Louisville & N.R. Co. v. Mink

• Decision Date: 26 June 1907
• Citation: 103 S.W. 294,126 Ky. 337
• Parties: LOUISVILLE & N. R. CO. v. MINK.
• Court: Kentucky Court of Appeals

103 S.W. 294

126 Ky. 337

LOUISVILLE & N. R. CO. v. MINK.

Court of Appeals of Kentucky.

June 26, 1907

Appeal from Circuit Court, Rockcastle County.

"To be officially reported."

Action by H. M. Mink against the Louisville & Nashville Railroad Company. Judgment for plaintiff. Defendant appeals. Reversed and remanded for new trial.

John T Shelby and J. W. Brown, for appellant.

C. C Williams, for appellee.

O'REAR C.J.

This was an action for damages against a common carrier by the owner of a sawmill, who shipped parts of the machinery and engine from Rockcastle county to a point in Ohio for repair and return. The carrier negligently delayed the return shipment, so that the articles were lost for about two months. The plaintiff alleged that by reason of the delay a certain quantity of logs which he had on hand deteriorated in quality, to his damage in the sum of $1,000; also, that he had lost two valuable customers, whose orders he could not fill because he could not operate his sawmill without the machinery delayed in shipment, and thereby he suffered a further damage of $250. As to the measure of damages recoverable, the court instructed the jury as follows "(2) The court instructs the jury that the criterion of damages is the difference in value of the logs plaintiff would have sawed on his mill during the time said engine cylinder and valve were unreasonably delayed, and the value of said logs at the time plaintiff could saw same after receiving said engine cylinder and valve rod. (3) Unless the jury believe from the evidence that the defendant railroad company, through or by some one of its duly authorized agents, or party acting as such agent, it was notified of the special importance of the shipment of the engine cylinder and valve rod to the plaintiff, the jury should find for the plaintiff only nominal damages."

The leading case as authority on this subject is Hadley v. Baxendale, 9 Ex. 341. The principles announced therein have been applied both in England and America with varying consistency ever since the opinion was rendered. Its interpretation has not always been the same; but the weight, and it may be said the result, of innumerable cases in which it has been followed since, settle the principle to be that in any breach of a contract the plaintiff may recover always such damages as normally result therefrom, or he may, by showing special facts to have been known to the defendant at the time of the contract, which would give notice to him that a breach of the contract would result in an otherwise unexpected loss, recover his special damages. Hadley v. Baxendale was very much like the case at bar. The plaintiffs were owners of a steam mill. A shaft of their machinery was broken. They gave it to the defendant, a carrier, to take to an engineer to serve as a model for a new one which he was to make. Defendant's clerk was informed, when the contract was made for shipping the shaft, that the mill was stopped, and that the shaft must be sent immediately. The carrier delayed the delivery, and, in an action for the breach of the contract, plaintiff's claimed, as special damages, the loss of profits while the mill was kept idle. In the course of the opinion this rule was laid down: "We thing the proper rule in such a case as the present is this: Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i. e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract, as the probable result of the breach of it. Now, if the special circumstances under which the contract was actually made were communicated by the plaintiff to the defendant, and thus known to both parties, the damages resulting from the breach of such a contract, which they would reasonably contemplate, would be the amount of injury which would ordinarily follow from a breach of contract under these special circumstances so known and communicated; but, on the other hand, if the special circumstances were wholly unknown to the party breaking the contract, he, at the most, could only be supposed to have had in his contemplation the amount of injury which would arise generally, and in the great multitude of cases, not affected by any special circumstances, from such a breach of contract, for, had the special circumstances been known, the parties might have specially provided for the breach of contract by special terms as to the damages in that case, and of this advantage it would be very unjust to deprive them. The above principles are those by which we think the jury ought to be guided in estimating the damages arising out of any breach of contract." The same principle was soon thereafter applied on this side by the Court of Appeals of New York, in Griffin v. Colver, 16 N.Y. 489, 69 Am. Dec. 718. The same court, in Booth v. Spuyten Duyvel R. M. Co., 60 N.Y. 487, thus stated the rule: "It is presumed that the parties contemplate the usual and natural consequences of a breach when the contract is made; and if the contract is made with reference to special circumstances, fixing or affecting the amount of damages, such special circumstances are regarded within the contemplation of the parties, and damages may be assessed accordingly."

The object of every rule on the subject is to ascertain that damage resulting from the breach which the parties, at the time the contract of affreightment was made, presumably had in mind. "Damage" means loss. Compensation would be inadequate that did not cover the loss sustained. It might be, in such a case as we have at bar, the deterioration of material on the mill owners' hands which was occasioned by the delay; but he might be entitled to more than his sound material, or its equivalent in money, for his object in having the material was to manufacture it into planks for sale. If he had a market for the lumber when so made, or contracts of sale already entered into, his profits, which were lost by reason of the delay in delivering the parts of the machinery, are recoverable upon the same grounds as is the depreciated value of his logs. Both items of damage grow out of the same breach, and together constitute the loss sustained by reason of it. Each of these elements is special damage. Each...