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Implement Co. v. Harvesting Machine Co.

WEBER IMPLEMENT COMPANY, Appellant, v. ACME HARVESTING MACHINE COMPANY.

1. REFEREE:

Division One, July 3, 1916.

Findings of Fact: Appeal. Where the case is neither an equitable suit nor one wherein a reference of the issues would have been compulsory under the statute, the findings of fact by the referee, if supported by any substantial evidence, are conclusive on appeal.

2.

: -No Appeal from Finding. The failure of the defendant, who the referee found had breached its contract, to appeal from the judgment of the trial court affirming the referee's findings of fact, closes the door to any reinvestigation of the facts at its instance.

Dam

3. BREACH OF CONTRACT: Damages: Loss of Profits. ages for a breach of a contract are such as may fairly and reasonably be considered as arising either naturally (that is, according to the usual course of things) from such breach itself, or such as may reasonably be supposed to have been in contemplation at the time they made the contract, as the probable result of the breach. Thi rule does not include speculative profits or accidental or consequential losses, or losses of a fancied good bargain. It includes proximately caused or reasonably contemplated losses, and excludes the problematical profits of future bargains.

4.

5.

:

: Consummated Sales. Where a manufacturing company agreed to make and furnish to a wholesale jobber one thousand mowing machines of a certain brand, to be resold to users, and breached the contract, it is liable to the jobber for profits lost on so many of the machines as were actually sold by the wholesaler to his vendees, which it refused to deliver, but not for profits the wholesaler might have made on so many of the machines as were not sold or contracted for sale by him.

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-: Duty to Minimize Loss. It is the duty of the party injured by a breach of a contract to take reasonable steps to minimize the loss; but it is not such party's duty to alter the terms of his agreement for that purpose in the circumstances shown in this case.

Implement Co. v. Harvesting Machine Co.

Appeal from Jackson Circuit Court.-Hon. O. A. Lucas, Judge.

REVERSED AND REMANDED (with directions).

Morton Jourdan and Sparrow, Page & Rea for appellant.

(1) The trial court was wrong in holding that profits are not recoverable and that appellant was only entitled to recover nominal damages. We recognize the well established general rule to be, as stated by the courts, that on failure of the vendor to deliver goods according to contract, the ordinary measure of damages is the difference between the contract price and the market value of the goods at the time when, and the place where, they should have been delivered; but the courts recognize an exception to this rule, and it is this exception that is applicable to the facts of this case. Appellant sues here for special or consequential damages. If under the facts of a particular case, the difference between the contract price and the market value at the time and place of delivery of the goods, will compensate the injured party, the general rule above quoted should be, and is, applied by the courts; but what about the case, under the facts of which the difference between the contract price and the market value at time and place of delivery will not compensate the injured party? Such is the case at bar. This is not a case where appellant could have gone into the open market and bought the goods contracted for and the referee so found. These machines were not manufactured by anyone but respondent. Appellant tried to get them elsewhere, but was unable to do so. It is in such a case that the exception to the general rule applies. The profits which appellant expected to realize from a resale of these machines being that which induced it to enter into the contract of purchase

Implement Co. v. Harvesting Machine Co.

with respondent, it is absurd to say that after respondent has violated its contract and refused to deliver the mowers, appellant can be reimbursed for any loss sustained by it by the difference in contract price of mowers and their market value at time and place of delivery. These profits were within the contemplation of the parties at the time the contract was entered into, and became therefore part and parcel of it. Respondent knew that appellant was purchasing these mowers for the purpose of resale. It knew that appellant expected to sell them at a profit. Knowing this fact, it also knew that if it failed to deliver the mowers, appellant would be deprived of the profits at which it not only expected to sell, but could and would have sold them, if delivered. Chalice v. Witte, 81 Mo. App. 92; Hadley v. Baxendale, 9 Exch. 341; Hammond v. Beeson, 112 Mo. 190; Lumber Co. v. Warner, 93 Mo. 374; Crescent Mfg. Co. v. Nelson Mfg. Co., 100 Mo. 336. (2) Appellant in any event, is entitled to recover $1828.50, the amount of its lost profits on the 230 machines which it had actually sold at the time of respondent's breach of its contract.

New, Kennish & Krauthoff, Maurice H. Winger, Arthur Miller and P. E. Reeder for respondent.

(1) Appellant under its amended petition was only entitled to nominal damages. Wall v. Ice Co., 112 Mo. App. 666; Northrup v. Cook, 39 Mo. 208; Warren v. Maher Mfg. Co., 161 Mo. 124; Griffith v. Kansas City Co., 46 Mo. App. 539; Van Stone v. Hopkins, 49 Mo. App. 386; Cobb v. Whitsett, 51 Mo. App. 146; Bush v. Fisher, 85 Mo. App. 1; Halliday v. Lesh, 85 Mo. App. 285. Counsel attempts to evade the effect of the rule by claiming that appellant is suing for "special or consequential" damages; in other words, special damages, or profits which it would have made by a re-sale of the mowers in ques

Implement Co. v. Harvesting Machine Co.

tion. One insurmountable objection to this claim of appellant is that it does not plead any special facts or circumstances in the amended petition entitling it to the special damages contended for. Wilson v. Russer, 91 Mo. App. 275. (2) Appellant was not entitled to recover as its damages the probable profits it might have realized from a resale of the mowers. Gill v. Johnson, 84 Mo. App. 456; Bush v. Fisher, 85 Mo. App. 1; Halliday v. Lesh, 85 Mo. App. 285. (3) There was no competent proof whatsoever to sustain the finding of the referee that appellant would have received a profit of $1,828.50, or any other definite amount. Doyle v. Turpin, 57 Mo. App. 84; Murphy v. St. Louis, 8 Mo. App. 483; Bersch v. Sander, 37 Mo. 104; Billups v. Daggs, 38 Mo. App. 367; Bean v. Miller, 69 Mo. 384.

OPINION.
I.

BOND, J.-This cause was appealed to the Kansas City Court of Appeals and transferred to this court for the reason that the amount involved exceeded the jurisdiction of that court.

The plaintiff, the Weber Implement Company, a Missouri corporation located at St. Louis, Missouri, and doing a jobbing business in farm machinery, on November 7, 1905, entered into a written Statement. contract with defendant, the Acme Harvesting Machine Company, an Illinois corporation, manufacturing farm machinery at Peoria, Illinois, whereby the latter agreed to manufacture certain mowing machines to be specially branded "Koenig Buckeye," and the former agreed to purchase same at specified prices and dates of delivery during the years of 1906, 1907 and 1908.

By said contract it was agreed that plaintiff should order one thousand of the above mowers

Implement Co. v. Harvesting Machine Co.

yearly, which were to be manufactured and ready for shipment not later than May first of each year.

In the clause setting out the manner and time of payment, the plaintiff agreed, upon receipt of a shipment of mowers, to execute notes, without interest before maturity, payable one-third September tenth, one-third October tenth and the final third on November tenth, of each year, and which should be subject to a discount of three per cent for cash, if paid by July first of that year.

Defendant did not manufacture, nor did plaintiff receive, the specified number of mowing machines during the year 1906 and 1907; but there is no controversy here as to the damages growing out of the failure in this regard, for plaintiff limits its demand to a recovery of such damages as it sustained by reason of the failure to manufacture and deliver the one thousand machines covered by the contract for the third year, 1908.

On November 25, 1907, defendant wrote plaintiff, declining to furnish any of the thousand mowers which it had agreed to furnish during 1908, claiming that the contract of November 7, 1905, had been mutually abandoned and a new or modified contract entered into under date of October 12, 1907, and that plaintiff had violated the terms of the latter contract. Plaintiff insisted that the contract of November 7, 1905, had not been abandoned or modified, and instituted this action to recover damages in the sum of $7940, sustained by reason of defendant's failure to manufacture and deliver the thousand mowers during the year 1908.

Plaintiff also alleged in its petition that it had suffered a further loss because of defendant's breach of its contract in being prevented from making profits on the sale of kindred goods which of necessity would have been used with said mowers, including extras,

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