Court Opinion

ID: 8657413
Source: CourtListenerOpinion
Date Created: 2022-11-24 21:17:23.015719+00
Date Added: 2024-06-11T16:56:47.786240
License: Public Domain

FRICK, J.
Tbe plaintiff brought this action to recover damages for *282tbe breach of a contract of sale of an automobile. The contract is in writing, and, in view that the only material question that is involved is the measure of damages that should be applied, it is not necessary to refer to either the pleadings or the findings of the court except to state that the court found that there was a binding contract entered into by the parties in which the plaintiff agreed to sell and the defendant agreed to buy an automobile at a stipulated price; that the delivery of the automobile was tendered by plaintiff and acceptance thereof refused by the defendant, and (stating it in the words of the finding), “that plaintiff has performed each and every covenant and condition on his part to be kept and performed,” while the defendant has failed to comply with the terms of the contract, by reason of which the plaintiff suffered damages in the sum of $200. A conclusion of law was made to that effect and judgment was accordingly entered for the plaintiff for $200, from which defendant appeals and assigns a number of errors.
The only error that requires consideration, however, is the assignment that the district court erred in awarding to the plaintiff the profits he would have realized on the sale of the automobile if the defendant had consummated the transaction, and had not breached his contract.
The evidence, without conflict, is to the effect that the plaintiff was a dealer in or “salesman” of automobiles in Ogden; that he “purchased ears from the Oldsmobile Company at a certain price and then sold them to the purchasers at an advanced price,” and that the automobile in question was an Olds automobile. The plaintiff also testified that in selling automobiles it was necessary to become established in business and to “establish a reputation as a car dealer and to advertise the business”; that he employed salesmen in his business to sell cars; that he was required to “furnish cars and gasoline and pay the men salaries to go out and hunt up prospects. If a prospect calls at the office, the name is retained by the man on the floor. In this case I had a man on the floor, Mr. Crosby, on a salary, and any prospect that called there he retained his name and address, and they *283were given to the salesmen and the salesmen were sent to call, and the car would have to be demonstrated. We very seldom sell cars without a demonstration. Among automobile dealers that is the practice we follow, and I followed that practice in the Hansen case. I had a man go out and demonstrate this car to Mr. Hansen. ’ ’ The plaintiff further testified that in case the buyer refuses to receive the car the same efforts to sell to another and the same demonstrations have to be made to a'new prospective purchaser. He also testified that the invoice price of the car in question to him was $1,150; that it might have been a little less, but in order to be on the “safe side” he placed it at $1,150; that that was the price the dealers paid for the cars like the one in question, while the selling price to the buyers or the public was $1,395, which was the price the defendant agreed to pay for the car in question. The evidence further shows (which, however, may not be very material to the principle involved, and it is stated here merely because it is a fact in this case) that after plaintiff had kept the car in question for “three or four months” after the defendant’s purchase he returned it to the company from whom he had purchased it receiving credit therefor for the exact amount he had paid or agreed to pay for it.
All of the foregoing evidence was objected to by defendant’s counsel, and was received over his objections. The objections, however, all go to the measure of damages, and are all covered by the defendant’s assignment to which we have referred.
What, then, is the proper measure of damages, in case the purchaser of an automobile refuses to consummate his contract of purchase where the purchase is made from a dealer in automobiles under the circumstances outlined in the case at bar?
Our statute, Comp. Laws Utah 1917, § 5173, which is a copy of the damage section of the Uniform Sales Act, so far as material here, reads as follows:
“1. Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain an action against him for damages for non-acceptance.
*284“2. The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course of events, from the buyer’s breach of contract.
“3. Where there is an available market for the goods in question, the measure of damages is, in the absence of special circumstances showing proximate damage of a greater amount, the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted, or, if no time was fixed for acceptance, then at the time of the refusal to accept.”
Section 5183 reads as follows:
“The title shall be so interpreted and construed as to effectuate its general purpose to make uniform the laws of those states which enact it.”
If, therefore, tbe section of the Uniform Sales Act here in question has been construed by the court of last resort of any state in which the Uniform Sales Act is in force, then I conceive it to be the duty of this court to follow such construction in order to comply with the spirit and purpose of section 5183, supra, and to maintain the uniformity of the provisions of the Uniform Sales Act. It would be utterly futile for the Legislatures of the several states to adopt uniform laws upon any subject if each court of the several states followed the notion of its members with regard to how a particular provision should be construed and applied.
The only case, so far as the writer has been able to ascertain, in which the precise question here involved has been passed on and decided is the case of Torkomian v. Russell, 90 Conn. 481, 97 Atl. 760, decided in April, 1916, by the Supreme Court of Connecticut. The Uniform Sales Act was approved in this state in March, 1917, or nearly a year after the Connecticut Supreme Court had construed the section here in question. Quite apart, therefore, from the duty imposed on this court in section 5183, supra, the construction given the act by the Supreme Court of Connecticut should be followed upon the presumption that our Legislature adopted the act with the construction given it by that court. In view that this case is one of the first impression in this *285court, I shall take tbe liberty of quoting freely from tbe decision in the Torkomian Case.
In passing upon the measure of damages, the Supreme Court of Connecticut in that case, at page 485 of 90 Conn., at page 761 of 97 Atl., said:
“The defendants, if entitled to recover under their counterclaim, were entitled to recover under our common law such sum as would put them, so far as it can he done hy money, in the same position they would have been in if the contract had been performed. In the absence of special circumstances requiring a different rule, the damages recoverable by a vendor for refusal to tafee goods contracted for is the difference, at the time and place of delivery, between the contract price and the marfeet price. Jordan, Marsh & Co. v. Patterson, 67 Conn. 473, 480, 35 Atl. 521. But we recognize that this rule is not an unbending one, that the circumstances may require its modification in order to effectuate the cardinal purpose, ‘just compensation for the loss incurred’; and the loss must be such as ‘may reasonably be supposed to have been in the contemplation of ’ the parties at the time they made the contract.’ Jordan Marsh & Co. v. Patterson, supra. Section 64 of the Sales Act (Public Acts of 1907, c. 212, p. 782) reaffirms our rule for measuring damages in case of breach of a contract of sale by the vendee.
“The market price to these defendants of a Lozier Six was undoubtedly less than its selling price, since they were selling agents who purchased and took title to the cars they disposed of. Section 64 provides as a measure of damage the difference between the contract price - and the market price ‘in the absence of special circumstances showing proximate damage of a greater amount.’ The circumstance that these defendants were selling agents, and purchased cars at a rate lower than the market price of the cars to the public, made the ordinary measure of damages inadequate. The defendants lost, by the plaintiff’s breach, the difference "between the contract price and what the car, ready for physical delivery to the plaintiff, would have cost them, which would have been the purchase price of the car plus the expense, if any, of delivery and of making it ready for delivery. This is the application of section 64 to the facts of this case. It requires the person who has- failed to keep his contract of sale to pay the loss caused to the contractor who has kept his contract. Lee v. Harris, 85 Conn. 212, 214, 82 Atl. 186.
“The defendants, as vendors or contractors, were entitled to show what a Lozier Six car would have cost them, in the same way a manufacturer might show the cost of an article manufactured by him. The defendants would thus recover the profits *286they would have made had the plaintiff carried out his contract. In such a case profits are not speculative, hut certain and ascertainable and the legitimate fruits of the contract. Roehm, v. Horst, 178 U. S. 1, 21, 20 Sup. Ct. 780; Dimmick v. Hendley, 117 Md. 458, 84 Atl. 171; Poppenberg v. Owen & Co., 84 Misc. Rep. 126, 146 N. Y. Supp. 478.”
The undisputed facts of this case, in my judgment, bring it clearly within the provisions of subdivision 2 of section 5173, supra, and also within the provisions of subdivision 3 of that section, which permit damages beyond those stated in the general rule there stated in the event of “special circumstances, showing proximate damage of a greater amount” than the “difference between the contract price and the market or current price,” etc. If we keep in mind the fact that if in cases like the one at bar the general rule of damages for breaches of contracts of sale by the purchaser is adopted, then the dealer of necessity must in every case be the loser by reason of the fact that he loses all compensation for his time and efforts in attempting to effect a sale, or in effecting it, of a car and in demonstrating it to the prospective purchaser and receives nothing for rent, advertising and other “overhead” expenses. Upon the other hand, the rule adopted by the Connecticut Supreme Court takes all of those matters into consideration, and its fairness and justice in that regard are commendable and wholesome in that  it affords just and fair compensation to the seller without inflicting the slightest injustice upon the purchaser and is an inducement to all men to meet the obligations assumed by them in their contracts. Moreover, the rule adopted gives the seller the fruits of his bargain, which is a matter that should always be considered in applying the measure of damages in any case.
The evidence in this case shows that both the dealer’s price and the selling price to the public were the same at the time of the purchase that they were at the time the contract was entered into. In the nature of things such must nearly always be the case in transactions like the one in question here, for the reason that the sale and the breach,, where one occurs, are seldom far apart in time,
*287As I understand tbe law upon the question of the measure of damages, however, the rule adopted by the district court in this ease is the correct one and is sustained by abundant authority quite apart from the provisions of the Uniform Sales Act. In the case of Howard v. Stillwell, etc., Co., 139 U. S. 199, 206, 11 Sup. Ct. 500, 503 (35 L. Ed. 147), Mr. Justice Lamar in stating the general rule in cases of breaches of sales contracts, and, after stating the reasons for that rule, says:
“But it is equally well settled that the profits which would have heeu realized had the contract been performed, and which have been prevented by its breach, are included in the damages to be recovered in every case where such profits are not open to the objection 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. United States v. Behan, 110 U. S. 338, 345, 346, 347; Western Union Tel. Co. v. Hall, 124 U. S. 444, 454, 456; Philadelphia, Wilmington & Baltimore Railroad Co. v. Howard, 13 How. 307.”
The same question in another form was considered in.the case of Masterton v. Mayor of Brooklyn, 7 Hill (N. Y.) 61, 69, 42 Am. Dec. 38, 42, where, after discussing the question of profits and when and why profits as a general rule are too remote and speculative to constitute a true measure of damages, it is said:
“But profits or advantages which are the direct and immediate fruits of the contract entered into between the parties, stand upon a different footing. These are part and parcel of the contract itself, entering into and constituting a portion of its very elements; something stipulated for, the right to the enjoyment of which is just as clear and plain as to the fulfillment of any other stipulation. They are presumed to have been taken into consideration and deliberated upon before the contract was made, and formed perhaps the only inducement to the arrangement.”
In 17 C. J. p. 788, § 113, in referring to the question of profits as the measure of damages, it is said:
“As a general rule a party not in default is, in case of a breach of contract due to the fault or omission of the other party, entitled to recover profits which would have resulted to him from performance. But in order that it may be a recoverable element of *288damages the loss of profits must tie the natural and proximate result of the breach complained of and they must be capable of ascertainment with reasonable certainty.”
In 2 Sutherland on Damages (4th Ed.) § 647, after an exhaustive discussion respecting “liability for not accepting goods,” and after stating the general rule that is ordinarily applied, the author says:
“The law of damages is not comprised in a set of arbitrary rules. Where a contract has been broken, or a wrong has been committed, compensation must be made. This is the underlying principle, and any standard or measure which does not accord with it cannot be applied, but some other, -which is fairly compensatory to the one party, and not unjust to the other, must be resorted to.”
The text is fully sustained by the cases that are cited in its support.
Many similar quotations from the authorities might be given, but the foregoing are quite sufficient to show the trend of the decisions. I have quoted the foregoing excerpts from the opinions merely to show that the statements of the law as quoted are clearly and indisputably applicable to the undisputed facts of the case at bar and to make clear that the general rule cannot, in justice and fairness, be applied to this case.
In addition to what has been said, however, there is, to my mind, another very potent reason why the rule stated in the foregoing quotations should be applied to the case at bar. If the plaintiff in this case had stored the car for the benefit of the defendant, and had brought this action to recover the purchase price which the defendant had agreed to pay therefor, plaintiff’s profits would have been included in that price and no court would, nof under the facts and circumstances could, legally have denied him judgment for the full amount of the purchase price. That fact clearly demonstrates that in this case plaintiff’s profits are necessarily included in the contract and hence do not fall within the category of what are termed remote or speculative profits as is very often the case, but they are necessarily contained within the contract, and must be considered and allowed if the contract is to be enforced in accordance with its terms. *289Indeed, the contract cannot be enforced without allowing the plaintiff the contract price, and in doing that his profits would necessarily be included.
To further demonstrate that the loss of profits in this case is the natural and proximate result of its breach it is only necessary to say that in a case like the one at bar the amount of damage is ascertained in precisely the same way as they would be ascertained under the general rule, namely, by a mere process of subtraction. When the difference between the contract price and the market price is allowed, we merely subtract the lesser from the greater, and the difference, if there be any, fixes the amount of damages to be allowed. That is precisely what happens in a case like the one at bar. When that rule is applied, in case the seller refuses to consummate the contract, the purchaser obtains the full benefit of his bargain by being allowed the advanced price he was required to pay for a like article in the market, if there was any advance in price. If he has contracted for a price less than the current market price, he would again be given the benefit of his bargain by receiving the difference. If, therefore, the buyer obtains the benefit of his bargain in case the seller fails to consummate the sale, why should not the seller likewise receive the fruits of his bargain if the buyer refuses to perform the terms of his contract. This the seller cannot do in cases like the one at bar, unless he is allowed the profits that he would have received if the sale had been consummated. The general rule relied on by the defendant, therefore, has no application to this case.
The following cases are, however, specially relied on as sustaining defendant’s contention: Wood & Selick v. American Grocery Co., 96 N. J. Law 218, 114 Atl. 756; Allen v. Wolf River Lbr. Co., 169 Wis. 253, 172 N. W. 158, 9 A. L. R. 271; McLaren v. Marmon-Oldsmobile Co., 95 N. J. Law, 520, 113 Atl. 236; Gloekler v. Painter, 272 Pa. 131, 116 Atl. 110; Standard Casing Co. v. California Casing Co., 233 N. Y. 413, 135 N. E. 834.
In the case first cited the purchaser refused to receive a large amount of raisins which he had purchased. The vendor then resold them, and obtained less than the contract *290price at such sale. He sued to recover tbe difference between the contract price and the amount realized at such sale. The court awarded him the difference sued for. In the course of the opinion the general rule respecting the measure of damages for purchase and sale contracts is stated and discussed, but the question here involved is not discussed, much less, decided. Indeed, it could' not have been decided, because it was not involved. The other cases cited are all cases where the seller refused to deliver the articles which he had agreed to sell and deliver and the action was commenced by the purchaser to recover damages for the seller’s breach. In those cases the general rule respecting the measure of damages in sales contracts is again stated and discussed, and the provisions of the Uniform Sales Act are also referred to. It must be apparent, however, to any lawyer that the question involved in the case at bar could not have been decided.
In addition to the foregoing cases defendant’s counsel also cites and relies on the following: Progressive Smelting & Metal Corp. v. Ansonia Foundry Co., 93 Conn. 123, 105 Atl. 322. That is a Connecticut case which was decided after the case of Torlcomian v. Russell, supra, was decided, and in no way affects the decision in the latter case. Besides, the action is again one by the purchaser against the seller.
The defendant also cites and relies upon Phillips Sheer & Tinplate Co. v. W. W. Boyer & Co., 133 Md. 119, 105 Atl. 166; Packard Iron & Metal Co. v. H. P. Pearl Co., 139 Md. 498, 115 Atl. 761; Iron Trade Products Co. v. Wilkoff Co., 272 Pa. 172, 116 Atl. 150; Hess Bros., Inc., v. Great Northern Pail Co., 175 Wis. 465, 185 N. W. 542. In all of the cases last cited the purchasers brought the actions against the sellers for the refusal to comply with the contracts of sale, and in all of them the general rule in such cases is stated and applied. In none of them, however, is the question here involved discussed. The other cases cited by defendant’s counsel have no application here, and hence need not be considered.
The principle that I have attempted to invoke as applicable to the case at bar is also in harmony Avith the rule adopted by this court in Holland-Cook Mfg. Co. v. Con. Wagon & M. *291Co., 49 Utah, 43, 161 Pac. 922, and Tanner v. Johnson, 50 Utah, 23, 165 Pac. 466. It is true that in those eases the profits that were in question and were allowed were those that the seller would have realized if he had been permitted to complete the manufacture of the articles contracted for or to carry into effect the terms of the contract. The principle is, however, substantially the same in the case at bar for the reason that, as was the case in the two cases last referred to, the seller is merely allowed to reap the fruits of his contract. That is precisely what will result in this case in case the judgment is affirmed.
In my judgment there is no' escape from the conclusion that while the district court did not allow the plaintiff the full amount to which he was entitled, but of which plaintiff does not complain, yet the court adopted the correct measure of. damages, and therefore the judgment, should be affirmed, with costs to respondent.
WEBER, C. J., and THURMAN and CHERRY, JJ., concur.