Kennedy v. Hudson , 224 Ala. 17 ( 1931 )

The case was put on rehearing by the court for consideration of the measure of damages under the evidence disclosed, and is now further considered on the time in which interest would be computed.

It is established that where a tort action is waived and that action upon a contract, express or implied, is maintained, the measure of damages is governed by the rules applicable to like actions on contracts. Where the contract is to deliver notes, the measure of damages for the breach, in the absence of any further proof of the value of the notes, is their face value with interest. Caldwell v. Kuykendall, 94 Okl. 84, 221 P. 84; Bowman v. Branson, 111 Mo. 343, 19 S.W. 634; Wasser v. Western Land Sec. Co., 97 Minn. 460, 107 N.W. 160. We will advert to the time for which interest is recoverable. And where the agreement is for the amount supposed to be secured by mortgage and with no personal obligation or other liability (than that implied in the assignment without recourse), the measure of damages for a failure to perform has been declared to be the amount of the mortgage, Wilson v. Clark, 63 Wash. 136,114 P. 916; or on contract, for the delivery of a bond guaranteed of payment at maturity, the measure of damages for the breach held to be the face of the bond with interest, Shelton v. French,33 Conn. 489; and on a contract to return securities on demand, the measure of damages for the breach, held the value of the securities at the date of the contract with interest from the date or failure or refusal, Babbet v. Belding, 1 Root (Conn.) 445; 17 C. J. 867, § 178. It is further declared that for the breach of a contract to repurchase stock of a corporation on extension of time therefor, damages must be assessed on the basis of the value of the stock at the time of the breach of the amended contract, and not at the time originally fixed. Sibley v. Barclay, 14 Ala. App. 422, 70 So. 201; Smith v. Dunlap, 12 Ill. 184, 193.

In this jurisdiction the damages for the breach of a contract should restore the injured party to the condition he would have occupied if the contract had been fully performed. Nunnally Co. v. Bromberg Co., 217 Ala. 180, 115 So. 230; Snodgrass, King's Adm'r v. Reynolds, 79 Ala. 452, 458, 58 Am. Rep. 601; 62 A.L.R. 1311, note. That is, for such loss as may be the natural and direct consequences of the breach of contract, full compensatory damages in contemplation of the parties are recoverable for the breach. Mobile, M. G. S. S. Co. v. Postal Telegraph-Cable Co., 22 Ala. App. 207, 210, 114 So. 179; Id.,216 Ala. 576, 114 So. 181; Western Union Tel. Co. v. Westmoreland, 151 Ala. 319, 44 So. 382; Buist v. Guice, 96 Ala. 255,11 So. 280.

It is further declared that the measure of damages for the breach of contract to pay money is ordinarily the principal and interest, unless the obligation to pay is special and refers to other objects than the mere discharge of the debt, in which case special damages may be recovered according to actual injury sustained. Bixby-Theirson Lumber Co. v. Evans, 167 Ala. 431,52 So. 843, 140 Am. St. Rep. 47, 29 L.R.A. (N.S.) 194 and notes. That is the saying — within the contemplation of the parties — that the amount of the money lost with interest is the limit of recovery for the default in payment of money (Pyle v. Pizitz, 215 Ala. 398, 402, 110 So. 822); any other damages being considered remote, speculative, and unrecoverable.

Such being the recognized rule, the consideration paid for the transfer and assignment of writings (in evidence) for the security and payment of money being shown by the evidence, we hold that where documents (as these) are not genuine by the product of forgeries, the recited consideration makes a prima facie case of the measure of damages. Such inquiries as whether such purported maker and grantor, or his ownership of the alleged properties embraced in the mortgage, or its value at the time of the assignment, or the ability of such maker to respond to judgment for such amount if it had been his undertaking to pay and discharge in money according to the tenor of the instrument, are inquiries beside the issues of fact for decision.

To accede to the contention made as to measure of damages as next above adverted to, would destroy the guaranty on which the contract of transfer and assignment was made — that there was the purported maker and security described. We are not now considering values of property, or the credit or judgment liability of the maker, but that of the implication of genuineness imported by the acts of transfer and assignment on which the recited consideration as shown by the evidence was paid.

In the case of Fogleman v. National Surety Co., 222 Ala. 265,132 So. 317, there was a marshaling of assets among certain persons defrauded under color of office and by notary, and protected by his official bond and suretyship of the defendant thereon. In such a case the equities of the several innocent mortgagees who were respectively defrauded, and the liability on the official bond of the notary by the surety company, were declared, and the measure of damages for the fraudulent misrepresentations to the mortgagees was declared to be such as would, as nearly as possible, place the several defrauded mortgagees in the positions they would occupy, if representations of the notary were true; and the facts of amounts and of security vel non or its defective title in the mortgagors were held pertinent inquiries as touching the equities (within the amount of the official bond) of the several parties interpleaded. It was a question of making good false certificates or representations made to the several mortgagees there considered, and, therefore, a different measure of damages as to each mortgagee to be prorated within the amount of the official bond.

The plaintiff is entitled to the purchase price, with interest from the date of payment.

The application for rehearing is denied.