Webster v. Woolford

Robinson, C. J., delivered the opinion of the Court. This is an action to recover damages for deceit alleged to have been practised by the defendant in respect of his authority to sell certain property situate in the town of Cambridge, and known as “The Seminary property.” The plaintiff says that the defendant, professing to -be the agent of the Board of School Commissioners for Dorchester County, agreed to sell to him said property at a stipulated price; and that pending the negotiations for the sale, the plaintiff told the defendant that he intended to sell his interest in the fertilizer business, in which he had been engaged for some years, for the purpose of raising money to meet the payments on the “ Seminary property,” and that subsequently he did in fact sell out his interest in said business. The plaintiff further alleges, that the representations made by the defendant in respect of his authority to sell said property were false and fraudulent, and made with intent to deceive the plaintiff; and that acting on the faith of these representations he sold out his fertilizer business, in consequence of which he suffered great loss by being thrown out of business and great worry of mind, &c. The sole question on the demurrer is whether upon the facts thus alleged the plaintiff is entitled to recover the special damage suffered by him by the sale of his interest in the fertilizer business ?

The action, it is true, is in the nature of an action for tort, but it is a tort founded on a breach of contract, and there being no question as to exemplary damages, the rule as to the measure of damages is the same as in cases for breach of contract in regard to the ³³¹ sale of property. Now, what is the rule in such cases? We take the rule to be that when two parties make a contract for the sale of property which one of the parties has broken, the other party may recover such damages as may fairly and reasonably be considered, i. e., according to the usual course of business, to flow from the breach 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 the breach of it. If the special circumstances under which the contract was made were communicated by the plaintiff to the defendant, then, in the language of the Court in Hadley v. Baxendale, 9 Exch. 341, “the damages resulting from the breach of such a contract which they would reasonably contemplate, would be the amount of injury which would ordinarily follow from a breach of a contract under these 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 his 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.” The first part of the rule as thus laid down applies to cases in which the damages are the direct and natural result of the breach of the contract, and which the law presumes to have been in the contemplation of both parties. The latter part of the rule applies in cases where special damages are claimed under special circumstances made known by the plaintiff to