Coos Lumber Co. v. Builders Lumber & Supply Corp.

• Decision Date: 06 March 1963
• Citation: 104 N.H. 404,188 A.2d 330
• Parties: , 1 UCC Rep.Serv. 30 COOS LUMBER COMPANY, INCORPORATED v. The BUILDERS LUMBER AND SUPPLY CORPORATION. The BUILDERS LUMBER AND SUPPLY CORPORATION v. COOS LUMBER COMPANY, Incorporated.
• Court: New Hampshire Supreme Court

Page 330

188 A.2d 330

104 N.H. 404, 1 UCC Rep.Serv. 30

COOS LUMBER COMPANY, INCORPORATED v. The BUILDERS LUMBER AND SUPPLY CORPORATION.

The BUILDERS LUMBER AND SUPPLY CORPORATION v. COOS LUMBER COMPANY, Incorporated.

Supreme Court of New Hampshire.

Argued Jan. 2, 1963.

Decided Jan. 31, 1963.

As Modified on Denial of Rehearing March 6, 1963.

George H. Keough, Berlin, for plaintiff.

Joseph Stancik, Derry, and Robert Shaw, Exeter, for defendant.

LAMPRON, Justice.

As a result of a purchase order from the defendant dated July 6, 1960, the plaintiff agreed to ship to it at a sawmill in Bridgewater the following:

'Approx 2 1/2 million feet International log Scale, #1 Spruce logs 12' to 16' minimum top diameter 8"'

'All to be delivered prior to 12-31-60 $60 M''

These logs were to be cut by the plaintiff from standing timber it had purchased in the town of Livermore on the 'Greeley Brook Chance lot'. There was evidence that this was virgin timber for which the defendant was paying a premium price.

It was the position of the defendant, and there was testimony to that effect, that the timber on plaintiff's lot was insufficient to meet the requirements of the contract and that the first loads of logs delivered to it about the 28th or 29th of August did not meet the specifications as a result of which the parties agreed to terminate their contract.

However there was sufficient evidence to warrant a finding by the jury that the agreement was not cancelled by mutual consent; that it was breached by the defendant, and to support a verdict for the plaintiff.

Although there was testimony from which the jury could have found that plaintiff's cost to produce and deliver the 2 1/2 million logs required by the contract was approximately $40 per thousand, there was also sufficient evidence to support a finding that this cost was $37.33 per thousand or a total of $93,325., as claimed by the plaintiff. Adding to this total the amount of $10,000 for the cost of establishing a camp and to make the initial roads necessary to produce the logs, as claimed by the plaintiff, the jury could find that plaintiffs cost to produce and deliver the 2 1/2 million feet of logs required by the contract was $103,325. If this amount is subtracted from the contract selling price of $150,000. a profit of $46,675 would result, which is the amount of the verdict returned by the jury.

The Trial Court charged the jury that the measure of damages to be awarded was the amount of profits which would have been realized by the prevailing party if the contract had been fully performed. We are of the opinion that this was not the measure of damages under the facts of this case and that the charge as a whole did not state the proper rule of damages to be applied by the jury, as will appear hereinafter, and the verdict must be set aside for that reason. West v. Boston & M. Railroad, 81 N.H. 522, 531, 129 A. 768, 42 A.L.R. 176.

It is a well established rule of law that in awarding compensatory damages for breach of contract, 'the effort is made to put the injured party in as good a position as that in which he would have been put by full performance of the contract, at the least cost to the defendant and without charging him with harms that he had no sufficient reason to foresee when he made the contract.' Restatement, Contracts, s. 329, comment a; Hawkins v. McGee, 84 N.H. 114, 117, 146 A. 641; McLaughlin v. Union Leader Corp., 99 N.H. 492, 497, 498, 116 A.2d 489; 5 Williston, Contracts (Rev. ed.) s. 1338.

'Where a buyer of goods under an executory agreement breaks his contract by refusing to accept title to the goods which are in existence * * * it is to be observed that if the buyer had accepted and paid for the goods as he was bound to do by his contract, the seller would have been obliged to surrender their ownership and to incur all the expenses of delivering them at the time and place agreed on, and he would, on the other hand, have received the price or become entitled to it. The buyer's wrong leaves him still owner of the goods and frees him from any expense of delivery of them, and on the other hand, deprives him of the price * * * The measure of damages is the difference between the contract price and the market price of the goods at the time when and the place where the contract should have been performed.' 5 Williston, Contracts (Rev. ed.) s. 1378; Trask v. Hamburger, 70 N.H. 453, 454, 48 A. 1087; RSA 346:64.

This rule is based on the principle of avoidable consequences. 5 Corbin, Contracts, s. 1039. The defaulting buyer should be credited with the price actually obtained or obtainable for these goods by a new sale. Restatement, Contracts, s. 336, comment c. The rule properly applies, however, only when a new sale can be made to a customer that the seller could not have supplied but for the buyer's repudiation. 5 Corbin, Contracts, supra.

A contract...