Champion Ice Manufacturing & Cold Storage Co. v. Pennsylvania Iron Works Co.

The request of the ice company for a proposition for furnishing the. shaft gaye prominence to its desire for a definite understand 319 ing as to tbe time when it could be furnished. The iron company’s proposition to furnish it in three weeks, when accepted,had the force of a stipulation; and no reason appears why there should not be a recovery for its breach. The reasons for the delay which were given upon the trial might well serve to relieve the iron company from culpability, but not from the obligation of its unconditional undertaking to furnish the shaft' at the time specified. Nor -does it appear that the circuit court gave adequate compen'sation for the breach when it required the iron company to remit from the judgment which it had recovered in the common pleas court interest upon the value of the machine for the thirty-three days which it found tó have intervened between the time stipulated for the delivery of the shaft and the date of its actual delivery. When the breach of a contract consists in the failure to pay money, interest is allowed as compensation because, according to common understanding, it actually represents the value of the use of the money. But in this case the parties were not stipulating for the use of money, nor could there have been in the contemplation of either party damages resulting from the failure to pay money. The celebrated case of Hadley v. Baxendale, 9 Exch., 341, has been generally accepted as defining correctly the principles upon which damages should be assessed for a breach of contract. It has been so accepted in this state. They are such damages as arise naturally from the breach of the contract, 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. Later decisions show that there has been difficulty in the application of these principles to particular cases, and that case has been many times interpreted and its statements paraphrased, though the correctness of the principles which it defines has been generally if not' universally accepted. It does not appear that such view has ever been taken of the case as would justify the assessment of damages for the deprivation of the use of property by the computation of interest upon its value. Nor upon the other hand, would it justify the recovery by the ice company in the present case of the large profits which, as its testimony tended to show, were probably lost by reason of the delay. In that respect the case 320 should be regarded as within the rule as familiarly stated, that profits or speculative damages are not recoverable, but which would give the result of a much -larger number of cases, 'and be much less liable to misconstruction, if it were said to be that the law does not permit the recovery of damages which can be -ascertained only by speculative methods. The recovery of lost profits in the present case would involve the local condition of the markets, peculiarities of the ice company’s business, its ability to substitute other machinery for the disabled machine, and other elements of injury not arising naturally from the breach of the contract nor presumably within the contemplation of the parties as the result of a breach. By the terms of the correspondence and the circumstances in which it was conducted, the iron company was admonished that the loss of the use of the disabled machine would result from its failure to furnish the shaft at the time agreed upon, -and the loss of such use results naturally from the breach. The value of the use of the machine for the time intervening between the day stipulated for its delivery and the day of its actual delivery should therefore be ascertained and awarded as damages. Evidence of the capacitj of the machine and the extent -and character of the ice company’s business was properly admitted to aid in assessing damages under the rule stated. In language used so frequently as to be well understood: “It was to be considered in arriving at the rental value, though not constituting the measure of damages.” Judgments of the circuit and common pleas courts reversed.