Wednesday, December 25, 2013

Globe Refining Co. v. Landa Cotton Oil Co. case brief

Globe Refining Co. v. Landa Cotton Oil Co. case brief summary
190 U.S. 540 (1903)

Plaintiff in error, a buyer, sought review of a judgment from the Circuit Court of the United States for the Western District of Texas, which dismissed its suit, for breach of a contract to sell and deliver crude oil, for lack of jurisdiction because plaintiff in error had fraudulently magnified the damages to meet the jurisdictional requirements.

The Court affirmed a judgment that dismissed an action for breach of contract. The defendant in error seller alleged that plaintiff in error buyer claimed damages in excess of lost profits in order to fraudulently give the circuit court jurisdiction. The contract was for the sale of oil. Plaintiff in error claimed damages for payment to the railroad to ship the oil, the travel of railroad cars in excess of 1,000 miles prior to notice of the breach, the loss of the use of its oil tanks for 30 days, its promises to customers to furnish oil within a certain time, and the loss of customers, credit, and reputation.


  • The Court held that defendant in error was only liable for damages that were contemplated by the contract or that plaintiff in error could have reasonably expected them to contemplate. 
  • The Court stated that mere notice to a seller of some interest or probable action of the buyer was not enough to charge the seller with special damages on that account if he failed to deliver the goods. 
  • The Court agreed with the trial court that none of the special damages were reasonably contemplated by the contract.
The Court affirmed the judgment and held that defendant in error could only be held responsible for damages that plaintiff in error could have reasonably contemplated at the time of contract. Finding that none of the special damages could have been reasonably contemplated, the Court affirmed the dismissal of the case.

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