Case ID: ad_85/html/0216-01.html
Source: Caselaw Access Project
Author: {"author": "Houghton, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Thomas J. O'Gara, Respondent, v. Edwin H. Ellsworth and Others, Appellants.
    
      Measure of damages for a breach of a contract to deliver coal on cm's at the. mines.
    In an action brought to recover damages for the breach of a contract made between the plaintiff's assignors and" the defendants, who controlled the entire output of the Crescent colliery, located in the State of Pennsylvania, by which . the defendants agreed to deliver to the plaintiff’s assignors, free on board the Cars at the mines, 5,000 tons of Crescent coal at a stipulated price per ton, it appeared that the alleged breach consisted in the refusal of the defendants to deliver the coal, which it was intended should be shipped to Chicago and the vicinity.
    Upon the question of damages, the plaintiff was permitted to prove the highest retail price of Crescent coal prevailing in the vicinity of Chicago during the season in which the coal was to be delivered and also the freight rate per ton from the Crescent mine to Chicago and vicinity.
    
      Held, that this method of .proving the value of Crescent coal at the mines was improper;
    That the measure of the plaintiff’s damages depended upon the market price of Crescent coal.at .the time.and .place of delivery;
    
      That if Crescent coal could not he obtained, evidence of the price of coal of a similar kind at places not distant, or in other controlling markets, would be proper, not for the purpose of establishing the market price at another place, but for the purpose of showing the market price at the place of delivery;
    That the market price was the price at which the coal could be replaced for money in the market and not the retail price for which it was or could be sold;
    That the highest market price of the coal during the season in question could not be used as a basis for determining the plaintiff’s damages, for the reason that where deliveries under a contract of sale may be made within a certain time, the law, in determining the measure of damages for non-delivery, contemplates the average price prevailing in the entire market during the whole period of time.
    Appeal by the defendants, Edwin H. Ellsworth and others, from a judgment of the. Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Schuyler on the 31st day of December, 1902, upon the report of a referee.
    
      Owen Cassidy and C. M. Woodward, for the appellants.
    
      O. P. Hwrd, for the respondent. .
   Houghton, J.:

The plaintiff brings this action as assignee of the firm of O’G-ara, King & Co., to recover damages against the defendants for breach of a contract alleged to have been made by them to sell to said firm 5,000 tons of Crescent coal.

During the period covered by the controversy the defendants controlled the entire output of the Crescent colliery located in the vicinity of Coxton, Penn.

The alleged contract between the defendants and the plaintiff’s assignors was embraced in numerous letters, telegrams and price list circulars, quite ambiguous as constituting a binding contract on the part of the defendants to sell to the plaintiff’s assignors 5,000 tons of coal. Except for the fact that the defendants interpreted the correspondence against themselves, and recognized it as constituting a contract, and did acts which might be considered a part performance, there would be a very grave question whether anything further passed between the parties than offers and counter propositions. The referee has found, however, that there was a contract binding on the defendants which they partly performed, and it is not our purpose in this decision to question the correctness of his conclusions in that regard. In the further discussion of the case it will be assumed that such binding contract existed.

The delivery of the coal was, by the contract, subject to the ability of the defendants to procure cars upon which to load it. The plaintiff, claimed that the defendants made no efforts to procure cars, and that the railroads in the vicinity of “the colliery had many cars available for that purpose during the time the coal should have been delivered. It was undisputed that the coal roads allowed only a certain percentage or certain kind of cars to be loaded with coal, the destination of which was west of Buffalo. The entire 5,000 tons was to be transported to Chicago and vicinity.. The defendants claimed that they were unable to procure cars for western transportation.

The contract also provided for sample cars of Crescent coal to be approved by the purchasers.

We refrain from discussing these propositions, for an expression of opinion as to them might unnecessarily embarrass the parties on a retrial of the case, which, we think, must be ordered because .of' errors committed by the referee in respect to the proof of damages which he allowed. '

The contract provided that the coal should be delivered free on board the cars at the mines at one dollar and ninety cents per ton for egg, stove and nut sizes, ■ and fifteen cents less per ton for grate, size. It was undisputed that Crescent coal, which the defendants contracted to sell and deliver, was of a poor quality for anthracite coal; that it was soft and easily broken, and that it sold in the market for a less price than some other kinds of anthracite coal. Defendants were also dealers in Plymouth coal; and while they were quoting Crescent coal to the plaintiff’s assignors at one dollar and ninety cents, Plymouth coal was quoted at two dollars and fifteen cents; and while Crescent grate was one dollar and ninety cents with fifteen cents off, Plymouth grate was two dollars'. The plaintiff’s assignors were dealers in coal at Chicago and sold in that city and surrounding territory.

The referee found that the market value of anthracite coal at the mines at .the time.of the breach of the contract was two dollars and seventy-five cents per ton ; and that the difference between the contract price and the market price was eighty-five cents per ton on all ■sizes except grate, on which it was one dollar per ton.

We think he erred in the admission of the evidence which permitted him to come to this conclusion. The plaintiff produced one of the employees of his assignor firm, and proved the freight rate per ton from the Orescent mine to Joliet and Chicago, and then, against the defendants’ objection and exception, the referee permitted him to state the highest price of Crescent anthracite coal during the season of 1899 at Joliet, 111. Deducting the freight from the prices given, left the coal at the mine from two dollars and seventy-cents for grate, to three dollars and twenty cents per ton for the other sizes. Another employee was produced, who was acquainted with the market value of coal at Joliet and Chicago ■during the time, and against like objection and exception, was allowed to state the highest market price for Crescent anthracite •coal during said period, and gave substantially the same prices.

The plaintiff’s counsel, evidently not being satisfied with this proof of market value, later in the case called a witness, who was familiar generally with the price of coal in the anthracite region,but who knew nothing of the Crescent mine or the coal it produced; ■and he was asked what was the market price at the mines, of coal, in the anthracite region, during the year 1899. Against the defendants’ specific objection that the plaintiff must be confined to the market price of Crescent coal, he was allowed to give the general price of coal during that period. One of the former witnesses was recalled, who had made inquiries as to the price of coal at the mines during the period, and testified that the price of Plymouth coal was two dollars and seventy-five cents per gross ton. The referee fixed that as the price, and charged the defendants with the difference between that and the price stipulated in the contract.

The plaintiff should have confined his proof to the market price of Crescent coal; or, if the defendants controlled the output of that coal so it could not be obtained, then to the price of coal of similar kind and quality.

The plaintiff called one of the defendants as a witness, and. he testified that during the entire season of 1899, the price of Crescent coal did not rise to exceed twenty cents per ton, and at times sold even -lower than one dollar and ninety cents per ton. The superintendent of the Orescent colliery was called by the défendants, and he testified that at all times the Orescent coal sold for from fifty to seventy-five cents per ton less than other coal produced in that vicinity.

The damages of the plaintiff depended upon the market price, at which he could have purchased the coal at the time and place of delivery. (Dana v. Fiedler, 12 N. Y. 40.) If coal could not be obtained from the Crescent mine, evidence of the price of similar coal at places not distant, or in other controlling markets, would be proper, not for the purpose of establishing the market price at another place, but for the purpose of showing, the market price at the place of delivery. (Cahen v. Platt, 69 N. Y. 348.) Besides, the prices given by the witnesses, at Joliet and Chicago, were retail prices. Market value is the price at which goods can be replaced for money in the market; not the retail price for which they are sold. (Wehle v. Haviland, 69 N. Y. 448.) The highest market price in the season of 1899 was not the fair measure of damage, even if it had been proper to prove the price of coal at Joliet and Chicago. Where property should have been delivered at any time within a certain period, the law, in regulating the measure of damages, contemplates a range of the entire market and the average of-prices as thus found, running through the period of time. Neither a sudden and transient inflation nor depression of prices should control the question. (Smith v. Griffith, 3 Hill, 333; Durst v. Burton, 47 N. Y. 167.) In addition, the case of Grand Tower Co. v. Phillips (23 Wall. 471), cited by the respondent’s counsel, with quite similar facts, is a direct authority against the propriety of proving the market price in the manner which- was done on the trial. The Grand Tower Company was engaged in coal mining eighty miles above Cairo, on the Mississippi, and had contracted to deliver a large quantity of coal and had failed to perform. The court held that the measure of damages was the price which the purchasers would have had to pay for coal of the same kind in the quantities in which they were entitled to receive it from the company under the contract, at the nearest available market where it could have been obtained, and that the cash value of similar coal at Cairo, or at points below it-on the Mississippi river, less the cost and expenses of transporting it, was not. the. true measure, of. value.

The damages which were awarded to the plaintiff were assessed on a wholly erroneous theory, and in violation of well-settled rules, and require a reversal of the judgment.

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

All concurred.

Judgment reversed on law and facts, referee discharged, and new trial granted, with costs to appellant to abide event