out of a train under such circumstances as in the Hobbs case should catch cold as that horses turned out as these were in this case should suffer. There is, therefore, a difference, though I own I do not see much between this case and that.”

§ 50. Liability under special circumstances. The leading English case on the scope of recovery for the breach of a contract established two propositions which have been very generally accepted. As expressed by Baron Alderson they are: "Where two parties have made a contract which one of them has broken, the damages which the other ought to receive in respect to such breach of contract should be such as may fairly and reasonably be considered either as arising naturally that is, according to the usual course of things — from such breach of contract itself, 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 a breach of it. Now, if the special circumstances under which the contract was actually made were communicated by the plaintiffs to the defendant, and thus known to both parties, the damages resulting from the breach of such contract, which they would reasonably contemplate, would be the amount of injury which would ordinarily follow from a breach of contract under the special circumstances so known and communicated. But, on the other hand, if these special circumstances were wholly unknown to the party breaking the contract, he, at the most, could only be supposed to have had in contemplation the amount of injury which would arise generally, and in the great multitude of cases, not affected by any special circumstances from such a breach of contract." 2 The first of these rules has been considered in the preceding sections. It is to be remembered that there is no relaxation of the rule confining the recovery to the damages naturally and proximately resulting from the breach in cases where

1 Hadley v. Baxendale, 9 Exch. 353.

2 Griffin v. Colver, 16 N. Y. 489. Criticisms upon the language used in the extract quoted in the text have been made by various judges and writers; but the principle enumerated therein has received general ap

proval. Occasionally a judge intimates that the conditions of business have so changed since the case under consideration was decided that it is no longer applicable in its entirety. See Daughtery v. American U. T. Co., 75 Ala. 168, 178.

there are such known special circumstances. Indeed, the same strictness exists to confine the recovery to the immediate consequences. The general principle of compensation is that it should be equal to the injury. It is a rule based on that principle that the amount of the benefit which a party to a contract would derive from its performance is the measure of his damages if it be broken. It is a rule of interpretation, too, that the intention of the parties is to be ascertained from the whole contract, considered in connection with the surrounding circumstances known to them both. If it appear by such circumstances that the contract was en- [80] tered into, and known by both parties to be entered into, to enable one of them to serve or accomplish a particular purpose, whether to secure special gain or to avoid an anticipated loss, the liability of the other for its violation will be determined and the amount of damages fixed with reference to the effect of the breach in hindering or defeating that object. The proof of such circumstances makes it manifest that such damages were within the contemplation of the parties. Looking alone at a contract of this character, silent as to the circumstances which were in view, such damages are consequential and sometimes appear to arise very remotely and collaterally to the undertaking violated. But when the contract is considered in connection with the extrinsic facts there is established a natural and proximate relation of cause and effect between its breach and the injury to be compensated." If all such facts as are admissible to justify the proof of consequential damages were recited in the contract as the law connects them with it when known, or if the legal obligation which the law imposes by reason of them had been expressed in words by the parties, such damages would be direct and not

1 Alder v. Keighley, 15 M. & W. 117.

2 In Fox v. Everson, 27 Hun, 335, the defendant sold plaintiff clover seed with which was mixed plaintain seed. A recovery was allowed for the difference between the value of pure seed and that actually sown and for the depreciation in value of the farm on account of the plaintain seed. It was contended that there

was no liability for the last item because it was not proven that defendant knew the seed was bought for the purpose of being sewn. The contention was overruled because that is the purpose for which such seed is usually purchased. But the vendor was not apprised of the fact that the seed sold was to be mixed with timothy seed, and hence was not liable for the loss of the latter.

consequential. In a case in Wisconsin the plaintiff was a butcher, and the defendant agreed to furnish him with what ice he might require for a season, knowing that the plaintiff needed it to preserve fresh meat. About the last of July the defendant stopped supplying ice and refused to furnish any more, in consequence of which plaintiff lost considerable meat. This loss the plaintiff recovered. The court say: "As the defendant was acquainted with all the special circumstances in respect to this contract knew for what purpose the ice agreed to be furnished by him was to used,- he should fully indemnify the plaintiff for the loss he sustained by the nondelivery of the ice; and he was therefore justly chargeable in damages for the meat spoiled in consequence of the inability of the plaintiff to procure ice elsewhere." This case was not one of simple contract of sale. The special circumstances, [81] known to both parties, made it more than that in its

1 Hammer v. Schoenfelder, 47 Wis. 455. See Manning v. Fitch, 138 Mass. 273; Beeman v. Banta, 118 N. Y. 538. In Jones v. George, 61 Texas, 345 (see S. C., 56 id. 149), plaintiff applied to defendant, a druggist, for a quantity of Paris green; by mistake he was supplied with chrome green, a substance similar in appearance but not possessing the same properties. The vendor knew that the article called for was desired to prevent the destruction of plaintiff's cotton crop by the cotton worm which had for years been very destructive. Without knowing the mistake the chrome green was applied to the cotton, and failed to produce the desired result. Evidence was given to show that Paris green would have had a beneficial effect. It was ruled that there was not a technical warranty that Paris green was delivered, but an implied contract that such was the fact. In answer to the contention that it is not enough to entitle a party to recover damages for breach of contract to show that without the breach relied on the injury would not have

been received when it results from an unforeseen or unexpected cause, or from a cause which no reasonable human exertion could counteract, the court observed, “but if it appears that the contract was made for the express purpose of avoiding a loss likely to occur from a known natural cause, which could be controlled and avoided; that this was known to the contracting parties, and that compliance with the contract would have prevented the injury by destroying the thing which immediately inflicts it, then it is believed that the breach of such a contract must be said, within the meaning of the law, to be the direct cause of the injury. In such case there is an immediate and natural relation between the act complained of and the injury without the intervention of other and independent cause;' for a cause which is subject to control and contemplated by the parties to a contract, looking to its avoidance or control, cannot be said to be an 'independent cause.""

aims and consequences, although the terms in which it was made, considered alone, imported only a contract of sale. The vendor, knowing the purpose for which the ice was wanted, was held by implication to undertake to deliver it as agreed in order that the vendee should not suffer loss on his fresh meat from his inability to preserve it for want of ice. Such being the contract, the loss which occurred from its breach was the direct consequence thereof. It is to be observed that the implication from the vendor's knowledge of the special circumstances required performance of no additional act to fulfill the contract. It merely enjoined on him the duty to perform it in view of more serious consequences than those which usually follow a vendor's default. The principle that the injured party is entitled to compensation proportioned to the actual injury is paramount, ar overrides any rule not adapted to measure compensation in such a special case. The vendor is thus admonished that if he fails to deliver the property as agreed he cannot satisfy the injury to the vendee by paying the difference of a higher market price unless the article can be obtained in market; that the loss will be the value of the property which the ice was needed to preserve.'

51. Further illustrations and discussion of the rule. In a New York case the plaintiff having contracted to sell to the state of Ohio a large quantity of bullets of a certain quality and at a fixed price, deliverable at Columbus, made a contract with the defendant at New York by which the latter agreed to manufacture and deliver to him the same quantity and quality of bullets; at the time of making it he informed the defendant of his arrangement with the state of

1 The contract in suit provided that the manufacturer should furnish, deliver and put in running order by a specified day machinery for a cottonseed oil mill. By reason of a breach a quantity of seed purchased for grinding was damaged. Parol evidence was received to show that time was of the essence of the contract, and that the purchase of seed in advance of the period fixed for the

completion of the mill was within the contemplation of the parties. Van Winkle v. Wilkins, 81 Ga. 93; Dennis v. Stoughton, 55 Vt. 371; Goodloe v. Rogers, 10 La. Ann. 631: Lobdell v, Parker, 3 La. 328. Compare Brayton v. Chase, 3 Wis. 456, which is inconsistent with Hammer v. Schoenfelder, 47 id. 455, stated supra.

2 Messmore v. New York S. & L Co., 40 N. Y. 422.

Ohio and that he was contracting with him for the bullets in order to fulfill that agreement. The contract between these parties was in writing, but did not contain any allusion to the special object of making it. It was held, notwithstanding, that it was competent to prove such antecedent contract and parol proof was admissible to establish that the defendant was informed that the plaintiff made the contract in question [82] with a view to performing the other; and that the proper measure of damages was the difference between the price at which the defendant was to furnish the bullets and that the plaintiff was to receive. It appeared that the market price advanced so that the bullets could not be obtained below the latter price; the market price was considerably higher, but the recovery was limited as above stated, for that gave the plaintiff compensation for his actual loss and that was the loss. which was in contemplation by the parties when the contract was made. Where the contract relates to commodities commonly purchasable in the market it is safe to say that the purchaser is made whole when he is allowed to recover the difference between the contract price and the value of the article in the market at the time and place of delivery, because he can supply himself with this article by going into market and making his purchase at such price, and these are all the damages he is ordinarily entitled to recover, for nothing beyond this was within the contemplation of the parties when they contracted. If, however, the vendor knows that the purchaser has an existing contract for a resale at an advanced price, and that the purchase is made to fulfill such a contract, the profits on such resale are those contemplated by the parties. In other words, on the ordinary contract of sale the damages contemplated are those which would result with reference to market value if the subject of the contract have such a value; otherwise, on the basis of its actual value, as it may be ascertained by proof or for the use to which the property is commonly applied, whether known or not.' But if the contract of purchase is made with a view to a known resale already contracted or any known special use, the damages which are contemplated to result from the vendor's breach are those

1 Rhodes v. Baird, 16 Ohio St. 573; Borries v. Hutchinson, 18 C. B. (N. S.)