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SECTION 10. DIRECT LOSSES.

For the purpose of determining what consequences are proximate and what consequences are remote the losses caused by a tort, or by a breach of contract, are divided into direct losses, and consequential losses.

Direct losses are such losses as proceed immediately from wrongful conduct, without the intervention of any intermediate cause."

Direct losses must necessarily be proximate consequences of the act, and, therefore compensation is always recoverable in such cases." A person is conclusively presumed to intend the direct consequences of his acts, and therefore can not escape liability by asserting that he did not intend to do a certain thing, which was nevertheless a direct and necessary consequence of his act. SECTION 11. CONSEQUENTIAL LOSSES.

. Consequential losses may be either proximate or remote. Many of the most difficult problems in the field of damages arise in the determining whether particular losses are proximate results of the wrongful action, and therefore the basis for the awarding of damages, or whether they are remote and therefore unrelievable in damages. In general it has been said that: “Consequential losses are proximate when the natural and probable effect of the wrongful conduct under the circumstances is to set in operation the intervening cause from which the loss directly results. When

Hale on Damages, p. 36. Schu

maker vs. St. Paul and D, R. Co., 46 Minn., 39, 48 N. W.,

559.
• Campbell vs. Pullman Palace Car

Co., 42 Fed., 484; Stewart vs.
City of Ripon, 38 Wis., 548;

Cincinnati, 1 St. L. & C. R. Co.

vs. Coope, 22 N. E., 340. • Mann, Boudoir-Car Co. vs. Dupre,

4C. C., 540, 54 Fed., 646; Terre Haute and I. R. Co. vs. Buck, 96 Ind., 346.

such is not the natural and probable effect of the wrongful conduct, the losses are remote."

The Supreme Court of New Hampshire in discussing these terms said: “Consequential damage means both damage which is so remote as not to be actionable, and damage which is actionable. Sometimes it is used to denote damage which though actionable does not follow immediately in point of time, upon the doing of the act complained of. * * It is thus used to signify damage which is recoverable at common law, in an action of case, as contra-distinguished from an action of trespass. On the other hand, it is used to denote a damage which is so remote a consequence of the act that the law affords no remedy to recover it. The terms 'remote damages' and 'consequential damages' are not necessarily synonymous or to be indifferently used.'

No single rule, or even set of rules, can be given for the determination of the question as to the losses for which damages can be recovered for in each case. In the succeeding chapter the various classes of wrongs will be taken up in turn, and the various kinds of losses for which damages can be recovered in each class considered.

Hale on Damages, p. 39.

• Eaton vs. Railroad, 51 N. H., 504,

519.

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The leading case on the point as to what damages can be recoverd for the breach of a contract is that of Hadley vs. Baxendale. In this case the plaintiffs were owners of a steam mill. The shaft was broken and they gave it to the defendant, a carrier, to take to an engineer, to serve as a model for a new one. On making the contract, defendant's clerk was informed that the mill was stopped, and that the shaft must be sent immediately. He delayed its delivery; the shaft was kept back in consequence; and, in an action for breach of contract, plaintiffs claimed as special damages the loss of profits while the mill was kept idle. The court said in part: “We think the proper rule in such a case as the present is this: Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect to 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. Now, if the special circumstances under which the contract was actually made were communicated 19 Exch., 341; 23 Law J. Exch., 179; 18 Jur., 358; 26 Eng. Law & Eq., 398.

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by the plaintiffs to the defendants, and thus known to both parties, 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 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 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; for, had the special circumstances been known, the parties might have specially provided for the breach of contract by special terms as to the damages in that case, and of this advantage it would be very unjust to deprive them. The above principles are those by which we think the jury ought to be guided in estimating the damages arising out of any breach of contract.'

"Three rules may be deduced from Hadley vs. Baxendale: First, that damages which may fairly and reasonably be considered as naturally arising from a breach of contract, according to the usual course of things, are always recoverable; secondly, that damages which would not arise in the usual course of things from a breach of contract, but which do arise from circumstances peculiar to the special case, are not recoverable unless the special circumstances are known to the person who has broken the contract; thirdly, that where the special circumstances are known, or have been communicated to the person who breaks the contract, and where the damages complained of flow naturally from the breach of contract under those

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