C. B. Coles & Sons Co. v. Standard Lumber Co.

150 N.C. 183

• Court: Supreme Court of North Carolina
• Decided: February 24, 1909
• Status: Published

Opinion

Connor, J.,

after stating the case: Tlie controversy, in regard to plaintiff’s right to recover the lumber on the yard, is dependent upon the construction of the contract and the conduct of plaintiff respecting its performance of the stipulation thereof. The evidence upon this last question was conflicting. The contract is executory, and until all of the stipulations contained in it were performed, or, at least, performance with readiness and ability tendered and refused, no title vested in plaintiff. These aspects of the case were fully explained to the jury by his Honor, followed by the instruction that if the defendant had cut, graded and set apart this lumber, and plaintiff had paid for it or stood ready to pay for it, and nothing was to be done but to take charge of it, and defendant refused to permit them to do so, they should answer the first issue in the affirmative. To this instruction plaintiff excepted.

We find no error in the instructions. They are in accordance with the principles and authorities announced in Hughes v. Knott, 138 N. C., 105. It is true that the contract, being in writing, was to be construed by the court, but the plaintiff’s right to demand the possession of the lumber was dependent upon the establishment of its compliance with the terms of the contract, and this was properly submitted to the jury. The first issue having been answered adversely to plaintiff, the second and third were immaterial. This brings us to an examination of plaintiff’s exceptions to his Honor’s instructions upon the character and measure of damages which defendant was entitled to recover.

Defendant claimed that it was entitled to deliver and plaintiff compelled to receive 100,000 feet a month from the date of the agreement to 1 April, 1901, and that it had a profit of $3 per thousand feet in the lumber. It appears that 61,098 feet were delivered, and plaintiff advanced on account thereof $700, and paid for insurance $35; that by reason of plaintiff’s failure to accept and remove the quantity of lumber fo'r which it had contracted, its yards were blocked, whereby it sustained damage ;®fchat by reason of plaintiff’s failure to make advancements, as it bad contracted to do, it was unable to operate its mill, and sustained a loss of profits on lumber, wbicb it would have sold if plaintiff bad complied witb its contract in respect to tbe advancement. Defendant further claimed that by reason of tbe failure of plaintiff to comply witb its contract it was unable to meet its obligations, resulting in a destruction of its business and tbe sacrifice of its property, and for this- it claimed a large amount of damages. His Honor excluded evidence tending to establish tbe last element of damage, and instructed tbe jury that they could not award any damage on that account. In regard to tbe other elements of damage be instructed tbe jury: “Tbe defendant would be entitled to recover from tbe plaintiff such damages for any breach of tbe contract on tbe part of plaintiff as may have fairly and reasonably arisen, according to tbe usual course of things, and for such damages as were caused by tbe breach of tbe contract, as are incident to tbe acts or omissions thereof, and wbicb may have reasonably been assumed to have been in contemplation of tbe parties at the time of "the making of tbe contract. Tbe defendant would be entitled to recover such amount as it has lost by reason of blocking, bis yard, if you find from tbe evidence it was blocked; by reason of bis not being able to secure tbe advances contemplated by tbe contract, if you find be did not receive tbe advances, and such profits as be would have made from operating tbe mill, if be was forced to shut down by tbe failure of tbe plaintiff to make tbe advances as called for in the contract. If you find that defendant bad lumber on bis yard, and that by reason of the plaintiff not taking it off, when be could have reasonably done so, defendant suffered loss by reason of that, you will give him whatever you find to be a reasonable allowance.” To these instructions plaintiff excepted.

It will be convenient to dispose of tbe several elements of damage in tbe same order as given by bis' Honor'. He told tbe jury that defendant was entitled to damages by reason of bis yard being “blocked.” It appears from tbe testimony that plaintiff was under a contract obligation to take 100,000 feet of lumber per month. This lumber was to be piled on defendant's yard until delivered to plaintiff or loaded on barge or ves-vel. If plaintiff failed to provide means for removing it according to its contract, it would seem, in the absence of any special agreement to the contrary, that for failure to do so it would be liable for the use and occupation of so.much of the yard as was occupied by the lumber after its default. For any special or consequential damage no liability would attach itself by special agreement. We find no evidence showing the rental value of the yard. The suggestion that if the yard had been relieved of the lumber which plaintiff was to take, the defendant could or would have sawed other lumber, piled it on the yard and sold it at a profit, is too' speculative and remote. Too many contingencies are involved to make it a safe measure or element of damage. If one is under contract obligation to remove lumber from a yard at a given time, and fails to do so, in the absence of any special circumstances entering into the contract when made, he is liable for the use and occupation — that is, a fair rental value of the yard. In ascertaining its rental value, evidence of the manner in which it was used or capable of being used would be competent. We think that the instruction was erroneous, for two reasons: There was no evidence of the rental value of the yard to guide the jury.- The jury may, in the light of the testimony admitted by the court, have well understood that they were to take into consideration the profits which defendant may have made by piling lumber on the yard and selling it. This was entirely speculative. His Honor instructed the jury that defendant was entitled to recover damages by reason of his not being able to secure advances. The difficulty which is encountered in sustaining this instruction is that the only evidence of any loss to defendant in this respect was that it was unable to go on with its operations, and was compelled to close out its business, sacrificing its property. This element of damage is too remote and entirely speculative. Treated in the most favorable light for defendant, the plaintiff’s obligation was to loan it money, the time and amount to be measured by the delivery and value of the lumber. The measure of damage for a failure in this respect would be any extra expense to which defendant was put to obtain the money. The failure to perform an agreement to loan a man money, unless some special and consequential damages were shown to be in contemplation of the parties when the contract was made, would not subject him to speculative damage. In Green v. Goddard, 50 Mass., 212, defendants failed to meet certain bills drawn on them which they were under obligation to pay. Plaintiffs alleged that by reason of defendants’ default they sustained loss in the business operations, etc. Hubbard, Jdiscussing this claim, says: “In regard to the claim for losses alleged by the plaintiffs to have been suffered by them in consequence of the withholding of advances by Baring Bros. & Go. on the goods consigned, * * * we think the claim cannot be sustained. The plaintiffs are entitled to recover for the loss directly and necessarily incurred by them in providing for the payment of these, bills; but they cannot claim compensation for the loss of those incidental benefits which they might have derived from the use of their money. Speculative damages (sometimes so called) are not favored in law, and the actual damage arising out of breach of contract for the nonpayment of money is usually measured by the interest of money. * * * In the use of the money, instead of realizing great profits, they might have encountered difficulties and sustained injuries unforeseen at the time, and have suffered like thousands of others. Theirs is not a loss, in the just sense of the term, but the deprivation of an opportunity for making money, which might have proved beneficial or might have been ruinous, and it is of that uncertain character which is not to be weighed in the even balances of the law nor to be ascertained by well-established rules of computation among merchants. * * * To sustain such a claim would be to sanction principles not supported by any decision with which we are acquainted, and instead of making persons sustain the direct loss arising from their neglect of engagement it would be to expose them to hazards never contemplated, and to affect them by uncertain speculations in the profits in which they could have no participation, while at the same time they would be insurers of such profits to their creditors.” It may be that a failure to perform an agreement to loan or advance money for a specific purpose, known to the defendant and in view of the parties to. the contract, the profit to be made being fixed, would subject tbe defendant to damage for sucb loss. Defendant’s claim does not come witbin sucb a class. To bold tbe plaintiff responsible for speculative damages in tbis case would be a dangerous inno^-vation upon tbe rule of reasonable certainty and contemplation.

Ilis Honor further told tbe jury tbat “If defendant bad lumber on bis yard, and by reason of plaintiff not taking it off wben be could bave reasonably done so, and defendant suffered loss by reason of tbat, you will give bim whatever you find to be a reasonable allowance.” If defendant, as we bave said, is entitled to recover for tbe use and occupation of bis yard by reason of plaintiff’s failure to remove according to bis contract, be cannot recover double damages by charging plaintiff with possible losses sustained by reason of its failure to take tbe lumber away. Tbe only amount which it would seem be could sustain by plaintiff’s failure to remove tbe lumber was tbe value of tbe use of tbe yard. Again, if liable at all, some measure of damages should bave been given the jury for their guidance. It should not bave been- left to them to give whatever “they found to be a reasonable allowance.” For a breach of a business contract, in tbe absence of any element entitling tbe plaintiff to vindictive or exemplary damages, be is entitled to compensation for tbe loss sustained by tbe breach. Tbe measure or rule by which sucb compensation is fixed by tbe jury is certain and to be given them by tbe court as their guide. Tbe law seeks to confine tbe damages to sucb as reasonably flow from tbe breach and were in tbe contemplation of tbe parties. The recovery of profits, while in some cases allowed, is confined to “sucb as may fairly be supposed to bave entered into tbe contemplation of the parties wben they made tbe contract — that is, must be sucb as might naturally be expected to follow its violation; and they must be certain, both in their nature and in respect to tbe cause from which they proceed.” Hale on Damages, 73, citing Griffin v. Colver, 16 N. Y., 489. Eliminating all other elements of damage, we bave tbis case: Plaintiff contracted to take from defendant, at a stipulated price, subject to inspection, etc., .100,000 feet of lumber a month. Tbe lumber was to be cut, graded and piled on defendant’s yard. Tbe jury find tbat plaintiff failed to comply with bis contract. If defendant bad the lumber on its yard, ready for delivery, and plaintiff failed to take it, be is liable for tbe difference between tbe contract price and wbat it cost defendant to cut and place tbe lumber on tbe yard — tbat is, tbe profit wbicb defendant would bave made on tbe lumber, subject to a reduction of sucb profit, if any, as defendant made by selling tbe lumber to some other person. Tbis is tbe measure of defendant’s loss and plaintiff’s liability. If by reason of plaintiff’s failure to take tbe lumber according to contract tbe yard was “blocked,” plaintiff is liable for tbe value of tbe use and occupation of tbe yard. In ascertaining sucb value, testimony of tbe use to wbicb defendant could bave put it, etc., is relevant. Tbe other elements of damage are too remote and uncertain. Tbe testimony sent up is not-very full, and we are unable to do more than prescribe tbe general principles upon wbicb tbe damage should be assessed. It appears tbat some three months or more intervened between tbe date of tbe contract and tbe period fixed for its termination. Tbe defendant says tbat tbe profit on tbe lumber was from $3 to $3.35 per thousand feet. Some 61,000 feet were delivered and $735 advanced on tbe undelivered lumber. It would seem an easy matter to calculate tbe damages. In no aspect of tbe testimony does it appear tbat by any measure of damages could tbe jury bave correctly arrived at tbe sum of $1,815. All in excess of tbe profits on tbe lumber wbicb plaintiff failed to take is speculative ; tbat is, we find nothing in tbe evidence to guide tbe jury to tbe conclusion tbat defendant lost tbat sum by reason of damages reasonably within tbe contemplation of tbe parties, etc. For tbe reasons given, there must be a new trial on tbe fifth issue.

DEPENDANT’S APPEAL. Contract, Breach of — Measure of Damages — Contemplation of Parties. The general rule in regard, to damages for breach of a contract confining them to such as proximately resulted from such breach, and were within the contemplation of the parties, was applied by the Court.

New Trial.

Connor, J.

Defendant tendered tbe following issue: “What damage, if any, has defendant sustained by reason of the loss of its business and sacrifice of its property by reason of the breach of the contract?” ' This was refused, and defendant excepted. Many other exceptions were noted to the rejection of evidence bearing upon this 'contention. For the reasons given in plaintiff’s appeal, we concur with his Honor. It may be well that defendant .was crippled in his business and ultimately compelled to close it out because plaintiff did not take the lumber as he contracted to do, but it would be impossible to carry on the business affairs of life if, in the absence of any stipulation for indemnity against such remote results, a breach of contract entailed such liabilities. How is it possible for a court or jury to know, or by any competent testimony to ascertain, whether a continuation of the business would have brought profit to defendant, or the amount of such profit ? The changes and chances of business and industrial life are too uncertain to form the basis of verdicts. To many sanguine minds fortunes are foreseen in all enterprises. Unfortunately, while the general result of commercial and industrial, enterprises add to the wealth of the State, experience and observation teach us that a large proportion, if not a majority, of individuals go down in the struggle. Whether the defendant would have made money by continuing his business is uncertain; how much he would have made is beyond any human power to conjecture. To hold plaintiff an insurer of success, and the extent of it in dollars and cents, would be to impose liabilities never contemplated and render business more hazardous than it now is.

Without further pursuing an interesting but elusive subject, we have no hesitation in affirming his Honor’s ruling.

Affirmed.