Boyce v. Fowler

• Decision Date: 30 December 1949
• Docket Number: Civ. No. 8227.
• Parties: BOYCE v. FOWLER.
• Court: U.S. District Court — District of Massachusetts

87 F. Supp. 796

BOYCE v. FOWLER.

Civ. No. 8227.

United States District Court D. Massachusetts.

December 30, 1949.

Robert W. Meserve, Nutter, McClennen & Fish, Boston, Mass., for plaintiff.

Jacob S. Aronson, Boston, Mass., for defendant.

WYZANSKI, District Judge.

The principal issue in the case at bar concerns the damages recoverable by one jobber from another on account of breaches of warranty. The governing principles are set forth in the Massachusetts Sales Act, Mass.G.L.(Ter.Ed.) c. 106, §§ 58(6), 58(7) and 59. These sections provide:

§ 58(6) "The measure of damages for breach of warranty shall be the loss directly and naturally resulting, in the ordinary course of events, from such breach.

§ 58(7) "In case of breach of warranty of quality, such loss, in the absence of special circumstances showing proximate damage of a greater amount, shall be the difference between the value of the goods at the time of delivery to the buyer and the value they would have had if answering to the warranty.

§ 59 "Nothing in this chapter shall affect the right of the buyer or of the seller to recover interest or special damages in any case where by law recoverable, or to recover money paid where the consideration for the payment has failed."

Most of the facts have been found by a special verdict of the jury, annexed hereto as an appendix. In accord with Federal Rules of Civil Procedure, Rule 49(a), 28 U.S.C.A., other facts, consistent with the jury's verdict but not necessarily covered thereby, are found by the Court in the following 12 numbered divisions.

Findings of Fact

F. 1. Boyce, a jobber, bought from Fowler, another jobber, 600 work benches at $8.20 each to be delivered in Boston to a carrier for shipment to Boyce's customers. Fowler expressly warranted that the benches were of first quality and according to sample. Fowler anticipated that Boyce would resell the benches with similar warranties to retailers or jobbers. Fowler was aware that if these warranties should be broken Boyce would be presented with claims by customers, would lose profits, would have to take back benches and would suffer a loss of good will. Boyce paid Fowler for the goods.

F. 2. Boyce resold the benches, 300 to Macy and 300 to Tools for Fun, Inc., at $8.50 each to be delivered in Boston to a carrier for shipment. In making these resales Boyce repeated Fowler's warranties as well as another warranty not now material. Macy and Tools for Fun, Inc., paid Boyce. Tools for Fun, Inc., resold some of its benches to retailers in Philadelphia and Chicago.

F. 3. If the benches had answered to the warranties that Fowler gave, they would have been worth in Boston at the time of delivery $9 each or $5,400 for the lot. In fact the benches substantially failed to answer to these warranties. As shipped in Boston they were worth $5.30 each or $3,180 for the lot.

F. 4. Boyce gave Fowler notice of the breach of warranty within a reasonable time.

F. 5. Macy presented Boyce with a claim for $1,841.23, comprising $1,020 for repairing defective benches, $26.23 for missing parts, $420 for freight and trucking — including apparently charges for carrying benches to repair them and to repossess them from Macy's dissatisfied customers — and $350 for markdowns on 75 benches sold to Macy's customers. Macy also demanded that Boyce retake 30 unsold benches and "send * * * check in payment therefore sic".

F. 6. Tools for Fun, Inc., presented Boyce with a claim for $2,324.61, comprising items with respect to 4 defective benches which Tools for Fun, Inc., had not sold, 70 defective benches it had sold and taken back from a Philadelphia retailer and 61 defective benches it had sold to a Chicago retailer and which that retailer contemplated returning. As to each of these 135 benches Tools for Fun, Inc., specifically asked to recover its original cost of $8.50, its anticipated profit of $2.25, and certain costs of handling and improving the merchandise. Tools for Fun, Inc., also demanded that Boyce retake an additional 10 benches alleged to be defective.

F. 7. In answer to question 4(b) put by the Court the jury answered that Boyce will be "required to pay R. H. Macy & Co. and Tools for Fun, Inc. in order to settle with them for any expenses they have incurred and any loss of profits they have suffered * * * on account of breaches of warranty * * * in connection with the benches Macy's sic and Tools for Fun, Inc. bought from Boyce and sold to their customers" $3,100.84.

F. 8.(a) The precise construction of the Court's question 4(b) and the jury's answer recited in the preceding finding presents difficulties. Read literally, as a jury verdict should be, the finding covers only the 556 benches Macy or Tools for Fun, Inc., had sold to customers. That is, it covers the 270 benches which Macy sold its customers; the 155 benches which Tools for Fun, Inc., sold to retailers which they resold; and the 131 benches which Tools for Fun, Inc., sold to retailers but which have been returned or offered back to Tools for Fun, Inc., by those retailers. It would therefore not cover the 30 benches which Macy never sold but still has on hand, or the 4 defective benches which Tools for Fun, Inc., listed as unsold in Schedule A of Ex. 36, or the 10 other defective benches which Tools for Fun, Inc., had neither sold nor listed.

(b) To settle the claims with respect to the 30 benches, unsold by Macy, the Court finds that Boyce will have to pay Macy only the price Macy paid Boyce, namely $8.50 per bench or $255 for the lot. See third sentence from the end of Ex. 35.

(c) To settle the claims with respect to the 4 defective benches listed in Schedule A of Ex. 36 Boyce will have to pay Tools for Fun, Inc., $58.96.

(d) To settle the claims with respect to the 10 defective benches not listed and apparently not improved by vises and the like, Boyce will have to pay Tools for Fun, Inc., only the price Tools for Fun, Inc., paid Boyce, that is $8.50 each or $85 for the 10.

(e) Each of the settlements just referred to would be a reasonable settlement, but each of these settlements like the main settlement with Tools for Fun, Inc., contemplates the return to Boyce of the defective benches. Thus, when he makes his settlements, Boyce will have the right to receive in New York from Macy 30 benches and from Tools for Fun, Inc., 4 lots of respectively 4, 10, 70 and 61 benches. This makes a total of 175 benches. This is in accord with the answer rendered by the jury to special question 4(a) (1).

(f) The Court finds that when Boyce receives these 175 benches in New York they will be in much worse condition than the average bench was in Boston at the time of Fowler's sale of 600 benches to Boyce. The 175 benches will be the benches of poorest quality among the 600. They will have been damaged by shipment. They will show signs of having been rejected. Their value as a lot (even taking into account that some have vises) will be only $3 each in Boyce's hands in New York or a total of $525.

F. 9. If Fowler pays Boyce the $3,100.84 referred to in finding 7 and Boyce uses that sum to settle the claims of Macy and Tools for Fun, Inc., for the benches they sold to customers, Fowler will in effect be the purchaser of the benches at a rate that gives Boyce and his subvendees their full profits. Boyce in connection with these particular benches will with one exception be put in precisely the position for which he bargained and will have retained all the foreseeable profits and avoided all the foreseeable losses (aside from loss of reputation.) The exception is that Boyce will be better off than he anticipated because he will have received back from Tools for Fun, Inc., 131 benches which it had sold to customers and which are worth in New York $3 each.

F. 10. If Fowler pays Boyce $255 to settle with Macy for the 30 benches referred to in finding 8(b) and $85 to settle with Tools for Fun, Inc., for the 10 benches referred to in finding 8(d), Fowler will in effect be the purchaser of the benches at a rate that gives Boyce his full profits. Boyce will be in precisely the position for which he bargained except that he will have on his hands 40 benches which are worth $3 each.

F. 11. If Fowler pays Boyce $58.96 to settle with Tools for Fun, Inc., for the 4 benches referred to in finding 8(c), Boyce with one exception will be in precisely the position for which he bargained and will have retained all the foreseeable profits and avoided all foreseeable losses (aside from loss of reputation). The one exception is that Boyce will be better off than he anticipated because he will have on hand 4 benches which are worth $3 each.

F. 12. As a consequence of Fowler's breach of warranty Boyce sustained, as the jury found, a $1,200 loss of good will.

Conclusions of Law

C. 1. Since the place for the performance of the contracts between Fowler and Boyce and those between Boyce and his subvendees was Boston, the law of Massachusetts governs the damages. Meyer v. Estes, 164 Mass. 457, 465, 41 N.E. 683, 32 L.R.A. 283; Restatement, Conflict of Laws, § 358.

C. 2. The least to which Boyce is entitled is so-called normal contractual damages, that is the difference between the value of the benches at the time of their delivery to Boyce in Boston and the value they would have had if they had answered to Fowler's warranties. Mass.G.L.(Ter. Ed.) c. 106, §§ 58(6) and 58(7); Brown v. Bigelow, 10 Allen, Mass., 242; 3 Williston Sales (Rev.Ed.1948) § 613. In the case at bar these damages would be $2,220 plus interest.

C. 3. But since in this case Boyce and Fowler made their contract in the light of the special circumstances that Boyce was a jobber buying for immediate resale and that he was expected to sell with warranties similar to those given by Fowler to him, and since an average man would foresee that if those warranties should be broken, Boyce's customers would probably claim damages (including costs of repairing benches, costs...