action in that country for non-delivery of goods according to contract, the damages were not restricted to the difference between the contract and market price, but that the plaintiff might recover in respect of the profits which he would have made by a contract of resale into *which he had entered. The decision is in itself no authority *453] in England, as it turned upon the acknowledged difference

between the law of the two countries in this respect. It is remarkable, however, for a vigorous onslaught upon the English law by so formidable an opponent as Lord Cottenham, C. He said, 'If pig. iron had only risen 1s. a ton in the market, but the purchasers had lost 10007. upon a contract with a railway Company, in my opinion they ought not only to recover the damage which would have arisen if they had gone into the market and bought the iron at the increased price, but also that profit which would have been received if the party had performed his contract. No other rule is reconcileable with justice, nor with the duty which the jury had to perform,-that of deciding the amount of damage which the party has suffered by the breach of his contract.' But, with the greatest possible respect, it may be suggested that the rule most reconcileable with justice would be, to inquire what was the contract, and what were the liabilities really entered into by the parties. The question is, not what profit the plaintiff might have made, but what profit he professed to be purchasing. Not what damage he actually suffered, but what the other contemplated, and undertook to pay for. It is quite clear that loss of profits by a resale can never be contemplated, unless the resale has actually taken place at the time, and is communicated to the other party. The reason is, that such a profit is utterly incapable of valuation. It may depend upon a change of weather, a scientific discovery, an outbreak of war, a workman's strike. It will depend upon the energy and sagacity of the person who purchases the goods, and the solvency of the person to whom he sells them again. In short, if the Scotch rule were to be carried out to its fair extent, no one *could contract to sell goods which were not actually in his *454] possession, without charging an additional premium, commensurate to the profits which the vendee might possibly make, and for which he himself would have to pay, if prevented from carrying out his agreement."] The English rule, it is submitted, is that which should be followed here. [ERLE, C. J.-The real question is, whether the plaintiffs are entitled to recover the 1597. as damages arising out of the resale of the soda by Heitmann to Heinburger.] In Josling v. Irvine, 6 Hurlst. & N. 512,† the defendant on the 26th of July sold by sample to the plaintiff 3000 gallons of naphtha, at 2s. 2d. per gallon. On the 27th the plaintiff resold the same to H. (also by sample), at 2s. 6d. It appeared that the sample contained 73 per cent. of benzol, an article used in the manufacture of Magenta dye, then newly discovered, and for that purpose was worth 5s. 9d. a gallon. The defendants failed to deliver the naphtha. It was proved that H. had claimed the difference between 5s. 9d. and 2s. 6d. from the plaintiff. In assessing the damages in an action for the non-delivery of the naphtha, the jury gave this amount to the plaintiff as damages. The Court directed a new inquiry, because it did not appear at what price

laintiff could have procured naphtha according to the sample, at

the time of the breach,-Martin, B., saying: "Upon these facts, I think that the case of Randall v. Rapir, E. B. & E. 84 (E. C. L. R. vol. 96), is decisive to show that the damage which the plaintiff is liable to pay to the sub-purchaser may be taken into consideration. I agree, that, if a person purchases stock, or any other article which has a certain known price and quality, the market-price at the time of the breach affords a fair measure of damage. But, in this case, the value of the naphtha may have risen immediately after the sale, and there may have been no ascertainable *market value." On a second in[*455 quiry, it appeared that naphtha known to contain 73 per cent. of benzol could not have been bought for less than 5s. 9d. at the time of the breach. The learned Judge before whom the inquiry was executed told the jury that the plaintiff would have no to an action by H. for the difference, and advised the jury to give such a sum as would enable him to pay H. The jury having adopted this view, it was held that the damages were rightly assessed, and that there was no misdirection. In Mayne on Damages, p. 16, it is said: "One very common instance in which damages are held to be too remote, arises where the plaintiff claims compensation for the profits which he would have made if the defendant had carried out his contract. It is by no means true, however, that such profits can never form a ground of damage. There are many cases in which the profit to be made by the bargain is the only thing purchased, and in such cases the amount of that profit is strictly the measure of damages. When A. agrees to execute work for B., or to sell him goods, or hire him a ship at a future day, the benefit to A. is the profit flowing from the transaction, and to this he is entitled. But, when the thing purchased is a specific article, and not the right to make a profit, the measure of damages will be the value of that article, or the difference between the contract-price and that at which it could have been purchased elsewhere. The mere fact that some ulterior profit might have been made out of it cannot be considered, because such profit formed no part of the contract. This distinction has been very clearly pointed out in a case in the Supreme Court of New York. The plaintiffs had contracted with the defendants to furnish marble from a specified quarry, at a fixed sum, for the erection of a City Hall. The plaintiffs entered into a contract with *the proprietors of [*456 the quarry for the required amount, at a smaller sum. After delivering a part of the marble, the defendants refused to receive any more. The plaintiffs sued for breach of contract, and claimed as damages the profit they would have made by furnishing the marble. at a larger sum than they were to pay for it. Kent, J., ruled accordingly, that the jury should allow the plaintiffs as much as the performance of the contract would have benefited them :' and this ruling was affirmed in the Court above. Nelson, C. J., said: 'It is not to be denied that there are profits or gains derivable from a contract which are uniformly rejected as too contingent and speculative in their nature, and too dependent upon the fluctuation of markets and the chances of business to enter into a safe or reasonable estimate of damage. Thus, any supposed successful operation the party might have made, if he had not been prevented from realizing the proceeds of the contract at the time stipulated, is a consideration not to be

taken into the estimate. Besides the uncertain and contingent issue of such an operation, it has no legal or necessary connection with the stipulations between the parties, and cannot therefore be presumed to have entered into their consideration at the time of contracting. When the books and cases speak of the profits anticipated from a good bargain as matters too remote and uncertain to be taken into the account in ascertaining the true measure of damages, they usually have reference to dependent and collateral engagements entered into on the faith and in the expectation of the performance of the principal contract. But, profits or advantages which are the direct and immediate fruits of the contract entered into between the parties, stand upon a different footing. These are part and parcel of the contract itself,-entering into and constituting a portion of its very *457] *elements; something stipulated for, the right to the enjoy ment of which is just as clear and plain as to the fulfilment of any other stipulation. They are presumed to have been taken into. consideration and deliberated upon before the contract was made, and formed perhaps the only inducement to the arrangement:' Masterton v. The Mayor, &c., of Brooklyn, 7 Hill's N. Y. Rep. 61. It is conceded that the plaintiffs are entitled to the loss of profit on their sale to Heitmann. Are they not also entitled to recover the sum which they were compelled to pay Heitmann to compensate him for the loss he sustained by the breach of his contract with his vendee? It is difficult to discover any principle upon which these two heads of damage are to be distinguished. When a man sells goods to a merchant, he knows that they are bought for the purpose of resale. In Smeed v. Foord, 1 Ellis & Ellis 602 (E. C. L. R. vol. 102), the defendant contracted to deliver to the plaintiff, a farmer, a threshing-machine, within three weeks. It was the plaintiff's practice, known to the defendant, to thresh wheat in the field, and send it thence direct to market. At the end of the three weeks, the plaintiff's wheat was ready in the field for threshing; and, on the plaintiff's remonstrating at the delay in the delivery of the machine, the defendant several times assured him it should be sent forthwith. The plaintiff, having unsuccessfully tried to hire another machine, was obliged to carry home and stack the wheat, which, while so stacked, was damaged by rain. The machine was afterwards delivered to the plaintiff, who paid the defendant the contract price. The wheat was then threshed; and it was found necessary, owing to its deterioration by the rain, to kiln-dry it. When dried and sent to market, it sold for a less price than it would have fetched had it been threshed at the time fixed by the contract for the *delivery of the machine, and then *458] sold, the market-price having in the meantime fallen. In an action for the non-delivery of the machine, it was held that the plaintiff was entitled to recover substantial damages in respect of the expense of stacking the wheat, of loss arising from its deterioration by the rain, and of the expense of drying it in the kiln.(a)

Brett, Q. C., and Littler, in support of the rule.-There being no

(a) But that he was not entitled to recover any damages in respect of the fall in the marketprice of the wheat, inasmuch as that could not have been in the contemplation of the parties when the contract was made, and could not be said to have been in any way the natural result of the defendant's breach of contract.

market to which the plaintiff, could have resorted in order to supply themselves with the article in question, upon the defendant's failure to deliver it pursuant to his contract, it may be that the plaintiffs were entitled to recover as damages the difference between the contract-price and the price which they would have received under their sub-contract with Heitmann; and that sum the defendant has paid into court. All beyond that was clearly too remote. The plaintiffs, however, claim to be entitled also to the increased freight and insurance to which the 26 tons delivered were subjected by reason of the lateness of the season for the Baltic, and also the loss sustained by Heitmann by reason of his inability to perform his contract with his sub-vendee. The true measure of damages, as laid down by all the authorities, is, the loss which the defendant has contracted to make good. The amount of damages payable for a breach is as much part of the contract as the quantity of goods to be delivered or the price to be paid for them. The rule is neatly laid down in Mayne on *Damages, p. 15: "The first, and in fact the only inquiry in [*459 all these cases, is, whether the damage complained of is the natural and reasonable result of the defendant's act: it will assume this character if it can be shown to be such a consequence as in the ordinary course of things would flow from the act;" that is, the result which might reasonably be expected from the defendant's breach of contract; or, in cases of contract, if it appears to have been contemplated by both parties. Where neither of these elements exists, the damage is said to be too remote." That means, contemplated at the time the contract is made, and with reference to the contract. This case, it is submitted, does not fall within either of those rules. The contract was made with the plaintiffs at Newcastle. It is true that the defendant was told at the time that the soda was wanted for shipment to a correspondent abroad: but no names were disclosed, nor was it stated to what part abroad it was to be sent. What, then, is the natural consequence of the breach of such a contract? Can it be more than the loss of the profit the plaintiffs would have made if they had been enabled to perform their contract with the merchant abroad? Then, upon what principle can the defendant be liable for the increased freight and insurance? There is no pretence for saying that there was anything in the contract from which the plaintiff could reasonably infer that the defendant knew the soda was to be shipped for the Baltic. Vessels are constantly running to Antwerp and Rotterdam from Hull, as well as to Hamburg and the Baltic. Or it might be that the soda was wanted for shipment to a Belgian or a French port. The claim in respect of the sub-contract is altogether out of the question. That is disposed of by the case of Portman v. Middleton, 4 C. B. N. S. 322 (E. C. L. R. vol. 93). There, A. contracted with B. to repair a steam *threshing-machine, undertaking to get it [*460 ready by harvest-time. A new fire-box being needed, C. engaged to make one for A. "in about a fortnight," but failed in the performance of his contract, and A. (who had paid C. for the article) was obliged to get one made elsewhere, at an additional cost; but this he did not do in time to enable him to perform his contract with B. (although there was ample time for him to have done so after C. had broken his contract); whereupon B. sued A., who paid him 207. to

settle the action. It was held that A. was entitled to recover from C. the sum he had paid for the fire-box, and the extra cost incurred in getting another; but that the compensation paid by A. to B. was not such a damage "as might fairly and reasonably be considered either as arising naturally from C.'s breach of contract, or such as might reasonably be supposed to have been in the contemplation of the parties, at the time they made the contract, as the probable result of the breach of it," within the rule in Hadley v. Baxendale, 9 Exch. 341.+

ERLE, C. J.--This was an action for the breach of a contract to deliver a quantity of caustic soda. As a general rule, a vendor who fails to deliver goods according to his contract, must pay as damages to the vendee the difference between the value of the goods at the time of the breach of contract as compared with the contract-price: or, in other words, if the vendee can go into the market and get the article contracted for, the vendor must reimburse him the difference between that which he has been compelled to pay for it and the price at which the vendor had contracted to deliver it. But, where the article is not one of constant demand and supply, so that there is no market which can be resorted to for the purpose of obtaining it, another *principle must be had recourse to in order to deter*461] mine the measure of damages which the vendee is to recover: and that principle has been adopted here, in accordance with the rule in Hadley v. Baxendale, 9 Exch. 341,† where it was held, 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. The vendor is to pay to the vendee such damages as he may fairly and reasonably be supposed to have considered that he would be liable to pay in the event of his failure to perform his contract. Here, the vendor had notice that the vendee was buying the caustic soda, an article not ordinarily procurable in the market,-for the purpose of resale to a sub-vendee on. the continent. He made the contract, therefore, with knowledge that the buyers were buying for the purpose of fulfilling a contract which they had made with a merchant abroad. If the plaintiffs could have delivered the caustic soda which the defendant failed to supply to their vendee Heitmann, their profit thereon would have been 521. 5s. 4d. That sum the defendant has paid into Court: and we may assume that the plaintiff's are entitled to recover as damages for the defendant's breach the loss of the profit which the plaintiffs would have derived from the transaction if the defendant had delivered the caustic soda pursuant to his

contract.

Then, the contract was for the sale of 75 tons, 25 tons of which was were to be delivered in June, 25 tons in July, and 25 tons in August. *462] None was delivered until September; and then only 26 tons in all. The question is, to what damages the defendant is liable by reason of that late delivery. Now, the purchaser of the caustic