A.F. Johnson & Son v. Atlantic Coast Line R. Co.

• Decision Date: 20 March 1906
• Citation: A.F. Johnson & Son v. Atlantic Coast Line R. Co., 53 S.E. 362, 140 N.C. 574 (N.C. 1906)
• Parties: A. F. JOHNSON & SON v. ATLANTIC COAST LINE R. CO.
• Court: North Carolina Supreme Court

53 S.E. 362

140 N.C. 574

A. F. JOHNSON & SON v. ATLANTIC COAST LINE R. CO.

Supreme Court of North Carolina

March 20, 1906

Appeal from Superior Court, Sampson County; W. R. Allen, Judge.

Action by A. F. Johnson & Son against the Atlantic Coast Line Railroad Company. Judgment for plaintiff, and both parties appeal. Reversed.

Where in an action against a railroad company for setting fire to plaintiff's factory, the evidence was circumstantial, and witnesses had testified to various facts introduced for the purpose of excluding the suggestion that the fire was caused by sparks from the engine, it was proper to impeach him by asking him if he had not stated that the fire was caused by sparks from the engine and to prove that he made such statements.

Civil action for the recovery of damages for the alleged negligent burning by defendant corporation of building used by plaintiffs A. F. Johnson & Son for the manufacture of crates baskets, etc. Plaintiffs set forth in their complaint that "they had accumulated upon said premises valuable forms tools, fixtures, office supplies, furniture, etc.; also large quantities of crates, baskets, etc., already manufactured large quantities of crates, baskets, etc., in course of manufacture; and large quantities of raw material for the manufacture and completion of others crates and baskets. And plaintiffs further allege that, at said time, they had contracted and agreed to furnish to various persons, firms and corporations, an output of 75,000 completed crates from their said factory, upon which they would have realized a reasonable profit of $3,500, but for the loss and destruction of the aforesaid property by fire," etc. Defendant, not having sufficient knowledge or information to form a belief, denied this allegation. The plaintiffs, upon the issue in regard to damages, offered to show that they had a contract with the East Carolina Fruit Packing Company to deliver 75,000 berry crates at a fixed profit of $3,500; that they had accumulated the material to complete this contract, and had the same on hand on November 29, 1904, when they were burned out; that it was impossible to replace this material in any of the markets of the country and they lost the year's work; their laborers and servants were, for a long time, idle upon their hands, at heavy expense. This testimony was, upon defendant's objection, excluded. Plaintiffs excepted, and assigned as error upon the issue in regard to damages the rejection of the proposed testimony.

Grady & Graham, for plaintiff.

Junius Davis and Stevens, Beasley & Weeks, for defendant.

Plaintiffs' Appeal.

CONNOR J. (after stating the facts).

His honor, we presume, was of the opinion that the anticipated profits to be derived from completing the contract made by plaintiffs with the fruit packing company for the manufacture and delivery of the crates were too speculative and conjectural to form the basis of a claim for damages. While this court has uniformly adhered to the rule in Hadley v. Baxendale prescribing the measure of damages recoverable for breach of contracts, we find no decision controverting the proposition, held by other courts and laid down by many text-writers, that in actions founded upon a pure tort a different rule prevails. Mr. Sutherland, after discussing many decided cases, says: "The correct doctrine, as we conceive, is that if the act or neglect complained of was wrongful, and the injury sustained resulted in the natural order of cause and effect, the person injured thereby is entitled to recover. There need not be in the mind of the individual whose act or omission has wrought the injury the least contemplation of the probable consequences of his conduct; he is responsible therefor because the result proximately follows his wrongful act or nonaction." 1 Damages, 16. "A tort-feasor is liable for all injuries resulting directly from his wrongful act, whether they could or could not have been seen by him. *** The real question in these cases is, did the wrongful conduct produce the injury complained of? and not, whether the party committing the act could have anticipated the result." Hale on Damages, 36; 8 Am. & Eng. Enc. 625.

Sledge v. Reid, 73 N.C. 440, was an action of trover, for the wrongful taking of plaintiff's mule. Bynum, J., said: "Consequential damages to be recovered in an action of tort must be the proximate consequence of the act complained of, and not the secondary result thereof." The court in Welch v. Piercy, 29 N.C. 365, thus states the same doctrine: "Every man, in law, is presumed to intend any consequences, which naturally flow from an unlawful act, and is answerable to private individuals for any injury so sustained." Whatever distinctions may be recognized between actions founded upon tort, pure and simple, and those in which the cause of action is tort growing out of a breach of contractual duty, such as actions by passengers for wrongful ejection, shippers for failure to deliver freight, or parties in interest for failure to deliver telegrams, it is well settled that when the cause of action is based upon a wrongful invasion of plaintiff's rights of person or property, he may recover all such damages, either direct or consequential, as flow naturally and proximately from the trespass. When the action is for breach of contract, the damages recoverable are such as naturally flow from the breach and such special or consequential damages as are reasonably presumed to have been with the contemplation of the parties at the time they made the contract as the probable result of a breach of it. In ascertaining what damages come within the rule, it is proper to examine, not only the terms of the contract, the subject-matter, etc., but also to inquire whether such circumstances or conditions as produced special damages were communicated to the defendant. We apprehend that the same rule prevails when an action in the nature of tort is brought for the breach of a duty arising out of contract. Williams v. Telegraph Co., 136 N.C. 82, 48 S.E. 559; Dayvis v. Telegraph Co., 139 N.C. 79, 51 S.E. 898. In Lee v. Railroad (N. C.) 48 S.E. 809, it is said: "It is immaterial whether we treat the cause of action as for a breach of contract, or for a negligent omission to perform a public duty arising out of contract." We were then considering the measure of damages for failure to deliver freight. When a party commits a trespass, he must be held to contemplate all the damages which may legitimately follow from his illegal act. In Brown v. Chicago, etc., Railroad Co., 54 Wis. 354, 11 N.W. 361, 41 Am. Rep. 41, it is said: "The general rule is that the party who commits a trespass or other wrongful act is liable for all the direct injury resulting from such act, although such resulting injury could not have been contemplated as the result of the act done." Judge Christiancy in Allison v. Chandler, 11 Mich., at page 561, says: "It is urged by counsel for the defendant that damages for the loss of profits ought not to be allowed, because they could not have been within the contemplation of the defendant. Whether, as a matter of fact, this is likely to have been true, we do not deem it important to enquire. It is wholly immaterial whether the defendant in committing the trespass actually contemplated this, or any other species of damage, to the plaintiff. It is a consideration which is confined entirely to cases of contracts, when the question is, what was the extent of the obligation in this respect, which both parties understood to be created by the contract. But when a party commits a trespass he must be held to contemplate all the damages which may legitimately flow from his illegal act." Stevens v. Dudley, 56 Vt. 158.

We are thus brought to a consideration of the question whether the proposed testimony was competent to be considered by the jury in assessing plaintiffs' damages. "It was at one time laid down as a general rule that damages could not be recovered for the loss of profits. It was thought that profits were in their nature too uncertain to be considered." Hale on Dam. 72. The rule is subject however, to the modification that if the profits lost by defendant's tortious conduct, proximately and naturally flow from his act and are sufficiently definite and certain, they may be recovered or at least evidence in respect to them may be heard and considered by the jury in fixing such damages as will compensate plaintiff." Profits which would certainly have been realized, but for the defendant's fault, are recoverable; those which are speculative and contingent are not." Id. Judge Christiancy in Allison v. Chandler, supra, says: "But whatever may be the rule in actions upon contract, we think a more liberal rule, in regard to profits lost, should prevail in actions purely of tort (excepting, perhaps, the action of trover). Not that they should be allowed in all cases without distinction; for there are some cases where they might in their nature be too entirely remote, speculative or contingent to form any reliable basis for a probable opinion ***. But generally, in an action purely of tort, when the amount of profits lost by the injury can be shown with reasonable certainty, we think they are not only admissible in evidence, but that they constitute, thus far, a safe measure of damages." Sutherland, vol. 1,§ 70, says: "If a regular and established business is wrongfully interrupted, the damage thereto can be shown by proving the usual profits for a reasonable time anterior to the wrong complained of. Schile v. Brokahus, 80 N.Y. 614; French v. Lumber Co., 145 Mass. 261, 14 N.E. 113. In Jackson v. Stanfield, 137 Ind. 592, 36 N.E. 345, 37 N.E. 14, 23 L. R. A. 588, it is held that evidence is admissible showing anticipated...