On appeal from the Essex County Circuit Court.
For the appellant, Schotland & Schotland.
For the respondent, Samuel Schwartz.
The opinion of the court was delivered by
HEHER, J. Plaintiff sued to recover damages claimed to have been the proximate result of defendant's breach of an undertaking to lease to him the building designated as numbers 22-24 West Kinney street, in the city of Newark, and was awarded a verdict for a substantial sum by the jury impaneled to try the issue. From the consequent judgment, defendant appeals.
The decisive question is whether the trial judge, in certain rulings on evidence and in his instructions, applied the correct principle for the admeasurement of the damages. Defendant denied the asserted breach, but none of the challenged rulings relates to that issue.
These are the essential facts: On January 30th, 1934, defendant, by an indenture, leased to plaintiff, "for rooming house purposes," the adjoining building, Nos. 26-28 West Kinney street, and the equipment therein contained, for a term of three years from the ensuing February 1st, and, by a separate instrument delivered contemporaneously, granted to plaintiff an option, to be exercised within the period beginning April 1st and ending April 3d, 1934, to lease the building first mentioned upon identic terms and conditions. These buildings each contained fifty-six rooms. Plaintiff took possession of the building thus leased, and devoted it to the business authorized by the lease. He exercised the option to lease the adjoining building within time, but defendant did not perform.
The rule of damages applied by the trial judge was "the difference between the actual value of the leasehold estate that should have been enjoyed by the plaintiff, and the agreed rental." More specifically, the jury were instructed that the plaintiff was entitled to recover "the value of his term," and that, in the appraisement, it was proper to "consider the use to which the property may be most advantageously put," and
that, while the plaintiff was not entitled to an award of "those profits that he would have earned for the entire term," they were permitted, if not indeed required, to "consider what it is probable that this property would earn in determining what the term was worth to him."
In these instructions, and, by the same reasoning, in the related rulings on evidence to be adverted to hereafter, the trial judge fell into error.
Ordinarily, the prima facie measure of damages for the breach of a contract is the quantum of loss consequent thereon. The injured party is entitled to the value of the contract to him. It was this that he lost by the default of the other. Feldman v. Jacob Branfman & Son, Inc., 111 N.J.L. 37. But this general rule is subject to two qualifications designed to confine within reasonable limits the appraisement of the consequences of the default, viz.: First, the damages shall be those arising naturally, i.e., according to the usual course of things, from the breach of the contract, or such as may fairly and reasonably be supposed to have been in the contemplation of the parties to the contract at the time it was made, as the probable result of the breach; and, second, they must be the reasonably certain and definite consequences of the breach, as distinguished from mere quantitative uncertainty. Wolcott v. Mount, 38 Id. 496; United States v. Behan, 110 U.S. 338; 28 L. Ed. 168; Witherbee v. Meyer, 155 N.Y. 446; 50 N.E. Rep. 58; Wakeman v. Wheeler and Wilson Manufacturing Co., 101 N.Y. 205; 4 N.E. Rep. 264; Hadley v. Baxendale, 9 Exch. 341; 23 L.J. Exch. 179; 18 Jur. 358; 5 Eng. Rul. Cas. 502. This general principle seems to have had its genesis in the last cited case. There Baron Alderson declared that if special circumstances attending the making of the contract were communicated by the party asserting the breach to the one charged therewith, the ...