; (3) a similar purchase from Texas Powder Company of 300 kegs of powder at an advance of $1.08 per keg over the price at which appellee agreed to deliver similar powder, or a total of $324; (4) damages for increased cost of outp'ut at its mines in December, 1918, due to use of appellee’s powder, $373; (5) damages for increased operating expense and loss in production from April, 1918, to September, 1918, due to use of appel-lee’s powder, $2,000; (6) profits on 4,000 tons of coal, which would have been produced, but for the inferiority of appellee’s powder, $500.

Exceptions challenging the right of appellant to recover the damages detailed above were sustained, and the action of the court in that respect is assigned as error. We conclude the court did not err.

The buyer has various remedies for relief from contracts induced by fraud (Mech-era, Sales, vol. 2, § 940); among which is the right to confirm the contract after knowledge of the fraud, and reconvene for damages when sued upon the contract. Grabenheimer v. Blum, 63 Tex. 369; Hallwood Cash Register Co. v. Berry, 35 Tex. Civ. App. 554, 80 S. W. 857; 35 Cyc. 617. Such is the form of remedy adopted by appellant as disclosed by its pleading. The measure of damages in such cases generally is the difference, at the time and place of delivery, in the market value of the article actually delivered and the market value of that contracted to be delivered. Florida Athletic Club v. Hope Lumber Co., 18 Tex. Civ. App. 161, 44 S. W. 10, and case cited.

None of the items enumerated, and for which appellant sought judgment, represent, or are claimed to represent, the recoverable damages in such eases. The first three items, aggregating $490, in final analysis, but represent the difference between what appellant agreed to pay appellee for Hercules powder and what he had to pay another mining company in one instance and a dealer,in the others for powder that would perform the work that Hercules powder would not perform. Obviously, to prove that he did pay the prices alleged would be no proof at all of the difference in the market value of the powder delivered and that for which appellant contracted. It is so because market value is not to be shown in that manner, and it is so also because, market price being the basis for estimating the damages, proof of such items would, in effect, be to permit proof of exceptional and not market values, for it -is conceivable that the price paid for an article may often be in excess of the market price, depending to an extent upon the need of the purchaser and the availability of the article.

As to the other items, that is, increase in cost of operating the mine, loss in production and of profits due to the inferior quality of appellee’s powder, appellant was not, in our opinion, under his pleading entitled to recover same: First, because such losses have repeatedly been held not to be in the contemplation of the parties under the ordinary contract of sale and purchase, since they are not the natural and probable result of the breach of the contract; and, secondly, because, as alleged, they are so remote as to be incapable of definite ascertainment.

At the conclusion of the evidence the court peremptorily directed verdict for ap-pellee. The court’s action in that respect is assigned as error. Concerning such contention, we have carefully examined the evidence from the standpoint of appellant, and it is our opinion that the evidence so considered tends to show that the powder delivered to and accepted by appellant’ was not of the quality represented, and that the difference in value of that actually delivered and that that the parties stipulated should be delivered was considerable. We are, however, constrained to the conclusion that that fact will not warrant a reversal of the case, for the reason that the appellant did not, when the court sustained exceptions to the items of damage herein enumerated, amend its pleading, and by appropriate allegations ask judgment for the difference in value of the powder delivered and that contracted for. Instead of pursuing that course, which under the pleading was the true remedy, appellant relied upon its allegation that the powder was worthless and as a consequence there was a total failure of consideration. The evidence did not support that contention, since it appears that appellant disposed of all of it to its miners, the bulk of it at $2 per keg and some of it at $2.35 per keg. The prices, however, were less than the price that the powder contracted for would have sold for according to appellant’s witnesses.

The pleading and evidence being as detailed, that is, no plea asserting the true measure of damages or prayer therefor, and the evidence failing, to show a total failure of the consideration, there was no issue to submit to the jury.

Finding no reversible error in the record the judgment is affirmed.' 
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