tion, though often cited as so deciding. Jurisdictions which deny the buyer more than nominal damages until eviction sometimes take fine and hardly tenable distinctions in this respect between different kinds of actions or warranties. Thus, where the seller fraudulently represents that he has title, it seems to be admitted that an immediate cause of action for substantial damages lies.15 In some jurisdictions the distinction is taken between express and implied warranties. It has been held in Kentucky that though no right of action arises immediately for breach of express warranty, 16 a right of action arises immediately on the sale where there has been merely an implied warranty. 17 But this distinction has been properly disapproved. 18 In Missouri with as little reason the converse of the Kentucky rule was suggested; namely, that for breach of an express warranty an action arises immediately, but for breach of an implied warranty no action arises until damage. 19

§ 1396. Damages for breach of warranty of title to goods.

Not only is it disputed when the buyer's cause of action or right to substantial damages arises, but also what is the basis for calculating substantial damages when the right to them has arisen. On principle it would seem clear that the buyer's damage is the full value of the goods, irrespective of the price paid for them, and this rule finds considerable support.20 In Massachusetts the value of the goods is thus allowed even though a buyer has not been dispossessed.21 It is sometimes said that the value is to be taken as of the time when the wrong was committed,2 ,22 which would be either the time of the sale or the time 15 Sumner v. Gray, 4 Ark. 467. Tipton v. Triplett, 1 Metc. (Ky.)

570.

"Pusey's Trustee v. Wathen, 90 Ky. 473, 14 S. W. 418.

18 Gross v. Kierski, 41 Cal. 111; Hodges v. Wilkinson, 111 N. C. 56, 15 S. E. 941, 17 L. R. A. 545.

19 Matheny v. Mason, 73 Mo. 677, 680, 39 Am. Rep. 541.

20 Rowland's Admr. v. Shelton, 25 Ala. 217; Marlatt v. Clary, 20 Ark. 251; Dabovich v. Emeric, 12 Cal. 171; Grose v. Hennessey, 13 Allen, 389;

Brown v. Pierce, 97 Mass. 46, 93 Am. Dec. 57; Hendrickson v. Back, 74 Minn. 90, 76 N. W. 1019; Hoffman v. Chamberlain, 40 N. J. Eq. 663, 5 Atl. 150, 53 Am. Rep. 783. The earlier Massachusetts and Tennessee decisions of Eaton v. Mellus, 7 Gray, 566, and Crittenden v. Posey, 1 Head, 311, are inconsistent with the later decisions in those States cited above.

21 Grose v. Hennessey, 13 Allen, 389.

22 Rowland's Admr. v. Shelton, 25 Ala. 217.

of dispossession, according to the doctrine held by the court in question. But whatever the time of the wrong there seems no reason for refusing to admit evidence of subsequent circumstances, as mitigating or increasing proximately the damages. This was well brought out in a Minnesota decision.23

The court said: "It seems that the charge to the jury was that the vendee was entitled to recover as damages the value of the property when it was taken from him, and damages were awarded on this basis, and that in passing upon the motion the court held its charge to have been erroneous, and that it should have stated that the vendee's damages were the price paid for the chattel. Unless we are to lose sight of the cardinal principle which governs when estimating and awarding damages in civil actions, which is simply compensation to the injured party, the court was right in its charge, and wrong when it concluded that an error had been committed." 24 In many cases following the analogy of the law governing covenants in conveyances of real estate,25 it has been held that the buyer can recover only the purchase money with such expenses as he may have properly incurred in defending his title. 26 This rule

23 Hendrickson v. Back, 74 Minn. 90, 76 N. W. 1019.

24 The court continued: "It was held in Close v. Crossland, 47 Minn. 500, 50 N. W. 694, in a case involving this very question, that the damages are the actual loss, which is the value of the chattel purchased. Of course, there might be circumstances which would affect any particular case. Under the rule established by the granting of the motion, the damages actually sustained might be more or might be less than the recovery, depending on the real value of the chattel when the paramount title was asserted as against the vendee; that is, whether the real value was more or less than the price paid. A good illustration of this is found in the present case. Defendant purchased in 1892, agreeing to pay $75 for the harvester and binder in question. He gave his note for this sum to his vendor, plain

tiff's intestate, and the note in suit was given in renewal in 1894. The machine was mortgaged, but no claim for possession was asserted until 1895, and it was then worth but $25. Defendant had the possession and the use for three years, during which time the property would materially decrease in value. His actual loss when the paramount title or right was asserted was the value of the property when taken away from him, and his loss would have been the same if he had bought the machine for $10 in 1892."

25 See infra, §§ 1401, 1402.

26 Ellis v. Gosney's Heirs, 7 J. J. Marsh. 109; Noel v. Wheatley, 30 Miss. 181; Armstrong v. Percy, 5 Wend. 535; Arthur v. Moss, 1 Or. 193; Hudson v. Norwood, 13 Tex. Civ. App. 662, 35 S. W. 1075; Cranberry v. Hawpe, 30 Tex. 409; Goss v. Dysant, 31 Tex. 186; Duecker v. Goeres, 104

virtually confines the remedy of the buyer to rescission and restitution, a remedy to which the injured buyer is undoubtedly entitled if he so elects, but it is a violation of general principles of contracts to deny him in an action on the contract such damages as will put him in as good a position as he would have occupied had the contract been kept. It is of course true that even if the value of goods furnishes the measure of damages, in the absence of evidence to the contrary the price will be regarded as fixing that value.27 The buyer who has been dispossessed is also entitled to recover as consequential damages, any expense reasonably incurred in defending his right to the goods against the true owner.28 Among such expenses should be included reasonable fees paid to buyer's counsel. 29

§ 1397. Damages for anticipatory breach.

After an anticipatory breach a defendant should not be liable for any greater damage than is naturally caused by the defendant's wrong. If the plaintiff by taking one line of conduct may secure such advantage as the contract entitles him to at less expense to the defendant than if another course is pursued, the plaintiff should be allowed only damages based on the former course.30 How far this principle precludes the plaintiff from continuing performance after repudiation of a contract for the manufacture of goods or for work and labor has been considered in another section.31 Another application of the principle, however, has been suggested. It has been held in England that after repudiation has been accepted as a breach the injured party should at once make another contract with a third person similar to that which has been repudiated, if the market prices are clearly tending in a direction which will make Wis. 29, 36, 80 N. W. 91; Confederation Life Assn. v. Labatt, 27 Ont. App. 321.

"Hoffman v. Chamberlain, 40 N. J. Eq. 663, 5 Atl. 150, 53 Am. Rep. 783. "Rowland v. Shelton, 25 Ala. 217; Marlatt v. Clary, 20 Ark. 251; Johnson v. Meyers' Exr., 34 Mo. 255; Armstrong v. Percy, 5 Wend. 535.

"Harding v. Larkin, 41 Ill. 413; Thurston v. Spratt, 52 Me. 202; Ryer

son v. Chapman, 66 Me. 557; Allis v. Nininger, 25 Minn. 525; Balte v. Bedemiller, 37 Or. 27, 60 Pac. 601, 82 Am. St. Rep. 737. The contrary was held, as it seems erroneously, in Reggio v. Braggiotti, 7 Cush. 166; Clark v. Mumford, 62 Tex. 531.

30 Sackville v. Storey (Tex. Civ. App.), 149 S. W. 239. And see supra, 1298.

31 Supra, § 1298.

that the more profitable course for the defendant. 32 There are two reasons to be urged against the correctness of such decisions. In the first place it is always impossible to be certain whether prices are going up or down. To speak of a market obviously falling" or "obviously rising" is to speak without due reflection. The prices at which persons will make contracts for future delivery must always be based on the estimate of well-informed persons as to the future value of the goods in question. Many things are obvious after the event which were not so previously. At least it is never so clear what turn the market price of a commodity may take that it is entirely certain that if the plaintiff at once makes a substituted contract it will turn out to be profitable for the defendant. It is not clear then that to take such a course will mitigate damage, and though for his own protection it may often be reasonable for a party to take this course, and if reasonable he should be allowed damages assessed on the basis of the expense of obtaining the new contract, 33 there seems no reason why he should adopt such a course for the defendant's benefit. Another reason against the English decisions is that the plaintiff is entitled to use such money or credit as he has for making all the forward contracts he is able to for his own benefit. He need not, even though the transaction seems likely to be profitable, give the repudiating defendant the advantage of any contract he is able to make when the making of such a contract limits his ability to make contracts for his own benefit.34

At least, it is clear that even though the breach be regarded

32 Roth v. Taysen, 73 L. T. R. 628. See also Re South African Trust, etc., Co., 74 L. T. 769; Nickoll v. Ashton, [1900] 2 Q. B. 298; Central Lumber Co. v. Arkansas Valley Lumber Co., 86 Kans. 131, 119 Pac. 321.

33 Rohm v. Horst, 178 U. S. 1, 44 L. Ed. 953, 20 Sup. Ct. 780; Skeele Coal Co. v. Arnold, 200 Fed. 393, 118 C. C. A. 545. In Missouri Furnace Co. v. Cochran, 8 Fed. Rep. 463, the court, however, held that the plaintiff was not entitled to damages on the basis of a new forward contract he

had entered into after the repudiation, but could only recover damages based on the actual price at the time fixed by the contract for perform

ance.

34 In Kadish v. Young, 108 Ill. 170, 48 Am. Rep. 548, the court held plaintiff need not make a new forward contract. See also Hinckley v. Pittsburg Steel Co., 121 U. S. 264, 7 S. Ct. 875, 30 L. Ed. 967; Missouri Furnace Co. v. Cochran, 8 Fed. 463; J. P. Gentry Co. v. Margolius, 110 Tenn. 669, 75 S. W. 959.

as having occurred at the time of repudiation, yet it was a breach of a contract to deliver at a later day, and, if it was not a reasonable thing under the circumstances to take some action at the earlier day the damages must be calculated on the basis of the price of the goods at the time when delivery should have been made. By no reasoning can the contract be treated as a contract to deliver goods at the date of the repudiation.35 In a narrow class of cases it may be that, following the analogy of the law governing breach at the time of performance, the market value of a contract such as that which the defendant has repudiated should be taken as the basis of damages, rather than the actual value of performance as proved by the event, but it is only a limited class of contracts for future performance -such as contracts to sell wheat or cotton in the future, or to insure which can be said to have a market value; and it is to be observed that even in the case of a breach at the time for performance, the plaintiff is not restricted to damages based on the difference between contract price and market price where injurious consequences were within the contemplation of the parties. If this principle is applied to an anticipatory breach, it can hardly be questioned that the parties when the contract was made contemplated as the natural consequences of a breach, the injury which would accrue at the time of performance, that is the difference between the contract price and the market price then-not the cost of a new forward contract at some prior date.

§ 1398. Contract to pay a sum of money in goods.

It is a not uncommon form of contract for a debtor to promise to pay a stated sum of money in goods or services. If the agreement fixes no rate at which the goods or services are to be taken the creditor's measure of damages is the amount of the debt.36 If the creditor breaks such an agreement and collects his claim in money, the debtor's measure of damages is the

"Roper v. Johnson, L. R. 8 C. P. 167; Rahm v. Horst, 178 U. S. 1, 20 Sup. Ct. 780, 44 L. Ed. 953; Wulff v. Lindsay, 8 Ariz. 168, 71 Pac. 963; Gansey v. Orr, 173 Mo. 532, 73 S. W.

477; Windmuller v. Pope, 107 N. Y. 674, 14 N. E. 436.

36 Cummings v. Dudley, 60 Cal. 383, 44 Am. Rep. 58.