Acme Mills & Elevator Co. v. Johnson

On April 26, J. C. Johnson (defendant) contracted to sell 2,000 bushels of wheat at $1.03 per bushel to Acme Mills & Elevator Co. (Acme) (plaintiff). Delivery of the wheat was due when Johnson finished threshing the wheat. Acme supplied Johnson with $80 worth of sacks for use in delivering the wheat. Sometime between July 13 and July 15, Johnson contracted to sell the same wheat to a third party for $1.16 per bushel. Johnson began threshing the wheat after July 25 and finished around July 29. By July 29, the market price for wheat had dropped to only $1.00 per bushel. When Johnson failed to deliver the wheat to Acme once it was threshed, the contracted-for time of delivery, Acme sued Johnson for breach of contract. Acme argued that its damages were $240, the difference between the price Johnson obtained in the sale to the third party and the price of the wheat under the Johnson-Acme contract. Acme also sought to recover $80 for the sacks provided to Johnson. Johnson admitted to the breach and to liability for the $80. However, he argued that Acme’s damages were the contract price minus the market price at the contracted-for time of delivery. In this case, because the price of wheat on July 29 had dropped below the contract price, Johnson argued that Acme was not entitled to damages. The trial court held in Acme’s favor but agreed with Johnson’s calculation of damages and therefore awarded Acme only $80 for the sacks. Acme appealed.