HOME BAKERY v. ROBINSON MILLING CO.

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HOME BAKERY v. ROBINSON MILLING CO.
1935 OK 38
40 P.2d 637
170 Okla. 349
Case Number: 23117
Decided: 01/22/1935
Supreme Court of Oklahoma

HOME BAKERY OF CARNEGIE et al.
v.
ROBINSON MILLING CO.

Syllabus

¶0 1. SALES--Measure of Damages for Buyer's Failure to Accept Personalty.
The measure of damages recoverable against a vendee for failure to receive and pay for personal property contracted for is the difference between the contract price and the reasonable market value of the personal property at the time of the breach.
2. SAME--DAMAGES--Invalidity of Provision Fixing Penalty as Liquidated Damages for Breach of Contract to Buy Where Actual Damages Provable.
A provision of a contract which undertakes to fix a penalty as liquidated damages for the breach of a contract for failure to receive and pay for personal property as contracted for, is void, if the actual damages which may be suffered by the seller through the breach of the contract are susceptible of proof.

Appeal from District Court, Caddo County; Will Linn, Judge.

Action by the Robinson Milling Company, a corporation, against the Home Bakery of Carnegie and A. L. Morrison for breach of contract to receive and pay for flour contracted for by the latter. Judgment for the plaintiff, and defendants appeal. Reversed and remanded.

Oris L. Barney, of Anadarko, for plaintiffs in error.
Morris & Wilhite, of Anadarko, for defendant in error.

PER CURIAM.

¶1 The Robinson Milling Company commenced this action against Home Bakery of Carnegie, Okl., and A. L. Morrison to recover damages for breach of a certain contract in writing wherein the latter bound themselves to purchase a certain amount of flour.

¶2 It is alleged that the plaintiff performed all the conditions on its part under the contract, and that the defendant neglected and refused to accept said merchandise and to order the same shipped, under the provisions of said contract, and that the plaintiff thereby terminated said contract and commenced this action. Copy of the contract is attached to said petition.

¶3 The petition contained allegations as to the contract price of said merchandise, but contained no allegations as to the reasonable market value thereof at the time of the breach. The contract also provided for a "carrying charge" and an "entry charge" of certain designated amounts per barrel, and also for a charge for the difference between the market value of a bushel of cash wheat at mill on the date of the sale and on the date of termination, multiplied by 4.6 times the number of barrels of flour, if the contracts should be breached by the vendee, which the plaintiff sought to recover.

¶4 The plaintiff in error filed motion to strike the third, fourth, fifth, and sixth paragraphs from the petition of the plaintiff, for the reason that those parts of said contract therein set forth were contrary to law and void. The motion to strike was by the court overruled. The plaintiff in error then filed a demurrer to said petition, which was by the court overruled.

¶5 It was error for the trial court to overrule the motion to strike, and it was also error for the trial court to overrule the demurrer of the plaintiff in error herein.

¶6 Under the holding in the case of Consolidated Flour Mills Co. v. Wright et al., 131 Okl. 22, 267 P. 464, 465, the court, in passing on the same cause in this case, said:

"The trial court sustained defendants' demurrer to plaintiff's petition, for the reason that said contracts were void under the laws of this state, and, upon refusal of the plaintiff to plead further, the cause was dismissed. Plaintiff has duly perfected its appeal, and for reversal assigns said ruling of the court as error.

¶7 The measure of damages recoverable against a vendee for failure to receive and pay for personal property as contracted for is the difference between the contract price and the reasonable market value of the property at the time of the breach. The actual damage suffered by the plaintiff, if any, on account of the breach of the contract, was susceptible of proof. Therefore an attempt on the part of the plaintiff to fix a given sum as liquidated damages for the breach was contrary to sections 5068 and 5069, C. O. S. 1921. J. I. Case Plowworks v. Stewart, 70 Okl. 210, 173 P. 1048; Deming Investment Co. v. Baird, 32 Okl. 393, 122 P. 676.

¶8 More recently this question was presented and settled, contrary to the contention of the plaintiff in error, in the case of Kansas Flour Mills Co. v. Ballard, 120 Okl. 162, 250 P. 1006, wherein the court was considering a contract almost, if not identical to the one involved herein.

¶9 The rule is well settled that a provision of a contract, which undertakes to fix a penalty as liquidated damages for the breach of a contract for failure to receive and pay for personal property as contracted for, is void, if the actual damages which may be suffered by the breach are susceptible of proof."

¶10 Under the rule laid down in the Kansas Flour Mills Co. v. Ballard, supra, and also the Consolidated Flour Mills Co. v. Wright et al., supra, from which we have quoted at length, we must conclude, in view of the fact that the defendant in error did not plead any actual damages and relied solely upon the provisions of the contract providing for liquidated damages for its recovery of damages from the plaintiff in error, which provisions were void under the laws of this state, that the trial court erred in overruling the demurrer of the plaintiff in error herein, and we therefore must conclude that the trial court committed reversible error in overruling the motion to strike and in overruling the demurrer of the plaintiff in error herein, and this case is remanded to the trial court for further proceedings in accordance with this opinion.

¶11 The judgment is reversed.

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