Security Stove & Mfg. Co. v. American Ry. Express Co.

Facts: Plaintiff was a furnace manufacturer in Kansas City, and made a prototype dual-fuel furnace. The furnace was to be exhibited in Atlantic City at a convention. The plaintiff contracted with the defendant. The defendant would transport the furnace to Atlantic city. The defendant knew when the furnace would be needed in Atlantic city, and told the plaintiff on which day the furnace should be ready to be picked up. The plaintiff complied and the furnace was picked up on time to be shipped. The furnace was packed in 21 separate packages. One of the packages was not delivered by the defendant in Atlantic City. The missing piece was an essential one, and it was not replaceable in Atlantic City. The missing package was eventually returned to Kansas City.

Procedural History: Plaintiff filed in trial court for loss of shipping costs. Judge awarded $801.50 plus interest. The damages amount was calculated using reliance measure, the cost that the plaintiff paid in anticipation that the contract would be fully performed. Expectation wasn't used because the plaintiff was not expecting any profit from the convention. Appealed.

Issue: Should the reliance or expectation measure be used to calculate the amount of damages?

Arguments: Defendant argued that Plaintiff should only receive that which he would have had, had the contract been performed on both sides. Plaintiff originally wanted to receive expectation damages, calculated from what Plaintiff hoped to profit as a result of showing its prototype at the convention, but that would have been too difficult to calculate.

Holding: Reliance damages should be used.

Reasons: Defendant knew the circumstances, that Plaintiff would be spending money on hotel, time etc. for the convention and that it would be wasted if the furnace were not there. "The whole damage, therefore, was suffered in contemplation of Defendant performing its contract, which it failed to do, and would not have been sustained except for the reliance by Plaintiff upon Defendant to perform it."

Judgment: Affirmed.