1902 Encyclopedia > Damages

Damages




DAMAGES, the compensation to which a person is by law entitled who has been injured by another. The principle of compensation m law makes its first appearance as a substitute for personal retaliation. In primitive law something of the nature of the Anglo-Saxon were-gild, or the ______ of the Iliad, appears to be universal. It is a payment due from the offender to the person he has offended, or to his family or kin. The system relates to personal injuries. It marks out with great minuteness the measure of the compensation appropriate to each particular case. And there is sometimes a resemblance between the legal compensation, as it may be called, and the compensation which an injured person, seeking his own remedy, would be likely to exact for himself. In such a system the two entirely different objects of personal satis-faction and criminal punishment are not clearly separated, and even in modern law damages are still occasionally penal.

The object of legal compensation should be to place the injured person as nearly as possible in the situation in which he would have been but for the injury. In the law of England the two historical systems of common law and equity viewed this problem from two different points of view. The principle of the common law was that the amount of every injury might be estimated by pecuniary valuation. The object of equity was to place the injured party in the actual position to which he was entitled. This difference comes out most clearly in cases of breach of con-tract. The common law, with a few partial exceptions, would do no more than compel the defaulters to make good the loss of the other party, by paying him an ascertained sum of money as damages. Equity, recognizing the fact that complete satisfaction was not in all cases to be obtained by mere money payments, compelled the defaulter to specifically perform his contract. Again, in those injuries which do not fall under the head of breach of contract, equity, on satisfactory proof that a wrong was contemplated, would interfere to prevent it by injunction; while at com-mon law no action could be brought until the injury was accomplished, and then only pecuniary damages could be obtained. Common law and equity are now so far fused by the Judicature Act of 1873 that the appropriate remedy can be awarded in any of the divisions of the High Court of Justice.

The assessment of damages is peculiarly the business of the jury, and the court will only interfere with their decision on strong cause being shown. Thus a verdict may be set aside on the ground that damages are excessive, or that they are palpably insufficient. And if it appear that the result was arrived at by mere hazard, as, for instance, by each juryman naming a sum and an average being struck, that would be an impropriety which would invalidate the verdict. There are, moreover, certain principles according to which the damages must be ascertained.

To take, first, cases of breach of contract. Here, it is said, the motive of the defendant is an irrelevant considera-tion. He has broken his contract, and all that has to be done is to fix the amount of the loss occasioned thereby. So wherever there has been a breach of contract, some damages, though they should be merely nominal, are recoverable. And when the contract was for a payment of a fixed sum of money, the damages recoverable for a breach thereof would be that sum with interest. Where, in other cases, the parties themselves have fixed the sum which should be due as damages in case of the contract not being fulfilled, such sum will be the proper damages to be awarded by a jury. On this point, however, the cases run rather fine. When a contract provides that a fixed sum shall be payable for breach, the law will ask whether it has been fixed as a penalty or as liquidated (i.e., ascer-tained) damages. In the former case it will not allow the fixed sum to be awarded, but will require evidence to show what the amount of loss actually was. In Kemble v. Farren (6 Bingham, 141), a contract between a manager and an actor provided that for a breach of any of the stipulations therein the sum of £61000 should be payable by the defaulter, not as a penalty, but as liquidated and ascertained damages. Yet even here, the court observing that under the stipulations of the contract the sum of £1000, if it were taken to be liquidated damages, might become payable for mere non-payment of a trifling sum, held that it was not fixed as damages, but as a penalty only. On the other hand, when the damage caused by a breach of contract is of its own nature uncertain, and the parties have positively fixed a sum as liquidated damages, that sum will be the proper damages. Where no such arrangement is made, the general rule for the assessment of damages is that the aggrieved party is to be placed in the same position, so far as money can do it, as if the contract had been performed. Thus, in a contract for the sale of goods when the vendor makes default in delivery, the proper measure of damages is the difference between the contract price and the market price of the goods on the day when they ought to have been delivered ; so that if the price has not risen in the interval, the vendor can only get nominal damages. If he has in the meantime resold the goods to a sub-vendor, he cannot claim against his own vendor any damages which the sub-vendor may recover against him for breach of contract, because he ought to have gone into the market and purchased other goods. Again, if a buyer refuses to accept the goods when tendered to him, the measure of damages will be the difference between the contract price and the market price at the time of his refusal, if the latter is lower than the former. But in such cases the trouble and expense of finding a new purchaser or other goods may be taken account of in asses-sing the damages. It has been held that in a breach of contract to replace stock lent, the measure of damages will be the price of the stock on the day when it ought to have been delivered or on the day of trial, at the plaintiff's option. Where goods inferior in quality to those contracted for are delivered, the difference between the value at the time of delivery of the goods contracted for and the value of those actually delivered will be the proper damages. The con-trolling principle, in fact, is that compensation should be determined by the amount of the actual loss. In an American case, where a person had agreed with a boarding-house keeper for a year, and quitted the house within the time, it was held that the measure of damages was not the price stipulated to be paid, but only the loss caused by the breach of contract. In contracts to marry, a special class of considerations is recognized, and the jury in assessing damages will take notice of the conduct of the parties. The social position and means of the defendant may be given in evidence to show what the plaintiff has lost by the breach of contract.





It is not every loss caused by the act or default complained of which can be taken in estimating the proper amount of damages. The remoteness of the consequences is a bar to their being recognized in the assessment, and it is a question of no little difficulty what damages are and what are not excluded for remoteness. The leading English case on this point is Hadley v. Baxendale (9 Exch., 341), in which damages were sought for the loss of profits caused by a steam mill being kept idle, on account of the delay of the defendants in sending a new shaft which they had contracted to make. The court held the damage to be too remote, and stated the true rule to be 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 either such as may fairly and substantially be considered as arising naturally, i.e.., according to the usual course of things, from such breach of con-tract itself, or such as may reasonably be supposed to have been in contemplation of both parties at the time they made the contract, as the probable result of the breach of it"

So also in cases of trust, the general rule is that the damages must be restricted to the " legal and natural consequences of the wrongful act imputed to the defendant." In an action by the proprietor of a theatre, it was alleged that the defendant had written a libel on one of the plaintiff's singers, whereby she was deterred from appearing on the stage, and the plaintiff lost his profits; such loss was held to be too remote to be the ground of an action for damages. The line of remoteness cannot probably be drawn with much greater precision than in the rule in Hadley v. Baxendale quoted above, vague and ambiguous as the language may seem to be. A subsequent case shows the limitations of the rule on the other side. In Smeadf. Foord (1 Ellis and Ellis, 602), the defendant con-tracted to deliver a thrashing-machine to the plaintiff, a farmer, knowing that it was needed to thrash the wheat in the field. Damages were sought for injury done to the wheat by rain in consequence of the machine not having been delivered in time, and also for a fall in the market before the grain could be got ready. It was held that the first claim was good, as the injury might have been anticipated, but that the second was bad. When, through the negli-gence of a railway company in delivering bales of cotton, the plaintiffs, having no cotton to work with, were obliged to keep their workmen unemployed, it was held that the wages paid and the profits lost were too remote for damages. On the other hand, the defendant having failed to keep funds on hand to meet the drafts of the plaintiff, so that a draft was returned dishonoured, and his business in con-sequence was for a time suspended and injured, the plaintiff was held entitled to recover damage for such loss. The great difficulty of framing a rule which shall meet all cases is acknowledged by judges and legal writers. One judge declared that no rule could be made in the matter. Another declared that the rule in the majority of cases could have no application, because parties never con-template the consequences of a breach of contract. The cases probably do not go beyond this, that, when from facts known to everybody, or from special facts proved to be known to the defendant, he ought to have anticipated the consequences of the breach of contract, he will be liable for them.

The rule that the contract furnishes the measure of the damages does not prevail in the case of unconscionable, i.e., unreasonable, absurd, or impossible contracts. The old school-book juggle in geometrical progression has more than once been before the courts as the ground of an action. Thus, when a man agreed to pay for a horse a barley-corn per nail, doubling it every nail, and the amount calculated as 32 nails was 500 quarters of barley, the judge directed the jury to disregard the contract, and give as damages the value of the horse. And when a defendant had agreed for £5 to give the plaintiff two grains of rye on Monday, four on the next Monday, and so on doubling it every Monday, it was contended that the contract was impossible, as all the rye in the world would not suffice for it; but one of the judges said that, though foolish, it would hold in law, and the defendant ought to pay some-thing for his folly. And when a man had promised £1000 to the plaintiff if he should find his owl, the jury were directed to mitigate the damages.

Interest is recoverable as damages only when an agreement that it should be paid can be proved or inferred (as in the case of bills of exchange), and under the statute 3 and 4 Will. IV. c. 42.

In American law interest is in the discretion of the court, and is made to depend on the equity of the case. In both England and America compound interest, or interest on interest, appears to have been regarded with the horror that formerly attached to usury. Lord Eldon would not recognize as valid an agreement to pay compound interest. And Chancellor Kent, and American lawyers generally, hold that compound interest cannot be taken except upon a special agreement made after the simple interest has become due. See INTEREST.
In actions of tort the discretion of the jury is not so strictly limited as in cases of breach of contract. The cases we have referred to show a general tendency to make the amount of damages a matter of legal certainty, and the jury can do little more than find the facts. If they travel beyond the contract the court will revise their verdict. But in estimating the damages for a civil injury, matter of aggravation may be taken into account. This position was strongly asserted in the cases arising out of the celebrated " General Warrants " in the time of Lord Camden, who is reported in one case to have said, " damages are designed not only as a satisfaction to the injured person, but as a punishment to the guilty, and as a proof of the detestation in which the wrongful act is held by the jury." In another case he mentioned the importance of the question at issue, the attempt to exercise arbitrary power, as a reason why the jury might give exemplary damages. Another judge, in another case, said, " I remember a case when the jury gave £500 damages for knocking a man's hat off; and the court refused a new trial." And he urged that exemplary damages for personal insult would tend to prevent the practice of duelling, The right of the jury to give exemplary or vindictive damages has been repeatedly confirmed in recent cases, and the same doctrine prevails generally throughout the United States. In Scotch law the distinction between compensation and punishment has been more carefully maintained. In Baillie v. Bryson (1 Murray's Reports), Lord Chief Commissioner Adams said that Lord Kenyon had " introduced into cases of this sort a principle as to damages extremely dangerous in its con-sequences. He considered such questions not merely as calculated to repair the injury done to the one party, but as a punishment of the other, and as intended to correct the morals of the country. The morals of the country have not been improved, and I am afraid its feeling has been much impaired. A civil court in matters of civil injury is a bad corrector of morals; it has only to do with the rights of parties."





When both parties are in fault, if the plaintiff's conduct has contributed to the injuries, his claim for damages will not be sustained. This has been carried so far that it has been held that, when a person in one carriage receives injuries from the management of another carriage, he cannot recover damages if any negligence, either on his own part or on the part of the owner or managers of the carriage in which he was, has contributed to the accident. (See NEGLIGENCE.) In the Court of Admiralty, where the question constantly arises in cases of collision, a different rule has been adopted. When both vessels are in fault the whole amount of loss is divided between them. And by a section of the Judicature Act, 1873, the Admiralty rule in such cases is to be adopted in all the courts.

In the old action of criminal conversation, exemplary damages might be given, and now the petitioner in a divorce suit may be awarded exemplary damages by the jury against a co-respondent. In this case, however, the disposition of the sum awarded as damages is in the discretion of the judge, who may apply it to the maintenance and education or otherwise to the benefit of children of the marriage.

Damages are said to be either general or special. The former are given for loses implied by law as the necessary consequences of the wrongful act. The latter are not implied by law, but are compensation for such loss as may be proved to have been in fact caused by the wrongful act. Thus, in an ordinary slander, special damage must be alleged and proved to entitle the plaintiff to pecuniary compensation. But if a slander touches a person in the way of his trade, the law will presume that it caused loss to the plaintiff, with-out calling on him to show what the loss actually was.

When a person was injured by the negligence of another, and died, the benefit of an action for damages did not survive to his representatives. But by the 9 and 10 Vict. c. 93 (commonly called Lord Campbell's Act), it is enacted that wherever the wrongful act is such as would have entitled the injured person to recover damages (if death had not ensued), the person who in such case would have been liable " shall be liable to an action for damages notwithstanding the death of the person injured, and although the death shall have been caused under such circumstances as amount in law to felony." Every such action shall be brought for the benefit of the husband, wife, parent, and child of the deceased. " Child " includes grandchild and step-child, but not illegitimate child.

Loss caused by an act which is not wrongful (damnum absque injuria) cannot be the ground of an action for damages; e.g., if A's business is injured by his neighbour B starting the same business, this is not an actionable loss.

Reference may be made to Sedgwick on The Measure of Damages, or Mayne on the same subject. (E. R.)


Footnotes

The were was 'the price of a man's life—the fine a murderer had to pay to the family or relations of the deceased, as the wite was the fine paid to the magistrate.

Quolibet alio die lunos, which was translated by some every Monday, and by others every other Monday. The amount in the latter case would have been 125 quarters, in the former 524,288,000 quarters.




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