Security Stove & Mfg. Co. v. American Ry. Express Co.
227 Mo.App. 175, 51 S.W.2d 572 (Mo.App. 1932)
Security Stove wanted a demo
stove shipped in 22 packages from Missouri to New Jersey for an appliance
exhibition.
They hoped to get a
distributor interested in their product.
Only 21 packages arrived on
time.
Security Stove sued the
shipper (American).
American argued that since
the show was just an exhibition, there was no real loss of profit for
Security Stove, therefore the damages should be minimal.
Security Stove argued that
there was considerable loss of goodwill and potential future profits. In addition, they had a reliance
interest.
A reliance interest is the measure of compensation given to a
person who suffered an economic harm for acting in reliance on a party
who failed to fulfill their obligation.
The Trial Court found for
Security Stove.
The Trial Court found that
Security Stove had a reliance interest, and so American was liable for damages to that interest.
That includes all of the
costs associated with the exhibition (such as the price for the
exhibition booth, travel expenses, and employee's time) was recoverable,
including those expenses prior to the contract!
This is contrary to the
decision in Chicago Coliseum v. Dempsey (265 Ill.App. 542 (Ill.App. 1 Dist. 1932)).
