Court Opinion

ID: 8832253
Source: CourtListenerOpinion
Date Created: 2022-11-26 16:07:23.537625+00
Date Added: 2024-06-11T17:04:57.218395
License: Public Domain

BRYAN, Circuit Judge
(dissenting in part). I concur in the majority opinion prepared by Judge KING, except upon the question of' the' measure of damages for future profits. The first trial of this case resulted in a verdict, rendered in accordance with the charge of the District Court, for an amount which represented the difference between the contract price and the market price. On- writ of error this court held that the contract bound the defendant to furnish only such quantities of oil as the plaintiff should sell as fuel for delivery to ships in the port of Pensacola, and—
“that the number of barrels of oil to be computed was such as the plaintiff had sold or procured contracts for the sale of, to vessels in the port of *70Pensacola, and such other oil as from the evidence it appeared that plaintiff could have sold during the remaining months of the contract had its performance not been terminated.”
The evidence in support of the amount of damages awarded by the judgment on the second trial is substantially as follows: During the early months of 1920 the demand for fuel oil greatly exceeded the supply. Vessels which required oil- for fuel experienced much difficulty and delay in obtaining it. In several instances they went from port to port in an effort to be supplied. There was a falling off in production, and an approach of salt water, which indicates that oil is about to become exhausted, in many wells in both the Mexican and domestic oil fields. On account of this scarcity, and the excess of demand over supply, the price of oil rapidly advanced. From December 6, 1919, to February 1, 1920, the advance in the market price was from $1.37 to $1.89; from February 1 to February 7, the market price was $2.10.; from March 1 to March 5, $2.467; from March 5 to March 13, $2.-887; from March 13 to July 5, $3.30%; from July 5 to November 3, $3.51%. On May 3, 1920, the defendant repudiated its contract with the plaintiff, and it was necessary for two ships then awaiting fuel oil under contract with the plaintiff to proceed elsewhere to get it. During the remaining months covered by the contract, the demand for fuel for oil-burning ships was so great as reasonably to support the conclusion that the plaintiff would have had opportunities to sell at Pensacola all the oil which it was entitled to receive from the defendant at prices more than sufficient to sustain the judgment which was recovered; but no one, including the defendant, which had the only dock for the delivery of oil at Pensacola, undertook to supply this demand. Some of the ships in port procured only enough oil to enable them to proceed to other ports in further search of a necessary supply.
The J. H. W. Steele Company was operating 27 or 28 oil-burning ships, some of which were delayed from 10 to 20 days on account of lack of fuel, and its general manager testified that this company alone could haye taken the entire supply to which the plaintiff was entitled. John A. Merritt & Co. operated five oil-burning ships out of Pensacola, each of which left that port at least once after the defendant repudiated its contract, and were agents for other oil-burning ships which came into Pensacola and would have bunkered there during the remaining months of the contract period. These ships would have taken 80,000 barrels of oil. The Pensacola Shipping Company was another agent at Pensacola representing oil-burning ships. It made application to the plaintiff for 20,000 barrels, and did not make other offers of purchase only for the reason that it had been informed that the plaintiff was unable to procure the oil. Zimmern & Co., of Mobile, mjide a definite offer for 10,000 barrels. The plaintiff was under contract to furnish 40,000 barrels to the steamship Munsomo.
After defendant’s repudiation of the contract, the plaintiff made an effort to procure oil for shipment in tank cars to Pensacola, and based upon the success of that effort, received offers from the agent of the Shipping Board for 50,000 to 60,000 barrels, and from John A. Merritt *71& Co. for 100,000 barrels. But the plaintiff was unable to buy at prices to enable it to make resales at a profit.
In Howard v. Stillwell & Bierce Manufacturing Co., 139 U. S. 199, 206, 11 Sup. Ct. 500, 503 (35 L. Ed. 147), it is said:
“The profits which would have been realized had the contract been performed, and which have been prevented by its breach, are included in the damages to be recovered in every ease where such profits are not open to the objections of uncertainty or of remoteness, or where from the express or implied terms of the contract itself, or the special circumstances under which it was made, it may be reasonably presumed that they were within the intent and mutual understanding of both parties at the time it was entered into.”
The damages are not remote. Anticipated profits constituted the sole inducement to the plaintiff, and were within the contemplation of both parties. Masterton v. Mayor of Brooklyn, 7 Hill (N. Y.) 61, 42 Am. Dec. 38; 1 Sutherland on Damages, § 64. Damages are not rendered uncertain because they cannot be calculated with absolute exactness. It is sufficient if a reasonable basis of computation is afforded, although the result be only approximate. The defendant, whose wrongful act creates the difficulty, is not entitled to complain that the amount of the damages cannot be accurately fixed. Anvil Mining Co. v. Humble, 153 U. S. 540, 14 Sup. Ct. 876, 38 L. Ed. 814; Hetzel v. B. & O. R. R. Co., 169 U. S. 29, 18 Sup. Ct. 255, 42 L. Ed. 648; Pierce v. Tenn. Coal, Iron & R. R. Co., 173 U. S. 1, 19 Sup. Ct. 335, 43 L. Ed. 591; Wakeman v. Wheeler & Wilson Mfg. Co., 101 N. Y. 205, 4 N. E. 264, 54 Am. Rep. 676; 3 Williston on Contracts, §§ 1345, 1346.
Counsel for defendant thus frankly state the question here involved:
“As the plaintiff was not able to get oil elsewhere, its prospective oil business ceased; so the question before us is baldly and squarely: “What damages can be recovered for the loss of hoped-for profits from a business which is prevented or terminated by the wrongful act of the defendant?”
The defendant contends that the plaintiff cannot recover at all, unless it had an established business, and even then that it cannot recover more than the average amount of profits which had theretofore been realized during a like period. These propositions were advanced and rejected by this court on the first writ of error. 279 Fed. 19, 29, 30. Evidence of profits shown by past experience is an element to be considered in determining future profits. Where the only other evidence is purely speculative, it is entirely proper, and indeed necessary, to resort to past experience as the sole basis of recovery. Troy Laundry Machinery Co. v. Dolph, 138 U. S. 617, 11 Sup. Ct. 412, 34 L. Ed. 1083, Hodges v. Fries, 34 Fla. 63, 15 South. 682, Central Coal & Coke Co. v. Hartman, 111 Fed. 96, 49 C. C. A. 244, and Winston Cigarette Machine Co. v. Wells-Whitehead Tobacco Co., 141 N. C. 284, 53 S. E. 885, 8 L. R. A. (N. S.) 255, relied on by the defendant, are cases in which no reliable evidence whatever was furnished for the computation of lost profits.
But past experience should not, as it appears to me, be adopted as the sole test of plaintiff’s loss of profits under the facts of this case. There was no other dock in Pensacola than the defendant’s from which oil could have been delivered to ships. The market price of oil wa-j *72so high that it could not be purchased and delivered from tank cars at a profit. There were ships enough in port or nearby in search of necessary fuel oil to have used the entire supply to which the plaintiff was entitled. It is a reasonable inference that the agents of these ships would have bought from the plaintiff, if the latter could have supplied their requirements. There were some definite offers, and binding contracts would have resulted from their acceptance. But it quickly became known to agents for ships at Pensacola and elsewhere that the defendant had repudiated its contract, and that consequently the plaintiff had no oil to sell. These agents did not thereafter submit additional offers to the plaintiff. In the nature of things they could not then have made bona fide offers. To require firm offers from them is to require the impossible, and thus to limit the plaintiff’s proof to offers from prospective purchasers who had no knowledge of defendant’s wrongful act, and to general market conditions.
The contract period had expired when this case was tried. The jury were able to assess the damages in the light of knowledge as to scarcity, demand and supply in the past, and were not required to speculate as to future market conditions. They were justified in reaching the conclusion that in the sale of oil the plaintiff would have had little, if any, competition. The plaintiff was entitled to the profits it would have made if the contract had been performed, and to show, if it could, that it would have made greater profits than it had been making, just as the defendant would have been entitled to show, if it could, that the profits in the future would not have been as great as they had been in the past. The rule that future profits are limited by past profits should not be extended beyond the reason which gave rise to it, so as to prevent recovery of a greater amount which the evidence reasonably shows has been sustained. The application of that rule in this case would enable the defendant to repudiate its contract and to keep a large part of the profits to which the plaintiff was lawfully entitled. I do not know of any authority binding upon this court which compels such a result.
The majority opinion likewise rejects the rule, contended for by the defendant, that future profits are measured by past profits, and allows future profits greater than past profits upon the volume' of business shown by past experience. . But upon what kind of evidence? Upon evidence showing better market conditions, if necessary. This is properly done in an effort to award approximately the damages sustained. The same kind of evidence under like circumstances is admissible, it seems to me, also to show an increase in the volume of business. Necessary expenses should be deducted from the profits, as a matter of course. However, it does not appear that the plaintiff would • have incurred any additional expense, and .the evidence would have supported a judgment for a larger amount.
The conclusion I reach is that the evidence is sufficient to sustain the judgment, and I think this conclusion is sustained by the following authorities: Anvil Mining Co. v. Humble, supra; Shields v. Norton 143 Fed. 802, 74 C. C. A. 254; Northwest Auto Co. v. Harmon, 250 Fed. 832, 163 C. C. A. 146, Ann. Cas. 1918E, 461; Randall v. Peer*73less Motor Co., 212 Mass. 352, 99 N. E. 221; Bagby v. Straub, 101 Kan. 608, 168 Pac. 1098. See, also, 3 Williston on Contracts, §§ 1346, 1347, and 1 Sutherland on Damages, § 121.