Hays v. Western Union Tel. Co. , 70 S.C. 16 ( 1904 )

This is an action for damages alleged to have been sustained by the plaintiffs on account of an error in the transmission of a telegram. At the time hereinafter mentioned, the plaintiffs conducted the business of a general sale stables for the sale of horses and mules at Greenwood, S.C. On the 18th of January, 1901, A.C. Hays delivered to the defendant at East St. Louis, the following telegram to be transmitted to R.M. Hays, the other member of the firm, to wit: "Fourteen half hands ninety-five, fifteen hands one hundred and five, fifteen half hands one hundred and seventeen fifty — pair for self, sixteen hand two sixty, all little less quality than before."

The defendant erroneously, however, sent the following telegram to R.M. Hays: "Fourteen half hands ninety-five, fifteen hands one hundred and five, fifteen half hands one hundred and seven fifty, pair for self sixteen hands two sixty all little less quality than before."

R.M. Hays telegraphed to A.C. Hays: "Buy twenty-four mules fifteen two hands, pair sixteen hands for farm, get nice colors fully half mare mules, give Thomson preference, wire when ship."

The mules were purchased, shipped to Greenwood and sold by the plaintiffs. On cross-examination, R.M. Hays testified as follows: "Q. When you speak of your loss being so much, what do you mean by that is that you made that much less than you expected to make? A. I didn't mean that. I meant to say that I could have used fifteen hand mules and sold the same mules at the price they were bought at. Q. Did you as a matter of fact lose a dollar on this car load of mules? A. I couldn't state that as a fact. Q. Would you say you lost a dollar? A. No, sir, I never figured it out; I stated this: I said that fifteen hand mules at $105 sold for the same money on the market as fifteen and one-half hand mules."

The jury rendered a verdict in favor of the plaintiffs for $240.

The appellant's ninth exception assigns error on the part of his Honor, the presiding Judge, as follows:

"In charging the jury in accordance with the second, third, fourth and fifth requests of the plaintiffs, that profits which are direct and immediate fruits of a contract may be recovered; the errors being that the contract out of which the profits might have come was not before the Court for consideration, and that there was no pretence or claim on the part of the plaintiffs that they had actually lost anything by giving $117.50 per head for the mules, but only that they had failed to make what they would have made by buying them at $107.50."

Those requests are as follows:

"2. Profits which are the direct and immediate fruits of a contract can be recovered. There are many cases in which the profits to be made by the bargain is the only thing purchased, and in such cases the amount of such profits is the measure of damages.

"3. Where the profits are the direct and immediate fruits of the contract, they are free from the objection of being speculative, and can be recovered.

"4. Whenever it is shown by the evidence that a telegraph company has by its fault in the transmission of a message caused the sender to fail to make some gain or profit which he otherwise would have made, and the amount thereof is shown with certainty by the evidence, the gain or profit thus prevented is a proper element of damages in an action against the company for its breach of contract.

"5. Damages may be recovered for losses sustained or gain prevented, when they are the proximate and certain results of the defendant's fault."

There was no testimony that the defendant had notice of the fact that the first message related to the purchase of mules, nor that the mules were purchased for resale, nor as to the market value of the mules at the time the plaintiffs' right of action accrued. His Honor, the presiding Judge, erred in the test for the admeasurement of damages which he submitted to the jury, for the reason that profits were not a proper element of damages in this case. In the leading case of Hadley v. Baxendale, 9 Exch., 341, the following general rules are indicated: "First. That damages which may fairly and reasonably be considered as naturally arising from a breach of contract according to the usual course of things, are recoverable. Second. That damages which would not arise in the usual course of things from a breach of contract, but which do arise from circumstances peculiar to the special case, are not recoverable unless the special circumstances are known to the person who has broken the contract." Cited with approval in Sitton v. McDonald, 25 S.C. 68.

In the earlier cases, both English and American, there was a general concurrence in excluding profits in actions of tort as well as on contract, which merely might have been realized had the injury not been done or the contract been performed. 8 Enc. of Law, 617. "Profits which depend upon the fluctuations of the markets and the hazards and chances of business, are considered too contingent and speculative to enter into a safe or reasonable estimate of damages. Thus any supposed successful operation the party might have made, if he had not been prevented from realizing the proceeds of the contract at the time stipulated, is a consideration not to be taken into the estimate of damages; for, besides the uncertain and contingent issue of such an operation in itself, it has no legal or necessary connection with the stipulations between the parties, and cannot, therefore, be presumed to have entered into their consideration at the time of contracting." 8 Enc. of Law, 618-9.

In the case of W.U. Tel. Co. v. Grain Co., 63 L.R.A. (Neb.), 803, it was held, that "where the negligent delay of a telegraph company in the delivery of a message delivered to it for transmission by the plaintiff, results in the loss to the plaintiff of a sale of a quantity of corn at a price above the market value of the corn at the time and place it would have been delivered had such sale been made, the measure of damages is the difference in value between the price the plaintiff would have received for the corn had the sale been made and the market value of the corn at such time and place of delivery, unaffected by the price at which the plaintiff may have disposed of the corn after that time." In discussing the question of profits, the Court uses this language: "In such cases the general rule is that, so far as it can be done by money, the injured party is to be placed in the same situation in which a performance of the contract would have placed him. But it would be impossible to follow the labyrinth of remote results and consequences of a breach of contract and determine either the ultimate situation of the party as affected thereby, or what such situation would have been had the contract been performed. The law, therefore, takes into account only proximate results and disregards such as are remote, or are the product of intervening or independent causes. Hence the situation of the injured party which forms the basis of the comparison must be his situation when the breach of contract occurred, and before remote or independent causes had intervened to change it. His situation after that time can never be material as an ultimate fact in the case, because after the intervention of such causes it can never be known, with any reasonable degree of certainty, to what extent it is due to causes only remotely connected with the breach of contract or wholly independent of it."

Whatever may be the rule elsewhere, the Courts of this State have followed the earlier decisions, both English and American, which held that anticipated profits could not be recovered, for the reason that they were indefinite, uncertain and too remote. In the case of Sitton v. McDonald, 25 S.C. 68, the plaintiff carried on the business of buying old cotton-ties and manufacturing them into new ones. In the operation of its machinery it used a peculiar kind of punch which could not be repaired by a blacksmith. The plaintiff carried it to the defendant, who undertook to repair it. The defendant failed to carry out its contract and the plaintiff brought an action for $1,000 damages. Upon the trial the plaintiff offered to prove as damages the amount of profits he would have earned in the ordinary employment of the punch during the time it was detained by the defendant. The defendant objected to the testimony on the ground that such damages were too speculative, remote and contingent. The objection was sustained. The Court said: "We are aware that there are circumstances under which one who, by breach of contract, has delayed a sale until there is a fall in the marketable value of the property, may be charged as damages with the difference in price; but we do not see that such principle applies to a case where the only question is as to more or less profits, which as a whole as profits are excluded as too contingent, remote and speculative." In commenting on the case of D'Orval v. Hunt, Dudley, 180, the Court uses this language: "In this latter well considered case, it was held that 'for the breach of an executory contract, without fraud or imposition, the jury can only give such damages as fairly and naturally result from it and which can be measured by a pecuniary standard; remote and consequential damages cannot be allowed.'"

We desire to call special attention to the fact that profits were excluded in the case of Sitton v. McDonald, 25 S.C. 68, on the ground that they were too contingent, remote andspeculative. Are anticipated profits in the case under consideration less contingent, remote and speculative than in the case just mentioned? They are in their very nature problematical, conjectural, uncertain, indefinite, speculative and remote. They are dependent upon many contingencies — fluctuations in the market, caprice of purchasers, value of services employed in selling the articles, interest on capital invested, and various other circumstances that cannot be contemplated with any degree of certainty.

The rule for the admeasurement of damages is correctly set forth in Wallingford v. Tel. Co., 53 S.C. 410,31 S.E., 275. In that case the plaintiff brought an action for damages on account of the failure on the part of the telegraph company to deliver seasonably a message whereby the plaintiffs lost the sale of a lot of mules. Mr. Justice Jones thus states the principle in the admeasurement of damages: "The measure of damages in such case as this, is the difference in the market value of such mules on same terms, at the time the message should have been delivered and the price offered, in case such market value was less than the price offered."

It certainly cannot be successfully contended that the plaintiffs are entitled not only to profits but likewise to the difference in the amount paid for the mules and their market value at the time their cause of action accrued. The law does not allow both measures of damages in one case. We, therefore, conclude that either the rule for the admeasurement of damages laid down in Wallingford v. Tel. Co., 53 S.C. 410,31 S.E., 275, is erroneous or the principle announced in the opinion of Mr. Justice Woods is wrong. The rule stated in Wallingford v. Tel. Co., 53 S.C. 410,31 S.E., 275, should, for a stronger reason, be applied in this case, because the error in transmitting the telegram did not prevent the plaintiffs from becoming the purchasers of the mules, nor deprive them of the opportunity of making whatever profit they saw fit by a resale of the mules. The direct and proximate result of the error in sending the message was to cause the plaintiffs to purchase the mules for which they had to pay a larger sum than they contemplated as the purchase money thereof, and the measure of their damages was the difference in the market value of the mules at the time their right of action accrued and the amount they were compelled to pay by reason of said error. This mode of admeasuring damages is more certain than determining the amount of anticipated profits supposed to have been lost by the error. In 8 Enc. of Law, 611, it is said: "Where the damages may be estimated in more than one way, that mode should be adopted which is most definite and certain."

The quotation which Mr. Justice Woods makes from 27 Enc. of Law, 1069, shows, that when the person affected by an error in the transmission of a message is the purchaser, he is entitled to recover the increase in price which he is obliged to pay in consequence of the error, but it does not sustain the doctrine that the purchaser has the right to recover lost profits.

As I think the judgment of the Circuit Court should be reversed, I dissent from the opinion of Mr. Justice Woods.