Magnolia Metal Co. v. Gale , 189 Mass. 124 ( 1905 )

Morton, J.

This is an action for the breach of a written contract dated June 26,1900. The defendant notified the plaintiff on January 22, 1901, that he would no longer act under the contract, and this was the breach relied on. It was admitted that from that date the contract was no longer in force. The defences relied on were that the contract was procured by fraud and misrepresentation on the part of the plaintiff, and that the plaintiff had violated certain terms and conditions on its part to be performed. There had been a previous contract between the same parties dated September 22, 1899, which was expressly cancelled and the parties relieved from further liability thereunder by the contract in suit. The fraud and misrepresentation relied on related to the first contract and the first exception is to the refusal of the justice to rule as requested that the second contract was a continuation of the first and that the two should be read together, and that the plaintiff was not entitled to recover on the contract in suit if the defendant was induced to enter into the first one by the fraud or misrepresentation of the plaintiff as its duly authorized agent. It is too plain for argument that this request was rightly refused. Save as the second had incorporated into it with certain modifications certain covenants and agreements contained in the first, the two were independent and distinct. The second was not a continuation of the first and the two together did not constitute one contract or agreement. This exception is overruled.

The next and remaining exception is to the refusal of the justice to rule as requested that in estimating the damages, if any, which the plaintiff was entitled to recover, such expenses as the plaintiff would have been subjected to in carrying out the contract on its part were to be deducted from the profit, meaning thereby, we assume, the gross profit, which would have accrued to it under the contract. We think that this instruction should have been given. The plaintiff was not entitled to be put in a better position by reason of the breach than it would have been in if the contract had been carried out by the defendant. The damages are to be assessed on the footing of what the plaintiff’s profits would have been if the contract had been carried out by the defendant according to its terms, and the plaintiff is to be made whole for what he has thus lost by the defendant’s breach. The jury properly were instructed that the plaintiff was entitled to recover the net profit which it would have made if the contract had been performed. But in order to arrive at that it was necessary to take into account the expense to the plaintiff of completing the contract on its part. It cannot have the same benefit of the contract that it would have had, if it had been fully performed, and at the same time avoid the expense. to which, according to the terms of the contract, it would have been subjected by performance. To allow such expense to be ignored in the estimation of the damages would be putting the plaintiff in a better position than it would have occupied if the contract had been fully performed. See Noble v. Ames Manuf. Co. 112 Mass. 492 ; Fox v. Harding, 7 Cush. 516; Masterton v. Mayor of Brooklyn, 7 Hill, 61; Sedg. Damages, (8th ed.) § 609. According to the terms of the contract the plaintiff was to employ two salesmen in the territory covered by the contract, to supply the defendant with advertising matter and to advertise the metal and use every effort to advance its sale, to pay the defendant $25 a month for office rent during the period covered by the contract, to divide with the defendant the expense of one stenographer at Boston, and to continue Mr. W. H. Lent in charge of their interests at Boston so long as he was connected with the company and the contract remained in force. It would have been subjected to expense in regard to ail of these matters if the contract had been performed, and in estimating the damages such expense should be taken into account. The fact that such expense may be difficult of estimation is far from being a sufficient reason for disallowing it altogether. As said by Barker, J. in Cutter v. Gillette, 163 Mass. 95, “It is not the law that damages which may be larger or smaller because of such uncertainties are not recoverable. The same kind of difficulty is encountered in the assessment of damages for personal injuries. All the elements which bear upon the matters involved in the prognostication are to be considered by the jury, and from the evidence in each case they are to form an opinion upon which all can agree, and to which, unless it is set aside by the court, the parties must submit.” See also Daniell v. Boston & Maine Railroad, 184 Mass. 337, 343. The rule of damages is not affected by the motive which the defendant had for breaking the contract or by the fact that he chose, without any sufficient excuse, to break it rather than go on with it. We understand the phrase “ so long as . . . this contract remains in force ” used in connection with the plaintiff’s agreement to continue Mr. Lent in charge at Boston to refer not to a possible breach, but to mean so long as the contract continues in force if performed according to its terms.

The result is that the. exceptions must be sustained. But inasmuch as the exceptions that are sustained relate only to the question of damages the new trial will be confined to the matter of damages only. Whipple v. Rich, 180 Mass. 477. De Forge v. New York, New Haven & Hartford Railroad, 178 Mass. 59, 64.

Exceptions sustained; new trial granted but on the matter of damages only.