
    Gustave Poppenberg, Plaintiff, v. R. M. Owen & Company, Defendant.
    (Supreme Court, Erie Special Term,
    February, 1914.)
    Contracts — terms of —■ breach of — counterclaim — motion for new trial after verdict in favor of defendant.
    A contract by which defendant, which had the exclusive sale and output of the Reo Manufacturing Company, in consideration of an order of 420 Reo motor ears, 85 of which were to be of a particular model, gave plaintiff the exclusive right to sell all styles of Reo motor cars within a certain territory, provided that plaintiff should take certain cars in each of the months of August to July, both inclusive, type and style of cars being specified, and the contract was so drawn as to give defendant opportunity to meet the requirements of plaintiff by, in turn, placing the orders received from him with the manufacturer, and defendant could make no shipment or draw any draft for a shipment until it had received from plaintiff the shipping, specifications or directions and instructions contemplated by the contract. Sometime after the making of the contract defendant notified plaintiff that it would not be able to furnish any of the 85 automobiles and proposed to substitute therefor cars of another model, but plaintiff insisted on the right to continue to act as the representative of defendant under the contract and it was continued in force and acted upon by the parties during the term of its life. In an action in which the main controversy was the right of plaintiff to a reduction on the list price of certain automobiles made in the last month of the contract, it was conceded that plaintiff who had agreed to push the sale of the Reo cars only, except upon the written consent of defendant, did not take or pay for all the cars agreed to be purchased, nor did he handle exclusively the cars sold by defendant but sold a large number of cars manufactured by other concerns. Defendant counterclaimed for damages for plaintiff’s breach of the contract. On motion by plaintiff for a new trial after a verdict in favor of defendant, held, that, plaintiff’s failure to give directions and instructions for shipment to defendant who was constantly demanding them of plaintiff and actually did fill all orders sent constituted a breach of the contract on plaintiff’s part and it was not necessary for defendant to make physical tender of the ears, and the plaintiff’s exceptions to the ruling of the court on the point were not well taken.
    According to the terms of the contract plaintiff was required to deposit with defendant $1,500 for each of the 420 ears ordered and agreed to be purchased, “ at the signing of the contract.” But one deposit of $1,500 was made and that had been reduced at the time of the suit to $986.92 by charging against it extras furnished plaintiff. Held, that plaintiff by taking the position at the time of the trial that defendant, if entitled to recover at all, was entitled to recover substantial damages uncontrolled and restricted by the clause of the contract relating to liquidated damages, could not raise the point for the first time on the present motion.
    A charge to the jury that defendant upon its counterclaim was entitled to recover as damages the profits lost by reason of plaintiff’s breach of the contract, i. e., the- difference between the price agreed to be paid for the ears not taken and the cost to defendant of furnishing them, correctly laid down the rule of damages applicable.
    Motion by the plaintiff for a new trial after a verdict in favor of the defendant.
    Frank H. Gibbons, for plaintiff.
    Irving W. Cole and Hamilton Ward, for defendant.
   Wheeler, J.

The plaintiff moves for a new trial on the ground of alleged errors claimed to have been committed by the court on the trial of this action.

The complaint set forth eight causes of action upon a contract entered into between the parties to this action, nearly-all of which were either -admitted by the pleadings or conceded upon the trial. There was, however, a controversy touching the right of the plaintiff to a reduction on the list price of certain automobiles made in July, 1911. The main controversy arose out of the contract between the parties, dated June 30, 1910. By the terms of this contract the defendant, in consideration of an order for 420 Reo motor cars, gave the plaintiff “ the exclusive right to sell all styles of Reo motor cars ” in the counties of Erie, Niagara, Chautauqua, Cattaraugus, Orleans, Genesee, Wyoming, Allegany, Livingston, Monroe, Steuben, Tates, Ontario and Seneca, in this state until July 31, 1911.

The plaintiff agreed to push the sale of the Reo cars to the best of his ability in the territory named, and as part of the contract agreed to handle, during the term of the contract, “ only cars sold by the party of the first part, except upon the written consent of the party of the first part.”

It was conceded the plaintiff did not take or pay for all the 420 cars agreed to be purchased, nor did he handle exclusively the cars sold by the defendant, but on the contrary handled and sold a large number of automobile cars manufactured by other concerns.

The defendant set up by way of counterclaim in its answer the failure of the plaintiff to comply with the contract in the particulars above specified, and demanded damages for such breach.

The plaintiff, on the trial, contended that the requirements of the contract in these respects had been waived by the defendant, and these questions of fact so presented by the evidence were submitted to the jury for their disposition under proper instructions. The jury returned a verdict in favor of the defendant for the sum of $31,315.33, which it may be said represented the damages sustained by the defendant, less the demands of the plaintiff allowed by the jury.

So far as the disputed questions of fact have been settled by the verdict of the jury, they are not now the subject of further consideration. Their verdict was fully sustained by the evidence. It only remains to review, as briefly as possible, the questions of law raised and involved in the case.

The plaintiff contends, in the first place, that the defendant is entitled to recover no damages whatever for any breach of the contract by the plaintiff, for the reason that the defendant was guilty of a breach of the contract in question on its part, in that the defendant did not make or deliver, or offer to sell or deliver, any of the automobiles designated and described as “ Models K or J ” in the contract. An examination of the contract shows that 85 of the 420 cars agreed to be purchased were to be what is designated as the “K Roadster” and “J Roadster.” Some time after the contract had been entered into and prior to December 21,1910, the defendant notified the plaintiff that it would not be able to furnish any of the automobiles described as “ Models K and J,” but proposed instead to substitute in place thereof what is known as the 66 Torpedo Roadster.”

The defendant claims that this proposed substitution was mutually agreed upon by the parties. But we deem it quite immaterial in this case whether such was the fact or not. If the defendant defaulted in fulfilling the terms of its agreement, the plaintiff had a perfect right to terminate the contract and refuse further performance on his part. This he did not do. On the contrary, he insisted on the right to continue to act as the representative of the defendant under it. In fact the evidence discloses that early in the winter of 1911 the defendant became solicitous, about .the plaintiff living up- to his agreement with it, and wrote the plaintiff calling attention to the fact that he was not talcing cars as he had contracted to do, and expressing doubt whether under the circumstances and by reason of his delay he would be able to handle and dispose of the cars he had agreed to purchase, and offering on its part to cancel the contract with the plaintiff, with a view, of course, of making arrangements with others to handle the business in the territory given the plaintiff exclusively. The plaintiff declined to terminate the existing contract and sent his representative to the defendant excusing his delay in performing his agreement to take cars- and assuring defendant’s officers that all would be satisfactory, and the cars agreed to be purchased would ultimately be taken and disposed of within the life of the contract. Upon these assurances the parties continued to act and do business under the contract in question, and no question was raised by either but that the contract was in full force and effect.

Of course, if the defendant failed to fulfill some of the stipulations of the contract and the plaintiff suffered damage by reason of such failure, the plaintiff was entitled to maintain an action for such a breach. The court so charged the jury, but the plaintiff neither alleged in his complaint nor proved on the trial any damages resulting from the failure of the defendant to manufacture or deliver the “ Model K ” roadster or 'any other of the cars covered by the agreement. In fact I recall no evidence in the case where any shipping- orders for such roadsters were given. The contract having been continued in force and effect by the parties and acted upon by-them during- the term of its life, the plaintiff is now in no position to say that the defendant cannot recover for breaches on its part. Deeves & Son v. Manhattan Life Ins. Co., 195 N. Y. 330; Ruff v. Rinaldo, 55 id. 664; Granniss & Hurd Lumber Co. v. Deeves, 72 Hun, 171; affd., 147 N. Y. 718; Beyer v. Henry Huber Co., 115 App. Div. 344; Crocker-Wheeler Co. v. Varick Realty Co., 104 id. 570; Sinclair v. Talmadge, 35 Barb. 602-606; Rogers v. Beard, 36 id. 31; Ming v. Corbin, 142 N. Y. 334; Tipton v. Feitner, 20 id. 425; Secor v. Sturgis, 16 id. 548.

All that could he claimed by the plaintiff under such circumstances was the right to recover for the defendant’s breaches, and, in-this case, the damages, if any, were at best purely nominal, so far as the evidence discloses.

It is further contended on the part of the plaintiff that the defendant cannot recover for the failure of the plaintiff to take and pay for the automobiles agreed to be purchased, for the reason that the defendant never tendered the cars not taken, and that without such a tender the defendant could not put the plaintiff in default.

On the other hand, the defendant contends that no such physical tender was necessary under the terms of the contract and the circumstances of the case. The justice presiding at the trial held that a physical tender was not necessary, and denied a request to charge in accordance with the plaintiff’s Contention in this regard.

In order to fully understand the question presented and the ruling made, it is necessary to examine the provisions of the contract between the parties. This agreement recites that: “In consideration of an order for 420 Reo motor cars placed by the party of the second part with the party of the first part, the party of the first part grants to the party of the second part the exclusive right to sell all styles of Reo Motor Cars ” in certain territory embracing all western New York.

The contract provides that the plaintiff was to take a certain number of cars each month; four in August, twenty-one in September, twenty-one in October, eleven in November, nine in December, eighteen in January, thirty-nine in February, seventy-five in March, seventy-nine in April, eighty-two in May, forty-two in June and nineteen in July. The different types and styles of motor cars and the number of each type were specified. It was also provided that: “ Shipping specifications for each month’s allotment of cars must be given the party of the first part by the party of the second part” (i. e., the plaintiff) “ 30' days in advance. If shipping specifications are not in factory thirty days prior to the above monthly delivery table, then the party of the first part reserves the right not to furnish the above specified allotment for the month in question.”

The contract further provided the plaintiff should sell only the cars sold by the defendant; that the plaintiff should not invade other territory than that given him and agreed to refer all inquiries outside that territory to the defendant. He also agreed to appoint subagents for properly handling the business contemplated and to report the names and addresses of all purchasers of Reo cars, and to provide ample facilities for handling, adjusting and repairing machines sold to purchasers.

It will thus be seen that the contract was not simply for the purchase of a given number of cars, but for an exclusive agency, in which the plaintiff was to represent the defendant and push the sale of its cars.

It was further provided that after the receipt of shipping specifications, the “ shipments to be made sight draft against bill of lading, F. O. B., Lansing, Mich.”

The shipping specifications in use provided for the number of cars, the manner of shipment, by what route, the place of delivery and to whom delivery was desired, directions as to how to draw draft and other details.

The defendant had the exclusive sale of the entire output of the Reo Manufacturing Company, and it was evident that the provisions of the contract were framed as they were in order to give the defendant opportunity to meet the requirements of the plaintiff by, in turn, placing the orders received from him with the Reo Company, the manufacturer.

It will thus be seen that by the very terms of the contract the defendant could make no shipment or draw any draft for a shipment until it had received from the plaintiff the shipping specifications or directions and instructions contemplated by the agreement. The initial act or duty rested on the plaintiff and not on the defendant. The plaintiff made an affirmative agreement to give these specifications, and his failure so to do constituted a breach of the contract on his part. These shipping specifications by the plaintiff were things to be done before the defendant was called on to do any act toward shipment or delivery.

The evidence shows that the defendant was constantly and emphatically demanding of the plaintiff that he furnish such specifications, and that it was ready at all times to fill, and actually did fill, all orders received for which specifications were sent. The plaintiff, on his part, failed and omitted to perform the duty imposed by the contract on him. It was an act imposed on the plaintiff as a condition precedent to the duty or right of the defendant to ship.

The facts in this case bring it fairly and squarely within the decided case of Gordon Malting Co. v. Bartels Brewing Co., 206 N. Y. 544, where Judge Werner, speaking for the court, said: “ The subject-matter of the contract was such that it was not necessary for the plaintiff to make a physical tender. Shipments were to be made, moreover, according to directions from defendant, and when it refused to give such, directions after request by the plaintiff the breach was complete.” See also Atkinson v. Truesdell, 127 N. Y. 230.

• We therefore think the point that a physical tender of the cars agreed to be purchased was unnecessary, and the plaintiff’s exceptions to the' rulings of the trial court not well taken.

The remaining questions raised on this motion relate to the measure of damages, which should control the defendant’s recovery.

The plaintiff contends that the contract between the parties limits the recovery to the deposit made by the plaintiff; and further insists that, if such is not the case, the rule laid down by the trial court for the guidance of the jury was erroneous.

We proceed to a consideration of these questions in the order presented and call attention to clauses 14, 15, 16, 17 and 18 of the contract, which provide:

“ 14. It is mutually agreed that the following terms of payment shall prevail in the matter of all orders, viz.:

“ 15. The party of the second part shall deposit with the party of the first part, at the signing of this contract $1500.00 dollars on each machine, which amount will be placed to the credit of the party of the second part; shipments to be made sight draft against bill of lading, F. O. B., Lansing, Michigan.

“ 16. Accounts for parts and accessories ordered by the party of the second part shall be due and payable at the office of the party of the first part in Lansing, Mich., on or before the tenth of each month for goods ordered during the preceding month. If the party of the second part fails to remit as heretofore provided the party of the first part is hereby authorized to apply in payment of said parts account any cash deposits held by the party of the first part for account of the party of the second part, and until such deposits are restored by the party of the second part there shall be no deduction of deposits theretofore made.

“ 17. The party of the first part agrees, that if credit is passed to the party of the second part for parts returned and parts account has already been paid by the party of the second part, it will, upon request, immediately send its cheek to the party of the second part for such credit memorandum.

“ 18. And it is hereby expressly agreed that in case the party of the second part shall neglect or refuse to accept or to pay for any car or cars which the party of the second part has theretofore specified, then and in that case all deposits theretofore made by the party of the second part shall belong to and be the property of the party of the first part as liquidated damages for the breach of this contract.”

When the contract was executed, the plaintiff deposited with the defendant the sum of $1,500. At the time the contract, by its terms, expired, a balance of $986.92 remained in the defendant’s hands. The plaintiff contends that any right of recovery on the part of the defendant was, by the terms of the contract, limited to that amount as liquidated damages.

It is perhaps: sufficient answer that this contention is made for the first time on this motion for a new trial. It was not raised upon the trial; but, on the contrary, the plaintiff’s counsel proceeded upon an entirely different theory as to the rule which should be applied in the disposition of the case. After taking exception to the rule as given to the jury by the court, plaintiff’s counsel requested the court to charge that if the jury awarded damages to the defendant upon its counterclaim, “ the measure of damages would he the difference between the contract price and the market price at the time and place of delivery.” The court refused to charge the proposition. The request, however, shows that no claim was made on the trial that the defendant’s damages were limited to the amount of the deposit in the defendant’s hands as liquidated damages. Nor was the question raised by any allegation in the plaintiff’s reply to the defendant’s counterclaim. If the plaintiff had desired to stand on the proposition that the damages were limited to the deposit in the defendant’s hands, he should have raised the question on the trial and insisted on the rule as now claimed; otherwise he will be deemed to have waived his right. In other words, the plaintiff, by the position he took upon the trial, assumed and proceeded upon the theory that the defendant, if entitled to recover at all, was entitled to recover substantial damages, uncontrolled and unrestricted by the clause of the contract now insisted upon.

It is a well recognized rule of law that on an appeal a case must be disposed of upon the theory upon which it was tried. Hicks v. British Am. Assur. Co., 162 N. Y. 284-290; Caponigri v. Altieri, 165 id. 255-263; Daley v. Brown, 167 id. 389; Vann v. Rouse, 94 id. 401; Wellington v. Morey, 90 id. 656; Tyng v. Corporation Trust Co., 104 App. Div. 486.

We therefore think the question cannot now be raised for the first time on this motion for a new trial.

Irrespective, however, of the question as to whether the point raised is available to the plaintiff on this motion, we are of the opinion that the defendant’s recovery was not limited to the deposit in its hands.

The fifteenth clause of the contract provides that: The party of the second part [the plaintiff] shall deposit with the party of the first part [the defendant] at the signing of the contract, $1,500 on each machine, which amount will be placed to the credit of the party of the second part; shipments to he made sight draft against bill of lading, F. O. B. Lansing, Michigan. ’ ’

An examination of the original contract will show that a printed form of a contract was used, and this form had, immediately following the words of the fifteenth clause quoted, the following additional words, which were eliminated by the drawing of a pen through them, viz.: “ the amount of deposit on each machine being deducted from draft as shipments are made.”

As the contract stands, and if construed according to its terms, the plaintiff was required to deposit with the defendant $1,500 for each of the 420 cars ordered and agreed to be purchased “ at the signing of the contract.” This, of course, was not done. A strict compliance with the contract in this respect was not insisted on by the defendant. One deposit of $1,500 was in fact made, which amount was reduced at the time of the suit to $986.92, by charging against it for extras furnished the plaintiff.

In addition there is attached to the contract a letter from the defendant to the plaintiff, in which reference is made to clause 15 of the contract, in which it is provided that when one-third of the cars ordered is delivered, one-third of the deposit is to be returned, and, when two-thirds of the cars have been delivered, $500 are to be returned, and the balance at the completion of the contract.

The parties have certainly left these provisions in a hopeless jumble so.far as the wording of the contract is concerned. So far as the literal reading is concerned, we have an agreement to put up $1,500 on each machine at the time of the signing, modified by the letter that one-third of the amount is to be returned when one-third of the machines have been delivered, $500 when another third has been delivered, and the balance on the completion of the contract.

The eighteenth clause of the contract as to liquidated damages should be read and interpreted in the light of the agreement as made, notwithstanding that a strict and literal compliance was not insisted on by the defendant.

When, therefore, the eighteenth clause provided: “And it is hereby expressly agreed that in case the party of the second part shall neglect or refuse to accept or to pay for any car or cars which the .party of the second part has theretofore specified, then and in that case all deposits theretofore made by the party of the second part shall belong to and be the property of the party of the first part as liquidated damages for the breach of this contract,” it may be argued that the parties had in view the entire deposit agreed to be made, of $1,500 on each car of the 420 agreed to be taken. This amount would more than have indemnified and saved the defendant harmless from any loss or damage it could have sustained by reason of any failure to accept drafts, or pay for machines shipped, or which he had contracted to buy.

In any event, can the plaintiff stand on the strict letter of the contract and now insist that the small balance in the defendant’s hands must be accepted and deemed the total recovery to which the defendant is entitled when that small unexpended balance was due to the failure of the plaintiff himself to comply with the strict letter of the agreement as to the amount to be deposited, owing to the indulgence of the defendant in not insisting on a strict compliance with its terms on the plaintiff’s part at the time of signing? If the plaintiff is to insist on the letter of the contract, and stand on the proposition that the contract liquidates the damages between the parties for a general breach of the contract, then the defendant has an equal right to insist that the plaintiff should make good the amount which it was stipulated should constitute the liquidated damages, that is, $1,500 for each machine. This would leave the plaintiff in a far worse condition than he now finds himself under the ruling of the court confining the defendant’s damages on the counterclaim to such losses as it actually sustained by the failure of the plaintiff to fulfill.

If, on the other hand, the contract between the parties is to be construed as fixing an amount as liquidated damages for the failure to pay for each particular car shipped pursuant to shipping specifications given, then it is plain that such damages do not relate to or cover a general breach of the contract, such as is presented by the facts in this case, and the recovery cannot be limited to the amount of the particular deposit.

Whether the contract is susceptible of this latter interpretation or not, it is sufficient for the purposes of this case to say that, whichever of the two interpretations is to prevail, neither of them aids or assists the plaintiff in his contention.

It, however, may be said as a general proposition, that courts are disposed to regard with disfavor agreements by which the damages of parties to them are fixed at stated amounts regardless of the actual losses sustained. Such agreements have been held valid and binding in certain cases and under certain circumstances. The disposition of the courts, however, is to treat such engagements rather in the nature of a provision for a penalty than as liquidated damages, particularly in cases where the stipulated sum is clearly disproportionate to actual losses sustained, and where the actual damages are easily and readily ascertainable, as they were in the case at bar. Curtis v. Van Bergh, 161 N. Y. 47; Hicks v. Monarch Cycle Co., 176 id. 111; Caesar v. Rubinson, 174 id. 492; Kemp v. Knickerbocker Ice Co., 69 id. 45; Bagley v. Peddie, 16 id. 469; Cotheal v. Talmage, 9 id. 551.

In Curtis v. Van Bergh, 161 N. Y. 47, the court said (p. 52): “ Where the sum agreed to be paid is so great as to be unconscionable it will be regarded as a penalty, even if the parties have expressly declared their intention to be otherwise. (Kemble v. Farren, 6 Bing. 141; Jackson v. Baker, 2 Edw. Ch. 471; Spencer v. Tilden, 5 Cow. 144; Niver v. Rossman, 18 Barb. 50; Mitt v. Mott, 11 Barb. 134; Beale v. Hayes, 5 Sandf. 640.)”

In Hicks v. Monarch Cycle Mfg. Co., 176 N. Y. 114, the court said: “ The rule is that ‘when the stipulated sum. is disproportionate to presumable or probable damage, or to a readily ascertainable loss, the courts will treat it as a penalty, and will rely on the principle that the precise sum was not the essence of the agreement, but was in the nature of security for performance.’ (Ward v. Hudson River Bldg. Co., 125 N. Y. 230; Curtis v. Van Bergh, 161 N. Y. 47; 3 Parsons on Contracts [6th ed.], 157.) ”

In the case of Caesar v. Rubinson, 174 N. Y. 492 (at p. 496), Judge O’Brien, speaking for the court, said: “A provision in a contract such as that now under consideration will be treated as liquidated damages only in those cases where from the nature of the transaction, the actual damages consequent upon a breach of the contract are incapable of accurate measurement, or where the sum specified in the instrument is not out of all proportion to any damages which could possibly arise from a breach. In the cases where these general features do not exist, the tendency of the courts is to treat the stipulation not as providing for liquidated damages, but in the nature of a penalty. Where the language of such a provision, specifying the amount of damages to be paid in case of a breach of the contract, is clear and explicit to that effect, the amount is to be deemed liquidated damages when the actual damages contemplated at the time the agreement was made are in their nature uncertain and unascertainable with exactness and may be dependent upon extrinsic considerations and circumstances, and the amount is not on the face of the contract out of all proportion to the probable loss.”

These principles should obtain whether the stipulated amount is excessively large or grossly inadequate.

When we consider this case in all its bearings, with all the surrounding circumstances, we can reach no other conclusion than that the contention of the plaintiff that the defendant’s damages should be limited to the $986.92 in hand must be repudiated as unsound.

It then only remains for us to consider whether the rule of damages actually laid down by the trial court for the guidance of the jury was the proper rule in this case. The court, in substance, charged the jury that, if the defendant was entitled to recover upon its counterclaim, it was entitled to recover the profits lost by reason of the breach, that is, the difference between the price agreed to be paid for the cars not taken, and the cost to the defendant of furnishing the cars in question. To fully understand the situation, it will be necessary to here state certain undisputed facts bearing on the question of damages. The cars agreed to be purchased were the Eeo motor cars, manufactured by the Eeo Manufacturing Company, of Lansing, Mich. The defendant in this action had a contract with the Eeo Manufacturing Company, by which it took and handled the entire output of that • factory. This contract specified the prices to be paid by the defendant for the various styles or models made by that company. The defendant in turn disposed of the automobiles so purchased by it through the means of subagencies for their sale, and by arrangements with dealers throughout the United States and Canada. No cars were to be had, except through the defendant, which, in order to facilitate and advance the sale of these cars, expended many thousands of dollars in extensive advertising of these cars in various ways —by display advertisements in various journals and magazines published throughout the country, and by exhibitions in large cities. In fact, the defendant may be said to have stood practically in the place and stead of the manufacturer, for it took all cars made by it, and none were to be had except from the defendant. The defendant, by this arrangement with the factory, was able to deliver to the plaintiff all the cars agreed by him to be purchased, excepting, of course, the model K roadsters, which we hav-e discussed earlier in the opinion. It, in fact, shipped and delivered to the plaintiff every car for which the plaintiff gave any shipping specifications, and was prepared to fulfill its contract with the plaintiff in every respect.

It is thus perfectly plain that when the plaintiff failed to carry out his contract, and to pay for the cars he had agreed to purchase, the defendant necessarily lost the difference between the price which the plaintiff agreed to pay, and what those cars cost the defendant at the factory. This difference, the court charged the jury, the defendant was entitled to recover, if a recovery was allowed the defendant on its counterclaim. The simple question is whether this was the correct rule of damages to be applied in this case. Section 145 of the Personal Property Law of the state lays down the general principles governing damages. It provides: “Action for Damages for NonAcceptance of the Goods: 1. Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain an action against him for damages for non-acceptance.

2. The measure of damages is the estimated loss directly and naturally resulting in the ordinary course of events from the buyer’s breach of contract. * * *

3. Where there is an available market for the goods in question, the measure of damages is, in the absence of special circumstances showing the approximate damage of a greater amount, the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted, or if no time was fixed for acceptance, then at the time of the refusal to accept. * * * The profit the seller would have made if the contract or sale had been fully performed shall be considered in estimating such damages.”

This section is nothing but a codification of the common law rules of damages long established by the decisions of the courts.

It is to be noted in the first place in this case that there was no available market or market price of the cars agreed to be purchased. These cars are not staple articles like wheat or other food products where there is an established market and a market price, and any one desiring to purchase can go into the open market and, by paying the price, obtain what is desired. This was a special machine, built on special models, and after special designs, only to be purchased from the defendant in this action, which took the entire output of the factory. The price the defendant ' established was the price that controlled. So we have a special article of manufacture handled only by, and exclusively by, the defendant.

In the case of Wakeman v. Wheeler & Wilson Mfg. Co., 101 N. Y. 205, the Court of Appeals laid down the general rule that in cases of this general nature the injured party is entitled to recover such damages as he has sustained by reason of the breach, i. e., the value of the contract, not merely imaginary or speculative damages, but such as are reasonably certain, and such only as actually follow, or might follow, from such breach — and that prospective profits, so far as they can properly be proven, and which would certainly have been realized but for the defendant’s default, are recoverable. This rule has been repeatedly applied and followed in various cases and under varying circumstances.

In Todd v. Gamble, 148 N. Y. 382, it was held that the general rule fixing the measure of damages for a breach of a contract of sale by the vendee, the difference between the contract price and the market value, had no application to a breach of a contract for the manufacture and sale of a commodity, unless it appears that, upon the breach by the vendee, the vendor could have placed the .commodity upon the market and thus have relieved himself from the consequence of the vendee’s default.

Consequently it was held that where the subject of a contract of sale at a fixed price is an article to be manufactured by the vendor, having a limited demand and no real market, the vendor was entitled to recover the difference between what it would cost him to manufacture and deliver the article under the contract and the contract price.

To the same effect are the cases of: Gordon Malting Co. v. Bartels Brewing Co., 206 N. Y. 529; Belle of Bourbon Co. v. Leffler, 87 App. Div. 302; Snell v. Remington Paper Co., 102 id. 138; Lehmaier v. Standard Specialty & Tube Co., 123 id. 436; Isaacs v. Terry & Tench Co., 125 id. 534; Meyer Bros. Drug Co. v. McKinney, 137 id. 541.

The facts in this case bring it squarely, we think, within the rule enunciated above. The defendant was not technically the manufacturer of the cars contracted to be purchased, but it stood, so far as its relations to the plaintiff were concerned, in that position. Under contract with the factory, the defendant took its entire product. It controlled every car turned out by the factory. In other words, the Reo Manufacturing Company manufactured for the defendant alone, and was prepared and equipped to supply the defendant with all cars which it could sell. The evidence shows that the Reo Manufacturing Company in fact had on hand the constituent parts of the different styles of cars capable of being assembled and made into a completed motor car on short notice, and in time to have fulfilled any orders received from the defendant. It will be noted that the contract between the plaintiff and the defendant distributed the time of purchasing the 420 cars in question over the entire year, specifying the number and kind to be taken each month, and further providing that shipping specifications should be given thirty days in advance. This timely notice was undoubtedly required so that the defendant might have ample opportunity to make the necessary arrangements with the factory for the proper assembling of the parts into the completed machine. Consequently the defendant had the same right to assert against the plaintiff the same rule of damages as would be applied had the contract ran direct to the factory instead of to the defendant.

The amount of the damages was absolutely definite and certain, and was in no sense speculative. The defendant got the cars at a specified price from the factory. The plaintiff agreed to buy from the defendant for another fixed price, and the difference between these prices on the number of cars not taken was a simple matter of computation. It is only proper to add at this time that the overhead charges or expense of the defendant, the evidence showed, would have been in no way increased by the fulfilling of the contract with the plaintiff.

The number of models K and J mentioned in the contract, the jury were instructed to eliminate from their consideration in arriving at the amount of damages in the defendant’s counterclaim. This they did, and made their award solely on the number of other machines which the plaintiff failed to take and pay for. We think their verdict was correct, and that the court committed no error in the rule of damages charged. ,

The motion for a new trial is, therefore, denied.

Motion denied.  