In Rosenthal v. Empire Brick Supply Co., 123 App. Div. 503 [108 N.Y. Supp. 347], the validity of a contract was sustained whereby the seller agreed to furnish the buyer all the mason's materials required for the construction of certain houses.Summary of this case from Tennant v. Wilde
January 17, 1908.
William C. Beecher of counsel [ Benjamin F. Edsall, attorney], for the appellant.
Walter J. Rosenstein, for the respondent.
The question involved arises out of an alleged breach of contract for the sale and delivery of brick. The contract was in writing, and the material part thereof is as follows: "We propose to furnish you all the masons' materials required for the construction of seven houses on the S.S. of 134th street, 100 feet west of Amsterdam avenue, this city, all to be delivered at the following prices and conditions: Hard brick at the market price, guaranteed not to exceed $9.50 per M. * * * It being understood that you will require about three million brick to complete the operation, and that all the hard brick will be received by you before December 1st, 1905."
As we interpret this contract it required performance before December 1, 1905. The contract was in the shape of a proposal by the defendant, "that all the hard brick will be received by you before December 1st, 1905," accepted by the plaintiff. If then before December first the defendant had tendered and the plaintiff had refused to receive the brick, it is clear that the plaintiff would have breached the contract and the defendant would have had a cause of action to recover damages therefor. The promises under this contract were mutual. If the plaintiff was bound to receive, the defendant was bound to deliver. By the middle of November a large amount of the brick required had been delivered. The plaintiff some days prior to December first demanded the brick necessary to complete the construction of the seven houses he was erecting. The defendant failed to deliver. The plaintiff wrote that if for any reason the defendant could not deliver before said date he would take the brick thereafter at the price agreed on. The defendant not only failed to deliver before December first, but refused to deliver thereafter unless the plaintiff would enter into a new written contract at an advanced price. This the plaintiff refused to do. The breach, then, occurred on December first, the date the plaintiff was required to receive and the defendant was required to deliver. Upon breach of a contract for the sale of merchandise at a fixed price, the general rule is that the measure of damages is the difference between the contract price and the market value at the time and place of delivery. ( Stecker v. Weaver Coal Coke Co., 116 App. Div. 772; Atlas Portland Cement Co. v. Hopper, Id. 445; Todd v. Gamble, 148 N.Y. 382.)
There was a market value for brick on December 1, 1905. It was $11 per 1,000, and so continued until the twentieth of the month. Indeed, the defendant offered to deliver all the brick that plaintiff required at this price. The value subsequently rose, and when the plaintiff bought 243,000 brick at the end of December and the first of January, the price was $13.50 per 1,000. The recovery was upon that basis, namely, the difference between $13.50 and $9.50 per 1,000, amounting to $850.50. The learned court applied the rule which obtains in actions for conversion of stock. It charged: "If the defendant was then chargeable with a breach of its contract, and you find that fact, then the plaintiff was required within a reasonable time after the breach of the contract to go into the open market and buy the brick at the best price he could;" and submitted to the jury what was a reasonable time.
It seems to us that the wrong measure of damage was applied, and that the true rule was, as stated supra, the difference between the contract price and the market value at the time and place of delivery.
The determination will, therefore, be reversed and a new trial ordered, with costs to the appellant to abide the event, unless the plaintiff stipulates to reduce the judgment to $364.50, with interest and costs. If so stipulated, the judgment will be modified accordingly and affirmed, without costs in this court to either party.
PATTERSON, P.J., LAUGHLIN and SCOTT, JJ., concurred.
The defendant agreed to furnish the plaintiff with all the masons' materials required for the construction of certain houses, which included hard brick at the market price, guaranteed not to exceed $9.50 per 1,000, it being understood that the plaintiff would require about 3,000,000 brick to complete the operation, and that "all the hard brick will be received by you [plaintiff] before December 1st, 1905." I think this was an absolute agreement to deliver all brick required for the construction of the houses irrespective of time, the defendant being under no obligation to deliver all the brick prior to December first, but only such as should be required for the construction of the houses as the work proceeded. To protect the defendant, however, the plaintiff was bound to receive the brick before December first. This was a provision in the proposal submitted by the defendant and accepted by the plaintiff which was clearly for the benefit of the defendant and a condition which he could waive by not delivering or tendering the brick before that time. It was not, therefore, as I view it, necessarily a breach of the contract because the defendant neglected to deliver a portion of the brick before December first. By a failure to deliver or tender the full amount of 3,000,000 brick before December first the defendant waived this provision, the obligation, however, still existing. When, however, the defendant refused to furnish brick after December first except at an increased price, I think there was then a breach of the contract by the defendant which entitled the plaintiff to maintain an action for the damages sustained thereby; and undoubtedly if such an action had been commenced immediately after December first, the plaintiff would have been entitled to recover the difference between the market value of the brick on December first and the contract price. The plaintiff, however, was not bound to treat it as a breach but was entitled to consider the contract as existing and enforce it according to its terms. I agree with Mr. Justice CLARKE that as on December first both parties treated the contract as broken it was then the duty of the plaintiff to reduce his damages as much as possible by purchasing the amount of brick that he would require within a reasonable time and not wait until the end of January or February when, in consequence of the close of navigation, the price of brick always advanced. The position of the defendant was unequivocal, it repudiating any obligation to furnish additional brick after December first. Plaintiff then knew he would be compelled to procure brick elsewhere and had information as to the amount of brick he would require. It seems to me, therefore, that within a reasonable time after the defendant's breach he should have made such a contract or procured the brick from others at the then market price and the defendant would be liable for the difference between the market price at the time plaintiff procured the brick and the contract price which the plaintiff was to pay.
I, therefore, concur with Mr. Justice CLARKE in the conclusion at which he has arrived.
Determination reversed and new trial ordered, with costs to appellant to abide event, unless plaintiff stipulates to reduce judgment as stated in opinion, in which event, judgment as so modified affirmed, without costs. Settle order on notice.