[*444

would otherwise have been at large. There was, therefore, a manifest use for the words "the cotton to be taken from the quay." The meaning of them is, that the quay is to be taken as the place at which the delivery is to be made. This construction is fortified by the provision made for the usual allowances, and the stipulation that the invoice is to date from the delivery of the last bale. That must mean from the time the last bale is landed on the quay. The contract, therefore, stands as a contract for the delivery of the cotton in a reasonable time and under reasonable circumstances, the cotton to be at the buyer's charge from the time it is landed on the quay. That seems to me to be the proper construction; and it is the construction which the sellers have put upon it. They offered to deliver the cotton to the buyers on the same terms as if it had been delivered on the quay: nay, more, the vendors offered to take it back to the quay, so as literally to comply with the words of the contract. For these reasons, I am of opinion that the rule should be made absolute to enter the verdict for the defendants.

KEATING, J.-I am of the same opinion. I think, after hearing the argument, it is quite clear that the words in question were introduced as a stipulation in favour of the vendors. The place where they are found seems to me to make this quite obvious. The meaning is, that the vendees shall be bound to take the cotton from the quay, provided the vendors were ready to deliver it there. The words were in all probability introduced in order to get rid of any question as to which party was to bear the expenses to be subsequently incurred. That seems to me to be the only sensible construction of the contract. Rule absolute accordingly.

*BORRIES and Others v. HUTCHINSON. Jan. 19. [*445 The defendant contracted to sell to the plaintiffs 75 tons of caustic soda,-a commodity not ordinarily procurable in the market, at a given price, to be delivered on the rails at Liverpool for Hull, 25 tons in June, 25 tons in July, and 25 tons in August; but he failed to deliver any until the 16th of September, between which day and the 26th of October he delivered 26 tons in all.

At the time of entering into the contract, the defendant was aware that the plaintiffs were buying the soda for a foreign correspondent, but did not know until the end of August that it was destined for St. Petersburg.

The plaintiffs had in fact contracted to sell the soda to A., a merchant at St. Petersburg, at an advanced price; and A. had contracted to sell it to B., a soap-manufacturer at that place, for a still further advance.

In consequence of the late delivery of the 26 tons, the plaintiffs were compelled to pay a higher rate of freight and insurance. This amounted to 40%. 178. For their failure to deliver the remainder to A., they were called upon to pay and actually paid 1597., which A. claimed as the compensation he had been obliged to pay to B. for the failure to perform his sub-contract with him.

In an action by the plaintiffs to recover from the defendant damages for the breach of his contract with them, it was conceded that they were entitled to recover the difference between the price (on the 49 tons undelivered) at which he had sold the caustic soda to them, and the price at which they had contracted to sell it to A,-in other words, the loss of profit on the resale: and,

Held, that they were also entitled to recover the 407. 178., the excess of freight and insurance, which was the necessary result of the defendant's breach of contract; but that the defendant was not chargeable with the 1591. which the plaintiffs had paid to A. to compensate B. for the loss of his bargain,—this being too remote a damage.

THIS was an action for the breach of a contract for the sale of a quantity of caustic soda.

The declaration stated that the plaintiffs bargained with the defendant and agreed to buy of him a large quantity, to wit, 75 tons, of his best caustic soda, strength guaranteed not to be less than 70 per cent., in 5 cwt. iron casks or 3 cwt. wooden casks, at the plaintiffs' option, at the price of 167. 58. per ton free on rails at Widness Dock, less 2 per cent. discount and 1 per cent. commission: payment, cash fourteen days after delivery: shipment to be, 25 tons in June, 25 tons in July, and 25 tons in August: Averment, that all conditions were fulfilled, and all things happened, and all times elapsed necessary to entitle the plaintiffs to the delivery of the said caustic soda: Breach, that the defendant did not deliver the same to the plaintiffs; and the plaintiffs, by reason of the premises, had been hindered and prevented from performing a certain other contract made by them with one Heitmann, of St. Petersburg, for the sale to him of the said caustic soda at greatly increased prices, which last-mentioned con*446] tract was made on the faith of the agreement by the defendant; and by reason of the premises the plaintiffs had been obliged to pay a much larger sum for freight and insurance than they otherwise would have done if the defendant had performed his said contract, and had incurred other losses, and were liable for other damages, &c.

The defendant paid 527. 5s. 4d. into court, averring that that sum was sufficient to satisfy the claim of the plaintiffs; which they by their replication traversed; and thereupon issue was joined.

The cause was tried before Willes, J., at the second sitting in London in Michaelmas Term last. The facts were as follows:-On the 11th of May, 1863, the defendant, who was an alkali manufacturer at Liverpool, sold to the plaintiffs, who were merchants at Newcastleupon-Tyne, 75 tons of caustic soda, to be delivered free on the rails for Hull, 25 tons in June, 25 tons in July, and 25 tons in August, at 167. 5s. per ton. The contract was made by letters, which letters and some subsequent correspondence between the plaintiffs and the defendant showed that the plaintiffs were to the knowledge of the defendant buying the article for shipment to "friends on the continent." The plaintiffs had in fact made a sub-contract with one Heitmann, a merchant of St. Petersburg, to supply him with the article in question, to be shipped at Hull, at 177. 10s. per ton, and had made arrangements for its shipment for the Baltic at the times above mentioned."

No part of the caustic soda was delivered by the defendant until September, between the 16th and the 26th of which month several deliveries took place, in the whole amounting to 26 tons, which were shipped by the plaintiffs for St. Petersburg in pursuance of their contract with Heitmann; but in consequence of the advanced season,” this was done at an increased *rate for freight and insurance *447] to the extent of 407. 178. (being 351. 15s. for freight, and 51. 2s. for insurance) beyond what they would have had to pay if the shipments had been made before the end of August.

It was admitted that caustic soda is not an article which is kept in stock, so as to be capable of being at any time bought in the market like most other articles of commerce, consequently there was no

ascertainable market-price; hence, the defendant paid into Court enough to cover the difference between the price the plaintiffs had contracted to pay him for the caustic soda and the price at which they had contracted to sell the article to Heitmann.

The plaintiffs, however, further claimed to be entitled to recover as damages the increased freight and insurance which they had been obliged to pay by reason of the lateness of the shipment. They also claimed to be entitled to a further sum of 1597. for the loss of Heitmann's profit upon the 49 tons undelivered, and a compensation which Heitmann had been obliged to pay (and which they had repaid him) for the non-performance of his contract with one Heinburger, a soap and candle manufacturer at St. Petersburg, to whom he had contracted to sell the caustic soda,-of which contract the defendant had notice by the correspondence, but not at the time he made his contract with the plaintiffs.

On the part of the defendant it was submitted that these two lastmentioned items of damage were too remote; and that the mention of "our friends on the continent," in the correspondence which took place concerning the contract, at the utmost amounted only to an intimation. to the defendant that the plaintiffs were buying as agents for a foreign merchant.

The learned Judge was inclined to think that the plaintiffs were entitled to recover in respect of the *extra cost for freight and insurance occasioned by the delay, but not for the loss by reason of the sub-contract entered into by Heitmann with Heinburger.

[*448

The jury returned a verdict for the full sum claimed,-1997. 178.;. and the learned Judge reserved leave to the defendant to move to reduce the damages, the Court to be at liberty to draw such inferences as the jury might have done.

Brett, Q. C., in the course of the term, obtained a rule nisi accordingly. S. Temple, Q. C., and Udall, now showed cause. The plaintiffs were entitled to be reimbursed by the defendant all the loss and expensethey had sustained through his breach of contract. It was conceded that there was no market to which the plaintiffs could have resorted, on the defendant's failure to supply the article contracted for; therefore the ordinary rule cannot apply here. The defendant had notice from the correspondence that the damages now claimed would be the natural and necessary result of the breach of his contract. The extra freight and insurance became necessary from the lateness of the delivery at Hull of the 26 tons which were delivered: and, when a man contracts to sell goods to a merchant, he is necessarily cognisant of the fact that they are bought for the purpose of resale, or to supply orders already received. [WILLES, J.-The sale by Borries & Co. to Heitmann was not made with any reference to the particular terms of their contract with Hutchinson.] We are justified in assuming that Heitmann bought from the plaintiffs upon the same terms (except as to price) on which the plaintiffs bought of Hutchinson. [ERLE, C. J.-It is not to be assumed, because the buyer is a merchant, he will contract to sell on and on before he has possession of the goods.] Such is the [*449 invariable practice in every market. The rule, as laid down by Alderson, B., in delivering the judgment of the Court in Hadley v. Baxendale, 9 Exch. 341, 354,t-and which has since received almost C. B. N. S., VOL. XVIII.-18

universal assent,-is, that," where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i. e. 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 the breach of it." In Randall v. Raper, Ellis, B., & Ellis 84, the plaintiffs, corn-factors, bought of the defendant a quantity of barley which was warranted to be seed barley of a particular quality, and in the course of their trade resold it, with a like warranty, to third persons, who sowed it on their land, believing that it was of the description warranted. The crop which came up was of an inferior kind of barley, and claims were made upon the plaintiffs by their vendees for compensation in respect of the damage which they had suffered, and the plaintiffs agreed to satisfy them, but no sum was fixed. In an action by the plaintiffs against the defendant, it was held (Wightman, J., hæsitante) that they might recover the amount of damage which their vendees had sustained, they being liable to pay it, though they had not actually done so. In giving judgment, Lord Campbell says: "The true rule is, that you must show that the damage which is sought to be recovered naturally arose from the breach of contract of which you complain. Suppose the plaintiffs had paid according to the liability which they had incurred, it would have *been a natural, probable, and necessary consequence of the *450] breach of the contract, for, the defendant sells the barley as Chevalier seed barley, and the purchaser sells it again with the same description. If it be sown, and turns out not to be Chevalier seed barley, it will not produce that quality of grain which was warranted, not on account of climate, or soil, or weather, but because seed will produce the same product, and the difference in value will be a necessary loss, and one which naturally arises from the breach of contract by the defendant. Therefore, the defendant having warranted the barley as Chevalier seed barley, if the plaintiff's had been sued, and had been obliged to pay damages, there is no doubt that they could have recovered them again. But then it is said that here there has only been a claim, no action having been brought, or any sum paid. It would be a great hardship if we were to say that the liability to pay damages was not enough to enable the plaintiffs to recover; and no case can be found where it has been decided that there must be more than a liability." [ERLE, C. J.-It is agreed on all hands that the loss of profit upon the first resale (to Heitmann) is recoverable.] That which is said by Parke, B., in the course of the argument in Hadley v. Baxendale, 9 Exch. 346,† is abundantly sufficient to show that the plaintiffs are entitled to recover the whole of the damages which they now claim. "The sensible rule," he says, "appears to be that which has been laid down in France, and which is declared in their code,Code Civil, liv. iii. tit. iii. ss. 1149, 1150, 1151, and which is thus translated in Sedgwick, p. 67,- The damages due to the creditor consist in general of the loss that he has sustained, and the profit ich he has been prevented from acquiring, subject to the fications hereinafter contained. The debtor is only liable for the

[*451

damages *foreseen, or which might have been foreseen, at the time of the execution of the contract, when it is not owing to his fraud that the agreement has been violated. Even in the case of non-performance of the contract, resulting from the fraud of the debtor, the damages only comprise so much of the loss sustained by the creditor, and so much of the profit which he has been prevented from acquiring, as directly and immediately results from the non-performance of the contract.'" The rule is well laid down by an eminent American Judge (Selden, J.), in a case of Griffin v. Colver, 2 Smith's New York Rep. 489, 494,-"It is an error to suppose that 'the law does not aim at complete compensation for the injury sustained,' but 'seeks rather to divide than satisfy the loss' (Sedgwick, ch. 3). The broad general rule in such cases, is, that the party injured is entitled to recover all his damages, including gains prevented as well as losses sustained; and this rule is subject to but two conditions. The damages must be such as may fairly be supposed to have entered into the contemplation of the parties when they made the contract, that is, must be such as might naturally be expected to follow its violation; and they must be certain, both in their nature and in respect to the cause from which they proceed. The familiar rules on the subject are all subordinate to these for instance, that the damages must flow directly and naturally from the breach of contract, is a mere mode of expressing the first; and that they must be not the remote but proximate consequence of such breach, and must not be speculative or contingent, are different modifications of the last. These two conditions are entirely separate and independent, and to blend them tends to confusion." [ERLE, C. J.-That is, such damages as may naturally be expected to follow and are certain to follow a breach of the contract.] The *general

rule is also stated by Tindal, C. J., in delivering the judgment [*452 of the Exchequer Chamber in Barrow v. Arnaud, 8 Q. B. 604, 609 (E. C. L. R. vol. 55), as follows:-"Where a contract to deliver goods at a certain price is broken, the proper measure of damages in general is, the difference between the contract-price and the market-price of such goods at the time when the contract is broken, because the purchaser, having the money in his hands, may go into the market and buy. So, if a contract to accept and pay for goods is broken, the same rule may be properly applied; for, the seller may take his goods into the market and obtain the current price for them." But that rule is inapplicable to a case like this, where there is no market-price, and no possible means of obtaining other goods, so as to enable the purchases to perform the sub-contract. In Dunlop v. Higgins, 1 House of Lords Cases 381, the measure of damages in an action for breach of contract in the sale of goods, is held to be not merely the amount of the difference between the contract-price and the price at which such goods could be bought at the moment when the contract was broken, but likewise a compensation for such profit as might have been made by the purchaser had the contract been duly performed. [WILLES, J.— Mr. Mayne, observing upon that case (Mayne on Damages 18), says: "It may be as well to state, that, according to the Scotch law, loss of profits may be included in the estimate of damages. It was on this ground that Dunlop v. Higgins was decided in the House of Lords. It was an appeal from a Scotch Court: and it was held, that, in an