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CHAPTER VII.

THE MEASURE OF DAMAGES IN ACTIONS ON CONTRACTS.

General rules of compensation in personal actions founded on breach of contract, without penalty or liquidated damages-Damages limited to the results of the breach of contract-Motives of the defendant not inquired into-Exceptions, The contract controls the measure of damages-Exceptions. Tender, how far equivalent to performance in reference to damages-Compensation in cases of partial or imperfect performance of contract-Rule of damages on continuing agreements Forms of action employed-Account obsolete.

HAVING thus considered the rules which govern compensation in cases relating to real estate growing out of actions regarding its possession, its occupation, enjoyment, and contracts for its transfer, we now proceed to consider the great class of cases relating to personal property, including, of course, personal services.

These actions generally grow out of negotiable paper, policies of insurance, the sale and warranty of chattels, contracts of agency, suretyship, or other express executory agreements sealed or unsealed, as well as those implied contracts which the law engrafts upon a legal liability. These subjects will be considered separately; but before doing so it will be well to bear in mind the general principles upon which the English and American law proceed in cases ex contractu.

Damages (t) are recoverable in every personal action which lies at the common law." (u) The language of the civil law is,

Loco facti impraestabilis succedit damnum et interesse. We [200] have already considered the subject of nominal damages, and seen how far the courts go for the mere purpose of

(t) Sayer on Damages, ch. 1, 6.

(u) Ante, 43, et seq. So in Tennessee, where there has been a breach of contract without actual loss, the plaintiff is

at all events entitled to a judgment for nominal damages and costs. Seat v. Moreland, 7 Humphreys, 575.

declaring a right. We are now to examine those cases of contract where substantial relief is demanded; and the two cardinal principles which will be found to pervade and regulate this branch of our subject, are-First, that the plaintiff must show himself to have sustained damage, or, in other words, that actual compensation will only be given for actual loss; and—Secondly, that the contract itself furnishes the measure of damages. These two rules are closely interwoven with each other, and it is impossible to consider them altogether separately. The first rule is one of great importance. It excludes a large class of cases in which relief is often sought before an injury has occurred; and we shall have frequent occasion to refer to it. So a surety cannot sue his principal till he has paid the debt; nor a covenantee for quiet possession, his grantor, till he has been evicted; nor a covenantee against incumbrances, till he has paid the incumbrance; nor a principal his agent, till he has paid the loss sustained by the latter's misconduct. (e) This rule is, however, not without exception, as we shall hereafter see. The second rule, that the contract itself furnishes the measure of damages, is of equal importance. We have already adverted to it generally, but we have now to consider it more fully, and at the same time to notice such exceptions to it as may be found to exist.

We have already had occasion to observe the vague discretion that in the early books is attributed to the jury in the matter of damages. (w) Thus in a case already referred to, as late as the reign of James I., where the plaintiff sued the defendant, on a covenant that if certain land conveyed to him by the defendant fell short of a specified measurement, he, the defendant, would pay a fixed sum for every deficient acre, and alleged that the number of acres wanting would have amounted to the sum of £700, and the jury gave but £400 damages,—it was held, that this was well found; and it was said, "If all the land was wanting, still the jury are chancellors, and can give such damages as the case requires in equity." (x)

(v) Legare v. Fraser, 3 Strobhart, 377. (w) Ante, 20.

(x) Sir Baptist Hixt's case, 3 Roll. Abr. 703; Trial, pl. 9. In Kentucky, in an action of covenant on an agreement to pay for property, judgment was obtained. Suit was brought on that judgment, and the jury were told that they were bound ⚫ to give interest on the judgment. The

original agreement contained no stipulation for interest. The Court of Appeals said: "It is true, according to the ancient course of the common law, although the value of the things covenanted to be performed usually regulated the amount of damages, the jury in an action altogether in damages did in some instances exceed that measure; but they did not

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So, even as late as the middle of the last century, in an action for escape against the sheriff, Lord Ch. J. Wilmot said, "In actions on the case, the damages are totally uncertain and at large." (y) So, a standard text-writer, (2) uses this language: "In all actions which sound in damages, the jury seem to have a discretionary power of giving what damages they think proper; for though in contracts the very sum specified and agreed on is usually given, yet if there are any circumstances of hardship, fraud, or deceit, though not sufficient to invalidate the contract, the jury may consider them, and proportion and mitigate the damages accordingly; as in a case upon a policy of insurance, which was a cheat, for an old vessel was painted, and goods of no value put in the vessel, and about £1500 insured on it, and then the ship was voluntarily sunk." There can be no stronger proof of the revolution that has been effected in this branch of our law, than is furnished by this citation. Here, even on promissory notes, the jury are said to have power to give a sum less than that expressed in them; and a contract which now the law would pronounce utterly void, is declared to be a matter for the mere discretion of the jury.

It is, in truth, but slowly and at comparatively a recent period that the jury has relinquished its control over actions even of contract, and that any approach has been made to a fixed and legal measure of damages. But, by degrees, the salutary principle has been recognized, and it is now well settled, that in all actions of contract, subject to the exception already noticed, and

in all cases of tort where no evil motive is charged, the [202] amount of compensation is to be regulated by the direction of the court, and the jury cannot substitute their vague and arbitrary discretion for the rules which the law lays down. (1)

so because the law subjected the covenantor to the payment of interest, but in the exercise of a sound discretion with which they were invested, regulated by what, under the peculiar circumstances of the case, they might think just." And for the reason that the charge controlled the

discretion of the jury, the judgment was reversed. Guthrie v. Wickliff, 4 Bibb, 541; S. P., Cogswell's Heirs v. Lyons, 3 J. J. Marsh, 38.

(y) Ravenscroft v. Eyles, 2 Wils. 295. (z) Bacon Ab., Tit. Ďamages, D.

(1) In actions for breach of contract, no damages can be, in general, recovered, which are incapable of being specifically stated and appreciated with certainty, and which depend merely on the feelings or inclination of the jury to give. Hamlin v. The Great Northern Railway Company, 38 Eng. Law & E. 335; compare Bradley v. Denton, 3 Wis. 557. The general rule is, compensation. Robinson v. Vannell, 16 Tex. 382. The measure of damages for the violation of a simple contract, where vindictive

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It is, in fact, indispensable that it should be so: the measure of damages is the gist of the remedy; the emedy is no part of the facts of the cause, while, on the other hand, so completely controls the rights of the parties, that if any absolute discretion be given to the jury over the amount of compensation, the power of the court over questions of law would be most emphatically a barren sceptre. The measure of damages in all cases, then, where no complaint is made of evil motive, is a pure question of law; in all cases of contract, the sole object of the court is to ascertain the agreement of the parties, and that agreement, as a general rule, controls the measure of remuneration. "In contracts," said the Supreme Court of Massachusetts, (a) " where the precise sum is fixed and agreed on by the parties, as in many actions of assumpsit and of covenant, the jury are confined to that sum." "In no case," says the Constitutional Court of South Carolina, "where the action is for money had and received, goods sold and delivered, or for work and labor performed, which from the nature of the contract itself furnishes the standard of assessment, are the jury allowed to give more than the amount received, with interest, or the value of the articles delivered or the services rendered." (b) So in Ohio, where land had been sold at a given price, and the securities turning out valueless the original owner of the land brought suit, and it was contended for the defendant that he had a right to show the value of the land; but the Supreme Court said, "The law permits parties in their agreements to fix their own terms, conditions, and prices, and the court did not err in holding the amount estimated by themselves, with the interest thereon, to be the rule of damages." (c) "It is urged," (c) Taft v. Wildman, 15 Ohio, 123.

(a) Leland v. Stone, 10 Mass. 459.

(b) Ferrand v. Bouchell, Harper's R. 83, and post, 215.

damages are not authorized, is the amount necessary to put the party injured in as good a condition when the contract was broken, as if he had not made the contract. Jones v. Van Patten, 3 Ind. 107.

"Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i. e. according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as to the probable result of the breach of it." Hadley v. Baxendale, 9 Exchequer, 341; See, also, Meade v. Rutledge, 11 Tex. 44; Baldwin v. Bennett, 4 Cal. 392; Cunningham v. Dorsey, 6 Ib. 19; Powell on Ev. 215.

says the Supreme Court of Pennsylvania, "that the standard furnished by the contract may be resorted to as a measure of damages, but not as the measure. If it be not the exclusive measure it must be disregarded altogether. If it be but one of many standards, then there is no standard at all or as good as none. The jury are without a rule when they have a choice between different rules." (d) "There are certain established rules," says the Court of Exchequer in England, "according to which the jury ought to find. And here there is a clear rule, that the amount which would have been received if the contract had been kept, is the measure of damages if the contract is broken." (e)

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"It is desirable," says the Supreme Court of Massachusetts, "to have as definite and precise rules on the subject of damages as practicable." (ee) "A proper administration of justice requires that the rules established by law for the assessment of damages, should be adhered to," says the Supreme Court of Louisiana. (f) It has been repeatedly said, that courts will not attempt to modify the contracts of the parties. Their only duty is to expound and to enforce them.

In connection with this subject, it may be noticed that where the contract is one by which the plaintiff is to receive not money, but the transfer of certain property or services, then the value of the original consideration is not to be inquired into, but the value of the property or services is the measure of damages, because this is the remuneration fixed by the agreement. So as we have seen, (g) where land is the mode of payment, the value of the land is the compensation. So where the plaintiff had forborne a debt, on consideration that the defendant would build a house and give a lease of it, the value of the lease is the standard. (h) "If," said Parke, B., "the consideration is to be paid in money, it must be paid; if by the delivery of a thing of ascertained value, that value is the measure of damages." So, where a wagon was transferred in consideration that the defendant would break up certain land, the value of the labor, and not of the wagon, was held to be the measure of damages. (2) So again, if the rent of

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