Price v. . Goodman

Seawell, J. On this appeal we are dealing with an executed sales contract and an alleged breach of warranty on the part of the seller. Since the sale was consummated in West Virginia and delivery had there, the case, in its substantive features, is controlled by the West Virginia law. For that reason our references are, for the most part, to works of recognized accuracy and generally accepted rather to our own Reports, citing the latter only when believed to be in accord with West Virginia law and its legal interpretation. The Uniform Sales Act appears not to have been adopted in West Virginia, as it has not been in this State, and the case under review is free from the implications of that Act in the matter of warranties. For the purpose of this review, the exceptions to the trial may be resolved into three objections: The exclusion of evidence relating to special damages from the loss of expected profits in a transaction alleged to have been pending between the defendant and a customer in Louisiana, and the consequent removal of that element of damages from consideration by the jury; the so-called peremptory instruction to the jury on the second issue relating to plaintiffs’ recovery, which defendant contends relieved the plaintiffs from the burden resting upon them to prove the performance of the contract as it applied to them; and application of the rule restricting defendant’s recovery of damages upon his counterclaim to the amount of the purchase price of the road forms. *228 It is important to observe in the beginning that the great latitude given the defendant in presenting his counterclaim to the jury, particularly on the question of damages,' and the verdict of the jury on the disputed evidence have rendered most of the complaints of the defendant academic; and extended discussion of them would lead to the pursuit of abstract principles, which it is our purpose to avoid. There are, it is true, many anomalies presented in the case, and perhaps some irregularities, arising for the most part from a departure from the course charted by the pleadings ; but they do not necessarily result in reversible error. The defendant’s pleading in setting up his counterclaim is very narrow in its scope, although in the progress of the trial little attention was given to its limitations. Pleading ad damnum, he itemizes his damages arising from the alleged breach of warranty, in language purporting, to be comprehensive and inclusive, as $1,500 paid on the purchase price, $695.21 freight charges incurred, and $156.23 handling charges, totaling the damage at $2,351.44; and in an ensuing paragraph again alleges that his damages by reason of the breach were $2,351.44, with interest thereupon. This was in the body of the pleading. It was in the power of the court, and doubtless would have been its duty on objection, to have limited the evidence of defendant to these items, and recovery could not exceed the amount so alleged and demanded. There was no objection, however, except as to the attempted proof of loss of expected profits in the Louisiana transaction; and defendant’s evidence, properly excluded on other grounds stated infra, is also referable to the above stated principle. 1. Only those damages may be awarded for a breach of contract which are within the reasonable contemplation of the parties as a natural and probable consequence of the breach and which are, therefore, foreseeable. Troitino v. Goodman, 225 N. C., 406, 412, 35 S. E. (2d), 217; Williston on Contracts, sec. 1344; Eestatement, Contracts, sec. 330. Special or extraordinary damages cannot be recovered unless the person sought to be charged is at the time of making the contract informed of the special circumstances out of which they may probably arise, and they arc thus brought within the principle of reasonable foreseeability. Hadley v. Baxendale, 9 Ex., 321; Troitino v. Goodman, supra; Iron Works v. Cotton Oil Co., 192 N. C., 442, 135 S. E., 1002. Instances of such special damages are most frequently met with in executory contracts; and especially those relating to transportation, manufacture, repair of machinery, and the like, but such damages in proper cases may be recoverable for breach of an executed sales contract. There are, however, two requisites for recovery — one factual, and the other procedural; as stated above, the parties sought to be charged must have been duly informed at the time of making the contract of the special circumstances *229 out of which, the damage may arise; Troitino v. Goodman, supra; Raleigh Iron Works v. Cotton Oil Co., supra; Hadley v. Baxendale, supra; and the fact of such notice and of the special damage must be adequately set forth in the complaint or pleading. Special damages “must be stated and described in the declaration or complaint.” Williston on Contracts, sec. 1344Á. After stating the rule as to the pleading of general damages, it is said in Southerland on Damages, p. 1365, sec. 419: “If special circumstances existed entitling the purchaser to greater damages because the default defeated a particular purpose known to the contracting parties, they must be stated and also the facts which, under the circumstances, rendered the injury greater.” “Special damages are required to be stated in the declaration for notice to the defendant and to prevent surprise at the trial.” Ib., p. 1364. See cases under Note 47. In the case at bar it was not so pleaded, and no attempt was made' on the trial to show that plaintiffs had any information or knowledge of the Louisiana transaction on which the defendant, somewhat remotely, we think, predicates loss of profit — in fact, there is a clear inference from his testimony that no such notice was given; and there was nothing in his pleading on which such special damage could be based. The objection and exceptions comprised in it are untenable. 2. The defendant excepts to the instruction given to the jury on the second issue relating to the recovery by the plaintiff of the purchase price promised for the forms. The defendant admitted the receipt of the road forms purchased from the plaintiffs, and the purchase price he agreed to pay. Moreover, he permitted this to be embodied in the first issue and consented that the issue should be answered “Yes.” Nothing else appearing, the plaintiffs, upon the facts established in that issue, were prima facie entitled to recover the purchase price. "Without objection, the partial payment which had been made by defendant was credited to him. The amount of plaintiffs’ recovery so found was provisional and made subject to diminution to its full extent by any recovery made by defendant in the third issue. The defendant made no exception to the issues as so presented or to their sufficiency to completely determine the controversy; and in view of the result, this was not prejudicial to him. The objection, however, appears to be that more proof was required of the plaintiffs to entitle them to recover — that the defendant having alleged a breach of warranty, the burden rested upon the plaintiffs to show that they had delivered to the defendant articles free from challenge-able defects, or of the quality and fitness such warranty might imply. Breach of warranty in a sales contract is an affirmative plea, whether as a defense or ground for recovery of "damages, and the burden is on one who asserts it to establish it by the greater weight of the evidence. *230 Tbe plaintiffs were not bound to anticipate or negative tbe defense or, imprimis, to disprove an unproven claim. Tbe objection is without merit. 3. His Honor limited recovery by defendant on bis counterclaim to tbe total amount of tbe purchase price paid or agreed to be paid. Perhaps such a rule would have been more applicable to some situations met with where tbe remedy sought is recision or offset connected with tbe transaction, which defendant’s form of pleading and allegation of damage strongly suggest. However, notwithstanding any technical inaccuracy in the rule, since the defendant, on an unrestricted presentation to the jury of all the elements of damage he chose to offer (except the properly excluded special damage attributed to the Louisiana transaction), recovered nothing, the limitation did not affect him. Had the jury reached or endeavored to exceed the limitation set by the court, a different situation might have been presented. Obviously, defendant’s difficulty lay with the jury, not with the court. Our attention is called to the limitations on implied warranty growing out of the fact of inspection. We do not consider it necessary to discuss this or, indeed, other rules which might have constituted a hindrance to the defendant, because no such limitations were imposed upon him in the trial, and no exception brings the subject into question. In fact, technicalities that might have rendered defendant’s recovery on his counterclaim more difficult were disregarded, and he was given practically free rein before the jury. There was sharp contradiction between his evidence and that of the plaintiffs, and the evidence of the latter prevailed with the jury. If there was any prejudicial error in the trial, and we do not conclude that there was, it is not disclosed in the exceptions. We find No error.