LAW.coLAW.co

Wappoo Mills v. Commercial Guano Company

Supreme Court of Georgia1893-03-27
91 Ga. 396

Summary

Holding. The judgment is reversed because the trial court's jury instruction improperly allowed damages based on profits lost on a particular resale contract and payments made under that resale contract, when the evidence showed no mutual understanding that such specific resale profits or losses would be the measure of damages.

Wappoo Mills breached a contract to deliver commercial fertilizer to the Commercial Guano Company. The trial court instructed the jury that damages could include profits the company would have made on a resale contract it had entered into, as well as payments the company was forced to make to its own buyer due to the breach. The Supreme Court found this instruction erroneous because there was no evidence that Wappoo Mills knew about or contemplated any particular resale arrangement when the original contract was made.

The court held that damages for breach of a goods sale contract should be measured by the difference between the contract price and the market price at the time and place of delivery, not by profits or losses on subsequent resale contracts. Since commercial fertilizers are ordinary commercial commodities traded in open markets, the standard market-price measure of damages applies. The instruction improperly allowed the jury to award consequential damages based on a specific resale transaction that was outside the parties' reasonable contemplation.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether damages for breach of a goods sale contract may include lost profits on a particular resale contract unknown to the breaching party
  • Whether the measure of damages should be market price or profits on a specific resale
  • Whether consequential damages from resale contracts are recoverable when not within the parties' contemplation

Procedural posture

The Commercial Guano Company sued Wappoo Mills for breach of a contract to deliver fertilizer, and after a jury trial resulted in judgment for the plaintiff, Wappoo Mills appealed to the Supreme Court challenging the jury instructions on damages.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Bleckley, Chief Justice.

We feel constrained to reverse the judgment for error in that part of the charge of the court to the jury which instructed thus: “You have the right to include-what it may have been compelled to pay out, or what it may have lost in the way of profit, if it be shown to-you in figures what such payment or loss is.” The pronoun “it” as first used and then repeated in this quotation refers to the Commercial Guano Company, the defendant in the court below, and the profit mentioned as-recoverable has reference not merely to any difference between the contract price and a higher one which the-commodity would have brought in market, when the breach occurred, but to the profit the company would have realized on a particular contract of resale which it had made, and which the breach sued for prevented it from fulfilling. And the phrase “what it may have-been compelled to pay out” has reference to the amount which the company was required to pay and did pay to its own vendee in the contract of resale, by reason of its inability to perform that contract, in consequence of non-performance by the Wappoo Mills of its contract with the company. There was no evidence showing, or tending to show, that the Wappoo Mills had, at the-time of making its contract with the company, any notice of any particular contract of resale which the company had made or would make. Nothing appears which would justify the assumption that the profits or losses resulting, or which might result, from any particular resale, were in the contemplation of the parties,, so as to make these the measure of damages rather than that measure which, the law prescribes in ordinary cases-where a contract for the sale and delivery of goods is-made and broken. Commercial fertilizers have long been a commodity of general commerce, and there would seem to be no reason why damages for the breach of a contract of sale of which they are subject-matter,, should not be measured with reference to market price at the time and place appointed for delivery, instead of the price which a particular purchaser from. the first purchaser might agree to pay. The general rule is that, one who, by his contract, is entitled to have goods, not yet paid for, delivered to him at a particular time and place, is compensated for his disappointment when he-is allowed the difference between the price at which he purchased and the market price of the article in the market of delivery. This rule excludes any reference to a particular sale, except in so far as it may be evidence of the market price; and it wholly excludes any addition to the damages by reason of payments, voluntary or involuntary, made on contracts of resale, as the-result of a breach thereof occasioned by an antecedent breach of the original contract of sale.

Instructions so vaguely and inadequately stated as-those referred to in the second head-note, cannot be reviewed. Complaint of them in a motion for a new trial,, without setting them out more fully and distinctly, presents nothing for adjudication by the Supreme Court.

Judgment reversed.