Bluegrass Cordage Co. v. Luthy & Co.

• Decision Date: 18 January 1896
• Parties: Bluegrass Cordage Co. v. Luthy & Co.
• Court: Kentucky Court of Appeals

98 Ky. 583

Bluegrass Cordage Co. v. Luthy & Co.

Court of Appeals of Kentucky.

January 18, 1896.

APPEAL FROM SCOTT CIRCUIT COURT.

VICTOR F. BRADLEY AND THOMAS S. GAINES FOR APPELLANT.

JAMES F. ASKEW AND OWENS & FINNELL FOR APPELLEE.

JUDGE GRACE DELIVERED THE OPINION OF THE COURT.

On May 7, 1892, a contract was made between Luthy & Co., wholesale dealers in agricultural implements, machinery and binder twine, doing business at Peoria, Ill., and the Bluegrass Cordage Co., doing business at Georgetown, Ky., manufacturers of hemp binding twine, for the sale by the latter to the former of 100,000 pounds of their manufacture of such twine, at 7½ cents per pound, same to be delivered F. O. B. cars, at Georgetown, by the 10th of June, 1892, to be paid for by September 10, 1892, with some discounts for payments made at an earlier date. This twine was guaranteed to be good merchantable twine, reasonably smooth, to have ample strength to do good work on any binder in good condition.

This contract was in the form of an order by Luthy & Co., signed by Fred Luthy, the president of the corporation, and accepted by the appellants, signed by Wm. Fleming, superintendent, who was then out traveling for his corporation and representing them in their business.

While, by the pleadings, appellant made some question as to the making of this contract, and as to the authority of Fleming to execute same, and while it was claimed that this contract was only conditional and dependent on the approval of the appellant; and the court, on the trial of the cause, gave, by reason of some allegations in the answer undenied, an instruction to the jury that it was originally conditional, but that, by reason of the submission of same to the Cordage Company on the 9th day of May, 1892, and their failure to repudiate it until the 21st of May, 1892, it became binding on the appellants to all intents and purposes.

The facts upon which the court relied in the making of this ruling were shown by the admitted correspondence filed in the case, and this view was fully sustained, as it appeared in the evidence, by the Cordage Company, that they did not at any time intend to accept and to fill said contract.

On this state of the case, although there had been issue tendered on these points, yet the court was quite authorized to instruct the jury as indicated above.

A trial resulted in a verdict for the appellees for $750, and from that judgment, after motion for a new trial was overruled, this appeal is prosecuted.

On this appeal the main question is as to the estimate of the damage to which appellees were entitled for a breach of this contract by appellant. On this question of damages the court instructed the jury, in substance, that if the appellees, Luthy & Co., could have purchased the twine in the market, then the damages would only be the difference between the price so paid and the contract price.

But, by instruction No. 3, the court further said that if, by the use of reasonable diligence, appellees were unable to purchase twine of the same character and description in the market, and if the defendants knew, at the time of purchase by plaintiffs, that they purchased same with a view to a re-sale, and that the profits anticipated thereon were, in the contemplation of both parties, the motive which induced plaintiffs to make the purchase, then the measure of the damages is the difference between the contract price of this twine, plus the freight thereon, and the price at which it could have been sold for by plaintiffs at their place of business, Peoria, Ill., on and after the 21st of May, 1892.

In the introduction of the evidence plaintiffs were allowed to show that they were an old established house in the agricultural implement and binder twine business; that they had for years made sales of far greater amounts of twine than that embraced by this contract; that, at the time of making this contract, they had ten traveling salesmen out on the road selling their goods; that within the short time in which they supposed they would obtain this twine from defendant they had, in fact, sold between three and four thousand pounds of this twine at a price averaging 9.6 cents per pound; that these sales cost them no additional expense, and that they knew, by their former business, that they could easily have sold the whole of this purchase during the season at substantially this price. They laid their damages at $2,000.

Their testimony further showed an advance in the market value of twine as the season progressed. They went into some details to show why this advance was made, as by reason of the efforts of the American Cordage Co. to corner, so to speak, the market on twine, this company having almost the exclusive control of the supply of Sisal and manilla twine and the mixed manufacture of the two materials; that this hemp twine, made by the defendant, was the chief twine that could then be secured and brought in competition with the goods of this American Cordage Co.

They furthermore gave in evidence that, after they were notified on the 21st of May, 1892, by the defendant company that it did not intend to comply with its contract, though making diligent efforts, they had been unable to purchase any hemp twine such as embraced in their contract.

And this latter proposition must have been believed by the jury, as it was only on this view that they were authorized to make an estimate of the damages along the line of profits indicated by the instructions.

Quite a number of cases are cited in Kentucky where this court held that, on the sale of ordinary articles of merchandise and on non-delivery of same, the measure of damages is the difference, if any, between the contract price and the market value of the same goods at the time and place of delivery as per contract.

This is the doctrine recognized in Moore v. Payne, 7 Dana, 382, as to the sale of a lot of corn for shipment to New Orleans, part only of which was damaged.

In Miles v. Miller, 12 Bush, 135, in reference to the sale of a quantity of...