Opinion
June Term, 1896.
David Benjamin Scharps, for the appellant.
George H. Fletcher, for the respondent.
The question as to whether the agreement was made, as testified to by plaintiff, was one of fact for the jury. The only question as to the agreement itself is, whether an agreement to conduct the business "on shares" was in effect one providing that the plaintiff and defendant should share equally in the net profits of the business. No such question as this was suggested in express terms at the trial. It was not suggested that there was any variance between the agreement sworn to by the plaintiff and the one alleged in the complaint. The learned trial court submitted to the jury the question of fact whether the agreement upon which the action was based was entered into. Nothing was said by him as to the meaning of the words "on shares," as used by the parties, and there was no request by the defendant upon that subject. If there had been such suggestion made, it would very likely have been a question to be determined by the jury, under all the circumstances, what the intention of the parties was in the use of the phrase "on shares," and we think the jury would have been justified, then, in finding that the meaning of the phrase in the contemplation of the parties was "equal shares." The defendant cannot now complain, in the absence of any request on the subject, that the question as to the meaning of the phrase was not specifically submitted to the jury. The jury, under the charge of the court, did find that the agreement alleged in the complaint was entered into by the parties, and we see no reason to disturb the verdict on this subject.
We think the meaning of the phrase, within the intention of the parties, was "equal shares" of the profits of the business. There were various exceptions taken to the admission of evidence upon the question of damages, and to the charge and refusals to charge upon this subject.
In Bagley v. Smith ( 10 N.Y. 489), which was an action brought to recover damages for the breach of an agreement of co-partnership by one of the co-partners, in terminating the co-partnership before the expiration of the term agreed upon, it was held that the damages recoverable were the loss of the plaintiff's share of the profits which the co-partnership would have made had it continued to the end of the term. And while it was conceded that there were difficulties in ascertaining and estimating such prospective profits, yet the court held that it would not refuse to make the inquiry as to such profits, especially as it was the misconduct of the defendant that rendered the inquiry necessary.
In Devlin v. The Mayor ( 63 N.Y. 8-25), which was an action to recover damages for the breach of an executory contract for street cleaning in the city of New York, it was said: "The measure of damages * * * is too well settled by authority to require discussion, and the rule adopted by the courts commends itself for its simplicity, as well as equity and good sense. It secures to the injured party as a compensation only such advantages as the parties must be deemed to have had in their minds in making the agreement, and excludes all contingent and uncertain profits, every thing that may not reasonably be supposed to have been within the contemplation of the contracting parties, and would not naturally follow the breach. The party who has been wrongfully deprived of the gains and profits of an executory contract may recover as an equivalent, and by way of damages, the difference between the contract-price, the amount which he would have earned and been entitled to recover on performance, and the amount which it would have cost him to perform the contract."
And in Wakeman v. Wheeler Wilson Mfg. Co. ( 101 N.Y. 205, 209, 210), which was an action to recover damages for the breach of an executory contract between an agent and a sewing machine company for the sale by the agent for the company of sewing machines, it was held that prospective profits, so far as they were provable, and which would certainly have been realized but for the defendant's default, were recoverable as damages, although the amount was uncertain, and that the rule that damages which were contingent and uncertain could not be recovered, embraced only such as were not the certain result of the breach, and not such as were the certain result of the breach, but uncertain in the amount only. EARL, J., said: "When it is certain that damages have been caused by a breach of contract, and the only uncertainty is as to their amount, there can rarely be good reason for refusing on account of such uncertainty any damages whatever for the breach. A person violating his contract should not be permitted entirely to escape liability because the amount of the damages which he has caused is uncertain. It is not true that loss of profits cannot be allowed as damages for a breach of contract. Losses sustained and gains prevented are proper elements of damages. Most contracts are entered into with the view to future profits, and such profits are in the contemplation of the parties, and, so far as they can be properly proved, they may form the measure of damage. As they are prospective they must, to some extent, be uncertain and problematical, and yet, on that account, a person complaining of breach of contract is not to be deprived of all remedy. It is usually his right to prove the nature of his contract, the circumstances surrounding and following its breach, and the consequences naturally and plainly traceable to it, and then it is for the jury, under proper instructions as to the rules of damages, to determine the compensation to be awarded for the breach. When the contract is repudiated the compensation of the party complaining of its repudiation should be the value of the contract. He has been deprived of his contract, and should have in lieu thereof its value, to be ascertained by the application of rules of law which have been laid down for the guidance of courts and juries."
The court reviewed the authorities in this State and elsewhere bearing upon this subject, and the rules laid down in this case have never since been questioned.
We think the case we are considering was tried and submitted to the jury within the law as laid down in the cases to which we have referred. Evidence was given on both sides as to the circumstances surrounding the making of the agreement and its breach, and as to the amount of profits that would probably have been realized from the carrying on of the business under the agreement. The court instructed the jury that, in arriving at the amount of damages, they should consider what profits, if any, would have been made, whether the venture, the business, would have proved successful, and should award only such damages as would fairly compensate the plaintiff for her loss of prospective profits by reason of the defendant's breach of the agreement. The jury rendered a very moderate, reasonable verdict; a verdict fairly within the evidence. The plaintiff had been for many years in the business of conducting a boarding house, and was an expert who could give an opinion as to the probable expense incident to conducting the house in question. The full capacity of the house was fifty boarders. There were twenty double rooms and eight single rooms. Estimating, as plaintiff did, the single rooms with board at $12 per week each, and the double rooms at $25 per week each, the total receipts per week would have been $596. And estimating the expenses as $812 per month, or about $190 per week, the net profits per week would have been $400 or thereabouts. From August 1, 1893, to November 1, 1893, three months, or about thirteen weeks, the net profits would have been $5,200, of which plaintiff's one-half would have been $2,600. These were the plaintiff's best figures, and were based upon every room being filled all the time at a good round price per week, and very likely some expenses would have been necessary which were overlooked.
The evidence on the part of the defendant showed an entirely different estimate of net profits. The charge for rooms and board was put at five to nine dollars per week, and it was said that the rooms would not have been full all the time, and that the season was practically from June first to September first. In connection with this evidence some idea of the defendant's estimate of the earning capacity of the house was afforded by the consideration that he asked $2,500 per year rent for the property.
The verdict of the jury was $450, which was in effect arrived at on the basis of the net profits for the three months, or thirteen weeks, being $900, or $300 per month, or $70 per week. The verdict was, as we have said, moderate, reasonable and fairly within the evidence.
The judgment and order appealed from should be affirmed, with costs.
VAN BRUNT, P.J., PATTERSON, O'BRIEN and INGRAHAM, JJ., concurred.
Judgment and order affirmed, with costs.