Magnolia Metal Co. v. Gale
| Decision Date | 11 September 1905 |
| Citation | 189 Mass. 124,75 N.E. 219 |
| Parties | MAGNOLIA METAL CO. v. GALE. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Alexander S. Bacon and I. R. Clark, for plaintiff.
George F. Piper and Walter H. Thorpe, for defendant.
This is an action for the breach of a written contract dated June 26 1900. The defendant notified the plaintiff on January 22 1901, that he would no longer act under the contract, and this was the breach relied on. It was admitted that from that date the contract was no longer in force. The only defenses relied on were that the contract was procured by fraud and misrepresentation on the part of the plaintiff, and that the plaintiff had violated certain terms and conditions on its part to be performed. There had been a prior contract between the same parties dated September 22, 1899, which was expressly canceled, and the parties relieved from further liability thereunder by the contract in suit. The fraud and misrepresentation relied on related to the first contract, and the first exception is to the refusal of the court to rule, as requested, that the second contract was a continuation of the first, and that the two should be read together, and that the plaintiff was not entitled to recover on the contract in suit if the defendant was induced to enter into the first one by the fraud or misrepresentation of the defendant or its duly authorized agent. It is too plain for argument that this request was rightly refused. Save as the second had incorporated into it with certain modifications certain covenants and agreements contained in the first, the two were independent and distinct. The second was not a continuation of the first, and the two together did not constitute one contract or agreement. This exception is overruled.
The next and remaining exception is to the refusal of the court to rule, as requested, that in estimating the damages, if any, which the plaintiff was entitled to recover, such expenses as the plaintiff would have been subjected to in carrying out the contract on its part were to be deducted from the profit meaning thereby, we assume, the gross profit which would have accrued to it under the contract. We think that this instruction should have been given. The plaintiff was not entitled to be put in a better position by reason of the breach than it would have been in if the contract had been carried out by the defendant. The damages are to be assessed on the footing of what the plaintiff's profits would have been if the contract had been carried out by the defendant according to its terms, and the plaintiff is to be made whole for what he has thus lost by the defendant's breach. The jury was properly instructed that the plaintiff was entitled to recover the net profit which it would have made if the contract had been performed. But, in order to arrive at that, it was necessary to take into account the expense to the plaintiff of completing the contract on its part. It can not have the same benefit of the contract that it would have had if it had been fully performed, and at the same time avoid the expense to which, according to the terms of the contract, it would have been subjected by performance. To allow such expense to be ignored in the estimation of the damages would be putting the plaintiff...
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