Blanchard v. Ely

21 Wend. 342

• Court: New York Supreme Court
• Decided: July 15, 1839
• Status: Published

Opinion

By the Court,

Cowen, J.

The objection that-the assignment of the articles of agreement by the plaintiff to one of the defendants, should have been received as a bar, is founded on the principle that where the right of the creditor and the liability of the debtor, or any one of several debtors meet in the same person, such coincidence works a release by operation of law. The reason is that a man cannot sue himself; the action is suspended by the voluntary act of the creditor; and is gone and discharged forever. 2 Wms’ Exec. Phila. ed. 1832, p. 811. It is obvious from the bare statement of the argument, that it must mean a vesting of the legal right, or, in other words, a right to sue in the creditor’s own name, in the person of his debtor. Otherwise the reason fails. It will, I apprehend, be found applicable to those cases only where the same individual, in order to sue, must appear on the record both as plaintiff and defendant. Main waring v. Newman, 2 Bos. & Pul. 120. The case of Van Ness v. Forrest, 8 Cranch, 30, will be found an authority for this distinction. Besides, it is suggested that the assignment in this case was merely by way of pledge, or security to one of the defendants for money lent; the plaintiff thus still retaining his interest as general owner. It is certainly very clear, that even if he could have divested his legal interest by an absolute assignment, that could not be done by merely pledging it; but he could not part with it in either form. This court has held that a defendant may, before suit brought, purchase a chose in action against the plaintiff, and use it as a set off: and we have often held that the assignee is the real party, and shall be protected. But this has always been held in an equitable sense, which would rather go to favor the present action than to defeat it.

Did the judge narrow the jury too much in the rule of damages? The plaintiff had failed in some comparatively trifling respects, to make so perfect a boat as he had stipulated for. The shafts were not of adequate strength, in consequence of which the boat was interrupted in some of her trips; and the company incurred expense in procuring repairs to be done, and in towing the boat to a proper place for undergoing her repairs. All this the judge left to the jury to deduct in their discretion, from the acknowledged balance of account for building her. But he directed them not to allow for delays, and for profits which might have been made from the trips that were lost. No common law authority was cited at the bar, one way or the other, having any direct application to the measure of damages in such a case as this; nor am I aware that any exists. If there be none, it is somewhat singular, considering the many contracts for building boats and other vessels which must have been made in England and this country. We have to regret that the attention of the counsel seemed to have been entirely turned from the character of this claim in the abstract, by a remark of the judge implying that damages for loss of profits were admissible in a cross action, but not in mitigation. This led the counsel for the defendant to stop with citing Reab v. McAllister, 8 Wendell, 115, to show that proof of any damages arising from a plaintiff’s breach of the contract upon which he sues, may be'received to reduce his claim. This we all understand to be clearly so. The counsel for the defendant, too, merely thought it their duty to cite cases showing that in an action on a warranty of land, the plaintiff recovers only the consideration money paid, with interest and costs, &c.; and we were reminded particularly of one reason for that rule as given by Chief Justice Savage, in Dimmick v. Lockwood, 10 Wendell, 150, viz. “ That it would be ruinous and oppressive to make the seller respond in damages, for any accidental rise in value of the land or the increased value in consequence of the improvements by the purchaser.” He, at the same time, however, notices some technical reasons for the rule which render it less decisive in respect to executory contracts, especially those which' regard personal property. The prevalence of the rule is very extensive in its application to covenants of title. Vide 1 Selw. N. P. 533, Phil. ed. 1839. The rule is more pertinent when applied, as it has been in several cases to the breach by failure of title of a covenant to convey. Baldwin v. Munn, 2 Wendell, 339. Sutherland, J. there adopts a former remark of Ch. J. Kent, importing that it must block up sales of real estate, if the vendor were to be made liable in proportion to the rise of property. It is added on the same authority, that “The safest rule is, to limit the recovery as much as possible, to an indemnity for the actual injury sustained, without regard to the profits the plaintiff has failed to make.” Id. 406. This was A. D., 1829. As long ago as 1811, in Letcher v. Woodson, 1 Brock. 212, Marshall, Ch. J. laid down the rule of damages on a similar covenant, in nearly the same words with Mr. Justice Sutherland. Combs v. Tarlton's Admrs., 2 Dana, 466, 7, S. P., A. D. 1834. This rule would cut off all rise of the value intermediate the contract and time fixed for its execution. The rule on agreement to sell and deliver goods, is universally broader; giving the vendee advantage of the rise in market, and the consequent advantage of profit on any sale which he might have made at the time stipulated for delivery, or whenever it becomes due. Smee v. Huddlestone, Sayer’s Dam. 49. See many other cases cited in Ch. J. Marshall’s note to Letcher v. Woodson, 1 Brock. 218. Clark v. Pinney, 7 Cowen, 681, 687, and the cases there cited. Nay more, under circumstances, the rise is considered even down to the time of the trial. . Id. The rule of damages in respect to contracts for the sale of chattels is the general one, and some courts have refused to depart from it, in measuring damages for breach of covenants to convey real estate. Hopkins v. Lee, 6 Wheaton, 109, 117, 118. Cannell v. McLean, 6 Har. & Johns. 297. I do not dwell upon these cases, more of which may perhaps be found. In both classes, the courts are seeking after an indemnity; that is to say, making good to the vendee what he has paid his money for. Both classes of cases profess to deny the allowance of damages remotely consequential, as of profits resting in speculation. The possible or even probable use to which the vendee may put the property, aside from a market sale, is clearly excluded. Going upon analogy, then, suppose the owners of this boat, the defendants, had sold out ; in the absence of evidence that there had been a rise of the boat’s value in market, we must take the stipulated value at which it was to be built, Bailey v. Clay, 4 Rand. 346, and then the sum which would command the materials and work for making good the defects, would be the measure of damages in an action, or by way of recoupment in a defence. In like manner, a contract to insure a cargo will not, in the event of loss, carry the specuative profits of the adventure, though these may be insured In express terms, even by an open policy. 1 Phil, on Ins. 320, 325. Id. 46. Yet, insurance is called pre-eminently a contract of indemnity. The damages are what will restore the value of the cargo on ship board at the port of departure. Id. 46, et seq. The rule is nearly the same , in respect to damages for breach of warranty. The defect arising from the vice warranted against, must be made good in such sense that the article shall fetch a sound price, which prima facie, we have seen is the one agreed on between warrantor and warrantee. 4 Rand, ut supra. 2 Leigh’s N. P., Philad ed. 1838, p. 1506. Caveat emptor in search of a horse, 1 Rural Lib. N. Y., No. 5, for 1837, p. 140. Clare v. Maynard, 7 Carr. & Payne, 741 ; 1 Nev. & Perr. 701, S. C. Chesterman v. Lamb, 4 Nev. 5c Mann. 195 ; 2 Adolph. & Ellis, 129, S. C. 1 Selw. N. P., ed. before cited, p. 654, tit. Deceit, I. 1, and notes. Bacon v. Brown, 4 Bibb, 91. Yet, in all the cases mentioned, as in that of insurance, there is no doubt, that by an express contract, on good consideration, the vendor may stipulate expressly to indemnify in respect to loss of profits arising from the defect against which he contracts. In short, it will be seen by the cases cited and many more, that on the subject in question, our courts are more and more falling into the track of the civil law, the rule of which is thus laid down by a learned writer :p‘ In general, the parties are deemed to have contemplated only the damages and interest which the creditor might suffer from the non-performance of the obligation, in respect to the particular thing which is the object of it; and not such as may have been accidentally occasioned thereby in respect to his own nffairs.’ 1 Evans’ Poth. 91, Lond. ed. 1806. He illustrates the rule by the rise of value in goods which the promissor fails to delivér. He adds, if the lessor’s title to a house fail, he is bound to pay to his lessee the expense of removal, and indemnify him against the ad - vanee of rents, but not against the loss of custom in a business he may have established while residing in the house. He also adverts to the distinction that the vendor may, notwithstanding, incur liability for extrinsic damages of the creditor, if it appear they were stipulated for or tacitly submitted to in the contract. One instance is that of stipulating to deliver a horse in such time that a certain advantage may be gained by reaching such a place. There the debtor shall, on default, pay for the loss of the advantage. The case of tacit submission is illustrated by a case of demising premises expressly for use asan inn. There, if, the tenant be evicted, a loss of custom may be taken into the account. Id. 91, 92. This latter rule was in some measure acted upon in the late case of Driggs v. Dwight, 17 Wendell, 71. There was a promise to demise a tavern stand at a day certain, which was refused by the promissor, after the promissee had broken up his former residence, and proceeded with a view to take possession. We allowed to the latter, damages for removing his family and furniture ; in this, following the case of Ward v. Smith, 11 Price, 19. In Brackett v. McNair, 14 Johns. R. 170, the broken Contract was to transport goods from one place to another; and the increase of value in the goods at the latter place was allowed as damages ; though even this principle ' of estimate seems to have been denied in the previous case of Smith v. Richardson, 3 Caines, 219. In another case, the plaintiff sued for stone delivered to be used in building a church, and the defendants claimed a recoupment, because they had not been delivered at the day. They insisted, among other things, on damages, by reason of their workmen lying idle for want of the material. The court did not deny the claim absolutely but held that the defendants, even if the delivery had been stopped, would have been bound to use diligence in keeping their workmen employed on other materials, to be supplied as soon as they could be procured ; thus avoiding all unnecessary loss, and that the deduction must be governed with a view to that principle. Miller v. Mariner’s Church, 7 Greenl. 51, 55. The unreasonable delay of workmen stood somewhat on the footing of unreasonably delaying the boat in this case, which the judge refused to allow, though he directed that damages might be due for taking the boat to a proper place, for being repaired.

But to go the length insisted upon by the defendants, would, I apprehend, transgress what the law should allow, even had the plaintiff, without fraud, tortiously broken the machinery of this boat, as by a negligent collision, in navigating his own boat. The profits of a voyage broken up, are constantly denied consideration, even in questions relating to marine trespasses. The Amiable Nancy, 3 Wheat. , and the cases there cited. La Amistad De Rues 5 id. 385, 389. Of course 1 lay out of view, as do all the cases, that the transaction is accompanied with wanton outrage, fraud or gross negligence; the cases just cited from Wheaton, show that these are exceptions. And see Merrils v. The Tariff Manufacturing Co. 10 Conn. R. 384. The case of De Wint, v. Wiltse, 9 Wendell, 325, must, I think, have been regarded by this court as a fraudulent breach of a covenant to keep a ferry in repair, which materially henefitted the plaintiff’s tavern. The defendant' left it unrepaired, in order to favor his own ferry. Therefore damages were allowed for loss of custom at the plaintiff’s inn. Pothier, as before cited, maintains the same distinction. In Nurse v. Barnes, T. Raym. 77, the defendant, in consideration of £10, promised to demise a mill to the plaintiff, who laid in a large stock to employ it, which he lost, because the defendant refused to let him have possession. The jury were held properly to have assessed the damages at £500. Very likely it appeared that the breach of contract was committed to favor some particular interest of the defendant or his friend, though the case mentions a simple refusal to perform.

The ease at bar, so far as I have been enabled to discover from the evidence, stands entirely clear of fraud. If .some of the iron used for shafts was rotten, there is nothing going to fix knowledge, or that I see, gross negligence in the plaintiff or his superintendent. The extent to which the iron proved bad, was doubtful, though the jury were authorized to infer it was by no means all of a good quality. There is no proof, however, that such iron was used intentionally ; and we ought not to infer that a fraud was committed by any one. No new trial can, therefore, be granted on any error of the judge.

Still, we think, complete justice cannot be done without the cause being submitted to another jury ; for the plain inference is, that they totally disallowed any thing whatever for defects in the boat. The plaintiff’s counsel make a computation by which they show that $62 deduction was made; but even this assumes that interest ran on the balanee mentioned in the assignment, $4524 66 from the first of May. This could not be so. All parties agreed that the boat was not finally completed till pretty well along in July, and she was accepted, subject to completion. At most, the interest ought not to run till after the job was finished. It is sufficient to say, we think there is a strong preponderance of evidence in favor of some deduction.

New trial granted, on payment of costs.