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tents, over fifteen and under twenty-five; sixty-six members in new tents, over twenty-five; and the total number of new members. From this statement he made up his total claim, as follows: Charter fees, forty tents, two thousand four hun. dred dollars; membership fees under clause 2 of the contract, six hundred and twenty-five dollars; membership fees under clause 3, one hundred and sixty-five dollars; per capita tax under clause 4, three hundred dollars; per capita tax under clause 5, two thousand nine hundred and fifty-six dollars and eighty-three cents.
The rule governing these cases is established by an unbroken line of authorities—that damages which are purely speculative in character, and dependent on so many contingences that they cannot be traced with reasonable certainty to the breach of the contract, are not allowable. The difficulty lies in determining whether the facts of a particular case bring it within or without this rule. There is no sounder basis for damages for breach of contracts of this character than the profits, when they can be determined with proximate and reasonable certainty. In fact, there is no other basis. Their loss is the natural and proximate result of a breach, which the law presumes that each party foresees. The rulo does not require that such data be furnished that they can be computed with mathematical exactness. When one breaks a contract which the other party has partly performed, and the violator then performs the work himself, from which he reaps the profits which the other party might have made, he cannot escape liability for damages if such other party can show the profits made while he was executing it, and the benefits received from its subsequent completion. The contract in this case was specific and definite in all respects, fixing 48 the amount of work and the price. It was contemplated that the plaintiff should make profits, and the defendant was to be benefited by his work. These results were being successfully accomplished when the contract was broken. In case of a breach by plaintiff, defendant could perform the work, and recover as damages the difference between the price agreed upon and the cost of completion. In case of a breach by defendant the profits lost constitute the legitimate measure of damages. The law is not so blind to justice as not to require the defendant to respond in damages, if there is any reasonable basis for their ascertainment. There is no presumption, legal or otherwise, that the plaintiff
could not have completed the work. The defendant was satisfied with the success of the plaintiff. It is a fair presumption that he would have succeeded. It is a fair inference from the evidence that the defendant's officers broke the contract because of this success, and the belief that they could secure the accomplishment of the work cheaper, which they in fact did. The defendant took advantage of the work which the plaintiff had done, and completed it. The defend. ant may not now say, “It is true I completed the work, but there is no certainty you could."
This is not a case where one party agrees to sell goods for another for a year, to receive as compensation his share of the profits made; but it is a case where one agrees to sell a certain amount of goods, with no limit as to time, at a given price, and for a given compensation, and also where the goods have been sold at the same price within the agreed territory, and within the time contemplated. It has been demonstrated, not only that the work could be, but that it has been, done. It is a fair inference that it could have been done as well by the plaintiff as by the defendant. One element of damage is established by the contract, and the evidence froin the 49 defendant's own books, viz., the amount agreed to be paid, and the benefits reaped by it. The only other element is the cost of doing the work, which, deducted from the amount to be paid, would establish the profits. The expense of what plaintiff did is some evidence upon which to base a judgment of the expense of doing the rest of the work. If that be the only evidence as to the cost, and plaintiff can establish by experience that it is more difficult and expensive to accomplish the first part of the work than the last part, defendant cannot complain if the jury take that as a basis to determine the cost. On the contrary, such basis would be favorable to the defendant; and, if this was the only basis, we think, under the circumstances of this case, it was sufficient to justify a submission of the case to the jury. He who breaks his contract may not deny to the injured party the fair inferences to be drawn from the part performed.
In Bagley v. Smith, 10 N. Y. 489, 61 Am. Dec. 756, one partner sued another for breach of the partnership articles, and recovered profits lost by the unauthorized dissolution. The court say: "The loss of profits is one of the common grounds, and the amount of profits lost one of the common measures, of the damages to be given upon a breach of con
tract. .... It is very true that there is great difficulty in making an accurate estimate of future profits, even with the aid of knowing the amount of the past profits. This difficulty is inherent in the nature of the inquiry. We shall not lessen it by shutting our eyes to the light which the previous transactions of the partnership throw upon it. Nor are we the more inclined to refuse to make the inquiry by reason of its difficulty, when we remember that it is the misconduct of the defendant which has rendered it necessary."
A review of the vast number of authorities upon this subject would involve a critical statement of the facts of 50 each case, and the writing of an opinion of unnecessary length. It is sufficient to say that we think this case comes within and is ruled by the following authorities: Wakeman v. Wheeler etc. Mjg. Co., 101 N. Y. 205; 54 Am. Rep. 676; Treat v. Hiles, 81 Wis. 280; Mueller v. Bethesda Mineral Spring Co., 88 Mich. 390; Oliver v. Perkins, 92 Mich. 304. The case of Wakeman v. Wheeler etc. Mfg. Co., 101 N. Y. 205, 54 Am. Rep. 676, is similar in its facts to the present case, and many of the authorities are there collated and discussed.
Judgment reversed, and new trial ordered.
DAMAGES-SPECULATIVE-RECOVERY OF.—Damages for a remote and speculative loss of profits caunot be allowed, and an award rendered on such a basis will be set aside: Muldrow v. Norris, 2 Cal. 74; 56 Am. Dec. 313, and note; Cowela Falls Mfg. Co. v. Rogers, 19 Ga. 416; 65 Am. Dec. 602, and note; Abbott v. Gatch, 13 Md. 314; 71 Am. Dec. 635. Speculative or prospective profits are not proper elements to be computed in assessing damages for a breach of contract; but profits which are the direct result and fruits of the contract may be assessed for a breach thereof: Cates v. Sparkman, 73 Tex. 619; 15 Am. St. Rep. 806, and note. See, also, the notes to Barker v. Mann, 96 Am. Dec. 378, and Adams Express Co. v. Eg. bert, 78 Am. Dec. 387.
DAMAGES. - Loss of Profits: See the extended note to Sitton v. Mac donald, 60 Am. Rep. 488, and the note to Martin v. Deetz, 41 Am. St. Rep. 163, where the cases are collected.
WEBBER V. RAMSEY.
(100 MICHIGAN, 58.) MORTGAGES—TIMBER AS PART OF Mortgage Security-LUABILITY OF
PURCHASER. — A purchaser from a mortgagor of timber standing on the mortgaged premises and forming a valuable part of the mortgaged se curity, with constructive notice of the mortgage at the time of his pur. chase, and with actual notice of its existence and of the insolvency of the mortgagor at the time he commences to cut such timber, is liable to the mortgagee for the value of the timber taken, in the event that upon foreclosure and sale of the mortgaged premises the pro
ceeds are not sufficient to satisfy the mortgage debt. MORTGAGES-RECORD OF AS NOTICE OF LIEN ON TIMBER.-A record of a
mortgage of land on which is growing timber is constructive notice to the purchaser of the timber from the mortgagor of the lieu of the morto gagee
thereon. MORTGAGES-IMPAIRING SECURITY.-A mortgagee has a right to the whole
security to meet the amount of his mortgage encumbrance, and cannot
60 LONG, J. September 16, 1885, Levi Shotwell and wife executed a mortgage to the plaintiff for seven thousand dollars, with interest at seven per cent, payable annually. The mortgage covered two hundred and fifty-four acres of land, and was recorded in the office 61 of the register of deeds on the day of its execution. The mortgage contained an interest clause providing that, should any default be made in the payment of the interest, or any part thereof, on any day when payable, and the same should remain unpaid for twenty days, the principal, with all arrearages of interest thereon, should, at the option of the holder of said mortgage, become due and payable. September 16, 1889, Shotwell made default in the payment of the annual installment of interest. October 21, 1889, defendant in this suit purchased froin Shotwell the timber on twelve acres of the mortgaged land, paying two hundred and twenty-five dollars therefor, and taking a bill of sale of said timber from Shotwell. At the time of this purchase the defendant had no actual knowledge of the plaintiff's mortgage, though it was of record, but he was informed of it before he entered upon the land, and cut and removed the timber. October 24th of that year Shotwell made a common-law assignment of all his property to Laban A. Smith, and on the final settlement of that estate it paid only one cent and forty-eight one hundredths on a dollar
of his unsecured indebtedness. October 26th defendant saw Shotwell, and ascertained that he had made such an assignment. He then called upon the assignee to get his permis. sion to cut the timber, and was advised by him that the plaintiff would be injured by the cutting of the timber. On Sunday, October 27th, defendant entered upon this twelve acres with a force of men, and commenced to cut the timber. While proceeding with this work, and on November 1st, the plaintiff exercised his option under the interest clause in his mortgage, and commenced a suit in the circuit court for the county of Ionia, in chancery, to foreclose the mortgage, and made Shotwell and his wife, the assignee, and the defendant herein defendants in that suit. An injunction was allowed by the court, restraining the defendant from cutting or removing the timber-in question, but it was afterward modified, and the defendant 62 allowed to remove the timber already cut, but restraining him from any further cutting. Subsequently, the complainant, in the foreclosure suit, by a stipulation between the solicitors and the order of the court thereon, dismissed his bill of complaint as to defendent Ramsey without prejudice, and thereupon the suit proceeded to a decree against the other defendants. The decree of foreclosure was for eight thousand one hundred and sixty-three dollars, and was dated December 22, 1890. On February 21st following, the premises were sold under said decree, and struck off to the plaintiff here for six thousand five hun. dred dollars, he being the highest bidder, and that being the highest sum offered for them. The circuit court commissioner who made the sale reported a deficiency of one thousand eight hundred and thirty-seven dollars and eightyfour cents, and the sale was duly confirmed. No execution was ever issued for the collection of this deficiency.
This action was brought by the plaintiff to recover from defendant Ramsey the value of the timber taken from the land. The cause was heard before the court without a jury, and the court made findings of fact and law, and entered judgment for plaintiff for three hundred dollars, finding that sum to be the value of the timber taken. The court found as a fact that the trees and timber standing and growing upon the mortgaged premises constituted a valuable part of the security for said mortgage indebtedness, and that the cutting of the same injured and deprived the plaintiff of bis said security to the extent of the value of said trees and tim