 |
Wiki Law School will soon be moving! Please update your bookmarks. Our future address is www.wikilawschool.org |
Peevyhouse v. Garland: Difference between revisions
From wikilawschool.net. Wiki Law School does not provide legal advice. For educational purposes only.
No edit summary |
No edit summary |
||
| Line 23: | Line 23: | ||
|arguments=Garland argued that the court should limit damages to $300. | |arguments=Garland argued that the court should limit damages to $300. | ||
|holding=In a 5 to 4 decision: If the cost of performance is grossly dis-proportionate to the economic benefit, <big>the defendant should only pay the economic benefit</big>. | |holding=In a 5 to 4 decision: If the cost of performance is grossly dis-proportionate to the economic benefit, <big>the defendant should only pay the economic benefit</big>. | ||
|judgment=for | |judgment=for Peevyhouse for $300 | ||
|reasons=* The cost of performance is the proper measure of damages if it does not involve unreasonable economic waste. | |reasons=*The cost of performance is the proper measure of damages if it does not involve unreasonable economic waste. | ||
* Where the defect in material or construction is incidental to the main purpose of the contract | *Where the defect in material or construction is incidental to the main purpose of the contract & one that cannot be remedied without an expenditure for re-construction disproportionate to the end to be attained, the value rule should be followed. | ||
*Sometimes, the full cost of performance is an economic waste! | |||
|rule=Justice Jackson: The proper way to calculate [[damages]] is by looking at the relative economic benefit. | |rule=Justice Jackson: The proper way to calculate [[damages]] is by looking at the relative economic benefit. | ||
|comments='''Dissent''' | |comments='''Dissent of Justice Irwin:''' The measure of damages should be the cost of performance because that is what the contract calls for and there is freedom of contract. | ||
The measure of damages should be the cost of performance because that is what the contract calls for and there is freedom of contract. | |||
|case_text_links={{Infobox Case Brief/Case Text Link | |case_text_links={{Infobox Case Brief/Case Text Link | ||
|link=https://casetext.com/case/peevyhouse-v-garland-coal-mining-company-1 | |link=https://casetext.com/case/peevyhouse-v-garland-coal-mining-company-1 | ||
| Line 36: | Line 35: | ||
|link=https://law.justia.com/cases/oklahoma/supreme-court/1962/36236.html | |link=https://law.justia.com/cases/oklahoma/supreme-court/1962/36236.html | ||
|case_text_source=Justia | |case_text_source=Justia | ||
}}{{Infobox Case Brief/Case Text Link | |||
|link=https://www.quimbee.com/cases/peevyhouse-v-garland-coal-mining-co | |||
|source_type=Video summary | |||
|case_text_source=Quimbee | |||
}} | }} | ||
|case_videos={{Infobox Case Brief/Case Video | |case_videos={{Infobox Case Brief/Case Video | ||
Revision as of 23:29, December 23, 2023
| Peevyhouse v. Garland | |
| Court | Oklahoma Supreme Court |
|---|---|
| Citation | 382 P.2d 109, cert. denied, 375 U.S. 906, 84 S.Ct. 196, 11 L.Ed.2d 145 |
| Date decided | May 28, 1963 |
Facts
- In 1954, the Peevyhouse couple owned acres of land in Oklahoma containing rich coal deposits.
- Mr. & Mrs. Peevyhouse = "Peevyhouse" = plaintiff
- Garland Coal Mining Co. = "Garland" = defendant
- Garland wanted to lease the Peevyhouse in order to mine the coal
- Plaintiff contracted with defendant coal mining company to allow them to use Peevyhouse’s land (60 acres) in excavating a coal vein. The contract was for 5 years.
- In the contract, Garland specifically agreed to perform certain restorative and remedial work at the end of the contract.
- The work would involve moving many thousands of yards of dirt, a cost estimated to be about $29,000, while the improvement to the land was estimated at only $300.
- Garland employed the strip mining technique. At the end of the 5 years, Garland refused to restore the land to its original condition.
Procedural History
- Peevyhouse sued Garland for breach of contract.
- Garland's expert testified that it restoration cost would be $29,000 while increasing the land value by only $300.
- Verdict for plaintiffs in the amount of $5,000, only a fraction of the cost of performance.
- The $5,000 the jury awarded Peevyhouse exceeded the cost of the farm in 1962.
Issues
- Must the breaching party (Garland) pay the full cost of performance ($29,000), if that cost greatly exceeds the total economic value of full performance ($300)?
- Whether the damages should be limited to
- the difference in the value of the land or
- to the cost of the remedial work defendant agreed to do.
Arguments
Garland argued that the court should limit damages to $300.
Holding
In a 5 to 4 decision: If the cost of performance is grossly dis-proportionate to the economic benefit, the defendant should only pay the economic benefit.
Judgment
for Peevyhouse for $300
Reasons
- The cost of performance is the proper measure of damages if it does not involve unreasonable economic waste.
- Where the defect in material or construction is incidental to the main purpose of the contract & one that cannot be remedied without an expenditure for re-construction disproportionate to the end to be attained, the value rule should be followed.
- Sometimes, the full cost of performance is an economic waste!
Rule
Justice Jackson: The proper way to calculate damages is by looking at the relative economic benefit.
Comments
Dissent of Justice Irwin: The measure of damages should be the cost of performance because that is what the contract calls for and there is freedom of contract.
Resources
