George Delker Co. v. Hess Spring & Axle Co.

WANTY, District Judge, after making the foregoing statement •of the case, delivered the opinion of the court. The defendant claims that the facts found by the judge below do not support the judgment rendered, because, first, the contracts are •so indefinite as to lack mutuality; second, the plaintiff should have given notice of its election under the clause in the contracts giving it the option to consider the specifications sufficient, or that the neglect to specify might be considered a lawful tender of the undelivered goods and a refusal of acceptance; and, third, that the measure of damages should have been the difference between the contract price and the market price. 1. These contracts are definite as to the quantity of springs and axles, and as to the price and time of delivery, and nothing remained but the specification by the defendant of the sizes and varieties. A failure on the part of the defendant to keep its agreement to make these specifications as provided is the only way in which the contracts could be rendered uncertain; and it would be illogical to hold that by a breach of that part of the contracts the defendant •could relieve itself of all the obligations it had assumed, and take the springs and axles only so long as the price of steel advanced, and, by failing to specify when the market declined, throw the loss upon the plaintiff. These were not options given to the defendant, but definite agreements by it for the purchase of the property mentioned, and the provisions for the specifications to be furnished did not make them so uncertain that an action did not lie for their breach. Hinckley v. Pittsburg Steel Co., 121 U. S. 264, 7 Sup. Ct. 875, 30 L. Ed. 967; Kimball Bros. v. Deere, Wells & Co., 108 Iowa, 676, 77 N. W. 1041; Ault v. Dustin, 100 Tenn. 366, 45 S. W. 981; [653] Minn. Lumber Co. v. Coal Co., 160 Ill. 85, 43 N. E. 774, 31 L. R. A. 529. The defendant cites many cases which are claimed to sustain its view, but they lack the agreement to take a quantity of goods, which is made certain by the contract itself, or could be made certain by evidence; thereby differing from the contracts here, where a definite quantity is fixed, and only its apportionment is to be made by the defendant. 2. We think that when the defendant refused to specify under the contract it became liable'in an action for its breach, and that the clause providing that “any goods named in this contract for which the buyer shall neglect or refuse to specify, may, at the option of the seller, be regarded as sufficiently specified above, or at the option of the seller, such neglect or refusal to specify may be-treated as a lawful tender of all undelivered goods, and a refusal to accept same by the buyer, but shall not be construed as a waiver of any rights by the seller,” did not give any other or different remedy than the law, and therefore did not make notice of an election necessary. It only dispensed with the necessity of a tender, and by its terms this clause was not to be construed as a waiver of any rights the plaintiff had in its absence. This was not a case where the seller of the goods, after tender, elected to resell, and was-obligated to give notice to the purchaser of such election. 3. The contention most strongly urged by the defendant is the-failure of the trial judge to apply as a measure of damages the difference between the contract price and the market price, instead of the difference between the contract price and the cost of manufacture and delivery. The damages for the breach of these contracts-is compensation, and, in arriving at what will accord compensation to the plaintiff, it is always necessary to look into the situations of the parties, as well as to all the provisions of the contract broken. If these were contracts of purchase and sale, as their opening clauses indicate, then the measure of damages contended for would be correct, and the recovery should have been on that basis, for, if it was contemplated by the parties that the plaintiff should have these springs and axles in stock, or go into the market and purchase them for delivery to the defendant, that would be the rule of compensation; but, if these goods were to be manufactured as the specifications were received, then such a rule would not be one which would afford compensation. The facts found by the trial' judge indicate clearly that these were understood to be manufacturing contracts by the parties according to their former dealings, and the contracts themselves, when taken in their entirety, bear that interpretation. The provisions that specifications should be given from time to time, that strikes óf workmen should excuse performance on the part of the plaintiff, that the plaintiff should purchase steel necessary for their manufacture, and defendant should take the full amount of springs and axles covered by the contracts, without rebate in price in event of a decline in the market,, all point to a purpose of manufacturing the articles from time to time as specifications should be received from the defendant, and not to-a sale of a manufactured product on hand, or to be purchased in the [654] market. If these were manufacturing contracts — and we agree with the court below, holding that they were — then the measure of damages is the difference between the cost of manufacture and delivery and the contract price as applied by the Circuit Court. Hinckley v. Pittsburg Steel Co., 121 U. S. 264, 7 Sup. Ct. 875, 30 L. Ed. 967; Kingman & Co. v. Western Mfg. Co., 92 Fed. 486, 34 C. C. A. 489. The court below took those articles which could have been specified under the contracts upon which the plaintiff would have received the smallest profit, and therefore reduced the damages to the lowest amount compatible with the facts, of which course the defendant could not complain. The judgment will be affirmed.