105 Neb. 557 | Neb. | 1921
This action was brought by William B. Shurtleff, in •the district court for Lancaster county, against the Occidental Building & Loan Association to recover special damages claimed to have been sustained by him for an alleged breach of contract on the part of the defendant to lend the plaintiff $16,000.
The petition alleges in apt terms the making of the contract for the loan, the unwarranted breach' thereof by the defendant, and the. items going to make up his claim for special damages, which may be epitomized as damages arising out of the increased cost of the building; the loss of prospective rents; and the court costs and attorney fees incurred in perfecting his abstract to meet the' requirements of the defendant, a more detailed statement of which will hereinafter appear.
At the close of the testimony, on motion of the defendant, the court directed the jury to return a verdict for the defendant, which was accordingly done, and judgment rendered thereon for the defendant. The plaintiff has appealed.
The only question presented by the appeal is whether the court erred in instructing a verdict for the defendant.
It was the theory of the trial court, as disclosed by its remarks in ruling on the defendant’s motion for a directed verdict in its favor, that, conceding .that the plaintiff had established the making of the contract for the loan, and conceding the unwarranted breach thereof by the defendant, still the plaintiff must fail for the reason that no damages such.as the law recognizes for a breach of a contract to lend money had been shown. The trial court took the view that the measure of damages in such cases is the .difference between the contract rate of interest and the rate the borrower would have been required to pay in procuring the money elsewhere; and, there being no
In passing upon the correctness of the ruling of the court, we must consider the testimony tending to support the plaintiff’s theory of the case in its most favorable aspect. In support of the plaintiff’s theory, the testimony tends to shoAV that on October 5, 1916, the plaintiff made an application to the defendant for a loan of $25,000 upon an apartment house Avhich the plaintiff contemplated building upon a lot then OAvned by him in the city of Lincoln, Nebraska. At the time of the application the plaintiff exhibited to the. defendant the plans of the proposed building, which the defendant examined, figured the cost of the building, and informed the planitiff that his estimates were too high, but finally agreed to make a loan of $16,000 upon the premises, the money to be advanced from time to time as the building progressed toAvard completion. This proposition Avas accepted by the plaintiff, and in furtherance of the agreement on October 23,1916, he signed a note for $16,000 payable to the defendant, and plaintiff and his Avife duly executed a mortgage upon the premises to secure the payment of said note. The mortgage and note were delivered to the defendant and accepted by it, and the mortgage was duly filed for record the folloAving day. The testimony also shows that plaintiff, relying upon his contract, commenced the erection of the building in November, 1916, in accordance Avith the plans exhibited to the defendant; that plaintiff submitted to the defendant an abstract of his title, to Avhich objections Avere made, and, in order to satisfy the requirements of the defendant, plaintiff commenced tAvo suits to clear the clofid upon his title, and in the -end, about March 1, 1917, submitted an abstract Avhich met all the requirements of the defendant; that meanwhile the plaintiff had proceeded Avith the construction of the building, and had expended thereon about $12,000; that he had
The measure of damages for a branch of a contract to lend money is usually, as announced by the trial court, the difference between the contract interest rate and the increased interest rate the borrower is obliged to pay in procuring a new loan. There are certain exceptions to this rule, one of which is that, where it appears that the specific purpose for which the loan was made was communicated to the lender at the time the contract was entered into, and where it further appears that the borrower has suffered special damages by the breach, Avhich are pleaded and proved, the damages recoverable are such as may fairly and reasonably be supposed to have been in the contemplation of the parties at the time of making the contract, as the probable result of a breach of it. The leading case upon this general subject, and one frequently cited by the courts, is Hadley v. Baxendale, 9 Exch. (Eng.) *341, *354, in Avhich it is said:
“Where two parties have made a contract, Avhich 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, that is, 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 Avhich the contract was actually made were communicated by the plaintiffs to the defendants, and thus known to both parties, the damages resulting from the breach of such a contract, which they Avould reasonably contemplate, would be the. amount of injury Avhich Avould ordinarily folloAV from a breach of contract under these special circumstances so known and communicated.”
In the case before us it must be borne in mind that the plaintiff in contracting for the loan did so with the special purpose in view of constructing the building and paying for it in part at least, out of the money to be advanced on the loan from time to time as the building progressed, this fact was made known to the defendant at the time. That the plaintiff in carrying out the project might enter into contracts with contractors for various parts of the work would seem to be within the fair and reasonable contemplation of tbe parties at the time the contract for the loan was made, and that, if the contract were breached, the plaintiff might suffer damages. Whether such facts were reasonably within the contemplation of the parties, and whether it must have been reasonably contemplated that special damages would be suffered by a failure to carry
As we view the record, the item of special damages arising out of the increased cost of the heating and plumbing, above the cost in the original contracts, are not too remote and speculative to form the basis of recovery. Here the plaintiff had made contracts for the performance of this work, presumably with parties who were able to fulfil their agreements. That the work was not completed was due to the plaintiff’s inability to pay for it, which in turn was brought about by the defendant’s default. Such damages appear to be the direct and immediate result of the breach of the contract.
As to the element of special damages arising from the loss of rents of the building for the period of delay in the completion thereof, occasioned as the plaintiff claims by a breach of the contract, we are of the view that such damages are too remote and speculative to form the basis of recovery. Too many independent circumstances followed the breach of the contract to say that the loss of rents was the direct and immediate result of such breach. So, with respect to the costs and attorney fees paid by the plaintiff to perfect his title to meet the requirements of the defendant, we are of the view that they are not proper elements of damage. The' demands made by the defendant may have been somewhat technical, as claimed by the plaintiff, and yet in our view they are not beyond the reasonable requirements of a careful and prudent person engaged in loaning money. As before stated, the plaintiff procured a loan elsewhere. Had he not previously perfected his title, he would in all probability have been required to do so, paying therefor approximately the same amount.
In this discussion we have ommitted any reference to the argument of defendant’s counsel, for the reason that it is based upon the theory of defendant of the evidence, and
From what has been said, it folloivs that the judgment of the trial court should be reversed, and the cause remanded for further proceedings.
Reversed and remanded.