Winston Cigarette Mach. Co v. Wells-whitehead Tobacco Co

• Decision Date: 08 May 1906
• Citation: 53 S.E. 885,141 N. C. 284
• Court: North Carolina Supreme Court
• Parties: WINSTON CIGARETTE MACH. CO. v. WELLS-WHITEHEAD TOBACCO CO.

53 S.E. 885

141 N. C. 284

WINSTON CIGARETTE MACH. CO.

v.WELLS-WHITEHEAD TOBACCO CO.

Supreme Court of North Carolina.

May 8, 1906.

Damages—Loss of Profits.

Where plaintiff, a manufacturer of a machine for making cigarettes, contracted with defendant, a cigarette manufacturing company, to operate and exhibit a model of the machine at an exposition, a breach of the contract by defendant's failure to operate and exhibit the model, even in bad faith, did not entitle plaintiff to recover estimated profits to accrue from the operation and exhibition thereof, in the absence of evidence that plaintiff had actually secured any contracts for the purchase of its machines if they proved satisfactory when the model was exhibited and operated, or that plaintiff would have made any particular number of sales.

[Ed. Note.—For eases in point, see vol. 15, Cent. Dig. Damages, § 75.]

Appeal from Superior Court, Forsyth County; E. B. Jones, Judge.

Action by the Winston Cigarette Machine Company against the Wells-Whitehead Tobacco Company. From a judgment in favor of plaintiff, defendant appeals. Affirmed in part, and reversed and remanded in part.

In August, 1903, the defendant, being a manufacturer of cigarettes and desiring to advertise its brands, contracted with the plaintiff, who is the manufacturer of the Briggs cigarette machine, that if the plaintiff would furnish one of its machines well equipped for the purpose, the defendant would operate and exhibit it at the St. Louis Exposition in 1904. The plaintiff alleged that it performed the contract on its part by preparing the machine for exhibition and did so at considerable expense, but that the defendant, just before the Exposition was opened and when it was too late to make other arrangements to have its machine exhibited, refused to operate and exhibit the machine at the Expositon as it had undertaken and promised to do, without any reasonable or valid excuse for so doing. The defendant admits the contract as alleged, except that it alleges there was a condition precedent annexed to it, namely, that it could procure free, or without any charge therefor, such space in the Exposition Building as was needed for the purpose of operating and exhibiting the machine, and that this it failed to do without any fault on its part Plaintiff alleged that by reason of the breach of the contract by the defendant, it has not only sustained damages in the way of moneyactually paid out to put the machine in readiness, but that it has suffered further damage by the loss of profits it would have made if the contract had been performed and the loss of the benefits that would have accrued to it In increased sales of its machines, by the exhibition of said machine at St. Louis while in actual operation and by the advertisement of its peculiar features and its advantages over other machines of a like kind. The issues submitted to the jury, with their answers thereto, were as follows: "(1) Did the defendant contract to exhibt at the St. Louis Expositon the cigarette machne of the plaintiff, known as the 'Briggs Machine, ' as alleged in the complaint? Ans. Yes. (2) Did the defendant fail and refuse to carry out the contract aforesaid, as alleged inthecomplaint? Ans. Yes. (3) What amount if any, is plaintiff entitled to recover for the construction and preparation of the machine contracted to be delivered to defendant for exhibition? Ans. $211. (4) What amount, if any, is plaintiff entitled to recover for the failure of defendant to exhibit the machine at the Universal Exposition, as alleged in the complaint? Ans. $5,000."

Upon the question of damages, so far as it related to the fourth issue, the material part of the charge to the jury, was as follows: "In answering this issue the court charges you that if you find the defendant violated its contract by failure to exhibit the machine at St. Louis, as agreed upon, the plaintiff would be entitled to at least nominal damages. And by nominal damages I mean a penny or some such small amount. And if the plaintiff has failed to show to you by the greater weight of the evidence that its damages exceed a nominal amount, you should answer the fourth issue one penny, or some other small amount. Now the plaintiff contends that, at the time of the execution of this contract, both parties had in contemplation the profits that would result to them from such an exhibition. That is, the sale of defendant's cigarettes would be increased by such exhibition, and the sale of plaintiff's machine for making cigarettes would be increased, and thereby the anticipated and probable profits of both would be materially increased; and that by failure of defendant to comply with its part of the contract the plaintiff has lost the sale of many machines, and consequently the profits that would naturally follow a sale. In this branch of the case, gentlemen, the court finds it very difficult to lay down a certain rule by which you are to be governed in ascertaining and measuring the plaintiff's damages, if you should first find it has suffered damages by reason of defendant's failure to exhibit the machine at St. Louis. The plaintiff contends that this contract to exhibit at St. Louis had some value, and that the conduct of the defendant has deprived it of the value and profits which would naturally have grown out of the exhibition had defendant complied with its contract. A party seeking to recover profits for breach of contract is not required to prove, either that profits would have accrued, or the amount of them, by any other or higher evidence than one is required to produce in any other civil action. So, if the plaintiff has made it appear by a fair preponderance of the evidence that profits would have resulted from an exhibition of the machine at St. Louis, and if it has produced such evidence as will authorize a jury upon legitimate and proper inference to ascertain the amount of profits which would have been made, it would be entitled to recover such amount of damages as the jury may honestly and consistently believe due it by reason of the breach."

There was no evidence that the plaintiff had secured any contracts for the purchase of its machines, if they proved satisfactory when the model was exhibited and operated at St. Louis, nor was there any evidence that the plaintiff would have made any particular number of sales, nor was there any other proof which would enable the jury by any certain and reliable standard to estimate the losses, unless the evidence hereinafter stated is sufficient for that purpose. It was shown that the plaintiff had another offer for the exhibition of its machine but declined the same because of the contract with the defendant There was also evidence tending to show that the machines sold for $1,600 apiece, and that the company had already sold from 150 to 160 of them in different parts of the world; that they were advertised usually by operating them where they could be seen by those interested in the purchase of such machinery; and that one is constantly kept in New York on exhibition, as it is found necessary to prove the value of the machine to those who may buy by the actual operation of a machine in their presence. This particular machine which was to be exhibited at St Louis had been exhibited elsewhere. The exhibition of them usually led to sales, and almost all of them had been sold by reason of their value being demonstrated in the presence of the purchasers. The Briggs machine will turn out 125, 000 to 150, 000 cigarettes per day, and is of simple construction. It costs about half as much as the Bonsack machine. About 50 of them are in operation. The plaintiff had intended to make an exhibit of one of its machines at St Louis before the contract to do so was made with the defendant, and had decided to spend between $5,000 and $6,000 on the exhibition and operation of the machine at the exposition. Plaintiff further offered evidence tending to show that it would have cost $5,000 to have exhibited and operated the machine itself, which it had intended to do before contracting with the defendant, and that it did not have the time and opportunity to make the required preparation for doing so after it was notified by the defendant that it would not perform the con-tract on its part. Exceptions were taken by the defendant to his honor's rulings and charge upon the fourth issue. There was a judgment upon the verdict, and defendant appealed.

Lindsay Patterson and Connor & Connor, for appellant.

Manly & Hendren and Watson, Buxton & Watson, for appellee.

WALKER, J. (after stating the case). There is no serious objection made by the defendant to the rulings and charge of the court upon the first, second, and third issues; and, after a careful perusal of the charge, and an examination of the rulings of the court, so far as they bear upon those issues, we are satisfied that no exception can well be taken thereto. The defendant frankly and fully placed its right to the favorable consideration of this court upon its exception to that part of the charge which relates to the fourth issue, and around this single question the contention of the parties was waged. While the inquiry we are about to make is important, it is by no means a novel one, and does not open up any new field of legal investigation. It involves, not the discussion of any new principle but merely the application of one of some antiquity to the actual facts of this case. We usually experience difficulty in adjusting even a well-settled rule to any particular state of facts, but those in this case are so few and so simple that we should have little or no embarassment in reaching a correct conclusion. Generally speaking, the amount that would have been received if the contract had been kept and which will completely indemnify the injured party is the true measure of damages for its breach. Benjamin v. Hillard, 23 How. (U. S.) 149, 16 L. Ed. 518; Mace v. Ramsey, 74 N. C. 14. Where one...