Orester v. Dayton Rubber Mfg. Co.
| Decision Date | 24 February 1920 |
| Citation | 126 N.E. 510,228 N.Y. 134 |
| Parties | ORESTER v. DAYTON RUBBER MFG. CO. |
| Court | New York Court of Appeals Court of Appeals |
OPINION TEXT STARTS HERE
Action by Jacob Orester against the Dayton Rubber Manufacturing Company. Judgment for the plaintiff was affirmed by the Appellate Division (176 N. Y. Supp. 914), and defendant appeals.
Reversed, and new trial granted.Appeal from Supreme Court, Appellate Division, Fourth department.
Stewart F. Hancock, of Syracuse, for appellant.
Frank E. Young, of Syracuse, for respondent.
It seems that motor tires are made by various manufacturers and sold under different trade names. The defendant makes what is known as the ‘Dayton pneumatic tire.’ Apparently it had never been introduced in Syracuse. For the purpose, therefore, of creating a demand for it and of distributing it through authorized dealers, the defendant agreed to manufacture, sell, and deliver to the plaintiff such tires as he might require at a reduction from its list prices as they might be fixed from time to time and further agreed that the plaintiff should have the sole right to distribute and sell these tires in Onondaga and some neighboring counties. In return he was to ‘aggressively push’ the sale, to provide showrooms, to carry in stock a sufficient supply to meet the trade requirements, and to sell only in the territory allotted to him.
Under this contract some 200 tires were received and sold by the plaintiff, both at wholesale and retail. He also fulfilled all the obligations imposed upon him. Yet the contract was broken by the defendant. It refused to supply 1,000 tires which he had ordered. The question before us is as to the proper measure of damages under such circumstances.
The jury was instructed that this measure was the difference between the market value of these tires in Syracuse and the price fixed in the contract. It was told further that because of the plaintiff's sales there was such a market value. In effect, the jury was permitted to award as damages the gross profits which the plaintiff might have made had he sold the whole 1,000 tires at the prices he had fixed.
[1] For a wrong, the law's ideal, not always realized, is compensation, neither more nor less. Theoretically the loss to an injured party because of a broken contract is its value to him. Yet this rule may not always be safely applied. He may have in mind or claim that he had in mind some special object which would make the contract of extraordinary value. It is well to avoid temptation. It is well to have some theory applicable to the majority of cases. The rule is therefore limited. As such value, for such loss, he may recover as damages only those that would naturally arise from the breach itself, or those that might reasonably be supposed to have been contemplated by the parties when the contract was made. True this is an arbitrary rule. By it full justice is not always done. But it has seemed a politic one.
[2] Further, the methods by which the result is reached are often standardized. In the case of sales, where the articles may be purchased in the market, the value of the contract to the purchaser is the difference between the price at which in like quantities they may be bought at the time and place of delivery and the price which he would have had to pay under the contract. This rule assumes, however, the possibility of such a purchase in the market. Then the injured party may obtain the articles, but at a greater price. If this is made good, he is compensated. But it may be none can be bought. Then the rule is inapplicable. Some other method by which his loss may be fixed must be used. Saxe v. Penokee Lumber Co., 159 N. Y. 371, 54 N. E. 14.
[3] Such is the case before us. The plaintiff could not purchase the tires from others in Syracuse. He himself was the sole source of supply. Under the circumstances the charge of the trial court was erroneous.
[4] Nor is the error cured by the submission to the jury of other evidence than that of the plaintiff's sales as bearing upon the market price of Dayton tires. There was before it the list price issued by the defendant. This the plaintiff claimed ‘was the only evidence of market price, aside from the price at which the plaintiff sold.’ But, as the court said, it did not appear that anything was sold at the list price, nor had it any tendency to show a market in Syracuse at which such tires might be purchased.
As there must be a new trial, we should determine the proper rule of damages. If there was a market elsewhere at which tires in the quantity desired by the plaintiff could be freely purchased the damages would be the difference between the contract price and the price at that market plus the transportation charges to Syracuse. Cahen v. Platt, 69 N. Y. 348, 25 Am. Rep. 203;Wemple v. Stewart, 22 Barb. 154; Berry v. Dwinel, 44 Me. 255. Possibly there was such a market, although, if other buyers from the defendant were limited as was he to sales in specified localities, this may be doubtful. In the absence of such a foreign market, if the plaintiff might...
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