54

particular case should be held, since it is clearly impossible to trace out the ultimate effect of any wrongful act. Plaintiff was a passenger on one of defendant's cars. On account of the late arrival of the train at plaintiff's destination the conductor sent her to a hotel to remain until morning at the expense of the company. The innkeeper assigned her to a room and gave her a lamp which exploded and she was severely burned. For this injury she sued the railway company, since it was on account of its fault she was in the hotel. But the court held the damage was too remote, and for this reason could not be recovered against the railway company.

55

20. Two classes-Tort and contract actions.The cases which touch upon this question are so numerous and present so many phases of the subject of damages, that only a few even of the points mentioned can be discussed here. But there may be two great divisions made, namely, actions for breach of contract and actions in tort.

The leading case of Hadley v. Baxendale established the most important rule relating to damages for breach of contract, which in substance is that the damages to be recovered for a breach of contract are those which arise, either naturally, that is, according to the usual course of things, from such breach of contract itself, or on the other hand such as may reasonably be supposed to have been in the contemplation of the parties at the time they made the contract, as the probable result of the breach

54 Central of Ga. Ry. v. Price, 106 Ga. 176.

55 43 L. R. A. 402, 32 S. E. 77; presents facts illustrating this proposition.

of it. This rule has generally been adopted by the courts.56

Only direct and immediate damages are recoverable under the first part of this rule. Speculative profits or remote losses are not within its meaning.57 Thus it was held in Mitchell v. Clarke that where defendant had broken his contract with plaintiff in failing to pay a creditor of plaintiff's, money entrusted to him for that purpose, those damages resulting from the sale of plaintiff's property at a sacrifice in order to pay such debt, could not be shown.58 Damages in this case would appear to be both speculative and remote.

Such a result did not usually and naturally flow from such a breach of contract. And so it has frequently been held that in an action for breach of contract damages arising from loss by plaintiff of a collateral contract may not be recovered unless the existence of such collateral contract was known to the defendant.59 It is also settled that damages which are remote and speculative may not be recovered for breach of a contract. In Williamson v. Brandenburg, defendant was sued for misrepresentations made in the sale of a horse to plaintiff. It was held that an allegation relating to the amount the horse would have been able to earn if he had been sound and able to trot at a specified rate of

60

56 9 Ex. 341, LEADING ILLUSTRATIVE CASES; Hopkins v. Sanford 38 Mich. 611; Billmyer v. Wagner, 91 Pa. St. 92.

57 Hamilton v. McPherson, 28 N. Y. 72.

58 71 Cal. 163, 60 Am. Rep. 529.

59 Bridges v. Stickney, 38 Me. 361; Sanderlin v. Willis, 94 Ga. 171; Wetmore v. Pattison, 45 Mich. 439.

60 133 Ind. 594.

speed was too remote and speculative to be considered as an element of damages.61

21. Future profits. While future profits which are entirely speculative may not be recovered as damages for a breach of covenant, it does not follow that no future profits may be recovered. Where such profits are sufficiently certain, or where they were in the contemplation of the parties when making the contract, or where by evidence they may be shown with reasonable certainty, and their loss results from defendant's breach of contract, they may be allowed against him.

So where plaintiff had an established business from which profits in the past had been made, which was destroyed by defendant's breach of contract, the gain or profit arising from such business was proper evidence to prove what plaintiff reasonably might have made in the future, and therefore what loss defendant's breach had caused plaintiff.62

In Griffin v. Colver the court fully discusses the subject of profits as damages and makes the distinction accurately between profits which may be recovered and those which may not be. It is said that profits are so frequently excluded from the estimate of damages because they are so often speculative and uncertain and not because there is anything in their nature which should prevent their allowance; and that profits which would certainly have been realized but for the defendant's default are recoverable. This is only an illustration of the more general rule

61 Hill v. Parsons, 110 Ill. 107; First Nat'l. Bank v. Thurman, 69 Ia. 693. 62 Allison v. Chandler, 11 Mich. 542; Chapman v. Kirby, 49 Ill. 211.

that damages must be certain both in their nature and in respect to the cause from which they proceed.63

On this principle, the Massachusetts court held in Dennis v. Maxfield that plaintiff might recover profits which could have been made in a whaling voyage except for defendant's breach of contract.64

22. Certain profits.-Profits of a contract which certainly would have been made, embraced in the contract itself, are always elements of damages for a breach of the contract. Where a contract with plaintiff to do a certain piece of work or to erect a certain building has been broken, plaintiff will recover the profits he would have made had the contract not been broken.65 So it has been held that one partner may recover of another, who has broken a partnership contract, prospective profits of the partnership business.66 But the second part of the rule given in Hadley v. Baxendale,67 supra, covers many cases not included in the first portion of the rule, namely, that such damages may be recovered as may be reasonably supposed to have been in the contemplation of the parties at the time they made the contract as the probable result of the breach of it. So in Fox v. Boston & Maine Railroad,68 the defendant was held responsible for loss sustained by plaintiff on account of apples freezing while being carried

63 16 N. Y. 489.

64 10 Allen 138 (Mass.).

65 Dibol v. Minott, 9 Ia. 403; Brown v. Hadley, 43 Kan. 267; Lee v. Briggs, 99 Mich. 487.

66 Bagley v. Smith, 19 How. Prac. 1; Hunt v. Reilly, 50 Tex. 99.

67 9 Ex. 341, 23 L. J. Ex. 179, LEADING ILLUSTRATIVE CASES.

68 148 Mass. 220.

by defendant, under a special contract to carry them at a particular time. Under the general rule applicable to carriers for delay in carrying goods, defendant would not have been responsible for the loss caused by freezing; but the court held the carrier liable here because the parties, at the time they made the contract, had in contemplation the danger which would result from a delay in shipping the fruit.

69

This principle applies to loss of profits. In Adams Express Co. v. Egbert, plaintiff had delivered to defendant a box containing plans and specifications to be forwarded to a committee who had offered a premium of five hundred dollars to the successful competitor for the best plans for a certain building. On account of the delay by the company in delivering the plans plaintiff was prevented from competing with others. The company had knowledge on accepting the box of what it contained and of plaintiff's purpose in sending it, and of the time when it must have been delivered in order to be considered with the plans of others. Plaintiff claimed damages on account of loss of an opportunity to compete for the premium. The court held that this privilege was the main thing inducing plaintiff to contract with defendant to carry his plans, and that damages for its loss were therefore in contemplation of the parties as a result of the breach of contract, and that the loss of the opportunity to compete for the prize is not too remote to be considered. The court held, however, that plaintiff failed to prove any loss in this regard, as no evidence was offered showing that 69 36 Pa. St. 360, 78 Am. Dec. 382.