Hawk v. Pine Lumber Co.

WalKeb, J. We are of the opinion the Judge erred in admitting the testimony of Benjamin Moore and other witnesses as to facts supervening the breach of the contract, that is, the cost of logging after the breach and the increase in the rate of wages, and also in refusing the plaintiff’s prayer for instruction. ■ This case, in respect to the damages recoverable for the breach of the contract is governed by Wilkinson v. Dunbar (decided at this term). We held there that, while the entire damage must be assessed, present and prospective, the measure of damages is the value of the contract at the time of the breach. Justice Hoke, for the Court, says in that case: “There was evidence offered tending to show that this contract would have required some years in its performance beyond the time when a breach was established, and, as to this prospective damage, that to arise in the time required for performance after such breach, the correct rule would be the present value of the difference between the contract price and the cost of performance. We hold, as stated, that recovery for this prospective damage can be had, but defendant is only entitled to the present value of’his contract, and,, in so far as such damage is allowed by anticipation, proper allowance should be made for the fact that present recovery is had for damage that would only have accrued at a future time. This position as to the correct rule for determining values to arise and accrue in the future, when a present recovery is allowable, is very well illustrated in the case of Pickett v. R. R., 117 N. C., 616.” He cites the leading and authoritative case *14 of Masterton v. Mayor, 7 Hill, 61, in which it was beld: “(a) When one party to an executory contract puts an end to it by refusing to fulfill, the other party is entitled to an equivalent in damages for the gains and profits which he would have realized from performance. “(b) The measure of damages, in respect to so much of the contract as remained wholly unperformed at the time of the breach, is the difference between what the performance would have cost the plaintiff and the price which the defendant had agreed to pay. “(c) In estimating what the performance would have cost the plaintiff, the Court and jury should bo governed by the price of labor and material at the time of the breach, paying no attention to subsequent fluctuations of the market.” This, of course, means actual fluctuations. The language of Chief Justice Nelson (afterwards a Justice of the Supreme Court of the United States) is especially applicable do our case. He says: “Where the contract, as -in this case, -is broken before the arrival of the time for full performance, and the opposite party elects to consider it in that light, the market price on that day of the breach is to govern in the assessment of damages. In other words, the damages are to be settled and ascertained according to the existing state of the market at the time the cause of action arose, and not at the time fixed for full' performance. The basis upon which to estimate the damages, therefore, is just, as fixed and easily ascertained in cases like -the present, as in actions predicated upon a failure to perform at the-day.” ■■ The concurring opinion of Bronson, J., is equally as strong and'explicit in stating the same principle. The rule, as now formulated by this Court, and governing in such cases as this one, is well supported, not only by Masterton v. Mayor, supra, but by the other cases which will be found in the learnéd and forceful opinion of Justice Iloke. We need not refer to them seriatim and make special comment upon the' reasons' assigned *15 therein for the conclusion reached by the Courts of Alabama, Iowa, Wisconsin and Illinois, and by this Court in Oldham v. Kerchner, 19 N. C., 106, as it will suffice to say, generally, that they fully and conclusively sustain the rule as one both simple in its application, certainly less-speculative than any other, and eminently just and proper. We again commend its wisdom, as it fixes a sure standard for assessing the damages, and prevents a jury.from entering into the field of uncontrolled conjecture and speculation, which might result in many cases most disastrously to the offending party. He surely should not complain of it, and his adversary has no ground for criticism of it, as a proper criterion of what he should receive, as he gets, under it, all that he could have contemplated that he would receive, and he also receives a benefit from the fact that we exclude from the consideration of the jury vague surmise and conjecture as to what the future market, with- respect to the cost of labor and material, and other elements of damages, will actually be. The fact that the market will fluctuate and that prices will rise or fall may be considered in estimating the damages, but not any particular or actual damage which may have occurred in future conditions. The presumption is that he estimated his profit upon the basis of the conditions existing at the time of the breach, if there should be one, or that is, at least, as close an approximation as we can possibly make, with reference to what was in the minds of the parties and within their reasonable expectation, when they made the contract. This ruling entitles the plaintiff to a new trial. The instructions of the Court, Nos. 1 and 2, would seem to be somewhat inconsistent, though it is possible we may be mistaken as to this, and not clearly understand them with reference to each other, • so as to be able to reconcile them. The last instruction was erroneous, under the rule laid down by us, especially when considered in connection with the incompetent evidence admitted and the instruction asked by the plaintiff, which was r,ejected. *16 We think that, under the peculiar circumstances of this case, the new trial, which we award, should extend to all the issues, for the reason, among others which are controlling, that the facts of the case may be more fully developed and the questions intended to be presented, more clearly presented. To do otherwise, might result in injustice to one or both of the parties. We grant the new trial generally in the exercise of the discretion which belongs to this Court, as has been so often decided. Burton v. R. R., 84 N. C., 192; Holmes v. Godwin, 71 N. C., 306; Meroney v. McIntyre, 82 N. C., 103; Strother v. R. R., 123 N. C., 197; Hall v. Hall, 131 N. C., 185; Benton v. Collins, 125 N. C., 83; Nathan v. R. R., 118 N. C., 1066. Let there be a new trial as to all the issues. New trial.