Court Opinion

ID: 9642291
Source: CourtListenerOpinion
Date Created: 2023-08-22 17:54:10.888502+00
Date Added: 2024-06-11T11:35:09.120128
License: Public Domain

HUXMAN, Circuit .Judge
(dissenting in part).
I concur in the opinion of Judge BRATTON upholding the validity of the first contract executed between the government and Brookridge Farm, Inc., a corporation, herein called Brookridge, but dissent from that part of the opinion denying Brookridge damages for the breach of the first contract for the period of time covered by the second contract.
When the government breached its contract for the purchase of this milk, it became the duty of Brookridge to mitigate its damages by disposing of the milk on the most favorable terms obtainable. It was its duty to seek a market for the milk and realize therefrom what it could. The resultant damage is what it could charge the government with:
I do not interpret the decision of the courts of Colorado to require a holding that Brookridge could not mitigate its damage by executing a second contract with the government for its milk requirements covering the remaining period of time specified in the first contract without losing its right to proceed against the government for *466damages for the breach of the first contract. The majority opinion relies largely on the case of McKay v. Fleming, 24 Colo.App. 380, 134 P. 159, to sustain its position. In my opinion, the McKay case requires no such holding.
An enunciated abstract principle of law, standing by itself and disassociated from a given state of facts, is valueless and of no effect. It is only as it relates to a given state of facts that it is effective and has life and meaning. And when the substantive ultimate facts change, the abstract principle is no longer applicable. In endeavoring, therefore, to determine if the pronouncement of a court in a given case is controlling in a question under consideration, we must first carefully ascertain whether the substantive facts in the two cases are the same.
The facts in the McKay case, supra, are essentially different from the facts under consideration here. There plaintiff purchased a specified piece of real estate from defendant at a stated consideration. It developed that defendant was the owner of only a one-half interest in the real estate and could not fulfill his contract. In order to obtain the real estate, plaintiff executed a new contract with the person with whom he had made the first contract, agreeing to purchase his undivided one-half interest in the real estate at the stipulated price in the original contract, and then made a new contract with the owner of the other half, agreeing to pay him an increased price. Then plaintiff filed his action, seeking to recover damages from the party in the original contract for breach thereof. The court rightfully held that this he could not do. There, when the contract was breached, no obligation rested upon plaintiff to do anything. He was not required to nor could he mitigate the damages in any way. His damage was the difference between the contract price and the fair, reasonable, actual value of the real estate. He had the right to sue to recover this damage, but he chose instead to enter into further negotiations for the purchase of the real estate at an increased price. In discussing the rights of the aggrieved party, the court said that when plaintiff found the defendant unable, and therefore unwilling, to perform the contract, he could have rested upon his rights under the first contract and could have brought suit for damages for its breach, but that he could not do what he did do and still rely upon his right to a suit for damages under the first contract. The court states that “a party cannot avail himself of the nonperformance of a contract if his own act has prevented performance. His act estops him.”
But here, when the government breached its contract, Brookridge could not have rested upon its rights. It was under a positive duty to take certain, affirmative steps before it could seek recovery of damages from the government. It was its duty to mitigate its damage by selling the milk at the best price obtainable. It therefore was required to make a new contract for the sale of the-milk, if possible. If it made a new. contract with a third party by Which the government’s damages were reduced, it thereby made impossible the performance of the first contract. If it now sues, can, the government assert the defense in the McKay case and say that by its execution of the second contract Brookridge has made impossible the performance of the first contract and therefore is estopped?
Let us assume that, the duty resting on Brookridge to mitigate its damages, it advertises a public letting for the sale of this milk and that at this letting the government is one of two'bidders and is the high bidder. Must Brookridge reject the government’s higher bid and accept the lower bid, or could it do so, and then sue the government for the resulting increased damage? Or, let us assume that at this letting the government is the only bidder and that it bids a price lower than the contract price, but above the cost of production. Could Brook-ridge then refuse to enter a new contract with the government and sue for the contract price as its damage? It appears to me the answer must be that it 'could not, for the duty rests upon it to mitigate its damage to the greatest extent possible.
If what has been said is sound, then would the fact that Brookridge submitted a bid at the second public letting advertised by the government, destroy its right to recover damages for the breach of the first contract? An advertisement for a public letting for the purchase of a commodity is simply an offer to all to execute a contract for the purchase of the articles desired. It would be immaterial whether the government, after its breach of the first contract, went directly to Brookridge and offered to execute a second contract resulting in a reduction of its loss, or whether it offered to do so by notice of a public letting.
*467In every case coming to my attention in which the principle of mitigating damages has been present, the courts have held, without exception, that it was the duty of the aggrieved party to mitigate his damage, even to the extent of executing a new contract with the offending party, covering the same subject matter. In Warren v. Stoddart, 105 U.S. 224, 26 L.Ed. 1117, defendant had contracted with plaintiff to solicit orders for books to be furnished by defendant to plaintiff on thirty days’ credit, as plaintiff contended. A large number of orders were procured. Plaintiff then quit the employ of defendant and defendant refused to furnish these books except for cash. Plaintiff procured substitute books and sought to recover his damages therefor. The Supreme Court held that even assuming that defendant had contracted to give plaintiff thirty days’ credit, yet it was the duty of plaintiff to minimize his damage and where he could have procured the books from defendant by paying cash, his amount of recovery would be limited to the interest thereon. The court therefore impliedly held that it was the duty of plaintiff to minimize his damage even if by so doing he had to make a new contract with defendant for the same subject matter.
In Lawrence et al. v. Porter et al., 6 Cir., 63 F. 62, 66, 26 L.R.A. 167, the court held that on a contract for sale of goods on credit, where the seller refused to deliver them but offered to deliver for cash at a reduced price, and the reduction more than equalized the interest for the term of credit, the buyer, not alleging inability to pay cash but that he was unable to obtain the goods from others than the seller at the place of delivery, cannot recover damages on the ground that he had bought elsewhere at an advance over the contract price and cost of transportation. In the opinion, the court said: “The fact that they could only buy from the defendant does not affect the duty of plaintiffs to minimize their loss as far as they reasonably could.”
The case of Arkansas & Texas Grain Co. v. Young & Fresch Grain Co., 79 Ark. 603, 96 S.W. 142, 143, 116 Am.St.Rep. 99, is very much like the case under consideration. There Young and Fresch Grain Company had sold a carload of corn to the Arkansas & Texas Grain Company. When the corn arrived, purchaser refused to accept until accorded the right to inspect. After inspection, the purchaser refused to take the corn. Young and Fresch Gram Company then sent its agent to purchaser and made a new contract with it, by which it agreed to purchase the corn at a reduced price. An action was then filed by Young and Fresch Grain Company against the Arkansas & Texas Grain Company, who had broken the first contract. Concerning the identical question under consideration here, the Supreme Court of Arkansas said: “Neither did the fact that the agent of appellee came down to Texarkana and resold the corn to defendant amount in itself to a waiver of that right. It was his duty to obtain the best price possible, and, if the best offer came from defendant, plaintiff did right in accepting the offer. The circumstances and proof justified the circuit court in finding that there was no waiver by plaintiff of the original contract, nor of its right to seek damages for breach of the contract.”
It appears to me that these cases declare the correct rule. Clearly, the circumstances under which the second contract was executed do not indicate that it was the intention of Brookridge to waive its right to damages for the breach of the first contract. Brookridge had filed suit to recover damages for the breach of the first contract prior to the execution of the second contract. The second contract contained no reference to the pending suit, its dismissal or settlement. All the surrounding circumstances indicate that there was no waiver by Brookridge of its original contract nor its right to seek damages for the breach thereof.
I think the judgment of the trial court should be affirmed.