Case Name: FELL v. NEWBERRY
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1895-10-01
Citations: 106 Mich. 542
Docket Number: 
Parties: FELL v. NEWBERRY.
Judges: McGrath, C. J., Long and Hooker, JJ., concurred with Montgomery, J.
Reporter: Michigan Reports
Volume: 106
Pages: 542–550

Head Matter:
FELL v. NEWBERRY.
1. Breach of Contract — Damages—Loss of Profits.
Loss of profits arising from the breach of a contract may be recovered if they were within the contemplation of the parties at the time the contract was executed, and if they can be determined with a reasonable degree of certainty, so as not to fall within the rule precluding a recovery of speculative or conjectural damages.
3. Same.
Defendant, the owner of a shingle mill, entered into a contract with plaintiff whereby the latter was to operate the mill for a specified time, furnishing his own help, and defendant was to supply the mill with timber, and pay plaintiff a stipulated price per thousand for cutting the shingles. Upon defendant’s refusal to permit plaintiff to run the mill, suit was brought for breach of the contract. Held, that plaintiff was entitled to recover the profits that he might have made under the contract had defendant not prevented its performance. Grant, J., dissenting.
3. Same — Overruled Oases.
The case of Taleott v. Crippen, 53 Mich. 633, was overruled by Leonard v. Beaudry, 68 Mich, 313, so far as the cases are in conflict.
Error to Emmet; Adams, J.
Submitted June 4, 1895.
Decided October 1, 1895.
Assumpsit by Sylvester O. Fell against Jay L. New-berry for work and labor, and for damages in being prevented from performing a sawing contract. Plaintiff brings error from a judgment in his favor for less than the amount claimed.
Reversed.
Lyon & Looting, for appellant.
B. T. Halstead and A. L. Cruickshank, for appellee.

Opinion:
Montgomery, J.
The facts are sufficiently stated in Ihe opinion of Mr. Justice Grant. The question involved is whether the plaintiff is entitled to recover as damages the amount of such profit as he might have made by per forming the contract if performance had not been prevented by the defendant.
The general and simplest rule of damages is that the injured party is entitled to compensation for the loss sustained. In actions on contract this rule is so far qualified as to limit the recovery to such damages as can be said to have been in the contemplation of the parties. A further limitation to the general rule is that damages which are speculative or conjectural cannot be recovered. To this class belong profits that cannot be fairly estab lished by proof, not because the loss of profits should not be compensated, but solely because of the inability to estimate or determine the amount. It has been frequently held by this court that when the breach of contract results in the loss of profits to .the plaintiff, and the contract is one in which a profit accruing to the plaintiff was contemplated, the amount of such profit is recoverable. Atkinson v. Morse, 63 Mich. 281; Leonard v. Beaudry, 68 Mich. 312, 80 Mich. 163; Burrell v. Salt Co., 14 Mich. 34. See, also, 5 Am. & Eng. Enc. Law, 32, note. In the case of Allis v. McLean, 48 Mich. 428, it was held that, for the failure to furnish machinery to the owner of a sawmill as agreed, the owner could not recover for profits which he would have made in the general conduct of the lousiness. Mr. Justice Cooley, speaking of the profits claimed in that case, said:
"They depend on many circumstances, among which are capital, skill, supply of logs, supply and steadiness of labor; and one man may fail while another prospers, and the same man may fail at one time and prosper at another, though the prospective outlook seems equally favorable at both times."
It will be seen that the case of Allis v. McLean was not a case in which the plaintiff was proceeding under contract with the defendant or with a third party to manufacture at a stipulated price; and in the precisely analo-
gous case of John Hutchinson Manfg. Co. v. Pinch, 91 Mich. 156, the case of Allis v. McLean was followed. On the other hand, in Leonard v. Beaudry, supra, it was held that the owner of a sawmill, who was defeated of the profits which he might have made under a contract with the defendant, could recover such profits on showing what it would cost him to manufacture the lumber. We think the latter case, if followed, rules the present. There is no element of uncertainty in the present case which there was not in that. The only difference is that in that case the amount of lumber to be cut was fixed, while in the present the plaintiff was entitled to the profits which he might malee by cutting up to the capacity of the mill for a given time. Breakdowns and' interruptions affect the cost in the one case as well as in the other, but this fact Was not in that case, nor should it in this, be deemed an insuperable obstacle to recovery. A workman engaged with a team may meet with an accident to Ms wagon or break a logging chain, but we apprehend that, if this be the only element of uncertainty, he would be entitled to recover the prospective profits >of an employment. The rule ought not to be different in the case of the owner of a mill. In Leonard v. Beaudry, 68 Mich. 322, Mr. Justice Champlin very pertinently said:
"It is a mistake to suppose that sawmill owners are without the protection of the law, or that their business is so hazardous and uncertain that parties dealing with them can violate their contracts with impunity."
In Petrie v. Lane, 67 Mich. 454, plaintiff failed to show that his mill was not as profitably employed during the season as it would have been by fulfilling the contract.
It may be difficult to reconcile the case of Talcott v. Crippen, 52 Mich. 633, with Leonard v. Beaudry, but, in so far as the two cases conflict, the latter, it must be held, has overruled the former.
Plaintiff was entitled to have the jury consider his loss of profits by the breach of Hie contract.
Judgment should be reversed, and a new trial ordered.
McGrath, C. J., Long and Hooker, JJ., concurred with Montgomery, J.