Source: http://supreme.nolo.com/us/139/199/case.html
Timestamp: 2019-04-18 14:32:49+00:00

Document:
As a general rule, subject to well established qualifications, anticipated profits prevented by the breach of a contract are not recoverable as damages for such breach, but where such profits, which would have been realized had the contract been performed and which have been prevented by its breach, are not open to the objection of uncertainty or remoteness, or where, from the express or implied terms of the contract itself or the special circumstances under which it was made, it may be reasonably presumed that they were within the intent and ritual understanding of both parties at the time it was entered into, they are so recoverable.
This was an action at law by the Stillwell and Bierce Manufacturing Company, an Ohio corporation having its principal place of business at Dayton in that state against W. C. Howard, S. T. Stratton, and J. Rauch, citizens of Texas, to recover a balance due on a contract in writing entered into between the parties hereto March 23, 1885, for the reconstruction by the company of a flour mill owned by the defendants in Dallas, Texas.
said party of the second part agrees to be responsible for any damage or loss by fire or otherwise after the machinery reaches Dallas. The title of said machinery shall remain in and not pass from said party of the first part until the same is paid for and until all the notes, whether secured or unsecured, given therefor are fully paid, and in default of payment as above agreed, said party of the first part or its agent may take possession of and remove said machines without legal process."
The amended petition, filed January 31, 1887, alleged that the plaintiff had performed its part of the contract; that the defendants had paid the first payment of $7,000 at the time it fell due, but that they had not paid the two deferred payments, which were then past due, and that they had refused to execute their notes for the deferred payments according to the contract. The plaintiffs prayed judgment for the sum of $10,850, the amount of the deferred payments, with eight percent interest from May 26, 1885, the date of the shipment of the machinery.
delays caused by plaintiff, viz., 200 barrels per day, and that plaintiff, by reason of the facts above stated, delayed defendants in the manufacture of said flour for sixty days, by which defendants lost a profit of $1 per barrel on 12,000 barrels of flour, or the sum of $12,000."
The defendants accordingly demanded judgment against the plaintiff for the sum of $20,000.
"(1) Because said deposition is not certified to by the officer who took the same, as required by law regulating the taking of depositions de bene esse."
"(2) Because no reasonable notice of the time and place of taking said deposition was given the defendants, as required by law regulating the taking of depositions de bene esse."
"(3) Because said deposition was not taken under authority of any dedimus potestatem granted by any court of the United States according to common usage."
The court overruled the motion to suppress the deposition, and it was admitted and read in evidence, to which ruling the defendants excepted.
Afterwards, on the same day, the plaintiff moved to strike out so much of the defendants' plea in reconvention as seeks to recover the sum of $1 per barrel on 12,000 barrels of flour -- that part quoted above -- which motion was sustained by the court, and the defendants excepted.
"that the market price per barrel for flour of the grade the contract sued upon stipulated for, between the middle of July, 1885, and middle of September, 1885, was $5 per barrel; that during that period there was a ready cash market value in Texas for said grade of flour at $5 to $5.50 per barrel, and that the defendants could have sold 200 barrels per day during said period at $5 per barrel, and that upon each barrel so sold they would have realized $1 per barrel profit; that defendants had purchased and held on storage during said period a sufficient quantity of good wheat to have manufactured 200 barrels per day during said sixty days; that the market price during said period of such wheat was 60 to 70c. per bushel, and that the expense of turning such wheat into flour during said period was 80c. per barrel, and that defendants had in their employ all necessary laborers and skilled workmen to manufacture said wheat into flour, and were fully equipped with fuel and water and everything necessary to convert said wheat into flour, save and except the parts and pieces of said mill which plaintiff contracted to furnish in the contract sued on,"
interest, and for the defendants in the sum of $875 as damages. Upon this verdict judgment was rendered in favor of the plaintiff and against the defendants for $11,457.82. A motion for a new trial having been overruled, the defendants sued out this writ.
"(1) There was error in sustaining the exception to that part of defendants' plea which sought the recovery of profits, and in rejecting defendants' offer of evidence in support of the plea. "
"(2) the court erred in overruling the defendants' motion to suppress the deposition of Odell."
and cross-interrogatories. [Signed] Lindsley & McCormick, att'ys for Defendants."
As already stated, the deposition was filed in the case on the 22d of January, 1887, and opened at the request of the attorney for the plaintiff on the 5th of February following. The motion to suppress the deposition was not made until the 8th of February, when the case came on for trial. In our opinion, the motion in this instance was too late. The counsel for defendants, by waiving copy of the interrogatories when notice of them was served upon them and consenting to the issue of the commission, and practically uniting with plaintiff's counsel in executing it, by adding their own cross-interrogatories, and withholding the objections until after the trial had begun, must be considered as having waived such objections. It is the settled rule of this Court that the failure of a party to note objections to depositions of the kind in question when they are taken, or to present them by a motion to suppress, or by some other notice before the trial is begun, will be held to be a waiver of the objections. While the law requires due diligence in both parties, it will not permit one of them to be entrapped by the acquiescence of the opposite party in an informality which he springs during the progress of the trial, when it is not possible to retake the deposition. Shutte v. Thompson, 15 Wall. 151, 82 U. S. 158 et seq; Mechanics' Bank of Alexandria v. Seton, 1 Pet. 299, 26 U. S. 307; Winans v. New York & Erie Railroad, 21 How. 88, 62 U. S. 100; York Company v. Central Railroad, 3 Wall. 107, 70 U. S. 113; Doane v. Glenn, 21 Wall. 33, 88 U. S. 35; Buddicum v. Kirk, 3 Cranch 293, 7 U. S. 297; Rich v. Lambert, 12 How. 347, 53 U. S. 354.
agreed that as a general rule, subject to certain well established qualifications, the anticipated profits prevented by the breach of a contract are not recoverable in the way of damages for such breach; but in the application of this principle the same uniformity in the decisions does not exist. In some cases of almost exact analogy in the facts, the adjudications of the courts in the different states are directly opposite. The grounds upon which the general rule of excluding profits in estimating damages, rests are (1) that in the greater number of cases such expected profits are too dependent upon numerous, uncertain, and changing contingencies to constitute a definite and trust worthy measure of actual damages; (2) because such loss of profits is ordinarily remote, and not as a matter of course the direct and immediate result of the nonfulfillment of the contract; (3) and because most frequently the engagement to pay such loss of profits in case of default in the performance is not a part of the contract itself, nor can it be implied from its nature and terms. Sedgwick on Damages (7th ed.), vol. 1, p. 108; The Schooner Lively, 1 Gallison 315, 325, per Mr. Justice Story; The Anna Maria, 2 Wheat. 327; The Amiable Nancy, 3 Wheat. 546; La Amistad de Rues, 5 Wheat. 385; Smith v. Condry, 1 How. 28; Parish v. United States, 100 U. S. 500, 100 U. S. 507; Bulkley v. United States, 19 Wall. 37. But it is equally well settled that the profits which would have been realized had the contract been performed, and which have been prevented by its breach, are included in the damages to be recovered in every case where such profits are not open to the objection of uncertainty or of remoteness, or where from the express or implied terms of the contract itself, or the special circumstances under which it was made, it may be reasonably presumed that they were within the intent and mutual understanding of both parties at the time it was entered into. United States v. Behan, 110 U. S. 338, 110 U. S. 345-347; Western Union Tel. Co. v. Hall, 124 U. S. 444, 124 U. S. 454-456; Philadelphia, Wilmington & Baltimore Railroad Co. v. Howard, 13 How. 307.
contemplated by both the parties when they made this contract. For such loss would neither have flowed naturally from the breach of this contract in the great multitude of such cases occurring under ordinary circumstances, nor were the special circumstance which perhaps would have made it a reasonable and natural consequence of such breach of contract, communicated to or known by the defendants."
That case has been cited with approval and commented on by many of the courts of this country, and by text writers as well. The general principles of it, we believe, are recognized and enforced in most, if not all, of the several states. A large number of the cases are referred to in Sedgwick on the Measure of Damages, vol. 1, pp. 66-76, and 5 Encyclopaedia of Law, pp. 13, 15, 32-34, and we shall attempt no extended review of them. We shall content ourselves with a reference to a few of the leading ones most nearly similar to the one before us.
Pennypacker v. Jones, 106 Penn.St. 237, 242, was very much like the present case. In that case, the plaintiffs, who owned and operated a flour mill in Philadelphia, entered into a contract with the defendants by certain of the terms of which the defendants were to place in their mill, within a specified time, machinery of a certain capacity, to make flour of a high grade. The machines, when furnished, were found not to make a high grade of flour, and to be incapable of producing the stipulated number of barrels per day. In an action for damages by the plaintiff for breach of the contract, it was held that the loss of possible profits which might have been made if the mill had run properly was not a proper subject of damages for the reason that such damages were too remote and speculative. In delivering the opinion of the court, Mr. Justice Green used this language.
the possible profit is the very object of the contract, and is necessarily in the contemplation of the parties. But when a machinist furnishes machinery to a mill owner, it is no part of his engagement that a profitable business shall be carried on with the machinery furnished. Of course if it is defective, he is responsible for the damage resulting directly from such defect; but that is a very different thing from the uncertain, remote, and speculative profits, which may or may not be made in the business to be done."
In Callaway Mining & Manufacturing Co. v. Clark, 32 Mo. 305, which was an action for the seizure and detention of a steamboat by an attachment which was discharged, it was held that the measure of damages was only the actual damage sustained by the seizure, and that the jury could not be permitted to speculate as to what might or might not have been the earnings of the boat during the period of seizure.
Blanchard v. Ely, 21 Wend. 342, was an action for the price of a steamboat. The defense was that part of the machinery of the boat was unsound and imperfect, whereby considerable delay was caused, and that the loss of the probable profits that would have been made upon the trips that might have run during the time the vessel was delayed on account of the imperfections in its construction might be recouped in the action for the price of the boat. But the court held that such contingent profits could not be allowed. See also Olmstead v. Burke, 25 Ill. 86; Winne v. Kelley, 34 Ia, 339; Howe Machine Co. v. Bryson, 44 Ia. 159; Freeman v. Clute, 3 Barb. 424; Griffin v. Colver, 16 N.Y. 489; Wakeman v. Wheeler & Wilson Mfg. Co., 101 N.Y. 205; Brown v. Smith, 12 Cush. 366; Boyd v. Brown, 17 Pick. 453; Willingham v. Hooven, 74 Ga. 233; Georgia Railroad v. Hayden, 71 Ga. 518; Bridges v. Lanham, 14 Neb. 369; Houston & Texas Cent. Ry. Co. v. Hill, 63 Tex. 381; Smith v. Condry, 1 How. 28.
which they would have manufactured, and in excluding the evidence offered in support of the claim therein set up. Tested by them, such losses were, in our opinion, rather remote and speculative than direct and immediate, resulting from the breach alleged. There was no stipulation in the contract that the defendants should make profits on flour from the wheat ground up by the machinery which the plaintiff contracted to furnish and erect in the mill. Nor were there any special circumstances attending the transaction from which an understanding between the parties could be inferred that the plaintiff was to make good any loss of profits incurred by a delay in furnishing and putting up such machinery according to the terms of the contract.

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