David v. William Whitmer & Sons, Inc.

Opinion by Morrison, J., This is an action upon a book account to recover the sum of $682.71, with interest, for lumber sold and delivered by the plaintiffs to the defendant. The defendant filed an affidavit of defense and later a supplemental affidavit, and on motion and argument, the learned court below granted judgment in favor of the plaintiffs because of the insufficiency of the affidavits of defense. There is no denial that the plaintiffs’ declaration showed a good cause of action, nor is it denied that the defendant received the lumber claimed for and at the price stated. The defense to the claim is a set-off arising out of a failure on the part of the plaintiffs to deliver about thirty cars of shingles .which the plaintiff had agreed to sell and deliver to the defendant, but the plaintiff was not limited in time as to the delivery of said shingles for the reason [309] that there was at the time of the contract a large shortage of cars for the shipment of such merchandise from Seattle east to Newark where the defendant had its place of business. The defendant alleges that in April, 1907, the plaintiffs could have obtained cars to make delivery of the shingles as per agreement, but they refused to do so and defendant was obliged to go into the open market and purchase shingles to replace those which were not delivered and that the said plaintiff company was notified that defendant would hold them liable for any damages by reason of a breach of their contract. First: It must be conceded under the authorities that ordinarily the measure of damages for nondelivery by the vendor of goods sold is the difference between the contract price, or so much thereof as remains unpaid, and the market value of the goods at the time and place appointed for delivery; and in the absence of proof of the market value at the time and place of delivery, the vendee fails to show any damages at all. The time for delivery, if not provided for by the contract, becomes, for the purposes of the above rule, the time of lawful demand for performance: Lewis & Sons v. Carradan, 1 Yeates, 37n (opinion by McKean, C. J.); Fessler v. Love, 48 Pa. 407 (opinion by Thompson, J.); Merchants & Manufacturers Nat’l. Bk. v. Spratt, 108 Pa. 97 (opinion by Clark, J.); Kinports v. Breon, 193 Pa. 309 (opinion by Fell, J.). ' Second: There is nothing in the affidavits of defense showing that the plaintiffs at the time of contracting with the defendant in respect of the shingles had any knowledge of the contracts made by the defendant with its customers, and without such knowledge the plaintiffs cannot be held liable for defendant's loss of anticipated profits. Merely knowing that the defendant was a dealer and that, the shingles were purchased to be resold by defendant to its customers, the latter being unknown to the plaintiff, is not sufficient to make the plaintiff liable for loss of profits: Sherman v. Roberts, 1 Grant, Pa. 261; Eckel v. Murphey, 15 Pa. 488; Haak v. Wise, 2 W. N. C, 689. In 24 Am. & [310] Eng. Ency. of Law (2d ed.), 1155, it is said: “The profits which the purchaser could have made by a resale of the property in case it had been delivered by the seller are not an element of damages, when the seller at the time of the sale was not informed of such intention or contract for resale, as such profits cannot be considered as within the contemplation of the parties at the time of the sale.” Kinports v. Breon, 193 Pa. 309; Pennypacker v. Jones, 106 Pa. 237; Clyde Coal Co. v. Pittsburg & Lake Erie R. R. Co., 226 Pa. 391. In the syllabus of the latter case we find the following: “Profits arising from a subsequent contract though made on the faith of the original contract and capable of definite ascertainment, are not recoverable in an action for the breach of the original contract. “Where a railroad company contracts with a coal mining company to furnish cars at a particular point and fails to do so, the coal company in an action for the breach of the contract, is not entitled to recover profits that would have accrued on a contract subsequently made, to deliver a definite number of tons per day to a purchaser, if it appears that the railroad company had no knowledge at the time it made its agreement to deliver cars that the coal company contemplated the making of such a contract.” That case clearly holds that, “at the time the original contract was entered into, it does not appear that the defendant was notified that the plaintiff had any contract with any person or company to furnish coal, or that the contract was executed on the part of the plaintiff with the view of furnishing any certain or definite amount of coal to anyone or had any agreement to do so.” We think that case and many others clearly hold that there must be more than mere knowledge on the plaintiffs’ part, in the present case, that the defendant intended to sell the shingles to third persons, who were unknown to the plaintiff, at the time they entered into the contract. In 8 Am. & Eng. Ency. of Law (2d ed.), 593, it is said: “There must be, it seems, according to the doctrine of ' these cases, in addition to the mere knowledge of the col [311] lateral contract, from whatever source derived, something to show that the defendant made himself in a sense responsible for the performance of the collateral contract, or agreed to liability for the loss therein as the measure of damages.” In the same book on page 594, on the authority of Michigan cases, it is said: “In this connection it has been said there must in every case, be something in the terms of the contract, read in the light of surrounding circumstances, which shows .an intention on the part of the vendor to assume an enlarged engagement, a wider responsibility than is assumed by the vendor in ordinary contracts for the sale and delivery of merchandise:” citing Clark v. Moore, 3 Mich. 55; Cuddy v. Major, 12 Mich. 368. The appellant’s counsel cites Kinports v. Breon, 193 Pa. 309, and Wilson v. Wernwag, 217 Pa. 82, but we think the opinion of Mr. Justice Mestrezat in Clyde Coal Co. v. Pitts. & Lake Erie R. R. Co., 226 Pa. 391, clearly shows that the doctrine of those cases does not support the appellant’s contention. Third: Another difficulty in the appellant’s attempt to set off damages growing out of the contracts made by it for a resale of the shingles is that the appellant did not go into the open market and purchase shingles at or near the time of the plaintiffs’ alleged breach of contract, but several months thereafter, to wit, in the month of November, 1907, and the early part of 1908. It will be noted that the appellant contends that the embargo as to freight cars was removed in April, 1907, and that under the agreement it was then the duty of the plaintiffs to deliver the shingles. Assuming this to be true, the defendant ought then to have gone into the open market and purchased the shingles and if it suffered loss thereby, it would have been in position to claim the same as damages, if it sustained its contention that the plaintiffs were liable at all for damages on defendant’s collateral contracts. But the affidavits of defense do not allege that the market value of shingles at the time of the alleged breach of plaintiffs’ contract was [312] any different from the contract price. We know of no authority in such a case sustaining the defendant in waiting over six months after the breach and then going into the market and purchasing shingles and claiming the difference in the price paid and the contract price as damages. If the plaintiffs were bound to deliver the shingles in April, 1907, and failed to do so, the defendant ought to have acted promptly in fixing the amount of damages it sustained. A large portion of the damages claimed by defendant is made upon the basis of purchases made by the defendant’s vendees to supply shingles which the defendant alleges it could not deliver on account of the breach of this contract by the plaintiffs. But we do not think the defendant can set off such damages against the plaintiffs’ claim. We do not understand how the plaintiff can be responsible for the acts of a large number of persons, strangers to the plaintiffs, who purchased shingles in the open market on account of the defendant’s failure to deliver the same on its contracts with them. The supplemental affidavit avers that upon learning of the removal of the embargo in April, 1907, the defendant notified the plaintiff thereof and of its contracts- with its customers, and that the defendant would go into the open market and purchase similar shingles unless the plaintiff made delivery, but that the plaintiff still refused to make delivery. It therefore appears that the breach occurred at or about that date and then was the time for the defendant to go into the market and purchase the shingles. We do not understand the defendant to contend that it could not have purchased the shingles at or about the time of the breach. Upon due consideration of the affidavits of defense we are of the opinion that the facts therein averred do not present a legal defense to any part of the plaintiffs’ claim, and the assignments of error are, therefore, all dismissed, and the judgment is affirmed.