Brief for the Respondent in Opposition — Sonken-Galamba Corp. v. Butler Iron & Steel Co.

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Supreme Court of the United States

OCTOBER TERM, 1941

No. 167

SEEN eR ss

SPSL a ARE PENS

SONKEN-GALAMBA CORPORATION, a corporation,

and W. C. BERRY,

Petitioners

vs.

BUTLER IRON & STEEL COMPANY,

INCORPORATED, a corporation,

Respondent.

RESPONDENT’S BRIEF IN OPPOSITION :

TO PETITION FOR CERTIORARI :

e

Maurice J. O’Suuivan, &

700 Gloyd Bldg.,

Joun M. P. Mier, Kansas City, Missouri.

Kansas City, Mo. Davin R. Minsten,

Of Counsel. 807 Tulsa Loan Bldg.

Tulsa, Oklahoma.

Attorneys for Respondent.

SPENCER D. BOVARD, LAW BRIEF PRINTER, 1020 MC GEE, K. C., MO.

TABLE OF CASES CITED

PAGE

Central Trust Company vs. Adams, 107 Kan. 492,

192 Pac. 761.............-c-c---cec-ceossscccseensecscnesesnsnccsnensseseneenens 3

Darnell vs. Haines, 119 Kan. 633, 1. ¢. 634, 240 Pac.

ae ak giibedepilnatinenilanmninrnenesnsnsinntacetietnsninieahin 5

Griffin vs. MeCoach, .... U. S. ------------ sg ee ig

85 L. Ed. (adv. a) SRA Bite anette 9 oe rane 1

Habeler vs. Rogers, 131 Fed. 43, 1. ¢. 45, 46 (C.C.A. 2).. 5-6

International Trading & Rice Corp. vs. Benscheidt,

141 Kan. 416, 41 Pac. (2d) 737, 738 (Subd. 1, 2)... 5

Klaxon Co. vs. Stentor Elect. Mfg. Co., .... U.S. -...---- ,

_ 8. Ct. .., 85 L. Ed. (adv. op.) 969..........-.-.-.---- 1

Meyer vs. W. R. Grace & Co., 290 Fed. 785 (C. C.

A. 7) D.C. TBT.nnca--nsneenssnsnecnsensennnsenscessssnsnsensensasensnsenccnsnnsoes 6

Midland S. & L. Co. vs. Tradesmen’s Nat. Bank, 57

Fed. (2d) 686 (Kan. C. C. A. 10) 5

Minneapolis Nat. Bank vs. Liberty Nat. Bank, 72 Fed.

(2d) 434 (Kan. C. C. A. 10) 5

Montgomery County Nat’! vs. igewan 102 Kan. 904,

196 Pac. 1146..............--------- : .. 5,6

Moore vs. Potter, 155 N. Y. 481..............-.-.----- 4

Oil Well Supply Co. vs. First National Bank, 106 Fed.

(2d) 399 (Kan. C. C. A. 10)... 5

Stegman vs. Offerle Coop. Grain and Supply Co., 151.

Kan. 655, 1. ¢. 657, 100 Pac. (2a) 635................-------- 6

Union Trust Co. vs. Wiseman, 10 Fed. (2d) 558 (D.

Ch CRY inna aaa scicececsttiesieetinscenermcencesnere 5

Webber vs. Umback, 125 Kan. 117, 263 Pac. 786............ 5

TEXTS

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55 C. J. 1057, Note 22 ; we

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Supreme Court of the United States

OCTOBER TERM, 1941

No. 167

SONKEN-GALAMBA CORPORATION, a corporation,

and W. C. BERRY,

Petitioners

vs.

BUTLER IRON & STEEL COMPANY,

INCORPORATED, a corporation,

Respondent.

RESPONDENT’S BRIEF IN OPPOSITION

TO PETITION FOR CERTIORARI

The Cireuit Court of Appeals determined and fol-

lowed the applicable (Kansas) State law as required by

recent decisions such as

Klaxon Co. v. Stentor Elect. Mfg. Co., «.......2.-2-.---

Wi Was: sac oeoeeccias ues ioe ds iialdiie Saceieaie S. Ct.

ic cam beeen , 85 L. Ed. (adv. op.) 969, No. 741.

Griffin v. McCoach, ..................... Bi ae Kiisadcaiinteasnie

siicininndmaanies Td ciientoscunaig: a ih

(adv. op.) 972, No. 755.

Petitioner summarizes evidence most favorable to it

but overlooks that it conflicts with facts found by the

trial court and approved on appeal.

The contrast is illustrated (R. 217-218) where the

opinion says:

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«“* * © The Court found as a fact that plaintiff

and Horwitz Iron and Metal Company signed

a written form of agreement on July 30, 1938 for

sale of this scrap iron, but that the agreement never

became operative but was abandoned by mutual con-

sent because of a failure of a meeting of the minds

with respect to the nature, kind and character of the

material remaining on hand. The Court found that,

‘The parties thereto under the facts disclosed by

the evidence did not, in fact, reach a meeting of

minds with respect to the subject matter of said

contract.’ This finding of fact, which is sustained

by substantial evidence, removes from considera-

tion the contention that the plaintiff elected to re-

sell the undelivered property. What the rights of

the parties would have been had the sale been com-

pleted need not be considered. There is no incon-

sistency of remedies in announcing an intention to

make a resale or in unsuccessfully attempting to

resell and m establishing the market value in an

action for damages by evidence of market value.

In each instance the seller has elected to hold the

buyer liable in damages based on the difference be-

tween the contract price and the market value. A

resale is but one method of determining the market

price. The methods of establishing the market value

by resale and of determining it by evidence other

than by resale are analogous ways of establishing

damages. They are designed to and should reach

the same result. Pursuing consistent remedies al-

ternatively to achieve a lawful end does not consti-

tute an election of remedies. Kansas City Live Stock

Commission v. Hamlin Bank, Kans., 101 Pace. Ciataaaaia

Yet (Petition P. 2) says:

““* * * it was conceded that a resale, pursuant

to such election, had been made (R. 84, Ex. A. R. 46-

49) and that subsequently, without notice to the buy-

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3

ers (R. 83) and for private reasons existing be-

tween Butler and the purchaser at such resale (R.

49-50; 83), the contract of resale had been cancelled

(R. 49-50) and that Butler had thereafter, without

notice to petitioners (R. 85-86), applied said scrap

in filling certain commitments it had with others.

The price obtained by Butler on the resale

(under the contract which it subsequently cancelled)

was substantially in excess of what the Court found

to be the market price at the time of breach. The

difference is approximately $1,500.00. * * * ”

The questions presented, reasons relied om and

specification of errors rest on the self constructed errone-

ous premises of fact.

Each specification of error assumes an election to

resell, and that it constituted an election of remedies

under Kansas law.

The error is disclosed by the opinion on rehearing

in Central Trust Company v. Adams, 107 Kan. 492, 192

Pac. 761. Petitioner cites this but quotes only from the

original opinion, 107 Kan. 126, 190 Pac. 755.

At 107 Kan. 1. e. 495, the Kansas Supreme Court

says:

‘«« * * * Having chosen not to keep the goods

to be delivered to the owner on payment of price,

he could not sue for price. Goods on one side and

price on the other resemble opposite terms of an

equation, and whenever goods are eliminated, there

is no equivalent for price. The right of the seller

must then be stated in another way, that is, in terms

of damages. Election to resell was an election to

liquidate, as far as proceeds of resale would go,

damages resulting from breach of the buyer’s obli-

gation to pay price and take the goods, and then

to rely on an action for damages for the remainder

of the loss, if any. In ease of a fair resale, the

measure of damages is the difference between the

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net resale price and the contract price. The rule

is precisely the same as if the contract had re-

mained executory, and the seller had fixed his dam-

ages by proper resale. (Hardwick v. Can Co., 113

Tenn. 657.)

It requires no argument to demonstrate that

the theory underlying recovery of damages is in-

consistent with the theory underlying recovery of

price. This is just as true when the contract is exe-

cuted as when it is executory. The two theories

are utterly incompatible with each other, and_be-

cause of that fact, election to proceed according to

one of them renders the other unavailable. (Treland

v. Waymire, 107 Kan.. 384, 191 Pac. 304, and cases

cited in the opinion.)’”’

It approves the doctrine of Moore y. Potter, 155 N. Y.

481, and quotes therefrom:

‘**Tt is well established by the decisions of this

Court that a vender of personal property, when the

vendee has declined to take the property and pay for

it, ordinarily has the choice of any three methods to

indemnify himself against loss: (1) He may store

or retain the property for the vendee and sue him

for the entire purchase price; (2) he may sell the

property and recover the difference between the con-

tract price and the price obtained upon a resale,

or (3) he may keep the property as his own, and re-

cover the difference between the market value at

the time and place of delivery and the contract price.’

(p. 486.)”’

In this case there was no effective resale. Respond-

ent followed the dpdemnity choice numbered (3) above.

As indicated in the, rehearing opinion a resale price on a

sale fairly conducted may be the best evidence of the

market price.

Le IL aR ee

Compare the following:

5

International Trading & Rice Corp v. Benscheidt, 141

Kan. 416, 41 Pac. (2d) 737, 738, (subd. 1, 2) where re-

sale price of sugar was received as evidence of market

price. Recovery was on basis of market price.

Webber v. Umback, 125 Kan. 117, 263 Pac. 786, where

the market value was proved by evidence of the Kansas

City hog market less freight, ete., and the sale price of

_the hogs in question was received to show market price,

which governed recovery of damages.

Montgomery County Nat’l v. Wherry, 102 Kan. 224,

196 Pac. 1146, where an abortive conditional sale was

held not to establish market price. The market price

is held to fix damages for breach of purchase con-

tract.

There is no inconsistency of remedies between

claiming either the difference between resale or market

price and the contract price. Often the resale price is

the best evidence of market value.

That there was no such election of remedies is also

disclosed by Darnell v. Haines, 119 Kan. 633, 1. ¢. 634,

240 Pac. 582 which explains that following an incompat-

ible cause of action makes the rule of election operative,

but taking different compatible courses, even though

proof and measure of recovery are dissimiliar, does not.

The doctrine is harsh and its seope is restricted. Oil

Well Supply Co. v. First National Bank, 106 Fed. (2d)

399. (Kan. C. C. A. 10). Minneapolis Nat. Bank v.

Liberty Nat. Bank, 72 Fed. (2d) 484 (Kan. C. C. A. 10).

In the absence of inconsistency of remedies, there is no

election. Midland S. & L. Co. v. Tradesmen’s Nat. Bank,

57 Fed. (2d) 686 (Kan. C. C. A. 10); Union Trust Co. v.

Wiseman, 10 Fed. (2d) 558 (D. C., Oregon, cited because

well reasoned.)

A mistaken notion in giving even a formal notice to

resell is not an election. Habeier y. Rogers, 131 Fed. 48,

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1. ¢. 45, (C. C. A. 2). Telegram advising plaintiff ‘would

sell the goods and sue defendant for damages’’ was not

an act required to pursue any remedy and was neither

election or estoppel to maintain action for full purchase

price. Meyer v. W. R. Grace & Co., 290 Fed. 785, (C. C.

A. 7), 1. e. 787. Quoted from 20 C. J., p. 34 is:

‘‘The mere giving of notice of an intention to

pursue a certain course, which is not acted upon

by either party, or which does not alter nor affect

the position of the party receiving it, is not

such an election of remedies as will bind the party

serving it so as to preclude pursuing a different |

course,”’

An unconsummated agreement of resale is no evidence

of market value. 55 C. J. 1057, note 22, and also Mont-

gomery County Nat. Bank v. Wherry, supra.

Following a particular evidentiary method of proof

of damage is not an election of remedies.

In Stegman v. Offerle Coop. Grain and Supply Co.,

151 Kan. 655, |. e. 657, 100 Pae. (2d) 635, it is said:

«* * * Under different sets of facts the courts

have used or approved the use of different measures

of damages, the theory in each instance being to use

the measure of damages which will enable plaintiff

to be recompensed for the loss he has sustained.***’’

It is submitted that the Cireuit Court of Appeals

correctly determined and applied the settled principles

of Kansas law. No reason exists for certiorari and the

petition should be denied.

Maurice J. O’SuLLIvAN,

700 Gloyd Bldg.,

Joun M. P. Mier, Kansas City, Missouri.

Kansas City, Mo. Daviv R. MILsTEN,

Of Counsel. 807 Tulsa Loan Bldg.

Tulsa, Oklahoma.

Attorneys for Respondent.