Fell v. Newberry

• Decision Date: 01 October 1895
• Court: Michigan Supreme Court
• Parties: FELL v. NEWBERRY.

64 N.W. 474

106 Mich. 542

FELL v. NEWBERRY.

Supreme Court of Michigan

October 1, 1895

Error to circuit court, Emmet county; Oscar Adams, Judge.

Action by Sylvester C. Fell against Jay L. Newberry for breach of contract. From a judgment for defendant, plaintiff brings error. Reversed.

Grant J., dissenting.

Lyon &amp Dooling, for appellant.

B. T Halstead and A. D. Cruickshank, for appellee.

MONTGOMERY J.

The facts are sufficiently stated in the 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 performing 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 established 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, 29 N.W. 711; Leonard v. Beaudry, 68 Mich. 312, 36 N.W. 88; Id., 80 Mich. 163, 45 N.W. 66; Burrel v. Salt Works, 14 Mich. 34. See, also, 5 Am. & Eng. Enc. Law, 32, note. In the case of Allis v. McLean, 48 Mich. 428, 12 N.W. 640, it was held that, for the failure to furnish machinery to the owner of a sawmill as agreed, the owner cannot recover for profits which he would have made in the general conduct of the business. 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 prospects at both times appear equally good. 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 analogous case of Manufacturing Co. v. Pinch, 91 Mich. 156, 51 N.W. 930, the case of Allis v. McLean was followed. On the other hand, in Leonard v. Beaudry, supra, it was held that the owner of the sawmill who was defeated of the profits which he might have made under a contract with the defendant could recover such profit on showing what it would cost him to manufacture the lumber. I 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 make 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 his 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 case of the owner of the mill. In Leonard v. Beaudry, 68 Mich. 322, 36 N.W. 88, Mr. Justice Champlin very pertinently said: "It is a mistake to suppose that sawmill owners are without the pale 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, 35 N.W. 70, 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, 18 N.W. 392, 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 contract. Judgment should be reversed, and a new trial ordered.

McGRATH, C.J., and LONG and HOOKER, JJ., concurred with MONTGOMERY, J.

This is an action of assumpsit to recover for work and labor performed in repairing a shingle mill for the defendant, and to recover as damages prospective profits which plaintiff claims he might have made if he had been permitted to run the mill for six months under a parol contract made with the defendant. The contract, as stated by the plaintiff, is as follows: "The arrangement was that I was to go up to Germfask, and see to getting the mill into running order and, after it was ready to run, I was to run the mill by the thousand, for six months. I was to hire my own help, and he was to pay me for cutting, by the thousand, one dollar for the clear, fifty cents for the seconds, and twenty-five cents for culls. That was Mr. Newberry's proposition. I accepted it at the time I looked the mill over. He was to furnish the mill with stock, and keep the mill running. He said the parties there with whom he had a contract would stock it, and I said, 'That is very uncertain;' and he said, 'I will see that it is stocked, because I want that mill to run every day until I get my money out of it.' He said the timber was pine, and it would run three-quarters star. Under the arrangement, I was to furnish the oil and the files and the incidentals. I was to employ the hands. Payments were to be made monthly. The amount of shingles were to be counted up at the end of each month, and the payment was to be made the 15th of the next succeeding month. I was to pile the shingles up in the yard away from the fire. When the mill was about ready to operate, I had the men all engaged at that time. I had a conversation with Mr Newberry in reference to getting a filer, one particular man. He said he thought he could get me a good filer, and made an effort of that kind. I had the men all engaged to operate the mill. Some of them had been employed for quite a while before the mill was ready. Most of them, for a number of days, had been ready whenever the mill was ready. They were all engaged August 14, 1893, and were all there in the neighborhood, handy, where I could find them." The mill was ready for operation about August 14th. It was then proposed by the defendant to reduce their contract to writing. They disagreed as to the terms. Plaintiff refused to sign the contract prepared by the defendant, insisting that it was not in accordance with their parol agreement, for the breach of which this action is brought. Plaintiff's testimony on the question is brought. Plaintiff's testimony on the question of damages is as follows: "I have no knowledge of my own as to the capacity of that mill, as I came away before the mill was run. Based upon my knowledge of the business and my experience as a shingle maker, with the material such as Mr. Newberry agreed to furnish, I would say the capacity of the mill was from 40 to 50 thousand shingles a day. I saw some of the timber there at the mill. With the timber of the quality it was agreed to be furnished, it would run, I should think, three-quarters stars,-an average of three-quarters stars,-and, of the balance, three- quarters to four-fifths seconds, and the remainder culls, would not be far out of the way. Q. Would the proportions of the different classes or qualities of shingles be affected by the manner of manufacturing? A. Oh, in a certain degree, yes, sir; but more in timber. It is supposed to be in a workmanlike manner. I know of the skill or ability to manufacture shingles of most of the crew of men that I had employed, and I got the best men I could for that line of...