Winslow Elevator & Machine Co. v. Hoffman

• Decision Date: 01 April 1908
• Parties: WINSLOW ELEVATOR & MACHINE CO. v. HOFFMAN et al.
• Court: Maryland Court of Appeals

69 A. 394

107 Md. 621

WINSLOW ELEVATOR & MACHINE CO. v. HOFFMAN et al.

Court of Appeals of Maryland

April 1, 1908

Appeal from Superior Court of Baltimore City; George M. Sharp Judge.

Action by Sarah Elizabeth Hoffman and others against the Winslow Elevator & Machine Company. From a judgment for plaintiffs defendant appeals. Reversed, and new trial awarded.

Samuel K. Dennis and Wm. S. Bryan, Jr., for appellant.

Wm. S Bansemer and Richard B. Tippett, for appellees.

BURKE J.

The appellees, in August, 1904, began the erection upon their lot No. 11 East Lexington street a six-story office building. This building was completed and occupied about the 1st of April, 1905. On the 7th day of October, 1904, the parties to this appeal entered into a contract by which the appellant, the Winslow Elevator & Machine Company, in consideration of the sum of $1,600, agreed to furnish and erect in a workmanlike and substantial manner in said office building one electric combined passenger and freight elevator in accordance with certain specifications set out in the contract. The elevator was to be furnished and in working order according to these specifications by the 15th day of January, 1905, subject to limitations of strikes, lockouts, accidents, and other unavoidable causes. Incorporated in this contract was this guaranty: "We guarantee all the labor and material furnished to be of the best grade and free from defects, and will replace defective apparatus within two years, provided an inspection proves such claim; and also that the apparatus will work to its rated capacity, and will do its work when kept clean, dry, and in good condition, provided you employ competent attendants." On January 14, 1907, the appellees sued the appellant in the superior court of Baltimore city for a breach of the contract. The declaration contains the six common counts and one special count, which alleged the breach for which the suit was brought to be that the appellant did not erect the elevator in a good and workmanlike manner in accordance with the proposal and specifications embraced in the contract. The count further averred that as a result of the unsafe and defective construction of the elevator and its unsatisfactory operation and working the plaintiff "lost large sums of money by the loss of tenants in the said building, who removed therefrom, and from others who refused to rent the offices in said building by reason of the general complaint of said elevator due to its improper, defective, and dangerous construction, and sustained much other loss and damage." To the six common counts the appellant pleaded the general issue plea, and traversed the seventh plea. Issue was joined, and the case proceeded to trial before a jury, resulting in a verdict and judgment for the appellee for the sum of $7,000. From this judgment the appeal now before us was taken.

The testimony appearing in the record is very conflicting; but it is not necessary for us to discuss it at length, or to decide upon which side of the case is found the weight or preponderance of evidence. The defendant insisted that it had performed all its obligations under the contract, and it offered evidence, if the jury had found it to be true, to have justified a verdict in its favor. On the other hand, the evidence adduced by the plaintiffs proved the breach alleged in the declaration. It was exclusively the province of the jury to decide upon the weight and sufficiency in fact of the evidence, and as they accepted the evidence of the plaintiff as to the defective workmanship and construction of the elevator we are bound by their finding upon these questions and therefore a minute examination of the evidence, in the absence of any question as to its legal sufficiency, becomes unnecessary. There is only one question in the case, and that is, were the plaintiffs entitled to recover for the loss of rents claimed in the declaration? According to the evidence of Mr. Hoffman the direct loss sustained in the purchase of a new elevator for repairs, etc., was $1,565. The jury, therefore, allowed $5,435 for loss of rents. The evidence, some of which was taken subject to exception, showed that the building was one of the first erected after the fire of February, 1904, and that there was then a great demand for offices, and that rents were high. The building has 45 office rooms, and 1 large room on the first floor, which was at first rented for $3,000 per year, but was subsequently reduced to $2,000. It is also shown that following the completion of other office buildings rents began to decline, and the plaintiffs were obliged in consequence to make material reductions in the rent. There were 45 offices in the building, and upon each Mr. Hoffman fixed a certain rental value. According to this schedule of prices the estimated yearly income from these rooms was $10,800, or $900 per month. Before the building was completed 7 or 8 offices had been rented, and Mr. Hoffman was diligent in his efforts to rent all the rooms. There was evidence tending to show general complaint about the elevator; that in some instances reduction in rents was made on account of the bad elevator service; and that this bad service was a great objection to tenants and to others who might otherwise have rented offices in the building. Much of the testimony on the question as to what extent the elevator did in fact prevent people, who would have otherwise rented, from becoming tenants, is inconclusive and conjectural, and we have been unable to find any reasonably definite evidence upon which the jury could have found such a great loss of rents. This circumstance strikingly demonstrates the necessity of applying the correct rule for the measurement of damages in cases like the present. In the leading case of Hadley v. Baxendale, 9 Exch. 341, Baron Alderson stated the rule of damages in cases for breach of contract to be this: "When 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 damage resulting from the breach of such 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 these 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, for 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 court granted a new trial in that case upon the ground that "the judge ought to have told the jury that upon the facts then before them they ought not to take the loss of profits into consideration at all in estimating the damages." The second branch of this rule, like the famous judgment of Chief Justice Marshall in Marbury v. Madison, 1 Cranch (U. S.) 137, 2 L.Ed. 60, which declared that an act of Congress contrary to the Constitution was void, was an obiter dictum, still it has been consistently followed in later cases, and, as said by Judge Pearce in the Western Union Telegraph Company v. N. Lehman & Bro., 105 Md. 442, 66 A. 266, "remains the law of England, and has been generally approved in this country, and has been too often recognized in this state to be departed from, even if we were so disposed." It was approved in the United States Telegraph Company v. Gildersleve, 29 Md. 233, 96 Am. Dec. 519, Maryland Ice Company v. Arctic Machine Manufacturing Company, 77 Md. 203, 26 A. 493, Webster v. Woolford, 81 Md. 329, 32 A. 319, and in the recent case of Russell v. Stoops (decided May 17th, 1907) 66 A. 698. In Webster v. Woolford, supra, Judge Robinson said that "the first part of the rule as thus laid down applies to cases in which the damages are the direct and natural result of the breach of the contract, and which the law presumes to have been in contemplation of both parties. The latter part of the rule applies in cases where special damages are claimed under special circumstances made known by the plaintiff to the defendant at the time the contract was made; and in such cases the plaintiff is entitled to recover such damages as may reasonably be supposed to have been in contemplation of both parties in view of the circumstances thus disclosed." It must be admitted that the loss of rents cannot be recovered upon the ground of interruption or destruction of the plaintiffs' business, because there was no established business to be injured or destroyed. It is well settled that before a recovery can be had upon this ground it must appear that the business, which is claimed to have been injured, was an established one, and that it had been conducted successfully for such a length of time that the profits thereof could be ascertained with reasonable certainty. But "when a new business or enterprise is floated, and damages by way of profit are claimed for its...