§ 79. What losses elements of damage. Losses may be sustained in various ways in consequence of a breach of contract aside from gains prevented. First, a loss may consist of money, property or valuable rights which may be directly taken from the injured party by the breach. A servant improperly discharged before the period of his engagement has expired and unable to find any other employment, or one equally remunerative, is thereby deprived of the right to earn the stipulated wages. By that breach of contract her loses the whole or a part of what he was entitled to earn during the term he was engaged for; and he is entitled to recover accordingly. An agent or bailee who, by breach of duty, converts his principal's property, or by neglect suffers it to be lost or destroyed, or by failure to assert his rights or doing it in a careless or inefficient manner subjects him to loss, must respond in damages according to the injury thus occasioned.2 § 80. Same subject; labor and expenditures. Second, losses sustained may consist of labor or expenditures in preparation to perform or in part performance of the contract on the part of the plaintiff. Where a contract is partly performed by one party and, without his being in any default, the other stops him and prevents further performance, such part performance, in addition to the profits which could be possess the capacity as to the quantity and quality of flour it was warranted to produce. The damages were measured by the amount paid upon it, the loss by reason of its defects, and the cost incurred in repairing the mill and putting it in condition to produce the quantity and quality of flour stipulated for. Pennypacker v. Jones, 106 Pa. St. 237. 1 Sutherland v. Wyer, 67 Me. 64; Gifford v. Waters, 67 N. Y. 80; Gillis v. Space, 63 Barb. 177; Emerson v. Howland, 1 Mason, 45; Howe M. Co. v. Bryson, 44 Iowa, 159; Williams v. Anderson, 9 Minn. 50; Williams v. Chicago Coal Co., 60 Ill. 149; Smith v. Thompson, 8 C. B. 44. 2 White v. Smith, 54 N. Y. 522; Dodge v. Perkins, 9 Pick. 368; Clark v. Moody, 17 Mass. 145; Frothingham v. Everton, 12 N. H. 239; Webster v. De Tastet, 7 T. R. 157; Rundle v. Moore, 3 Johns. Cas. 36; Blot v. Boiceau, 3 N. Y. 78; Maynard v. Pease, 99 Mass. 555; Stearine, etc. Co. v. Heintzmann, 17 C. B. (N. S.) 56; Allen v. Suydam, 20 Wend. 321; Bridge v. Mason, 45 Barb. 37; Mallough v. Barber, 4 Camp. 150; Perkins v. Washington Ins. Co., 4 Cow. 645; Evans v. Root, 7 N. Y. 186; Scott v. Rogers, 31 id. 684: Nickerson v. Soesman, 98 Mass. 364; Trinidad Nat. Bank v. Denver Nat. Bank, 4 Dill. 290; De Tastet v. Crousillat, 2 Wash. C. C. 132; Lilley v. Doubleday, 7 Q. B. Div. 510. made by completing the contract, will enter into the estimate of damages for such breach. Should a vendor who had received part payment for goods bargained and sold refuse to [132] go on with the contract the vendee would be entitled to recover, in addition to the profits- the excess of the value of the goods above the contract price - the amount which he had paid towards the latter, for the same reason which supports his claim where he has paid the whole purchase price for the value of the property. If a contract for particular work is partly performed and the employer then puts an end to the undertaking recovery may be had against him, not only for the profits the contractor could have made by performing the contract, but compensation also for so much as he has done towards performance. Preparations for performance, which were a necessary preliminary to performance or within the contemplation of the parties as necessary in the particular case, rest upon the same principle.' 1 Copper Co. v. Copper Mining Co., 33 Vt. 92; Woodbury v. Jones, 44 N. H. 206; Owen v. Routh, 14 C. B. 327; Bush v. Canfield, 2 Conn. 485; Loder v. Kekule, 3 C. B. (N. S.) 128; Smith v. Berry, 18 Me. 122; Berry v. Dwinel, 44 Me. 255; Wyman v. American P. Co., 8 Cush. 168; Pinkerton v. Manchester & L. R., 42 N. H. 424. 2 McCullough v. Baker, 47 Mo. 401; Jones v. Woodbury, 11 B. Mon. 167; Derby v. Johnson, 21 Vt. 17; Chamberlin v. Scott, 33 Vt. 80; Friedlander . v. Pugh, 43 Miss. 111; Polsley v. Anderson, 7 W. Va. 202; Danforth v. Walker, 37 Vt. 239. 3 United States v. Behan, 110 U. S. 338; Hale v. Hess, 30 Neb. 42, 58 (quoting the two preceding propositions, but allowing profits only under the circumstances); Bernstein v. Meech, 130 N. Y. 354; Masterton v. Mayor, 7 Hill, 61. In the last case the marble at the quarry was taken into account in the estimate of damages. In Nurse v. Barns, T. Raym. 77, the defendant, in consideration of 10., promised to demise a mill to the plaintiff, who laid in a large stock to employ it, which he lost, because the defendant refused to give him possession. A verdict of 500l. was approved. The stock so procured may more properly be classed as an expenditure on the faith of performance by the other party. See post, § 81. But the allowance of a loss for such expenditures rests on a similar principle. In Skinner v. Tinker, 34 Barb. 333, an action was brought to recover damages for breach of a contract for a partnership. The plaintiff, a dentist of Brooklyn, and the defendant, a dentist of Havana, Cuba, entered into an agreement, in writing, at the latter place, in March, 1853, by which they were to do a joint business as dentists at Havana, to begin in October or November following, if the plaintiff should present himself. The agreement was silent as to the duration of the partnership. Thereupon plaintiff sold his business at Brooklyn and entered into bonds not to resume practice there, and made all prepara § 81. Same subject; damages by relying on performance. [133] Third, such losses may consist of expenditures made by one party to a contract and damages from his own acts done on the faith of its being performed by the other, in further tions for carrying out his agreement. In May he received a letter from the defendant, declining to carry out the agreement on his part. On the trial the plaintiff proved these facts, and his readiness and an offer to fulfill, and recovered a verdict for $4,000. On appeal Ingraham, J., said: "Performance on the part of the plaintiff by appearing in Havana, in October or November, as stated in the contract, was unnecessary because the defendant had given notice of his determination not to form a partnership. The plaintiff was then entitled to damages, if any were sustained, up to that time, but not to prospective damages." Johnson v. Arnold, 2 Cush. 46, was an action to recover damages for the breach of a special contract by which, upon certain terms, the defendant agreed to furnish and keep the plaintiff supplied with a stock of goods for carrying on business in the defendant's store in another state, and the plaintiff undertook to carry it on for a share of the profits for a given term. It was held that in estimating the damages it was competent to allow the plaintiff compensation for the loss of his time and for the expenses of removing his family to and from the place where the business was to be carried on. Noble v. Ames Manuf. Co., 112 Mass. 492, is apparently not consistent with the principle stated. The defendant, doing business in Massachusetts, wrote the plaintiff in the Sandwich Islands: "I am ready to offer you a foreman's situation at these works as soon as you may get here; pay, $1,500 a year." The plaint iff accepted the proposition and came, but the defendant refused to employ him. The court rejected the claim of compensation for the time and expenses in coming from the Sandwich Islands on the ground that those items preceded the taking effect of the contract, and were not in part performance. Morton, J., said: "All the plaintiff can claim is that he should be placed in as good condition as he would have been in if the contract had been performed. But the ruling (allowing these items) puts him in a better condition." On the trial those were the only items claimed. It was stated by plaintiff's counsel that no claim was made for business sacrifices in leaving the Islands and coming to defendant to perform the contract, and none for any loss of time or other loss or damage after the refusal of the defendant to employ him. The contrary view is expressed in Moore v. Mountcastle, 72 Mo. 605, where plaintiff was allowed to recover for loss of time and expense in going to perform a contract. The expense incurred in taking another person with him to assist in the work he was to do was disallowed. His personal expenses and the loss of his time were "such damages as may be presumed necessarily to have resulted from the breach of the contract," and hence did not need to be specially pleaded. In Smith v. Sherman, 4 Cush. 408, it was held that loss of time and expenses incurred in preparation for marriage are directly incidental to the breach of the marriage promise. In Durkee v. Mott, 8 Barb. 423, on a contract to pay a certain price for [134] ance of the object for which the contract purports to be made, or the object which was in the contemplation of the parties at the time of contracting.1 § 82. Same subject; liabilities to third persons; covenants of indemnity. Fourth, such losses may consist of sums necessarily paid to third persons, or of sums recovered and expenses incurred in actions brought by third persons in consequence of the defendant's breach of contract. They are those losses which may result from suretyship or the breach of any [135] duty or obligation of indemnity. In such cases the rafting logs which the defendant put an end to before the labor began, it was held the plaintiff might recover the immediate loss in preparing to perform the contract by providing men for that purpose. Woodbury v. Jones, 44 N. H. 206, affirms the same doctrine. There the defendant proposed to the plaintiff, who was then living in Minnesota, that if he would come back to N. B. he might move into the defendant's house, and he would give the plaintiff and his wife a year's board, and he might carry on the defendant's farm on any terms he might elect. He accepted, and came back; defendant failed to make his offer good; the court held that it was competent for the jury to take into consideration in assessing the damages the expenses of removing to N. B. In an action against the proprietor of a school for the breach of a contract to employ the plaintiff as a teacher, made for her by her father during her absence in Europe, the plaintiff was held not entitled to recover as part of her damages the expenses of her journey home, it not appearing that they were incurred in consequence of the contract, or were in the contemplation of the parties when it was made. Benziger v. Miller, 50 Ala. 206. See Williams v. Oliphant, 3 Ind. 271; Bulkley v. United States, 19 Wall. 37; Dillon v. Anderson, 43 N. Y. 231; Hosmer v. Wilson, 7 Mich. 294. 1 Dean v. White, 5 Iowa, 266; Grand Tower Co. v. Phillips, 23 Wall. 471; Driggs v. Dwight, 17 Wend. 71; Bunney v. Hopkinson, 1 L. T. (N. S.) 53; Smith v. Green, 1 C. P. Div. 92; Randall v. Newson, 2 Q. B. Div. 102; Leffingwell v. Elliott, 10 Pick. 204; Milburn v. Belloni, 39 N. Y. 53; Thoms v. Dingley, 70 Me. 100; Randall v. Raper, E. B. & E. 84; Borradaile v. Brunton, 8 Taunt. 535; Brown v. Edgington, 2 M. & G. 279; Knowles v. Nunns, 14 L. T. (N. S.) 592; French v. Vining, 102 Mas. 132; Johnson v. Meyer's Ex'r, 34 Mo. 255; Rowland's Adm'r v. Shelton, 25 Ala. 217; Ferris v. Comstock, 33 Conn. 513; Zuller v. Rogers, 7 Hun, 540; Fisk v. Tank, 12 Wis. 276; Reggio v. Braggiotti, 7 Cush. 166; Jeter v. Glenn, 9 Rich. L. 374; Skagit Ry. & L. Co. v. Cole, 2 Wash. St. 57; Bernstein v. Meech, 130 N. Y. 354; 29 N. E. Rep. 255. See Mason v. Alabama Iron Co., 73 Ala. 270. 2 French v. Parish, 14 N. H. 496; Newburgh v. Galatian, 4 Cow. 340; Brooklyn v. Brooklyn City R. Co., 57 Barb. 497; Holdgate v. Clark, 10 Wend. 215; Lincoln v. Blanchard, 17 Vt. 464; Kettle v. Lipe, 6 Barb. 467; Chamberlain v. Godfrey, 36 Vt. 380; Westervelt v. Smith, 2 Duer, 449; practical question will always be what the plaintiff was obliged or authorized to pay both in respect to the principal and incidental costs or expenses. If there has been a voluntary payment by the indemnified party or a compulsory payment resulting from a suit by which the indemnitor is not bound by his contract or in consequence of the lack of notice to defend, the question of the liability of the indemnified party to make such payment is open in his action for indemnity.' If there is an express indemnity against the result of a particular suit, whether the indemnitor is a party or not, the judg ment binds him for the purposes of that contract.2 But under a general covenant of indemnity against suits the covenantor has a right to defend either in the action against the indemnified party or in the latter's action upon the covenant of indemnity. There is a marked distinction between covenants which stipulate against the consequences of a suit and those which contain no such undertaking. In the latter class the judgment is res inter alios acta, and proves nothing except rem ipsam against the indemnitor, unless he has had notice and an opportunity to defend. The want of notice does not go to the cause Illies v. Fitzgerald, 11 Texas, 417; Bra- v. Pulver, id. 494; Howe v. Buffalo, man v. Dowse, 12 Cush. 227; Spear v. etc. R. Co., id. 297; Spalding v. Oakes, Stacy, 26 Vt. 61; Hallock v. Belcher, 42 Vt. 343; Chamberlain v. Beller, 18 42 Barb. 199; Howard v. Lovegrove, N. Y. 115; Stone v. Hooker, 9 Cow. L. R. 6 Exch. 43; Finckh v. Evers, 25 154; Scott v. Tyler, 14 Barb. 202; Ohio St. 82; Jarvis v. Sewall, 40 Barb. Bridgeport Ins. Co. v. Wilson, 34 449; Webb v. Pond, 19 Wend. 423; N. Y. 275: Proprietors of L. & C. v. Rockfeller v. Donnelly, 8 Cow. 623; Lowell Horse R. Co., 109 Mass. 221; Chace v. Hinman, 8 Wend. 452; War- Biggs v. Boyd, 37 Vt. 534; Colburn wick v. Richardson, 10 M. & W. 284; v. Pomeroy, 44 N. H. 19; Thomas v. Gerrish v. Smyth, 10 Allen, 303; Ray Beckman, 1 B. Mon. 31; Robertson v. Clemens, 6 Leigh, 600; Kip v. v. Morgan's Adnı'r, 3 id. 309; LittleBrigham, 6 Johns. 158; Colter v. Mor- ton v. Richardson, 32 N. H. 59; Gibgan's Adm'r, 12 B. Mon. 278; Mayor son v. Love, 2 Fla. 598. v. Troy, etc. R. Co., 3 Lans. 270; Lowell v. Boston, etc. R. Co., 23 Pick. 24; Baynard v. Harrity, 1 Houst. 200; Robbins v. Chicago, 4 Wall. 657; Crawford v. Turk, 24 Gratt. 176; Duxbury v. Vermont, etc. R. Co., 26 Vt. 751; Annett v. Terry, 35 N. Y. 256; Thomas v. Hubbell, id. 120; Binsse v. Wood, 37 id. 526; Armitage 1 Douglas v. Howland, 24 Wend. 35; Lee v. Clark, 1 Hill, 56; Duffield v. Scott, 3 T. R. 374; Aberdeen v. Blackmar, 6 Hill, 324; Rapelye v. Prince, 4 Hill, 119. 2 Patton v. Caldwell, 1 Dall. 419; Rapelye v. Prince, 4 Hill, 119; Thomas v. Hubbell, 15 N. Y. 405; Chamberlain v. Godfrey, 36 Vt. 380. |