Deming v. Grand Trunk Railway Company.

this testimony we think it was competent for the jury to find that by the breach of the defendants' agreement the plaintiffs lost the sale to the Atlantic Delaine company, and were obliged to sell the wool for a diminished price.

The inquiry, then, is whether for this loss the defendants may e charged. This subject has of late been much discussed on both sides of the Atlantic. The leading English case is Hadley v. Baxendale, 9 Exch. 341, where ALDERSON, B., after great consideration, lays it down as a general rule that "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, that is, 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 the probable result of the breach of it."

The action here was against the defendants as common carriers for not delivering seasonably a broken iron shaft sent to the manufacturers as a pattern for another for plaintiffs' mill, and it was held that the plaintiffs were not entitled to damages for the loss of profits while their mill was stopped in consequence of defendants' delay; notwithstanding the plaintiffs' agent told the defendants clerk when the shaft was sent to them that the mill was stopped, and the shaft must be sent immediately, and the clerk replied that it would reach its destination the next day. The opinion of the court was, that this was not notice of such special circumstances as would lead the defendants to contemplate such loss of profits as a natural consequence of a delay in forwarding the shaft, inasmuch as, for aught that was said to defendants, the plaintiffs might have had another shaft; or there might have been other defects in the machinery that would have stopped the mill. The verdict which included such profits was therefore set aside. The court, however, held that if the special circumstances under which the contract was actually made were communicated by the plaintiffs to the defendants, 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 communicated.

Deming v. Grand Trunk Railway Company.

The general doctrine of this case, which was decided in 1854, has been recognized and followed in both the English and American courts, and is regarded as a leading case. Sedg. on Dam. (4th ed)., 81 to 84, notes and cases, and also p. 406, 409. See, espe cially, cases collected on p. 81. Copper Company v. Copper Mining Company, 33 Vt. 92.

In Griffen v. Colver, 16 N. Y. 489, 494, the subject was carefully considered and the opinion given by SELDEN, J., who laid it down that the broad, general rule in such cases is that the party injured is entitled to recover all his damages, including gains prevented as well as losses sustained; and this rule is subject to but two conditions: "The damages must be such as may fairly be supposed to have entered into the contemplation of the parties when they made the contract, that is, must be such as might naturally be expected to follow its violation; and they must be certain both in their nature and in respect to the cause from which they proceed."

In 2 Kent's Commentaries, 480, in note, it is laid down that "damages for breaches of contract are only those which are incidental to, and directly caused by, the breach, and may reasonably be supposed to have entered into the contemplation of the parties, and not speculative profits or accidental losses, or the loss of a fancied good bargain."

In Blanchard v. Ely, 21 Wend. 342, the court recognizes the doctrine laid down in Evans' Pothier (London ed.), 1806, in these words: "In general the parties are deemed to have contemplated only damages and interest, which the creditor might suffer from the non-performance of the obligation in respect to the particular thing which is the object of it, and not such as may have been accidentally occasioned thereby in respect to his other affairs;" and the court quotes the illustrations of Pothier, that, in the case of the failure of title to land demised, the lessor would not be liable for the loss of custorn in a business established by the lessee while residing there, although he would be bound to pay the lessee the expense of removal; but that a party may incur liability for intrinsic damages if it appear that they were stipulated for, or tacitly submitted to, in the contract, as if a party stipulate to deliver a horse in such time that a certain advantage may be gained by reaching a certain place, when for a default the party shall pay for the loss of such advantage; and as an instance of a tacit submission, the case of demising premises expressly for use as an inn is put, and there it is

Deming v. Grand Trunk Railway Company.

said, that if the tenant is evicted for want of title the loss of custom may be taken into account.

These illustrations furnished by this eminent writer accord substantially with the rule laid down in Hadley v. Baxendale, and the provision of the French code, as stated by Sedgwick in his work on damages, p. 67, is also in accordance with that rule. The substance of it is that the "debtor is only liable for the damages foreseen, or which might have been foreseen, from the breach of the contract." And PARKE, B., in Hadley v. Baxendale, said that was the sensible rule.

It now must be considered as settled both in the English and American courts, that for the breach of a contract to transport goods, the consignee may recover damages for the depreciation of the goods in market during the delay; that is, the difference between the market price when and where they should have been delivered, and when they were actually delivered. Sedg. on Dam. 75, 78, and 356, 360, and cases; 2 Redf. on Rail. 166; Griffen v. Colver, 16 N. Y. 491. And it is obvious that this is in the nature of general damages, as in contracts for the sale of goods, and need not be set out specially in the declaration. See Collard v. Southeastern Railway Company, 7 H. & N. 79, cited in Sedg. on Dam. 407, in notes; and see Stevens v. Lyford, 7 N. H. 366. The question, then, is whether the consignee may also recover damages for the loss of a sale which he had previously contracted for, and which he communicated to the carrier, when that loss was caused by a breach of the carrier's contract. The authorities very generally agree that the plaintiff can include in his damages only such as are the direct, immediate and natural consequences of the breach of contract; uch as flow directly and naturally from such breach, and are not remote, speculative or contingent.

There is difficulty in determining, sometimes, what are, and what are not, the direct, immediate and natural results of the breach complained of. But we think that the decisions which allow, as damages, the difference between the market price of the goods at the time and place when and where they should have been delivered, and the market price when they were in fact delivered, must govern this case.

There it is assumed that if the goods had been delivered to the consignee, according to the contract, they would have been worth to him as much as the then market value, because he could have sold them at that price; and, of course, it is assumed that the injury VOL. II.--35

Deming v. Grand Trunk Railway Company.

is the direct, immediate and natural result of the carrier's breach of contract. Such an injury must have been foreseen, and in the contemplation of the parties when the contract was made. It would be so equally in the case of a previous sale of the goods, which was communicated to the carrier when he received them, and when the contract was entered into for the express purpose of enabling the seller to complete the sale.

In such a case the loss would be the difference between the price at which the goods were bargained, and the price the consignee was enabled to sell them for in market, and the loss would be the direct, immediate and natural result of the carrier's breach of contract as in the other case.

In the one case the difference in the market price is the measure of damages, because it is assumed that the consignee could certainly have sold them at the market price, had the goods been delivered in due time. In the other case the sale was already made and the price fixed, and had the goods been delivered in due time the consignee would have received that price for them as surely as in the other case he would have obtained the market price; and even more surely, because he might not have chosen then to sell.

The damages for the loss of a sale would fall under the denomination of special damages; and, without notice of the fact of such sale, it could not be understood that such a loss would have been foreseen or contemplated by the parties. It is proper that the carrier should understand the extent of the responsibility he assumes, and the consequence of a failure on his part; and if no special circumstances are communicated to him he ought to be held responsible only for the consequences which might ordinarily be supposed to flow from his breach of contract.

In this case the plaintiff's evidence tended to prove that he informed the defendants' agent that he had a lot of wool that was sold if it could go immediately to Boston, and that if it could not go at once that way he should send it by another railroad; and that the agent told him to send it the next morning, and it should go by the next freight train. Under the circumstances the jury might have found that the contract was entered into for the express purpose of enabling the plaintiffs to complete their contract of sale, and we think the defendants ought to be charged with the loss occasioned by the breach of their contract. Griffen v. Colver, 16 N

Y. 493.

Deming v. Grand Trunk Railway Company.

In the cases of sales with warranty, or contracts to sell and deliver goods, it is often held that the vendee cannot recover damages for the loss of a contract of resale, arising from the breach of warranty or the failure to deliver the goods. Clare v. Maynard, 6 A. & E. 519; Masterton v. Mayor of Brooklyn, 7 Hill, 68, and cases cited.

In these cases, however, it does not appear that the contracts were made with any reference to a resale, and therefore they could not come within the principle we have been considering. But a very different case is presented where the contract is entered into for the express purpose of enabling one party to complete a sale, or to obtain some other advantage, and it is so understood by both parties. In this respect the illustrations given by Pothier, before referred to, are in point. In such cases the special damages are deemed to be within the contemplation of the parties.

In the recent English case of Berries v. Hutchinson, 18 C. B. (N. S.) 445, which was a contract to sell and deliver to the plaintiff a quantity of caustic soda, which was designed for sale in Russia, and the defendant knew it was designed for a foreign market, and before the time of delivery he knew it was to be sold in Russia, it was held that defendant was liable for the loss of the profits on the resale in Russia caused by defendant's failure to deliver the goods accord ing to his contract, and to the additional cost of freight.

So where defendant had agreed to deliver to a farmer a threshing machine at a time fixed, knowing it was to be used to thresh wheat in the field, and by his failure to deliver it the wheat was injured by the rain, it was held that defendant was liable for the injury, since the parties might well have anticipated such injury to result from the breach of the contract. Smeed v. Foord, 1 Ellis & Ellis, 602, cited in Sedg. on Dam. 81, in note; see also cases collected in Sedg. on Dam. (4th ed.) 333, 335; among them, Randall v. Raper, 1 Ellis, B. & Ellis, 84 (96 Eng. Com. Law, 82), where defendant sold the plaintiff some barley, warranting it to be "Chevalier seed barley," and plaintiff sold it with similar warranty upon the strength of defendant's warranty, and it proving not to be that kind of barley, it was held that defendant was liable for what plaintiff was bound to pay his vendee. See also Waters v. Towers, 8 Exch. (W. H. & G.) 401, and Woodbury v. Jones, 44 N. H. 206, and cases cited.

Upon these views we think there was no error in the instructions to the jury in respect to damages for loss of the sale to the Delaine