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CONSEQUENTIAL DAMAGES.

[CHAP. III. 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 the probable result of the breach of it. Now, if the special circumstances under which the contract was actually made were communicated by the plaintiff to the defendant and thus known to both parties, the damages resulting from the breach of such a contract which they would reasonably contemplate, would be the amount of injury which would ordinarily follow from a breach of contract under these special circumstances so known and com. municated. But, on the other hand, if those special circumstances were wholly unknown to the party breaking the contract, he, at the most, could only be supposed to have had in his contemplation the amount of injury which would arise generally, and in the great multitude of cases, not affected by any special circumstances, for such a breach of contract. For had the special circumstances been known, the parties might have expressly provided for the breach of contract by special terms as to the damage in that case, and of this advantage it would be very unjust to deprive them. The above principles are those by which we think the jury ought to be guided in estimating the damages arising out of any breach of contract."

The rule laid down in Hadley v. Baxendale was again acted upon in a very recent case. The defendant had contracted to build a ship, which was to be delivered to the plaintiff on the 1st of August, 1854. It was not delivered till March, 1855. The vessel was intended by the plaintiffs,-and from the nature of her fittings the defendants must have known the fact, for a passenger ship in the Australian trade. Evidence was given that freights to Australia were very high in July, August, and September, but fell in October, and continued low till May, when the vessel sailed; and that had she been delivered on the day named, she could have earned £2,750 more than she did. On the other hand, it was shown that the plaintiffs would have extended the time for delivery till the first of October, if the defendants would have bound themselves to that day under a demurrage (which, however, was refused), and that they had stated as their reason for wishing to have the ship then, "that after that time the days would be shortening so fast that they would be seriously inconvenienced and prejudiced in fitting the vessel out." The judge charged in the words of Hadley v. Baxendale, and the jury found a verdict of £2,750. An attempt was made to set aside the verdict for excess of damages, on the ground that if the plaintiffs' offer had been complied with the loss of freight would have been suffered, and that the damages should be measured rather by the

E

species of loss which they had themselves pointed out, than by that which they afterwards set up. The rule was refused. (y) We turn now to other cases connected with our subject.

The general principle, in regard to remoteness of damage, has been applied in Massachusetts to a case of surety. The defendant had executed an instrument by which he promised to hold the plaintiff harmless against any loss he might sustain by signing a certain bond for duties at the Passamaquoddy custom-house. The plaintiff showed, that in 1814 the British captured [77] Eastport, got possession of the custom-house and bond in question; that they issued a writ against the plaintiff as obligor, that the plaintiff was obliged to fly to avoid arrest, and that his business was greatly injured thereby. But it was held that he could claim no remuneration for any such injury, and Parker, C. J., delivering the opinion of the Court, said,—

"The common construction of such a contract is, that if the surety is obliged to pay the bond by suit, or otherwise, the principal shall pay him the sum he has been obliged to advance, together with all such reasonable expenses as he -may have been obliged to incur, and which may be considered as the necessary consequence of the neglect of the principal to discharge his own, debt. But extraordinary expenses which might have been avoided by payment of the money, or remote or unexpected consequences, are never considered as coming within the contract. Thus, if a surety, by reason of being obliged to pay money for his principal, becomes embarrassed in business, and is finally obliged to abandon it, it is not expected that the principal will be held to indemnify him for this consequential misfortune. It is not the natural and necessary effect of his becoming a surety, but is occasioned by his undertaking to do what he was not in a condition to perform. So, flight to avoid payment of his debt is an accident wholly unforeseen, and its consequences cannot be considered as provided for." (2)

So in New York, the plaintiff sued the defendant on a contract, by which the defendant, in consideration of $5 paid him, agreed to take a note executed by the plaintiff and a surety, payable the first of May, and to forbear prosecution of the note for nine months; and it was alleged that the defendant did not forbear, but sued on the note, by which the plaintiff lost $500. The plaintiff offered to prove, to enhance the damages, that when he was sued he was engaged in his harvest, and that for the purpose

(y) Fletcher v. Tayleur, 19 C. B. 21.
(z) Hayden v. Cabot, 17 Mass., 169.

See, also, Bishop v. Williamson, 2 Fairfield, 504.

of raising money to satisfy the demand he was obliged to quit his work and thresh his grain, and that he was put to great trouble in raising the money. But on certiorari to the Supreme Court, Woodworth, J., said, "It appears to me that this could not form a ground of damages, although the plaintiff might have suffered inconvenience and loss by the failure to fulfill the contract. Such remote consequences cannot be taken into consideration in esti

mating the damages;" which was qualified by this remark, [78] "Besides, there does not appear any necessity that the

plaintiff, at the moment the writ was served, should quit his harvest and make sacrifices to raise the money." (a)

So, again, where, in a lease of a dairy farm for five years, the lessor agreed to put the barns on the premises in a good state of repair, but neglected to do so; it was held that the lessee could recover the amount it would cost to put the barns in repair, but not the damage sustained by injuries to the cows and young cattle, the increase of food and the decrease of produce resulting from the state of the barns; these damages being altogether too remote and contingent." (b)

In a case in New York, where the plaintiff sued the defendant for the breach of an implied warranty in the sale of a horse which had been recovered from him at the suit of a third partyit was held by the Supreme Court that the measure of damages was the price paid by the purchaser, with interest, and the costs recovered against him; and that the costs incurred by him in the defense of the action brought by the real owner were not allowable. (c)

So, again, where the defendant sold the plaintiff certain cloths for the Mexican market, accompanied by an invoice specifying the contents of the bales, and warranted correct, but in which the number of yards was much over-stated-the goods, on being forwarded to Mexico by the plaintiff, were entered at the customhouse before the mistake in the invoice was discovered, and the duties paid upon the erroneous amount; the parties settled the difference between them amicably, so far as the price of the goods was concerned, and the action was brought to recover the excess of Mexican duties paid by the plaintiff, together with certain commissions in New York, in consequence of the erroneous valu

(a) Deyo v. Waggoner, 19 J. R., 241. (b) Dorwin v. Potter, 5 Denio, 306.

(c) Armstrong v. Percy, 5 Wend., 535.

ation made by the defendants in their invoice. But the suit was successfully resisted, and the claim disallowed. (d)

In a recent case in England, where a prize had been offered for the best plan and model of a machine, and plans [79] and models were to be sent by a certain day, the plaintiff sent a plan and model accordingly, by a railway; but through the negligence of their agents, it did not arrive at its destination till after the time appointed; it was considered that the proper measure of damages was the value of the labor and materials expended on the plan and model, and that the chance of obtaining the prize was too remote to be estimated. (e)

We turn now to actions of tort. In regard to cases of deliberate or malicious wrong, we have already seen that the law applies very liberal relief. And in cases of reckless or mischievous acts injurious to others, even where exemplary damages are not claimed, the party in the wrong is often made answerable for consequences very remote from the original act. So in the famous squib case, the first thrower of the combustible was held responsible, though it had passed through the hands of two other parties. (f) So where the defendant foolishly went up in a balloon, which descended into the plaintiff's garden, and attracted a crowd, who trod down the plaintiff's vegetables and flowers, the original wrong-doer was held answerable for the injury done by the crowd as well as by himself. (g) So where the defendant having quarreled with a boy, pursued him with a pickax, and followed him into the plaintiff's store, where, in his effort at flight, he committed unintentional damage, the defendant was held responsible for the injury thus done. (h)

So in an action of trespass in Massachusetts, for breaking down and destroying part of a mill-dam, damages were assessed for the cost of repairing the dam, and also for interruption to the use of the mill, or diminution of profits occasioned by the water flowing through the break in the dam, and by that means falling too low for the working of the

(d) Hargous v. Abon et. al., 5 Hill, 473. See this case again, 3 Denio, 406. There is a number of analogous cases governed by the maxim Non remota sed proxima causa spectatur. Broom's Legal Maxims, P. 105.

(e) Watson v. Ambergate N. & B. Railway, 15 Jur., 448.

(f) Scott v. Shepherd, 2 W. Black, 892.

mill; it was objected that

(g) Guille v. Swan, 19 J. R., 381. () Vandenburgh v. Truax, 4 Denio, 464. But the defendant, liable in an action of false imprisonment for an unfounded arrest, is not responsible for further damages resulting from the plaintiff's remand by a magistrate; that being a judicial act. Lock v. Ashton, 12 Q. B. R., 871.

[80] damages for the latter cause could not be recovered in this action; but the Supreme Court said, "The interruption to the use of the mill and the diminution of the plaintiffs' profits on that account, were alleged in the declaration and proved at the trial; and we think this was right. The plaintiffs are entitled to recover for all the damages they suffered by reason of the trespass." (2) (1)

And in a case at nisi prius, () Lord Kenyon held that an action lay for firing on negroes on the coast of Africa, and thereby deterring them from trading with the plaintiff, so that the plaintiff lost their trade. (k) "I do not think," says an eminent English judge, in a recent case, "that the jury is bound to weigh in golden scales how much injury a party has sustained by a trespass." ()

So where the defendant's servant had left his horse and cart in the public street, where children might be playing. The plaintiff, who was a child between six and seven years of age,

(i) White v. Mosely, 8 Pick., 356.

(j) Tarleton v. McGawley, Peake, N. P. Cases, 205.

(k) The case appears to come under the head of profits; whatever was lost must have been the profits of the trade. I may here remark that the doctrine of the denial of profits that might have been made in a business, was again affirmed in Giles v. O'Toole, 4 Barb. S. C. R., 261; while admitting that the plain

tiff was entitled to the value of a bargain actually made. It was an action by lessee of a store against lessor, for a refusal to give possession of the demised property. The plaintiff was allowed his expenses in preparing to remove, but not the profits which he might have made in business on the premises.

(1) Gillard v. Brittan, 8 Mees. & Wels., 575.

(1) In an action of trespass on the case, diminution of the value of the property for purposes of renting, and the hindrance to plaintiff's servants in performing their labor, and damage resulting from water passing through a hole in the roof, caused by an explosion from a neighboring quarry, are consequential damages, and as such are recoverable. Scott v. Bay, 3 Md., 431.

Where a municipal corporation had rendered themselves liable to the plaintiff for damages for injuries to his manufactory, occasioned by excavations in street improvements, made under direction of the corporation, held that the plaintiff was entitled to a compensation for the loss of profits during the suspension of his business as a manufacturer, it being proved that the suspension was a necessary consequence of the injuries to his property, for which the defendants were liable, and that the profits claimed would certainly have been realized. Lacour v. The Mayor, &c. of New York, 2 Duer (N. Y.), 406. And where the plaintiff's toll-bridge was carried away, through the fault of the defendants, it was held that the damages recoverable would be the value of the superstructure destroyed, and the loss of the tolls during the time reasonably necessary to rebuild. Sewall's Falls Bridge v. Fisk, 3 Fost. (N. H.), 171.