exceptional case where the buyer in his sub-contract protects himself from liability by engaging to resell only in case the original seller fulfils his contract that the defendant can if ever fairly ask a restriction of the plaintiff's damages. 49 Perhaps the desirability of maintaining a uniform rule may have weight as a reason for refusing to diminish the plaintiff's damages. 50 Suppose one who had contracted to buy a race-horse worth a thousand dollars had agreed to let it for its life to a friend for five dollars a year, and the friend had agreed to hire it for that price. Does the fact the buyer has agreed to give away or to sell below cost part of the value for which he contracted absolve the defendant to that extent from the consequences of his breach of duty? This is the problem to which the law as yet can hardly be said to afford a conclusive answer. It seems immaterial on the question of limiting damages whether the defendant was aware of the sub-contract, 51 or whether it is made after the original contract. 52 If special limitation of damages is to be allowed, it is because the plaintiff gets full compensation from the smaller amount; and this reason would not be dependent on the defendant's expectations.53 Consider in 356, 109 N. W. 679. 49 A case of this sort was Foss v. Heineman, 144 Wis. 146, 128 N. W. 881. 50 In British Westinghouse Electric etc., Co. v. Underground Electric, etc., Co., [1912] A. C. 673, 691, Lord Haldane said, with apparent approval of the conclusion of the Court of Appeal, of the measure of damages for breach of covenant by a tenant to leave premises in repair: "In Joyner v. Weeks, [1891] 2 Q. B. 31, the lessor had made a lease to another lessee by way of anticipation, to commence from the expiration of the term of this lease, and the new lessee had made no claim to be reimbursed the cost which he had incurred in repairing after the expiration of the demised lease. Wright, J., held that the true test was the amount of diminution in value to the lessor, not exceeding the cost of doing the repairs. The Court of Appeal, including Lord Esher and Fry, L. J., took a different view. They thought that there had been a constant practice of laying down the measure of damages as being the cost of putting into repair, and that in the particular class of cases with which they were dealing it was a highly convenient rule which ought not to be disturbed." 51 See Wertheim v. Chicoutimi Pulp Co., [1911] A. C. 301. 52 Foss v. Heineman, 144 Wis. 146, 128 N. W. 881. 53 If the argument sometimes used in regard to the rule of Hadley v. Baxendale and criticised, supra, § 1357, namely, that consequential damages are allowed because in effect con § 1387. Delivery of too small a quantity. Where a seller is under a contract to deliver a specific quantity of goods and tenders a smaller quantity, the buyer may reject the tender.54 The buyer may, however, accept the offer though defective.55 In so doing he enters into a new contract. The offer of a quantity not contracted for is a manifestation of the seller's willingness to sell that quantity. The terms of this new contract,if no contrary intention is indicated, are the same as those of the original bargain, except as to quantity. If, therefore, the original bargain provided for a lump price, the buyer, if he accepted the goods, would become liable for that price. If, however, the original contract provided for payment by number, weight, or measure, the buyer would become liable to pay at this rate for the quantity of goods actually received. 5 56 § 1388. Deficient delivery under instalment contract. But in case the seller's obligation is either by its terms or by the buyer's permission performable in instalments it may happen that the buyer, not supposing the seller is going to be guilty of a breach of contract, accepts one or more instalments, assuming that the rest are to follow. If the buyer had agreed to pay a lump price after all the instalments had been delivered, it is obvious that the acceptance of the early instalments could not bind him to pay the agreed price. Delivery of the later instalments would be a condition precedent to the buyer's obligation.57 Even if the price of each instalment was payable separately, the buyer should have relief. It is true that his actracted for, it would seem to follow that in any event the damage that the defendant might normally expect would follow from a breach of his contract should be recovered even though the plaintiff actually suffered less damage. "Norrington v. Wright, 115 U. S. 188, 6 S. Ct. 12, 29 L. Ed. 366; Cleveland Rolling Mill v. Rhodes, 121 U. S. 255, 30 L. Ed. 920; Churchill v. Holton, 38 Minn. 519, 38 N. W. 611; Hill . Heller, 27 Hun, 416; Inman v. Elk Cotton Mills, 116 Tenn. 141, 92 55 Norrington v. Wright, 115 U. S. 188, 205, 6 S. Ct. 12, 29 L. Ed. 366; Bamberger v. Burrows, 145 Iowa, 441, 124 N. W. 333. 5 Morgan v. Gath, 3 H. & C. 748; Avery v. Willson, 81 N. Y. 341, 37 Am. Rep. 503. 57 Oxendale v. Wetherell, 9 B. & C. 386, 387; Waddington v. Oliver, 2 B. & P. (N. S.) 61; Colonial Ins. Co. v. Adelaide Ins. Co., 12 A. C. 128, 138, 140. ceptance of a part indicates an assent to take title to the goods offered, and to pay for them at the contract rate, but this assent was given in the justifiable expectation of receiving an additional quantity of goods. The buyer may, therefore, on finding out that the contract is not going to be fully performed by the seller, return the goods in his possession and refuse to pay the price, if not already paid; and, if already paid, recover it back. 58 If, however, the buyer when he accepts the partial delivery is aware that the seller proposes to make no other delivery, it is clear that the buyer should pay for the goods; and, similarly, if he retains them after he knows that no future delivery is to be made, even though at the time the partial delivery was accepted he had no reason to suppose the rest of the contract was not to be performed. If the contract is divisible and a price is, therefore, due according to the terms of the contract for what has been delivered and accepted, there can be no doubt of the seller's right to recover the price fixed by the contract. 59 § 1389. Deficient delivery where contract is entire. It may, however, be supposed that the contract was entire and that no part of the price was due until full performance by the seller. Even in such a case, if the buyer accepted a portion of the goods knowing that no more were to be delivered, there is no difficulty in finding a real contract to pay for them, as distinguished from a quasi-contractual obligation, since the partial delivery was in effect a new offer.60 But if the deficient quantity of the goods were delivered under such circumstances that the buyer was not aware that full delivery would not be made, no new contract can be said to have been agreed to 58 Benjamin, Sale (5th Eng. ed.), 697; Polhemus v. Heiman, 45 Cal. 573; Bamberger v. Burrows, 145 Ia. 441, 124 N. W. 333. But see Bigelow v. Barnes, 121 Minn. 148, 140 N. W. 1032. 59 Bowker v. Hoyt, 18 Pick. 555. The court held in this case that retention of the goods after knowledge of the seller's default made the buyer liable for the contract price; but the buyer, it was said, might recoup the damages that he suffered from the seller's failure completely to fulfil his contract. As to the question of the seller's liability where incomplete performance has been accepted, see supra, §§ 701 et seq. 60 See Georgia Pine Lumber Co. v. Central Lumber Co., 6 Ala. App. 211, 60 So. 512. by the buyer. Here accordingly, if the seller recovers payment for what he has furnished, it must be on principles of quasi-contract. It is true that it has often been laid down that a contract will not be implied by the law in favor of one who is in default under an express contract, but the injustice of allowing the seller to retain the benefit of goods without paying for them is so clear that even in England, where quasi-contractual rights are generally most strictly limited, recovery has been allowed,61 and the weight of authority in this country strongly supports this view; 62 but in New York by a long series of decisions the seller is denied relief.63 The New York view has been accepted in a few other States.64 The measure of damages in such an action is not necessarily the contract price even if the contract fixes a price by number, weight, or measure. If the buyer retained the goods, having it in his power to redeliver them after he knew that the seller was going to make default in delivering the whole amount, it seems just that the buyer should pay the contract price. This result seems supported by the decisions which hold the buyer liable under such circumstances. It is commonly said that the retention operates as a severance of the contract.65 The buyer, however, may in good faith have dealt 61 Oxendale v. Wetherell, 9 B. & C. 386. In this case the plaintiff delivered 130 bushels of wheat and though he was bound to deliver 250 bushels and failed to deliver the residue, the court held that after the expiration of the time within which delivery should by the contract have been made, recovery could be had for the 130 bushels. Parke, J., said: "If the buyer retained the part delivered after the seller had failed in performing his contract, the latter may recover the value of the goods which he so delivered." 2 Richards v. Shaw, 67 Ill. 222; Holden Mill v. Westervelt, 67 Me. 446; Rodman v. Guilford, 112 Mass. 405; Hedden v. Roberts, 134 Mass. 38, 45 Am. Rep. 276; Clark v. Moore, 3 Mich. 55; Shaw v. Badger, 12 S. & R. 275. 63 Champlin v. Rowley, 13 Wend. 258, 18 Wend. 187; Mead v. Degolyer, 16 Wend. 632; Baker v. Higgins, 21 N. Y. 397; Catlin v. Tobias, 26 N. Y. 217, 84 Am. Dec. 183; Kein v. Tupper, 52 N. Y. 550; Nightingale v. Eiseman, 121 N. Y. 288, 24 N. E. 475. If there are any facts tending to show waiver or prevention of full performance, the New York court is quick to seize upon these facts as a ground of liability. Avery v. Willson, 81 N. Y. 341, 37 Am. Rep. 503; Brady v. Cassidy, 145 N. Y. 171, 39 N. E. 814. 64 Haslack v. Mayers, 26 N. J. L. 284; Witherow v. Witherow, 16 Ohio St. 238; Petersburg Fire Brick Co. v. American Clay Mach. Co., 89 Ohio St. 365, 106 N. E. 33, L. R. A. 1915. B. 536. 65 See cases cited supra, n. 61, 62. with the goods in such a way as to make it impossible for him to return them, and yet the value of the portion received may not be so large a proportion of the total price as the goods are of the total amount of goods which should have been delivered. As the buyer's obligation is imposed by law, the extent of it should be restricted to the benefit which the defendant has received. The seller, being a wrongdoer in failing to deliver the whole amount, can certainly claim no more than this; and so it is provided in the section of the Sales Act under consideration. Though it has been seen the buyer may accept the smaller quantity offered him, he has, it seems, no right to accept a portion only of this amount. If he does so, his action amounts to a new offer to the seller to purchase the partial quantity. § 1390. Damages for delay in delivery. The seller may perform his contract otherwise but break it in regard to the time of performance. The normal measure of damages in such a case is the difference in value of the goods at the date contracted for and their value when delivered.66 In fact, however, such damages may give the plaintiff either less than compensation or more than compensation. As to the first, the rules governing the recovery of consequential damages mark the boundary of the plaintiff's rights.67 Thus if the goods which the defendant contracted to deliver were machines known to be intended for the buyer's use, the measure of damages then becomes the rental value of such machines for the period of delay,68 unless the plaintiff can show that no other machines could be obtained and that the defendant knew this when he contracted with the plaintiff, in which case the damages might be greater.69 Whether special expenses resulting from the delay are recoverable depends upon how far they were 358; Edwards v. Sanborn, 6 Mich. 348. 67 See supra, §§ 1347, 1355. Startup v. Cortazzi, 2 Cr. M. & R. 165; Ramish v. Kirschbraun, 98 Cal. 676, 33 Pac. 780, 107 Cal. 659, 40 Pac. 1045; Clement, etc., Co. v. Meserole, 107 Mass. 362; Whalon v. Aldrich, 8 Minn. 346; Spiers v. Halsted, 74 N. C. 620. Where the price had been paid interest from the time of the breach was allowed in Loomis v. Norman &c. Co., 81 Conn. 343, 71 Atl. 68 Maryland Ice Co. v. Arctic Ice Machine Mfg. Co., 79 Md. 103, 29 Atl. 69; Tomkins Co. v. Dallas Cotton Mills, 130 N. C. 347, 41 S. E. 938; Standard Supply Co. v. Carter, 81 S. C. 181, 62 S. E. 150, 19 L. R. A. (N. S.) 155. 69 See supra, § 1347. |