Summary of Acme Mills & Elevator Co. v. Johnson
141 Ky. 718 (1911)
Facts: In 1909, Johnson and Acme Mills entered into a contract which stated that Johnson would deliver 2,000 bushels of wheat at $1.03 per bushel (to be paid upon delivery) to Acme Mills. Acme would provide sacks to Johnson to transport the wheat from the thresher to the mill. Johnson failed to deliver the wheat, and Acme sued to recover damages of $320, including $80 for the value of the sacks provided to Johnson.
Johnson admitted a breach of contract, but denied that Acme was damaged. In contracts of this type, the “vendee is entitled to damages against the vendor for a failure to comply and the measure of damages is the difference between the contract price and the market price of the property at the place and time of delivery."
Procedure: Acme Mills is suing Johnson for damages equal to the wheat that was never delivered and for the sacks provided for that delivery. The lower court ruled for Johnson, with the exception of an $80 judgment for the costs of the sacks.
Issue: As the value of wheat fell below the value in the contract between the time of delivery and the time of the agreement, was Acme still damaged by the breach of contract?
Holding: The Kentucky Court of Appeals affirmed the lower court’s ruling, stating that “the appellant [Acme Mills], instead of being damaged by the breach of the contract, was actually benefited to the extent of about three cents per bushel."
Analysis: The court decided that a breach of contract in a case involving the purchase and delivery of goods would only be recognized if the vendee was damaged. In essence, you can only sue for damages if the property is worth the same or more than you agreed to pay. In this case, Acme Mills would have been paying more than the wheat was worth, so the court ruled Acme was not damaged by failure to collect the wheat. (Johnson basically did them a favor by selling the wheat elsewhere).