Peal v. Gulf Red Cedar Co.

STEEL, J.,

pro tem.

Plaintiff and respondent herein brought this action to recover the sum of $1990, damages alleged to have been sustained by him in lost profits by reason of the failure of the defendant to fulfill and complete the obligations of two certain contracts entered into between the parties. Trial was had before the court without a jury; judgment was entered in favor of plaintiff, and the defendant appeals.

Plaintiff is engaged in the burlap and twine business in the city of Stockton, and the defendant, a foreign corporation doing business in San Joaquin County, is engaged in' the manufacture of cedar pencil slats, using burlap to wrap the shipments thereof.

On February 11, 1931, defendant company signed an order with respondent for 50,000 yards of burlap, to be delivered in monthly shipments from June to December, 1931. Defendant took delivery of 34,000 yards, but failed to take delivery of the balance of 16,000 yards. On July 15, 1931, defendant placed another order with respondent for 150,000 yards of burlap, shipments to begin upon conclusion of the former order. Of this order none was taken by the defendant company.

[198]

During the latter months of the year 1931 the defendant company became involved financially, and a creditors’ committee was named to take over the operation of the defendant’s business. This committee continued to function throughout the years 1932, 1933 and into 1934, during which period plaintiff, on numerous occasions, contacted the company through the chairman of the'creditors’ committee, in an endeavor to have them take deliveries upon the orders theretofore given him, representing that he did not want to make any profit on the undelivered burlap, but that his brokers were pressing him, and he was about to be sold out, thereby sustaining a loss of $3,250, which loss he insisted would have to be assumed by the defendant company.

Plaintiff’s efforts in this regard met with no success, the-receiver claiming they could buy burlap cheaper elsewhere. Thereafter, and in the early part of 1933, after somewhat extended conferences with the president of the defendant company, and also with their attorney, an agreement was reached whereby plaintiff would make deliveries from time to time of the said balance of 166,000 yards of burlap, and would be paid therefor by defendant upon a basis of one and one-quarter cents per yard, over and above what plaintiff would pay therefor upon the market, thereby ultimately realizing a total of $2,075 in settlement of plaintiff’s claim. This agreement was subsequently reduced to writing and forwarded to defendant company at Richmond, Virginia, for the signature of its president. The agreement was signed, and upon return thereof, plaintiff called at the office of defendant’s attorney for the purpose of signing the same and closing the matter, whereupon defendant’s counsel advised plaintiff that they were not going to close it, for the reason that they had learned plaintiff had not been sold out by his brokers and had not suffered a loss of $3,500, or any loss whatever. Shortly thereafter the instant action was commenced by plaintiff.