Mich. C. R. Co. v. State

85 Ind. App. 557, 155 N.E. 50 (1927)



In actions to enforce quasi contractual obligations, the general rule is that the measure of recovery is the value of the benefit received by the defendant, but it cannot be said that to this rule there are no exceptions. If, for example, the carrier has settled with the owner of a consignment of goods that had been misdelivered, the settlement being for a sum less than the market value, it is not contended that the carrier could recover the market value in an action against the person who had received the goods. 


The State contracted with the railway company for a year's supply of coal for a prison, with the contract price set based upon the tons delivered. While the contract was in force, the railway company had in its possession for interstate transportation a carload of coal of the same kind and quantity as that contracted for by the State. The carload of coal, by mutual mistake of the railway company and agents of the State, was delivered to the prison and consumed. The market value of the carload delivered was higher than the State's contract price. Upon learning of the misdelivery, the railway company paid the consignee of the coal the market value thereof and demanded reimbursement from the State. The superior court limited the railway company's recovery to the State's contract price instead of the market value, and the railway company appealed.


Was it proper to limit the railway company's recovery of payment to the contract price instead of the market value?




The court held that because the State contracted a year's supply of coal for its penal institution, the State's representatives could not, by their mistake in receiving the coal of like quality obligate the State to pay a price in excess of the State's contract price because the coal had been sold and consigned to another.

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