Mitsubishi Shoji Kaisha v. Davis

• Citation: 291 F. 882
• Parties: MITSUBISHI SHOJI KAISHA, Limited, v. DAVIS, Director General of Railroads.
• Decision Date: 04 December 1922
• Court: U.S. District Court — Southern District of New York

291 F. 882

MITSUBISHI SHOJI KAISHA, Limited, v. DAVIS, Director General of Railroads.

United States District Court, S.D. New York.

December 4, 1922

Murray Corrington, of New York City, for plaintiff.

Theodore Kiendl and George M. Skinner, both of New York City, for defendant.

LEARNED HAND, District Judge.

This case comes up on motion for judgment on the pleadings coupled with a stipulation admitting the answer. The motion would have been the same without the stipulation, except that there is now no reason to allow any further pleading or any trial. It presents only the question whether the plaintiff is entitled to its resale price in Yokohama or the market price at the same place. I ignore the first two points presented because if the plaintiff is wrong on the third, they are without importance.

The facts stated in the pleadings are that before the bill of lading was issued by the initial carrier the plaintiff advised it 'that it should provide necessary facilities and move said steel bars forward promptly so that they could be landed in Yokohama at the earliest practicable time in order to satisfy plaintiff's Japanese customers for or purchasers of said steel bars. ' It had been earlier alleged that plaintiff had in fact already resold the bar for the price sought to be recovered, but clearly the allegation quoted is not intended to assert that the plaintiff advised the initial carrier of this contract. It must be taken as it reads. The seventh article of the complaint alleges that in September, 1918, the resale price was the market price at Yokohama.

The answer, while admitting this last allegation, alleges in defense in the third partial defense that on December 15 1918, when the bars should have been delivered the market price was the amount which it concedes to be due. This the stipulation admits. It follows that there was at that time a market price in Yokohama.

With that admission the plaintiff must lose. I know of only one case where, when there is a local market place, the buyer is entitled to recover special damages, whether in contract or conversion. Indeed it could not be otherwise because the buyer by hypothesis has it in his power to cover his loss on the resale by buying and filling his order. It is true that in the seventh article of the complaint the plaintiff alleges that it 'did not learn of the conversion of said steel bars by defendant until several weeks after December 15, 1918,' but that is clearly no answer. It knew that the bars had not arrived, and that its contract of resale was due. Its duty was to buy and fill the order, and hold the defendant for the delay in delivery if the bars were delivered late; its damages would have been the difference in the market value of the bars between December 15th and the actual delivery date, and this would have been a complete restitution.

The single case apparently supporting the plaintiff is Medbury v. N.Y. & Erie R.R., 26 Barb. 564, decided in 1858 by a General Term of the New York Supreme Court. The point was considered briefly in one paragraph without citation and with deference is not to be regarded as law in this court. The plaintiff's chief reliance is Delafield v. Armsby, 131 A.D. 572, 116 N.Y.Supp. 71 affirmed on opinion below in 199 N.Y. 518, 92 N.E. 1083; but there the case turned altogether upon the fact that the plaintiff could not fill its resale contracts with any equivalent salmon. It is entirely clear that without that fact the result would have been different. All that the case holds is that if the buyer cannot substitute, it is not necessary that he should have told the seller that he is buying to fill an existing contract, or indeed that there should be any such. France v. Gaudet, L.R. 6 Q.B. 199, was a case of the same character in this, that the buyer could not get any substitute champagne to fill his resale contract. The action was in trover, and the decision does indeed hold that when the buyer has no such opportunity, the value of the goods is their resale price. I question whether the case would be followed in the federal courts, but even so, it has no application here where there was a market price. Wallingford v. Kaiser, 191 N.Y. 392, 84 N.E. 295, 15 L.R.A. (N.S.) 1126, 123 Am.St.Rep. 600, had nothing to do with this situation, but decided only that the recovery in conversion should be the value of the goods at the place of delivery. The point need not be considered because the market value at the place of conversion was here the same as at the place of delivery.

I think it very doubtful in any event...