Thomas Manufacturing Co. v. Lyons

McCOY, P. J. Plaintiff brought suit against defendants to recover damages for alleged breach of contract of sale of certain farm machinery. As shown by the pleadings and proof, on May 28, 1910, defendants executed and delivered to a sales agent of 602 plaintiff, at Redfield, S. D., a written order for said machinery, to be shipped January i, 1909. The said written order contained, as a part thereof, the following clause: ‘“This contract is subject to the personal approval of the president or secretary of the Thomas Mfg. 'Co., at Springfield, Ohio.” This order also contained another clause, as follows: “Second party agrees not to cancel this order nor to have shipment held beyond 1910 season, except on payment to the Thomas Mfg. Co. of fifteen per cent, of. the invoice price of said order as liquidated damages.” On the 26th day of October, 1910, defendants countermanded and canceled said order by letter of that date. Thereafter, on about March 1, 1911, plaintiff shipped said farm machinery to Redfield and offered to deliver the same to respondents, but who' refused to accept the same, and plaintiff thereafter sold a portion of said machinery to other parties, and shipped the remainder to plaintiff’s warehouse at Sioux Falls. The cause was tried to> the court, without a jury, and findings and judgment rendered in favor of plaintiff for nominal damages, with costs in favor of defendants. Plaintiff appeals. It is the contention of appellant that upon the countermanding of said order plaintiff became entitled to recover of defendants the said 15 per cent, of the invoice price of said order as liquidated damages; and that, in case it be held plaintiff is not entitled to recover said 15 per cent, under the provisions of section 1275, Civil Code, that then plaintiff is entitled to recover damages under section 2303, Civil Code. The trial court found that plaintiff could not recover under section 1275, and had not produced evidence sufficient to show any actual damage under section 2303. These findings are excepted to and urged as error. Respondents contend that under no condition of the’ record should plaintiff be permitted to recover damages, either the 15 per cent, under section 1275, or actual damages under section 2303, for the reason that plaintiff did not plead or prove that the president or secretary of plaintiff ever approved or accepted said order and gave respondents notice of such acceptance, and until such acceptance and notice thereof said order did not become a binding contract between said parties; and that respondents, at all times before 603 such acceptance and notice thereof, had the right to countermand and terminate said order, without becoming liable under such order for the payment of damages of any character. We are of the opinion respondents are right in such contention. This court held in Cooper Wagon & Buggy Co. v. Stedronsky Bros., 24 S. D. 381, 123 N. W. 846, that such a contract or order, given to an agent, and containing the provision that the same was subject to the approval of the principal, was only an offer or proposal to enter into a contract, and did not become an existing and binding contract between the parties until approved and accepted, and notice of 'such approval given to the proposed purchaser; and that until the giving of such notice of acceptance or approval, under the provisions of -section 1215, Civil Code, such purchaser had the right to revoke or countermand such order and thereby terminate such proposed contractual relation. Watters v. Lincoln, 135 N. W. 712. Finding no reversible error in the record, the -order and judgment appealed from are affirmed.