Court Opinion

ID: 6250154
Source: CourtListenerOpinion
Date Created: 2022-02-17 21:12:17.755146+00
Date Added: 2024-06-11T08:59:23.983361
License: Public Domain

Opinion by
Mr. Justice Potter,
February Í4, 1910:
In this case the vendor sought to recover the price of lumber delivered, and the vendee sought to recoup damages for non-delivery of other lumber which he claimed was due under the contract. The defendant maintained that the plaintiff had agreed to supply a fixed amount of lumber at a certain rate; that the market price advanced, and the refusal of the plaintiff to deliver the balance of the amount purchased, made it necessary for the defendant to draw upon and make use of other lumber of the same kind and quality, which he had purchased at a higher price than that at which the plaintiff had agreed to supply the lumber. The trial judge declined to permit the jury to determine whether or not the contract had been broken, and if so the amount of the damages suffered by the defendant, because the defendant company did not actually go out and purchase the lumber which it needed to make good the shortage, but instead of so doing, it made use of other lumber which it had on hand, which it had previously purchased. In other words, the trial judge assumed that there was a duty upon the defendant to go into the open market and actually purchase lumber, before it could be legally entitled to claim that it was damaged by the failure of the plaintiff to deliver lumber under the contract. We think this was a misconception of the proper rule.
In Morris v. Supplee, 208 Pa. 253, Chief Justice Mitchell said (p. 258): “When a vendor refuses to deliver goods sold the buyer may wait until the contract time of delivery has passed and then go into the market arid purchase, holding the *147seller liable for any loss. In such cases the measure of damages is the difference between the contract price and any greater market price that the buyer has been compelled to pay, or in other words the actual loss to the buyer from the breach.” Then he goes on to point out that the buyer is also at liberty to supply himself before the contract date of delivery, taking the risk that he may pay more than the market price may be at the contract date of delivery. And he sums it up by saying: “The foundation of the rule is that he is entitled to compensation for his actual loss, provided always that he keeps the loss as small as he reasonably can.”
In the present case, as we understand the evidence, it appears that the defendant happened to have on hand a supply of similar lumber, previously purchased, which would answer the required purpose, and while he was under no obligation to do so, yet he did substitute that for the supply which he claimed under the contract was due him from the plaintiff. The lumber which he thus substituted cost him less than the market price of the same lumber at the time of substitution, and if the plaintiff company was liable at all, it was manifestly to its advantage to have this lumber substituted at the reduced price, rather than that the defendant should go into the open market and purchase other lumber at the then prevailing price. Certainly, the plaintiff company can have no just cause of complaint by reason of the fact that the defendant used other lumber, previously purchased at a less price, to make up for the alleged shortage upon the part of the plaintiff.
The defendant should not have been called upon to forego any advantage when he made use of the lumber which he already had on hand. Presumably that lumber was worth the market price which prevailed at the time of the breach of the contract which required the substitution. At any rate, we are unable to see any good reason why the fact that he made use of other lumber previously purchased, should in any way preclude him from claiming damages for a breach of the contract upon the part of the plaintiff. In Mechem on Sales, sec. 1738, what seems to us a very reasonable rule *148is thus laid down: “It is not essential .to the operation of this rule giving the difference between the contract and the market price, that the buyer shall have actually gone into the market and bought other goods to supply the place of those not delivered.” The writer then cites this extract from Saxe v. Penokee Lumber Co., 159 N. Y. 371: “It would not advantage the defaulting party if he should do so; for, if he buys at the market value, the result to the other party is the same as if he simply proved the market value.” Compensation for the actual loss sustained, is what the injured party is entitled to recover.
This case must go back to be submitted to the jury for them to determine as a matter of fact whether the plaintiff committed a breach of the contract. If so, then the defendant is entitled to recoup the loss sustained thereby. As a rule this loss would be the difference between the contract price and the market value of the lumber at the date of the breach of the contract. In the present case the defendant has kept the loss considerably below what it would otherwise have been, by the substitution of lumber previously purchased at less cost than the market price at the date of the breach, and has thus reduced the amount of the damages below what it would have been-under the usual rule.
The first and second assignments of error.are sustained, and the judgment is reversed with a venire facias de novo.