Plesofsky v. Kaufman & Flonacker

• Citation: 204 S.W. 204,140 Tenn. 208
• Parties: PLESOFSKY v. KAUFMAN & FLONACKER.
• Decision Date: 01 June 1918
• Court: Tennessee Supreme Court

204 S.W. 204

140 Tenn. 208

PLESOFSKY v. KAUFMAN & FLONACKER.

Supreme Court of Tennessee.

June 1, 1918

Certiorari to Court of Civil Appeals.

Action by Max Plesofsky against Kaufman & Flonacker. Judgment for plaintiff was affirmed by the Court of Civil Appeals, and defendant petitions for writ of certiorari. Writ denied.

Fentress J., dissenting.

Banks & Harrelson, of Memphis, for plaintiff.

Ben Matthews, of Memphis, for defendant.

WILLIAMS J.

Plesofsky is a retail clothier in the city of Memphis, and purchased of the defendant firm, doing business in New Orleans, a bill of Palm Beach suits for delivery, for the summer trade, about eight months later. The sellers on accepting the order gave notice that they would not permit a cancellation.

Near the date set for delivery the sellers wrote the purchaser the following letter (April 14, 1916) in reply to a communication from him:

"The reason your order has not been shipped is that we have been unable to get our credit department to approve same. The only way we can have same approved for shipment is on a cash basis, allowing you 6 per cent. discount in lieu of the terms. If this will be satisfactory to you, let us have your check for $100.00 to apply on the account and we will let the goods go forward without delay, bill of lading attached."

A few days later the purchaser wrote the sellers, calling their attention to their previous statement that a cancellation of the order would not be accepted, and saying that he was solvent both at the time the order was given and at the date of his letter; that he had "turned down" other dealers with whom he had done business and who had extended him credit; that he could not accept the sellers' new terms; and that he had made advance sales and his customers were asking about the goods. He said, further:

"I am responsible for any debt I make and have always met my obligations. I might have been slow at times, but have always paid same. This is a late date for you to be writing about your credit department and new terms after I have depended on you. * * * I expect that you will ship according to your agreement."

The facts set forth in this letter were shown to be such by plaintiff's proof in this action for damages for defendants' breach. There was no proof that he was able to pay cash, or to borrow funds in order to do so.

May the defendant sellers prevail upon the theory that the buyer should have availed of the opportunity to minimize the damages incident to their breach of his contract by taking delivery for cash according to the offer embodied in the letter of April 14, 1916?

The decision in Lawrence v. Porter, 63 F. 62, 11 C. C A. 27, 26 L. R. A. 167, opinion by Judge Lurton, is referred to as supporting authority.

The rule in that case is thus summarized in the headnote in 26 L. R. A. 167: "The duty to minimize loss requires the buyer, upon breach by the seller of a contract to sell goods upon credit, to accept the latter's unconditional offer * * * at a reduced price for cash on delivery, where he is able to accept it, and goods of that kind and quality are not purchasable from other parties."

The decision rests upon the theory that the disappointed buyer does not surrender or yield his original contract or any right of action he may have for its breach.

"It rests wholly upon the duty of mitigating the loss by replacing the goods by others, if they are obtainable by reasonable exertion. If this duty be such as to require him to buy from the delinquent seller, if the article can be obtained only from others, such a purchase from the seller is not the abandonment of the original contract by the substitution of another, nor would the purchase operate to the seller's advantage, save in so far as the damage resulting from his bad faith was thereby reduced. If the seller offers to sell for cash at a reduced price, * * * with the condition that it should operate as a waiver of the original contract, or of any right of action for its breach, then the buyer would not be obliged to treat with the seller, nor would the seller's offer, if rejected, operate as a reduction of damages."

In other words, the seller is not excluded from or to be treated as no longer a part of the market to which the buyer may be held to resort to mitigate his damages, in event the seller offers to sell as stated. We believe that this is a sound doctrine when thus understood and when its severe limitations are regarded. Limited as it is, it must have a narrow application.

The decision in Lawrence v. Porter has been criticized in Coxe Bros. & Co. v. Anoka Waterworks, etc., Co., 87 Minn. 56, 91 N.W. 265, but in our view the strictures are based upon a misconception of the theory underlying that decision, which we have just attempted to restate. The criticism runs as follows:

"We quite agree with the proposition that it is the vendee's duty to minimize or mitigate loss growing out of a vendor's refusal to perform his contract, but we are convinced that it was a totally unwarranted and unprecedented application of that rule. The cases cited fall far short of supporting it, and a careful research compels us to say that it is not sustained by a single authority. The learned editor of the Lawyer's Reports Annotated, in the note before mentioned, refers to it as a 'somewhat striking' application of the rule as to the duty of a party to a contract, which has been broken without his fault, to keep down damages. We quite agree with him. It is striking because it 'strikes out' of a contract entered into by a vendor and a vendee one of the conditions, and substitutes another, to which the parties have not assented. It entirely abrogates the contract as made by the parties, and forces upon them another and wholly different one made by the court. * * * It requires the vendee to secure and pay cash, less an amount equal to the interest * * * whether satisfactory or not."

The doctrine set forth in the Lawrence Case has been rejected by several other state courts. Cook Mfg. Co. v Randall, 62 Iowa, 244, 17 N.W. 507; Havemeyer v. Cunningham, 35 Barb. (N....