for such breaches of contract has been clearly defined. The rule fixed is as follows: (1) A party is liable for such damages as he would contemplate at the time of making the contract as naturally and probably consequent upon its breach. (2) If peculiar circumstances beyond the ordinary course of events, from which special damages may ensue, are communicated to the party when the contract is made, he is liable to the full extent thereof. It is, however, true that he cannot be held for special damages arising from any unusual circumstances of which he was not apprised. All such remote, speculative, or consequential damages are not recoverable. The doctrine is discussed by this court, in Taylor Manufacturing Company v. Hatcher Manufacturing Company (C. C.) 39 Fed. 440, 3 L. R. A. 587. The plaintiff here, however, disclaims all right to recover profits.

It has been held that where a telegraph company fails to deliver a message ordering goods the measure of damages is the difference between the price due under the order, and that which the plaintiff was, or would be, obliged to pay at the same place, in the exercise of due diligence, to obtain a like quantity and quality. Dodd Grocery Co. v. Postal Telegraph Co., 112 Ga. 685, 37 S. E. 981; Western Union Telegraph Co. v. Way, 83 Ala. 542, 4 South. 844; Mowry v. Western Union Telegraph Co., 51 Hun, 126, 4 N. Y. Supp. 666. In case of failure to sell, by the early English authorities, it was held that a party could recover as nominal damages only the amount of purchase money actually paid for the land. This restricted rule was varied only in case of palpable bad faith, where the owner sold the property to another, in which event the injured party might recover the difference between the original contract price, and that which the owner received for the property. This doctrine grew out of the unsettled condition of land titles in England prior to the registration acts. The vendor, on account of those conditions, often found it difficult to produce title deeds, and the vendee could not enforce a contract to sell. The English courts, therefore, often favored refractory vendors, and, upon a misconcption of these decisions, some courts of this country have allowed a vendee to recover only the amount of money actually paid. Under modern conditions, however, American courts have gradually recognized this rule as obsolete. It has been accordingly held that, where a telegraph company fails to deliver a message, and a party thereby lost the opportunity to purchase for $3,000 land which was worth $5,000, he might recover the difference; such damages not being remote or conjectural. Alexander v. Western Union Telegraph Co., 67 Miss. 386, 7 South. 280. See, also, Western Union Telegraph Co. v. Snow, 72 S. W. 250, 31 Tex. Civ. App. 275. The general rule, then, which the majority of courts now hold, seems to be that the proper measure of damages is the difference between the contract price and the market and actual value of the property at the time of the proposed delivery or execution of the contract. Essex Co. v. Pacific Mills, 14 Allen (Mass.) 389; Bozeman v. Rose, 40 Ala. 212; Phillips v. Ocmulgee Mills, 55 Ga. 633.

1

Under the allegations of the petition, the property was to be delivered when the Pineville Company had finished their year's business. In order, however, that it may meet, if it can, the averments and proof

of the plaintiff as to the market and actual value, it would seem in accordance with the rules of correct pleading that the telegraph company should be more definitely apprised of the time when possession and delivery were to be accomplished; that is to say, the time when the year's business was to be finished. An amendment will be required as to this feature; but upon the other grounds urged and argued, the demurrer will be overruled.

While interposing a demurrer, the defendant also, in a paragraph of its answer, alleged that the telegram in question was not repeated as required by a stipulation of the form on which it was printed. To this the plaintiff specially demurs. Upon this subject, in a case of error in transmitting a message, it has been held, in Primrose v. Western Union Telegraph Co., 154 U. S. 1, 14 Sup. Ct. 1098, 38 L. Ed. 883, that this requirement of repeating was reasonable, and should be enforced. That, however, was not a case of an utter failure to deliver a message. Here two messages were sent from Savannah-one to Sparks, and the other to Cecil. The telegraph company forwarded the message to Ocilla. It could scarcely be insisted that the plaintiff should not recover, because he did not repeat the message to a locality wholly different from that designed. The object of repetition is to make sure the verbiage of the message itself. The rule in Georgia, and in most of the states, differs upon the point in issue from that held by the Supreme Court, which we may safely assume was restricted to interstate messages alone. This message was intrastate; that is, from one point to another or others in Georgia. We think, however, that this is one of those questions of general commercial law, upon which the national courts make their independent judgment. It being not a failure to correctly transmit the message, but a failure to send it to the right destination, it does not seem that the failure on the part of the sender to repeat ought to defeat its right to recover. Besides, since two messages in identical terms were sent by the Purdom Company to Sparks and to Cecil-these localities in close proximity to each other-in either of which the vendor could be found, it is in substantial effect a repetition of the telegram.

For these reasons, this feature of the defendant's answer should be stricken, and it will be so ordered.

SHUMAKER v. SECURITY LIFE & ANNUITY CO. OF AMERICA. (Circuit Court, E. D. Pennsylvania. May 10, 1907.)

No. 48.

INSURANCE CONSTRUCTION OF LIFE POLICY-NONFORFEITURE PROVISION. A policy of life insurance provided that on request of the insured the company would advance to him 30 per cent. of each premium, which should be a lien on the policy, also that, in case any premium was not paid when due, the same should be charged against the policy as a loan and the policy continued in force, if its loan value should be sufficient as shown by a table of values given therein, but that "these values shall be claimable only in case the full premiums have been paid in cash and there are no loans on the policy." Held that, where the insured obtained the 30 per cent. advance on the payment of each premium, on his subsequent de

fault he was not entitled to the benefit of the automatic nonforfeiture provision.

At Law. On rule for judgment for want of a sufficient affidavit of defense.

This was an action on a policy of life insurance which contained, among others, the following provisions:

"(7) Special Provision.

"It is hereby agreed: First, that the company shall, if requested by the insured, advance for the insured thirty per cent. of each premium paid hereunder during the dividend period which shall be a lien against this policy, accumulating at three and one-half per cent. interest, compounded annually, until paid by the application of cash dividends or otherwise; and, second, that in the event of the death of the insured during the dividend period and while this policy is in force, a mortuary dividend equal to thirty per cent. of all premiums heretofore due hereon, accumulated at three and one-half per cent. interest compounded annually, shall be paid with the principal sum insured bereunder.

"(8) Right to Cash Loan.

"At any time after this policy has been in force for one full year and premiums have been paid up to the anniversary of the insurance next after the date when the loan is made, the company will lend upon demand, on the sole security of this policy the respective sum named in the table of cash loans here. in, which shall include any previous loan then unpaid. Interest shall be at five per cent. per annum in advance.

"(9) Right to Automatic Nonforfeiture.

"If any premium shall not be paid when due, the same shall be charged against the policy as a loan, if the respective loan value be sufficient to enable such advance, after providing for the existing loans and accrued interest; provided, that if not sufficient to cover the entire premium due, à premium for a shorter period, but no less than a monthly premium shall be charged, if the available loan value is sufficient. Notice of such advance shall be mailed to the insured, and at any time while this policy is sustained in force, the payment of premiums may be resumed.

"(10) Right to Surrender Values.

"If this policy is surrendered at the end of any policy year after renewal, the insured shall be entitled to a paid-up non-participating policy, either (1) for a fractional amount of insurance, for the whole life of the insured, as per the table of paid-up insurance values below, or (2) for the full amount of insurance hereunder, but for a limited term as per the table of periods of exteaded insurance herein. These values shall be claimable only in case the full premiums have been paid in cash and there are no loans upon the policy. In event there are loans, the values claimable shall be computed upon the same basis as an equivalent to the unincumbered equity of the insured.

"(11) Table of Cash Loans and Paid-Up and Extended Insurance.

The supplemental affidavit of defense filed by defendant was as follows:

"Henry C. Brown, being duly sworn according to law, says: (1) That he Is the secretary of the Security Life & Annuity Company of America, the de

fendant in the above-entitled action, and, as such, is familiar with the affairs of the said company. (2) That the said company, as set forth in the plaintiff's statement of claim, issued on October 12, 1903, a policy of life insurance apon the life of Alvin P. Shumaker in the sum of fifteen thousand (15,000) dollars, a copy of which is hereto annexed marked 'A' and made part hereof, being No. 2763; that by the terms of the said contract of life insurance the said Alvin P. Shumaker agreed to pay the premium named in the said contract annually on, or within 30 days after, October 8th of each year, and did pay the said premium on October 8, 1903, part in cash and part by credit as hereinafter described, and October 8, 1904, part in cash and part by credit as hereinafter described; but that neither the said Alvin P. Shumaker nor any one for him or on his account did or ever has paid the premium, or any part thereof, due October 8, 1905, or within thirty days thereafter; but the said Alvin P. Shumaker did not pay the full premiums in cash on October 8, 1903, and October 8, 1904, when they were due, but, on the contrary, availed himself of paragraph 9 of his application for the policy which is made a part thereof, providing that while the annual premium was to be $542.70, payable in advance, yet that the policy was issued 'on the advance dividend plan under which the company agrees to advance' to him against the policy contract 30 per cent. of each premium during the advance dividend period of twenty years. The affiant avers that the said Alvin P. Shumaker availed himself of this clause in his application made part of his policy by paying on October 8, 1903, the sum of $379.95 in cash, receiving credit for the balance of his premium then due on the advance dividend plan, namely, for the sum of $162.75, and the aífiant further avers that the same payment was made and no other on account of the premium due October 8, 1904, so that from the outset down to the present time the said Alvin P. Shumaker never paid the full premium in cash and accordingly the policy under its terms never had any surrender value. (3) That the said Alvin P. Shumaker died on December 12, 1905, without ever having paid and without any one ever having paid for or on his account the said premium, or any part thereof due October 8, 1905, or within 30 days thereafter. (4) That under paragraphs 9, 10, and 11 of the 'Privileges and Conditions,' which were a part of the said policy, the policy did not have any cash loan value unless or until the third annual premium, due at the end of the second year of the life of the policy, had been paid in cash, and that this third annual premium, due October 8, 1905, or within 30 days thereafter, was not paid as required by the terms of the policy either by the assured or any one for him prior to his death on December 12, 1905, and that the said payment never was made. Furthermore, under the said paragraph 10 the assured was not at the time of his death entitled to a paid-up nonparticipating policy for any amount because the assured was in default on his third premium as hereinbefore stated, and under the table of cash loans and paid-up and extended insurance in said paragraph 11 the policy until after the end of the second year had no cash loan or paid-up and extended insurance value, the premiums due not having been paid when due in cash, but having been paid only part cash as hereinbefore set forth, nor was the said policy surrendered under the said paragraph 10. (5) That under the terms of the said contract or policy of life insurance as hereto annexed, the said policy had lapsed by reason of the breach and nonfulfillment thereof by the said Alvin P. Shumaker above described so that at the time of his death on December 12, 1905, and never since has the said policy been a valid outstanding contract of life insurance for any sum."

Mason & Edmonds, for plaintiff.

Sydney Young, Theodore W. Reath, and Jos. I. Doran, for defendant.

BUFFINGTON, Circuit Judge. After argument and due consideration, we are of opinion the affidavits of defense disclose a good defense. The premium due at the expiration of the second year, viz., October 12, 1905, was not paid and the two prior premiums were not

paid in cash. Therefore, by the terms of the policy, no right to a cash loan on the policy or to an automatic nonforfeiture of the policy existed when the insured defaulted on the premium due October 12, 1905.

The rule for judgment is therefore discharged.

In re ROSENBLATT et al.

(District Court, E. D. Pennsylvania. April 22, 1907.)

No. 2,420.

1. BANKRUPTCY-COMPROMISE OF CRIMINAL PROSECUTION-APPROVAL. A court of bankruptcy will not encourage or approve an agreement be tween the trustee and creditors of the bankrupts not to furnish any evidence against the bankrupts in any criminal prosecution, and not to institute such prosecution in consideration of certain transfers of property to the trustee and an increase in the assets by a fund raised by the friends and relatives of the bankrupts for their benefit. 2. SAME DISPOSITION.

Where a court of bankruptcy refused to approve an agreement between bankrupts and their trustee and certain creditors, because it involved a compromise on the question of a criminal prosecution against such bankrupts in consideration of a payment of certain funds to the trustee by third persons, the court would not interfere with or control the disposition of the amount so paid among the creditors.

In Bankruptcy.

W. Horace Hepburn, for receiver.
Furth & Singer, for bankrupt.

Samuel Dickson, Arthur G. Dickson, and James McMullan, for Fourth Street Nat. Bank.

HOLLAND, District Judge. In this case the bankrupts were threatened with criminal prosecution. There were a number of claims held by relatives of the bankrupts which were disputed, and it was alleged that a number of payments and transfers of property within four months of the time of filing the petition in bankruptcy were preferential and recoverable by the trustee. The assets of the estate were appraised at $22,700. This was a very small percentage of the total liabilities, which amounted to the sum of $237,500. The trustee and creditors, anxious to increase the assets of the estate with the least possible cost and delay, and the bankrupts, equally solicitous to secure immunity against prosecution, entered into an agreement with others, bearing date the 9th day of March, 1906, by which it is stipulated that certain transfers of property shall be returned to the trustee, and, in addition, a sum in cash should be raised by the friends and relations of the bankrupts, to be paid to the trustee, and certain claims over which the bankrupts had some control should be withdrawn from the estate, in consideration of which the trustee stipulated not to furnish any evidence against the bankrupts in any criminal prosecution, and other parties agreed not to institute such prosecutions.

The primary object of the trustee in entering into this contract was,