Brandt v. Buckley

Hill, J. (After stating the foregoing facts.) This suit as finally framed by amendment was for damages on account of the breach of a contract for the delivery of certain corporate stock for which the plaintiff had paid the defendant. There was evidence to establish the contract and its breach by the defendant. The vital point is whether there was any evidence authorizing the jury to find that the amount of their verdict in favor of the plaintiff represented the damages recoverable under the law for the breach of the contract. The general rule is that the measure of damages recoverable of the seller for failure to deliver goods sold is the difference between the contract price and the market value at the time and place for delivery; and it is incumbent on one who seeks to recover such damages to submit evidence as to the market price at the time and place for delivery, in order to recover compensatory damages. In the absence of such evidence no actual damages can be recovered. To this general rule as to the measure of damages there are some exceptions. Bloom v. Americas Grocery Co., 116 Ga. 784 (43 S. E. 54); Sizer v. Mellon, 129 Ga. 143 (7) (58 S. E. 1055); Edwards v. Hale, 129 Ga. 302, 304 (58 S. E. 817); Hardwood Lumber Co. v. Adam, 124 Ga. 821 (68 S. E. 725, 32 L. R. A. (N. S.) 192). This is the general rule where the purchase-price has not been paid. A contract for the sale of stock in a corporation is governed by substantially the same principles as a contract for the sale of any other personalty, both as to its formation and as to its construction and performance. 3 Clark and Marshall, Private Corp., § 608. And the remedies of the parties in the case of a breach of the contract for the sale of. stock in a corporation are substantially the same as in tho case of a contract for the sale of any other personal property. Id., § 615. The buyer’s claim for damages for the failure of the seller to make delivery is ordinarily a claim for unliquidated damages; and the general measure of damages recoverable in such a case, if the price has been paid in advance, is the market value of the subject-matter of sale, because by reasonable diligence the subject-matter may be obtained by the buyer in the market at its market value. 24 R. C. L. 69, § 335. “ In case of a nondelivery of stock in accordance with the contract, if the purchase-price has been paid, the general measure of damages is the actual or market value of the stock at the time when delivery should have been made, or, in [520] other words, at the time of the breach of the contract.” 14 C. J. 717, § 1097, and cases cited in note 58. Inhere the buyer has paid the purchase-price, and “ stands on' the contract, as by suing for its breach, he must be content if the law places him in the position he would have occupied if the contract had been performed. This it does by permitting the recovery of the market value of the property at the time and place when and where it should have been delivered.” 2' Sutherland Damages (4th ed.), § 650, notes 75 and 76. In Bank of Culloden v. Bank of Forsyth, 120 Ga. 575 (48 S. E. 226, 100 Am. St. R. 115), it was held that the measure of damages for the failure of a bank to make a transfer on its books and to issue a certificate therefor of stock in the bank owned by a purchaser is the value of the stock at the time of the demand and refusal to transfer and issue the certificate. There was no exception to the charge of the court in the instant case, and it is not in the record. We therefore assume that the court instructed the jury that the rule for the recovery of damages in the case was that which we have stated. There was no evidence tending to show the market value of the corporate stock at the time the defendant contracted to deliver it to the plaintiff. As set forth in the preceding statement of facts, the only evidence tending to show the value of the stock at any time was that of the defendant, who testified: “ The last sales made of the stock of the American Cloth Register Company (the corporation whose stock is here involved) were made in September, 1918. I don’t know exactly how many shares were sold, but I think about ten or twelve. The par value of the stock is $100 per share, and this stock was sold at the rate of $75 per share for the preferred stock. The common stock has never been sold. No price has ever been put on it.” This evidence tended to show the value of the preferred stock in September, 1918, when the last sales of it were made, more than four years after the contract was executed, and nearly three years after the institution of this suit, and of course nearly three years after the breach of the contract. This evidence, therefore, threw no light on the value of the preferred stock at the time the defendant should have delivered it under the contract, nearly three years previously. According to the evidence there was no market value for the common stock at the time the defendant agreed to deliver it, nor at any other time, as none of it had [521] ever been sold, nor had any price ever been “ put on it.” Even if, in the absence of evidence of actual sales, the par value of paid-up stock is presumptively its market value, no such rule could apply in the case at bar, in view of the allegations of the first amendment made to the petition, which the plaintiff’s evidence tended to sustain, to the effect that by certain acts of the defendant the value of the stock wa,s greatly lessened even from the organization of the corporation. So if the par value was $100 per share, its value was greatly depressed by the alleged acts of the defendant. It was therefore incumbent upon the plaintiff to establish the actual value of the common stock at the time the defendant agreed to deliver it, by showing the property of the corporation as compared with its liabilities, or its dividend-earning capacity at that time. 14 C. J. 718, § 1099. There was no such evidence. We confidently conclude that there was no evidence to authorize the verdict rendered for $15,666.66 as damages for the defendant’s breach of contract, and the court therefore erred in refusing a new trial. Judgment reversed. Jenkins, P. J., and Stephens, J., concur.