Arrowsmith v. Gordon

The judgment of the court was pronounced by Eustis, C. J.* The plaintiff, in September, 1844, sold to the defendants two bills of exchange, amounting to ¿62,327 15 6 sterling, and with them were delivered bills of lading for six hundred and ninety-seven bales of cotton shipped on board the Coromando. The plaintiff and defendants were merchants in New Orleans; the bills were sold here, and were drawn on Henry H. Hoskins of Liverpool, to whom the cotton was consigned. It is alleged that the bills [108] of lading were purchased under a special agreement; that they were given and held as security for the acceptance only of the bills of exchange, and were to be delivered up to the consignee on his acceptance. The acceptance of the bills was tendered by Hoskins on the delivery of the bills of lading. This was refused by the agents of the defendants, the bills of exchange were protested, Hoskins having refused acceptance on any other terms, and the defendants’ agents took possession of the cotton on its arriyal, sold it, and applied the proceeds to the payment of the bills. Another bill of exchange drawn for ■ ¿£500 on the same shipment, and negotiated by the plaintiff was protested, and returned in consequence of the refusal to deliver up the bills of lading. The plaintiff sues the defendants for damages for protesting his bills and retaining the bills of lading, and unjustly and in violation of the contract and agreement aforesaid appropriating the cotton to their own use. By the retention and disposition made of the cotton in Liverpool, the plaintiff charges that he suffered a direct loss of $6,000, and that by reasons of the failure of the defendants to comply with their agreement aforesaid, and of the dishonoring of the bill aforesaid, his reputation as a merchant was greatly affected, and his commercial transactions, which were important and extensive, were embarrassed, that the dishonor of said bills becoming generally known in New Orleans, New York and Boston, to persons engaged in the bill business, with whom he had theretofore dealt, he could no longer with facility negotiate his bills in the ordinary course of his business as he could before, and that the loss and damage so sustained by him in his commercial reputation and business amounts at leant to $1.0,000, which he sues for* The petition concludes with a prayer for judgment for $16,000, and costs. The agreement about the bills of lading is expressly put in issue by the defendants’ answer; it is charged that it was agreed that the cotton was to be their security until the Mils were paid. Other matters of defence are specially set forth, but as they come under the general issue it is not material to notice them particularly. This case was submitted to a special jury of merchants, who found a verdict for the plaintiff in the sum of $4,§43 91, on which judgment was rendered, and the defendants have appealed. We are disposed to give great weight to the verdict of a special jury of merchants in a case of this kind ; but, in estimating the damages on so broad a surface of facts as the pleadings in this case present it is not at all surprising that, without any direction from the court as to the rules of law on that subject to which the evidence can be applied, the jury should have fallen into error. We giye full faith and credit to this verdict as settling all doubtful questions of fact, and all points of conflicting testimony, and we consider it as established : That the agreement was made as stated in the petition : That it was broken by persons for whose conduct the defendants are responsible: That the bills of exchange were protested without any reasonable cause, and that the defendants are liable to plaintiff for damages for those acts. The only question is, as to the amount- And in reviewing the verdict on this point, we do not conceive that we are interfering with any question of fact, but applying the law to the facts as they are in evidence. The jury has no more right to assess damages arbitrarily and without eyidence in a ease of this kind, than we have to sanction such a verdict. The cotton was sold by the defendants’ agents from the 13th to the 16th December. The advance of price between that time was very gradual until the [109] 10th March following, when there was an advance of a farthing per pound, which the cotton, had it been retained, would have produced. The suit was brought on the 13th March, and it is contended that, by the law of England where the contract was broken, the plaintiff is entitled to recover the increased value of the cotton at any time previous to the institution of the suit by way of damages. We have examined the authorities on which the plaintiff relies, and we do not think they establish that the rule is invariable. The true measure of damages in cases of breach of contract, is that which Will indemnify the party injured. In this case no evidence was offered to show that the plaintiff intended this shipment of cotton for any particular purpose, which was defeated by the acts of the defendants, nor that any unusual circumstances attended its origin or destination. It was to be consigned to Hoskins, and he was to have tha benefit or profits of the consignment. It was intended to be sold in Liverpool, and the proceeds applied to bills drawn upon it. No loss has been shown in consequence of the time at which the sale was made, as compared with prices a reasonable time afterwards, and we think it would not be just that the plaintiff should have the option of fixing on the defendant the price of the cotton in the month of March following. We do not think any fair rule of indemnity applied to the ordinary transactions of the cotton trader would authorise this, nor that any court in England could sanction such a test. We think, under the finding of the jury, that the defendants had no right to retain the bills of lading, and thus to divert the consignment from its destination. They had consequently no right to sell the cotton, and still less the whole quantity of cotton contained in the bills of lading, for which there appears to be no apology. We are disposed to allow the plaintiff the extent of indemnity which his case warrants and the breach of the contract authorises ; but in so doing we are not disposed to award him any thing which a deliberate view of the law will not sanction, notwithstanding the verdict in his ffiyor. We think the defendants have no claim for the commissions on the cotton, which they had no right to dispose of, and that they owe interest on the balance of the proceeds of the cotton remaining in their hands, over and above the amount of the bills. New Orleans Draining Co. v. De Lizardi, 2 Annual R. 283. 6 Toullier, 268. But it is said the jury had before them other elements besides the value of the cotton, on which they had a right to base their verdict — the injury done to the plaintiff’s credit resulting from the defendants’ acts. We have considered this subject with.great care ; but under the allegations of the petition and the evidence on this branch of the case, we are satisfied that the jury would not be authorised in assessing damages against the defendants for the injury alleged to have been done to the credit of the plaintiff. In the assessment of damages in mses of contracts, even where there is fraud, the damages for which the debtor s liable are those which are the immediate and direct consequence of the breach >f the contract; and, in cases of quasi-contracts, offences and quasi-offences nuch discretion is left to the judge or the jury; but in these cases that discre;ion ought to be directed by proper pleadings, and supported by sufficient evilence. There can be no better rule than that which experience has imposed upon :ourts in other countries, as a necessary protection against the abuse and error o which an undue latitude in the assessment of damages exposes judges as veil as jurors. When the law does not necessarily imply that the plaintiff has uslaingd damage by the acts complained of, the resulting damage should be al [110] leged and proved, so far as the facts are susceptible of proof, in order to prevent surprise at the trial, which might otherwise ensue. 1 Chitty on Pleading, 428. 6 Toullier, 289 et.seq. A proper administration of justice requires that the rules established by law for the assessment of damages should be adhered to; for the article of the Civil Code which gives a discretionary power to judges and juries in certain cases, expressly declares that, in. other cases, they have none, but are bound to give a full indemnity to the creditor whenever the contract has been broken by the fault, negligence, fraud, or bad faith of the debtor, according to the rules provided therein. Under the charge in the petition of the injury done to the plaintiff's credit by the acts complained of, we consider that there is no sufficient evidence to support the verdict. Under the other charge of loss of profits and damages for the breach of the contract, we have felt ourselves limited to such as were the immediate and direct consequence of the .breach. We cannot admit that a discretionary power of awarding damages in actions of trover vested in juries by the law of England, admitting it to be .as insisted on by .the counsel for the plaintiff, would be the standard by which the responsibility of the defendants ought to be tested in this action. It is therefore .ordered that, there be judgment in favor of the plaintiff against the defendants, for the sum of §1762 45, and interest at the rate of five per cent, from the 28th March, 1845, until paid, and costs in the court .below; the .costs of this appeal to be paid by the plaintiff and appellee. Footnotes [*] Slidell, J. did not sit in this caso, having been of counsel.