Abrahams and another v. Herbert Reiach Limited 1921
1 K.B. 477 IN THE COURT OF APPEAL 2nd December 1921
Contract - Author and Publisher - Contract to publish - Discretion of Publisher - Breach of Contract - Measure of Damages
A firm of publishers agreed with the authors of a series of articles to print and publish the articles, first in a magazine on certain terms, and after that in the form of a book on the terms of paying the authors 4d. for every copy of the book sold. The form and price of the book, the number of copies to be printed, and the date of the publication were left to the discretion of the publishers. They printed and published the articles in the magazine upon the agreed terms, but refused to print or publish them in the form of a book. In an action by the authors for damages for breach of contract:- Held, that the defendants could not limit the damages to 4d. a copy upon the smallest number of copies that could be described as a publication of the book; but that they were bound to publish such a number as was reasonable in all the circumstances, and that damages were to be measured by the amount the plaintiffs lost through the defendants' refusal to do this.
APPEAL from the judgment of Sankey J. in an action tried before the learned judge without a jury.
In April 1919, the defendants, who were printers and publishers of a magazine called the Badminton Magazine, agreed with the plaintiffs to print and publish in the Badminton Magazine a series of articles on Training for Athletics written by the plaintiffs with photographic illustrations, and, on completion of the publication of the articles in the Badminton Magazine, to publish the same also as a book, and to pay the plaintiffs therefor at the rate of £1 per 1000 words in respect of the publication in the Badminton Magazine and a royalty of 4d. a copy on each book sold.
The defendants printed and published the articles in the Badminton Magazine, but refused to publish them as a book. The plaintiffs were two celebrated athletes one of whom had run for Oxford University and the other for Cambridge. They were also members of the medical profession. They claimed damages for the loss of the benefit of the publicity they would have secured by the publication of the book and for the loss of a favourable opportunity for selling the book, the Olympic Games having been fixed to take place in August 1920 at Antwerp. The learned judge held that they had suffered no loss under these heads.
The plaintiffs also claimed for the loss of the royalties they would have received but for the defendants' breach of contract. The defendants paid £25 into Court with a denial of liability. On this head Sankey J. awarded the plaintiffs £500 damages. The defendants appealed on the ground that these damages were excessive.
Jowitt for the appellants. The damages are excessive. The obligation of a publisher who contracts to publish, and no more, is not an onerous one. He need not publish more than one edition. The relation between the author and publisher is that of a partnership at will: Reade v. Bentley (1857) 3 K. & J. 271; (1858) 4 K. & J. 656.; Warne v. Routledge (1874) L. R. 18 Eq. 497.; and either party may on reasonable notice retire from the joint venture. By this contract a very wide discretion is allowed to the appellants. The number of copies to be printed and published, the form of the book, the date of publication and the price of each copy are all left to their judgment. Accordingly they would perform their obligation by offering to the public the smallest number of copies that could be called an edition or a publication of the book. The amount paid into Court represents a sale of 1500 copies. No one could deny that an offer of 1500 copies would constitute a publication of the book within the meaning of this contract. If a defendant may perform his obligations in either of two ways the plaintiff can only claim for a breach of that stipulation which is less profitable to himself and less onerous to the defendant: Cockburn v. Alexander (1848) 6 C.B. 791, 814., per Maule J.; Robinson v. Robinson (1851) 1 D.M.&G. 247, 257., per Lord Cranworth L.J.; Deverill v. Burnell (1873) L.R. 8 C.P. 475, 481., per Bovill C.J.; Thornett v. Yuills [1921] 1 K.B. 219; 26 Com. Cas. 59.. [Maw v. Jones (1890) 25 Q.B.D. 107. and Baker v. Denkera Ashanti Mining Corporation (1903) 20 Times L.R. 37. were also cited.]
H.G. Robertson for the respondents. This contract does not impose alternative obligations upon the appellants. There is only one obligation - namely, to publish the book. It may be difficult to define that obligation, but it is still one obligation, although its bounds may be vague or obscure. If it be granted for the sake of argument that an issue of 1500 copies would be a publication within the meaning of this contract, it must follow that an issue of 30,000 would be a publication; but that does not convert the contract into an obligation to issue 1500 or 30,000 copies at the option of the publishers. It may be that if the respondents alleged an obligation to issue 30,000 copies they would fail to establish that obligation; but that does not conclude this case, because the obligation of the appellants is not to issue this or that specific number of copies, but is to effect a reasonable publication of the book. The question the Court has to determine is, how much have the respondents lost by the appellants' refusal to make such a publication of this book as would have been reasonable in all the circumstances? That is the question which Sankey J. put to himself, and this Court will not readily interfere with the learned judge's conclusion in any case, and still less in relief of wrongdoers who have arbitrarily broken their contract.
Jowitt in reply. The respondents might have engaged the services of another publisher, and by so doing decreased the damages.
BANKES L.J. This appeal really concerns the amount of the damages. The action was brought for breach of the appellants' contract to publish in the form of a book certain articles which the respondents had written. The learned judge held that the contract as alleged in the statement of claim was proved. That being so, Reade v. Bentley 4 K. & J. 656. lays down a rule of construction which is applicable; a publisher who has agreed to publish a work must publish it, but is not bound to continue publishing it; the author has a right to determine the agreement after publication of an edition unless the agreement otherwise provides. The appellants undertook to publish this book and repudiated their agreement. What are the damages to which the respondents are prima facie entitled? The general rule is that stated by Parke B. in Robinson v. Harman (1848) 1 Ex., 850,855.: "Where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed." Mr. Jowitt contended that this was one of those contracts which may be performed in one of several ways and was analogous to those contracts which provide for alternative methods of performance. If this were so the party complaining of a breach must be content to have the damages assessed by the standard which is the least onerous to the defendant. But in my opinion this is not a contract of that kind. In the case to which we have been referred the contracts provide on the face of them for alternative methods of performance. This contract contract only imposes one obligation upon the appellants-namely, to publish. The question is what will satisfy that obligation? The appellants have a wide discretion; the time of publication, the number of copies to be printed, the price at which they are to be offered, and the form the book is to take are all left to their judgment. That however does not dispose of the case, because they have repudiated their obligation altogether, and the difficult question we have to decide is in what position the respondents would have stood if the appellants had performed their obligation. To answer this question the Court must come to some conclusion on matters on which there is no evidence; how the appellants would have exercised their discretion; what number of copies they would have published; how many editions would be reasonable. On all these points the parties left the learned judge in a difficult position. The case is very bare of materials from which he could draw any conclusion. He rightly emphasized the points which would induce a reasonable expectation of a large sale; the fact that the type was already set up and that the cost of production would be small; the character and reputation of the respondents, and the opportune occasion for publishing the book. But there were other matters to be taken into account, and in my opinion the learned judge made an estimate which was too favourable to the respondents and we cannot allow the judgment for £500 to stand. The parties have agreed that we may substitute an amount which we think fair, and I think £100 would be a fair assessment. The judgment will stand for that amount.
SCRUTTON L.J. I agree. The respondents are two distinguished athletes. They wrote certain articles on training for athletics and illustrated them with photographs and published them in the appellant's magazine. The appellant agreed to publish the articles in the form of a book. I cannot but wonder that publishers and authors enter into agreements as indefinite as this. It is so vague and general in its terms that it is hard to say what it means. It contemplates a book being published and copies of it being sold; but nothing is said about the number of copies to be printed, nothing about the price at which they are to be sold, or the time of publication. Mr. Jowitt contended that if one copy was published that would satisfy the appellant's obligation. That cannot be laid down as a proposition of law. I think the appellants were bound to make such a publication as could be considered reasonable in the circumstances. Having done that they are not bound to do anything further. Provided that they make a reasonable publication the number and price of the copies are left to them. They broke their contract, and now what is the measure of damages? There are two principles which may seem to clash. One of these is stated by Lord Selborne in Wilson v. Northampton and Banbury Junction Railway Co. (1874) L. R. 9 Ch. 279, 285.: "In the case of damages, as it appears to me, the plaintiff will be entitled to the benefit of such presumptions as, according to the rules of law, are made in Courts both of law and equity against persons who are wrongdoers in the sense of refusing to perform, and not performing, their agreements. We know it to be an established maxim, that in assessing damages every reasonable presumption may be made as to the benefit which the other parties might have obtained by the bona fide performance of the agreement." I am not inclined to be strict in limiting the damages recoverable against wrongdoers, but if their obligation is left so much to their discretion that there are several ways of performing it, I have always understood that the Court assesses damages on the basis that "if the contract could have been performed by the performance of the alternative least beneficial to the plaintiff, the measure of damages would be regulated by the loss occasioned by the non-performance of that alternative": Deverill v. Burnell L.R. 8 C.P. 475, 481., per Bovill C.J. The simple reason for this is that a defendant is not liable in damages for not doing that which he is not bound to do. In assessing the damages in this case I try first to ascertain what edition of the book would have been a performance of this contract; I do not forget that the respondents cannot recover more than they would have suffered if they themselves had acted reasonably; I bear in mind also that the appellants are wrongdoers; and acting on these lines I do not dissent from an assessment of £100, though I think myself the plaintiffs might have got considerably less.
ATKIN L.J. I agree in the result, though I do not go all the way with Scrutton L.J. The contract was to publish a book with illustrations and to pay the authors 4d for every copy sold. The book would no doubt be published for the benefit of the publishers, and the authors would have an interest in the nature of a royalty in the sale of the book. The transaction resembles an agreement for a joint adventure falling short however of a partnership. There having been a breach of this contract the Court, in order to place the parties in the same pecuniary position as if the contract had been kept, must first ascertain what the contract was. If a merchant makes a contract to deliver goods to a shipowner to be carried by him for reward, and the merchant fails to provide the goods, the Court must first find what is the contract that has been broken; and if it was to carry the goods to one of two alternative ports at different distances from the port of loading at rates of freight differing according to the distance, the only contract on which the shipowner can sue is a contract for carriage to the nearer port. The plaintiff cannot prove a contract for performance of the more onerous obligation. This explains why in cases of this kind the Court regards only the lesser of two alternative obligations. But in the present case there are no alternatives, and to adjust the rights of the parties the only method is to form a reasonable estimate of the amount the respondents would be in pocket if the appellant had kept his promise. Everything likely to affect the amount of the profit must be considered; the nature and popularity of the subject matter, the reputation of the authors, the cost of producing a book on that subject, the price at which it would command a sale, the business capacity of the publishers and the chances of earning a profit by the sale of the book. On the other hand the publishers are not bound to run risks contrary to their judgment; they would naturally and properly allow for fluctuation in the public taste for literature of this kind. An analogous calculation has to be made when a man having engaged to take another into his service for a time and to pay him a share in the profit of his business, refuses to employ him at all. In assessing the damages for the breach of this contract the question is not how the employer could carry on his business so as to make the least possible profit and so involve himself in the least possible obligation towards the plaintiff. Apart from his contract, he need not carry on business at all. The proper method of assessment is quite different; it is to make a reasonable computation of the amount the respondents would have received had the contract been fulfilled. The sum so arrived at is the measure of their damages. This seems to have been the method pursued by Sankey J., but in my view the actual result at which he arrived is too favourable to the respondents, and the learned judge must have omitted some considerations which ought to have been taken into account. To produce £500 damages there must have been a sale of 30,000 copies of the book, and that is too large an estimate. The evidence warrants the inference that there would have been a substantial sale; but the book may still be published, though perhaps under less advantageous conditions; and the sale may still be large. Moreover the publishers might have exercised their discretion upon a mistaken view of their own interests and have published less copies than they could without difficulty have sold. On the whole I agree that £100 is a fair assessment of the damages.
Appeal allowed.
Solicitor for appellants: L. F. Callingham. Solicitors for respondents: Crossman, Block, Matthews & Crossman, for Wade-Gery & Brackenbury, St. Neots.
W. H. G.
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