Court Opinion

ID: 8783766
Source: CourtListenerOpinion
Date Created: 2022-11-26 13:27:51.222353+00
Date Added: 2024-06-11T17:02:58.235268
License: Public Domain

W. H. MUNGER, District Judge
(after stating the facts as_ above). [1] It is clear, we think, from the correspondence at the time the orders for the staves were given by defendant and accepted by plaintiff, that it was mutually understood by both plaintiff and defendant that the staves were to be delivered by plaintiff, and accepted by defendant. within the period of one year, and had plaintiff insisted upon such delivery within a year, and defendant refused to receive all of them within that period, plaintiff would have been entitled to insist that the contract was broken at the expiration of the year. It, however, appears that plaintiff, at the solicitation and request of defendant, waived this provision of the contract and granted defendant further time in which to order and accept staves under the contract. That, however, did not modify the contract so as to permit it to remain enforceable by defendant ordering staves in the future whenever it should see fit over any period of time. But the plaintiff had a right to insist that defendant should comply with the contract within a reasonable time. We think it apparent from defendant’s letters of August 23, September 3, and September 14, 1909, that defendant repudiated the contract and insisted that it was, under no obligation to take staves except as it should desire them in the future, declaring that it would not comply with the contract in the future, but would only order and accept the remaining part of the staves for which the contract provided whenever it saw fit; these letters being in response to the letter of the plaintiff of August 4, 1909, insisting that it fully perform the contract within four months thereafter, and that plaintiff was authorized to treat the contract as then broken on the part of defendant.
We think it clearly appears from the correspondence that plaintiff had manufactured the staves for defendant, or at least a considerable portion of them, and had them on hand. This, we think, is dearly shown from plaintiff’s letter of date July 20, 1908, wherein it states:
■‘"We are very much cramped for room at our yards and our insurance rate is 4while our interest rate is 8%.”
And letter of September 17, 1908, wherein it says:
“We are carrying a terrible load, in the way of sold stock which we are holding for our customers, but most of them are allowing us to ship an occasional car load and we hope yon will find it possible to allow us to ship two car loads of staves during Oct. & Nov.”
*30Letter of February 4, 1909, in which plaintiff said:
• “We are not going to push you to pay for this car promptly and we regret that it seems necessary for us to ship it contrary to your wishes, but we have been carrying staves for you now over a year and crippled ourselves in consequence, not to speak of the cost of 8% money and 4%% insurance, which amounts to about $6 per 1,000 in course of a year.”
Letter of April 11, 1909, in which plaintiff said:
“It is necessary that we do something in the matter rather than continue in suspense and we must insist upon your taking deliveries or your authorizing us to dispose of some quantities elsewhere for your account. * * * It is quite out of the question to think of our carrying stock over into 1910.”
■ Also letter of August 4th, wherein it says:
“In the course of the last eighteen months you have refused to accept deliveries of any substantial number of staves under the contracts above referred to, and we have been showing you every indulgence in the matter and in so doing have shouldered a loss in carrying charges, insurance, etc., which, normally, should have fallen upon yourselves.”
In Kingman & Co. v. Western Mfg. Co., 92 Fed. 486, on page 490, 34 C. C. A. 489, on page 493, Judge Sanborn, writing the opinion of the court, announced five rules as determining the measure of damages for the breach of a contract to manufacture and deliver articles. It was there announced that the measure of damages for a breach resulting from failure to accept articles which had been made and were ready for delivery at the time of the breach is the difference between the market value and the contract price of the articles at the time of the breach, if the latter be greater than the former.
[2] Applying that rule to the case in hand, we think the court should have submitted to the jury, under the evidence, the question of fact as to what proportion of the staves called for by the contract had been manufactured and were on hand ready to be delivered, if any there were, at the time of the breach of the contract on the part of defendant, and instructed the jury that the plaintiff’s damages as to such portion of the staves was the difference between the market price and the contract price, if the contract price exceeded the market price.
As to the other staves to be furnished under the contract, and which had not been manufactured, ready for delivery, if any, then the damages' should be determined according to the applicable rule stated in Kingman & Co. v. Western Mfg. Co., supra.
The trial court, however, treated the case as one in which none of the undelivered staves had been manufactured, ready for delivery. In this respect an error was committed, for which the judgment is reversed, and a new trial granted.