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ures for the sum of 1 per cent. on the net ness.' The defendants continued in business amount of their sales for such year, the sales during the year 1891. In October, 1891, the made and the losses incurred during the remainder of such year, while the business was con
plaintiff requested the defendants to advise ducted by the firm which succeeded the defend him by November 1st whether they intended ants, could be taken as the data on which to
remaining in business during the year 1892, estimate the commissions or profits due the
and said that he was willing to guaranty plaintiff on such guaranty. 4. SAME-PROFITS.
them against losses for the year of 1892 at Damages are not excluded simply because 1 per cent of the net amount of their sales, they are profits, if it reasonably appear that and would pay them 772 per cent. commisthey would have been made had the terms of
sion, but would not pay $1,500 expenses, as the contract been observed, and that their loss necessarily followed the breach.
he had done during the year 1891. In No [Ed. Note. For cases in point, see Cent. Dig. vember, 1891, the plaintiff signed and de vol. 15, Damages, 88 72–88.)
livered to defendants the following writing, Potter and Elkin, JJ., dissenting.
written and witnessed by Samuel White, the
creditman and head bookkeeper of defendAppeal from Court of Common Pleas, Phil.
ants : "Philadelphia, November 10, 1891. Mr. adelphia County.
Thomas H. Wilson hereby agrees to guarAction by Thomas H. Wilson against Theo
antee Wernwag & Dawson against all losses dore Wernwag and T. Russell Dawson.
from failures, for and in consideration of the From an order dismissing exceptions to re
sum of one per cent. upon the net amount port of referee, defendants appeal. Affirmed.
of their sales for the year 1892." The deArgued before MITCHELL, C. J., and
fendants accepted this offer orally. They FELL, BROWN, MESTREZAT, POTTER,
continued in business, and continued to sell ELKIN, and STEWART, JJ.
the plaintiff's goods, until April 1, 1992, Peter Boyd, for appellants. Henry Budd when their firm was dissolved, and they reand William C. Stoever, for appellee.
fused thereafter to sell his goods or longer
to carry on the commission business. This MESTREZAT, J. This is an action of as action was brought by the plaintiff to recover sumpsit to recover damages for an alleged damages, which he alleges he sustained by breach of contract. The plaintiff was a manu reason of the defendants having discontinued facturer of woolen goods, in the city of Phil. their commission business and having declinadelphia. The defendants were commission ed to continue it during the entire year of merchants, and carried on the business in 1892, which he claims was a breach of the Philadelphia and New York. For a few contract of November 10, 1891. He (plainyears prior to 1890, they were the sole con tiff) claims that, under the contract between signees and agents of the plaintiff in selling the parties, the defendants were to continue bis goods, for which they received a fixed the business during the whole of 1892, and percentage of the amount of sales made as that by failing to do so he is injured to the compensation for their services. On Decem extent of 1 per cent. of the sales which the ber 12, 1890, the plaintiff submitted certain defendants would have made from April 1, propositions to the defendants in writing, 1892, the date of the dissolution of their which they accepted, among which were the partnership, to December 31, 1892, less the following: “In consequence of the great loss losses which they would have sustained durwhich would be incurred by the sudden ing that period. The defendants, on the changing of his commission house, Thomas other hand, deny that the contract between H. Wilson makes to Wernwag & Dawson the the parties contemplated that they should following propositions: '(a) That on and aft continue the business during the whole of er January 1, 1891, to July 1, 1891, that he the year 1892, or obligated them to do so, and will allow Wernwag & Dawson 712 per cent. contend that, if such is the correct interprecommissions on all goods sold and entered tation of the contract, the proper measure for his account; (b) that for and in consid of damages for its breach is not 1 per cent. eration of 112 per cent. on the total sales of of the sales which they would have made Wernwag & Dawson, he will guarantee all had they continued in business for the whole accounts sold by them between January 1 and year, less the losses; that such profits are July 1, 1891, this to include goods sold be too remote and too uncertain as a measure fore July 1, 1891, and not entered until after of damages for the alleged default. These that date; (c) if Wernwag & Dawson will are the important and controlling questions agree to remain in business for one year from in the case, and the only questions which we January 1, 1891, he will guarantee the entire deem it necessary to consider on this apbusiness against losses by bad debts for 1 peal. per cent.; (d) on or before July 1, 1891, The case was referred to a referee under Wernwag & Dawson will decide whether they the act of May 14, 1874. He found against will remain in business for the balance of the contention of the defendants on both propthe year, say from July 1, 1891, to Decem ositions, and his report was confirmed by the ber 31, 1891. Should they decide to continue court. He has found and stated at length in business till December 31, 1891, then they the facts in the case, and we think his findare to pay Thomas H. Wilson 1 per cent. ings are supported by the evidence. The refonly for guaranteeing the entire year's busi eree found that “it was understood by both
parties to said agreement of November 10, ness for a half year should be 142 per cent. 1891, that an important inducement to the on the sales for that period. In that con. plaintiff to enter into it was the continuance tract the stipulation for the consideration in of the defendants in their said business dur the first instance was for a percentage for ing the whole of the year 1892, and it was the six months, but with a provision that, if the intent and understanding of both parties that defendants remained in business for the defendants should remain in said business whole year, the plaintiff was “to guarantee during that period.” He therefore held that the entire business against losses by bad the contract of November 10, 1891, required debts for 1 per cent." It is apparent, therethe defendants to continue their commission fore, that, in determining the rate of combusiness, and to accept and sell the plaintiff's mission for guarantying the business, the goods during the entire year of 1892. We length of time was an important and conare clear that this is a proper interpretation trolling consideration, and that for one year of the contract. In Lacy v. Green, 84 Pa. the consideration should be 1 per cent., and 514, Woodward, J., delivering the opinion, for any time less than a year the rate should says (page 518): “Where the meaning of an be greater. agreement is doubtful, its terms are to be Another reason, as suggested by the referee, considered in the light thrown on them by for the conclusion that the contract contemapproved or admitted illustrative facts. The plated a continuance of the business for the situation in which the parties stand, the ne whole of the succeeding year, was the fact cessities for which they would naturally pro that the amount of the sales was greater durvide, the conveniences they would probably ing certain months of the year than during seek to secure, and the circumstances and other months, and that it appeared that durrelations of the property in regard to which ing 1891 the heaviest sales were made in they have negotiated, are all elements in the June, July, and August. With these facts interpretation of an ambiguous contract.” before him, it cannot be assumed that the We think the language of the proposition of plaintiff would agree to guaranty against November 10, 1891, made by Wilson to the losses for an indefinite time which might exdefendants, discloses clearly an intention that clude the heaviest selling months of the year; the business should be continued for the and especially should we not presume that whole of the ensuing year. His guaranty, as the plaintiff would consent to 1 per cent. therein expressed, is against all losses from commission, in view of the further fact, sug. failures, and the consideration which he is to gested above, that he demanded and received receive is & percentage “upon the net amount 112 per cent. for guarantying against losses of their [defendants') sales for the year 1892.". for the first six months of the preceding year. The percentage, therefore, was not to be com We think it clear that the parties meant puted upon such sales as they might make what the plaintiff proposed and the defend. in 1892, or until the dissolution of their part ants accepted on November 10, 1891, that nership, or until they discontinued their busi. the plaintiff's consideration for guarantying ness, but was stated clearly and distinctly to against losses was “upon the net amount of be upon the “net amount of their sales for their sales for the year 1892," and that therethe year 1892." When we consider all the fore the contract manifestly contemplated, as circumstances under which the contract was understood by both parties, that the defendmade, it is still made more apparent that ants should continue in the commission busisuch is the proper interpretation of the agree ness and sell the plaintiff's goods for the enment of the parties. The agreement of the tire year of 1892. previous year between the same parties as The next and an important question, and sists in construing the contract under consid
one not entirely free from difficulty, is the eration. By that agreement it appears that measure of the plaintiff's damages for the the plaintiff apprehended a great loss from violation of the contract. As we have seen, any sudden changing of his commission house, the defendants dissolved their partnership and that it was entered into for the purpose and discontinued their business on April 1, of preventing such a change. It is apparent 1892. The referee found that, "after said that the same reasons existed for his desire dissolution, the firm of Minot, Hooper & Co. to prevent a sudden change in his commis of New York took the place of the defendsion house when the contract of 1891 was ants, accepting transfer from defendants of made, and hence it is fair to infer that, by their accounts, and conducted under their the contract of 1891, he intended to guard own name the business formerly carried on against a sudden or unexpected changing of by the defendants, employing the same manhis commission house, and desired to fix a ager, using the same store and the same definite time on which he might rely for his salesmen and clerks, and conforming subgoods being sold by the defendants. By the stantially to the same rules as to giving contract of 1890 it also appears that the credit.” It appears that those who had been parties considered and agreed that a fair con the defendants' consignors prior to the dissideration for guarantying the business solution of the partnership, including the against losses was 1 per cent on the total plaintiff, thereafter consigned their goods for sales for an entire year; and, further, that the balance of 1892 to Minot, Hooper & Co. the consideration for guarantying the busi The goods of the plaintiff in the possession
of the defendants at the dissolution of their Pa. 45, 20 Atl. 937, was an action to recover firm were also transferred to the same firm, damages for violation of a contract by which and the plaintiff and the defendants agreed the defendant agreed to supply the plaintiff as to the quantity and quality of the goods company with coal sufficient to keep its coke transferred. The referee also found, and his plant in operation for a definite period. The finding was sustaine 1 by the court, that: “If coal was to be converted into coke for the the defendants had remained in business, defendant at a fixed price per ton. The tbe plaintiff would have received 1 per cent. measure of damages for the breach was on the amount of net proceeds of sales for held to be the net profits which the plainthe balance of the year, less the losses. The tiff would have made had the contract been amount of this difference can be ascertained fulfilled. In the opinion it is said (page 47 by subtracting the actual losses on sales of 138 Pa., page 937 of 20 Atl.); "While it made by Minot, Hooper & Co. during that is undoubtedly true that mere speculative period from 1 per cent, upon the amount of profits cannot be recovered in an action for net proceeds of sales by that firm.
breach of contract, a careful examination It is reasonably certain that the defendants, of the assignment shows that the profits in had they remained in business and perform- question were not within this rule. The jury ed their part of the contract in good faith, have found
that the defendant was would have made the same sales and losses to furnish plaintiff with enough coal to keep as were made by their successors." The ref Its 60 ovens in operation for six months, eree therefore held that the measure of dam and that the price was to be $1 per ton. ages was 1 per cent. upon the net proceeds The profits in such case were not speculative. of sales made by Minot, Hooper & Co., from They did not depend upon the fluctuations of April 1 to December 31, 1892, less the losses. the market, or the demand for coke, and they
Hoy v. Gronoble, 34 Pa. 9, 75 Am. Dec. 628, could be ascertained with mathematical acwas an action to recover damages for the curacy." This part of the opinion is quoted breach of a parol contract by which the de and approved in the very recent case of fendant agreed to employ the plaintiff to Puritan Coke Co. v. Clark, 204 Pa. 556, 54 cultivate a farm upon shares. It was held Atl. 350. Pittsburg Gauge Co. v. Ashton that the proper measure of damages was the Valve Co., 184 Pa. 36, 39 Atl. 223, was an acprofit which the plaintiff would have made tion for the breach of a contract by which on the farm if the contract had not been the defendant constituted the plaintiff its violated. In delivering the opinion, Strong, sole agent for the sale of certain goods withJ., said (page 10 of 34 Pa., 75 Am. Dec. 628): in certain designated territory for a term of "While it is well settled that a jury are
The plaintiff's compensation not at liberty to allow mere speculative dam was a commission of 10 per cent. on the ages, yet there are cases in which a plaintiff amount of sales. Before the expiration of has been held entitled to what he would have the term, the defendant declared a forfeiture made had the contract been fulfilled-I of the contract without sufficient cause. It mean, to what he would have made im was held that the plaintiff could show, as mediately out of the contract. The loss of bearing upon the damages, the extent and such profits is not consequential, in the sense volume of the business under his own agenin which consequential damages are some cy, and the extent and volume of it under times said to be too remote. They are in the agent appointed in his place. The very the immediate contemplation of the parties recent case of Singer Manufacturing Co. v. when the contract is made." The same Christian, 211 Pa. 534, 60 Atl. 1087, was an learned judge, delivering the opinion in action to recover for the price of a number Adams Express Co. v. Egbert, 36 Pa. 360, of machines. The defendant claimed that he 364, 78 Am. Dec. 382, says: “The loss of had purchased them by an oral contract with profits or advantages, which must have re the plaintiff's agent by which it was agreed sulted from a fulfillment of the contract, that the plaintiff would furnish work to keep may be compensated in damages, when they the machines going, and that they were to be are the direct and immediate fruits of the paid for out of the profits of such work, and contract, and must therefore have been stip- | that sufficient work was not furnished. The ulated for, and have been in the contempla defendant alleged a breach of contract on tion of the parties when it was made." the part of the plaintiff, and claimed as a Hoy y. Gronoble, 34 Pa. 9, 75 Am. Dec. 628, set-off the damages he had sustained. It was followed and approved in Wolf v. Stude was held that the measure of bis damages baker, 65 Pa. 459. The first two of the above for the breach was the profit which the decases are cited in the opinion of Mr. Justice fendant might have made, together with the Green in Pennypacker v. Jones, 106 Pa. 237, expense of maintaining the plant in idleness as bolding that "profits may be recovered caused by the neglect or refusal of the plainwhere they are ‘part and parcel of the con tiff to furnish work continuously according tract itself, entering into and constituting a to the terms of the contract. portion of its very elements; something stipu In other jurisdietions, the same rule as to lated for, the right to the enjoyment of the measure of damages has prevailed. In which is just as clear and plain as to the Brigham v. Carlisle, 78 Ala. 243, 56 Am. Rep. enjoyment of any other stipulation.' Im 28, Clopton, J., delivering the opinion, says: perial Coal Co. v. Port Royal Coal Co., 138 "When they (profits] form an elemental con
stituent of the contract, their loss, the na Rep. 91, and in Lewis v. Atlas Mutual Life tural result of its breach, and the amount Insurance Co., 61 Mo. 534, it was held that can be estimated with reasonable certainty, an insurance agent who had been dischargsuch certainty as satisfies the mind of a pru ed without cause could recover the probable dent and impartial person, they are allowed. value of renewals on policies previously ob
Profits are not excluded from re tained by him upon which future premiums covery, because they are profits; but, when would, in the usual course of business, be reexcluded, it is on the ground that there are ceived by the company. In Masterton v. Mayno criteria by which to estimate the amount or, etc., of Brooklyn, 7 Hill (N. Y.) 61, 42 Am. with the certainty on which the adjudica Dec. 38, Nelson, C. J., after holding that coltions of courts and the findings of juries lateral profits are too remote to be considered should be based. The amount is not sus in the measure of damages, says: “But profceptible of proof.” Wakeman v. Wheeler & its or advantages which are the direct and Wilson Manufacturing Co., 4 N. E. 264, 101 immediate fruits of the contract entered into N. Y. 205, 54 Am. Rep. 676, was an action to between the parties stand upon a different recover damages for the breach of a contract footing. These are part and parcel of the by which the defendant company agreed to contract itself, entering into the constituting give the plaintiff the sole agency for every a portion of its very elements; something place in Mexico in which he should within stipulated for, the right to the enjoyment of a given time sell 50 machines. The plain- which is just as clear and plain as to the tiff sold 50 machines or more in several fulfillment of any other stipulation." places, and therefore qualified himself for From these authorities, it is clear that the agency. It was held that the plaintiff damages may be recovered for loss of profits was entitled to recover the profits which he caused by a breach of contract, and that they probably could have made, and, as showing are never excluded simply because they are such profits, he could prove that, subsequent profits. If it reasonably appear that profits to the repudiation of the agreement, the de. would have been made had the terms of the fendant established agencies in Mexico, and contracť been observed, and that their loss the number of machines sold by them for the necessarily followed its breach, they may be defendant company. Wells v. National Life recovered as damages if the evidence is suffAssociation of Hartford, 99 Fed. 222, 39 O. ciently certain and definite to warrant the O. A. 476, 53 L. R. A. 33, was an action jury in estimating their extent. An examibrought to recover damages for the alleged nation of the well-considered cases will show breach of a contract employing plaintiff as that prospective profits may be recovered for general agent of defendant company for the the breach of a contract whenever they are state of Texas. It was there held by the susceptible of proof. They have been reUnited States Circuit Court of Appeals that: jected by the courts as damages only because “Loss of anticipated profits may by included of the failure to prove them with sufficient in a recovery for breach of a contract to em certainty and definiteness. There can be no ploy plaintiff on commission as exclusive gen good reason why they should noť be recovereral agent of an insurance company for par ed when they are capable of definite estimaticular territory during a specified time, tion. The injured party has the right to de which may be estimated by considering the mand and receive from the defaulting party value of renewals on policies already writ full compensation for the loss he has sustainten not shown by the company to have laps ed by a breach of the contract. Each party ed, and the probable future business as in knows the terms of the contract, and theredicated by that actually done by the company fore is presumed to know the loss each will through their agents after the breach, the sustain by its breach. Hence, when either respective facilities of the two for doing the party refuses to observe his agreement, he work, the probable expense, and the amount knows the necessary consequence of his to be done." There is an extended note to act, which is to deprive the other party of the report of this case, collecting all the au the value of his bargain, the equivalent of thorities on the subject of loss of profits which is the profits he would realize if its as an element of damages for breach of con terms had been complied with. In such tract. In Griffin v. Colver, 16 N. Y. 489, cases, as said in Hitchcock y.
Supreme Tent, 69 Am. Dec. 718, Selden, J., delivering the 58 N. W. 640, 100 Mich. 40, 43 Am. St. Rep. opinion, says: "Profits which would certain 423, “the profit's lost constitute the legitimate ly have been realized but for the defendant's measure of damages. The law is not so blind default are recoverable, those which are spec. to justice as not to require the defendant to ulative or contingent are not.
In respond in damages, if there is any reasondeed, it is clear that, whenever profits are able basis for their ascertainment.” When, rejected as an item of damages, it is be therefore, the evidence shows with reasoncause they are subject to too many contin able certainty the profits which have been gencies, and are too dependent upon the lost by the breach of a contract, they should fluctuations of markets and the chances of be considered damages recoverable by the inbusiness to constitute a safe criterion for jured party from the one in default. an estimate of damages.” In Ætna Life In Applying these principles to the case in surance Co. v. Nexsen, 84 Ind. 347, 43 Am. hand, we think the referee and the learned
court below were right in holding that the ages for a breach of contract, then the plainplaintiff was entitled to recover as damages tiff here must be permitted to recover. Any his commission on the net sales of goods further or greater degree of proof would be, which would have been made by the defend in effect, to exclude all profits as a measure ants from April 1 to December 31, 1892, less of damages for a violated contract. the losses sustained during the same period. The judgment is affirmed. Assuming the contract to have covered that period, the commissions as guarantor to POTTER, J., dissenting. I think the conwhich the plaintiff would have been entitled, clusion reached in this case by the majority had the defendants continued their business, of the court is based upon a misapprehension are susceptible of proof and sufficiently cer of what the contract between the parties tain and definite to warrant a recovery.
really was. It was a contract of insurance, found by the referee, Minot, Hooper & Co. by which the plaintiff was to guaranty the “took the place of the defendants, accepting
defendants against loss by reason of bad transfer from defendants of their accounts, debts, upon all sales made by the defendants and conducted under their own name the during the year. The compensation of the business formerly carried on by the defend- plaintiff for insuring against this risk of loss ants, employing the same manager, using the was to be 1 per cent of the amount of the same store and the same salesmen and clerks, sales. If the sales were large in volume, the and conforming substantially to the same
commission would be large in proportion; if rules as to giving credit.” On the dissolution the sales were small, the commisison would be of the defendants' partnership, the plaintiff reduced accordingly. There was no agreetransferred to Minot, Hooper & Co. all his ment as to any definite amount of sales or goods which a statement prepared by de commission, beyond the fact that it was to fendants showed to be in their possession.
be limited to 1 per cent. of the amount of The sales made by that firm under these cir those sales, whatever they were. If the decumstances are criteria from which can be fendants had remained in business during definitely estimated the sales which the de the entire year, while their sales might have fendants would have made had they con been greater, yet the risk of loss to be borne tinued their business, as required by the con by the plaintiff would also have been larger. tract. These are actual sales made under When the defendants ceased doing business precisely the same conditions as if the de in April, 1892, then, at that instant, the risk fendants had been the firm conducting the of insurance against bad debts which the business. As found by the referee, the busi plaintiff was called upon to bear also came to ness was carried on for the remainder of the an end. He was not thereafter called upon year 1892 in the same store, with the same to insure the defendants any further against consignors, with the same manager, and with
the risk of loss by reason of bad debts, and the same clerks and salesmen as it had been he therefore necessarily was not in a posiprior thereto by the defendants. There is
tion from that time on to earn any more no evidence in the case that would war commissions; and this for the obvious reason rant the conclusion that the sales made in that his commission was limited to 1 per the name of Minot, Hooper & Ço. during the
cent. of the actual amount of the sales. period in question and the losses sustained
When the sales ceased the insurance ceased, were greater or less in number or amount and the compensation to be paid for it, as a than would have been the sales and losses if matter of course, also ceased. The opinion defendants had continued the business. On of the majority of the court has apparently the contrary, the evidence is convincing that
taken no account of this fact, and it permits the sales and losses would have been prac
the plaintiff to recover commissions against tically the same. There is therefore no
the defendants upon a large amount of sales
which were never in fact made by them, and sufficient reason why the sales made and the losses incurred during the remainder of the
as to which plaintiff took no risk of insur
ance whatever, and upon which he therefore year 1892, while the business was conducted
had no right to ask for compensation. The in the name of Minot, Hooper & Co., should
affirmance of this case gives to the plaintiff not be taken as the data on which to esti
something for nothing. I cannot agree to mate the commissions or profits due the
such a judgment. plaintiff in this action. Such profits are not speculative, imaginary, or uncertain, but are determined by a standard that renders them ELKIN, J., concurs in this dissent. almost as certain as if the business had been continued by the defendants. The law does
(217 Pa. 140) not require absolute certainty as to the data upon which profits are to be estimated, but
MOCABE et al. P. CITY OF PHILADEL
PHIA. certainty to a reasonable degree or extent. so that the damages may rest upon a definite
(Supreme Court of Pennsylvania. Feb. 25,
1907.) basis, and not wholly in speculation and conjecture. If prospective or probable profits
MUNICIPAL CORPORATIONS — INJURY TO PE
DESTRIAN-NEGLIGENCE. are 'ever to be held as having been sufficiently
In an action to recover for injuries reand certainly proved as a measure of dam ceived by stepping in a hole through the ice