Alger-Fowler Co. v. Tracy

• Decision Date: 06 July 1906
• Docket Number: Nos. 14,716-(134).,s. 14,716-(134).
• Citation: 98 Minn. 432
• Parties: ALGER-FOWLER COMPANY v. JOHN L. TRACY.<SMALL><SUP>1</SUP></SMALL>
• Court: Minnesota Supreme Court

98 Minn. 432

ALGER-FOWLER COMPANY v. JOHN L. TRACY.¹

Nos. 14,716-(134).

Supreme Court of Minnesota.

July 6, 1906.

Appeal by plaintiff from a judgment of the district court for Hennepin county, entered pursuant to the findings and order of Holt, J. Affirmed.

Keith, Evans, Thompson & Fairchild, for appellant.

M. H. Boutelle and N. H. Chase, for respondent.

START, C. J.

Action, commenced March 2, 1905, to recover from the defendant an alleged balance of $5,958.12 as money had and received to the plaintiff's use. The answer alleged that the defendant had accounted to the plaintiff for all moneys received from it, except the sum of $130.62, and set up a counterclaim in the sum of $856.25. The reply put in issue the allegations as to the counterclaim and new matter in the answer. The cause was tried by the court without a jury, and as a conclusion of law based on the facts found, it directed judgment in favor of the defendant, that the plaintiff take nothing by its action, and that the defendant recover judgment on his counterclaim for the sum of $400.63. Judgment was so entered, from which the plaintiff appealed.

The only question presented by the record for review is whether the conclusion of law and judgment are sustained by the facts found.

The trial court found that the defendant had accounted with the plaintiff for all money received from it, except the sum of $130.62, admitted in the answer. The here material facts found by the court are substantially these:

1. The defendant during all the time herein referred to was a broker engaged in the business of buying and selling grain on commission in the city of Minneapolis. He was a member of the Chamber of Commerce in that city. By usage and custom existing in the state of Minnesota and the city of Minneapolis, brokers employed to sell and purchase grain for others make such purchases and such sales in their own names, without disclosing their principals, and become personally liable for the contracts so made, and the principals of such brokers are, as between them and such brokers so employed, liable and obligated to perform the contracts of purchases and sales so made in their behalf, and to indemnify and save harmless such brokers against liability upon such contracts so made, all of which was well known to the plaintiff at all times.

2. On November 22, 1904, plaintiff employed the defendant to sell for it, in accordance with such usage and custom of the Chamber of Commerce, thirty thousand bushels of wheat, to be delivered at any time at the option of the plaintiff, between May 1 and May 31, 1905, for the sum of $33,418.75; that is, at the rate of $1.11 3/8 per bushel upon the delivery of the wheat, and the defendant did so sell the wheat upon such terms and conditions, and duly notified plaintiff thereof. On the next day plaintiff employed defendant to sell for it another item of thirty thousand bushels of wheat on the same terms and conditions for the sum of $33,375; that is at the rate of $1.11¼ per bushel; and the defendant did, pursuant to such instructions, on said day sell the wheat and duly notified plaintiff thereof. On November 25, 1904, plaintiff notified the defendant that it would not deliver the wheat so sold, and that it would not carry out the contract it had directed the defendant to make in its behalf for the sixty thousand bushels of wheat, and absolutely repudiated the contract and refused to indemnify the defendant against liability upon the sales. Thereupon the defendant on the next day closed the transaction by purchasing sixty thousand bushels of wheat at the best market price then obtainable, to wit, the sum of $67,650, or at the rate of $1.12¾ per bushel, which was the fair market value of the wheat and the lowest price for which the same was obtainable. In closing the deal in regard to the sixty thousand bushels of wheat, which plaintiff had directed defendant to sell for it, and the contract which it repudiated, the defendant sustained a loss in the sum of $856.25. No part of said loss has been paid by the plaintiff except the sum of $325.

3. On November 28, 1904, the closing price of May wheat in the Minneapolis Chamber of Commerce was $1.11¼; on November 29, $1.10 1/8; and on November 30, $1.11¼; and that during the first fifteen days of May, 1905, the price of wheat did not reach so high a figure as $1.11¼ per bushel.

It is the contention of the plaintiff that upon the facts found it was entitled to judgment in its favor for the sum of $130.62 admitted to be due by the answer, for the reason that the facts sustain no part of the defendant's alleged counterclaim. On the other hand, the defendant claims that the facts sustain his counterclaim for $856.25, which sum, less the payment of $325 and the amount admitted in the answer, $130.62, or for $400.63, he was rightly awarded judgment. The sole question, then, for our decision is whether the defendant, under the circumstances disclosed by the facts found, had the legal right to treat the plaintiff's renunciation of the contract as a present breach of the entire contract and bring an action accordingly for the loss.

The general rule as to damages for a breach of contract for the sale of goods is the difference between the contract price and the market price at the time and place when they ought to have been delivered. Coxe Bros. & Co. v. Anoka Waterworks, Ele. L. & P. Co., 87 Minn. 56, 91 N. W. 265. If this rule applies to the facts of this case, and there was no breach of the contract until performance was due, then the contention of the plaintiff that the defendant's counterclaim was prematurely asserted is correct. But if, as the defendant claims, the renunciation of the contract by the plaintiff gave the defendant the right, at his option, to treat it as a breach of the contract and at once to bring an action for damages, the counterclaim was not prematurely asserted and the decision of the trial court was right.

There is a conflict of judicial opinion as to the relative rights and liabilities of the parties to a contract, where one of them before performance is due unqualifiedly repudiates the contract and gives notice that he will not perform it. After a somewhat extended examination of the...