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)).
  • The Appellate Court affirmed.