Arkansas Valley Town & Land Co. v. Lincoln

The opinion of the court was delivered by Martin, C. J. : I. The first question concerns the validity of the contract of guaranty that the railroad would be completed to Richards, and this includes the power of the town company to enter into such a contract, and the authority of the general agent to bind the corporation. If the corporation had no right to build a railroad, yet, as a means of promoting its own interest, it might contract with a railroad company for the extension of its road to or through the town — 149 — site, and aid it by the donation of town lots or money. ( Whetstone v. Ottawa University, 13 Kan. 320, 340 ; Fulton v. Land Co., 47 id. 621.) And if, in order to induce settlement, the town company should guarantee that the railroad would be built, and a person relying thereon should be induced to settle upon the town site at great expense, it could not be relieved of its obligation on the plea of want of power ; (Town Co. v. Morris, 43 Kan. 282, 284, and cases cited; Town Co. v. Russell, 46 id. 382; Mound City v. Snoddy, 53 id. 126;) nor could it escape liability on the ground that the board of directors failed formally to confer authority on the general agent to enter into the contract,. (Town Co. v. Swigart, 43 Kan. 292,) especially where it is customary for such agent to make and the corporation to act upon such contracts. (Durham v. Mining Co., 22 Kan. 232, 244 ; Building Association v. Martin, 39 id. 750.) Spivey testified that it was the custom of the general agent to make contracts to induce parties to locate upon the town sites, and to use his judgment and discretion as to the terms and conditions of such inducement, and that he made a large number of such contracts, and had authority to do so. II. The town company claims that the letters of June 28 and June 30, respectively, constitute whatever contract was made by the agent with Lincoln; and, as the latter said nothing about the railroad in his letter, there was no contract of guaranty of its completion. These letters can scarcely be said to embrace the full terms of the contract, for in that of the general agent to Lincoln he asks him to rest assured that the railroad would be built and in operation, as stated to him when he was at Topeka, which indicates that Lincoln had‘not covered the whole subject in his letter. Besides, the main, if not the only, in — 150 — ducement to Lincoln to remove his store from Matfield Green, where-he had a well-established business, to the new town site a mile away, was that Richards was to be the railroad town; and on the heading of the letter of June 30, by the general agent, as well as 'on all others written by him, was the following heading: “Arkansas Valley Town and Land Company. Town Property on the Túne of the Atchison, Topeka & Santa Fe Railroad and Auxiliary Lines.” There can be no doubt, upon the evidence, that the contract included the guaranty that the railroad would be built to Richards, if not in September, at least in the fall of-1886. III. The evidence and the instructions of the court as to damages are complained of. When the contract was entered into, both parties were fully cognizant of the situation. The success of Richards contemplated the downfall of Matfield Green, and neither was possible without the building of the railroad to the former place. With the railroad, Richards was to blot out Matfield Green; without it, no business could be established there. By the procurement of the general agent, Lincoln placed himself in a hostile attitude to Matfield Green, so that a failure at Richards, which must be inevitable without the railroad, involved the ruin of an established and profitable business. This brings the case within the rule of Hadley v. Baxendale, 9 Exch. 341, decided in 1854, Baron Alderson stating the same, as follows : ‘ ‘ Where 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 — 151 — to have been in the contemplation of both parties, at tbe time they made the contract, as the probable result of the breach of it.” The damages by the breaking up of Lincoln’s established business at Matfield Green were not as difficult nor as uncertain of measurement as those in the cases of Hoge v. Norton, 22 Kan. 374, 379, and Brown v. Hadley, 43 id. 267, 271, nor as some others that might be mentioned. (Heatwole v. Gorrell, 35 Kan. 692, 699.) Sedgwick, in his work on Damages (8th, ed.), section 182, says: “Where it clearly appears that the defendant has interrupted an established business, from which the plaintiff expected to realize profits, the plaintiff should recover compensation for whatever profit he makes it reasonably certain he would have realized. Here, as elsewhere, the question is one of fact; whether the profit can be proved with reasonable certainty.” And he cites the case of Chapman v. Kirby, 49 Ill. 211, 217, 219, where the court says : “And to measure such damages, the jury must have some basis for an estimate, and what more reasonable than to take the profits for a reasonable period next preceding the time when the injury was inflicted, leaving the other party to show that by depression in trade or other causes they would have been less? Nor can we expect that in actions of this character the precise extent of the damages can be shown by demonstration. By this means they can be ascertained with a reasonable degree of certainty.” We think it was proper for the jury to take into consideration the loss of profits incurred by Lincoln in the breaking up of his established business at Mat-field Green. In a projected business the loss of profits is often merely conjectural, and not the subject of any reasonable measurement. (Sedg. Dam. §183.) Such was the case in Town Co. v. Leonard, 46 Kan. — 152 — 854, 357, 358, and an exact rule of damages was there available, namely, the cost of’ removing the hotel to Sherman Center, and placing it over a cellar of equal size and a foundation of similar kind as it was then resting upon in Itasca. Finding no material error in the record, the judgment will be affirmed. All the Justices concurring.