Turkeys, Damages and Alternative Obligations

In 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 iftheir 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 deliverbetween 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. ofS. 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 andThanksgiving. Hens to weigh seven pounds and over and gobblers twelve poundsand over per piece.
TOZAI CO.
By K. HAYASHI.

When Jacobsen acceptedwithin 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 42cents per pound. Tozai conceded that ithad not delivered any turkeys. The issuewas whether Jacobsen’s damages should be based on Tozai’s failure to deliverthe minimum 200 turkeys (totaling roughly $77) or, alternatively, based onTozai’s failure to deliver the maximum 1,200 turkeys (totaling roughly $615).

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

What, then, isthe rule governing alternative obligations? Counsel seem to have explored thecases and the text-books with diligence for light, and the written opinion ofthe learned trial judge shows that he examined with much care the authoritiesupon the question.

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Referring to the number of turkeys to be delivered, the language of theobligation is, “numbering from two hundred head up to twelvehundred,” and as to the time of delivery theobligation is, “between now [its date] and Thanksgiving” (November29th). Plainly, the statute gave defendants the right to deliver any number ofturkeys from two hundred to twelve hundred “between” the date of theobligation and November 29th. Defendants, admittedly, neither offered to nordid deliver any number of turkeys “between now and Thanksgiving,” orat all, but, as the court found, refused to deliver any. In such case, by theterms of the statute, “the right of selection passes to the otherparty.” It is not necessary to resort to text-books or to the decisions ofthe 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 casethere being no pretention that performance was even as much as attempted, itseems that under well-recognized principles of equity the defendant should notbe permitted to limit his liability to the minimum delivery required by thisagreement. 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]