Camden Consolidated Oil Co. v. Schlens

Bartol, C. J., after stating the case, delivered the opinion of the Court. In the progress of the trial below, evidence was offered by the plaintiffs, for the purpose of proving that after the off had been inspected and approved, and before it was delivered at the ships’ side, certain agents or employes of the defendant substituted in its place, other and inferior oil, which was put on board the ships without the knowledge of the plaintiffs; and in their first prayer, which was granted, the plaintiffs placed their right to recover upon the finding by the jury of the fact that such inferior oil had been so substituted and delivered in the place of that which had been'inspected and approved. Several objections were made to this evidence, which will now be considered. It is contended first, that the testimony offered for that purpose was too vague, uncertain and inconclusive to be submitted to the jury; and special exception was taken to the first prayer of the plaintiffs upon the ground of want of evidence to support its hypothesis, in the particular mentioned. It was established by uncontradicted proof, that petroleum does not deteriorate during a voyage, but that the — 40 — effect of a sea voyage is to inprove its quality, or fire-test. The certificate of the inspectors showed that the “Franklin” oil, inspected hy them in Baltimore, was of the standard of 110 degrees, and the oil of that brand, when inspected' after the voyage, fell below that standard. This could only have resulted either from a had inspection or a false or erroneous delivery. If from the former cause, the-plaintiffs were not entitled to recover, and so the jury were instructed by the defendant’s second prayer, which was-granted. In addition to the fact of the inferiority of the “Franklin” oil, shipped by the “Agra” and the “Maryland,” when tested in Bremen, testimony was offered showing that the marks upon certain barrels, were altered by means of stencils cut from paste-hoard, by which the letter “D,” that indicated oil of 110 degrees, had been substituted for the letter “ C,” which indicated rejected oil, or such as had been marked by the inspectors as below the test of 110 degrees. The witnesses who testified on this subject were Freeland, Misspach and Hauf. The oils were inspected by Smith who represented the firm of Harrison & Smith, oil inspectors; Freeland and Misspach were their assistants. Freeland testified that all the oil of the Franklin brand, that had been inspected and approved by him, was of the fire-test of 110 degrees. He stated that after the oil had been inspected “there was something occurred; there were-some barrels that had their letters changed—their refining letter changed from an off-test letter, to one that was good.” “ It was changed between the time the ship stopped at, 12 o’clock—the dinner hour; Mr. Misspach and myself were walking down together, and we noticed these barrels with the refiner’s letter on the head turned one way; well it-created a suspicion, and we took the trouble to go on the other side of the tram-way as we call it—it is like a railroad track—and rubbed our hands over the letter, and out came the letter that was rejected, that had been off-test.” “A — 41 — letter had been put on top of that, in other words the marks had been changed.” “We ascertained'this by rubbing our hands over it; the lamp-black they had made the letters with rubbed off, and disclosed the rejected letter.” The witness was not able to state when this occurred; except that it was in the year 1877. Misspach, the superintendent, testified to the same fact as Freeland, with regard to the change of letters on certain barrels from C. to D. He could not say whether these alterations were made in barrels of the cargo intended for one or the other of the three vessels. Hauf, the other witness, a cooper employed by the defendant, said: “The letters were changed with my own pocket knife; my own pocket knife done it.” “The day, I can't recollect exactly the time, the rejected oil was lying on the right hand side going down to the warehouse; on the left hand side I was at work; the oil was lying where I was working, on the left hand side, going down to the wharf, the rejected oil was all on the right, and McIldew, he came to me and asked me for my pen-knife; I asked him what he wanted with it, he said he wanted to cut some letters out, and so he did, and he cut them out of a thick piece of paste-board: he cut the letters out and Tom Wall and Jim Cunningham they put it on.” (McIldew, Wall, and Cunningham were employés of the defendant.) The witness stated on cross-examination, that this occurred in the Spring of 1877, he forgot whether it was in March or April. He was asked, do you know which one of these vessels it was that this cargo went aboard of? He said “ I think there was three of t.hem, I think the £Agra' got this oil, I think it was the time she was loading.” He further stated, “ There were several hundred altered in that way, could not tell exactly, there were 5 or 6 or 700.” Gustav A. Schlens testified that when their claim for-compensation was presented by him and his partner to Mr. Camden, the president of the defendant, the latter — 42 — said, “ Gentlemen, I am very sorry that the boys gave you the wrong oil, but I am not the only one to decide about compensation, I have to see my friends in New York about it.” In our opinion, this testimony, when taken together with that of Freeland, Misspach and Hauf, justified the submission to the jury of the question, whether inferior oil had been substituted in the place of that which had been inspected and approved, and had been put on board the ships “Agra” and “Maryland.” It was further objected that this evidence was inadmissible under the pleadings, because its purpose and effect were to charge the defendant with the commission of a fraud, which was not alleged in the declaration; and to change the character of the suit, from ah action for a breach of contract, to an action of tort. But it seems to us this objection is not valid. The breach of the contract in failing to deliver oil of the kind and quality required by the contracts, is established by proving that such oil was not delivered, and that an inferior article was delivered instead. It can make no difference whatever, in the legal right of the plaintiffs to recover, whether such breach was caused by accident or design. It is not the less a breach of the contract alleged in the declaration, because the failure of the defendant to deliver the article purchased, proceeded from the fraudulent acts of the defendant’s agents. The first prayer of the plaintiffs is further objected to, because, as contended by the appellant, the contract set out in the prayer, the breach whereof is therein stated as the cause of action, is a different contract from that stated in the declaration. The prayer submitted to the jury to find “that the oil had been inspected by inspectors selected by the plaintiffs, and was certified by them to be of the fire-test of 110 degrees, and was accepted and paid for by the plaintiffs, — 43 — upon and according to such certificate,” and “that said oil, after such inspection and acceptance, was left in the custody of the defendant, and it was its duty to keep the same and deliver it at the ship’s side on the wharf for shipment, and that the same was not so delivered by the defendant, but that certain other and inferior oil of the same brand, and below the fire-test of 110 degrees, was substituted and delivered by defendant in its stead, &c. &c. then the plaintiffs are entitled to recover.” Row the argument on the part of the appellant is that the prayer states a contract of bailment, and seeks to recover for a breach thereof; whereas the seventh count of the declaration sets out a contract of sale and alleges a breach thereof in failing to deliver.” In order to determine the weight of this objection, we must refer to the contracts offered in evidence, and the testimony in this case, showing the course and manner in which the business was conducted. By the written contracts, the appellant was bound to deliver the oil “ in yard suitable to vessel in Baltimore.” The meaning and legal effect of this was to impose upon the defendant the duty of delivering the oil at the ship’s side. When received at the warehouse of the defendant, the purchasers were notified, and under the Rule before referred to, it was the duty of the latter to name their inspectors, who proceeded to inspect the oil in the warehouse. Upon their certificate that the same was of the quality required, the further duty of the defendant was to deliver the oil, thus inspected and approved, at the ship’s side; until that was done, the delivery of the goods under the contract was not complete. It was all one continuous transaction. If after the inspection, by any fault of the defendant, the oil specified in the contract was not delivered at the ship’s side, there was a breach of the original contract to deliver; and not as the appellant contends, a breach of another and distinct contract of bailment. — 44 — The second prayer of the appellees was also granted, and instructed the jury that the measure of damages was, “the difference between the market price of oil of 110 degrees, on the respective days of arrival, and the price which the plaintiffs afterwards actually realized, together with all necessary and proper charges and expenses, which the jury find that they were compelled to incur, in so dealing with the oil, and the jury may, in their discretion, give interest upon the whole amount, to which they may find that the plaintiffs are entitled.” In actions by vendee against vendor for a breach of a contract to deliver goods, the general rule is that the measure of damages is the difference between the contract price and the market price, at the time and place of delivery. 1 Chitty on Contracts, 621; 1 Sedgwick on Damages, 552; Williamson vs. Dillon, 1 H. & G., 445; Williams vs. Woods, Bridges & Co., 16 Md. 222. The application of this rule ordinarily secures to the injured party indemnity or compensation for the loss arising from the breach of the contract, which is the true principle upon which damages are estimated in civil suits; and the reason for the rule is that it is ordinarily in the power of the vendee to go into the market and purchase goods of the same quality at the market price. But this general rule is not applicable to all cases, and it is obvious that to apply it to the present case, would cause the greatest injustice. The oil was not purchased for the domestic market, but to be shipped abroad, and this fact was shown on the face of the written contracts, and was known to the defendant. The breach did not consist in a failure to deliver the quantity of oil purchased, in Baltimore, but in failing to deliver oil of the quality purchased; that which was delivered being in close packages and placed on board the ships for transportation, it was impossible for the plaintiffs to discover the inferiority of the article until it had reached — 45 — its ultimate destination. In such case, the market price in Baltimore could furnish no correct standard for estimating the damages suffered by the plaintiffs. In the leading case of Hadley vs. Baxendale, 9 Exch., 341, it was laid down that “the damages for a breach of a contract should be such as may fairly and reasonably be considered, either as arising naturally, i. e. according to the usual course of things from such breach of the contract itself; or suchas may reasonably be supposed to have been in contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.” In Abbott vs. Gatch, 13 Md., 333, the rule was thus stated: “Such damages as are incidental to, and caused by the breach, and may be said to flow reasonably and naturally from such breach, and are not accidental or consequential (quœre, contingent,) losses will be allowed, and whether they are of the one character or the other must depend on the nature of the transaction.” Applying this rule to the present case, we think the measure of damages laid down in the appellees’ second prayer was correct. The inferior oil having no market price at Bremerhaven when it arrived, and being then unsaleable, the plaintiffs were entitled to dispose of the same, with reasonable diligence, for the best price they could obtain, and the difference between the price thus realized and the market price of the oil contracted for, would be the measure of their damages, and they were also entitled to recover the necessary and proper costs and expanses incurred by them in so dealing with the oil. In support of these conclusions we refer to Borries, &c. vs. Hutchinson, 114 Eng. C. L., 443: Elbinger, &c. vs. Armstrong, L. R., 9 Q. B., 476; Hinde vs. Liddell, L. R., 10 Q. B., 269 ; Loder vs. Kekule, 3 C. B., N. S., 128, (91 E. C. L. R.;) 1 Sedgwick on Damages, 223, 236, 237, 586 n. The damages claimed by the plaintiffs, not being in their nature special; but such as were the natural and proxi — 46 — mate result of the breach, it was not necessary that they should he particularly stated in the declaration. 1 Chitty Pl., 348; 1 Sedgwick on Damages, 101, 103; Armstrong vs. Percy, 5 Wend., 538. (Decided 11th July, 1882.) It follows from what has been said in considering the first and second prayers of the appellees, that the third, fourth, fifth and sixth prayers of the appellant were properly refused. Judgment affirmed.