Wade McHenry Lumber Co. v. Frank Spangler Co.

WALKER, Circuit Judge. This was an action to recover damages for the alleged breach of a contract, dated November 5, 1910, for the sale of 2,000,000 feet of “one-inch and thicker liquid amber, commercially known as gum,” lumber, “No. 2 common and better, log run,” to be cut from first-class logs only, none smaller than 18 inches in diameter, to be of standard lengths and manufactured as the purchaser shall direct, and sawed in such manner as to produce the most red and sap box boards 13” to 18" wide; “1,500,000 feet to be put on stick by June 1, 1911, and the balance by November 5, 1911.” The averments of the declaration were put in issue, but it was conceded in the argument of the case in this court that the alleged breach of the contract by the defendants, the plaintiffs in error here, was established by the evidence. [1] To show that the defendants’ failure to comply with the contract caused damage to the plaintiff, the latter introduced qvidcnce tending to prove that, relying on its estimates of the amounts of different grades of gum lumber it would get under the contract, it accepted orders from customers for specified quantities (in the aggregate considerably less than 2,000,000 feet), of some of those grades of gum lumber, and, to fill some of those orders, had to pay more for the lumber the orders called for than that lumber would have cost it if the defendants had complied with their contract, and that, in consequence of its inability to buy from others the particular lumber called for by one or more of those orders, it had to pay damages to the parties to whom it was so obligated. There was evidence tending to prove that after the plaintiff was infonned that the defendants would not comply with the contract the plaintiff could have secured from another or others the lumber required to fill the contract, and within the time stated in the contract, for less than the lumber would have cost it if the contract had been complied with. This state of the evidence called for some instruction by the court to the jury as to the title to be applied by them, in ascertaining the amount of damages to be awarded to the plaintiff. The charge which the court gave did not inform the jury how the damages should he measured or ascertained. The evidence as above summarized was such that, in the absence of instruction from the court as to a rule to- be followed in determining the amount of damages, it was open to the jury to allow, as the whole or a part of the damages awarded, the amount found to have been •paid by the plaintiff to its customers in consequence of their accepted orders for special grades of lumber not being filled, and what it cost the plaintiff to fill other such orders in excess of what that cost would have been if defendants had complied with the contract. [2-5] An exception was duly reserved to the refusal of the court to give the following special instruction requested by the defendants: [420] “The court charges the jury that, if they believe from the evidence that the plaintiff could have obtained the lumber to fill the contract at any near or available market, at a less price or at a price equal to that named in the contract within the time mentioned therein, then the plaintiff has suffered no legal damage, and the jury in that event will not return a verdict for anything but nominal damages — which means $1, or some such small sum.” It is to be observed that the contract which the defendants breached called, not for gum lumber of special grades, such as the plaintiff accepted its customers’ orders for, but for 2,000,000 feet of gum lumber, of whatever grade within the description “No. 2 common and better, log run,” might be produced in sawing, in the way which the contract specified, the kind of timber described in the contract. Each of the purchases the plaintiff made, and also the one it unsuccessfully tried to make, to enable it to fill orders it had accepted for particular grades of lumber, was in material respects different from its purchase from the defendants of 2,000,000 feet of gum lumber, “No. 2 common and better, log run.” The refusal of tire defendants to carry out their contract entitled the plaintiff to obtain from another source such lumber as the defendants ought to have furnished, and to charge them with such damages only as, with reasonable endeavors and expense, it could not prevent in so obtaining that lumber. What it may have cost the plaintiff to make purchases entirely different frpm the one evidenced by the breached contract does not properly enter into the estimation of the damages to be awarded, if by the exercise of reasonable diligence the plaintiff could have obtained the lumber as called for by the contract. The plaintiff was under a duty to avoid or mitigate the loss to which the defendants’ breach of the contract exposed it. If, as there was evidence tending to prove, the plaintiff was afforded the opportunity of obtaining in a nearby market the lumber as required to fill the breached contract, the proper measure of recoverable damages is the difference between the contract price and the cost to the plaintiff of so obtaining the lumber from another source, including in such cost any additional expenses incident to making another purchase, as, for instance, added cost of transportation, or interest on the amount of the purchase price if required to be paid sooner than the breached contract called for. Grand Tower Company v. Phillips, 23 Wall. 471, 23 L. Ed. 71; Lawrence v. Porter, 63 Fed. 62, 11 C. C. A. 27, 26 L. R. A. 167; Borden & Co. v. Vinegar Bend Lumber Co., 7 Ala. App. 333, 62 South. 245. And if the expense of so obtaining from another source the lumber as called for by the contract was less than the plaintiff would have, been subjected to if the contract had been complied with, it was benefited, instead of being harmed, by the breach complained of. In that event, -while the breach of the contract entitled the plaintiff to a verdict in its favor, only nominal damages were allowable. ' The conclusion is that, as applicable to the evidence in the case, the requested, charge above set out was a proper one, and that the court erred in refusing to give it. The judgment is reversed.