Cragin v. J. S. Eaton & Bro

• Decision Date: 08 October 1923
• Docket Number: 23458
• Citation: 133 Miss. 151,97 So. 532
• Parties: CRAGIN v. J. S. EATON & BRO
• Court: Mississippi Supreme Court

97 So. 532

133 Miss. 151

CRAGIN v. J. S. EATON & BRO

No. 23458

Supreme Court of Mississippi

October 8, 1923

Division A

(Division A.) January 1, 1920

1 SALES. Remedies of seller on buyer's breach stated.

On refusal of buyer to take cross-ties at the agreed contract price, the seller could ship the ties and sue for the contract price, retain them and sue for the difference between the market value and the contract price or sell them on the market for the best price obtainable and sue for the difference between the price obtained and the contract price.

2 SALES. Seller's delivery at reduced price at which buyer offered to accept held to modify the contract.

Where buyer refused to take cross-ties at contract price, but offered to take them at a reduced price, and told the seller that he could ship them at that price if he accepted the offer, and the seller later did ship and bill the ties at the reduced price, he thereby agreed to sell them at that price and the original contract was modified, and when the modified contract was performed the transaction was ended.

3. SALES. Modification of contract as to price held valid, and not without consideration.

Where buyer refused to take cross-ties at the contract price, but offered to take them at reduced price, and the seller accepted the offer by shipping them at such price, this was not a new and independent transaction, but a modification of the old contract, and was valid and not without consideration.

4. SALES. Modification of contract as to price held to preclude recovery for refusal to accept at contract price.

Where buyer refused to accept cross-ties at the contract price, but offered to take them at reduced price, and the seller shipped them at that price, such modification and fulfillment of the contract precluded recovery for breach of the original contract, on theory that, as the seller could not obtain that price elsewhere, he was merely performing his obligation to sell them at the best price obtainable.

HON. R. S. HALL, Judge.

APPEAL from circuit court of Forrest county, HON. R. S. HALL, Judge.

Action by J. S. Eaton & Bro. against B. A. Cragin, Jr. From a judgment for plaintiffs, defendant appeals. Reversed, and judgment entered for defendant.

Judgment reversed.

Davis & Hill, for appellants.

On a breach of a contract by the purchaser, the seller has the option of doing one of three things; he may complete the contract and recover the contract price; or he may treat the contract as ended and keep the property as his own, and sue the purchaser for the difference in the market value and the contract price; or, he may sell the property at public or private sale, for the best price obtainable, and sue for the difference between the price realized and the contract price. The plaintiffs contend that they chose the third and last remedy, but we maintain that they not only failed to pursue the last remedy but they failed to pursue either of the remedies permitted by law. We do not see how it could seriously be said that the sale of the ties to the defendant was a sale of the ties in the open market.

All the authorities hold that in a re-sale of the property after the buyer's refusal to accept same, the seller makes the sale of the property as the agent of the buyer, and that he is required to exercise the utmost good faith toward the buyer in making the sale, and insofar as this is true, the seller deals with the property not as his own but as the buyer's, and before he makes a re-sale he must give him some kind of notice that he proposes to sell the property for the best price obtainable, or he must at least notify the buyer that his refusal to accept the goods is at his, the buyer's, risk and peril. Mr. Eaton in this case did not do any of these things. He did not deal with the property as if it were Cragin's, but he dealt with it as if it were his own when he shipped the ties and drew drafts on Cragin for the purchase price.

We respectfully submit that appellees waived any rights they may have had to insist upon and recover the amount sued for, or any other sum. The following authorities establish the justices of these views: Consumers Cotton Oil Co. v. Ashburn, 81 F. 331; 52 U.S. App. 258; 26 C. C. A. 436; U. S. v. Lamont, 155 U.S. 303, 309, 15 S. C. T. 97, 99; 39 U.S. (L. Ed.) 160.

There is another reason why the case made by the plaintiff was different from that alleged. If it be true as alleged that the sale of the ties to the defendant at the reduced price was a re-sale on the open market, then the amount sued for by plaintiff constitutes damages. But this is not a suit for damages; it is a suit for the balance of the purchase money.

The court erred in not granting the motion of the defendant at the close of the testimony of the plaintiffs to exclude the testimony and to grant the defendant a peremptory instruction, both because of the variance and because the testimony showed affirmatively that the ties were sold to the defendant under the new agreement that the price be reduced ten cents per tie.

T. J. Wills, for appellees.

When the contract was breached, there were three courses the appellees could pursue to protect themselves under the terms of the contract. American Cotton Company v. Herring, 37 So. 117; Walker Bros. & Co. Ltd. v. Daggett, 76 So. 569. Appellees elected to pursue the course outlined in the third method. They did sell the ties in the market for the best price to be obtained and sued for the difference in the price realized and the contract. They found no market for the ties and no offer therefor at a price as great as that offered by appellant of ten cents less than the contract price. Appellant was a purchaser of ties, and in the market offering to buy the ties.

If appellees had sold to some other purchaser at a reduction of twenty-five cents per tie and had sued appellant for the difference of twenty-five cents per tie, appellant could have successfully defended as to the fifteen cents per tie thereof by showing the offer to purchase at a reduction of ten cents. The open market contemplates every purchaser available. The best price obtainable was offered by appellant. The law imposed upon appellees the duty of selling to that person that would pay the best price so as to minimize the damages as much as possible. Under this legal duty appellees had no other course open to be pursued than to sell the ties to appellant since the price offered by him was the best price obtainable, and to sue for the difference between that price and the contract price. This is the course that was pursued in this case. There was no request by appellant to appellees to substitute a new contract for the old one. The notification to appellees was a breach of the contract and an offer to furnish the inspector and to purchase the ties at a reduction of ten cents below the contract price. If the offer had been to modify the contract as was contended by appellant, and it had been agreed to by appellees, the agreement would have been a nudum pactum unenforceable in law and would not have barred appellees from recovering the loss from the breach of the contract. If the contract has been performed on one side, a modification thereof without more would be without consideration and would not operate as a discharge. To render such an agreement for a modification effectual in bilateral contracts where performance has been made on one side, there must be a valuable consideration, supporting the new agreement to constitute a valid and enforceable contract. 3 Elliott on Contracts, par. 1857 and cases cited in footnotes 3 and 4 thereunder; 6 R. C. L., page 917, par. 301. There was no fraud perpetrated on the appellant in this case. Appellant was bound to accept the ties from appellees and to pay the contract price. By shipping them to appellant at the best price he would pay, it reduces his damage that appellees would sustain by appellant's breach of the contract below the damage that would have been sustained had they not so...