The rule of damages which the referee applied in this case was erroneous. He held that the true measure of damages was the difference between the actual sales made by the defendants to the persons and firms referred to, and the price at which the defendants were selling similar lawn mowers, at or about the same time, to the plaintiffs. A rule like this would put it in the power of the defendants, after a market had been created abroad for the article by the money expended by the plaintiffs, to deprive the plaintiffs of all interest whatever from the contract by selling the article abroad and to the exporters here at a lower price than the plaintiffs could sell them for and obtain any profit. It would be to take the market which the plaintiffs had created away from them, which could be easily done under such a rule ; for if the defendants sold to the others at the same price that they sold to the plaintiffs, then no damage could be recovered by the plaintiffs, although the defendants had violated their contract.
The plaintiffs’ damage is what it may fairly be assumed they would have gained if they had been allowed to have what was secured to them by the contract, the exclusive sale of the mowers in the foreign market and to the exporters here.
It might be assumed, prima facie, unless from facts given in evidence the contrary appeared, that the plaintiffs could have sold mowers to the same foreign customers and exporters that the defendants did in violation of their contract, and the measure of loss or damage of the plaintiffs would be the difference between what they paid the defendants for mowers and the average price they were ordinarily obtaining for them from the exporters and foreign customers. *336This was what the plaintiffs offered to show; that is, what profits they were making upon like mowers purchased from the defendants and sold by plaintiffs to the exporters in New York; which the referee would not allow them to do, under the rule he laid down as the true measure of the damages.
The plaintiffs were not entitled to recover, as a part of their damages, the amount they had expended in creating a market abroad. It was an outlay for which the plaintiffs expected to be remunerated if they succeeded in creating the market, as they had, under the contract, the exclusive right of selling the mowers in the market so created, at such prices as they could obtain for th’em. This risk they took when they made the expenditure, and if the defendants are held to a strict performance of their contract, by being compelled to pay for whatever loss it may fairly be assumed the plaintiffs have sustained bj the defendants selling mowers in violation of the contract, and the plaintiffs get upon all such sales the difference between what they pay defendants for mowers and the average price at which they sell them in the market they have created, then they obtain all that they expected from their contract, and are fully remunerated for the violation of it.
The case, therefore, should go back to the referee, for reassessment of the damages, unless the plaintiffs are concluded by the agreement under which the amount of the damages was fixed, as reported by the referee ; upon which there is some difficulty, arising from the manner in which the proposition of the defendants and the acceptance of it h}' the plaintiffs’ counsel is stated in the case. Upon full consideration, however, I think the fair construction and statement of what passed between the parties, is this :
The plaintiff claimed, under the rules laid down by the referee for estimating the damages in respect to the sales to Mar let & Co. and the sales to exporters, that they were entitled to receive $85 for the Markt & Co.’s sales, and $360.74 for the sales to exporters. The defendants, on the contraiy, claimed that, applying these rules to the evidence, the plaint*337iffs were not entitled to recover anything. But to save further delay and expense in litigation the defendants were willing that a report might be made for half the amount claimed by the plaintiffs, or $222.87, which the plaintiffs’ counsel accepted. In doing so, he did not understand that the exception previously taken to the rules laid down by the referee was to be waived, but on the contrary, that that ruling was to be reviewed, as it materially affected the amount of the plaintiffs’ recovery; and the explanation of the exception reserved by the plaintiffs’ counsel in accepting the proposition of the defendants was this: the counsel evidently thought there might be some doubt as to the effect of his acceptance on the rule applied to Markt & Co.'s sales, the rule of the measure of damages there being peculiar ; and the plaintiffs’ counsel, therefore, made this special reservation, so that there might be no question of the plaintiffs’ right to review this ruling, as well as the others, upon the appeal from the judgment entered upon the report of the referee. I think therefore that the judgment should be reversed, and the case sent back to the referee, for a reassessment of the damages.
Larremore and Beach, JJ., concurred.
Order accordingly.