Lehmaier v. Standard Specialty & Tube Co. (123 A.D. 431, 1908)

Ingraham, J.:

This action'was brought to recover the damages caused by the . defendant’s breach of a contract made January 8, 1904, whereby the defendant agreed to purchase from the plaintiffs-the entire supply of metal used by it in making collapsible tubes and ketchup caps between January 8, 1904, and January 8,1907,'the metal to be rolled to the thickness required and to be satisfactory in every respect, and to refrain from selling to any one but the defendant coated metal for making collapsible tubes during the period covered by the contract.

The complaint alleges that the plaintiffs performed each and every of the terms of the agreement on their part required to he performed ; that the defendant committed a breach of the agreement in that it failed to purchase from the plaintiffs, as by the agreement it was required to do, all the metal used by it in making collapsible tubes and ketchup caps, but had on the contrary purchased the metal it used in making collapsible tubes and ketchup caps from persons, firms or corporations other than the plaintiffs.

The answer admits the making of the contract; denies that the plaintiffs performed the contract on their part; admits that the defendant purchased and used metals in making collapsible tubes from persons and corporations other than the plaintiffs, and sets up a counterclaim. Upon the trial it was proved- that the defendant commenced to take metal from the plaintiffs under the contract in March, 1904; that the defendant purchased from others than the plaintiffs during the period covered by the contract 21,765 pounds of tin which at the contract price would amount to $28,895.79, which would have been $652.95 above the market price of tin during that period; that the cost of rolling the tin would have been $103.39, malting the damage sustained by the plaintiffs by reason of the .defendant refusing to purchase the tin from the plaintiffs, under the contract $544.66. I do not understand that any point is made by the appellant as to the amount of damages, allowed for breach of the contract in relation .to the tin, the question arising, under the breach . in relation to the other branch of the contract for the purchase of what is called coated metal. The question' arises under the clause of the contract by which the plaintiffs were to furnish the defendant coated metal in sheets for which the defendant, was to pay seven cents per pound. It appeared that the defendant commenced the purchase of coated metal from others .than the plaintiffs on April 5, 1904, and purchased during the' year 1904 approximately 51,037 pounds ; during ■ the year .1905 approximately 102,627-^ pounds.; and during the whole period' co.yered by the contract 412,797-J pounds. It also appeared that after tlie making of the contract the plaintiffs estimated the amount ■ of lead and tin that would be required to furnish the defendant with the-' amount that it was estimated it would ■ require during the term-of. the contract at 100 tons of lead and 10 tons of tin, and purchased this amount of these metals, which they reserved for use in completing the contract.; that the defendant discontinued ordering any coated metal from the plaintiffs after March, 1904, and after January 1,1905, the plaintiffs used,'in other ways, the.lead and tin that had been purchased- and reserved to-manufacture the coated metal for.the.defendant. The plaintiffs paid fdr this tin at the rate of twenty-nine and twenty-five. one-hundredths cents per pound and for the lead four and forty-five one-hundredths cents per pound. At these prices the cost of the completed product Was estimated at 5.86-2' cents per pound, and plaintiffs were allowed to recover the- difference between this cost of the product and the amount that the defendant was to pay under the contract; namely', seven cents per pound. It further appeared that the 100 tons of lead and 10 tons of tin would have .made approximately 225,000 ■ pounds of the .coated metal. ‘ During the. year 1904 the price- of these metals remained, about the same so that when the plaintiffs used.the.lead and tin which they had purchased for this contract in their own business-the price was about the same, as that at which they had purchased it.-. After January, 1905, the price of lead advanced.. In- August, 1905, it was- four and seven-tenths cents per pound; in September, 1905, it "was four and eighty- ■ seven and one-half one-hundredths cents per pound; in October, 1905, it was five and one-tenth cents per pound; in November, 1905, it was five and forty-eight one-hundredths cents per pound; and in 1905 the price ranged from five and thirty-five one-hundredths cents per pound in January to six and eight-tenths cents per pound in December.

It would seem, therefore, that immediately after the contract was made the plaintiffs purchased 100 tons of lead and 10 tons of tin to be used by them' in carrying out the contract; that that amount of lead and tin would have produced 225,000 pounds of the manufactured product which would have been sufficient to supply the requirements of the defendant to May, 1906; that for any additional metal that the plaintiffs would have been required to purchase to manufacture the product they would have been compelled to pay an increased price, so that it may fairly be said that there would have been no profit in carrying out the contract. The first question relating to .the measure of damages is whether there can be said to be a total breach of the contract by the defendant in consequence of its neglect to purchase from the plaintiffs the metal that it required from time to time. I do not-think there was any total and final breach by the defendant. The defendant never refused to carry out the contract; no demand was ever made by the plaintiffs that it receive any particular amount of this metal; and there was no refusal by the defendant to comply with its contract. There was complaint made about the quality of the metal furnished by the plaintiffs, with promises by the plaintiffs to improve the quality. Both parties to the contract understood the purpose for which the metal was to be used, and the contract made was based upon that knowledge. It does not appear that metal that was satisfactory to the defendant, or that it was bound to consider as satisfactory, was ever furnished or tendered. It seems to me, therefore, that the case must be considered as if each purchase of metal by the defendant was a partial breach of its contract to purchase all the metal it required from the plaintiffs, and the plaintiffs were entitled to recover the difference between what it would have cost them to furnish each lot of metal that the defendant purchased from others and the price which they would have been entitled to receive from the defendant. If we may assume that the conduct of the defendant would have justified the plaintiffs in electing to consider sncli conduct as a total breach of the contract, there is no evidence of such an election; on the contrary, plaintiffs insisted -that the contract was in force; and coin-, menced this action to enforce it' as an existing contract, and it was long after the action had commenced and long after the period covered by the contract that the action was, by an amendment to the complaint, turned into am action to recover for a breach of the conJ¡má^_/íthink, therefore, that this action must be treated as having ■ been commenced after the period covered by the contract had e'xpired, with no evidence ,of a distinct refusal to perform on behalf of the defendant, no tender or demand by the plaintiffs that the defendant perform, and without evidence that at any time prior to the amendment to the complaint the plaintiffs had elected to treat the defendant’s conduct as a breach.y'This brings the case within Brown v. Muller (L. R. 7 Ex. 319) and Roper v. Johnson (L. B. 8 C. P. 167), and what ivas said in the latter case by Keating,