Setton v. Eberle-Albrecht Flour Co.

• Decision Date: 07 May 1919
• Docket Number: 5213.
• Citation: 258 F. 905
• Parties: SETTON v. EBERLE-ALBRECHT FLOUR CO.
• Court: U.S. Court of Appeals — Eighth Circuit

258 F. 905

SETTON v. EBERLE-ALBRECHT FLOUR CO.

No. 5213.

United States Court of Appeals, Eighth Circuit.

May 7, 1919

Rehearing Denied July 22, 1919.

Frank H. Sullivan, of St. Louis, Mo. (Clement A. Lawler, of Kansas City, Mo., and George F. Haid, of St. Louis, Mo., on the brief), for plaintiff in error.

Rhodes E. Cave, of St. Louis, Mo. (A. G. Eberle and George H Williams, both of St. Louis, Mo., on the brief), for defendant in error.

Before HOOK and CARLAND, Circuit Judges, and AMIDON, District Judge.

AMIDON District Judge.

The plaintiff, Setton, a flour merchant of Alexandria, Egypt brought this action against the defendant, the Eberle-Albrecht Flour Company, of St. Louis, Mo., for a breach of the following contract, dated July 11, 1914:

'We offer to buy of you 2,000 bags 'White Owl' at 23/6 per 280 lbs. c.i.f. Alexandria, all August shipment.'

This offer was accepted by cable. The contract was wholly by correspondence and cable. The defendant failed to deliver the flour, as performance became difficult by the breaking out of the World War early in August. Probably the principal cause of the breach was obstruction to shipping facilities. It may also be that enhancement of price was a factor. It is not claimed that either of these causes was legal justification for the breach. In the trial court the case turned wholly on the proper measure of damages; plaintiff insisting that they should be based on the difference between the contract price and the market price at Alexandria, and the defendant on the difference between the contract price and the market price at St. Louis. The trial court held with defendant, and excluded evidence as to prices in Egypt, and, as plaintiff offered no evidence of market price at St. Louis, it directed a verdict in favor of defendant at the conclusion of plaintiff's case, and entered judgment accordingly. Plaintiff brings error to review that judgment.

Some time was spent in the trial court explaining the letters c.i.f. They mean 'cost, insurance, and freight.' Their significance was explained by Lord Justice Blackburn, in Ireland v. Livingston, L.R. 5 H.L. 395, 406, in language quoted in Williston on Sales, page 408, and in the fourth edition of Benjamin on Sales, section 891. The Lord Justice concludes his statement as follows:

'In substance, therefore, the consignee pays, though in a different manner, the same price as if the goods had been bought and shipped to him in the ordinary way.'

The duty which this feature of the contract imposed upon the seller has no bearing upon the question now under review.

The general rule as to damages is stated by Sedgwick, at section 734, as follows: 'When contracts for the sale of chattels are broken by the vendor failing to deliver the property according to the terms of the bargain, it seems to be well settled, as a general rule, both in England and the United States, that the measure of damages is the difference between the contract price and the market value of the article at the time * * * when and the place where it should have been delivered, with interest.'

The same rule is expressed in slightly different language, and a multitude of cases cited, in the fourth edition of Sutherland on Damages, at section 651.

The words 'place of delivery' in the rule, mean the place where title passes. If the goods are to be shipped by carrier, this will be the place at which they are delivered to the carrier. If there is no local market at that place, the words have been enlarged to include places in the same vicinity where there is a market; allowances being made for freight. The rule as stated by Sedgwick has been adopted by the federal courts (Grand Tower Co. v. Phillips, 23 Wall. 471, 23 L.Ed. 71; Globe Refining Co. v. Landa Cotton Co., 190 U.S. 540, 23 Sup.Ct. 754, 47 L.Ed. 1171; Salmon v. Helena Box Co., 147 F. 408, 412, 413, 77 C.C.A. 586), and by all state courts entitled to speak with authority on such a subject (Cahen v. Platt, 69 N.Y. 348, 25 Am.Rep. 203; Rahm v. Deig, 121 Ind. 283, 23 N.E. 141). An examination of these authorities will show that using the market price at the place of ultimate receipt by the consignee in measuring damages has resulted in a reversal in all ordinary mercantile transactions.

To the general rule there is an exception, which is accurately expressed in Sutherland on Damages, section 662, page 2343, as follows:

'If the buyer has, in advance, made a contract for resale, and discloses that fact to his vendor, who undertakes to furnish the

...