Contracts II, Pages 1139–1144

Security Stove & Mfg. Co. v. American Ry. Express Co.

Court of Appeals of Missouri, 1932

Facts:

Plaintiff made a furnace with a new combination gas and oil burner and shipped it to a convention in Atlantic City. To get it there, plaintiff contracted with defendant to do such as long as it was delivered by October 4. Plaintiff had defendant pick up the shipment on October 2. On the 11th, it was discovered that the most important box was not delivered and so the exhibit did not work. Defendant said that it would be there within two days, but it was not there by the 14th when the convention ended. It arrived back in Kansas City about a week afterwards.

Procedural History:

Trial court allowed damages for the shipping of the exhibit to and from the convention, transportation of the workers, hotel costs, plaintiff's president's time, and the booth rental for a total of $801.51.

Issue:

Can plaintiff recover reliance damages?

Defendant's Argument:

Four days was a reasonable shipping time, and plaintiff did not ask for a special advantage beyond normal shipping. At most, plaintiff can recover lost profits, and there is no evidence to base such a recovery on.

Rule:

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Ordinarily the measure of damages where the carrier fails to deliver a shipment at destination within a reasonable time is the difference between the market value of the goods at the time of the delivery and the time when they should have been delivered. But where the carrier has notice of peculiar circumstances under which the shipment is made, which will result in an unusual loss by the shipper in case of delay in delivery, the carrier is responsible for the real damage sustained from such delay if the notice given is of such character . . . that the carrier will be presumed to have contracted with reference [to the shipper's situation].

See Also:

R2C § 349

Reasoning:

  • No evidence suggests that defendant was not negligent.

  • Plaintiff is trying to recover what he would have had had the contract not been made. There were no provable money losses besides these, so denying this request will deprive plaintiff of any compensation for its loss.

    Defendant knew of the circumstances under which plaintiff wanted the package shipped and that the exhibit would be entirely valueless without the shipment. Even though some expenses were incurred before contracting with defendant, plaintiff did so knowing that defendant would transport the shipment. Therefore the whole damage was suffered in reliance upon defendant's performance.

Holding:

Yes, plaintiff can recover all damages suffered in reliance upon defendant. Affirmed.


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