## Facts

- A wheat grower agreed in writing to sell a milling company 2,000 bushels of No. 2 merchantable wheat at $1.03 per bushel, deliverable “from thresher 1909” at Hopkinsville, Kentucky, with “sacks to be furnished” by the buyer.
- The buyer furnished the seller 1,000 sacks valued at $80 to facilitate delivery.
- The seller did not deliver the wheat to the buyer.
- Before the contractual delivery window, the seller sold the same wheat to a third party for $1.16 per bushel.
- When the wheat was threshed (late July 1909), the market price at Hopkinsville had fallen to roughly $0.975 to $1.00 per bushel.
- The buyer sued for (1) $240 in damages for nondelivery (based on $1.16 − $1.03 on 2,000 bushels) and (2) $80 for the sacks.
- The seller admitted the contract and nondelivery, contested damages for the wheat, and offered to confess judgment for $80 for the sacks.
- The jury awarded $80 only; the buyer appealed after the trial court refused an amended reply asserting the seller was estopped by the higher third-party sale price.

## Issues

1. What is the proper measure of a buyer’s damages when a seller fails to deliver goods at a fixed time and place: the contract price minus the market price at the time and place of delivery, or the contract price minus the seller’s earlier resale price?
2. May a buyer recover expectancy damages for nondelivery when the market price at the time and place of delivery is below the contract price?
3. Does the seller’s pre-delivery resale at a higher price affect the buyer’s damages calculation?

## Decision

- The Kentucky Court of Appeals affirmed the $80 judgment for the sacks only.
- The court held the measure of damages for nondelivery is the difference between the contract price and the market price at the time and place of delivery.
- The seller’s prior resale of the goods before the delivery date did not change the governing damages rule.
- Because the market price at the time and place of delivery was below the contract price, the buyer suffered no loss from nondelivery and could not recover damages for the wheat.

## Legal Principles

- In a contract for delivery of personal property at a fixed time and designated place, the buyer’s damages for nondelivery are measured by contract price minus market price at the time and place of delivery.
- A seller’s resale of the goods before the contractual delivery date, even at a higher price, does not alter the buyer’s market-differential measure of damages.
- Expectancy damages are not awarded where the breach causes no loss to the buyer; damages are not used to place the buyer in a better position than performance would have produced.
- A buyer may recover separate, provable amounts tied to reliance or restitution (such as the value of delivery materials furnished to the seller) independent of market-differential damages.

## Conclusion

The court limited the buyer’s recovery to the value of the sacks because the correct damages measure for nondelivery is the market differential at the contractual time and place of delivery, and the market price then was below the contract price, leaving the buyer without compensable loss despite the seller’s earlier higher-priced resale.


Acme Mills & Elevator Co. v. Johnson, 141 Ky. 718, 133 S.W. 784 (Ky. Ct. App. 1911)