Page:Encyclopædia Britannica, Ninth Edition, v. 6.djvu/824

Rh 788 DAMAGES Farren (0 Bingham, 141), a contract between a manager and an actor provided that for a breach of any of the stipulations therein the sum of 1000 should be payable by the defaulter, not as a penalty, but as liquidated and ascertained damages. Yet even here, the court observing that under the stipulations of the contract the sum of 1000, if it were taken to be liquidated damages, might become payable for mere non-payment of a trifling sum, held that it was not fixed as damages, but as a penalty only. On the other hand, when the damage caused by a breach of contract is of its own nature uncertain, and the parties have positively fixed a sum as liquidated damages, that sum will be the proper damages. Where no such arrangement is made, the general rule for the assessment of damages is that the aggrieved party is to be placed in the same position, so far as money can do it, as if the contract had been performed. Thus, in a contract for the sale of goods when the vendor makes default in delivery, the proper measure of damages is the difference between the contract price and the market price of the goods on the day when they ought to have been delivered ; so that if the price has not risen in the interval, the vendor can only get nominal damages. If he has in the meantime resold the goods to a sub-vendor, he cannot claim against his own vendor any damages which the sub-vendor may recover against him for breach of contract, because he ought to have gone into the market and purchased other goods. Again, if a buyer refuses to accept the goods when tendered to him, the measure of damages will be the difference between the contract price and the market price at the time of his refusal, if the latter is lower than the former. But in such cases the trouble and expense of finding a new purchaser or other goods may be taken account of in asses sing the damages. It has been held that in a breach of contract to replace stock lent, the measure of damages will be the price of the stock on the day when it ought to have been delivered or on the day of trial, at the plaintiff s option. Where goods inferior in quality to those contracted for are delivered, the difference between the value at the time of delivery of the goods contracted for and the value of those actually delivered will be the proper damages. The con trolling principle, in fact, is that compensation should be determined by the amount of the actual loss. In an American case, where a person had agreed with a boarding- house keeper for a year, and quitted the house within the time, it was held that the measure of damages was not the price stipulated to be paid, but only the loss caused by the breach of contract. In contracts to marry, a special class of considerations is recognized, and the jury in assessing damages will take notice of the conduct of the parties. The social position and means of the defendant may be given in evidence to show what the plaintiff has lost by the breach of contract. It is not every loss caused by the act or default complained of which can be taken in estimating the proper amount of damages. The remoteness of the consequences is a bar to their being recognized in the assessment, and it is a question of no little difficulty what damages are and what are not excluded for remoteness. The leading English case on this point is Hadley v. Baxendale (9 Exch., 341), in which damages were sought for the loss of profits caused by a steam mill being kept idle, on account of the delay of the defendants in sending a new shaft which they had con tracted to make. The court held the damage to be too remote, and stated the true rule to be that &quot;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 either such as may fairly and substantially be considered as arising naturally, i.e., according to the usual course of things, from such breach of con tract itself, or such as may reasonably be supposed to have leen in contemplation of both parties at the time they made the contract, as the probable result of the breach of it. &quot; So also in cases of trust, the general rule is that the damages must be restricted to the &quot; legal and natural con sequences of the wrongful act imputed to the defendant.&quot; In an action by the proprietor of a theatre, it was alleged that the defendant had written a libel on one of the plaintiff s singers, whereby she was deterred from appearing on the stage, and the plaintiff lost his profits ; such loss was held to be too remote to be the ground of an action for damages. The line of remoteness cannot probably be drawn with much greater precision than in the rule in Hadley v. Baxendale quoted above, vague and ambiguous as the language may seem to be. A subsequent case shows the limitations of the rule on the other side. In Smeadf. Foord (1 Ellis and Ellis, 602), the defendant con tracted to deliver a thrashing-machine to the plaintiff, a farmer, knowing that it was needed to thrash the wheat in the field. Damages were sought for injury done to the wheat by rain in consequence of the machine not having been delivered in time, and also for a fall in the market before the grain could be got ready. It was held that the first claim was good, as the injury might have been anticipated, but that the second was bad. When, through the negli gence of a railway company in delivering bales of cotton, the plaintiffs, having no cotton to work with, were obliged to keep their workmen unemployed, it was held that the wages paid and the profits lost were too remote for damages. On the other hand, the defendant having failed to keep funds on hand to meet the drafts of the plaintiff, so that a draft was returned dishonoured, and his business in con sequence was for a time suspended and injured, the plaintiff was held entitled to recover damage for such loss. The great difficulty of framing a rule which shall meet all cases is acknowledged by judges and legal writers. One judge declared that no rule could be made in the matter. Another declared that the rule in the majority of cases could have no application, because parties never con template the consequences of a breach of contract. The cases probably do not go beyond this, that, when from facts known to everybody, or from special facts proved to bo known to the defendant, he ought to have anticipated the consequences of the breach of contract, he will be liable for them. The rule that the contract furnishes the measure of the damages does not prevail in the case of unconscionable, i.e., unreasonable, absurd, or impossible contracts. The old school-book juggle in geometrical progression has more than once been before the courts as the ground of an action. Thus, when a man agreed to pay for a horse a barley-corn per nail, doubling it every nail, and the amount calculated as 32 nails was 500 quarters of barley, the judge directed the jury to disregard the contract, and give as damages the value of the horse. And when a defendant had agreed for 5 to give the plaintiff two grains of rye on Monday, four on the next Monday, 1 and so on doubling it every Monday, it was contended that the contract was impossible, as all the rye in the world would not suffice for it ; but one of the judges said that, though foolish, it would hold in law, and the defendant ought to pay some thing for his folly. And when a man had promised 1000 to the plaintiff if he should find his owl, the jury were directed to mitigate the damages. Interest is recoverable as damages only when an agree ment that it should be paid can be proved or inferred (as in the case of bills of exchange), and under the statute 3 and 4 Will. IV. c. 42. 1 Qiiolibet alio die hence, which was translated by some every Monday, and by others every other Monday. The amount in the latte.r case would have been 125 quarters, iu the former 524,288,000 quarters.