Sect. 51. Purchaser for re-sale does not lose profit. Duty of purchaser to minimise loss. is, generally, on the arrival and examination of the goods. This rule certainly presupposes that a purchaser for re-sale is not to lose his profit on the adventure, because if he acts upon the rule, that is, if he supplies himself with goods at the market price of the day, he is able to make the same profit on the substituted goods that he would have made on the goods to be supplied under the contract, only his profit is paid to him in two portions, so much by the sub-vendee, and the balance by the seller who is liable in damages. The principle seems to be this, that the first purchaser has a duty to do what is within his power to lessen the loss to the seller by replacing the goods at the current price of the day,' and that if he fails in doing so, he will only recover from the seller the same sum which the seller would have had to pay in case the purchaser had supplied himself elsewhere. . . . It was contended that there was no precedent for assessing the damages otherwise than by a reference to market price as the standard of value, but, plainly, where there is no such standard, the damage must be ascertained in some other way, so that the seller shall be put to indemnify the purchaser against such inconvenience as the parties might necessarily foresee or contemplate as the result of a failure of duty on the part of the seller. In the present case the huts were in the maker's knowledge sent to South Africa for re-sale. . . . If huts could have been obtained in the colony at wholesale prices, it would have been the pursuers' duty to supply themselves so as to lessen the loss to the defenders, but as this could not be done, the consequence is that the whole loss must fall on the defenders. Basis on which That loss is, of course, the commercial profit which the pursuers have been prevented from making on that part of their capital which is locked up in the defenders' hands. Assessment of loss when no market standard. loss estimated. I should not be disposed to allow more than ordinary commercial profit, even if it were clearly proved that, in the 1 It is the duty of the buyer to act as a reasonable man in the ordinary course of business. See Wilson v. Hicks (1857), 26 L.J. Ex. 242; Dunkirk Hill Colliery Co. v. Lever (1878), 9 Ch. Div. 20.-Per James, L. J., at p. 25. 2 This would form in England a case of special damage under the second branch of the rule in Hadley v. Baxendale (1854), 9 Ex. 341 at p. 354. Sect. 54, note (b) post, p. 256. See circumstances of the place of shipment, larger profits might Sect. 51. have been made, because ordinary commercial profit represents the loss which the seller contemplates or ought to contemplate as the result of his negligence, and according to the opinions expressed in Hadley v. Baxendale and cognate cases, this is the measure of the seller's liability." Lauritzen. Purchaser not bound to make extraordinary The same principle was recognised in the Outer House. in Gunter and Co. v. Lauritzen 2 (1894), where Danish hay Gunter v. and straw offered for delivery was held to have been properly rejected as disconform to contract. The seller contended that at certain ports in Scotland, such hay could have been bought under contract price, and that it was the buyer's duty to have purchased. Lord Stormonth Darling in giving judginent admitted the rule, but held that "the goods in question were of a very special kind, and that at Aberdeen, which was the port of delivery, there was not a market for these goods at the time. The defender had led exertions to evidence to show that, by hunting all over the country, the pursuers might have found out that there were small parcels of Danish hay and straw at Leith and other places, which he might have picked up by private treaty; but none of these parcels were on public offer at the time, or quoted in any public market list which was open to the pursuers' inspection. In these circumstances, there was no duty on the purchaser to make extraordinary exertions to supply himself with goods elsewhere." 3 Where the contract stipulates for delivery at a future 119 Ret. at pp. 204, 205. Loss of profit was allowed as part of the buyer's damages in Taysen and Co. v. Johnsen (1872), 9 S. L. R. 229. Among English cases of damages where there was no available market, see Grébert Borgnis v. Nugent (1885), 15 Q.B.D. 85, particularly remarks of Brett, M. R., at p. 89, and Bowen, L. J., at p. 93. The English rule is fully borne out by the remarks of Lord M 'Laren above quoted. It is not loss of profit as such for which, in the general case, damages are recoverable by the buyer. The price on a re-sale is merely a means of ascertaining the value of the goods. There may be cases where loss may be directly recoverable as special damage under Sect. 54, but such loss will not include consequential damages arising from the buyer having entered into another contract to supply a larger quantity, of which the goods bought were intended to form part.-Dunlop v. M'Kellar (31st May 1815), F.C. 2 31 S.L.R. 359. 3 31 S.L. R. at p. 360. Where it is the seller who seeks the remedy, the rule is the same (Sect. 50), and in like manner it has been recognised in Scotland before this Act. See Warin and Craven v. Forrester (1876), 4 Ret. 190, Affd. (1877), 4 Ret. H.L. 75. See also COM., Sect. 50 ante, p. 239. obtain supply. Sect. 51. Intimation of intention not contract. Damages obligation prestable. time, and, before that time arrives, the seller intimates that he does not intend to fulfil his contract, the measure of to implement damages will nevertheless be fixed as at the date of delivery if that date is past before the action is raised.1 A more difficult question arises if the buyer makes his claim claimed before before the time fixed for implement of the seller's obligation.2 The whole circumstances will then be taken into account in order to arrive at an estimate of the damage. If, for example, in a case of instalment deliveries, the seller repudiates the contract before the deliveries are completed, the buyer may bring his action for damages at once, and in that case, the judge or jury will estimate prospectively the probable difference between the contract and the market price at the respective times when the future deliveries fall to be made.3 Sect. 52. FORMANCE. 52. In any action () for breach of contract to SPECIFIC PER deliver specific or ascertained goods the court may, if it thinks fit, on the application of the plaintiff, by its judgment or decree direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages. The judgment or 1 Howie v. Anderson (1848), 10 D. 355; Brown v. Muller (1872), L.R. 7 Ex. 319. 2 The party not in fault is not bound to wait till the arrival of the proper time for implement, before bringing his action for damage in respect of the contemplated breach. See Hochster v. De la Tour (1853), 2 E. & B. 678; Danube and Black Sea Ry. Co. v. Xenos (1863), 13 C.B. N.S. 825; Frost v. Knight (1872), L.R. 7 Ex. 111; Johnstone v. Milling (1886), 16 Q.B.D. 460. 3 Two English cases illustrate this rule and its converse. In Brown v. Muller (1872), L.R. 7 Ex. 319, the seller in a contract for delivery by three instalments in three successive months, repudiated the contract before delivery of the first instalment. The buyer in this case waited till the expiry of the three months before bringing his action. The damages found due amounted to the difference in the price of each instalment, calculated at the end of each month. On the other hand, in Roper v. Johnstone (1873), L.R. 8 C.P. 167, the buyer sued during the currency of the contract, and the damages were calculated or estimated, according as the several periods of delivery were past or future. See also Ex parte Llansamlet Tin Plate Co. (1873), 16 Eq. 155; Barningham v. Smith (1874), 31 L.T. N.S. 540. As to instalment deliveries generally, see Coм., Sect. 31 ante, p. 148. (e) decree may be unconditional, or upon such terms Sect. 52. and conditions as to damages, payment of the price, (d) and otherwise, as to the court may seem just, and the application by the plaintiff may be made at any time before judgment or decree.() The provisions of this section shall be deemed to be supplementary to, and not in derogation of, the right of specific implement in Scotland. NOTES. (a) "Action" in Scotland includes condescendence and claim and compensation [Sect. 62 (1)]. See also Sect. 57. (b) The rules as to delivery are contained in Part III. of the Act, Sects. 27 to 37 inclusive. 66 6 (c) Specific or ascertained goods." 'Specific goods' mean goods identified and agreed upon at the time a contract of sale is made" [Sect. 62 (1)]. "Ascertained goods" are not defined. Probably the phrase refers to goods made specific after the contract of sale, e.g. goods manufactured or acquired, and afterwards appropriated to the contract, or goods which it is in the power of the seller to make specific by separation from a larger bulk belonging to him.1 'Ascertained," in the case last mentioned cannot, however, be applied to Sects. 16 or 17. See ante, p. 79. 66 (d) "Plaintiff" includes pursuer, etc. [Sect. 62 (1)]. (e) "Decree." The word was introduced in adapting the bill to Scotland. (f) "Specifically." The words immediately following practically define the term by excluding the alternative. (g) 'Defendant" includes, in Scotland, "defender," etc. [Sect. 62 (1)]). (h) Application for specific performance. Compare this provi "In Scotland, the right to compel delivery is competent to a buyer although the goods purchased are not specific, if it be in the power of the seller to make them so and deliver them. If, for instance, the sale be of part of a whole, the seller may be compelled to separate and deliver without having the option of paying damages for breach of contract and retaining the goods."-T. G. Wright, Lecture on Sale (1872), Jour. of Jurisp. xvi. Sect. 52. Difference between English and Scottish law of specific performance. Scottish practice allied to English principle, and vice versa. sion with Sect. 2 of the English Mercantile Law Amendment COMMENTARY. In England, prior to the Common Law Procedure Act 1854, as extended by the Mercantile Law Amendment Act 1856, specific performance was not allowed except occasionally in the Equity Courts, and, under the Acts now referred to, it was only permitted in the discretion of the judge. In Scotland, on the other hand, it is said that a buyer can always insist upon specific implement unless it is shown to be impossible.4 This result is the reverse of what might have been expected from the different principle which, prior to this Act, regulated the passing of the property in England and Scotland respectively. Pothier refers to specific performance as a question much agitated among the civilians, and while his own view was in favour of the existence of the right, he states the contrary arguments of such interpreters of the Roman law as Sculting and Noodt. Among other arguments, "ils disent que le vendeur demeurant propriétaire de la chose vendue jusqu'à la tradition, il seroit incivil de le dépouiller par force de sa propre chose." 5 This was a good reason for denying the right to specific implement in Scotland, where, as in Roman law, the property did not pass till delivery, but in England, where the buyer was proprietor of goods left in the hands of the seller, it might have been fairly contended that the right to specific performance was a necessary complement of the right of ownership. Thus in Scotland, where principle seemed adverse to specific implement, it has been recognised a right, while in England, where the same principle as 1 19 & 20 Vict. c. 97. 2 17 & 18 Vict. c. 125. 3 19 & 20 Vict. c. 97, Sect. 2, repealed by this Act, Sect. 60 and Schedule. See Stewart v. Kennedy (1890), 17 Ret. H.L. 1, particularly remarks of Lord Herschell at p. 5, and Lord Watson at p. 10. See also 2nd Report of Mer. Law Com. 1855, p. 46; Bell's Com. i. 477; M. P. Brown on Sale, p. 211. 5 Contr. de Vente, No. 68. |