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Gruber v. S-M News Co.

United States District Court for the Southern District of New York
126 F.Supp. 442 (1954)


Gilbert Gruber (plaintiff) entered into an exclusive dealership agreement with S-M News Co. (S-M) (defendant), whereby S-M was to sell up to 90,000 Christmas card sets produced by Gruber. S-M had never sold Christmas cards before. S-M was to pay Gruber $0.84 for each set delivered. Gruber manufactured the sets, but S-M refused to sell any. Several years later, Gruber managed to sell 40,000 sets at $0.06 per set. Gruber sued S-M for breach of contract. The first trial court dismissed the action at the close of Gruber's case, concluding that the claim was barred by the statute of frauds. The court of appeals reversed and ordered a new trial. At the second trial, Gruber offered evidence that one retailer would have purchased fifty sets of cards from S-M. Gruber requested damages for lost profits or, in the alternative, out-of-pocket expenses. Gruber also presented evidence of labor and materials expenses totaling $19,934.44. S-M argued that Gruber would have lost money even if S-M had performed in full. S-M was found liable for breach of contract. The trial court judge then turned to a determination of the appropriate measure of damages.

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