Bixby-Theison Lumber Co. v. Evans

• Decision Date: 02 June 1910
• Citation: 167 Ala. 431,52 So. 843
• Parties: BIXBY-THEISON LUMBER CO. v. EVANS.
• Court: Alabama Supreme Court

52 So. 843

167 Ala. 431

BIXBY-THEISON LUMBER CO. v. EVANS.

Supreme Court of Alabama

June 2, 1910

Appeal from Circuit Court, Marshall County; W. W. Haralson, Judge.

Action by M. H. Evans against the Bixby-Theison Lumber Company. From a judgment for plaintiff, defendant appeals. Reversed and remanded.

John A Lusk, for appellant.

Street & Isbell, for appellee.

SAYRE J.

Plaintiff in the court below, appellee here, recovered judgment for the breach of a contract by which defendant agreed to lend him sufficient money, in no event to exceed $2,000, with which plaintiff was to construct a dam of stone and concrete across Town creek where he then had a wooden dam which furnished power for the operation of a grist mill. Plaintiff undertook also, with the money to be advanced, to purchase and set up in readiness for operation a turbine wheel and band sawmill guaranteeing that the sum named would be sufficient for the improvements specified, and that he would complete them out of his own purse in the event it proved insufficient. To secure the loan defendant was to have, and did get, a mortgage upon plaintiff's water power and surrounding tract of land. The contract also contained a provision that for a fixed period after the completion of the improvements plaintiff was to saw logs for defendant at a fixed schedule of prices, giving preference to defendant's logs at any and all times. Defendant was to furnish logs enough to make the bill for sawing equal to the amount of money advanced. Payment was to be made in that way. After defendant had furnished money to an amount between $400 and $500, it refused to furnish more or to go further with the performance of the contract. Defendant, however, contended that it had fully complied with its contract by purchasing a mill for plaintiff by plaintiff's direction, the price of which, along with the money furnished, made up the sum agreed upon. Meantime plaintiff had torn away the wooden dam and a waterhouse, which constituted a part of the plant, and had expended several hundred dollars of his own money in procuring and preparing stone for the proposed dam. He claimed damages on account of the diminished value of his property, loss of time, labor, and money expended in tearing away the old structure preparing for the erection of the new, and for loss of profits.

Notwithstanding Judge Stone's criticism of the leading case of Hadley v. Baxendale, 9 Exch. 341, in Daughtery v. American Union Tel. Co., 75 Ala. 168, 51 Am. Rep. 435, and his refusal to apply the doctrine of that case to the peculiar facts of the case he had in hand--a case in which the defendant company had failed to correctly transmit a cipher telegram--he assented, and the courts generally assent, to the proposition that if the plaintiff's special, ulterior purposes in making the contract are disclosed, they then become an element of the duty thereby imposed upon the defendant, and afford a substantial basis for the assessment of special damages. The rule is clearly stated by the Supreme Judicial Court of Massachusetts in the following language: When the special circumstances are known to both parties, it is obvious that each may have contracted with reference to them; and that, if such was in fact the case, the party in fault may be held justly to make good to the other whatever damages he has sustained which were the reasonable and natural consequences of a breach under the circumstances so known and with references to which the parties acted. In such cases the larger damages may be recovered as having been in the contemplation of both parties and as naturally resulting, under the special circumstances, from the breach itself. Lonergan v. Waldo, 179 Mass. 135, 60 N.E. 479, 88 Am. St. Rep. 365. The rule here stated requires that both parties shall have contracted with reference to the special circumstances. In New York it is held that bare notice of special consequences which may result from a breach of contract will not suffice, unless under circumstances involving the implication that it formed the basis of the agreement. Booth v. Spuyten Duyvil Rolling Mill Co., 60 N.Y. 487. In Daughtery's Case it was said that if the special circumstances are communicated, they become an implied element of the contract. And in Reed Lumber Co. v. Lewis, 94 Ala. 626, 10 So. 333, it was held, in effect, that the engagement must have been entered into with reference to the special damages. Money, like the staples of commerce, is, in contemplation of law, always in the market and procurable at the lawful rate of interest. For the breach of a contract to pay, the principal with interest is the measure of damages. Such is the invariable measure in a creditor's action against his debtor. 1 Suth. Dam. § 76. It seems to follow, as was noted in Gooden v. Moses, 99 Ala. 230, 13 So. 765, that ordinarily the damages for the breach of a contract to lend money cannot be more than nominal. Recognizing the rule just stated, plaintiff invokes an application of the principle of Hadley v. Baxendale for the recovery of special damages by alleging in the third count of his complaint his inability to get from other sources money with which to replace his dam, and that defendant knew the fact, and knew that plaintiff was to use the money for the purpose of tearing away the improvements then on the land and erecting others in their stead. And special damages for the destruction of his improvements under these circumstances, and other special damages, as we have already noted, are claimed.

The...