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Thursday, November 17, 2005

Turkeys, Damages and Alternative Obligations

250pxlarge_white_turkey_femaleIn the U.S., this time of year is rough for the turkeys. (Image source: Wikipedia).  It is also likely a rough time for purveyors of turkeys, especially if their contracts do not go as planned. Thanksgiving 1917 was certainly difficult for Jacobsen-Reimers Co, a California company.   

Jacobsen had a contract with Tozai Co., a turkey supplier. Under the contract, Tozai agreed to deliver between 200 and 1,200 turkeys between November 5 and Thanksgiving. The offer for the sale of turkeys provided:

Cal.Colusa, Nov. 5, 1917.
We agree to sell Jacobson Reimers Co. of S. F. at twenty-seven and half cents per pound for choice dressed turkeys f. o. b. station numbering from Two hundred head up to Twelve hundred between now and Thanksgiving. Hens to weigh seven pounds and over and gobblers twelve pounds and over per piece.

TOZAI CO.

By K. HAYASHI.

When Jacobsen accepted within the provided time period by demanding that Tozai deliver 1,200 turkeys, Tozai refused to delivery any turkeys. Apparently, the market price for turkeys had increased from 27 to 42 cents per pound. Tozai conceded that it had not delivered any turkeys. The issue was whether Jacobsen’s damages should be based on Tozai’s failure to deliver the minimum 200 turkeys (totaling roughly $77) or, alternatively, based on Tozai’s failure to deliver the maximum 1,200 turkeys (totaling roughly $615).

The court held that Jacobsen’s damages should be calculated based on Tozai’s failure to deliver the maximum amount of turkeys, and awarded Jacobsen roughly $615. The court wrote:

What, then, is the rule governing alternative obligations? Counsel seem to have explored the cases and the text-books with diligence for light, and the written opinion of the learned trial judge shows that he examined with much care the authorities upon the question.

* * *
Referring to the number of turkeys to be delivered, the language of the obligation is, "numbering from two hundred head up to twelve hundred," and as to the time of delivery the obligation is, "between now [its date] and Thanksgiving" (November 29th). Plainly, the statute gave defendants the right to deliver any number of turkeys from two hundred to twelve hundred "between" the date of the obligation and November 29th. Defendants, admittedly, neither offered to nor did deliver any number of turkeys "between now and Thanksgiving," or at all, but, as the court found, refused to deliver any. In such case, by the terms of the statute, "the right of selection passes to the other party." It is not necessary to resort to text-books or to the decisions of the courts.

The court affirmed the opinion of “the learned trial court” based on certain provisions of the civil code, the trial court had written:

In this case there being no pretention that performance was even as much as attempted, it seems that under well-recognized principles of equity the defendant should not be permitted to limit his liability to the minimum delivery required by this agreement. To do so would allow the most flagrant abuse of such an agreement.

Jacobsen-Reimers Co. v. Tozai Co., 42 Cal. App. 178 (Cal. App. 3d Dist. 1919).

[Meredith R. Miller]


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