Yaffe v. American Fixture, Inc., 345 S.W.2d 195 (1961)

Defendant became a separate corporation in April 1955. Prior to that time, its business had been conducted as the fixture division of another corporation in business since 1908. Fischer became its chief financial officer in May 1955. Prior to that time he had (since 1951) audited the accounts of its predecessor as a certified public accountant. Defendant’s proof of lost profits is based on his testimony. Although he was familiar with the records of the former corporation, Fischer said he had no accurate basis for determining the profits of the division, which became the defendant corporation, prior to 1955 because of inapplicable charges between the divisions of the, former corporation and later changes in accounting methods. Defendant’s fiscal year ended November 30th so there was only one full year (1955-1956) prior to the year of the casualty to show defendant’s experience. It was shown that, in the 1955— 1956 fiscal year, defendant’s total sales were $3,347,917.01, while the 1956-1957 fiscal year sales were only $2,578,177.62, but that this decrease was mainly due to the 1957 recession. In the 1955-1956 fiscal year net profits were $7,523 and in the 1956-1957 fiscal year there was a net loss of $228,641.-86. The summer and fall months were defendant’s busiest and most of its sales were made during that period. They were the months which would show profits; the company expected to show a loss during the period from December 1st to June 1st.