THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW A TREATISE ON THE LAW OF DAMAGES EMBEACINQ AN ELEMENTARY EXPOSITION OF THE LAW AND ALSO ITS APPLICATION TO PARTICULAR SUBJECTS OF CONTRACT AND TORT BY J. G. SUTHEELAE"D Author op a Treatisb on "Statutes and Statutory CoNSTBtronoH" THIRD EDITION BY JOHN E. BERRYMAN Editor of the Second Edition op this Work; Author of A "Digest op the Law of Insurance;" One of thb Kbvisers and Editors of the "Wisconsin Statutes of 1898," etc., etc. YOL. I CHICAGO CALLAGE AN AND COMPANY 1903 r Copyright, 1903, BY CALLAGHAN AND COMPANY. STATE JOURNAL PRINTING COMPANY, Printers and Stereotypers, madison, wis. 5 PREFACE TO FIRST EDITION. The law of damages is now, and for many years has been, in the course of rapid and expansive growth; its former ap- plications have been subjected to frequent forensic and judi- cial review, with the advantage of the experience and learning of the past, and the stimulus as well as the suggestive aid of new and diversified interests demanding protection, and new forms of injury invoking redress. It is therefore desirable that the law be often rewritten to incorporate in its structure the results of the latest adjudica- tions, not only for the light they reflect upon the earlier cases, but to derive the full benefit of these accretions, which embody the contribution of contemporary jurists and master minds of the profession. The administration of justice is committed to so many inde- pendent tribunals, that it is not surprising their determinations, especially of questions of first impression, have not proceeded in a very harmonious current. Differences of judicial opinion, more or less radical, under such circumstances, are unavoid- able. These are liable to result in permanent divergencies ; and to beget local exceptions and peculiarities so numerous as to greatly mar the symmetry and impair the authority of our general jurisprudence. Frequent elementary expositions of the law, embracing a discussion of the discordant cases with reference to the general principles which ,all acknowledge, are of great importance ; for, to the extent that they are influential, they wfll counter- act this centrifugal tendency. It is believed that the work now offered will be found use- ful in these respects, notwithstanding that excellent works on the same subject are now in general use. It has extended to three volumes by being made to embrace a wide range of ^doa20 JV PREFACE TO FIRST EDITION. lopics germane to the general subject, and by an elementary and a minutely practical treatment of them. The First Part is elementary, and designed to aid the in- quiries of the student, and to facilitate the investigations of the practitioner. In it are stated and illustrated the general principles upon which damages, recognized under various names, are allowed by law ; their scope relatively to the in- jury to be redressed; the principles by which the elements of damage may be tested, and the amount to be allowed there- for determined; by which facts may be legitimately weighed to enhance or mitigate damages ; how they may be juridically or conventionally liquidated and satisfied; and the pleadings^ evidence and procedure suitable and necessary for their re- covery. The Second Part contains a particular discussion of these principles in their practical application to the subjects of con- tract and tort, which give rise to actual demands for damages. The whole is copiously elucidated by decided cases and apposite quotations ; and the supporting authorities will, it is believed, be found to embrace all the decisions of any impor- tance on the subject. The author submits his work with its faults — for he dare not hope it wiU be found faultless — to the indulgent judg- ment and fair criticism of the profession. J. G. S. Salt Laxe City, September, 1882. PREFACE TO SECOND EDITION. A new edition of this work has been deemed necessary to incorporate into it the results of the numerous adjudications during the ten years which have elapsed since the publication of the first edition. A thorough revision has been made, and about four hundred pages of new matter added as the fruit of nearly seven thousand later decisions. By a judicious con- densation of the old matter and the exclusion of some redun- dancies, the additions have not so materially increased the size of the volumes as to make them inconveniently large. The text has been divided into sections for easier reference ; but the side-paging will serve to direct the reader to the mat- ter indicated in the frequent references in judicial opinions and by text-writers and practitioners to the first edition. The editors submit their work to the profession with the assurance that they have spared no pains to make it compre- hensive and accurate. J. G. S. J. B. B. NoVEMBEE, 1892. PREFACE TO THIRD EDITION. This edition of Judge Sutherland's treatise on the Law of Damages has been prepared with the view of making it ex- pressive of the law of that subject as it is at the present time. This has not been done at the expense of the excellent per- spective that distinguished writer gave of the subject in the first edition. That part of the work remains undisturbed. The editor has sought to do for this edition what he endeav- ored to do, under the direction of the author, in preparing the second edition : incorporate into it the results of the numerous adjudications on the various branches of the law of damages made during the eleven years which have elapsed since the publication of that edition. That endeavor met the approval of the author, who desired that this edition should be pre- pared by the editor of the second edition. The ver}' numer- ous references in the reported cases and treatises on various branches of the law to that edition tend to show that it has been found useful to the bench and bar. The controlling aim in the preparation of this edition has been to make it as ad- vantageous as possible in presenting the American and Eng- lish law of damages as it has been declared by the courts. The American cases which have been reported in unofficial series of reports are referred to therein. These references and the new matter added to the text and notes represent about eight hundred pages. To make room for so much additional matter, it has been found necessary to condense somewhat a portion of the matter which appeared in the former edition. It is hoped that this has been done without serious detriment to the value of the work. Madison, Wis., August, 1903. John K. Bereyman. TABLE OF CONTENTS VOL. 1. PART L— AN ELEMENTARY EXPOSITION OF THE LAW OF DAMAGES. CHAPTER L— A GENERAL STATEMENT OF THE RIGHT TO DAM- AGES, THEIR LEGAL QUALITY AND KINDS. References are to sections. General observations. 1 The right to damages; how amount ascertained 2 Damnum absque injuria; injuria sine danino 3 Public wrongs 4 Illegal transactions . 5 Contractual exemption from liability for damages. 6 Nature of the right to damages; its survival ... 7 Injuries to unborn child 8 CHAPTER IL— NOMINAL DAMAGES. Nature and purpose of nominal damages 9 Illustrations of the right to nominal damages 10 The right a substantial one; new trials 11 CHAPTER IIL— COMPENSATION. Section 1.— Compensatory Damages. Award of compensation the object of the law 12 Limitation of liability to natural and proximate consequences 13 Section 2. — Direct Damages. What these include 14 Section 3. — Consequential Damages fob Torts. Awarded for probable consequences 1.5 Rule of consequential damages for torts 16 Illustrations of the doctrine of the preceding section 17-19 Consequential damages under fence statutes 20 Nervous shock without impact: the Coultas case and American cases in harmony with it 21 Same subject; ci'iticism of the Coultas case; nervous shock a phys- ical in j ury 23 Same subject; an earlier ruling 2.} iSarae subject; Dulien v. White 23a Same subject ; miscellaneous cases 24 Anticipation of injury as to persons; illustrations 2.5 Consequential damages in highway cases 26 Imputed negligence ... 27 Vlll TABLE OF CONTENTS. References are to sections. Particular injury need not be foreseen 28 The act complained of must be the efficient cause 29-31 Breach of statutory duties 32 Injury through third person 33 Liability as affected by extraordinary circumstances 34 Illustrations of the doctrine of the preceding section 35 Liability of carriers for consequential damages; extraordinary cir- cumstances 36 Intervening cause .... 87, 38 Act of injured party; fraud and exposure to peril 39 Act of third person 40-42 Wilful or malicious injuries 43, 44 Section 4.— Consequential Damages foe Breach of Contract. Recoverable only when contemplated by the parties 45 Illustrations of liability under the rule 46 Liability not affected by collateral ventures 47 Distinction between consequential liability in tort and on contract 48 Same subject; criticism of the Hobbs case 49 Liability under special circumstances; Hadley v. Baxendale 50 Same subject; illustrations and discussion of the rule 51 Market value; resale; special circumstances 53 Section 5.— Required Certainty op DAMAOEa Damages must be certain in their nature and cause 53 Liability for the principal loss extends to details and incidents 54 Only the items which are certain are recoverable 55 Recovery on successive consequences 56-58 Required certainty of anticipated profits ... 59, 60 Warranty of seeds 61 Prospective growth of orchard and of animals. 62 Profits of special contracts 63 Same subject; Masterton v. Mayor , 64 Violation of contract to lease 65 Profits of labor 66 Profits from commercial ventures 67 Profits on dissolution of partnership 68 Commercial agencies 69 Tortious interference with business 70 Chances for prizes and promotions 71 Contingent advantage 73^^ Uncertain mitigation of breach of marriage promise 73 Failure to provide sinking fund 74 Section 6. — The Constituents of Compensation, or Elements of Damage. Elementary limitation of damages 75 Damages for non-payment of money 76 Greater damages than interest for failure to pay money 77 Liability for gains and losses 78 What lo-sses elements of damage 79 Same subject; labor and expenditures 80 Same subject: damages for relying on performance 81 Same subject; liabilities to third persons; covenants of indemnity. . 82 Same subject; indemnity to municipalities; counsel fees 83 Same subject; liability for losses and expenses 84 Same subject: bonds and undertakings; damages and costs 85 Same subject; necessity of notice to indemnitor to fix liability 86, 87 Expen.'^es incurred to prevent or lessen damages 88 Same subject; between vendor and vendee 89 Same subject; extent of the duty 90 TABLE OF CONTENTS. IX References are to sections. Same subject; employer may finish work at contractor's expense. ... 91 May damages for breach of contract include other than pecuniary elements? 92 Elements of damage for personal torts 93 Character as affecting damages for personal injuries 94 Jlental suffering 95, 96 Same subject; liability of telegrapii companies 97 Right to compensation not affected by motive 98 Distinction made for bad motive; contracts 99 Motive in tort actions 100 How motive affects consequences of confusion of goods 101 Where property sued for improved by wrong-doer 103, 10;> Distinctions in the matter of proof 104 Value of property 105 CHAPTER IV.— ENTIRETY OF CAUSES OF ACTION AND DAMAGES. Section 1. — General Principle& Cause of action not divisible 106 Present and future damages 107 What is an entire demand ? 108 Entire demand may be severed 109 Contracts to do several things successively or one thing continuously 110 Items of account Ill Continuing obligations 112 Damages accruing subsequent to the action 1V6 Damage to real property 114-116 Contracts of indemnity 117 Damage to property and injury to person by same act 118 What is not a double remedy 119 Prospective damages 120 Certainty of proof of future damages 121 Action for enticing away apprentice, servant or son 122 Future damages for personal injuries 123 Only present worth of future damages given 124 Continuous breach of contract or infraction of rights not an entirety 125 Continuance of wrong not presumed 126 Necessity of successive actions 127 Section 2. — Parties to Sue and be Sued. Damages to parties jointly injured entire 128 Actions under statutes ... 121) Must be recovered by person in whom legal interest vested 180 Not joint when contract apportions legal interest 131 Implied assumpsit follows the ■ consideration 132 Effect of release by or death of one of several entitled to entire dam- ages 133 Misjoinder of plaintiffs, when a fatal objection 134 Joinder of defendants; effect of non-joinder and misjoinder 135 How joint liability extinguished or severed 136 Principles on which joint right or liability for tort determined 137 Tortious act not an entirety as to parties injured 138 General and special owners 139 Joint and several liability for torts 140-142 CHAPTER v.— LEGAL LIQUIDATIONS AND REDUCTIONS. Section 1. — Circuity op Action. Defense of 143 Agreement not to sue 144 Principal operates in favor of plaintiff 145 Damages must be equal 146 Reciprocal obligations 147 X TABLE OF CONTENTS. References are to sections. Section 8. — Mutual Credit. Compensation by mutual demands 148 Section 3. — Mitigation op DAMAOEa Equitable doctrine of 149 Absence of malice 150 Words as provocation for assault; agreements to fight 151 Provocation in libel and slander 152, 153 Mitigating circumstances in trespass and other actions 154 Plaintiff's acts and negligence • • 155 Measures of prevention: return of property; discharge of plaintiff's debt 156, 157 No mitigation when benefit not derived from defendant 158 Fuller proof of the res gestae in trespass, negligence, etc 159 Official neglect 160 Same subject; modification of the old rule 161 Plaintiff's consent 162 Injuries to character and feelings 163 Reduction of loss or benefit 164 Pleading in mitigation 165, 166 Payments 167 Section 4.— Recoupment and Counter-claim. Definition and history of recoupment 168, 169 Nature of defense 170, 171 Constituent features of recoupment. ... 172 Remedy by counter-claim 173 Validity of claim essential 174 Parties 175, 176 Maturity of claim or demand; statute of limitations ... 177 Cross-claim must rest on contract or subject-matter of action. 178 Recoupment for fraud, breach of warranty, negligence, etc 179, 180 What acts may be the basis of recoupment 181 Cross-claims between landlord and tenant 182 Cause of action, connection between and cross-claim 183 Recoupment between vendor and purchaser 184 Liquidated and unliqidated damages may be recouped 185 Affirmative relief not obtainable 186 Election of defendant to file cross-claim or sue upon his demand 187 Burden of proof; measure of damages 188 A cross-claim used in defense cannot be sued upon 189 Notice of cross-claim 190 Section 5. — Marshaling and Distribution. Definition 191 Sales of incumbered property in parcels to different purchasers . . 192 Sale subject to incumbrance 193 Effect of creditor releasing part 194 Rights where one creditor may resort to two funds and another to only one 195 Same where the funds belong to two debtors 196 Principles on which priority determined 197 Section 6.— Set-off of Judgments. Power to direct set-off inherent 198 AVhen it will or will not be granted . 199 Interest of the real parties considered 200 Set off not granted before judgment 201 Assignee must make an absolute purchase 202 Nature of action immaterial 203 Liens of attorneys 204 TABLE OF CONTENTS. Xl References are to sections. CHAPTER VI.— PECUNIARY REPRESENTATIVE OF VALUK Section 1. — Money. Characteristics of money 205 Payment to be made in money of country of performance 206 Payment in currency 207 Effect of changes in the value of money 208 Value of money at time of contracting 200 The legal tender act 210 Effect of fluctuations in currency 211 Section 2.— Par and Rate of Exchanoe. Par of exchange 212 Rate of exchange 213 CHAPTER VII.— CONVENTIONAL LIQUIDATIONS AND DISCHARGES. Section 1. — Payment. What is; modes of making 214-216 What is not payment 217 Effect of payment 218 Payment before debt due 219 Payment by devise or legacy 2''0 Payment by gift inter vivos 221 Payment by retainer 222 Payment in counterfeit money, bills of broken banks or forged notes 223, 224 Payment by note, bill or check 225-227 Collaterals collected or lost by negligence of creditor are payments 228, 229 Who may make payment 230 To whom payment may be made 231 Pleading payment 232 Evidence of payment 233 Section 2.— Application op Payments. General rule 234 By debtor 235, 236 Same subject; evidence 237 By creditor 238-240 Appropriation by the court 241 When payments applied pro rata 242 General payment applied to oldest debt 243 General payment applied to a debt bearing interest, and first to in- terest 244 General payment applied to the debt least secured; comments on con- flicting views of the general subject 245 Section 3.— Accord and Satisfaction. Definition 246 Consideration , 247 Payment of part of a debt will not support an agreement to dis- charge the whole 248 Same subject 248a Any other act or promise which is a new consideration will suffice. . 249 Composition with creditors 250 Compromise of disputed claim 251 Agreement must be executed 252 Jtll • TABLE OF CONTENTS. ■References are to sections. Section 4. — RELEAsa Definition 253 Differs from accord and satisfaction 254 Extrinsic evidence and construction 255 Who may execute 256 Effect when executed by or to one of several claiming or liable 257 What will operate as a release 258 Covenant not to sue 259 Section 5. — Tender Right to make 260 On what demands it may be made 261 When it may be made 262 In what money 263 Bywhom 264 To whom 265 It must be sufficient in amount 266, 267 How made 268 W here to be made 269 Must be unconditional 270 Effect of accepting 271 Must be kept good 272 Waiver and omission of tender on sufficient excuse 273 Tender must be pleaded and money paid into court. 274 Effect of plea of tender 275 Effect of tender when money paid into court 276 Effect of tender on collateral securities 277 Paying money into court 278 Section 6. — Stipulated Damages. Contracts to liquidate damages valid 279 Damages can be liquidated only by a valid contract 280 Modes of liquidating damages; computation of time 281 Alternative contracts 283 Liquidated damages contradistinguished from penalty 283 The evidence and effect of intention to liquidate 284 Stipulated sum when damages otherwise certain or uncertain 285 Contracts for the payment of money 286, 287 Large sum to secure payment of a smaller 288 Stipulation where damages certain and easily proved 289 Stipulation when damages uncertain 290, 292 Same subject; illustrations 293 Stipulation for payment of a fixed sum for partial or total breach. 294, 295 Effect of part performance accepted where damages liquidated 296 Liquidated damages are in lieu of performance 297 Effect of stipulation upon right of action 298 Waiver of right to stipulated damages 299 VOL. 2. PAKT I.— CONTINUED. CHAPTER VIIL— INTEREST. Definitions and general view 300 Interest by the early common law 301 Interest in England legalized by statute 302 Interest at common law in America 303 Agreements for interest 304 TABLE OF CONTENTS. XIU References are to sections. Section 1.— General Promise to Pay Money "With Interest." Rule of construction 305 Law or custom fixes the rate 306 Legal or stipulated rate applies from date 307 Whether same rate will apply after debt due 308, 309 Section 2. — Agreements for Interest "Until Paid." Agreements for interest from date until debt paid 310 Agreements for a different rate after debt due 311, 312 Section 3.— Agreements for More than Legal Rate Before Maturity. Fflfect of usury found 313 Who may take advantage of usury 314 When contracts not void for usury 315 Recoveries under usury statutes 316, 317 Section 4.— Agreements for More than Legal Rate After Maturity. Not usury, but penalty 318 Same subject; when debtor relieved in Illinois 319 Section 5.— Interest as Compensation. Scope of section 320 Right not absolute 321 Tacit agreements to pay interest on accounts 322 Interest where payment unreasonably and vexatiously delayed 323 Quantum meruit claim to interest 324 Allowed on money loaned 325 Allowed on money paid 326, 327 Quantum meruit claim to interest between vendor and purchaser. . . . 328 Interest allowed from time when money ought to be paid 329 No interest on penalties or statutory liability for riots. ., 330 When allowed on penalty of bonds 331 Interest against govern ment 332 Judgments bear interest .^ 333, 334 Not allowed on revival of judgment by scire facias 335 Interest in condemnation proceedings 336 Interest on taxes and license fees 337 Infants liable for 338 Allowed on sums due for rent 339 Interest on damages for infringing patents _. 340 Right to interest as affected by the marital relation 341 Interest as between partners 342 Interest on stociiholders' statutory liability 343 Allowed on annuities and legacies 344 Interest on advancements 345 On money due on policy of insurance 346 Not allowed on unliquidated demands 347,348 Interest on accounts 349, 350 When demand necessary 351 When allowed on money had and received 352 When allowed against agents, trustees and ofiBcers 353 On money obtained by extortion or fraud 354 Interest in actions for torts 355 Section 6.— The Law of What Place and Time Governs. Importance of subject • 356 General rule as to contracts 357 Rule as to notes and bills 358 Bonds to the United States 359 Xiv TABLE OF CONTENTS. References are to sections. Between parties in different states 360, 361 "Where usury is involved 362-365 The law v^f what place governs the rate as damages 366 Allegation and proof of foreign law 367 Effect of change in law of place of contract 368-370 Section 7.— Interest as an Incident to the Principal. Interest due by agreement a debt 371 Interest as damages accessory to principal 373 Section 8.— Interest upon Interest. Compound interest 373 Instances of interest on interest 374 Interest on instalments of interest 375 Separate agreements for interest 376 Periodical interest after maturity of debt 377 Computation, application and effect of partial payments 378, 379 Section 9.— Suspension op Interest. Miscellaneous cases 380 Where payments prevented by legal process ... 381 Where war prevents payment 383 Tender stops interest 383 Tender not allowed for unliquidated demands 384 When tender may be made 385, 386 Section 10.— Pleading. How interest claimed in pleading 387 Section 11.— Interest During Proceedings to Collect a Debt. Interest on verdict before judgment 388 On judgments pending review 389 CHAPTER IX.— EXEMPLARY DAMAGES. Compensation for wrongs done with bad motive 390 Exemplary damages; difference of views; when allowed 391-393 Malice in law and malice in fact 394 Restriction and denial of exemplary damages 395 Same subject ; New Hampshire rule 396 Same subject; Massachusetts rule 397 Same subject ; Nebraska rule 398 Same subject; Michigan rule 399 Same subject; the rule in Colorado, West Virginia, Washington and Connecticut 400 Exemplary damages as compensation and punishment 401 Exemplary damages for penal offenses 403 Exemplary damages as matter of right 403 Enhancement and mitigation of exemplary damages 404, 405 Exemplary damages based on actual damages 406 Motive of one wrong-doer not imputable to others 407 Parties liable : master for servant 408-411 Liability of officers, municipalities and estates 413 CHAPTER X.— PLEADING AND PROCEDURR Section 1. — Pleading. Plaintiff must state a case which entitles him to damages 413 The ad damnum 414 Demand of damages in code complaint 415 Effect of not answering allegation of damages 416 TABLE OF CONTENTS. XV References are to sections. ^d damnum limits recovery; erroneous claim of damages 417 What provable under general allegation of damage 418 Special damages must be alleged 419 Same subject; illustrations 420, 421 Not necessary to allege matter of aggravation 422 Matter of aggravation not traversable 423 Not necessary to itemize damages 42^ Statutory damages must be specially claimed 425 Pleading in actions to recover for death 426 Section 2. — Assessment of Damages. Writ of inquiry 427 When assessed without a jury 428 What a default or demurrer admits 42!) Defendant may offer evidence in reduction of damages 480 Not allowed to disprove cause of action 431 Jury tarn quam 433 When new jury may be called 433 Correction of error in assessment 434 Section 3.— Paying Money Into Court, Admits cause of action to amount paid 435 Payments to plaintiff after suit 430 Section 4. — Evidence. Must be adapted to damages claimed 437 Burden of proof 438 Intendments against defendant for holding back evidence 4-^9 Same as to plaintiff 440 Plaintiff must prove pecuniary items; opinions 441 Opinions upon subjects of common experience and observation 442 Instances of rejection and admission of opinions 44:> Opinions as to amount of damages 444 Proof of value 445 Same subject; opinions 446 Same subject; actual sales 447 Same subject ; elements of value 448 Proof of the value of dogs 449 Witnesses to value may be asked grounds of opinions 450 Physical examination of plaintiff 451 Exhibition of injured parts, and means of injury 452 Expressions of sufferer 453 Photographs 454 Life and annuity tables 455 Section 5. — Verdict and Judgment. Deliberations of the jury; quotient verdicts 456 Rendering and amending verdicts 457, 458 Excessive or insufficient verdicts 459, 460 Verdicts must be certain 461 General verdicts on several counts 463 Where there are several plaintiffs 46;J Double and treble damages 464 Judgment . . 465 Judgment must follow verdict 466 Judgments must be certain 467 Section 6. — Restitution After Reversal of Judgment. How made 468 Liability of third parties; restitution of property and compensation for loss of its use 469 b XVI TABLE OF CONTENTS. References are to sections. PAKT II.— APPLICATION OF THE LAW OF DAM- AGES TO YAKIOUS CONTRACTS AND WRONGS. CHAPTER XL— BONDS AND PENAL OBLIGATIONS. Section 1.— Penalties. Bonds and penalties 470 Penalties in affirmative agreements 471 Statute of 8 and 9 William III 472 Statute of 4 and 5 Anne 473 American statutes and practice 474 Statutory bonds 475 Impossible condition 476 Penalty limit of recovery except as to interest 477, 478 Section 2. — Bonds of Official Depositaries of Money. Liability absolute for money received 479 Adjustment of liability betvp^een sets of sureties 480, 481 Neglect of duty by other officers 482 Section 3.— Other Official Bonds. Scope of section 483 Right of action against officers 484 Construction of bonds 485 Mode of redress for official dereliction 486 What private injuries covered by official bonds 487 ]\Ieasure of damages against sureties 488 Measure of damages against officers for neglect of duty 489-492 Section 4. — Probate Bonds. Bonds for administration of decedents' estates 493 How such bonds made; what recoveries may be had. 494 Actions on bonds as to sureties; liability for executor's debt to estate 495 Guardian's bond; sureties' liabilities 496 Mitigation of damages 497 Liability as between sets of sureties 498 Section 5. — Replevin Bonds. Their original conditions 499 The condition for return of property 500 The condition required by modern statutes 501 Assessment of damages in suit on bond 503 When sureties not liable for judgment in replevin suit 503 Evidence of the value 504 Damages recoverable : 505 Effect of the judgment in replevin suit 506 What may be shown in defense 507 When plaintiff recovers as special owner; effect of change in statute 508 Bond by defendant to retain the property 509 Section 6. — Attachment and Forthcoming BoNDi Attachment bonds; when cause of action accrues 510 Who may sue 511 Damages recoverable 513, 513 Exemplai-y damages 514 TABLE OF CONTENTS. XVlw References are to sections. What may be shown in defense SIS Costs and expenses; attorneys' fees; lossoftime 51G Forthcoming bonds 517 Same subject; measure of damages 518 Conditions to pay the judgment 519 Section 7.— Injunction Bonds. Scope of obligation . . 520 Power of a court of equity 521 Right of action, when it arises; who may sue 522 Mode of assessing damages . 523 Costs and expenses; attorneys' fees 524, 525 Damages from restraint of injunction 526-528 What facts no defense 529 What facts may be shown in defense 530 Section 8. — Appeal and Supersedeas Bonds. Their conditions; liability of sureties 581 Supersedeas bonds in federal supreme court 533 Same subject; liability if judgment is in part for money or in rem. . . 533 Liability in state courts if judgment is in part for money or in rem. 534, 535 Instances of liability on more specific conditions 536, 537 Interest and damages awarded on appeal 538, 539 CHAPTER XII.— NOTES AND BILLS. Promissory notes and bills of exchange 540 Principal sum 541 Want or failure of consideration 542 Partial want of consideration 543 Partial failure of consideration 544-548 Consideration fraudulent or illegal in part 549, 550 Defect of considei-ation sliown by parol evidence 551-554 Liability of drawer and indorser for principal sum 555 Interest on notes and bills . . 556 Interest as damages to be paid by maker or acceptor 557 Liability of drawer or indorser for interest as damages 558 Notes and bills are by definition payable only in money 559 Re-exchange and damages on bills dishonored 560, 561 When re-exchange on damages not recoverable 562 By what law liabilities governed 563 Stipulations for attorney fees and costs 564 Value of notes and bills 565 CHAPTER XIIL— VENDOR AND PURCHASER. Damages for breach of contracts for sale of realty 566 Section 1.— Vendor against Purchaser. Seller entitled to purchase price and interest; abatement of price. . . 567 The legal remedy 568 Measure of damages 569, 570 Same subject; where notes are given for the price 571 Seller must convey perfect title; effect of condemnation proceedings 572 Recoupment for defect of title 573 Purchaser cannot assail validity of contract 574 Recovery when contract does not fix price 575 Conveyance in consideration of non-pecuniary covenants 576 Interest on purchase-money 577 Xviii TABLE OF CONTENTS. References are to sectiona. Section 2.— Purchaser against Vendor. Measure of damages in England 578 Conflict of American decisions on measure of damages 579, 580 English rule, when not applied 581 Elements of damages under the milder rule 582 Recovery on parol contract 583 Elements of damage where Fiureau v. Thornhill does not apply 584 Defaulting vendee's rights 585 Same subject; conflict of the cases in this country 586 Adjustment of counter demands on rescission 587 Adjustment of counter equities in specific performance 588, 589 Damages m suits for specific performance 590 Section 3.— Covenants for Title— Of Seizin and Good Right to Convey. Their purport; when broken 591, 592 Damages for breach of these covenants 598 Same subject; actual consideration may be proved. 594 Same subject; when not measured by the consideration 595 Same subject; etfect of recovery on a total breach 596 Same subject; only a nominal sum recovered if actual loss not shown 597-599 Same subject; when covenant runs with land 600 How damages may be prevented or mitigated 601, 602 Section 4.— Covenants of Warranty and for Quiet Enjoyment. Their scope, and the remedy for a breach 603 What is a breach 604 The rule of damages; remote losses 60a Same subject; where property is the consideration 606 Same subject; in England and Canada 607 Same subject; rule in some of the older states 608 Same subject; in case of partial breach, and where lien is satisfied. . 609 Same subject; where covenantee has extinguished adverse title 610 Mitigation of damages 611 Where defect is a dower right 612 By and against whom recovery may be had 613 Where covenantee sues remote covenantor 614 Notice of suit to covenantor 615 Interest as an item of damages 616 Expenses, costs and counsel fees as damages 617-619 Section 5.— Covenants against Incumbrances. What are incumbrances • • • • 620 A covenant in x>resenti; effect of incumbrance on executory contract 621 The rule of damages 622, 623 The Canadian and English rule of damages 624 In some states covenant runs with land 625 Criticism of the rule of damages 626 Damages where incumbrance permanent 627, 628 Liability of remote covenantor 629 Where covenant is connected with that for quiet enjoyment 630 Covenant to pay incumbrances 631 Section 6.— Defenses and Cross-claims against Purchase-money. Diversity of decisions 632 The New York rule • • • 633 Alabama rule 634 Mississi ppi rule 63) Rule in various other states 636 TABLE OF CONTENTS. XIX References are to sections. South Carolina and Virginia rule 637 Texas and Kentucky rule 638 Pennsylvania rule 639 Defenses under the code 640 Defenses in equity 641 VOL. 3. CHAPTER XIV.— VENDOR AND VENDEE — PERSONAL PROPERTY. Section 1. — Vendor against Vendee. Recovery on executed sales 642-644 Recovery for part of stipulated quantity 645, 646 Liability for not accepting goods 647 Effect of notice by vendee of refusal to accept 648 Rule of damages where articles made to order 649 Vendee's right to return property 650 Section 2.— Vendee against Vendor. Recovery for non-delivery of property contracted for 651-653 Proof of value 654 Rule in favor of vendor when delivery impossible 655 Damages if purchase price paid 656 Contracts for delivery of stocks 657 Sale of good-will 658 Contracts to pay in or deliver specific articles 659, 660 Same subject; author's view 661 Consequential damages on contracts of sale 663 Same subject; illustrations. 663 Damages for delay in delivering property 664-666 Warranties of quality and title 667, 668 Damages on breach of warranty of title 669 Damages for breach of warranty as to quantity or quality 670-675 Defense to action for purchase-money 676 CHAPTER XV.— CONTRACTS FOR SERVICES. Scope of chapter 677 Recovery where wages fixed and under statute 678 Recovery on quantum meruit 679 Proof of the value of services 680 A statutory day's work 681 Recovery for attorney's services 683 Recovery for broker's services 683 Various modes of compensating for services 684 Continuation of original contract. . 685 Necessity of full performance of entire contract 686 Same subject; dispensation in case of inability 687-690 Entire and apportionable contracts 691 Liabilit}^ for wrongful dismissal of employee 692-694 Liability of employee for violation of contract; recoupment of dam- ages '. 695 CHAPTER XVL— CONTRACTS FOR PARTICULAR WORKS. Section 1. — Employer against Contractor. Nature of the contract fi96 General rule as to contractor's liability 697, 698 Defects in work must be remedied 699 Liability if accident prevents performance 700 XX TABLE OF CONTENTS. References are to sections. Contractor not answerable for defects in plans 701 Liability for non-performance if works contracted for a particular purpose ~02 Damages for delay 703, 704 Consequential damages for defective work 705 Section 2,— Contractor against Employer. Contract price ; rights in insurance money 706 Demands for extra work 707 Recovery on part performance of severable contract 709-711 Certificate of architect, engineer, etc 712 Liability of employer for stopping work 713, 714 Section 3.— Salvage. Requisites of salvage service 715 A specific amount may be fixed by agreement 716 Nature of peril and duty of claimant 717 Property must be saved 718 Amount recoverable 719 Derelict property . . 720- Forfeiture of right to compensation 721 CHAPTER XVIL— SURETYSHIP. Section 1.— Creditor against Surety. The contract of suretyship, questions arising out of 722 Measure of surety's liability 723 Interpretation of surety's contract 724 Contract not to be extended by construction 725 Illustrations of the rule 726, 727 Guaranties, distinguishing characteristics of 728 Measure of guarantor's liability 729 Effect of indorsing negotiable paper 730 Methods which suretyship assumed for negotiable paper 731 Measure of liability of guarantor of payment 732 Guaranty of collectibility; liability for costs; diligence 733 Guarantor's liability where collateral is given 734 Discharge or reduction of surety's responsibility by act of creditor. . 735 Right of subrogation 736 Effect of creditor's failure to realize on securities 737 Same subject: release limited to injury sustained by surety 738 Creditor's duty to acquire liens 739 Value of re leased securities . . ... 740 Surety's right to put creditor in motion 741 Effect of releasing one or more of several parties 742 Surety's right to defend between principals 743' Surety may set up right of recoupment 744 Section 2. — Surety's Remedies for Indemnity. Action against principal for money paid 745 Who is the principal 746 When right of action accrues 747 Measure of recovery 748 Surety may compel debtor to pay 749 Payment giving right to reimbursement 750, 751 Liability of principal for surety's costs 752 Principal not liable for consequential damages 1 753 Contribution between co-sureties 754 W^ho are co-sureties 755 Basis of contribution 756 TABLE OF CONTENTS. XXI References are to sections. Insolvency of co-surety 757 Indemnification of surety by principal 758 Accrual of right of action; voluntary payments 759 Conclusiveness of judgment 760 Section 3. — Express Indemnities.' Damage the gist of the action 761 What may be recovered 762, 76.'i Contribution or indemnity betvpeen wrong-doers 761 Contracts varying from indemnity, but intended as such 765, 766 Etfect of judgment 767 CHAPTER XVIIL— AGENCY. Section 1.— Principal against Agent. The reciprocal obligations of principal and agent 768, 769 Agent's particular duties and liabilities 770, 771 Neglect of duty or agreement concerning insurance 772 Disregard of orders for the purchase and shipment of goods 773 Miscellaneous illustrations of agent's liability 774 Defaults in regard to commercial paper 775, 776 Same principles applied to factors 777 Sales at unauthorized price 778, 779 Duty to sell at certain times 780, 781 Terms of sale 782 Guaranty commission 783 Rendering accounts 784 Remitting funds 785 Liability of brokers 786 Damages for acting as agent without or in excess of authority 787 Section 2.— Agent against Principal. Agent's rights 788 Reimbursement of expenditures 789 Factor's right to reimburse himself by sales 790 Agent may charge for exchange 791 How right of reimbursement affected by mode of doing business 792 Agent's right to indemnity 793 No indemnity for unlawful act 794 Measure of recovery 795 Section 3.— Third Persons against Agent. When agent liable to third persons 796 Agent liable on implied warranty of authority 797 The measure of damages 798 Recovery of money from agent 799 Agent liable for his torts 800 CHAPTER XIX.— INSURANCE Growth and importance of insurance contracts 801 Kinds of insurance 802 Section 1.— Marine Insurance. Cause of damage must be proximate 803 Extent of injury; manner of ascertainment 804 Interpretation of contract 8U5 Valued policies 806 What constitutes a total loss; "wholly destroyed" in the law of fire insurance 807 XXll TABLE OF CONTENTS. References are to sectlona Contract methods for ascertainment of damages 808 When proofs of loss a condition precedent 809 Manner and time of making proofs 810 Preliminary proofs for information only 811 Pleadings 813 Rule of damages on open policies 813, 814 Loss in excess of sum fixed in policy 815 Damages in case of partial loss 816 Losses adjusted on the principle of indemnity 817 General average 818, 819 Section 2.— Fire Insurance. Nature of contract; how made 820 General rule of damages 831 Contribution if more than one policy 822 Mitigation of liability 823 What jurj"- may consider 824 Proof of damages 835 General average in fire insurance 826 Recoveries in special cases 827 Insurance on commission goods 828 Insurance by mortgagee 829 Contracts to replace or rebuild 880 Section 3. — Life and Accident Insurance. Definition of life insurance 831 Character of the contract 833, 833 When life insurance a collateral security 834 Accident policies 835 Difference between English and American decisions as to scope of recovery 836 Restatement of the measure and elements of damages 837 Insurers liability for terminating the contract 838 Refusal to issue paid-up policy 839 Liability of reinsurer 840 CHAPTER XX,— LANDLORD AND TENANT. Section 1.— Landlord against Tenant. Action for use and occupation 841 Same subject; measure of recovery 842, 843 Actions for rent; abandonment of lease 844 Same subject; amount as affected by subsequent facts 845 Recovery of rent payable in specific articles or as taxes 846 Termination of lease by lessor 847 Recovery of rent barred by eviction of lessee 848 Apportionment of rent 849, 850 Effect of partial destruction of demised property 851 Effect of entire destruction of demised property 853* Effect of taking demised premises for public use 853 Lessee's liability for interest 854 Covenants for repairs 855 Measure of liability for not making repairs 856-858 Liability of assignee of lease for repairs 859 Damages for repairs and non-repairs in special cases 860 Covenants not to sublet or assign; liability for breach; proximate cause of loss 861 Covenants to insure 863 TABLE OF CONTENTS. XX] 11 References are to sections. Section 2. — Tenant against Landlorix Lessor's covenant for quiet enjoyment 863 Same subject; the general rule of damages 864 Same subject; special, consequential and exemplary damages 865, 866 Same subject: recovery for damages to business 867-870 Mitigation of damages by lessee 871 Lessor's covenant to repair, etc 873 Lessee's duty concerning repairs 873 Same subject; liability for special and consequential damages 874 Removal of fixtures 875 Recoupment 876 CHAPTER XXL— CARRIERS. Section 1.— Actions by Carriers. Breach of contract to furnish goods for shipment 877 Measure of damages on charter-parties 878 Recovery for partial breach 879 Carrier must mitigate his loss 880 Shipper's rights in profits made by carrier 881 Burden of proof 883 Damages for breach of charter to load with enumerated articles 883 Carrier's action for freight charges 884 Freight charges as affected by value of property 885 Discriminations unlawful when conditions are similar 886 When freight due and earned 887, 888 When shipper not liable for freight 889 When pro rata freight due 890 Same subject; transshipment of freight 891 Right to freight when cargo insured 892 Rule for adjusting pro rata freight 893 Charges and expenses if delivery hindered or prevented 894 Freight under charter to load with enumerated articles 895 Recoupment against freight 896 Demurrage 897 Section 2. — Actions against Carriers. General statement of carrier's liability 89S When damages for refusal to carry measured by cost of transportation 899 Liability for loss of shipper's profits 900 Increased expenditures: loss of customers 901 Not liable for remote consequences 903 Must respond for negligent delay; proximate cause 903 Limitation of liability by contract 904 Illustrations of liability for delay: unmarketable property 905 Liability for loss of market value, quantity or quality 906 Vmdication of the rule stated 907. 908 Application of the rule to ocean carriage 909 Delay after notice of arrival 910 Increased cost of obtaining property 911 Expense of further ti-ansportation 913 Liability for delay where facts are known 913, 914 Physical and mental suffering as elements of damage 915 Carrier's responsibility in caring for property 916 Burden of proof as to injury or loss 917 Damages if goods have a market value; recovery by bailee 918 Damages for injury or loss of non-marketable property 919 Interest on damages 920 Shipper's efforts to lessen loss 921 When damages less than value of goods at destination 922 Same subject; criticism of the rule stated 923 XXIV TABLE OF CONTENTS. References are to sections. Same subject; loss at place of shipment 934 Same subject; shipper's conduct may affect damages 925 Qualification of carrier's liability by notice 9'2G Liability for partial loss when value limited 927 Apportionment of damage in case of mutual fault 928 Liability not mitigated by insurance 929 Exemplary damages 980 For what losses carrier responsible 931 Damages where there are successive carriers 932 Proof of value 933 Section 8.— Caeriees of Passenqees. Nature of their obligations 934 Damages for refusing to carry 935^ Same subject; loss of time, expense, exposure, humiliation 936 Same subject; exemplary damages 937 Removal of passenger at wrong place 9o8 Same subject; consequential damages 939 Passenger's indiscreet acts not ground of damage 940 Protection of passengers 941 Damages for physical and mental suffering 942 Mental suffering independently of other wrong 943 Past and prospective damages 944 Proof of damage 945, 940 Recovery for special loss 947 Wrongfully placing passenger in second-class coach. 948 Mitigation of damages 949 Exemplary damages 950 Same subject; rule different in some states 951 Injury to wife, child or servant 953 Excessive verdicts 953- Loss of or injury to baggage 954 Same subject : measure of damages 955 Liability of sleeping-car companies 956 CHAPTER XXIL— TELEGRAPH COMPANIES. Nature of their duty 957 Limitation of liability 958 Liability for neglect where message in cipher 959 Same subject; opposing view. . . 960 Liability when object of sender known 961 Same subject; illustrations 962-964 Same subject; loss of claim; physical pain; injury to credit 965 Same subject; liability for expenses 966 Same subject; loss of employment and profits of business 967 When company charged with knowledge of sender's purpose 968 Same subject; details need not be disclosed 969 Same subject ; result of the decisions 970 Same subject; opposing view 971 Form of action ; who may sue 972 Mitigation of damages by injured party 973 Exemplary damages .... 974 Damages for mental suffering 975 Same subject; reasons upon which liability rested 976 Same subject; opposmg authorities 977 Same subject; grounds upon which liability denied 978 Same subject; summary of the authorities 979 Same subject; conclusions of author 980 Same subject; notice to the company . . 981 Same subject ; measure of damages 982 TABLE OF CONTENTS. XXV References are to sections. CHAPTER XXIIL— BREACH OF MARRIAGE PROMISE. Nature of the action ; wlio may sue 983 Seduction as an aggravation , 984 Consequences of seduction 985 Injury to feelings and other elements of damage 986 Same subject; exemplary damages 987 Damages for loss of marriage 988 What will excuse a breach of the contract 989 What may be proved in mitigation 990 CHAPTER XXIV.— EJECTMENT. Proceedings regulated by statute 991 Section 1. — Mesne Profits. The remedy for 992 What may be allowed as damages 993 Recovery limited to compensation 994 Proof of rental value 995 What property withheld 996 Interest 997 Compensation on recovery of a term 998 Claims for improvements, taxes, etc. 999 Remedy under the code 1000 Section 2.— Dower. The right of 1001 It is assignable on a valuation 1002 Damages for detention of dower 1003 Extinguishment of dower right 1004 Reprisals 1005 Dower limited to husband's equitable interest 1008 Dower right subject to incumbrance 1007 VOL. 4. CHAPTER XXV.— INJURIES TO REAL PROPERTY. Scope of chapter 1008 Section 1. — Trespass to Real Property. The gist of the action 1009 Definition of trespass and scope of the remedy 1010 Damages confined to compensation 101 1 Damages where tenant sues 1012 Damages where suit by executor, etc 1013 Damages measured by benefit received . . 1014 Damages for destruction of property 1015 Occupation of land by railroads 1016. Damages for permanent wrong 1017 Damages where injury remediable 1018 Liability for cutting trees, and mining ores 1019 Same subject; when value computed 1020 Liability for additional injury to land 1021 Damages to unsecured ice; diversion of water 1022 Destruction of and injury to growing crops 1023 Destruction of fences 1024 Injuries to party-walls 102'> XXVI TABLE OF CONTENTS. References are to sections. Interest on the damages 1028 Mitigation of damages 10^7 Aggravations and special damages 1028-103C Exemplary damages 1031 Same subject; mitigations 1032 Section 3. — Injury to Inheritance. Injury to the rights of parties not in possession 1033, 1034 Section 3.— Nuisance. What is a nuisance 1035 General principles of the law of nuisance 1036 Wrong-doer liable for at least nominal damages 1037 Usually a continuing wrong requiring successive actions 1038 What recoverable in the first action 1039 Continuing liability of the person vrho causes it 1040 Damages may include future expenditures 1041 When nuisance not a continuing vv^rong 1042-1045 Same subject; result of tlie cases 1046 Depreciation in value as damages 1047 Other elements of damage 1048 Injuries to crops, trees, etc . . 1049 Liability for remoter consequences 1050, 1051 Exemplary damages 1052 Removal of lateral support to land 1053 1 nterf erence with business 1054 Mitigation of damages 1055 Same subject; deduction for benefits 1056 Damages affected by interest in estate. . 1057 Private remedy for public nuisance 1058 Joint and several liability 1059 Pleading 1060 CHAPTER XXVI.— TAKING PROPERTY FOR PUBLIC USK The power of eminent domain 1061 Consequential injury to property not taken. 1062 What is just compensation 1063 IMeasure of compensation 1064 Injury to property not taken 1065 Same subject; what facts pertinent 1066-1070 Same subject; remote damages 1071 Same subject; expenditures to lessen loss 1072, 1073 Basis for estimating value of land 1074 Same subject; value for special purpose 1075 Compensation for wrong-doer's improvements 1076 Compensation affected by title and nature of interest condemned; taking railroad property for street and telegraph uses 1077 Same subject: condemnation of railroad property for railroad uses. . . 1078 Same subject; injury to franchise 1079 Same subject; elevated railroad cases 1080 Same subject: injuries to various interests 1081, 1082 Assessment of damages, time of 1083 Deductions for benefits 1084-1087 What lands considered in assessing benefits and damages 1088 Proof of value and damages 1089 Effect of judgment for compensation — Abandonment of proceedings 1000 Interest 1001 TABLE OF CONTEXTS. XXVll References are to sections. CHAPTER XXVIL— TRESPASS TO PERSONAL PROPERTY. "When damages may exceed compensation 1092 Certainty of damages 109;J Remedy more comprehensive than trover 1094 Aggravations increase damages 1005 Measure of damages for taking or destroying property 109(5 Same subject ; quantity of interest 1 097 Same subject; market value 1008 Same subject; non-marketable property 1000 Special and consequential damages 1100-1103 Expenses to recover, restore and protect property 1103 Mitigation of damages. . . . • 1104 Same subject: application of property to owner's benefit HO") Damages against trespasser from the beginning 1106, 1107 CHAPTER XXVIIL— CONVERSION. The action of trover 1108 The general rule of damages 1109, 1110 Other rules of damages 1111 Time of conversion Ill "3 Proof of value 1113 Same subject; fixtures 1114 Intei-est lUo Recovery for property subject to sale 1116 Damages if property without market value 1117 Damages if property of fluctuatmg value 1118 Same subject; criticism and modification of the rule 1119 Same subject; conflict in New York cases 1130 Same subject; Pennsylvania rule 1121 Same subject; Massachusetts rule 1122 Same subject; English and Australian cases 1128 Same subject; rule in North Carolina 1124 Departure from the general rule sometimes justifiable 1125 Recovery where value of property enhanced by defendant 1126-1128 Special or consequential damages 1129 Attorney's fees 1130 Exemplary damages 1131 Conversion of money securities 1132 Conversion of insurance policies 1138 Conversion of deeds, etc 1 134 Conversion of shares of stock 1 135 Recovery limited to plaintiff's interest 1136, 1137 Mitigation of damages 1138-1141 Plaintiff's duty to mitigate damages 1142 CHAPTER XXIX— REPLEVIN. Section 1.— Plaintiff's Case. Definitions; who may sue 1143 Measure of damages 1 144 Exemplary damages 1145 Special and consequential damages 1146 Recovery if property not returned 1147, 1148 Damages affected by the object of the action 1149 Recovery for use and increase in value 1150 Intermediate injury and depreciation 1151-1153 Increase in value by defendant 1154 XXVIU TABLE OF CONTENTS. References are to sections. Section 2. — Defendant's Case. •Successful defendant's rights 1155 A plaintiff obtaining possession and failing in his suit a wrong-doer 1156 Measure of daraages 1157 Special and consequential damages 1158 Mitigation of damages 1159 Recovery affected by interest in property 1 160 Recoupment 1161 Part of property found for each party 1 162 CHAPTER XXX.— FRAUD. Scope of the natural and proximate consequences 1163-1165 False representations 1 166 Same subject ; materiality 1 167 Same subject; reliance upon representations 1168 Same subject; defendant's belief in representations 1169 Same subject; representations need not be made to plaintiff 1170 The measure of damages; general rule 1171 Same subject; another rule 1172 Same subject; other elements of damage 1173, 1174 Remote and contingent damages 1175, 1176 Expenses of litigation 1177 Exemplary damages 1178 Parties 1179 Pleading 1180 CHAPTER XXXI.— INFRINGEMENT OF PATENT RIGHTS. Statutory remedies 1181 Same subject; judicial summary 1182 Damages recoverable at law 1183, 1184 Same subject; profits as damages 1185 Same subject; other measures of damages 1186 Interest on damages 1187 Exemplary damages 1188 Compensation in equity 1189 Same subject; computation of profits 1190, 1191 Computation to what time made 1193 Rule when whole article not patented 1193, 1194 Same subject; ascertainment of profits 1195 Profits recoverable though no license fee established 1196 Interest 1197 CHAPTER XXXII— INFRINGEMENT OF COPYRIGHT. Copyright is statutory 1198 Compensatory and penal recoveries 1199 CHAPTER XXXIIL— INFRINGEMENT OF TRADE-MARKS. Nature of the right to a trade-mark and of the wrong of infringement 1200 The measure of damages 1201, 1203 XXXIV.— SLANDER AND LIBEL. Section 1.— Plaintiff's Case. Nature of the wrong 1203 Accusations actionable per se 1204 Malice the gist of the action 1205 General damages, how proven 1206, 1207 TARLE OF CONTENTS. XXIX References are to sections. ■Same subject; aggravation of damages 1208, 1209 Same subject; wealth aud rank of the parties 1210, 1211 Evidence of reputation 1212 Injuries to business 1213 Mental sulfering 12U Special damages 121 •'J Examplary damages I'-'l^ Damages in discretion of jury 1217 Special damages when words not actionable per se 1218, 1219 Same subject; injury to feelings 1220 Same subject: natural consequences 1221 Criticism of the doctrine last stated 1222 Slander of title 1223 Section 2.— The Defense. Failure of plea of justification 1224 Same subject ; effect of statutes ; . . 1225 Evidence in mitigation; plaintiff's bad character. 1226 Same subject; evidence of common reports as to plaintiff's guilt 1227 Same subject; proof of truth of words 1228, 1229 Same subject: effect of statutes 1230 Evidence in mitigation generally 1231-1233 CHAPTER XXXV.— MALICIOUS PROSECUTION. Nature of the wrong 1234, 1235 Unauthorized suit or appeal 1236 Elements of damage 1237, 1238 Evidence in mitigation 1239, 1240 CHAPTER XXXVL— PERSONAL INJURY. Elements of damage 1241 Physical and mental pain 1242-1245 Loss of time, injury to business, diminished capacity 1246 Same subject; pleading 1247 Same subject; evidence 1248 Same subject ; measure of recovery 1249 Expenses for surgical and medical aid, etc 1250 But one action maintainable; prospective damages 1251 Husband's and parents' action 1252 Exemplary damages ... 1253 Pecuniary and other circumstances of the parties 1254 Evidence in mitigation 1255 Province of the jury, and instructions thereto 1256 False imprisonment 1257-1258 CHAPTER XXXVIL— DAMAGES RESULTING FROM DEATH. No action for at common law 1259 Nature of the statutory action 1260 Diversities as to beneticiaries 1261 Only pecuniary losses compensated in England and Canada 1262 Same subject: rule in United States 1263 At least nominal damages recoverable 1264 Recovery by widow 1265 Recovery by husband 1266 Children's loss from death of parent . . 1267 Facts and circumstances to be considered in estimate of damages 1268-1271 Recovery for death of child 1272-1275 XXX TABLE OF CONTENTS. References are to sections. Damages recoverable by collateral kindred 1276 Damages to the deceased's estate — 1277 Special damages - _ 1278 Contracts exempting from liability 1279 Where the injury is done in another state 1280 CHAPTER XXXVIIL— SEDUCTION. The technical not the real gist of the action 1281 Who may maintain the action 1282 Evidence for plaintiff and damages recoverable 1283 Evidence for defendant in mitigation 1284 Criminal conversation and alienation of affections 1285 CHAPTER XXXIX.— DAMAGES FOR TORTS IN ADMIRALTY. Fundamental difference between liability in admiralty and at com- mon law 1286 Division of loss in collision cases 1287 Rule applicable to other torts 1288 Liability confined to proximate loss 1289 Total loss; elements of damage 1290 Total loss, what is 1291 Partial loss; elements of damage 1292, 1293 Interest 1294 Mitigation of liability 1295 Recovery by owner of cargo 1296 THE LAW OF DAMAGES. PART I. AN ELEMENTARY EXPOSITION OE THE SUBJECT. CHAPTER I. A GENERAL STATEMENT OF THE RIGHT TO DAMAGES, THEIR LEGAL QUALITY AND KINDS. § 1. General observations. 2. The right to damages; how amount ascertained. 3. Damnum absque injuria; injuria sine damno. 4. Public wrongs. 5. Illegal transactions. 6. Contractual exemption from liability for damages. 7. Nature of the right to damages; its survival, 8. Injuries to unborn child. § 1. General observations. The chief practical value of any system of law is in its adaptability and efficiency to se- cure the individual in the full enjoyment of his rights, and in giving him adequate relief when they are violated. The com- mon law defines these rights, and professes to afford a remedy for their every infraction. In the nature of things, this rem- edy cannot consist in so annulling, by adjudication, an act which violates a right that the injured party will be restored to its enjoyment as though there had been no interruption. The consequences of an act which is an invasion of an- other's right may be arrested ; in some cases partial restora- tion is practicable. But unless compensation can be made as a substitute for that to which a party is entitled, and of which he has been more or less deprived, there will be an irreparable Vol. I— 1 2 RIGHT TO DAMAGES. [§2. injury, and a corresponding failure of justice. This compensa- tion the law provides for; and it is the principal object of legal actions to ascertain what it should be, fix the amount, and enforce its payment. In some actions the paramount pur- pose is to compel the defendant to yield up possession of specific property which the plaintiff claims to own, and inci- dentally to obtain compensation for its detention, as in eject- ment and replevin. So in actions on contracts for the direct payment of money, the effect of recovery is apparently to compel the defendant to do the very thing he agreed to do; [2] compensation for the delay in the form of interest is a subordinate matter.' § 2. The right to damages; how amount ascertained. In contemplation of law, every infraction of a legal right causes injury; this is practically and legally an incontrovertible prop- osition. If the infraction is established, the conclusion of damage inevitably follows.^ This deduction is made though it actually appears and is recognized in the case that there 1 Radloff V. Haase, 196 111. 365, 63 N. E. Rep. 729, citing this section. 2 Radloff V. Haase, 196 111. 365, 63 N. E. Rep. 739; Hahn v. Cotton, 186 Mo. 216. 37 S. W. Rep. 919; Watson v. New Milford Water Co., 71 Conn. 442, 42 Atl. Rep. 265; Board of Water •Commissioners v. Perry, 69 Conn. 461,37'AtL Rep. 1059; Quillen v. Betts, 1 Pennewili, 53, 39 Atl. Rep. 595: Ross V. Louisville, etc. Co., 70 Miss. 725, 12 So. Rep. 825; New York Rub- ber Co. V. Rothery, 132 N. Y. 293, 30 N. E. Rep. 84, 28 Am. St. 575; Green Bay & M. Canal Co. v. Kaukauna Water Power Co., 112 Wis. 323, 87 N. W. Rep. 864. See §§ 9, 10. It is not a sufficient objection to the recovery of damages that the action brought for that purpose is witliout precedent. It was long since determined that a special action on the case was introduced because the law will not suffer an injury and damage without affording a remedy. Winsmore v. Greenbank, Willes, 577, 580. One who is induced by falsehood and fraud to marry a woman who is pregnant by the man who is guilty thereof may recover from him the damage sustained. Kujek v. Gold- man, 150 N. Y. 176, 44 N. E. Rep. 773, 55 Am. St. 670, 34 L. R. A. 156. One who, notwithstanding the hus- band's protests, persists in selling a wife drugs knowing that she uses them constantly and that their use is destructive to her mental and physical faculties, and causes her husband the loss of her companion- ship and services, is liable to him. Holleman v. Harward, 119 N. C. 150, 25 S. K Rep. 972, 56 Am. St. 672, 34 L. R. A. 803. See as to the right of action in favor of a widow for the mutilation of the body of her de- ceased husband, Foley v. Phelps, 1 App. Div. 551, 37 N. Y. Supp. 471; Larson v. Chase, 47 Minn. 307, 50 N. W. Rep. 238, 28 Am. St. 370, 14 L. R. A. 85. § 2.] EIGHT TO DAMAGES. 3 was in fact no injury, but a benefit conferred.^ This legal conclusion of damage is generally indeterminate as to amount; it is thnt so?ne damage resulted; if no proof is made of the actual damage, judgment can be given only for a minimum ■sum — nominal damages. In cases of contract it may occur that for any breach a large and determinate sum will become due, for which judgment without proof may be rendered. But generally, within certain limits, the actual injury is to be es- tablished by proof as matter of fact. In many cases of tort, however, the injury complained of is of such a nature that compensation cannot be awarded by any precise pecuniary standard, and there is no legal measure of damages, because the injury does not consist of pecuniary elements, or elements of which the value can be measured or expressed in money. The compensation which shall be allowed for an injury of this character is by the common law referred to the sound discre- tion and dispassionate judgment of a jury. Where there is a legal measure of damages the jury must determine the amount as a fact according to that measure, otherwise the law which measures the compensation would be of no avail; and whether they have done so or not in a given case may be proximately seen by a comparison of the verdict with the evidence.'- Courts of general jurisdiction have power over verdicts, and may set them aside when the jury have been influenced by passion or corruption, or have disregarded the legal measure of compensa- 1 Murphy V. Fond du Lac, 23 Wis. Rep. 797; Cummings v. Riley. 52 N. 365, 99 Am. Dec. 181; Roberts v. H. 368; Chickering v. Lord.67 id. 555, Glass, 113 Ga. 456, 37 S. E. Rep. 704; 32 Atl. Rep. 773; Fitzgerald v. Dob- Excelsior Needle Co. v. Smith, 61 son, 78 Me. 559, 7 Atl. Rep. 704: Bar- Conn. 56, 23 Atl. Rep. 693. Compare rett v. Maiden & M. R. Co., 3 Allen, Bossu V. New Orleans, etc. R. Co., 49 101; Hoole v. Dorroh, 75 Miss. 257, 22 La. Ann. 1593, 22 So. Rep. 809. So. Rep. 829; Kingsbury v. Missouri, 2 Parke v. Frank, 75 Cal. 364, 17 etc. R. Co., 156 Mo. 379, 57 S. W. Rep. Pac. Rep. 427, citing the text. 547; Carter v. Current River R. Co., In the exercise of its police power 156 Mo. 635, 57 S. W. Rep. 738. Corir the state may fix a minimum sum as tra, Atchison & N. R. Co. v. Baty, 6 compensatory and exemplary dam- Neb. 37; Grand Island, etc. R. Co. v. ages for the violation of a statute. Swinbank. 51 Neb. 521, 71 N. W. Rep. Cramer v. Danielson, 99 Mich. 531, 58 48, the court being influenced, to N. W. Rep. 476. And may provide some extent, because exemplary that the damages found by a jury damages are not recoverable under shall be doubled by the court. Fye the local law. V. Chapin, 121 Mich. 675, 80 N. W. 4 EIGHT TO DAMAGES. [§ 3. tion. B}' the course of the current of modern decisions, whether compensation for the actual injury in actions for torts is subject to legal measure or not, if the injury was done maliciously, fraudulently, oppressively or with wanton violence, such meas- ure, if an}^, while not entirely ignored, ceases to be the limit of recovery. The jury are at liberty, in the exercise of their [8] judgment, on finding such malice or other aggravation, to give additional damages as a solatium to the party so wronged, and as a punishment to the wrong-doer. The sums so allowed by law and found by a jury for tortious injuries, or losses from breach of contract, are damages — the pecuniary redress which a successful plaintiff obtains by legal action. They are for the most part compensation for civil injury — exemplary damages being an exception; therefore, the law relating to the subject of damages is principally directed to defining and measuring compensation.^ The civil injur}'- for which dam- ages may be recovered must be one which is recognized as such by the law; it must result from the violation in some form of a legal right. No damages can be recovered for fail- ure to fulfill a merely moral obligation, nor for any wrong or injury which consists in a neglect of social amenities. § 3. Damnum absque injuria; injuria sine damno. The right to damages constituting a legal cause of action requires the concurrence of two things: that the party claiming them has suffered an injury, and that there is some other person who is legally answerable for having caused it. If one suf- fers an injury for which no one is liable it gives no legal claim for damages: it is damnum absque injuria; so if one does a wrong from which no legal injury ensues, there is no legal cause of action : it is injuria sine damno} That no act char- 1 The term " compensatory dam- Acts clone with reasonable care ages " covers all loss recoverable as pursuant to valid statutes will matter of right; it is synonymous not render those who perform them with "actual damages." Pecuniary liable for damages resulting. High- loss is an actual damage; so is bodily way Com'rs v. Ely, 54 Mich. 173, 19 pain and suffering. Gatzowv. Buen- N. W. Rep. 940; Tate v. Greensboro, ing, 106 Wis. 1, 19, 81 N. W. Rep. 1003, 114 N. C. 392, 19 S. E. Rep. 767, 24 L. 49 L. R. A. 475, 80 Am. St. 17. R. A. 671; New Haven Steam Saw 2 McAllister v. Clement, 75 Cal. 182, Mill Co. v. New Haven, 72 Conn. 276, 16 Pac. Rep. 775; Wittich v. First 44 Atl. Rep. 229, 609; Transportation Nat. Bank, 20 Fla. 843, 51 Am. Rep.' Co. v. Chicago, 99 U. S. 635. 640; 631. Rowe V. Granite Bridge Co., 21 Pick. § 3.] RIGHT TO DAMAGES. 5 acterized by these negations is actionable is, in the abstract, a truism. When we say that a person who suffers an injury whicli does not arise from any other person's fault has no cause of action, a self-evident proposition is stated ; and equally so when we say that no person has a cause of action against an- other for the latter's wrongful act unless he is injured by it. The former precludes any action for lawful acts lawfully done, though some actual hurt or loss results to some person there- from.^ Thus, for example, adjoining land-owners have a mutual right of lateral support to the soil in its natural state, but not under the pressure of buildings, unless a prescriptive right to the support thereof has been acquired.^ When one has so loaded down his soil near the line, the other still has the right to make any use he pleases of his premises, and may excavate to the line, if he does so with due care, upon proper notice to the other; and if by such excavation the stability of the buildings [4] of the adjoining proprietor is endangered, or they are in fact destroyed, it is an injury for which no action lies.^ The exercise of one's right to dig in his own land may have the effect of diverting an underground stream of water which is beneficial to another, or of draining his well, but the act of digging which causes either result, not being wrongful even though done with malice, there is no redress for the injury.'' This 344; Darlington v. Mayor, 31 N. Y. 8 Am. Dec. 369; Lasala v. Holbrook, 164; Allegheny County v. Gibson, 90 4 Paige, 169, 25 Am. Dec. 524; Mc- Pa. 397, 35 Am. Rep. 670. Guire v. Grant, 25 N. J. L. 356; Hay lid.; De Baker v. Southern Call- v. Cohoes Co., 2 N. Y. 159; Winn v. fornia R. Co., 106 Cal. 257, 39 Pac. Abeles, 35 Kan. 91, 10 Pac. Rep. 443; Rep. 610, 46 Am. St. 237; Friend v. White v. Nassau Trust Co.. 168 N. Y. United States, 30 Ct. of Cls. 94, 107. 149, 61 N. E. Rep. 1135. 2 A'Beckett v. Warburton, 14 Vict. * Acton v. Blundell, 12 M. & W. 324; L. R. 308. Chasemore v. Richards, 7 H. of L. 3 Bass V. West, 110 Ga. 698, 36 S. E. Cas. 349, 2 H. & N. 168; Mosier v. Rep. 244; Block v. Haseltine, 3-Ind. Caldwell, 7 Nev. 363; Chase v. Sil- App. 491, 29 N. E. Rep. 937; Bohrer verstone, 62 Me. 175; Greenleaf v. V. Dienhart Harness Co., 19 Ind. App. Francis, 18 Pick. 117; Trustees, etc. 489, 49 N. E. Rep. 296; Ulrick v. Da- v. Youmans, 50 Barb. 316; Ellis v. kota Loan & Trust Co., 2 S. D. 285, Duncan, 11 How. Pr. 515; Lybe's 49 N. W, Rep. 1054; Laycock v. Appeal, 106 Pa. 626; Mayor, etc. of Parker. 103 Wis. 161, 79 N. W. Rep. Bradford v. Pickles, [189.5] App. Cas. 327; Wyatt v. Harrison, 3 B. & Ad. 587. See, on the question of mo- 875; Thurston v. Hancock, 12 Mass. tive, Fisher v. Feige, 137 Cal. 39, 59 220; Panton v. Holland, 17 Johns. 92, L. R. A. 333, 69 Pac. Rep. 618. 6 RIGHT TO DAMAGES. [§ 3.. principle has limitations. Where a municipal corporation by the operation of a water system, consisting of wells and pumps on its own land, taps the subsurface water stored in the land of an adjacent owner and in all the contiguous territory, and leads it to its own land, and by merchandizing it prevents its return, whereby the land of such owner is impaired for agricultural purposes, he may recover for the wrong done.^ Where the civil law is not in force or its analogies have not been followed, surface water is regarded as a common enemy, and every landed proprietor has the right to take all necessary steps to protect his land from its effects, though in doing so the water is cast upon the land of a coterminous proprietor to his in- jury .^ Mr. Gould says this rule prevails in England, Massachu- setts, Maine, Vermont, JN^ew York, New Hampshire, Ehode Island, New Jersey, Minnesota, Wisconsin, Nebraska, Wash- ington, New Mexico, and Texas.* By the civil law interference with the natural flow of surface water is a nuisance, for which nominal damages may be recovered without proof of actual damages. The courts of Pennsylvania, Illinois, North Caro- lina, Alabama, Kentucky, Tennessee, California and Louisiana have adopted this rule, and it has been referred to with approval by the courts of Ohio and Missouri.^ The owner of propert}'^ may thus and otherwise, whilst in the reasonable exercise of established rights, casuall}'^ cause an injury which the law regards as a misfortune merely, and for which the party from whose act it proceeds is liable neither at law nor in the forum of conscience. No legal liability is in- curred by the natural and lawful use of his land by the owner thereof in the absence of malice or negligence.* Thus one iForbell v. New York, 164 N. Y. 278; O'Connor v. Fond du Lac, etc. 522, 51 K R. A. 695, 79 Am. St. 666, R. Co., 52 Wis. 526, 9 N. W. Rep. 287; 58 N. E. Rep. 644, atBrming 47 App. Johnson v. Chicago, etc. R Co., 80 Div. ari, 61 N. Y. Supp. 1005; Wis. 641, 50 N. W. Rep. 771, 14 L. R. Willis V. Perry, 92 Iowa. 297, 60 N. A. 495. W. Rep. 727, 26 L. R A. 124. 3 Gould on Waters (3d ed.), § 265. 2 Edwards v. Charlotte, etc, R. Co., * Id., § 266. See Pfeiffer v. Brown, 39 S. C. 472. 18 S. E. Rep. 58, 22 L. R 165 Pa. 267. 30 AtL Rep. 844, 44 Am. A. 246; Morrissey v. Chicago, etc. R St. 598. Co., 38 Neb. 406, 430, 56 N. W. Rep. 8 Pennsylvania Coal Co. v. Sander- 946; Rowe v. St. Paul, etc. R Co., son, 113 Pa. 126, 57 Am. Rep. 445; 41 Minn. 384. 43 N. W. Rep. 76; Long v. Elberton, 109 Ga. 28, 34 S. E. Cairo, etc. R Co. v. Stevens, 73 Ind. Rep. 333, 41 Am. St. 454, 46 L. R A. § 3.] EIGHT TO DAMAGES. 7 opening a coal mine in the ordinary and usual manner may, ■apon bis own land, drain or pump tlie water which percolates into his mine into a stream which forms the natural drainage of the basin in which the mine is situate, although the quantity of the water may thereby be increased and its quality so af- fected as to render it totally unfit for domestic purposes by the lower riparian owners.^ In cases of this nature a loss or dam- age is indeed sustained, but it results from an act, which is neither unjust nor illegal, done by another free and respon- sible being.^ The prosecution in good faith of a groundless ac- tion may give the defendant great annoyance, and cause him loss of time and money; but the plaintiff in such case is exer- cising a legal right, and the defendant, according to the weight of authority, if there has been no interference with his person or property, is entitled to no compensation for the injury he suffers beyond the costs which may be taxed in his favor.' Every man is entitled to come into a court of justice and claim what he deems to be his right; if he fails he shall be amerced (according to the old principle) for his false claim; and the de- fendant is entitled to his costs, and with these he must be con- tent.* But if the suit be malicious, as well as false or groundless, 428; Barnard v. Sherley, 135 Ind. 547, erty was attached and a new action 34 N. E. Rep. 600, 35 id. 117, ^4 L. R. was brouglit for the same cause of A. 568, 575, 151 Ind. 160, 47 N. E. Rep. action, the same property being re- 671. attached, the only claim the defend- 1 Pennsylvania Coal Co. v. Sander- ant in those actions could maintain son, supra. This case has been con- was for the costs for failure to enter sidered in Robb v. Carnegie, 145 Pa. the first writ; for the malicious suing 324, 22 Atl. Rep. 649, 27 Am. St 694, out of the second attachment he had 14 L. R A. 329; Lentz v. Carnegie, no remedy because no wrong was 145 Pa, 612, 27 Am. St. 717, 23 Atl. done. Johnson v. Reed. 136 Mass. 421. Rep. 219, and in Drake v. Lady Ens- One cannot maintain an action for ley Coal, Iron & R. Co., 103 Ala. 501, the malicious prosecution of a pro- 48 Am. St. 77, 14 So. Rep. 749, 24 L. ceeding to which he was not a party. R. A. 64, the latter favoring a con- Duncan v. Griswold, 92 Ky. 546, 18 trary rule. S. W. Rep. 354; Duncan v. Citizens' ii Broom's Max. 151. Nat. Bank, 20 Ky. L. Rep. 237, 45 & 3Woodmansie v. Logan, 2 N. J. L. W. Rep. 1127. 67; Canter v. American Ins. Co., 3 *Id-; Henry v. Dufilho, 14 La. 48; Pet. 307; Muldoon v. Rickey, 103 Pa. Davies v. Jenkins, 11 M. & W. 745; 110; Eberly v. Rupp, 90 id. 259; Boardman v, Marshalltown Grocery Bishop V. American Preservers Co., Co.. 105 Iowa, 445, 75 N. W. Rep. 343; 105 Fed. Rep. 845. See ch. 35. Porter v. Johnson, 96 Ga. 145, 23 S. Where there was an intentional E. Rep. 123. non-entry of an action in which prop- 8 EIGHT TO DAMAGES. [§ 3. the party bringing it is answerable in an action at law by the party injured.^ The making, Ijona jide, of defamatory state- ments, though they are harsh, untrue and injurious, in the as- sertion of rights, in the performance of a duty, or in fair criticism upon a matter of public interest, is also damnum ahs- [5] que injuria} Private houses may be pulled down in the interest of the public to prevent the spread of fire,' and bul- warks may be raised on private property as a defense against a public enemy. So owners of land exposed to the inroads of the sea, or commissioners having a statutory power to act for a number of such owners, have a right to erect barriers, though they are consequentially prejudicial to others.* Owners of land adjoining streets are often subjected to temporary incon- venience while work is being done thereon for their improve- ment, or to change their grade, or by their temporary use for the deposit of building material or the delivery of merchan- dise; yet, in the absence of legislation, there is no right to compensation therefor; no legal injury is recognized.^ The construction of a new way or the discontinuance of an old one may very seriously affect the value of property; the same may result from the removal of a state capital or county seat; but persons suffering loss from such causes have no legal remedy.® 1 Seech. 35. 233; Griggs v. Foots, 4 Allen, 195; ■-iTodd V. Hawkins, 8 C. & P. 88; Benjamin v. Wheeler, 8 Gray, 409; Huntley v. Ward, 6 C, B. (N. S.) 514; Macey v. Indianapolis, 17 Ind. 267; Mackay v. Ford, 5 H. & N. 792; Revis Terre Haute v. Turner, 36 Ind. 522; V. Smith, 18 C. B. 126; Barnes v. Mc- Radcliflf v. Mayor, etc., 4 N. Y. 195; Crate, 32 Me. 442; Henderson v. Mills v. Brooklyn, 32 N. Y. 489; Rome Broomhead, 4 H. & N. 569; White v, v. Omberg, 28 Ga. 46. 73 Am. Dec. NichoUs, 3 How. 266; Lawson v. 748; Hovey v. Mayo, 43 Me. 322; Den- Hicks, 38 Ala, 279; Calkins v. Sum- ver v. Bayer, 7 Colo. 113, 2 Pac. Rep. ner, 13 Wis. 193, 80 Am. Dec, 738; 6; Lake Street Elevated R. Co. v. Allen V. Crofoot, 2 Wend. 515, 20 Brooks, 90 111. App. 173; Ridge Ave- Am. Dec. 647; Lawler v. Earle, 5 nue Passenger R. Co. v. Philadelphia, Allen, 22. 181 Pa. 592, 37 Atl. Rep. 910: Fernan- 3 American Print Works v. Law- dez v. Smith, 43 La. Ann. 708; Pueblo rence, 23 N. J. L. 9, 21 id. 248; Su- v. Strait, 20 Colo. 13, 24 L. R. A. 392, rocco V. Geary, 3 Cal. 69; Russell v. 36 Pac. Rep. 789; Talbot v. New York Mayor, 2 Denio, 461; Field v. Des & H. R, Co.. 151 N. Y. 155, 45 N. E. Moines. 39 Iowa, 575,18 Am. Rep. 46; Rep. 382; Sanitary District of Cbi- Aitken v. Wells River, 70 Vt. 308, 40 cago v. McGuirl, 86 111. App. 392. Atl. Rep. 829, 41 L. R. A. 566. ^ Swartz v. Board of Commission- * King V. Pagham, 8 B. & C. 355. ers, 158 Ind. 141, 63 N. E. Rep. 31, and 6 Reading v. Kepplemann, 61 Pa. cases cited; Cooley's Const. Li m. 384 §3.] EIGHT TO DAMAGES. 9 A new business may, by competition, greatly impair the pro- ductiveness of an old one, but there is no redress for the loss.- One who accepts a license from a municipality to sell liquors does so with knowledge that it is revocable at the pleasure of the officers who issued it, and cannot recover damages for its revocation though that be done without cause,'- or through malice.^ Damage by way of increased noise, smoke, cinders, etc., due to the elevation of a railroad track and changes in operating the road is da7nnuin absque injuria as to one who purchased a lot adjoining the road with notice of the existence of a right of way.* A breach of contract does not afford a cause of action where its performance is prevented by law."* Kegardiess of his motive, so long as his acts are not tainted with fraud,^ a person may sell or offer for sale at any price goods of which he is not the owner, but which he expects or hopes to acquire, and may make his price public.'^ The older See Weeks' Dam. Absque Injuria, ctu 1; Stout V. Nobles ville & E. Gravel R. Co., S3 Ind. 466; Hufif v. Donehoo, 109 Ga. 638, 34 S. E. Rep. 1035; Nichols v. Richmond, 162 Mass. 170, 38 N. E. Rep. 501; Buhl v. Fort Street Union Depot Co., 98 Mich. 596, 57 N. W. Rep. 829, 23 L. R A. 39-3; Frost V. Washington County R. Co., 96 Me. 76, 86, 51 Atl. Rep. 806, and cases cited. iMasterson v. Short. 3 Abb. Pr. . 769; Barlow v. Lowder, Stovvell V. Lincoln, 11 Gray, 434; 85 Ark. 493: Empire Gold Mining Co. Hathorne v. Stinson, 12 Me. 183, 28 v. Bonanza Gold Mining Co., 67 Cal. Am. Dec. 167; Pollard v. Porter, 3 406, 7 Pac. Rep. 810; Hancock v. Hub- Gray, 312; Newcomb v. Wallace, 112 bell, 71 Cal. 537, 12 Pac. Rep. 618; Mass. 25; Chamberlain v. Parker, 45 Kenney v. Collier, 79 Ga. 743, 8 S. E. N. Y. 569; Marzetti v. Williams. 1 B. Rep. 58; Brant v. Gallup, 111 111. 487, & Ad. 415; Kimel v. Kimel, 4 Jones, 53 Am. Rep. 638; Mize v. Glenn, 38 121; Warre v. Calvert, 7 Ad. & El. Mo. App. 98; Jones v. Hannovan, 55 143; Embrey v. Owen, 6 Ex. 353; Mo. 462; Tramraell v. Chambers Northam v. Hurley, 1 El. & Bl. 665; County, 93 Ala. 388, 9 So. Rep. 815; Medway Nav. Co. v. Romney, 9 C. B. Treadwell v. Tillis. 108 Ala. 262, 18 (N. S.) 575; McLeod v. Boulton, 3 Up. So. Rep. 886; Patrick v. Colorado Can. Q. B. 84; Smith v. Whiting, 100 Smelting Co., 20 Colo. 268, 38 Pac. Mass. 122; McConnelv. Kibbe, 33 111. Rep. 236; New Jersey School & 175, 85 Am. Dec. 265; Barker V.Green, Church Furniture Co. v. Board of 2 Bing. 317; Graver v. Sholl, 42 Pa. 58; Education, 58 N. J. L. 646, 35 Atl. Rep. Chapman v. Thames Manuf. Co., 13 397. See cases cited in notes 1,2. §2. Conn. 269, 33 Am. Dec. 401; Tyler v. 28 NOMINAL DAMAGES. [§ 10. livered. The market price of wheat advanced for two days, then fluctuated, and was less on the day specified in the mes- sage than on the day when it should have been delivered, so that there was not only no damage, but the sender was saved from the loss which he would have suffered if his message had been delivered and acted upon. But there was a neglect of duty, an infraction of the sender's right to have care and diligence used in the transmission and delivery of his message; for that he was entitled to nominal damages.^ The plaintiff and the defendants were riparian proprietors on a water-course, and had mills thereon; various other mills belonging to third persons were located on the same stream. In case, the plaint- iff complained that the defendants heated the water of the stream by operating steam boilers in their mills, increasing the evaporation five per cent., which was to that extent an abstraction of the water; also that they fouled the water by discharging into it soap suds, etc. But the pollution did no actual damage to the plaintiff, because the water was already so polluted by similar acts of other mill owners and dyers above the defendants' mill that the latter's acts made no ap- preciable difference; that is, the pollution by the defendants did not make the stream less applicable to practical purposes than it was before. It was held, however, that the plaintiff received damage in point of law from such pollution. It was an injury to a right; but that the loss of five per cent, would not give a cause of action if such diminution arose from a reasonable use of the stream.^ Where a part owner was ex- pelled from a mill property, and while wrongfully kept out of possession, the mill, which was old, was replaced by a new one of greater value, so that when he regained possession the property was much more valuable, and he was a gainer after deducting all intermediate lost profits, he was entitled to nom- inal damages.^ 1 Hibbard v. Western U. Tel. Co., 33 U. Tel. Co., 92 Ala. 399, 9 So. Rep. Wis. 558, 14 Am. Rep. 775. Nominal 200. damages may be recovered for such ^ Wood v. Waud, 3 Ex. 748; Ul- negligence though it does not appear bricht v. Eufaula Water Co., 86 Ala. that anything was paid for sending 587, 11 Am. St. 67, 6 So. Rep. 78, 4 L. the telegram. Kennon v. Western R. A. 572. 3 Jewett V. Whitney, 48 Me. 243. § 1<».] NOMINAL DAMAGES. 29 The principle that for the violation of every legal right nom- inal damages at least will be allowed applies to all actions, whether for tort or breach of contract, and whether the right is personal or relates to property. The offer of violence to a person is an assault, and the least unjustifiable touching of him a battery. Where a debtor was arrested on a ca. sa., and judgment, after an insolvent discharge, which gave him im- munity from arrest, it was held that the party at whose [12] instance the writ was issued, as well as the attorney who is- sued it, were liable for false imprisonment whether they were previously notified of the discharge or not. Want of notice might reduce the damages to a nominal sura, but could not be allowed to absolutely excuse a trespass.^ The death of a child was caused by the neglect or unskilfulness of defendant's clerk in substituting morphine for quinine. As the child could have brought an action for the injury had he survived, it was held that a liability under a statute of Kew York existed in favor of the administrator; and because the statute expressly gave a right of action, at least nominal damages were recov- erable.^ In actions for libel and slander, wherever there has been publication of matter in itself libelous or actionable per se, the law infers some damage.* Every unauthorized entry upon land of another or intermeddling with his goods is an actionable trespass, whether there be actual injury or not; whether the owner suffer much or little, he is entitled to a verdict for some damages.^ In an action for fishing in the 1 Deyo V. Van Valkenburgh, SHill, tion for a default which occurred 242. See Flint v. Clark, 13 Conn. 361. after commencement of the prior 2Quin V.Moore, 15 N. Y. 432; Mc- action. Shanklin v. Gray, 111 Cal. Intyre v. New York Central R. Co., 88, 43 Pac. Rep. 399. Where the law 43 Barb. 533; Ihl v. Forty-second gives an action for the doing of an Street, etc. R. Co., 47 N. Y. 317, 7 act, the doing thereof imports a Am. Rep. 450. damage. Whittemore v. Cutter, 1 The failure to comply with a stat- Gall. 429, 433. See Enos v. Cole, 53 ute requiring that, at stated times, Wis. 235, 10 N. W. Rep. 377. the officers of a corporation shall file ^ Ashby v. White, 1 Salk. 19, 2 Ld. verified accounts necessarily implies Raym. 955; Flint v. Clark, 13 Conn, an injury to the stockholders thouirh 361: Kelly v. Sherlock, L. R. 1 Q. B. no actual damages be shown; and 6S6. neither the recovery of judgment •* Dixon v. Clow, 24 Wend. 188: Mc- nor the pendency of an action for a Aneuny v. Jewett. 10 Allen, 151; l)ast default bars a subsequent ac- Carter v. Wallace, 2 Tex. 206; Plum- 50 NOMINAL DAMAGES. [§11. plaintiff's several fishery, he was held entitled to nominal dam- aires thouffh the defendant took no fish and the declaration did not allege that he caught any.^ One's right of property is infringed by any unlawful flowage of his land.^ A riparian owner has a right to the natural flow of water not increased or diminished in quantity, and unpolluted in quality, and for [13] any infraction of this right at least nominal damages may be recovered.^ A fraud by which one is drawn into a contract is an injury actionable ])er se.* Actual damage is not necessary to an action. A violation of a right with the possibility of damage is suflBcient ground.-^ § 11. The right a substantial one; new trials. The fail- ure to perform a duty or contract is a legal wrong independ- ently of actual damage to the party for whose benefit the per- mer v. Harbut, 5 Iowa, 308; Coe v. Peacock, 14 Ohio St. 187; Pierce v. Hosmer, 66 Barb. 345; White v. Grif- fin, 4 Jones, 139; Watson v. New Mil- ford Water Co., 71 Conn. 442, 42 Atl Rep. 265. 1 Patrick v. Gi'eenway, 1 Saund. 346&, note. 2 Amoskeag Manuf. Co. v. Goodale. 46 N. H. 53; McCoy v. Danley. 20 Pa. 89: Tootle v. Clifton. 22 Ohio St. 247, 10 Am. Rep. 732; Kemmerrer v. Ed- elman, 23 Pa. 143; WaiTen v. Deslip- pes, 33 Up. Can. Q. B. 59; Plumleigh V. Dawson, 6 111. 544, 41 Am. Dec. 199; Pastorius v. Fisher, 1 Rawle, 27; Whipple V. Cumberland Manuf. Co., 2 Story, 661; Jones v. Hannovan, 55 Mo. 462; Doud v. Guthrie, 13 111. App. 653; Mellor v. Pilgrim, 7 id. 306; Mize V. Glenn. 38 Mo. App. 98. 3 New York Rubber Co. v. Rothery, 132 N. Y. 293, 28 Am. St. 575, 30 N. E. Rep. 841; Newhall v. Gilson, 8 Cush. 595; Tillotson v. Smith, 32 N. H. 90, 64 Am. Dec. 365; Wadsworth V. Tillotson, 15 Conn. 366, 39 Am. Dec. 391; Clinton v. Myers. 46 N. Y. 511, 7 Am. Rep. 373; Holsman v. Boiling Spring B. Co., 14 N. J. Eq. 835; Embrey v. Owen, 6 Ex. 353; Northam v. Hurley, 1 El. & Bl. 665; Stockport Water Works Co. v. Pot- ter, 7 H. & N. 160; Tyler v. Wilkin- son, 4 Mason, 397; Wood v. Waud, 3 Ex. 748; Tuthill v. Scott, 43 Vt. 525, 5 Am. Rep. 301; Munroe v, Stickney. 48 Me. 462; Mitchell v. Barry, 26 Up. Can. Q. B. 416; Blanchard v. Baker, 8 Me. 253, 23 Am. Dec. 504; Stein v. Burden, 24 Ala. 130, 60 Am. Dec. 453. 4 Allaire v. Whitney, 1 Hill, 484; Ledbetter v. Morris, 3 Jones, 543; Pontifex v. Bignold, 3 Scott N. R. 390. 5 Id.; National Exchange Bank v. Sibley, 71 Ga. 726, 734; Ross v. Thompson, 78 Ind. 90; Hooten v. Barnard, 137 Mass. 36; Blodgett v. Stone. 60 N. H. 167; Alabama Min- eral R. Co. V. Jones, 121 Ala. 113, 25 So. Rep. 814. Mr. Justice Story observed in Webb V. Portland Manuf. Co., 3 Sumner, 189, that actual perceptible damage is not indispensable as the founda- tion of an action. The law toler- ates no further inquiry than whether there has been the violation of a right. If so, the party is entitled to maintain his action in vindication of bis right. 11.] NOMINAL DAMAGES. 31 formance of such duty or contract is due.^ The omission to show actual damages and the inference therefrom that none have been sustained do not necessarily render the case trivial. The law has regard for the substantial rights of parties though it may overlook trivial things.- When such a right is violated the" maxim de minimis non curat lex has no application.' The court will add nominal damages to the finding of a jury when necessary to such rights, as to carry costs.* So where [14-16] judgment should have been given for plaintifT for nominal damages, but was rendered for defendant, it will be reversed if such damages will entitle the plaintiff to costs; ^otherwise a 1 Spaflford v. Goodell, 3 McLean, 97; Runlett V. Bell, 5 N. H. 433; Hagan V. Riley, 13 Gray, 515: Pond v. Merri- field, 12 Gush. 181; Bagby v. Harris, 9 Ala. 173; Clinton v. Mercer, 3 Murph. 119; Conger v. Weaver, 20 N. Y. 140; Mecklem v. Blake, 22 Wis. 495; Freese v. Crary, 29 Ind. 525; Worth V. Edmonds, 52 Barb. 40; French v. Bent, 43 N. H. 448; John- son V. Stear, 15 C. B. (N. S.) 380; Steer V. Crowley, 14 id. 337: Brown v. Em- erson, 18 Mo. 103; Laflin v. Willard, 16 Pick. 64; Goodnow v. Willard, 5 Met. 517; Browner v. Davis, 15 Cal. 9; Seat v, Moreland, 7 Humph. 575; Bond V. Hilton, 2 Jones, 149; Craig V. Chambers, 17 Ohio St. 254; Dow V. Humbert, 91 U. S. 294; Smith v. Whiting, 100 Mass. 122; Blot v. Boi- ceau, 3 N. Y. 78; Hickey v. Baird, 9 Mich. 32; Newcomb v. Wallace, 112 Mass. 25; Chamberlain v. Parker, 45 N. Y. 569; Wilcox v. Executor of Plummer, 4 Pet. 172; Clark v. Smith, 9 Conn. 379; Barker v. Green. 2Bing. 317; Pollard v. Porter, 3 Gray, 312; Marzetti v. Williams, 1 B. & Ad. 415; Jordan v. Gallup, 16 Conn. 536; Coop- er V. Wolf, 15 Ohio St. 523; Mickles V. Hart, 1 Denio, 548; Carl v. Granger Coal Co., 69 Iowa, 519, 29 N. W. Rep. 437; Rosser v. Timberlake, 78 Ala. 162. 2 Smith V. Gugerty, 4 Barb. 614; Hathorne v. Stinson, 12 Me. 183; Stowell V. Lincoln, 11 Gray, 434; Kimel v. Kimel, 4 Jones, 121; EUi- cottville, etc. Plank R. Co. v. Buffalo, etc. R. Co., 20 Barb. 644. The Georgia court is not aware of any precedent authorizing a trial court to deprive a plaintiff of his right to recover nominal damages. To so hold would put it in the power of the court to prevent the recovery thereof, and render the law author- izing it inoperative. Addington v. Western & A. R. Co., 93 Ga. 566, 20 S. E. Rep. 71. Hence if the right to recover such damages is shown, a judgment directing a verdict for the defendant will be reversed. Id. And so of a judgment sustaining a demur- rer to the petition, only nominal damages being recoverable, Kenny V. Collier, 79 Ga. 743, 8 S. E. Rep. 58; Sutton V. Southern R. Co.. 101 Ga. 776, 29 S. E. Rep. 53; and a judgment dismissing the action. Roberts v. Glass, 112 Ga. 450, 37 S. E. Rep. 704. 3 Wartman v. Swindell, 54 N. J. L. 589, 25 Atl. Rep. 356, 18 L. R. A. 44. * Von Schoening v. Buchanan, 14 Abb. Pr. 185. 5 Potter v. Mellen, 36 Minn. 122, SO N. W. Rep. 438; Enos v. Cole, 53 Wis. 235, 10 N. W. Rep. 377; Sayles v. Bemis, 57 Wis. 315, 15 N. W. Rep. 432; Eaton v. Lyman, 30 Wis. 41. 32 NOMINAL DAMAGES. [§11- judgment which is erroneous only because it fails to award plaintiff nominal damages will not be reversed,' nor will a new trial be granted.- If the reviewing court recognizes that substantial damages have been sustained and that the party entitled to them mistook the basis on which they should be determined, the denial of his right to nominal damages, to which he was entitled, will be ground for reversing the judg- ment.' And if the object of the action is to determine some question of permanent right, and through error the plaintiff is deprived of the judgment he is entitled to, the fact that he can recover onlv nominal damages will not be reason for de- 1 Hickey v. Baird, 9 Mich. 32; Rob- ertson V. Gentry, 2 Bibb, 542; Watson V. Van Meter, 43 Iowa, 76; Wire v. Foster, 62 Iowa, 114, 17 N. W. Rep. 174; Ely v. Parsons, 55 Conn. 83, 101, 10 Atl. Rep. 499; Platter v. Sey- mour, 86 Ind. 328; Rhine v. Morris, 96 Ind. 81; Norman v. Winch. 65 Iowa, 263. 21 N. W. Rep. 598; Harris v. Kerr, 37 Minn. 537, 35 N. W. Rep. 379; Hib- bard v. Western U. Tel. Co., 33 Wis. 558, 14 Am. Rep. 775; Benson v. Wau- kesha, 74 Wis. 31,41 N. W. Rep. 1017; Beatty v. Oille, 12 Can. Sup. Ct. 706; Mears v. Cornwall, 73 Mich. 78, 40 N. W. Rep. 931; Haven v. Manuf. Co., 40 Mich. 286; McLean v. Charles Wright Medicine Co., 96 Mich. 479, 56 N. W. Rep. 68; Thisler v, Hopkins. 85 111. App. 207; People v. Petrie, 94 id. 652; Coffin V. State, 144 Ind. 578, 43 N. K Rep. 654,55 Am. St. 188; Smith v. Par- ker, 148 Ind. 127, 45 N. E. Rep. 770; Harwood v. Lee, 85 Iowa, 622, 52 N. W. Rep. 521; Boardman v. Marshall- town Grocery Co., 105 Iowa, 445, 75 N. W. Rep. 343; United States Exp. Co. V. Koerner, 65 Minn. 540, 68 N.W. Rep. 181, 33 L. R. A. 600; Kenyon v. West- ern U. Tel. Co., 100 Cal. 454, 35 Pac. Rep. 75, quoting the text; Phillips v. Covell. 79 Hun, 210, 29 N. Y. Supp. 613; Roberts v. Minneapolis Thresh- ing 51. Co., 8 S. D. 579, 67 N. W. Rep. 607; Ternes v. Dunn, 7 Utah, 497. 27 Pac. Rep. 692; Farr v. State Bank, 87 Wis. 223, 58 N. W. Rep. 377,41 Am. St. 40; East Molina Co. v. Weir Plow Co., 37 C. C. A. 62, 95 Fed. Rep. 250; Kelly V. Fahrney. 38 C. C. A. 103, 105, 97 Fed. Rep. 176; Scammell v. Clark, 31 N. B. 250: Glasscock v. Ro- sengrant, 55 Ark. 376, 18 S. W. Rep. 379; Bunch v. Potts, 57 Ark. 257, 21 S. W. Rep. 437: Hartmann v. Burtis, 65 App. Div. 481, 72 N. Y. Supp. 914; Briggs V. Cook, 99 Va. 273, 38 S. E> Rep. 148. If the judgment is reversed be- cause of error in the instructions the appellate court will direct judgment for a nominal sum for the plaintiff, it being clear that he is entitled to nominal damages. Jones v. Tele- graph Co., 101 Tenn. 442, 47 S. W. Rep. 699. 2 Id. ; Brantingham v. Fay, 1 Johns. Cas. 256; Jennings v. Loring, 5 Ind. 250; Watson v. Hamilton, 6 Rich. 75; Haines v. Dunlap, 33 N. B. 556; Ring- lehaupt V. Young, 55 Ark. 128, 17 S. W. Rep. 710. Costs are not taxed in the court of claim.s, and it is not in accordance with the practice of that court to render a judgment for nominal dam- ages. Friedenstein v. United States, 35 Ct of Cls. 1, 9. s Thomson-Houston Electric Co. v. Durant Land Imp. Co., 144 N. Y. 94, 39 N. E. Rep. 7. § 11.] NOMINAL DAMAGES. 33 nying a new trial.^ If the right to such damages is estab- lished the court cannot ignore it and give the defendant judg- ment although the jury erroneously find substantial damages in the plaintiff's favor."^ A cause of action may be so intrin- sically trivial and vexatious that it would be almost a pardon- able departure from the technical rule to apply the maxim de minimis non curat lex and direct a verdict for the defendant. It was so ruled in a Vermont case. The defendant as an offi- cer had attached certain hay, straw, etc., and used a pitchfork belonging to the debtor in removing the same; he did no in- jury to the fork, and after its use returned it where he found it. The court held there was no liability.^ It is to be observed that, though there was a technical wrong, by an unauthorized intermeddling with another's property, there was no assertion of an adverse right and no actual injury. The action was not necessary for the vindication of a right nor to redress a wrong deserving compensation. It was, however, a case in which, upon strict principles, nominal damages should have been given ; for they are always due for the positive and wrongful invasion of another's property.^ Technical rules and rules as to the forms of proceedings must be observed without regard to the consequences which may follow in particular cases; otherwise the stability of judicial decisions and the certainty of the law cannot be preserved.^ 1 Merrill v. Dibble, 12 111. App. 85; was said that whenever the maxim Ely V. Parsons, 55 Coun. 83, 101, 10 de viinimis non curat lex is applied Atl. Rep. 499; Skinner v, Allison, 54 to take away a right of recovery, it App. Div. 47, 66 N. Y. Supp. 288; has reference to the injury and not Olson v. Huntimer, 8 S. D. 220, 66 N. to the resulting damage. The opin- W. Rep. 313; Bungenstock V. Nish- ion of Bennett, J., in that case states nabotna Drainage District, 163 Mo. the result of several cases on this 198, 64 S. W. Rep. 149. proposition. See Ash by v. White, 2 2 Carl v. Granger Coal Co., 69 Iowa, Ld. Raym. 938; Kidder v. Barker, 18 519, 29 N. W. Rep. 437. Vt. 454; Clifton v. Hooper, 6 Q. B. 3 Paul v. Slason. 22 Vt. 231, 54 Am. 4G8; Barker v. Green, 2 Bing. 317; Dec. 75; Pronk v. Brooklyn Heights Williams v. Mostyn, 4 M. & W. 145; R.Co.,68App. Div. 390,74N. Y. Supp. Cady v. Huntington. 1 N. H. 138; 375. Young v. Spencer, 10 B. & C. 145; < Seneca Road Co. v. Auburn, etc, Emhrey v. Owen, 6 Ex. 353. 372; R Co.. 5 Hill, 175; Heater v. Pearce, Williams v. Esling, 4 Pa. 486, 45 Am. 59 Neb. 583, 81 N. W. Rep. 615, citing Dec. 710; Glanvill v. Stacey, 6 B. & the text. C. 543; Seneca Road Co. v. Auburn, 6 Clark V. Swift, 3 Met. 890, 395. etc. R. Co., 5 Hill, 175; Bustamente v. In Fullam v. Stearns, 30 \t. 443, it Stewart, 55 Cal. 115. Vol. 1 — 3 84 COMPENSATION. [§ 12. CHAPTEK III. COMPENSATION. Section 1. compensatory damages. § 13. Award of compensation the object of the law. 13. Limitation of liability to natural and proximate consequencegL Section 3. direct damages. 14. What these include. Section 3. consequential damages for torts. 15. Awarded for probable consequences. 16. Rule of consequential damages for torts. 17-19. Illustrations of the doctrine of the preceding sectioiu 20. Consequential damages under fence statutes. 21. Nervous shock without impact: the Coultas case and American cases in harmony with it. 22. Same subject; criticism of the Coultas case; nervous shock a phys- ical injury. 23. Same subject; an earlier ruling. 23a. Same subject; Dulien v. White. 24. Same subject; miscellaneous cases. 25. Anticipation of injury as to persons; illustrations. 26. Consequential damages in highway cases. 27. Imputed negligence. 28. Particular injury need not be foreseen. 29-31. The act complained of must be the efficient cause. 32. Breach of statutory duties. 33. Injury through third person. 34. Liability as affected by extraordinary circumstances. 35. Illustrations of the doctrine of the preceding section. 36. Liability of carriers for consequential damages; extraordinary cir- cumstances. 37-38. Intervening cause. 39. Act of injured party; fraud and exposure to peril. 40-43. Act of third person. 43-44. Wilful or malicious injuries. Section 4. consequential damages for breach of contraot 45. Recoverable only when contemplated by the parties. 46. Illustrations of liability under the rule. 47. Liability not affected by collateral ventures. § 12.] COMPENSATION. 35 § 48. Distinction between consequential liability in tort and on contract. 49. Same subject; criticism of the Hobbs case. 50. Liability under special circumstances; Hadley v. Baxendale. 51. Same subject; illustrations and discussion of the rule. 52. Market value; resale; special circumstances. Section 5. required certainty of damages. 53. Damages must be certain in their nature and cause. 54. Liability for the principal loss extends to details and incidents. 55. Onlj' the items which are certain are recoverable. 5G-58. Recovery on successive consequences. 59-60. Required certainty of anticipated profits. 61. Warranty of seeds. 62. Prospective growth of orchard and of animals, 03. Profits of special contracts. 64. Same subject; Masterton v. IMayor. 65. Violation of contract to lease. 66. Profits of labor. 67. Profits from commercial ventures. 68. Profits on dissolution of partnership. 69. Commercial agencies. 70. Tortious interference with business. 71. Chances for prizes and promotions. 73. Contingent advantage. 73. Uncertain mitigation of breach of marriage promise. 74. Failure to provide sinking fund. Section 6. THE constituents OF COMPENSATION, OR ELEMENTS OF DAMAGE. 75. Elementary limitation of damages. 76. Damages for non-payment of money. 77. Greater damages than interest for failure to pay money. 78. Liability for gains and losses. 79. What losses elements of damage. 80. Same subject; labor and expenditures. 81. Same subject; damages for relying on performance. 82. Same subject; liabilities to third persons; covenants of indemnity. 83. Same subject; indemnity to municipalities; counsel fees, 84. Same subject; liability for losses and expenses. 85. Same subject; bonds and undertakings; damages and costs. 86-87. Same subject; necessity of notice to indemnitor to fix liability. 88. Expenses incurred to prevent or lessen damages. 89. Same subject; between vendor and vendee. 90. Same subject; extent of the duty. 91. Same subject; employer may finish work at contractor's expensa 92. May damages for breach of contract include other than pecuniary elements ? 36 COMPENSATION. [§ 12. § 93. Elements of damage for personal torts. 94. Character as affecting damages for personal injuries. 95-96. Mental suffering. 97. Same subject; liability of telegraph companies. 98. Right to compensation not affected by motive. 99. Distinction made for bad motive; contracts. 100. Motives in tort actions. 101. How motive affects consequences of confusion of goods. 102-103. Where property sued for improved by wrong-doer. 104. Distinctions in the matter of proof. 105. Value of property. Section 1. compensatoky damages. § 12. Award of compensation the object of the law. [17] Actions at law are usually brought to recover compensa- tion for the wrong complained of. The law which is denomi- nated the law of damages is principally that which defines, measures and awards compensation. Such damages as are not compensatory are either nominal or exceptional. Compensa- tion is the redress which the law affords to alf persons whose rights have been invaded ; in the nature of things they must accept that by way of reparation. Therefore the principles which underlie this right, so necessary and so frequently in- voked, and the rules which govern its enforcement, are of the greatest importance. The law defines very precisely all personal and property rights so that every person may enjoy his own with confidence and repose. If they are infringed the extent of the encroachment is readily seen when the facts appear. The law defines the scope of responsibility with as much pre- cision as the nature of the subject will permit, and lays down a universal measure of recompense for civil injury which the sufferer is entitled to recover, and the person who is liable is bound to pay, when the injury has been done without a mo- tive for which the law subjects him to punishment. The uni- versal and cardinal principle is that the person injured shall receive a compensation commensurate with his loss or injury, and no more; and it is a right of the person who is bound to pay this compensation not to be compelled to pay more, ex- cept costs.^ It is not within legislative power to deprive an 1 Rockwood v. Allen, 7 Mass. 254; Ferrer v. Beale, 1 Ld. Raym. 692 Dexter v. Spear, 4 Mason, 115; Allison v. Chandler, 11 Mich. 542 Walker v. Smith, 1 Wash. C. C. 152; Northrup v. McGill, 27 Mich. 234 § 12.] COMPENSATORY DAMAGES. 3T individual who has been injured in his person or estate of redress either in whole or in part. "Nothing less than the full amount of pecuniary damage which a man suffers from an injury to him in his lands, goods or person fills the meas- ure secured to him in the declaration of rights." ^ The prin- ciple of just compensation is paramount. By it all rules [18] on the subject of compensatory damages are tested and cor- rected. They are but aids and means to carry it out; and when in any instance such rules do not contribute to this end, but operate to give less or more than just compensation for actual injury, they are either abandoned as inapplicable or turned aside by an exception. There are, however, upon cer- tain subjects some arbitrary rules, or those which have been adopted from considerations of policy, ostensible on the basis of compensation, which really fall short of that object in a conservative deference to possible consequences to the party who must respond to the demand. With these necesssary or expedient exceptions, the person who has broken his contract or caused injury by any tortious act is liable to the other party to the contract or to the sufferer from such act for such damages as will place the person so injured in as good condi- tion as though the contract had been performed or the tort Bussy V. Donaldson, 4 Dall. 206; Horst v. Roehm, 84 Fed. Rep. 565; Griffin v. Colver, 16 N. Y. 494; Mil- Alleghany Iron Co. v. Teaford, 96 Va. waukee, etc. R. Co. v. Arms, 91 U. S. 372, 31 S. E. Rep. 525. 489; Baker v. Drake, 53 N. Y. 216; A charge on the subject of dam- United States V. Smith, 94 U. S. 214; ages is objectionable if the jury are Robinson v. Harman, 1 Ex. 850; told that plaintiff is entitled to" full, Peltz V, Eichele, 62 Mo. 171; Noble complete and ample " compensation. V. Ames Manuf. Co., 112 Mass. 492; The adjectives should not be used. Buckley v. Buckley, 12 Nev. 423; Sale v. Eichberg, 105 Tenn. 332, 352, Suydam v. Jenkins, 3 Sandf. 614; 59 S. W. Rep. 1020. Parker v. Simonds, 8 Met. 205; Ja- To say to the jury that the plaintiff's cobson V. Poindexter, 42 Ark. 97; damages may be assessed at such. Good bar v. Lindsley, 51 Ark, 380, 14 sum as they may think he has sus- Am. St. 54. 11 S. W. Rep. 577; Mason tained is to give them a "roving V. Hawes. 52 Conn. 12, 52 Am. Rep. commission " to apply their oven 552; Jones v. People, 19 111. App. 300; measure of damages instead of that Page V. Sumpter, 53 Wis. 652, UN. defined by the law. Campy, Wabash W. Rep. 60; Henson-Herzog Supply R. Co., 94 Mo, App. 272. See § 1256. Co. V, Minnesota Brick Co,, 55 Minn. i Thirteenth & F. St. P. R. v. Boud- 530, 57 N. W. Rep. 129, citing the rou, 92 Pa. 475, 482. preceding sentence of the text; 38 COMPENSATION. [§ 13. Lad not been committed. It is not meant b}^ tliis that the party liable must answer for all consequences which may in- directly and remotely ensue. The latter are, beyond a certain point, incapable of being traced ; they combine with the re- sults of other causes, and any attempt to follow and apportion them would be abortive, and any conclusion of liability based upon such consequences would rest on conjecture and lead to great injustice. If men were held to such a far-reaching re- sponsibilit}'' they would be timid or reckless; if it were legally recognized it would be fatal to all activity and enterprise. § 13. Liniitatioii of liability to natural and proximate consequences. As before remarked, the law defines the scope of responsibility for consequences; beyond that they are sup- posed to cease or the injured party is presumed to counteract them by preventive measures. The legal scope is a reasonable one; in general it extends as far as the moral judgment and practical sense of mankind recognize responsibility in the do- main of morals, and in those affairs of life which are not re- ferred to the courts for regulation or adjustment. The law [19] defines it generally by the principle which limits the re- covery of damages to those which naturally and proximately result from the act complained of; or, in other words, to those consequences of which the act complained of is the natural and proximate cause. This limitation is expressed in such g-eneral terms that the distinction between those damages which are compensable and those which, because being too re- mote, are not, is not always very clear. On similar facts dif- ferent courts have come to diverse conclusions, though equally acknowledging the principle. It is made more specific, how- ever, by rules of an elementary character formulated under it, and by judicial exposition and illustrations which impart to this legal generality a more precise and determinate import than is suggested by its words; and it is only by resort ta them that the principle of this limitation can be definitely understood, explamed or elucidated. Damages which are re- coverable may, therefore, be conveniently divided primarily for this purpose into two classes: first, direct; second, conse- quential. § 14.] dikeot damages. 39 Section 2. direct damages. §14, What these include. These include damages for all such injurious consequences as proceed immediately from the cause which is the basis of the action; not merely the conse- quences which invariably or necessarily result and are always provable under the general allegation of damages in the dec- laration, but also other direct effects which have in the par- ticular instance naturally ensued, and must be alleged specially to be recovered for. The liability of the defendant for these, if responsible for the cause, is clear. All such damages, whether for tort or breach of contract, are recoverable with- out regard to his intention or motive, or any previous actual contemplation of them. A defendant is conclusively presumed to have contemplated the damages which result directly and necessarily or naturally from his breach of contract,' as will be more particularly illustrated in another place; and in [20] cases of tort his responsibility to this extent is absolute.^ An illustration of this rule is found in a case in Yirginia where an administrator sold a chattel which the intestate had in his possession when he died, but which in truth belonged to an- other, and applied the proceeds to the payment of the debts of the intestate, in due course of administration, without notice of the right or claim of the owner; he was held personally liable to such owner for the value of the property.* In a Massachu- setts case a factor bought goods for his principal residing at W., and by mistake sent them to a third person at S., who re- ceived them in good faith and paid the freight; he was held liable for the goods to the owner, but was allowed a deduction for the freight paid.* 1 Hadley v. Baxendale, 9 Ex. 341; v. Ayres, 3 Sneed, 677; Bowas v. Pio- Burrell v. New York, etc. Co., 14 ueer Tow Line, 2 Sawyer, 21; Parley Mich. 34; Brown v. Foster, 51 Pa. 165; v. Eastern R. Co., 98 Mass. 414; Lane Collard v. Southeastern R. Co., 7 H. v. Atlantic Works, 111 Mass. 136; & N. 79; Williams v. Vanderbilt, 28 Martachowski v. Orawitz, 14 Pa. N. Y. 217, 84 Am. Dec. 333; Smith v. Super. Ct. 175, 186, citing the text. St. Paul, etc. R. Co., 30 Minn. 169, 14 See chs. 21, 22, 36; Lathers v. Wy- N, W, Rep. 797; Agius v. Great man, 76 Wis. 616, 45 N. W. Rep. 669. Western Colliery Co., [1899] 1 Q. B. SNewsum v. Newsum, 1 Leigh, 86, 413; Cole v. Stearns, 20 N. Y. Misc. 19 Am. Dec. 739. 502, 46 N. Y. Supp. 238. * Whitney v. Beckford, 105 Mass. 2 Cogdell V. Yett. 1 Cold. 280; Tally 267; Etea v. Luyster, 60 N. Y. 252; 10 compensation. [§§ 15, 16. Section 3. consequential damages for torts. § 15. Awarded for probable consequences. Consequential iamages are those which the cause in question naturally, but in- jirectly, produced. An example: the defendant was liable for tilling a mare; the plaintiff suffered injury in the loss of that (iniraal to the extent of her value, but circumstances gave her an additional value to him; she had an un weaned colt, and was suckling the colt of another mare which had died. The direct consequence of the killing of the mare was her loss — the necessity of employing other means to raise the colts was con- sequentiaL' The consequential damages which may be recov- ered are governed by one consideration when they are claimed for a tort, and by another when they are sued for as the result of a breach of contract. The latter will be the subject of the next section. The question of the remoteness of damage, if the mate- rial facts are not in dispute, is for the court. Blackburn, J., has said that it never ought to be left to a jury; to do that would be in effect to say that there shall be no rule as to dam- ages being too remote.^ [21] § 16. Biile of consequential damages for torts. In an action for a tort, if no improper motive is attributed to the de- fendant, the injured party is entitled to recover such damages as will compensate him for the injury received so far as it might reasonably have been expected to follow from the cir- cumstances; such as, according to common experience and the usual course of events, might have been reasonably anticipated. The damages are not limited or affected, so far as they are com- Keenan v. Cavanagh, 44 Vt. 288; 724; Goodlander Mill Co. v. Standard Little V. Boston, etc. R. Co., 66 Me. Oil Co., 63 Fed. Rep. 400, 11 C. C. A. 239; Bowas v. Pioneer Tow Line, 2 253,27 L. R. A. 583; Pennsylvania Co. Sawyer, 21. v. Whitlock, 99 Ind. 16, 50 Am. Rep. 1 Teagarden v. Hetfield, 11 Ind. 522. 71: Stone v. Boston & A. R. Co., 171 2 Hobbs V. London & S. R., L. R. 10 Mass. 536, 51 N. E. Rep. 1, 41 L. R. A. Q. B. Ill, 122; Hammond v. Bussey, 794: Deisenrieter v. Kraus-Merkel 20 Q. B. Div. 79, 89; Read v. Nichols, Malting Co., 97 Wis. 279, 72 N. W. 118 N. Y. 224, 23 N. E. Rep. 468, 7 L. Rep. 735; Consolidated Electric Light R. A. 130: Cuff v. Newark, etc. R Co., & P. Co. v. Koepp, 64 Kan. 735, 67 Pac 35 N. J. L.. 17, 10 Am. Rep. 205; Rep. 608. Contra, Guif, etc. R. Ca Behling v. Southwest Pipe Lines, 160 v. Hayter, 93 Tex. 239, 54 S. W. Rep. Pa. 35'J, 28 Atl. Kep. 777, 40 Am. St. 944, 47 L. R. A. 325. § IG.] CONSEQUENTIAL DAMAGES FOR TORTS. 41 pensatory, by what was in fact in contemplation by the party in fault. lie who is responsible for a negligent act must answer " for all the injurious results which flow therefrom, by ordinary natural sequence, without the interposition of any other negligent act or overpowering force. Whether the in- jurious consequences may have been ' reasonably expected ' to have followed from the commission of the act is not at all de- terminative of the liability of the person who committed the act to respond to the person suffering therefrom. Such reason- able expectation bears more clearly upon the intent with which the act was committed than upon the liability of the doer for the injurious consequences. If he might reasonably have ex- pected that the injurious consequences which did flow from the iict would flow from its commission, the prima facie legal pre- sumption would be that he intended the consequences, and the action should be trespass rather than case. It is the unex- pected rather than the expected that happens in the great ma- jority of the cases of negligence." ' Mr. Wharton sa3^s that a man may be negligent in a particular matter "a thousand times without mischief; yet, though the chance of mischief is only one to a thousand, we would continue to hold that the mischief, when it occurs, is imjiutable to the negligence. Hence it has been properly held that it is no defense that a particular injurious consequence is 'improbable,' and 'not to be reason- ably expected,' if it really appear that it naturally followed from the negligence under examination." - Continuing, the 1 Stevens v. Dudley, 56 Vt. 158, 166. what a prudent man might reason- " When negligence is established it ably have anticipated, but when neg- im poses liability for all the injurious ligence is once established, that con- consequences that flow therefrom, sideration is entirely immaterial on whatever they ai"e, until the inter- the question of how far that negli- vention of some diverting force that gence imposes liability." Isham v. makes the injury its own. or until Dow's Estate. 70 Vt. 588, 41 Atl. Eep. the force set in motion by the negli- 585, 67 Am. St. 691, 45 L. R. A. 87. gent act has so far spent itself as to Compare Renner v. Canfield. 36 be too small for the law's notice. Minn. 90, 30 N. W. Rep. 435. But in administering this rule care '^ Wharton on Neg.. § 77, referring must be taken to distinguish be- to Higgins v. Dewey, 107 Mass. 494, tween what is negligence and what 9 Am. Rep. 63; AVhite v. Ballou, 8 tlie liability for its injurious con.se- Allen, 408; Luce v. Dorchester Ins. quences. On the question of what is Co., 105 Mass. 297, 7 Am. Rep. 522; negligence, it is material to consider Lewis v. Smith, 107 Mass. 334, and 42 COMPENSATION. [§ 16- same author says : " Nor, when we scrutinize the cases in which the test of 'reasonable expectation ' is applied, do we find that the ' expectation ' spoken of is anything more than an expec- tation that some such disaster as that under investigation will occur on the long run from a series of such negligences as those with which the defendant is charged." ^ This doctrine is fully approved by the supreme court of Vermont,^ and is logically sustained by other recent adjudications in this country, some of which are cited in the preceding note; others will be re- ferred to in the pages devoted to this branch of the law of damages. The correct doctrine, as we conceive, is that if the act or neglect complained of was wrongful, and the injury sustained resulted in the natural order of cause and effect, the person, injured thereby is entitled to recover. There need not be in the mind of the individual whose act or omission has wrought the injury the least contemplation of the probable conse- quences of his conduct; he is responsible therefor because the result proximately follows his wrongful act or non-action. All several English cases. See, also, Ste- vens V. Dudley, 56 Vt. 158: Brown v, Chicago, etc. k Co., 54 Wis. 342, 11 N. W. Rep. 356, 911; Terre Haute & L E. Co. V. Buck, 96 Ind. 346, 49 Am. Rep. 168; Winkler v. St. Louis, etc. R. Co., 21 Mo. App. 99; Evans v. Same, 11 id. 463; Baltimore City P. R. V. Kemp, 61 Md. 74; Hoadley v. Northern Transp. Co., 115 Mass. 304, 15 Am. Rep. 106; Ehrgott v. Mayor, 96 N. Y. 264, 281, 48 Am. Rep. 623; Milwaukee, etc. R. Co. v. Kellogg, 94 U. S. 469; Wygant v. Crouse, 127 Mich. 158, 86 N. W. Rep. 527, 53 L. Pu A. 626. Where there was a fraudulent in- crease of the mortgage indebtedness of a corporation which had issued stock to the amount of $21,000,000 from $2,579,149 to $4,299,000 and the value of the stock was depreciated $6,580,000, it was held that such re- sult was not to have been expected. Rockefeller v. 3Ierritt, 22 C. C. A. 608, 76 Fed. Rep. 909, 35 L. R. A. 633. The test applied seems to indicate that the wrong-doer, even in a case of fraud, must anticipate, approxi- mately at least, the extent of the in- jury his act may do. Such a rule would add another large element of uncertainty as to what constitutes proximate cause. It ought to be enough to make the wrong-doer liable for all the financial loss result- ing from a fraudulent transaction if it appears that such loss, to any con- siderable extent, would be reason- ably sure to follow. The fact that the licensee of a barn which was torn down was obliged to sell his horses is not the natural and proximate result of the tortious act, but of his financial situation. Chand- ler V. Smith, 70 111. App. 658, citing the first edition of this work. i§78. 2 Stevens v. Dudley, 56 Vt. 158. §1G.J CONSEQUENTIAL DAMAGES FOR TOUTS. persons are imperatively required to foresee what will be the natural consequences of their acts and omissions according to the usual course of nature and the general experience. The lavrfulness of their acts and the degree of care required of them depend upon this foresight.^ An apt illustration of this principle is afforded by the rule of law which compels a per- son who is insane, unless his condition was caused by the un- lawful violence of the plaintiff,' to make recompense for his iWitham v. Cohen, 100 Ga. 670, 676, 28 S. E. Rep. 505, citing tlie text; Murtlock V. Walker, 43 III. App. 590; Chicago, etc. R. Co. v. Mochell, 96 id. 178; Coy v. Indianapolis Gas Co., 146 Ind. 655, 663, 46 N. E. Rep. 17, 36 L. R. A. 535, quoting the major portion of the section; Licking Rolling Mill Co. V. Fischer, 8 Ky. L. Rep. 89, 95 (Ky, Super. Ct.); Hughes v. Austin, 12 Tex. Civ. App. 178, 184-5, 38 S. W. Rep. 607, citing the text; Hardaker V. Idle District Council, [1896] 1 Q. B. 335; McHugh v. Schlosser, 159 Pa. 480, 28 Atl. Rep. 291, 39 Am. St. 699, 23 L. R. A. 574; McPeek v. Western U. Tel. Co., 107 Iowa, 356, 78 N. W. Rep. 63. 70 Am. St. 205. 43 L. R, A. 214; Bradshaw v. Frazier, 113 Iowa, 579, 85 N. W. Rep. 752, 55 L. R. A. 258; Wallin V. Eastern R. Co., 83 Minn. 149, 86 N. W. Rep. 76. See McGowan V. Chicago, etc. R. Co., 91 Wis. 147, 154, 64 N. W. Rep. 891. A person who places a man whom He has made helplessly drunk in charge of a horse is presumed to know that Injury may result, be- cause horses require management by persons who are possessed of mental and physical capacities. Dunlap v. Wagner, 85 Ind. 529, 44 Am. Rep. 42; Mead v. Stratton, 87 N. Y. 493, 41 Am. Rep. 386; Bertholf v. O'Reilly, 8 Hun, 16, 74 N. Y. 509, 30 Am. Rep. 323; Aldrich v. Sager, 9 Hun. 537; Mulcahey v. Givens, 115 Ind. 286, 17 N. E. Rep. 598; Brink v. Kansas City, etc. R. Co., 17 Mo. App. 177, 199. See Smith V. Bolles, 132 U. S. 125, 10 Sup. Ct. Rep. 39. A man who is engaged to be mar- ried and who is examined by a phy- sician employed by the father of his fiancee for the purpose of ascertain- ing whether he is diseased or not may maintain an action against the physician for a negligent diagnosis; the breaking of the marriage en- gagement is not too remote a dam- age. Harriott v. Plimpton, 166 Mass. 585, 44 N. E. Rep. 992. One who negligently causes a fire which endangers pi'operty is bound to know that the owner of the prop- erty may take means to preserve it, and if, in doing so, he is personally injured, without negligence on his part, may recover for his injury. Berg V. Great Northern R. Co., 70 Minn. 272, 73 N. W. Rep. 648, 68 Am. St. 524. A wife who endeavors to preserve her husband's property from a fire so set is not a mere volunteer, and the damage she sustains in so doing is not too remote to be recovered. Edwards v. Melbourne & M. Board of Works, 19 Vict. L. R. 432. This measure of liability may be limited by statute, as under the In- dian Depredation Act of 1891, which provided for the recovery of prop- erty "taken or destroyed;" claims for consequential damages were not recoverable. Price v. United States, 33 Ct. of Cls. 106. 2 Jenkins v. Hankins, 98 Tenn. 545, 557, 41 S. W. Rep. 1028. 44 COMPENSATION. [§ 16. torts. This is rested, it is true, on grounds of public policy;^ and the liability of all persons may be rested there as well as on the principles of natural justice. The injurj'^, however, must proceed from and be caused by the wrongful act of the defendant; but the causation is not to be tested metaphysically or by any occult principles of science, but rather as persons of ordinary intelligence apprehend cause and effect. The law is practical, and courts do not indulge refinements and subtleties as to causation if they tend to defeat the claims of natural justice. They rather adopt the practical rule that the efficient and predominating cause in producing a given effect or result, though subordinate and dependent causes may have operated, must be looked to in determining the rights and liabilities of the parties.^ Hence if the defendant's negligence greatly multiplied the chances of accident, and was of a character naturally leading to its occurrence, the possibility that it might have happened without such negligence is not sufficient to break the chain of cause and effect.^ An act of negligence will be regarded as the cause of an injury which results unless the consequences were so unnatural and unusual that they could not have been foreseen and prevented by the highest practicable care.'' It is competent for the legislature to change the rule of the common law, which looks only to the proximate cause of the mischief so far as legal responsibility is concerned, and allow a recovery to be had against those whose acts contributed, al- though remotely, to produce the wrong.^ This is the effect of statutes in several states making the vendor of intoxicants, who sells them contrary to the terms of the law, liable to any per- 1 Williams v. Hays, 143 N. Y. 442, Co.. 171 Mass. 536, 51 N. E. Rep. 1, 41 47 Am. St. 748, 38 N. E. Rep. 449, 36 L. R. A. 794. L. R. A. 153; Donaghy v. Brennan, 19 3 Reyuolds v. Texas & P. R. Co., 37 N. Z. L. R. 289; Mclntyre v. Sholty, La. Ann. 694; Windeler v. Rush 121 111. 600, 2 Am. St, 140, 13 N. E. County Fair Ass'n, 27 Ind. App. 92, Rep. 239; Krom v. Schoonmaker, 3 59 N. E. Rep. 209, 60 id. 954. Barb. 647; Behrens v. McKenzie, 23 * Louisville, etc. R. Co. v. Lucas, Iowa, 333, 92 Am. Dec. 428: Ward v. 119 Ind. 583, 21 N. E. Rep. 968, 6 L. R. Conatser, 4 Baxter, 04; Cross v. Kent, A. 193. 32 Md. 581; In re Heller, 3 Paige. 199. 5 Bertholf v. O'Reilley, 74 N. Y. 509, See § 394. 30 Am. Rep. 323; Beers v. Walhizer, 2 Baltimore & P. R. Co. v. Reaney, 43 Hun, 254; Homire v. Halfman, 42 Md. 117, 136; Stone V. Boston & A. R. 156 Ind. 470. 60 N. K Rep. 154. § 10.] CONSEQUENTIAL DAMAGES FOli TORTS. 45 son who shall sustain any injury or damage to person, prop- erty or means of support by reason of such violation. Such a statute includes both direct and consequential injuries and creates a right of action unknown to the common law.^ The rule is laid down in many cases that an action may be main- tained under similar statutes for loss of means of support, when occasioned in whole or in part by such sales. If the means of support are lessened, and this result can be traced to the sale of intoxicants, there is a right of recovery for such loss, as in case of lessened ability to labor, and loss of attention to business.- So, where sickness or insanity is the result of in- toxication,^ and wliere expenses are incurred for care and medical attention.^ Where the husband was robbed while in- toxicated the wife was allowed to sue.* And, so, where the husband spent his wife's money for drink.® And a mother was allowed to recover where her son overdrove her horse because he was intoxicated.'^ The mere spending by the husband of his own money, it has been said, will give a right of action by the wife.- And so a widow, dependent on her son, may maintain an action for the sale' of liquors to him if injury results to her means of support,'' and a father, if dependent.^" Where a husband became so crazed by liquor that he committed murder and was sent to the penitentiary, his wife had a cause of action against the person who sold the liquor to hira.^^ But if the statute does not give a wife an action for an injury to the person or property of her husband, she cannot recover because he has been impris- oned for a crime committed while under the influence of liquor unlawfully sold to him. His imprisonment is not the proxi- 1 Volans V. Owen, 74 N. Y. 528, 30 6 McEvoy v. Humphrey, 77 111. 388. Am. Rep. 337; Meade v. Stratton, 87 ^Bertholf v. O'Reilly, 8 Hun, 16. N. Y. 493, 41 Am. Rep. 386; Homire 8Quain v. Russell, 8 Hun, 319; Mul- V. Halfman, supra; Neu v. McKech- ford v. Clewell, supra; Woolheather nie, 95 N. Y. 633, 47 Am. Rep. 89. v. Risley, 38 Iowa, 486; Hackett \. 2 Wightman v. Devere, 33 Wis. 570; Smelsley, 77 111. 109. Hutchinson v. Hubbard, 21 Neb. 33, mcClay v. Worrall, 18 Neb. 44, 24 31 N. W. Rep. 245; Volans v. Owen, N. W. Rep. 429. supra; Schneider v. Hosier, 21 Ohio lo Stevens v. Cheney, 36 Hun, 1; St. 98. Volans v. Owen, Bertholf v. O'Reilly, 3 Mulford V. Clewell, 21 Ohio St. 191. supra. 4 Wightman v. Devere, supra. ii Homire v. Halfman, supra; Beers •'' Franklin v, Schermerhorn, 8 Hun, v. Walhizer, 43 Hun, 254 112. 46 COMPENSATION. [§ 17. mate consequence of the dealer's unlawful act, out is the act of the law, the direct result of the intervention of an independ- ent agency.^ The Pennsylvania act provides that any person furnishing liquor to another in violation of law shall be civilly responsible for any injury to person or property in consequence thereof, and that any person aggrieved may recover full dam- ages. This does not extend the common-law rule as to prox- imate cause, and there was no liabilitj'^ for the death of a man to whom liquors were sold while intoxicated where death re- sulted in an an attempt to evade arrest for violating the law after deceased left the place where the liquors were sold him.- Under a statute providing that if a person is injured in his person or property by collision with the engines or cars of a railroad corporation at a crossing, and it appears that the cor- poration neglected to give the signals required, and that such neglect contributed to the injury, the corporation shall be lia- ble for all damages caused by the collision, unless the person injured, etc., was guilty of gross or wilful negligence, the lia- bility of the company does not depend upon whether its neg- ligence was the proximate or efficient cause of the injury.'' §17. Illustrations of the doctrine of the preceding sec- tion. It is a misfeasance to go through a militia drill in the public squares and business resorts of towns or villages; the officer under whose command it is done is responsible for con- sequential damages; if a team hitched to a wagon and stand- ing in the usual place takes fright at the exercises, the dis- charge of small arms, and the " pomp and circumstance " of mimic war, and runs away, and one of the horses is thereby killed, the officer is responsible for its value.* This case is a fair exemplification of the rule under consideration. Drilling the militia was lawful, but doing it in an improper manner or in an unsuitable place was a legal wrong to any person who in consequence thereof received injury. In ordering it to take place in a public square, the officer may not have considered 1 Bradford v. Boley, 167 Pa. 506, 31 105, 25 S. K Rep. 76, 58 Am. St. 870, 33 Atl. Rep. 751, disapproving Beers v. L. R. A. 191; Chattanooga Rapid Walhizer, supra. Transit Co. v. Walton, 105 Tenn. 415, 2 Roach V. Kelly, 194 Pa. 24, 44 Atl. 58 S. W. Rep. 737. Rep. 1090, 75 Am. St. 685. ■* Childress v. Yourie, Meigs. 561 ; 3 Wragge v. Railroad Co., 47 S. C. Forney v. Geldmacher, 75 Mo. 113. § IT.] CONSEQUENTIAL DAMAGES FOR TORTS. 47 the effect of frightening horses, but such an effect was natural ; horses have to be trained to witness such a spectacle witliout being frightened; tliey were to be expected where the drill was appointed to take place, and if one or a team, with or without a driver or attendant, got frightened, it would natu- rally run away, and in running away the usual collisions and casualties might occur. The officer who gave the command was bound to consider all these probabilities. Giving the com- mand, w^hich no subordinate could decline to obey, made the drill at the place appointed the act of the officer, whether he was present or not; the frightening of the horses which en- sued was probable from their known characteristics, and from their being where horses were likely to be; their break- [22] ing loose and running off in a state of fright, wnth or without a driver, made the usual collisions and casualties a natural se- quence. Here were a series of acts so concatenated that the final damage from killing a horse was a result Avhich the ofii- cer was bound to consider as likely to ensue; all the effects of the drill were an entirety, and therefore proceeded naturally and proximately from his act. In a Massachusetts case this subject was well illustrated and explained. By careless driving the defendant's sled was caused to strike against the sleigh of one Baker with such violence as to break it in pieces, throwing Baker out, frighten- ing his horse, and causing the animal to escape from the con- trol of his driver, and to run violently along Fremont street, round a corner near by into Eliot street, where he ran over the plaintiff and his sleigh, breaking that in pieces and dash- ing him on the ground. " Upon this statement," says Fos- ter, J,, delivering the opinion, "indisputably the defendant would be liable for the injuries received by Baker and his horse and sleigh. Why is he not also responsible for the mis- chief done by Baker's horse in its flight? If he had struck that animal with his whip, and so made it run away, would he not be liable for an injury like the present? By the fault and direct agency of his servant the defendant started the horse in uncontrollable flight through the streets. As a natural conse- quence it was obviously probable that the animal might run over and injure persons traveling in the vicinity. Every one <5an plainly see that the accident to the plaintiff" was one very 48 COMPENSATION. [§ 17. likely to ensue from the careless act. We are not, therefore, dealing with remote or unexpected consequences, not easily foreseen, nor ordinarily unlikely to occur; and the plaintiff's case falls clearly within the rule already stated as to the lia- bilit}^ of one guilty of negligence for the consequential dam- ages resulting therefrom. . . . Here the defendant is al- leged to have been guilty of culpable negligence. And his liability depends, not upon any contract or statute obligation, but upon the duty of due care which every man owes to the community, expressed by the maxim sic utere tuo ut alienum [23] non Icsdas. Where a right or duty is created wholly by contract it can only be enforced between the contracting par- ties. But where the defendant has violated a law it seems, just and reasonable that he should be held liable to every per- son injured, whose injury is the natural and probable conse- quence of the misconduct. In our opinion this is the well established and ancient doctrine of the common law; and such a liability extends to consequential injuries by whomsoever sustained, so long as they are of a character likely to follow and which might reasonably have been anticipated as the natural and probable result under ordinary circumstances of the wrongful act. The damage is not too remote if, according- to the usual experience of mankind, the result was to be ex- pected. This is not an impracticable or unlimited sphere of accountability extending indefinitely to all possible contingent consequences. An action can be maintained only where there is shown to be, first, a misfeasance or negligence in some par- ticular as to which there was a duty towards the party injured or the community generally; and secondly, where it is ap- parent that the harm to the person or property of another which has actually ensued was reasonably likely to ensue from the act or omission complained of. . . . It is clear from numerous authorities that the mere circumstance that there have intervened between the wrongful cause and the in- jurious consequence acts produced by the volition of animals or of human beings does not necessarily make the result so re- mote that no action can be maintained. The test is to be found, not in the number of intervening events or agents, but in their character and in the natural and probable connection between the wrong done and the injurious consequence. So § 18.] CONSEQUENTIAL DAMAGES FOE TORTS. 49 long as it affirmatively appears that the mischief is attribu- table to the negligence as a result which might reasonably have been foreseen as probable the legal liability continues. There can be no doubt that the negligent management of horses in the public street of a city is so far a culpable act that any party injured thereby is entitled to redress. Whoever drives a horse in a thoroughfare owes the duty of due care to the community or to all persons whom his negligence [24] may expose to injury. Nor is it open to question that the master in such a case is responsible for the misconduct of his servant.'" § 18. Further illustrations. Where a teamster's wagon, while being loaded at a depot, was injured by a train of cars, it was held he was entitled to recover for damage done thereto, for the loss of the trip in which he was engaged and for the loss of the use of the wagon until it could be repaired.^ A similar measure is applied in cases of collision of boats; a rea- sonable sum for the damage the injured boat has received ; the expense of raising it, if sunk, and of repairing it, and compen- sation for the loss of the use during the time it is being refitted, with interest on such items.* In an action of trespass by for- cibly invading a plantation, carrying off some slaves and frightening others away, it was held proper for the plaintiff to give in evidence the consequential damages which resulted to his wood and crops — to the former for want of the assistance of the slaves to preserve it from a subsequent flood, and to the latter to protect them against animals.^ The wrong included leaving a plantation Avith growing crops and other property ' McDonald v. Snelling, 14 Allen, - Shelby ville, etc. R. Co. v. Lewark, 292; Weick v. Lander, 75 111. 93; 4 Ind. 471. Clowdis V. Fresno Flume & Irriga- * Mailler v. Express Propeller Line, tion Co., 118 Cal. 315, 63 Am. St. 238, 61 N. Y. 313; Brown v. Beatty, 35 Up. 50 Pac. Rep. 373; Clark v. Chambers, Can. Q. B. 338; Steamboat Co. v. 3 Q. B. Div. 337, 7 Cent. L. J. 11. Whilldin, 4 Harr. 238; New Haven. In the last case defendant was etc. Co. v. Vanderbilt, 16 Conn. 420; held liable for an injury caused by a Williamson v. Barrett, 13 How. 101. dangerous thing put by him in a See ch. 39. carriage way, although it was after- ^ McAfee v. Crofford, 13 How. 447; wards removed to a footpath by a Hobbs v. Davis, 30 Ga. 423; Johnson third person, and was there when v. Courts, 3 Har. & McHen. 510; the plaintiff was injured. Crane v. Patton, 57 Ark. 340, 346, 21 S. W. Rep. 466. Vol I — 4 60 COMPENSATION. [§ 18. exposed to injury from any cause which might arise; there being no force of kiborers to meet any exigency, the wrong- doer was bound to take notice at his peril of any exposure to injury thus created by flood, marauding cattle or otherwise; whether an action would lie against the owner of trespassing cattle or not for the damage done by them was held immate- rial.' The owner of sheep which had a contagious disease suffered them to trespass on another's land and to mingle with his sheep, to which the disease was communicated, causing the death of many of the latter. He was held liable for the breach of the close, also for the loss of the sheep that so died.^ A [25] railroad company's servant left bars down between the plaintiff's field and the railroad track; horses escaped through the opening to the railroad and were killed by the engine; the company was held liable.' Plaintiff's horses escaped into the defendant's close by reason of the latter not keeping his fence in repair, and were there killed by the falling of a hay stack; he was held responsible.* The defendant's cow escaped from his enclosure without fault on his part, passed to the plaintiff's premises and entered his barn; her weight broke the sleepers and floor at a point over a cistern and she fell into it. Soon after this the plaintiff went to his barn and fell into the cistern through the hole made by the cow. It was conceded that the defendant was liable for the trespass by the cow,^ but the dam- ages resulting to the plaintiff from his fall were too remote.® The proximate cause of a personal injury produced by the run- ning away of a horse which left a race track through an open- 1 Where a dog went onto plaintiff's Rep. 982, affirmed, sub nom. Grayson land and barked at his horse grazing v. Lynch, 163 U. S. 468, 16 Sup. Ct. in an enclosed field, and the horse Rep. 1064. ran. tried to leap a fence, and fell » White v. McNett, 33 N. Y. 371; and broke its neck, the owner of the Henly v. Neal 2 Humph. 551. dog was liable. Doyle v. Vance, 6 * Powell v. Salisbury. 2 Y.& J. 391; Vict. L. R. (law) 87. Gilbertson v. Richardson, 5 C. B. 502; 2 Baruum v. Vandusen, 16 Conn. Lawrence v. Jenkins, L. R. 8 Q. B. 200; Fultz V. Wycoff, 25 Ind. 331. See 274; Couch v. Steel, 3 El. & B. 402; Gilman v. Noyes, 57 N. H. 627. See, Lee v. Riley, 18 C. B. (N. S.) 722. as to liability under the act of con- & Dickson v. McCoy, 39 N. Y. 400, gress of 1884, 23 Stats. 31, Croff v. « Hollenbeck v. Johnson, 79 Hun, Cresse, 7 Okl. 408, 54 Pac. Rep. 558; 499, 29 N. Y. Supp. 945. Lynch v. Grayson, 5 N. M. 487. 25 Pac. I 18.] CONSEQUENTIAL DAMAGES FOR TORTS. 51 ing in the fence surroimding the same, is not the running away of the horse but the opening.' The lessee of a wharf was guilty of negligence in not keep- ing it in repair; he suffered the railing to become dilapidated, and in consequence a horse backed into the river with a wagon, and both were lost. This loss was held to be the natural and proximate effect of the negligence.^ A gas company, having contracted to supply plaintiff with a service pipe from its main to the meter on his premises, laid a defective pipe from which the gas escaped. A workman, in the employ of a gas-fitter engaged by the plaintiff to lay pipes leading from the meter over his premises, negligently took a lighted candle for the purpose of finding out where the gas escaped. An explosion took place damaging the plaintiff's premises; he brought an action against the gas company and it was held that the dam- ao^es were not too remote.^ The failure of a natural-ijas com- pany to supply gas to a consumer in accordance with its con- tract is a tort, the agreement being a mere statement of the reasonable conditions under which the company's duty was to be performed. If there is a failure to supply gas during cold winter weather and the company has been notified of its cus- tomer's inability to procure fuel elsewhere, and of the sickness of his children, and as a result of such failure the sick children take a relapse and die, the company is responsible for their death.* In consequence of the negligence of a contractor for a public body in constructing a sewer a gas main was broken, and the gas escaped from it by percolation into the plaintiffs' house, and an explosion followed which injured one of them 1 Windeler v. Rush County Fair sale of plants injured by escaping Ass'n, 27 Ind. App, 92, 97, 59 N. E. gas and which were sold as sound. Rep. 209, 60 id. 954. but were not, is too remote. Dow v. 2 Radway v. Briggs, 37 N. Y. 256, Winnipesaukee Gas & Electric Co., 35 How. Pr. 422. 69 N. H. 312, 41 Atl. Rep. 288, 42 L. 3 Burrows v. March Gas Co.. 39 L. R. A. 569. J. (Ex.) 33, L. R. 5 Ex. 67; Lannen v. ^ Coy v. Indianapolis Gas Co., 146 Albany Gas L. Co., 44 N. Y. 459; Louis- Ind. 655, 46 N. E. Rep. 17, 36 L. R. A. ville Gas Co. v. Gutenkuntz, 82 Ky. 535; Hoehle v. Allegheny Heating 432; Koelsch v. Philadelphia Co., 152 Co., 5 Pa. Super. Ct. 21. In the latter Pa. 355, 25 Atl. Rep. 522, 34 Am. St. case the defendant had no knowl- 653, 18 L. R. A. 759. edge of the illness of the person who The injury resulting to the busi- died, ness reputation of a florist from the 52 COMPENSATION. [§ 18. and damaged the furniture of the other. The damaf^es were not too remote, and the contractor's negligence was that of the public body because he failed to do what it was its duty to do.^ A railroad company by wrongfully excavating in a public street destroyed the lateral support of the soil to the foundation of a house, and thereby plaintiff's adjoining house, depending on the other for support, was injured; it was held that the company was liable for the injury.^ By the weight of authority a person who negligently sets a fire is not only liable for the first building consumed, but for all subsequently destroyed by the same continuous conflagration, without re- gard to the distance the fire runs or the time it is in progress.^ In Kew York the liability is much more restricted on the ground that the loss of the first building which is negligently set on fire was to be anticipated ; its destruction was the ordi- nary and natural result of its being fired. But this does not hold good as to subsequent buildings or other property which became ignited from the first building; that the fire should spread and other buildings be consumed is not a necessary or the usual result. That result depends, not upon any necessity of a further communication of the fire, but upon a concurrence of accidental circumstances, such as the degree of the heat, the state of the atmosphere, the condition and materials of the ad- joining structures, and the direction of the wind. These are said to be accidental and varying circumstances over which the party responsible for the loss of the first building has no 1 Hardaker v. Idle District Council, Rep. 63; Pennsylvania R Co. v. Hope, [1896] 1 Q. B. 335. 80 Pa. 373. 21 Am. Rep. 100; St. Jo- 2 Baltimore, etc. R. Co. v. Reaney, seph, etc. R Co. v. Chase, 11 Kan. 47; 42 Md. 118. Atchison, etc. R. Co. v. Stanford, 12 3 Atkinson v. Goodrich Transpor- Kan. 354, 15 Am. Rep. 362; Atchison, tation Co., 60 Wis. 141, 50 Am. Rep. etc. R. Co. v. Bales, 16 Kan. 252; 352, 18 N. W. Rep 764; Adams v. Dougherty v. Smith, 5 N. Z. (Supreme Young, 44 Ohio St. 80, 4 N. E. Rep. Ct.) 374; Chicago & E. R. Co. v. Lud- 599; Small v. C, R. I. & P. R. Co., 55 dington. 10 Ind. App. 636, 38 N. E. Iowa, 582, 7 N. W. Rep. 398; Kellogg Rep. 342; Chicago, etc. R. Co. v, Will- V. Chicago, etc. R. Co., 26 Wis. 223, iams, 131 Ind. 30, 30 N. E. Rep. 596; 7 Am. Rep. 69; Hart v. Western R. Louisville, etc. R. Co. v. Nitsche, 126 Co., 13 Met. 99; Milwaukee, etc. R. Ind. 229, 26 N. E. Rep. 51, 9 L. R. A. Co. v. Kellogg, 94 U. S. 469; Perley 750; Wyant v. Crouse, 127 Mich. 158, V. Eastern R. Co., 98 Mass. 414; Hig- 86 N. W. Rep. 527, 53 L. R. A. 626. gins v. Dewey, 107 Mass. 494, 9 Am. § 18.] CONSEQUENTIAL DAMAGES FOR TORTS. 53 control, and is not liable for their effects.' The same rule has been applied where two buildings owned by one person were burned — the recovery was limited to the one to which the fire was directly carried from the engine.^ The same rule applies to fires on woodlands as to fires in villages or cities.' This restriction seems very arbitrary, and to be out of harmony with the general principle of the law governing proximate cause. It has not become the rule in New York without vigorous dissent from individual members of the court of ap- peals, extending to the latest case cited. The burning of property is not the natural and proximate result of an engineer running a train of oil-tanks into a mass of earth which had come on the track as a result of a landslide, the obstruction being unexpected and an engine having passed over a clear track only ten minutes before the accident. He was not bound to anticipate the bursting of the tanks, the taking fire of the oil, the burning oil being carried down the stream into which the tanks rolled, the sudden rise of the water, and the setting fire of property on the bank of the stream.* The fall of a negligently constructed tower, the overturning of a lighted lamp and the consequent death of a person are the proximate result of the negligent construction.^ The maintenance of a culvert in a condition to hold a large pool of water in close proximity to the street and sidewalk is the cause of the death of a child who falls therein while playing along the edge thereof.^ The negligent operation of a defect- ive locomotive which emits sparks is the proximate cause of the death of an infant asleep in the house of its parents when the fire occurs from such sparks.^ If a train is stopped on a mountain side, and the engineer leaves his engine, and during 1 Ryan v. New York Central R. Co., 55 N. E. Rep. 401, 73 Am. St. 715, 46 35 N. Y. 210, 91 Am. Dec. 49: Webb v. L. R. A. 672. Rome & O. R. Co., 49 N. Y. 420, 10 Am. 4 Hoag v. Lake Shore, etc. R. Co., Rep. 389. See Lowery v. Manhattan 85 Pa. 293, 27 Am. Rep. 653. R. Co., 99 N. Y. 158, 1 N. E. Rep. ^Rigdon v. Temple Water- works 608. Co., 11 Tex. Civ. App. 542, 32 S. W. 2Frace v. New York. etc. R. Co., Rep. 828. 143 N. Y. 182, 88 N. E. Rep. 102; Read «Elwood v. Addison, 26 Ind. App. V. Nichols, 118 N. Y. 224, 23 N. E. 28,59 N. E. Rep. 47. Rep. 468, 7 L. R. A. 130. ^ Gulf, etc. R. Co. v. Johnson, 51 3 Hoffman v. King. 160 N. Y. 618, S. W. Rep. 531 (Tex. Civ. App.). 54 COMPENSATION. [§ 19, bis absence the fireman, accidentally or otherwise, sets the engine in motion and the train moves downward, the violation of the rules of the company by the engineer will authorize a finding that his act was the proximate cause of the injury to the conductor, who was thrown off the train.^ [26] § 19. Further illustrations. The owner of a horse and cart who leaves them unattended in a public street is lia- ble for any damage to children resorting there and meddling with either.^ The owner of a loaded gun, who puts it into the hands of a child, by whose indiscretion it is discharged, is lia- ble for the damage occasioned thereby.^ It is negligence for a dealer to sell, contrary to law, dangerous explosives to chil- dren. "When this is done with knowledge that the purchasers are not familiar with their use the vendor is held to know that the probable consequences will be injury to them or to their associates; and he is liable to the party injured although the injuries were the result of the natural conduct of a child who did not purchase the article which produced them.* But the mere fact that the law forbids the sale of fire-arms to a minor does not make the vendor liable for the consequences unless he knew that the purchaser was ignorant of their character, inexperienced in the use of them, or that there was something in his character or disposition which rendered it unsafe for him to have thera.-^ Leaving an iron truck with a hot iron casting upon it in a street where children are accustomed to go and in a condition to do injury by slight interference is negligence, which will be regarded as the proximate cause of any injury to a child which may result therefrom.*' The rule is the same when lumber is so carelessly piled on an unfenced lot abutting 1 Mexican National R. Co. v. Mus- ^Binford v. Johnston, 82 Ind. 426, sette, 86 Tex. 708, 24 L. R. A. 642, 26 S. 42 Am. Rep. 508. W. Rep. 1075, 7 Tex. Civ. App. 169, 5 Poland v. Earhart, 70 Iowa, 285, 24 S. W. Rep. 520. 30 N. W. Rep. 637; Meyer v. King, 73 2 Lynch v. Nurdin. 1 Q. B. 29; II- Miss. 1, 7, 16 So. Rep. 245, 35 L. R. lidge V. Goodwin, 5 C. & P. 190; A. 474, citing the text, and disapprov- Dickson v. McCoy, 39 N. Y. 400; ing a criticism of the Iowa case in Millsv.Bunke,59App.Div.39,69N.Y. 36 Am. St. 807,817. See Harris v. Supp. 96: Mahoney v. Dwyer, 84 Hun, Cameron, 81 Wis. 239, 29 Am. St. 891, 34, 32 N. Y. Supp. 346. 51 N. W. Rep. 437. 3 Dixon V. Bell, 5 M. & S. 198; Meers ^ Lane v. Atlantic Works, 107 Mass. V. McDowell, 23 Ky. L. Rep. 461, 62 104; Osake v. Larkin, 40 Kan. 206, 2 S. W. Rep. 1013, 53 L. R. A. 789. L. R. A. 56, 19 Pac. Rep. 65S; Mc- § 19.] CONSEQUENTIAL DAMAGES FOR TORTS. 55 upon a street as to fall upon children playing near it.^ The defendant's servant left a truci^ standing near a sidewalk in a public street, with the shafts shored up by a plank in the usual way. Another truckman temporarily left his loaded truck di- rectly opposite on the other side of the same street; after which a third person tried to drive his truck between those two. In attempting to do so with due care he hit the defendant's truck in such a manner as to whirl its shafts round on the side- walk so that they struck the phiintiff, who was walking by, and broke her leg. For this injury she was allowed to main- tain her action, the only fault imputable to the defendant be- ing the careless position in which the truck was left by his servant on the street. This was treated as the sole cause of the plaintiff's injury, and was deemed sufficiently proximate to render the defendant responsible.- He was liable for the act of his servant, for the latter was engaged in his master's work; it was nefflio^ence to leave the truck in the street when not in use ; it was considered that the driver of the truck, who was the immediate agent of the force which injured the plaint- iff, had a right to attempt to pass between the two trucks, if he conducted himself with due care, and exercised a sound dis- cretion in determining whether the attempt could be [27] made with safety to persons lawfully using the street. And as the jury found that in the exercise of such care, prudence and discretion he made the attempt which resulted in the in- jury sustained by the plaintiff, the defendant was liable inas- much as his truck was unlawfully in the street, and that should be regarded as the natural and proximate cause of the injury. The decision imports that a danger not apparent enough to deter the driver from attempting to pass the truck of the defendant could legally be apparent enough to render the injury proximate to the illegal use of the street by leaving the truck there. The jury may find that the injury was probable, although brought about by a new agency, when heavy articles left near Dowall V. Great Western R. Co., iBransom's Adm'r v. Labrot, 81 [1902] 1 K. B. 618; Travail v. Banner- Ky. 638. man, 71 App. Div. 439, 75 N. Y. Supp. '^ Powell v. Deveney, 3 Cush. 300, 866. 50 Am. Dec. 738. 56 COMPENSATION. [§ 19. an opening in the floor of an unfinished building or in the deck of a vessel were accidentally jostled so that they fell upon persons below.^ A man who negligently sets and keeps a fire on his own land is liable for any injury done by its direct communication to his neighbor's land, whether through the air or along the ground, and whether or not he might reasonably have antici- pated the particular manner and direction in which it was communicated."^ The defendants moored their boats in the channel and entrance to the locks at a dam across a river so that the boats of others were stopped outside and exposed to the current, then rapidly rising, until by its force such boats were carried over the dam and lost without any fault of the owners. It was held that the defendants negligently or wan- tonly caused this injury and were liable for it.* The plaintiff's boat had anchored at a wharf when the water was low. The river rose afterwards, covering certain piles of pig iron negli- gently left by the defendant on the wharf about a foot above low-water mark. To avoid these piles the boat was compelled to back out into the stream, where she was struck by some floating body, stove and sunk. The defendant was held liable for the loss of the boat.'* The defendant broke and entered the plaintiff's close adjacent to a river and carried away gravel from a bank, near to a dam across the river, in consequence of which a flood in the river three weeks afterward swept away a portion of the close and a cider mill. It was held that the [28] whole damage might be recovered.^ A harbor company which had been in the habit of keeping a light on the end of one of its piers to enable vessels to safely enter the harbor at night discontinued the light without public notice. A vessel was afterwards lost in attempting to enter in the absence of the light. It was held that the harbor company was liable for iMcCauley v. Norcross. 155 Mass. Hesters, 90 Ga. 11, 15 S. E. Rep. 828. 584, 30 N. E. Rep. 464; The Joseph B. See ^ 18. Thomas, 81 Fed. Rep. 578, 30 C. C. A. 3 gcott v. Hunter, 46 Pa. 193. 33, 46 L. R. A. 58. * Pittsburgh v. Grier, 22 Pa. 54, 60 - Higgins V. Dewey, 107 Mass. 494, Am. Dec. 65. 9 Am. Rep. 63; Martin v. New York, 5 Dickinson v. Boyle, 17 Pick, 78, 28 etc. R. Co., 63 Conn. 331, 25 All. Rep. Am. Dec. 281 239; East Tennessee, etc. R. Co. v. § 19.] CONSEQUENTIAL DAMAGES FOR TORTS. 57 the value of the vessel lost and also for certain moneys ex- pended in good faith, with a reasonable expectation of success, m attempting to raise her.' One who maliciously causes the arrest of an engineer while he is engaged in running a train is liable to his employer for the damage resulting from the delay.^ It cannot be affirmed that it is not the natural and reason- able consequence of the sale of liquors to an intoxicated per- son between whose home and the place where the sale is made there are railroad tracks that such person should in a dark night meet with injury or death from a train of cars.* If weeds or brush are allowed to grow upon the right of way of a railroad company to such a height as to obstruct the view of a highway crossing and animals are injured by a train the company will be liable;'' and so if cattle concealed in such weeds or brush cause the wrecking of a train and the injury of a person thereon.^ If the unlawful speed of a train upon station grounds stampedes animals at large there and they run upon the track, either by breaking down fences or otherwise, •and are killed by the negligent running of the train, such speed is the direct cause of the killing.^ It is not the natural con- sequence of the intoxication of a man to whom liquors are sold in violation of law that his wife, while following him in the street for the purpose of ascertaining where he procures liquor, shall fall and injure herself, and the seller is not liable for such in jury.'' The neglect to fence a railroad and track is not the proximate cause of an injury to an animal sustained by putting its foot into a small hole while running along the track; such an occurrence is so unusual as not to be expected by a reasonable man.^ There is no connection between the failure of a railroad company to provide separate accommoda- tions for white and colored passengers, where that is required, and an assault made upon one of the latter, by a fellow pas- 1 Sweeney v. Port Burwell Harbor s Eames v. T. & N. O, E, Co., 63 Tex. Co.. 17 Up. Can. C. P. 574. 660. ^St. Johnsbury, etc. R. Co. v. Hunt, '''Story v. Chicago, etc. R. Co., 79 55 Vt. 570, 45 Am. Rep. 639. Iowa, 402, 44 N. W. Rep. 690. '■^Schroeder v. Crawford, 94 111. "^Johnson v. Drummond, 16 IlL 357. App. 641. * Indianapolis, etc. R. Co. v. Smith, « Nelson v. Chicago, etc. R. Co., 30 .78 111. 112. Minn. 74, 14 N. W. Rep. 360. 58 COMPENSATION, [§ 20.- senger, without the knowledge or consent of the company's- servants, after the removal of the passenger assaulted from the ladies' car to a smoking car;^ nor between the act of a mort gagee who takes possession of property under his mortgage before default and injury to crops because a mule needed to work them was taken ;2 nor between threats made to arrest a debtor and a miscarriage b}'^ his Avife, no physical violence being used;^ nor between a like result and the false imprison- ment of a husband;* nor as a result of the wrongful finding of an indictment against him.-^ One who invites a person to drink liquor with him is not responsible for an assault made by the person who accepts such invitation upon a third indi- vidual, although the liquor so drank made him intoxicated,® § 20. Consequential damages under fence statutes. When a new right is conferred by statute and a corresponding duty is thereby enjoined, the liability of the defaulting party to the- other is confined to the limits prescribed by the statute. Hence, when a statute concerning division fences provides that the party who shall neglect to maintain such fences shall be liable to the party injured by his default for " such damages as shall accrue to his lands, crops, fruit-trees, shrubbery and fixtures," there is no liability for injuries which may be sustained by animals while trespassing on the lands of the party who has failed to maintain his fence.^ It has been attempted, in order to restrict the liability of railroad companies for neglect to fence their tracks, to apply this principle. The duty is for the protection of the public as well as for the benefit of persons who stand in other relations to the party upon whom it is en- joined, and the neglect of the duty entitles the party who is- thereby injured to all the relief due him in either or both re- lations.^ But this view is not accepted in some jurisdictions, or at least the strict construction given such statutes is not in harmony with it, though the question in the aspect stated is * Royston V. Illinois Central R. Co., sjjampton v. Jones, 58 Iowa, 317, 67 Miss. 376, 7 So. Rep. 320. 12 N. W. Rep. 276. 2 Jackson v. Hall, 84 N. C. 489. eswinfin v. Lowry, 37 Minn. 345, sWulstein v. Mohlman, 57 N. Y. 34 N. W. Rep. 22. Super. Ct. 50, 5 N. Y. Supp. 569. ^Crandall v. Eldridge, 46 Hun, 411. * Ellis V. Cleveland, 55 Vt. 358; 8 Graham v. President, etc., 46 Hun^ Huxley v. Berg, 1 Starkie, 98. 386; Crandall v. Eldridge, id. 411. § 20.] CONSEQUENTIAL DAMAGES FOE TORTS. 59 not considered. Under a statute requiring railroad companies to fence and declaring them liable for all damages resulting from their neglect to do so which may be done by their " agents, engines or cars," liability does not extend to consequential in- juries to an animal which gets upon the track by reason of the failure to fence, as wh6re it is injured, after being frightened by an approaching train, either b}'- jumping a cattle-guard or by coming in contact with a wire fence, or both, no wilful misconduct being charged against the train-men.' The injuries contemplated by such language are only those which result from a direct or actual collision of the engines or cars with the animal injured.^ The same conclusion has been reached from language which imposed liability if animals "shall be killed or injured by the cars, or locomotive, or other carriages," ' Where it is provided that railroad companies shall be liable for animals killed or injured by their negligence, and that a " failure to build and maintain fences shall be deemed an act of negligence," such a construction as was given in the above cases is unwarranted.'* Under a statute which provides that on neglect to fence the road the company shall be liable for all damages sustained by any person in consequence, damages may be recovered for injury done to a farm by rendering it less fit for pasturage because of such neglect.^ The same lia- bility has been declared to exist under a statute which employs the words "shall be liable for all damages which shall be done by their agents or engines to cattle, horses or other animals; "^ ^Schertz v. Indianapolis, etc. R. struck by the train ; both were killed. Co., 107 111. 577; Knight v. New York, A recovery was allowed for but one. etc. R Co., 99 N. Y. 25, 1 N. E. Rep. The construction given the Mis- 108, reversing 30 Hun, 415, dis- souri statute is forcibly criticised in tinguished in Leggett v. Rome, etc. 25 Am. L. Rev. 114, 264. R. Co., 41 Hun, 80. * Nelson v. Chicago, etc. R. Co., 30 2 Ibid.; LaflFerty v. Hannibal, etc. Minn. 74, 14 N. W. Rep. 360. R Co., 44 Mo. 291; Foster v. St. Louis, ^ Emmons v. Minneapolis, etc. R. etc. R Co., 90 Mo. 116, 2 S. W. Rep. Co., 35 Mmn. 503, 29 N. W. Rep. 202; 138, and other Missouri cases cited Nelson v. Same, 41 Minn. 131, 42 N. therein. W. Rep. 788. 3 Peru & I. R Co. v. Hasket. 10 Ind. « Leggett v. Rome. etc. R Co., 41 409, 71 Am. Dec. 335; Jeflfersonville, Hun, 80. It is doubtful whether etc. R. Co. V. Downey, 61 Ind. 287. this case is in harmonj' with Knight In the last case one of two ani- v. New York, etc. R Co., 99 N. Y. 25, mals, which were tied together, was 1 N. E. Rep. 108. 60 COMPENSATIOX. [§21. and under that statute a railroad company has been held liable where a horse fell into a cut raade by the company along a pasture, which cut was not fenced.^ § 21. Nervous shock without impact; the Coultas case and American eases in liarmony with it. In 1888 the ques- tion whether damages for a nervous shock or injury caused by the defendant's negligence in permitting the plaintiff to cross its track when it was dangerous to do so, and its servant had knowledge of the danger, came before the English privy coun- cil on appeal from the supreme court of Victoria. The latter court was of the opinion that the damages were not tooremote.'- Its judgment was reversed, and the rule declared to be that damages arising from mere sudden terror, unaccompanied by actual ph3^sical injury, cannot be considered a consequence which, in the ordinary course of things, would flow from such nealiirence.^ The court observed that it was remarkable that 1 Graham v. President, etc., 46 Hun, 386. 2 Coultas V. Victorian Ry. Commis- sioners. 12 Vict. L. R, 895. "Victorian Ry. Commissioners v. Coultas, 13 App. Cas. 222. The facts are stated in the next section. The doctrine of the Coultas case, though repeatedly dissented from in England (see § 23a) and denied in Ireland, has been declared by several American courts. Braun v. Craven, 175 111. 401, 51 N. E. Rep. 657, 42 L. R. A. 199, afBrming Craven v. Braun, 73 III. App. 401; Mitchell v. Roches- ter R. Co., 151 N. Y. 101, 45 N. E. Rep. 354, 34 L. R. A. 781, 56 Am. St. 604, reversing 77 Hun, 607; Gulf. etc. R. Co. V. Trott, 86 Tex. 412. 25 S. W. Rep. 419, 40 Am. St. 866; San Anto- nio, etc. R. Co. V. Corley,87 Tex. 432. 29 S, W. Rep. 231 (see ^ 24 for Texas cases allowing recovery, under some circumstances, for nervous injury); Gatzow v. Buening, 106 Wis. 1, 20, 81 N. W. Rep. 1003, 49 L. R A. 475, 80 Am. St. 17; Denver, etc. R. Co. v. Roller, 41 C. C. A. 22, 100 Fed. Rep. 738, 49 L. R. A. 77; Spade v. Lynn & B. R. Co., 172 Mass. 488, 52 N. E. Rep. 747, 70 Am. St. 298, 168 Mass. 285, 47 N. E. Rep. 88, 60 Am. St. 393, 38 L. R. A. 512; Evring v. Pittsburgh, etc. R. Co.. 147 Pa. 40. 23 Atl. Rep. 340, 14 L. R. A. 666. 30 Am. St. 709; Wyraan V. Leavitt, 71 Me. 227; Haile v. Texas & P. R. Co., 60 Fed. Rep. 557, 9 C. C. A. 134, 23 L. R A. 774; Kalen v. Terre Haute & I. R. Co., 18 Ind. App. 202, 47 N. E. Rep. 694; Gaskins v. Runkle, 25 Ind. App. 548. 58 N. E. Rep. 740: Lee v. Burlington, 113 Iowa, 356, 85 N. W. Rep. 618, 86 Am, St. 379: Nelson v. Crawford. 123 Mich. 466, 80 Am. St. 577, 81 N. W. Rep. 335; Johnson v. Wells, Fargo & Co., 6 Nev. 224, 3 Am. Rep. 245; At- chison, etc. R, Co. V. McGinnis, 46 Kan. 109, 26 Pac. Rep. 453; St. Louis, etc. R. Co. V. Bragg, 69 Ark. 402, 64 S. W. Rep. 226, 86 Am. St. 206. And is recognized as binding in Ontario (Henderson v. Canada Atlantic R. Co., 25 Ont. App. 437), as it doubtless is in all the other British colonies. It has been said of it in New South Wales that it is binding there, "and when we are called upon to decide a 21.] CONSEQUENTIAL DAMAGES FOR TORTS. 61 no precedent was cited of a similar action having been main- tained or even instituted.^ It has since come to the knowl- edge of the legal world that such an action had been main- tained before that time. In 1890 substantially the same case in whicli the facts are identi- cal, we sliall be compelled to follow it. But I," said the chief justice, "do not feel inclined to extend the principle of the decision in any way." Rea V. Balmain New Ferry Co., 17 N. S. W. (law) 92. See Pelmothe v. Phillips, 20 id. 61, and 1 Beven on Neg. (2d ed.), p. 76 et seq. The American cases which deny redress for nervous shock and its re- sults do not all rest upon the same ground, though most of them take the view that the damages are too remote. It is said in Massachusetts: "The logical vindication of this rule is, that it is unreasonable to hold persons who are merely negligent bound to anticipate and guard against friglit and the consequences of fi'ight; and that this would open a wide door for unjust claims, which could not successfully be met." The rule is thus limited there: "It is hardly necessary to add that this de- cision does not reach those classes of actions where an intention to cause mental distress or to hurt the feel- ings is shown, or is reasonably to be inferred, as, for example, in cases of seduction, slander, malicious prose- cution, or arrest, and some others. Nor do we include cases of acts done with gross carelessness or reckless- ness, showing utter indifference to such consequences, when they must have been on the actor's mind." Spade V. Lynn & B. R. Co., 168 Mass. 28.-), 47 N. E. Rep. 88, 60 Am. St. 393, 38 L. R. A. 512. See Homans v. Boston E. R. Co., 180 Mass. 4.-36, 57 L. R. A. 291, 62 N. E. Rep. 737, stated in last paragraph of § 22. In a Wisconsin case the rule was applied under conditions which make it particularly noticeable, and lead to some doubt as to wliether the decision is right if damages for nervous shock are recoverable at all. A combination of liverymen was formed to limit their services to per- sons patronizing them exclusively and to monopolize the livery busi- ness in Milwaukee, including service for funerals. Such combination, the court held, was unlawful, and any member of it who acted in accord- ance with the regulations was lia- ble for compensatory damages to a person specially injured by an overt act. A member of such association let a hearse and carriage to the plaintiff" for the funeral of his child, but, upon learning that the person in charge was an undertaker and liveryman doing an independent business, joined with the association in sending the vehicles away from the plaintiff's house just as they were about to be used. Here, then, is an unlawful combination, doing or causing the doing of an act wilfully, with knowledge that the natural re- sult will be to cause plaintiff' mental distress or nervous shock. It is said in the opinion: "There was no phy- sical injury to plaintiff, and no per- sonal injury to him of any kind save to his feelings. The case does not fall within the few exceptions to the rule, — which prevails in this state and in most jurisdictions, — that men- tal disti-ess alone is too remote and difficult of measurement to be the subject of an assessment of dam- ages. The true idea is that, under 1 But see y 23. <)2 COMPENSATION. [§21. question came, for tlie second time, before the courts of Ire- land, and they reached a conclusion squarely opposite to that arrived at by the privy council, and one which is supported by better reasoning and is more in harmony with justice. The the general principle applicable to tort actions that recoverable dam- ages are limited to such as are the natural and proximate result of the act complained of, some physical in- jury is necessary to a definite causal connection between the wrongful act and the mental condition, to ren- der the former, in a legal sense, tlie cause of the latter, and such condi- tion, with its immediate cause, suffi- ciently significant to be compre- hended and measured in a money standard by average human wisdom with a reasonable degree of cer- tainty." Gatzow V. Buening, 100 Wis. 1, 20, 81 N. W. Rep. 1003, 49 L. R. A. 475, 80 Am. St. 17. In the New York case plaintiff was standing upon a crosswalk awaiting an opportunity to board one of the defendant's cars which had stopped there. While there, and as she was about to step upon the car, a horse of the defendant came down the street, and as the team attached to it drew near it turned and came so close to the plaintiff that she stood between the horses' heads when they were stopped. The fright and excite- ment rendered her unconscious, and there was a miscarriage and conse- quent illness. Because there could be no recovery for the fright, there could be none for the illness conse- quent upon it. The miscarriage was not the proximate result of the de- fendant's negligence, but the result of an accidental or unusual combina- tion of circumstances which could not have been reasonably antici- pated. Another reason for denying the right of action was that a flood ■of litigation might be anticipated, •with a wide field opened for fictitious or speculative claims. Mitchell v. Rochester R. Co., 151 N. Y. 107, 56 Am. St. 604, 45 N. E. Rep. 854, 34 L. R. A. 781. See 15 Harvard L. Rev. 304, for an answer to some of the foregoing ob- jections to recovery in such cases. The Minnesota cases on this ques- tion are reviewed in Sanderson v. Northern Pacific R. Co., 92 N. W. Rep. 542. In that case the plaintiff sought to recover for personal in- juries, due solely to fright and grief, because an attempt was made to put her children off the car, she not having been interfered with, nor having been put in fear of any physical injury or personal violence. The rule was declared to be that there can be no recovery for fright which results in physical injuries, in the absence of contemporaneous in- jury to the plaintiff, unless the fright is the pi'oxiraate result of a legal wrong against the plaintiff by the defendant. See Bucknam v. Great Northern R. Co., 76 Minn. 373, 79 N. W. Rep. 98. Purcell v. St. Paul City R. Co., 48 Minn. 184, 50 N. W. Rep. 1034, 16 L. R, 203, is an illustration of what con- stitutes a legal wrong so as to afford a basis for the recovery of damages resulting from mental disturbance. The plaintiff, who was pregnant, was a passenger on one of the de- fendant's cars. By its negligence in tlieir management a collision seemed inevitable, and the plaintiff was put in a position of such peril as to cause fright, which produced a miscarriage. Though there was no collision and no impact, the negligence was the cause of the plaintiff's injury, and entitled her to recover. § 21.] CONSEQUENTIAL DAMAGES FOR TORTS. G3 action was brought by a husband and his wife, and arose out of tlie following facts: The female plaintiff was a passenger in an excursion train on the defendant's railway. The train was too heavy to be drawn up an incline, and was divided, the car in which the plaintiff was remaining attached to the engine. The rear part of the train descended the incline with great velocity; the engine was thereafter reversed and with the car the plaintiff occupied followed at a high rate of speed, until stopped witl) a violent jerk. The proof showed that A. was put in great fright by the occurrence, and suffered from nervous shock in consequence ; that she was incapacitated from performing her ordinary avocations; medical witnesses ex- pressed the opinion that paralysis might result. The jury were charged that if great fright was, in their opinion, a reasonable and natural consequence of the circumstances in which the defendant had placed the plaintiff, and she was actually put in great fright by the circumstances, and if in- jury to her health was, in their opinion, a reasonable and nat- ural consequence of such fright, and was actually occasioned thereby, damages for such injury would not be too remote. The material facts were found in the plaintiff's favor. In con- sidering the objections to the refusal of the court to charge, as requested by the defendant, that if damages or injury were the result of, or arose from, mere fright, not accompanied by actual physical injury, even though there might be a nervous or mental shock occasioned by the fright, such damages would be too remote, Palles, C. B., said : " This objection presupposes that the plaintiff sustained, by reason of the defendant's negli- gence, ' injury ' of the class left to the consideration of the jury by the summing-up, i. e., injury to health, which is bodily or physical injury; and the proposition presented is that dam- ages for such injury are not recoverable if two circumstances occur: (1) if the only connection between the negligence and this bodily injury is that the former caused fright, which caused nervous or mental shock, which shock caused the bodily injury complained of; and (2) that this so-called bodily injury did not accompany the fright, which I suppose means that the injury, although in part occasioned by the fright, assumed the character of bodily injury subsequently to, and not at, the time of the neorlisence or friijht. To sustain this contention, 64 COMPENSATION. [§21. it must be true whether the shock which it assumed to have been caused was either mental or nervous; and as the intro- duction of the word 'mental' may cause obscurity, by involv- ing matter of a wholly different nature, unnecessary to be taken into consideration here, I eliminate it from the question. If there be a distinction between mental shock and nervous shock, then the objection cannot be sustained. It is then to be observed: (1) that the negligence is a cause of the injury, at least in the sense of a causa sine qua non; (2) that no inter- vening independent cause of the injury is suggested ; (3) that jurors, having regard to their experience of life, may hold fright to be a natural and reasonable consequence of such neg- ligence as occurred in the present case. If, then, such bodily injury as we have here may be a natural consequence of fright^ the chain of reasoning is complete. But the medical evidence here is such that the jury might from it reasonably arrive at the conclusion that the injury, similar to that which actually ^suited to the plaintiff from the fright, might reasonably nave resulted to any person who had been placed in a similar position. It has not been suggested that there was anything special in the nervous organization of the plaintiff which might render the effect of the negligence or fright upon her different in character from that which it would have produced in any other individual. I do not myself think that . proof that the plaintiff was of an unusually nervous disposition Avould have been material to the question; for persons, whether nervous or strong-minded, are entitled to be carried by rail- way companies without unreasonable risk of danger; and my only reason for referring to the circumstance is to show that, in this particular case, the jury might have arrived at the con- clusion that the injury which did in fact ensue was a natural and reasonable consequence of the negligence which actually caused it. " Again, it is admitted that, as the negligence caused fright, if the fright contemporaneously caused physical injur}'^, the damage would not be too remote. The distinction insisted upon is one of time only. The proposition is that, although, if an act of negligence produces such an effect upon particular structures of the body as at the moment to afford palpable evidence of physical injury, the relation of proximate cause § 22.] CONSEQUENTIAL DAMAGES FOE TOKTS. G5 and effect exists between such negligence and the injury, yet such relation cannot in law exist in the case of a similar act producing upon the same structures an effect which, at a sub- sequent time — say a week, a fortnight, or a month — must result, without any intervening cause, in the same physical injury. As well might it be said that a death caused by poi- son is not to be attributed to the person who administered it because the mortal effect is not produced contemporaneously with its administration. This train of reasoning; mi^ht be pursued much farther; but in consequence of the decision to which I shall hereafter refer, I deem it unnecessary to do so." § 22. Same subject; criticism of the Couitas case; nerv- ous shock a physical injury. The chief baron then proceeded to review the English case cited in the opening paragraph of the previous section: "In support of their contention the de- fendants relied upon the Victorian Railway Commissioners v. Couitas. That was a remarkable case. The statement of claim alleged that through the negligence of the servants of the defendants, in charge of a railway gate at a level cross- ing, the plaintiffs, while driving over it, were placed in immi- nent peril of being killed by a train, and by reason thereof the plaintiff, Mary, received a shock and suffered personal injuries. It appeared that the female plaintiff, whilst re- turning with her husband and brother in the evening, from Melbourne to Hawthorn, in a buggy, had to cross the defend- ant's line of railway at a level crossing. When they came to it the gates were closed ; the gate-keeper opened the gates nearest to the plaintiffs, and then went across the line to those on the opposite side. The plaintiffs followed him, and were partly onto the up-line (the further one), when the train was seen ap- proaching on it. The gate-keeper directed them to go back, but James Couitas, who was driving, shouted to him to open the opposite gate, and went on. He succeeded in getting the buggy across the line, so that the train, which was going at a rapid speed, did not touch it, although it passed close at the back of it. As the train approached the plaintiff, Mary, fainted. The medical evidence showed that she received a severe nervous shock from the fright, and that the illness from which she afterward suffered (and which is stated in Mr. Beven's book Vol. 1 — 5 t)() COMPENSATION. [§ 22. on ISTeirlijrence to have included a miscarriasre) was the conse- quonce of the fright. One of the plaintiffs' witnesses said she was suffering from profound impression on the nervous sys- tem — nervous shock; and that the shock from which she suf- fered would be a natural consequence of the fright. Another said he w^as unable to detect any physical damage; he put down her symptoms to nervotis shock. It is to be observed from this evidence the jury might have inferred that physical injury was sustained by the female plaintiff at the time of the occurrence in question. Although one witness spoke of nerv- ous shock as contradistinguished from physical damage, the question would still have been open for the jury whether the nervous shock was not — as in the generality of, if not indeed all, cases it necessarily must be — physical injury. The jury found for the plaintiffs. Upon an appeal the privy council, without deciding that an Impact was necessary to sustain the ac- tion, not only set aside the verdict, but entered judgment for the defendants. In delivering judgment Sir R. Couch says: * Her fright was caused from seeing the train approaching, and thinking she was going to be killed. Damages arising from mere sudden terror, unaccompanied by any actual phys- ical, injury, but occasioning a nervous or mental shock, cannot, under such circumstances (their lordships think), be considered a consequence w^hich, in the ordinary course of things, would flow from the negligence of the gate-keeper.' " Amongst the reasons stated in the judgment in support of this conclusion are: 1, that a contrary doctrine would involve damages on account of mejital injury being given in every case where the accident caused by the negligence had given the person a severe nervous shock; 2, that no decision of an En- glish court had been produced in which, upon such facts, dam- ages were recovered ; 3, that a decision of the supreme court of New York (Vandenburgh v. Truax)^ which was relied upon, was distinguishable as being a case oi palpable injury. Of these reasons, the first seems to involve that injuries other than men- tal cannot result from nervous shock; and the third implies that injuries resulting from such a shock cannot be ' palpable.' I am unable (I say it with deference) to follow this reasoning; 1 4 Denio, 464 g 22.] CONSEQUENTIAL DAMAGES FOR TORTS. 67 and further, it seems to me that even were the proposition of law upon which the judgment is based sustainable, the privy- council were not warranted in assuming as a fact, against the verdict of the jury, and without any special finding in regard to it, that the fright was, in that particular case, unaccompanied b}'' any actual physical injury. Further, the judgment assumes, as a matter of law, that nervous shock is something which affects merely the mental functions, and is not in itself a pecul- iar physical state of the body. This error pervades the entire judgment. Mr. Beven states in his recent work on Negligence,^ and I entirely concur with him, that ' the starting point of the reasoninir there is that nervous shock and mental shock are identical; and that they are opposed to actual physical in- jury.' " This view is in accord with that favored by the California court, which has thus expressed itself in case in which there was a nervous shock without physical impact: "The interde- pendence of the mind and body is in many respects so close that it is impossible to distinguish their respective influence upon each other. It must be conceded that a nervous shock or paroxysm, or a disturbance of the nervous system, is distinct from mental anguish, and falls within the physiological, rather than the psychological, branch of the human organism. It is a matter of general knowledge that an attack of sudden fright or an exposure to imminent peril has produced in individuals a complete change in their nervous system, and rendered one who was physically strong and vigorous weak and timid. Such a result must be regarded as an injury to the body rather than to the mind, even though the mind be injuriously affected. Whatever may be the influence by which the nervous system is affected, its action under that infiuence is entirely distinct from the mental process which is set in motion by the brain. The nerves and nerve centers of the body are a part of the physical system, and are not only susceptible of lesion from external causes, but are also liable to be weakened and de- stroyed from causes primarily acting upon the mind. If these nerves or the entire nervous system is thus affected there is a physical injury thereby produced, and if the primal cause of 1 P. 67 (1st ed.). G8 COMPENSATION. [§ 22. this injury is tortious, it is irnmaterial whether it is direct, as by a blow, or indirect through some action upon the mind."^ The Massachusetts court has reached the point where the distinction between the doctrine announced by it in the cases heretofore noticed^ and that of the California court is almost imperceptible. The action was for a recovery for personal in- juries received by the plaintiff on one of the defendant's cars, in consequence of a collision for which the latter was to blame. The plaintiff afterwards had a good deal of suffering of a hys- terical nature. The effort of the defendant was to require the plaintiff to prove that the nervous shock was the consequence of the injury; the trial court permitted a recovery for the shock if it resulted from a jar to the nervous system which ac- companied the personal injury, both being due to the same cause and to the fault of the defendant. Such action was sus- tained, the supreme court using this language: We are of opin- ion that the judge was right, and that further refining would be wrong. As has been explained repeatedly, it is an arbi- trary exception, based upon a notion of what is practicable, that prevents a recovery for visible illness resulting from nerv- ous shock alone. But when there has been a battery and the nervous shock results ft-om the same wrongful management as the battery, it is at least equally impracticable to go further and to inquire whether the shock comes through the battery or along with it. Even were it otherwise, recognizing as we must the logic in favor of the plaintiff when a remedy is denied because the only immediate wrong was a shock to the nerves, we think that when the reality of the cause is guaranteed by proof of a substantial battery of the person there is no occasion to press further the exception to general rules.* 1 Sloane v. Southern California R. sickness resulting from nervousness Co., Ill Cal. 668, 680, 44 Pac. Rep. 320, occasioned by the verbal abuse of her 32 L. R. A. 193. To the same effect, bj' her husband while intoxicated, Rea V. Balmain New Ferry Co., 17 the liquor which caused him to be so N. S. W. (law) 92; Hickey v. Welch, having been sold him by the defend- 91 Mo. App. 4, 10; Watkins v. Kaolin, ant in violation of law. Kear v, Gar- Manuf. Co., 131 N. C. 586, 42 S. E. Rep. rison, 13 Ohio Ct. Ct. 447. 983; Mack v. South Bound R. Co., 53 2g 21, note. S. C. 323, 29 S. E. Rep. 905, 40 L. R. A. SHomaus v. Boston E. R. Co., 180 679. See 1 Beveo on Neg. (2d ed.), Mass. 456, 57 L. R, A. 291, 62 N. E. p. 76 et seq. Rep. 737. A wife may recover damages for § 23.] CONSEQUENTIAL DAMAGES FOR TOKTS. 69 § '23. Same subject; an earlier ruling. Continuing the discussion in the case in the Irish court, the chief baron said: " Possibly, were there no decision the other way, I should from courtesy defer my opinion to that of the privy council, and leave it to the plaintiff to test our decision upon appeal. The very point, however, had been, four 3'^ears before the decision of the privy council in the Yictorian Eailway Commissioners v. Coultas, decided in this country, first in the common pleas division, then presided over by the present Lord Morris, and afterwards in the court of appeal, in the judgment delivered by the late Sir Edward Sullivan; and it is a sad commentary upon our present system of reporting that a decision so im- portant and so novel has never found its way into our law reports. The case I refer to is Byrne v. Great Southern and Western Eailway Company. It was tried before me on the 6th and 6th of December, 1882; and a motion to enter a ver- dict for the defendants was heard in 1883 by the common pleas division; and by the court of appeal in February, 1884. It was an action by the superintendent of the telegraph office at the Limerick Junction station of the defendant's railway. His office consisted of a small building at the end of one of the defendant's sidings, between which and the office there was a permanent buffer strongly fixed. On the 7th December, 1881, through some railway points having been negligently left open, a train entered this siding, broke down the perma- nent buffer and the wall of the telegraph office. The plaint- iff's case was that by hearing the noise, and seeing the wall falling, he sustained a nervous shock which resulted in certain injuries to his health. ... A verdict having been found for the plaintiff with £325 damages, a motion to set it aside, and enter a verdict for the defendant, on the ground that there was no evidence of injury sufficient to sustain the action, was refused by the common pleas division ; and this refusal was aflBrmed by the court of appeal. That case goes much further than is necessary to sustain the direction here, as in it there was nothing in the nature of impact. As between it, by which we are bound, and the decision of the privy council, by which we are not, I must prefer the former. I desire, however, to add that I entirely concur in the decision in Eryne v. Great Southern and Western Eailway, and that I 70 COMPENSATION. [§ 23«. should have been prepared to have arrived at the same con- clusion, even without its high authority, ... In conclu- sion, then, I am of opinion that, as the relation between fright and injury to the nerve and brain structures of the body is a matter which depends entirely upon scientific and medical testimony, it is impossible for any court to lay down, as a matter of law, that if negligence cause fright, and such fright, in its turn, so affects such structures as to cause injury ta health, such injury cannot be a consequence which, in the ordinary course of things, would flow from the negligence, unless such injury 'accompany such negligence in point of time.' " ' § 23a. Same subject ; Dulien v. White. In 1901 practically the same question came before Kennedy and Phillimore, justices of the king's bench division, and was decided in accordance with the rule of the Irish case. The plaintiff's case was that when she was behind the bar of her husband's publichouse, being then pregnant, the defendant's servant negligently drove a van into the publichouse; that plaintiff in consequence sus- tained a severe shock and was seriously ill, and at a later time gave premature birth to a child, which, in consequence of the shock sustained by plaintiff, was born an idiot. This last claim was abandoned as a ground for damages because untenable. The action was held sustainable, the result being reached by somewhat different courses of reasoning. Kennedy said, in part: This is an action on the case for negligence, that is to say, for a breach on the part of defendant's servant of the duty to use reasonable and proper care and skill. In order to suc- ceed the plaintiff has to prove resulting damage to herself, and a natural and continuous sequence uninterruptedly connecting the breach of duty with the damage as cause and effect. In re- 1 Bell V. Great Northern E, Co., 26 patrick v. Great Western R Co., 12 L. R Ire. 428 (1890). The opinion of Up. Can. Q. B. 645; Sloane v. Soutl>- the chief baron was concurred in by ern California R Co., Ill Cal. 668, 32 Andrews and Murpliy, JJ. L. R A. 193, 44 Pac. Rep. 320; Hickey The general doctrine of the Irish v. Welch, 91 Mo. App. 4, 10; Wat- court is recognized in Mack v. South kins v. Kaolin Manuf. Co., 131 N. C. Bound R Co., 52 S. C. 323, 29 S. E. 536, 42 S. E. Rep. 083; Cooper v. Cal- Rep. 905, 40 L. R A. 679; Purcell v. edonian R Co., 9 Scotch L. T. Rep. St. Paul City R Co., 48 Minn. 134, 50 S73, 10 id. 104. N. W. Rep. 1034, 16 L. R A. 203 Fitz- § 23«.] CONSEQUENTIAL DAMAGES FOR TORTS. 71 gard to the existence of the duty here, there can, I think, be no question. The driver of a van and horses in a highway owes a duty to use reasonable and proper care and skill so as not to injure persons lawfully using the highway, or property adjoin- ing the highway, or persons who, like the plaintiff, are law- fully occupying that property. . . . Theonly question here is whether there is an actionable breach of those obligations if the man in either case is made ill in body by negligent driv- ing which does not break his ribs, but shocks his nerves. As •regards the facts we must, for the purposes of this argument, assume all that, consistentlv with the allegations of the state- ment of claim, can be assumed in plaintiff's favor. Now, what are defendant's arguments against her right to recover dam- ages in this action? First of all, it is argued, fright caused by negligence is not itself a cause of action; ergo^ none of its con- sequences can give a cause of action -^ Mitchell v. Rochester R. Co.^ With all respect to the learned judges who decided that case, I feel a difficulty in following their reasoning. No doubt damage is an essential element in a right of action for negli- gence. "Fear taken alone" — as Sir Frederick Pollock has stated in his work on Torts - — " falls short of being actual dam- age, not because it is a remote or unlikely consequence, but because it can be proved and measured only by physical effects." That fright, where physical injury is directly produced by it, cannot be a ground of action merely because of the absence of any accompanying impact appears to me to be unreasonable and contrary to the authorities. We have, as reported, decis- ions which go far, at any rate in my judgment, to negative the correctness of any such contentions.^ Further, we have directly 1151 N. Y. 107,45 N. E. Rep. 354, turned over. Also to Harris v. Mobbs 34 L. R. A. 781, 56 Am. St. 604. 3 Ex. Div. 268. The facts were that ^ 6th ed., p. 51. a house-van attached to a steam-plow * Referring to Jones v. Boyce, 1 was left for the night on the side of Stark. 493, where it was ruled that a highway, four or five feet from the if through the fault of a coach pro- metaled part. During the evening prietor in neglecting to provide plaintiff's testator drove his horse proper means of conveyance, a pas- attached to a cart along the metaled senger be placed in so perilous a situ- road; the horse was a kicker, but he ation as to render it prudent for did not know it. Passing the van him to leap from the coach, whereby he shied at it, kicked, and galloped his leg is broken, the proprietor will kicking for 140 yards, got one leg be liable although the coach was not over the shaft, fell and kicked the 72 COMPENSATION. [§ 23a. in point the decision of the court of appeal and common pleas division in Ireland in the unreported case of Byrne v. Great Southern & "Western E.. Co.,^ approved of in Bell v. Great ]N"orthern R. Co.^ In Yictorian By. Commissioners v. Coultas,' which was much relied upon by defendants in the argument before us, the privy council expressly declined to decide that " impact " was necessary. It is not to be taken that, in my view, every nervous shock occasioned by negligence and pro- ducing physical injury to the sufferer gives a cause of action. There is, I think, one important limitation. The shock, in order to give a cause of action, must be one which arises from a rea- sonable fear of immediate personal injuries to the plaintiff. This limitation was applied by Bruce and Wright, JJ., in the unreported case of Smith v. Johnson & Co., where a man was killed negligently by the defendant in the sight of the plaint- iff, and the plaintiff became ill, not from the shock produced by fear of harm to himself, but from the shock of seeing an- other person killed. The court held that this harm was too remote a consequence of the negligence.* ... It remains to consider the second form in which defendant's counsel put his objection to the right of the plaintiff to maintain this ac- tion. He contends that the damages are too remote, and relies upon the decision of the privy council in Yictorian Ry. Com- missioners v. Coultas. The principal ground of their judgment is formulated in the following sentence: " Damages arising driver as he rolled out of the cart; are to be explained on a different he died from the effects of the kick, ground, namely, that the damage A verdict having been found in favor which immediately resulted from the of the executor of the deceased on act of the passenger or of the horse the question of defendant's negli- was really the result, not of that act, gence, it was ruled that such use of but of a fright which rendered that the highway was the proximate cause act involuntary, and which therefore of the injury. The third case referred ought to be regarded as itself the di- to is Wilkinsv. Day, 12 Q. B. Div. 110, rect and immediate cause of the the facts being quite similar to those damage, in Harris v. Mobbs, and the ruling in ' § 23. accordance with that therein. ^ ^g 21, 23. These cases are referred to in Wil- ^ ggg g 21. kinson v. Downton, [1897] 2 Q. B. 6, by * To the same effect, Cleveland, etc. Wright, J., in respect to their being R. Co. v. Stewart, 24 Ind. App. 374 inconsistent with the Coultas case. 56 N. K Rep. 917, He said : But I think that those cases § 23a.] Ct)NSEQUE]SITIAL DAMAGES FOR TOKTS. 73 from mere sudden terror, unaccompanied by any actual physical in jur3% but occasioning a mental or nervous shock, cannot under such circumstances, their lordships think, be considered a con- sequence which in the ordinary course of things would flow from the negligence of the gatekeeper." A judgment of the privy council ought, of course, to be treated by this court as entitled to very great weight indeed ; but it is not binding upon us; and in venturing, most respectfully, not to follow it in the present case I am fortified by the fact that its correct- ness was treated by Lord Esher, M. E., in his judgment in Pugh V. London, etc. R. Co.^ as open to question ; that it was disapproved of in Bell v. Great Northern R. Co. ... I prefer the decisions of the Irish courts; they seem to me strong and clear authorities for the plaintiff's contention. It is sug- gested on the part of the defendants that the applicability of the judgment in Bell v. Great Northern E.. Co. is impaired by the fact that the female plaintiff in that action was a passenger on the defendants' railway and as such had contractual rights. It appears to me that this fact makes no practical difference whatever. There was no special contract; no notice to the railway when they accepted her as a passenger that she was particularly delicate or liable to fright.' Before Dulien v. White was decided a different conclusion from that reached therein was arrived at in Massachusetts upon a state of facts less favorable to the defendant than ex- isted in the English case. The declared purpose of the defend- ant was to damage a house in which the plaintiff was, though it was not her house. In her presence he threw a large stone against the house, after which the plaintiff went into the front room of the house with her little child, and thereafter the de- fendant wilfully threw a large stone at the house which passed throush one of the blinds coverins: a window in that room and A [1896] 2 Q. B. 248. In this case ous shock which incapacitated him the plaintiff, while discharging his from employment. It was held that duty as a signalman in the defend- he had been incapacitated by"acci- aot's employment, endeavored to dent " within the meaning of a policy prevent an accident to a train by of accident insurance, signaling to the driver, and the ex- - Dulien v. White, [1901] 2KB. citement and fright arising from the 669. danger to the train produced a nerv- 74 COMPENSATION. [§ 24 greatly friglitenod the plaintiff, who was not touched or struck. The defendant was not liable for the fright or the consequent injury to the plaintiff's health because he had no intention to- injure her or her property, did not know of her delicate con- dition, or that she was in that room.' As between these cases the better reason lies with the English case. The Massachu- setts case seems a departure from the established principle re- specting remote and proximate cause. A later case favors the right of a pupil unlawfully excluded from the public schools to recover for his suffering from the disgrace inflicted upon him.^ § 24. Same subject; miseellaiieous cases. Though deny- ing the right of recovery for mere fright, neither attended nor followed by any other injury,^ the supreme court of Texas has sustained a recovery where a miscarriage was caused by a mental shock unaccompanied by any physical violence what ever to the person of the injured woman.^ In a later case it was alleged by the plaintiff that as the result of a nervous shock or physical injury, or both, caused by the collision of two trains there was developed a nervous affection known as traumatic neurasthenia; as a matter of fact plaintiff was not physically damaged by the collision in the sense that he sus- tained visible bodily injury. The conclusion reached was that where a physical injury results from a fright or other mental shock, caused by the wrongful act or omission of another, the injured party is entitled to recover his damages, provided the act or omission is the proximate cause of the injury in the light of all the circumstances, to have been foreseen as a nat- ural and probable consequence thereof, which questions are for the jury.'^ Proof that a woman was negligently carried be- yond her destination and thereby suffered from fright and want of food warrants a finding that the occurrence was the proximate cause of a sickness which immediately followed.^ 1 White V. Sander, 168 Mass. 296, 47 Corley, 87 Tpx. 432, 29 S. W. Rep. N. E. Rep. 90. 281. 2 Morrison v. Lawrence, 181 Mass. * Hill v. Kimball, 76 Tex. 210, 13 127, 63 N. E. Rep. 400. See the last S. W. Rep. 59, 7 L. R A, 618. paragraph of § 22. 5 Gulf, etc. R. Co. v. Hayter, 93 Tex. 3 Gulf, etc. Co. V. Trott, 86 Tex. 239, 54 S. W. Rep. 944, 47 L. R. A. 325. 412, 25 S. W. Rep. 419, 40 Am. St. « Texas & Pacific R. v. Gott, 20- 806; San Antonio, etc. R. Co. v. Tex. Civ. App. 335, 50 S. W. Rep. 193.. § 21.] CONSEQUENTIAL DAMAGES FOK TORTS. 75 Where the defendant, executing what he thought was a prac- tical joke, said to the plaintiff that her husband had met with an accident, and that his legs were broken, such statement being made with intent that it should be believed, and it was believed, and the plaintiff became ill in consequence of the re- sulting nervous shock, and not because of previous ill-health, weakness of constitution, predisposition to nervous shock or any other idiosyncrasy, the injury was not too remote.^ The rule of the New York court of appeals that no recovery can be had for injuries due solely to fright and excitement, unaccom- panied by actual, immediate, personal injury, does not apply to cases of wilful tort.- If the act or default which causes a nervous shock produces physical injuries, and other such in- juries result from the nervous shock, there ma}' be a recovery for the latter injuries as well as the others.' In Massachusetts a different view was taken where a passenger upon a street car suffered physical injury from fright caused by the removal of a drunken man, and a slight, unintentional battery of the per- son resulted. The court said of an instruction to the effect that if there was a fright which operated to the injury of the plaint- iff in body or mind and also a ph3'sical injury, the jury might take all that happened as one whole, that the defend- ant was not liable for all the consequences, but only for those of its wrong, which began with the battery, and the conse- quences thereof were all for which a recovery could be had. This was said with recognition of the difficulty of discriminat- iniT.'* A miscarriage resultino; from threats to arrest a debtor husband,* b}' the unlawful imprisonment of a husband,^ or by wrongfully procuring him to be indicted, is not the reason- 1 Wilkinson v. Downton, [1S97] 2 3 Rea v. Balmain New Ferry Co., Q. B. 57. The case was admitted to 17 N. S. W. (law) 9:3. be without precedent, and was dis- * Spade v. Lynn & B. R Co., 172 tinguished from Victorian Ry. Com- Mass. 488, 52 N. E. Rep. 747, 43 L. R. missioners v. Coultas on the ground A. 833. See Gatzovv^ v. Buening. lOG that therein was no element of wil- AVi.s. 1, 81 N. W. Rep. 1003, 49 L. R. ful wrong, "nor perhaps was the ill- A. 475, 80 Am. St. 17. ness so direct and natural a conse- * Wulstein v. Wohlman, 57 N, Y. quence of the defendant's conduct Super. Ct. 50, 5 N. Y. Supp. 569. as in this case." *>E[iis v. Cleveland, 55 Vt 358. See - Preiser v. Wielandt, 48 App. Div. Huxley v. Berg, 1 Starkie, 98. 569, 62 N. Y. Supp. 890. See ^ 43. Y6 COMPENSATION. [§ 24. able or natural result of such acts.^ One who en2:ao^es in a quarrel with the husband of a woman who \se7iciente, the quar- rel being carried on in her hearing without knowledge of her presence or condition, is not liable for a miscarriage.^ It has recently been ruled in Pennsylvania that a complaint which alleges that in a collision on the defendant's railroad the cars were thrown off the track and fell on plaintiff's premises and against her dwelling, whereby plaintiff was subjected to great fright, nervous excitement and distress, and her life endan- gered, does not state a cause of action.' An inexperienced youth, without money through defendant's neglect to deliver a message, and compelled to remain penniless among stran- gers for a week, cannot recover for the anxiety and mortifica- tion endured because of his belief that he was looked upon with suspicion.'' In a recent Xorth Carolina case* it was ruled: We are of the opinion that an action will lie iov physical injury or dis- ease resulting from fright or nervous shocks caused by negli- gent acts. From common experience we know that serious consequences frequently follow violent nervous shocks caused by fright, often resulting in spells of sickness, and sometimes in sudden death. Whether the physical injury was the natural and proximate result of the fright or shock is a question to be determined by the jury upon the evidence, showing the con- ditions, circumstances, occurrences, etc. But it must also ap- pear that the defendant could or should have known that such negligent acts would, with reasonable certainty, cause such re- sult, or that the injury resulted from gross carelessness or reck- lessness, showing utter indifference to the consequences when they should have been contemplated by the party doing such acts. As a condition precedent to recovery in such cases it must appear that the defendant must or ought to have known ' Hampton v. Jones, 58 Iowa, 817, ^ Ewing v. Pittsburgh, etc, R. Co., 12 N. W. Rep. 276. 147 Pa. 40, 14 L. R A. 666, 23 AtL 2 Phillips V. Dickerson, So 111. 11, Rep. 340. 2S Am. Rep. 607; Gaskins v. Runkle, * Voegler v. Western U. TeL Co., 10 25 Ind. A pp. 584, 58 N. E. Rep. 740 Tex. Civ. App. 229, 30 S. W. Rep. (though defendant knew plaintiff 1107. was in delicate health and easily ^Watkins v. Kaolin Manuf. Co., excited). See Cliicago & N. Pu Co. 131 N. C. 536, 540, 42 S. K Rep. 983. V. Hunerberg. IG III. App. 387. § 25.] CONSEQUENTIAL DAMAGES FOR TORTS. 77 of the plaintiff's perilous position or condition against which he should have to exercise care. It has been ruled in a Texas case that a mother who has been separated from her children because not allowed time to board a train on which they were placed may recover for her mental anguish, and that such lia- bility was not dependent upon the knowledge of the defend- ant's agent as to the degree of relationship existing between the plaintiff and the children, he knowing that they were in her custody and that she had bought tickets for thera.^ §25. Anticipation of injury as to persons; illustrations. It has alread}^ been stated that though consequential damages to be recovered must be the natural and probable effect of the act complained of, yet it is not requisite that the wrong-doer should be able to anticipate who the sufferer will be. If his act has a tendency to injure some person, or many persons, and finally does in the manner which was beforehand probable cause such injury, it is proximate. This is cogently illustrated by the case of a spring gun set so as to be unwittingly dis- charged by the first comer.- A dealer in drugs, for negli- gently bottling a poisonous drug and putting it in market la- beled as a harmless medicine, is liable to all persons who, with- out their fault, are injured by using it, though it may have been the subject of many intermediate sales.^ So a person who, knowing another to be a retailer of illuminating fluids, and that naphtha is explosive and dangerous to life for such use, sells that article to him to be retailed to his customers, he being ignorant of its dangerous properties, is liable to any person buying it of such retailer if injured by its explosion or ignition.* • International, etc. R. Co. v. An- Carter v. Towne, 98 Mass. 567, 9G Am. chonda, 68 S. \V. Rep. 743 (Texas Ct. Dec. 683. 103 Mass. 507. of Civil Appeals). The sale of an article in itself ^ Jay V. Whitfield, 4 Bing. 644; Bird harmless, and which becomes dan- V. Holbrook. 4 Bing, 628; Forney v. gerous only by being used in combi- Gel'imacher, 75 Mo. 113. See § 17. nation with some other substance, 3 Thomas v. Winchester, 6 N. Y. withoutanyknowledgebythe vendoi 397; Langridge v. Levy, 3 M. & W. that it is to be used in such combi- 519; Levy v. Langridge, 4 id. 337; nation, does not render him liable to Norton v. Sewall, 106 Mass, 143; an action by one who pui'chases the George v. Skivington, L. R. 5 Ex. 1. article from the original vendee, and * Wellington v. Downer K. O. Co., who is injured while using it in a 104 Mass. 64, 8 Am. Rep. 298. See dangerous combination with another 78 COMPENSATION. [§ 25, [:?0] One who knowingly delivers an apparently harmless pack- age containing a dangerous and explosive substance to a com- mon carrier for transportation without giving him notice of its contents is liable for damages caused by its explosion while the carrier is transporting it without knowledge thereof, with such care as is adapted to its apparent nature.^ The act of keeping a large quantity of gunpowder in a wooden building insufficiently secured, and situate near other buildings, thereby endangering the lives of persons in the vicinity, will subject the person so doing to damages for injuries suffered by any person from its explosion though the fire which causes the ex- [30] plosion is accidental or results from the negligence of a third person." So a person who by public false representations causes another reasonably to act upon them as true in a mat- ter of business is liable to make good any loss the latter may sustain from their falsity.^ The servants of a railroad com- pany ran its cars, after due warning, over a hose being used to convey water to a burning building, thereby severing it and preventing the extinguishment of the fire. It was held that the company was liable though the hose did not belong to the plaintiffs, and the men in charge of it were not their servants — that the severing of the hose was the proximate cause of the loss.* The plaintiff engaged with the defendant to serve on article, although by mistake the ar- hill v. Walter, 3 B. & Ad. 114. See tide actually sold is different from Chester v. Dickerson, 52 Barb. 349. that which was intended to be sold. * Metallic, etc. Co. v. Fitchburg R. Davidson v, Nichols, 11 Allen, 514 Co.. 109 Mass. 277, 12 Am. Rep. 689; See Loop v. Litchfield, 42 N. Y. 351, Atkinson v. Newcastle, etc. Co., L. 1 Am. Rep. 543; Longmeid V, HoUi- R. 6 Ex. 404. But .see Mott v. Hudson day, 6 Ex. 761; Langridge v. Levy, 2 River R. Co., 1 Robert. 593. M. & W. 519; Levy v. Langridge, 4 There is no connection betw^een the id. 337. wrongful occupation of the bank of 1 Boston, etc. R. Co. v. Shanly, 107 a river and a fire, although such oc- Mass. 568; Farrant v. Barnes, 11 C. B. cupation may render it impossible (N. S.) 553. for the fire department to obtain 2 Myers v. Malcolm, 6 Hill, 292; water with which to subdue the fire. Kinney v. Koopman, 116 Ala. 310, 37 Bosch v. Burlington, etc. R. Co., 44 L, R. A. 497, 22 So. Rep. 593; Rudder Iowa, 402, 25 Am. Rep. 754. See V. Koopman, 116 Ala. 332, 22 So. Rep. Brown v. Wabash, etc. R. Co., 20 Mo. 601, 37 L. R. A. 489. App. 222; Jackson v. Nashville, etc. 3 Morse v. Swits, 19 How. Pr, 275; R Co., 13 Lea, 491, 49 Am. Rep. 663; Gerhard v. Bates, 2 El. & B. 476; Pol- Railway Co. v. Staley, 41 Ohio St. 118, 52 Am. Rep. 754. § 25.] CONSEQUENTIAL DAMAGES FOR TORTS. 79 board the hitter's vessel as a common seaman on a specified voyage; breach, that defendant neglected to suppl}' and keep on board a proper supply of medicines as required by a statute, whereby plaintiff's health suffered ; held a good cause of action.^ The sale of a saltpetre cave was rescinded on the ground of the vendor's fraud; the vendee claimed compensation for erections •on the premises, for their improvement and use made prior to the discovery of the^fraud. The court held that these expendi- tures were not a loss naturally and proximately resulting from the fraud; that they were not j)art of the contract, but were made by the complainant of his own choice in consequence of the bargain; that damages could not be given upon the first consequence, and then upon successive subsequent conse- quences.^ But it is obvious that the expenditures were a [31] proper item of damages for the fraud, if, as a fact, they were expenditures likely to be made by a purchaser; for then they were a loss which was the natural and proximate consequence of the wrong done.* In a late case in Illinois the defendant contracted, without authority as agent, to sell land belonging to the plaintiff, and the latter had been put to the expense of defending an unsuccessful suit on that contract for specific per- 1 Couch V. steel, 3 El. & B. 403. In ware peddler wlio intended by the this case it was contended that as sale and profits to become a merchant the act of parliament imposing the and then a nobleman of the first duly to keep a proper supply of med- order, and afterwards to marry the ioine provided a penalty for neglect princess." SeeBishop v. Williamson, of that duty, and that it might be 11 Me. 495, where it was held that a sued for arid collected by a common postmaster was liable to an action informer, no action at common law for refusing to deliver a letter ao would lie for damages resulting from cording to its address, but delivering the breach of the statutory duty; but it to another, it containing a list of the court sustained the action, lottery prizes or statement of the Rowning v. Goodchild, 2 W. Bl. 906. drawing; and it appearing that the 2 Peyton v. Butler, 3 Haywood, 141. person receiving the letter, availing 3 In Peyton v. Butler, supra, the himself of the information contained court say: "The failui'e of a post- therein, purchased of the plaintiff, master to deliver a letter giving lib- who was a vendor of lottery tickets, a erty by a certain day to pay for a ticket that had drawn a prize; the lottery ticket, price one dollar, would injury was held to be the immediate make him liable for $20,000 should consequence of the unlawful with- the ticket afterward turn out to be holding of the letter, and the proper a prize of $20,000. In short, the ab- measure of damages the net amount surdity of such damages is well elu- of the priza ■cidaled by the story of the crockery- 80 COMPENSATION. [§ 26. formance. It was held that he was entitled to recover as dam- ages for his trouble and the expense in making such defense.^ Where a horse was driven from the stable of its owner and passed from a highway to a vacant lot adjoining the premises of its owner, and there killed one of a number of children at play, the owner of the horse was liable.^ § 26. Consequential damages in highway cases. The gen- eral rule is that municipal corporations are bound to keep their streets in a reasonably safe condition for travel. But ^■^^a.sz-municipal corporations, such as counties, townships and JSTew England tow^ns, are not under such obligation unless it is imposed b}^ statute,^ and clearly expressed therein.* Such stat- utes are strictly construed in some states and the right of re- covery is denied, especially in Maine and Massachusetts, under circumstances which do not prevent a recovery in other juris- dictions.^ This, it is probable, has been the result of the lan- guage employed in the statutes of those states, which are construed to relieve from liability if the accident was not directly and solely the effect of the insufficiency of the high- way.** It is said " that "some portion of the harness or carriage may be defective and unsafe, and the accident may be the iPhilpot V. Taylor, 75 111. 309, 20 ^ jTarble v. Worcester, 4 Gray, 395; Am. Rep. 241. Aldrich v. Gorham,77 Me. 287;Moul- 2 Mills V. Bunke, 59 App. Div. 39, ton v. Sanford, 51 Me. 127; Davis v. 69 N. Y. Supp. 96. Dudley, 4 Allen, 557. 3 2 Dillon, Mun. Corp., §996. Liability is limited to the direct * Barnett v. Contra Costa County, and immediate results of the injury, 67 Cal. 77, 7 Pac. Rep. 177. and the common-law rule that a re- 5 The construction given the stat- covery may be had for the natural utes in those states is approved in a and proximate result does not apply, recent Connecticut case, it being Hence where an injury resulted from held that the consequence of the a defect in a highway, and the per- failure of a town to keep its highway son injured sustained a subsequent in repair is to impose upon it the injury by undertaking to use the statutory penalty, and that the right limb injured on the highwa)', such to recover it may be defeated by any later injury could not be recovered concurring wrong of a third person for. Raymond v. Haverhill, 168 and a defect in the way. In such a Mass. 382, 47 N. E. Rep. 101. The case the injury is not caused by the contrary has been held in Wiscon- defect. Bartram V. Sharon, 71 Conn. sin. Wieting v. Millston, 77 Wis. 523, 686. 13 Atl. Rep. 143, 71 Am. St. 225, 46 N. W. Rep. 879. The Massachu- 46 L. R- A 144. Contra, Ouverson v. setts court refused to follow this Grafton, 5 N. D. 281, 65 N. W. case. Rep. 676. " Aldrich v. Gorham, 77 Me. 287. § 20.] CONSEQUENTIAL DAMAGES FOR TOKTS. 81 combined result of the defect in the harness or carriage and the defect in the way; in such case there is an efficient co- operating cause, in connection with the defect in the way, that produces the injury, and the town is not liable.^ The same principle applies where a horse, becoming frightened at an object for which the town is not responsible, breaks away from his driver and escapes from all control, while traveling on the way, and afterwards, while thus free from the man- agement and control of the driver, meets with an injury through a defect in the way.^ . . . But whether the fright or misconduct of the horse is such as to be regarded as the true and proximate cause of the injury, in any given case, is to be governed by the extent of such misconduct. It may in some remote degree even bear upon or influence, though not in any legal sense be said to cause it. ' Everything which in- duces or influences an accident does not necessarily and legally cause it." And not only is it the doctrine of the court in our own state, but also in Massachusetts, that if a horse, well broken and adapted to the road, while being properly driven, suddenly swerves or shies from the direct course, he is not in any just sense to be considered as escaping from the control of the driver or becoming unmanageable, if he is in fact only momentarily not controlled; and that if, while thus momen- tarily swerving or shying, he is brought in contact with a de- fect in the road and an injury is thereby sustained, such conduct of the horse will not be considered as the proximate cause of the accident, though it may be one of the agencies or mediums through which it was produced, and a recovery may be had for such injury."* This is also the rule in Wisconsin ^ and in other states.^ The Wisconsin case first cited appears to go 1 Contra, Vogel v. West Plains, 73 ston, 100 Mass. 55; Bemis v. Ailing- Mo. A pp. 5H8, citing Bassett v. St. ton, 114 Mass. 508; Wright v. Tern- Joseph, 53 Mo. 300; Brennan v. St. pleton, 133 Mass. 50; Morsman v. Louis, 92 Mo. 483; Vogelgesang V.St. Rockland, 91 Me. 264,39 AtL Rep. Louis, 40 S. W. Rep. 653, 139 Mo. 127. 995. 2 Davis V. Dudley, 4 Allen, 557; & Olson v. Chippewa Falls, 71 Wis. Moulton v. Sanford, 51 Me. 127; Mar- 558. 37 N. W. Rep. 575; Houfe v. Ful- ble V. Worcester, 4 Gray, 395. ton, 29 Wis. 296, 9 Am. Rep. 568, 3 Spaulding v. Winslow, 74 Me. 534. « Rockford v. Russell, 9 111. App. 229 ; < Id.; Titus V. Northbridge, 97 Masa Joliet v. Verley, 35 111. 58; Denver v. 258, 93 Am. Dec. 91; Stone V.Hubbard- Johnson, 8 Colo. App. 384, 46 Paa Vol. 1 — 6 82 COMPENSATION. [§26. beyond the cases in Maine and Massachusetts. The fright of the horses was caused by something not in the highway, and for Avhicli the city autliorities were not responsible. Never- theless the absence of a railing to a bridge was held the prox- imate cause of the accident. The distinction made in Maine and Massaclmsetts as to the duration of the loss of control of a horse by its driver does not appear to be taken in many states,' nor in Ontario.^ The rule in these jurisdictions is that when an accident happens from a defect existing in a highway as the result of negligence, the fact that the horse was at the time uncontrollable or running away is not a defense to an action to recover for the injury. The Connecticut court say : " The failure of a traveler to be continually present with his team up to the time and place of injury, when that failure proceeds from some cause entirely beyond his control, and not from any negligence on his part, ought not to impose upon him the loss from such injury, particularly when the direct cause of the same is the negligence of some other party; the loss should be charged upon the party guilty of the first and Rep. 621; Kennedy v. New York, 73 N. Y. 365, 29 Am. Rep. 169; Burns v. Yonkers, 83 Hun, 211, 31 N. Y. Supp. 757 (the horse balked and backed the vehicle off the highway down a steep and unguarded bank); Dillon V. Raleigh. 124 N. C. 184, 32 S. E. Rep. 548; Chacey v. Fargo, 5 N. D. 173. 64 N. W. Rep. 932; Ouverson v. Grafton, 5 N. D. 281, 65 N. W. Rep. 676; Cage v. Franklin, 8 Pa. Super. Ct. 89; Yoders v. Amwell, 172 Pa. 447, 51 Am. St. 750, 33 Atl. Rep. 1017; Davis V. Snyder, 196 Pa. 273, 46 Atl. Rep. 301; Stone v. Pendleton, 21 R. I. 332, 43 Atl. Rep. 643; Rohrbough V. Barbour County Court, 39 W. Va. 472, 20 S. E. Rep. 565, 45 Am. St. 925; Knouff V. Logansport, 26 Ind. App. 202, 59 N. E. Rep. 347. Contra, Brown V. Laurens County, 38 S. C. 282, 17 S. E. Rep. 21. Where the plaintiff was driving over a defective bridge and, without his fault, his horse broke through the bridge, and plaintitf, in trying to ex- tricate him, was injured by a blow from the horse, the defect was the proximate cause of the injury. Page V. Bucksport, 64 Me. 51. 18 Am. Rep. 239; Stickney v. Maidstone, 30 Vt. 378, 73 Am. Dec. 312; McKelvin v. Loudon, 22 Ont. 70. 1 Baltimore & H. Turnpike Co. v. Bateman, 68 Md. 389, 13 AtL Rep. 54, 6 Am. St. 449; Ring v. Cohoes, 77 N. Y. 83, 33 Am. Rep. 574; Putman v. New York, etc. R Co., 47 Hun. 439, 442; Baldwin v. Greenwoods Turn- pike Co., 40 Conn. 238, 16 Am. Rep. 33; Hull V. Kansas, 54 Mo. 598, 14 Am. Rep. 487; Hunt v. Pownal, 9 Vt. 411; Winship v. Enfield, 42 N. H. 197; Hey V. Philadelphia. 81 Pa. 44, 22 Am. Rep. 733; Byerly v. Anamosa, 79 Iowa, 204, 44 N, W. Rep. 359; Man- derschid v. Dubuque, 25 Iowa, 108; Ward V. North Haven, 43 Conn. 148; Campbell v. Stillwater, 32 Minn. 308, 20 N. W. Rep. 320. 2 Sherwood v. Hamilton, 37 Up. Can. Q. B. 410. § 26.] CONSEQUENTIAL DAMAGES FOR TORTS. 83 only negligence. If the plaintiff is in the exercise of ordinarj'- care and prudence and the injury is attributable to the negli- gence of the defendants, combined with some accidental cause to which the plaintiff has not negligently contributed, the de- fendants are liable." Kor will the fact that the horse of the plaintiff Avas uncontrollable for some distance before arriving at the place of injury affect the liability of the defendant.^ But this principle is not to be extended to a case in which the horse is left tied to a post, breaks away therefrom and goes over an unguarded bank, where he would not have been driven by a prudent driver.^ It ma}', however, apply where the first cause leading to the injury happened outside of the de- fendant's road, as where the horse became uncontrollable through fright upon a road for which the defendants were not responsible and ran from there upon private property, thence to the original road, and finally and without a driver upon the defendants' turnpike.* In a Wisconsin case* the injured horse took fright and escaped from his driver while in a field and ran from thence to the highway, which was out of repair. The court very properly held that towns are not bound to pro- vide roads for runaway horses; but if the highway is so de- fective as to cause a team to become frightened the town is liable.' If a traveler, while using due care, is exposed to im- minent danger by a defect in the highway, and to avoid the probable consequences of coming in contact with the defect and as a reasonable precaution turns his horse, whereby his vehicle- is brought into collision with another vehicle, which would not have happened if the horse had not been turned, the defect may be regarded as the sole cause of the injury.^ 1 Baldwin V. Greenwoods Turnpike ^Kelleyv. Fond du Lac, 31 Wis. Co., 40 Conn. 238, 16 Am. Rep. 33, 179; Hodge v. Bennington, 43 Vt. 451. approved in Ring v. Cohoes, 77 N. Y. « Flagg v. Hudson, 143 Mass. 280, 56 83, 88, 33 Am. Rep. 574; Joliet v. Shu- Am. Rep. 674, 8 N. E. Rep. 42. feldt, 144 111. 403, 33 N. E. Rep. 969, 18 It is difficult to harmonize the Lfc R. A. 750. Massachusetts cases on the question - Moss V. Burlington, 60 Iowa, 438, of consequential damages for inju- 46 Am. Rep. 83, 15 N. W. Rep. 267. ries on highways. It was ruled in 3 Baldwin v. Greenwoods Turnpike Palmer v. Andover, 2 Cush. 600. that Co., supra. a town was liable where the primary * Jackson v. Bellevieu, 30 Wis. 350; cause of the injury was a pure acci- Schillinger v. Verona, 96 Wis. 456,71 dent: a nut getting loose and drop- N. W. Rep. 8S8. ping from a bolt, the horses were 84: COMPENSATION. 26. If there is negligence in failing to erect a barrier for the pro- tection of pedestrians, one injured may recover though the primary cause of his injury was the sudden going out of the detached from a carriage while de- scending a hill, at the foot of which the road abruptly turned to the right on the bank of a mill pond, into w'hich, by going straight on, the car- riage plunged, on account of the absence of any railing. The court say: "The . . question . . . whether, in case of an injury re- ceived while traveling upon a public way. shown to be detective, but where the accident or injury is at- tributable in part to a defect in the carriage or harness, but occurring under such circumstances as show that the plaintiff was chargeable with no fault or negligence in the matter, the town is liable for the damage, is one not free from diffi- culty. Against maintaining such action, it is strongly urged that the injury is not fairly imputable to the defect in the highway; and inas- much as it resulted, at least in part, from causes for which the town was not responsible, and over which it had no control, the town should not be chargeable with damages there- for. If the objection was that the injury was caused by the combined effect of an obstruction or want of repair in the road, and the want of ordinary care, diligence or skill on the part of the plaintiff in reference to his harness, his horses or his car- riage, or the use of the road, it would be very clear that the plaint- iff could not recover. He must be without fault in this respect; and if not so, although the highway be out of repair, the town is not liable. But is the like effect to follow when there is a defect in the road, but the ac- cident or injury is attributable in part to a defect in the carriage or harness, which defect was unknown to the plaintiff, and which was of such a character that it might have existed, and yet no fault or negli- gence be chargeable by reason thereof to the plaintiff? We should be slow to adopt or sanction any principles in reference to this class of actions that would in so many cases render the statute nugatory. If the circum- stance that some accident or casu- alty occurred, as the primaiy cause, and which by reason of a defect in the road, and through their combined operation, caused the damage to the plaintiff, would deprive the party of recovering damages, the protection to the traveler would be very much restricted. It is the ordinary course of events, and consistent with a rea- sonable degree of prudence on the part of the traveler, that accidents will occur; horses maybe frightened, the harness may break, a bolt or screw may be dropped. To guard against damage by such accidents the law requires suitable railings and barriers, a proper width of the road, and whatever may be reasonably re- quired for the safety of the traveler. It seems to us that when the loss is the combined result of an accident and of a defect in the road, and the damage would not have been sus- tained but for the defect, although the primary cause be a pure accident, yet, if there be no fault or negligence on the part of the plaintiff, if the acci- dent be one which common prudence and sagacity could not have fore- seen and provided against, the town is liable." In Davis v. Dudley, 4 Allen, 557 (decided seven years after Palmer v. Andover, supra), a town was held not to be responsible in damages if a horse on becoming ac- cidentally frightened breaks away 'li. CONSEQUENTAL DAMAGES FOK TORTS. 85 lights in the street lamps.' It is not a defense to a city that another contributed, either before or after its default, or con- currently therewith, in producing the damage.^ § 27. Imputed negligence. It was formerly judicially de- clared to be the law in England that the negligence of the driver of a public conveyance was imputable to a passenger therein, although the latter exercised no control over the former,* This doctrine was not authoritatively disapproved of, although it was much commented on and shaken, until 1SS8, when it came before the house of lords in Mills v. Arm- strong,'* with the result that the whole foundation on which it rested was removed. The theory has but little support in the American cases: except in Wisconsin ^ all the recent ad- from his driver, and afterwards, while running at large, meets with an injury through a defect in the highway. It is declared that this case does not conflict with the other, Merrick, J., saying: "The facts in the present case are widely difl'erent, and afford no occasion for the appli- cation of the doctrine by which, in the decision of that case, the court were influenced and controlled. Here the accident and injury were not coincident, but were separate and produced by separate causes. The effect of the accident as procur- ing cause was complete when the horse, frightened by the falling of the cross-bar and thills upon his heels, became detached from the sleigh and had escaped from the con- trol of the driver. The blind violence of the animal, acting without guid- ance or direction, became, in the course and order of incidents which ensued, the supervening and prox- imate cause of the injury inflicted by his running against a wood-pile, which constituted an unlawful ob- struction and defect in the highway. In this succession of events, it hap- pens that the accident placed the owner in a situation where it was out of his power to exercise due care over the horse while this new cause was in operation, and until it had contributed to produce the disaster by which his leg was broken." These cases and others in Massachusetts are criticised and contrasted in an in- teresting manner in Toms v. Whitby, 35 Up. Can. Q. B. 195, where a differ- ent rule prevailed. The substance of the opinion in the case referred to is given in the first edition of this woi-k, vol. 1, pp. 38-47. iClay Centre v. Jevons, 2 Kan. App. 568, 44 Pac. Rep. 745. Where a team was being driven along a road and the tugs became loosened and fell from the whiffle- trees, the pole fell to the ground, the horses ran away, and the wagon went down an unguarded slope, the primary cause of the resulting in- jury was the detaching of the tugs, and not the absence of a barrier. Card V. Columbia, 191 Pa. 254, 43 Atl. Rep. 217. 2 McClure v. Sparta, 84 Wis. 269, 54 N. W. Rep. 387, 36 Am. St. 924. See Hayes v. Hyde Park, 153 Mass. 514, 27 N. E. Rep. 522, 12 L. R. A. 249. 3 Thorogood v. Bryan, 8 G B. 115 (1849). 4 13 App. Cas. 1. sPrideaux v. Mineral Point, 43 Wis. 513; Otis v. Janesville, 47 id. 422, 2 N. W. Rep. 783. SG COMPENSATION. [§27 judications arc hostile to it.^ The- principle dedacible from these decisions, say the supreme court of Indiana, is that one who sustains an injury without any fault or negligence of his own, or of some one subject to his control or direction, or with whom he is so identified in a common enterprise as to become responsible for the consequences of his negligent conduct, may look to any other person for compensation whose neglect of duty occasioned the injury, even though the negligence of some third person with whom the injured person was not identified may have contributed thereto.' But this is not the rule if the person who is riding with another knows of and ac- quiesces in the other's purpose to commit a wrong against a third party. In such a case, in the absence of exculpatory evidence, the passenger will be presumed to be co-operating with the driver.' It is said, arguendo^ in Vermont, and is held in some states that the rule does not apply to an action for the benefit of a parent, to recover for the death of a child, the 1 Little V. Hackett, 116 U. S. mQ, 6 Slip. Ct. Rep. 891: Wabash, etc. R Co. V. Shacklet, 105 111. 364, 44 Am. Rep. 791; Carlisle v. Brisbane, 113 Pa. 544, 6 At). Rep. 372; Railway Co. V. Eadie, 43 Ohio St. 91, 54 Am. Rep, 803, 1 N. E, Rep. 519; Philadelphia, etc. R. Co. V. Hogeland, 66 Md. 149, 59 Am. Rep. 159, 7 Atl. Rep. 105; Cuddy V. Horn, 46 Mich. 596, 10 N. W. Rep. 32, 41 Am. Rep. 178; New York, etc R. Co. v. Steinbrenner, 47 N. J. L. 161; Nesbit v. Garner, 75 Iowa, 314, 9 Am. St. 486, 39 N. W. Rep. 516; Masterson v. New York C. etc. R. Co., 84 N. Y. 247; Knights- town V. Musgrove, 116 Ind. 121, 9 Am. St. 827, 18 N. E. Rep. 452, 1 L. R. A. 152; Sheffield v. Central U. Tele- phone Co., 36 Fed. Rep. 164; Strauss V. Newburgh Electric R. Co., 6 A pp. Div. 264, 39 N. Y. Supp. 998; Hennes- sey V. Brooklyn City R Co.. 6 App. Div. 206, 39 N. Y. Supp. 805; Zimmer- man V. Union R Co., 28 Api'. Div. 445, 51 N. Y. Supp. 1; Ouverson v. Grafton, 5 N. D. 281. 65 N. W. Rep. 676; Faust v.Philadelphia&R. RCo.,19lPa.420, 43 Atl. Rep. 329; Bamberger v. Citi- zens' Street R Co., 95 Tenn. 18, 28 L, R A. 486, 49 Am. St. 909. 31 S. W. Rep. 163; Missouri, etc. R. Co. v. Rogers, 91 Tex. 52, 40 S. W. Rep. 956: Ploof V, Burlington Traction Co., 70 Vt. 509, 41 Atl. Rep. 1017, 43 L. R A. 108; Norfolk & W. R Co. v. Grose- close, 88 Va. 267, 29 Am. St. 718, 13 S. K Rep. 454; Atlantic & D. R Co. V. Ironmonger, 95 Va. 625, 29 S. E, Rep. 319; Roth v. Union Depot Co., 13 Wash. 525, 31 L. R. A. 855, 43 Pac. Rep. 641, 44 id. 253; Turnpike Co. v. Yates, 108 Tenn. 428, 438, 67 S. W. Rep. 69; Union Pacific R. Co. v. Lap sley, 51 Fed. Rep. 174, 2 C. C. A. 149, 16 L. R A. 800. See Jones v. Scul- lard, [1898] 2 Q. B. 565, for the rule where the servant of one person is hired by another. 2 Knightstovvn v. Musgrove, 116 Ind. 121, 9 Am. St. 827, 18 N. E. Rep. 452. 3Brannen v. Kokomo, etc. Co., 115 Ind. 115, 7 Am. St. 411. 17 N. K Rep 202. § 28.] CONSEQUENTAL DAMAGES FOK TORTS. 87 statute providing for the* recovery of such damages as are just.^ Other courts hold the contrary view where the action for the death of the child is brought by his personal representa- tive.^ The Connecticut court has refused to apply the rule in an action to recover for injuries sustained by a defective high- w^ay, the statute authorizing a recovery in such a case by any person injured by means of a defect in the highway. It is said that the liability is penal in its nature, and does not ex- tend to a case in which the injuries resulted to a traveler from the defect and the culpable negligence of a fellow traveler.' There is probably no dissent from the doctrine that one who is bound to care for and protect a child cannot profit because of the neglect of his duty.* § 28, Particular injury need not 1)6 foreseen. It will [47] appear from a perusal of the cases in which consequential damages have been allowed and from the principle on which they are recovered, that at the time the wrongful act is done it need not be certain that such damages will ensue. It is only essential that the act have a tendency and be likely to cause such damages, not that they be certain to follow; in this respect they are generally contingent, and by possibility may not happen.^ If one remove or destroy a fence inclosing a J Ploof V. Burlington Traction Co., N. E. Rep. 391: Brown v. Chicago, 70 Vt. 509, 41 Atl. Rep. 1017, 43 L. R. etc. R. Co., 54 Wis. 342, 11 N. W. Rep. A. 108; Tucker V. Draper, 62 Neb. 66, 356, 911; Hill v. Winsor, 118 Mass. d6 N. W. Rep. 917; Atlanta & C. Air 251; Barbee v. Reese, 60 Miss. 906; Line R. Co. v. Gravitt, 93 Ga. 369, Christiansen v. Chicago, etc. R. Co., 20 S. E. Rep. 550. 26 L. R. A. 553. 67 Minn. 94, 69 N. W. Rep. 640; Rea 2 Norfolk & W. R. Co. v. Grose- v. Bailmain New Ferry Co., 17 N. S. close, 88 Va. 267. 13 S. E. Rep. 454, 29 W. (law) 92; Henderson v. O'Halo- Am. St. 718; Wymore v. Mahaska ran, Ky. — , 24 Ky. L. Rep. 995, County, 78 Iowa, 396. 16 Am. St. 449, 20 S. W. Rep. 662. 43 N. W. Rep. 264. In Sneesby v. Lancashire & Y. R. 3 Bartram v. Sharon, 71 Conn. 686, Co., 1 Q. B. Div. 42, a herd of plaint- 71 Am. St. 225, 46 L. R. A. 144, 43 ifl's cattle were being driven along Atl. Rep. 143. See Ouverson v. Graf- an occupation road to some fields, ton, 5 N. D. 281, 65 N. W. Rep. 676. The road crossed a siding of defend- * xltlanta & C. Air Line R. Co. v. ant's railway on a level, and when Gravitt, supra, and cases cited. the cattle were crossing the siding * Louisville, etc. R. Co. v. VV^ood, the defendant's servants negligently 113 lud. 544, 565, 14 N. E. Rep. 572, sent some trucks down the siding 16 id. 197; Wabash, etc. R. Co. v. amongst them, which separated Locke, 112 Ind. 404, 2 Am. St. 193, 14 them from the drovers and so fright- CIMPENSATION. [§28. field, or open a gap in it, there is a possibility that animals confined there may not escape so as to encounter danger out- side ^ or subject the owner to expense in recovering them;* and it is possible that other cattle will not trespass upon such field to destroy a crop there,' or to do injury to an animal there,* or to receive injury;^ but the wrong done in opening such inclosure is so likely to lead to these injurious results that they are proximate if they occur. Opening the fence does not cause an animal to pass through it; it offers the op- portunity, exposes to injury property within or property out- side of it, or both. It is in this manner that the primary and efficient cause generally produces consequential damages. The party injured in his person or property is by the wrong- ful act of another or his culpable negligence exposed or left in exposure from some cause imminent and fairly obvious in ex- ened them that a few rushed away from the control of the drovers, fled along the occupation road to a gar- den some distance off, got into the garden through a defective fence, and thence on to another track of the defendant's railway and were killed. The result was not too re- mote. The court said that the re- sult of the negligence was twofold: first, that the trucks separated the cattle, and second, that the cattle were frightened and became infuri- ated and were driven to act as they would not have done in their natu- ral state: that everything that oc- curred or was done after that must be taken to have occurred or been done continuously; and that it was no answer to say that the fence was Imperfect, for the question would have been the same had there been no fence there. Compare West Ma- hanoy v. Watson, 116 Pa. 344, 9 Atl. Rep. 430, 2 Am. St. 804. See Rucker V. Freeman, 50 N. H. 420, 9 Am. Rep. 207; Alabama, etc. R. Co. v. Chap- man, 80 Ala. 615, 2 So. Rep. 738; Isham V. Dow's Estate, 70 Vt. 588, 41 Atl. Rep. 585, 45 L. 11. A. 87. 1 Powell V. Salisbury, 2 Y. & J. 391; White V. McNett, 33 N. Y. 371 ; Welch V. Piercy, 7 Ired. 365; Halestrap v. Gregory, [1895] 1 Q. B. 501. The act of opening a fence which incloses a pasture in which horses are kept is tlie proximate cause of injury to them, if they escape and come in contact with a barbed- wire fence, such material being largely used for fencing in the ad- jacent country. West v. Ward, 77 Iowa. 323, 14 Am, St. 284, 43 N. W. Rep. 309. 2 Bennett v. Lockwood, 20 Wend. 223. 32 Am. Dec. 532. 3 Scott V. Kenton, 81 111. 96. Injury done by trespassing ani- mals owned by a third person is not the direct result of the destruction of the fence which inclosed the crops damaged. Berry v. San Fran- cisco, etc. R. Co., 50 Cal. 435, ap- proved in Durgin v, Neal, 82 CaL 595, 23 Pac. Rep. 133. 4 Lee V. Riley, 18 C. B. (N. S.) 722. ° Lawrence v. Jenkins, L. R. 8 Q. B. 274. § 20.] CONSEQUENTAL DAMAGES FOE TOKTS. 89 isting circumstances or otlierwise, and through such exposure the injury ultimately and proximately reaches him. The [48] wrongful act is the cause of the injury in the natural and probable course of events by subjecting the party injured un- lawfully to other and dependent causes from which the injury directly proceeds. In this way at least the relation of cause and effect must be established between the wrongful act and the injurious consequence.^ The owner of a vessel employed in building a sea wall was given by the owner of the wall the exclusive right to its use as a place of safety for his vessel. The master of another vessel, without permission, placed her behind the wall and refused to move her when requested, the former desiring to put his there as a place of safety against a storm. This vessel was sunk by the storm while thus excluded from that position. The sinking was held to be the proximate consequence of being denied the shelter of the wall.- It is not required that the damages be foreseen, as consequential dam- ages from a breach of contract must be contemplated by the parties when they enter into it.* Nor, on the other hand, will the wrong-doer be liable for every possible damage which may indirectly ensue from his misconduct.* § 29. The act complained of must be the efficient cause. The defendant's misconduct must be the efficient cause and the injury which follows must be such as ought to have been foreseen as a probable consequence in the light of surrounding circumstances. There is generally another and more imme- diate cause of the injury; the primary cause, to be deemed re- sponsible and efficient for the purpose of recovering damages, 'Olmsted v. Brown, 12 Barb. 657; over a platform upon which the Schumaker v. St. Paul & D. R. Co., goods he was inspecting were dis- 46 Minn. 39, 48 N. W. Rep. 559, 12 L. played, they being near the shaft. R. A. 257; Christianson v. Chicago, Rosenbaum v. Shoffner, 98 Tenn, etc. R. Co., 67 Minn. 94, 69 N. W. Rep. 624, 40 S. W. Rep. 1086. 640; Beopple v. Railroad, 104 Tenn. 2 Derry v. Flitner, 118 Mass. 131; 420, 58 S. W. Rep. 231; Gilman v. Tinsman v. Belvidere D. R. Co., 26 Noyes, 57 N. H. 627. N. J. L. 148, 69 Am. Dec. 565. The negligence of the proprietor 3 Bowas v. Pioneer Tow Line, 2 of a store in failing to guard an ele- Sawyer, 21. vator shaft, and not the stumbling * Beach v. Ranney. 2 Hill, 314; of a customer, is the proximate Central R. Co. v. Dorsey, — Ga. — , cause of the latter's death from fall- 42 S. E. Rep. 1024. ing into the shaft after stumbling 90 COMPENSATION. [§ 29: must have directly set in motion an intervening and more im- mediate agency or be directly in fault for the exposure of the injured party to its injurious influence. The wrongful refusal of a corporation to register among its members one who has purchased shares of its stock on the ground that there was a debt due it from the original owner does not make it liable to such owner for a decline in their value occurring between the times when the transfer oucrht to have been registered and when in fact it was reo:istered, such decline damag'ino: the transferror because of the terms of the contract between him and the transferee, of which the company had no notice. There is no connection between the market price of the shares and the act of the corporation.^ A bridge erected over a slough of a river and a part of the highway from the business part of a citj'- to a levee on the river became impassable for [19] want of repairs, by reason of which the owner of a lot of wood which had been collected at the levee for transportation over the bridge was unable to so transport it. While l3'ing there under these circumstances it was washed away by a freshet. The damages were held too remote to be the conse- quence of the neglect to repair the bridge.^ The defendant's- negligence did not consequentially cause the loss of the wood, if it could be moved to a place of safety in another direction; nor was the loss by freshet proximate unless, according to the general experience, it was a probable occurrence. The loss of an office as the result of an assault and battery has been held too remote, and too much the result of other and independent causes to be taken into consideration.' So where the de- fendant libeled a concert singer who, in consequence, refused to sing at the plaintiff's oratorio for fear of being badly re- ceived, it was held that this damage to the plaintiff was not sufficiently connected with the act of the defendant. The re- 1 Skinner v. London Marine Ins. 3 gj-own v. Cumraings, 7 Allen, 507; Co.. 14 Q. B, Div. 883. See Bourdette Boyce v. Bayliffe, 1 Camp. 58; Hoey V. Sieward, 107 La, 258, 31 So. Rep. 630, v. Felton, 11 C. B. (N. S.) 142; Burton holding a similar rule where inspec- v. Pinkerton, L. R. 2 Ex. 340; Smitha tion of corporate books was denied v. Gentry, 20 Ky. L. Rep. 171, 45 S. a stockholder. W. Rep. 515, 42 L. R. A. 302, citing 2 Dubuque, etc. Ass'n v. Dubuque, the text. 30 Iowa, 17& §20.] CONSEQUENTIAL DAMAGES FOE TORTS. 91 fusal to sing might have proceeded from groundless apprehen- sion or caprice, or some other cause altogether different than that alleged.' It is not the natural result of enticing a minor daughter 1 Ashley v. Harrison, 1 Esp. 48. In Taylor v. Neri, id. 386, it appeared that the defendant beat an actorand thereby disabled and prevented him from performing his engagement with the plaintiff. It was held that the injury to the manager was too remote. These two cases came under criti- cism in Lumley v. Gye. 2 El. & B. 21G, which was an action by the manager of a theatre against the manager of a rival theatre for procuring a singer to break her engagement. The cir- cumstance that the plaintiff had an action against the singer herself upon her agreement was overruled, and the plaintiff recovered on the principle that the defendant incurred tiie same liability for interfering with such a servant as anj- other. Wightman, J., said: " In the present case there is the malicious procure- ment of Miss W. to break her con- tra't, and the consequent loss to the plaintiff. Why, then, may not the plaintiff maintain an action on the case? Because, as it is said, the loss or damage is not the natural or legal consequence of the acts of the de- fendant. There is the injuria and the damnum; but it is contended that the damnum is neither the nat- ural nor legal consequence of the in- juria, and that, consequently, the action is not maintainable, as the breaking of her contract was the spontaneous act of Miss W. herself, who was under no obligation to yield to the persuasion or procurement of the defendant. Another case of Vi- cars v. Wilcocks, 8 East, 1, which, though it has been brought into ques- tion, has never been directly over- ruled, was relied upon as an author- ity upon this point for the defendant. That case, however, is clearly dis- tinguishable from the present upon the ground suggested by Lord Chief Justice Tindal in Ward v. Weeks, 7 Bing. 211, 215, that the damage in that case, as well as in Vicars v. Wil- cocks, was not the necessary conse- quence of the original slander ut- tered by the defendants, but the result of spontaneous and unauthor- ized communications made by those to whom the words were uttered by the defendants. The distinction is taken in Green v. Button. 2 Cr.. M. & R 707, in which it was held the ac- tion was maintainable against the defendant for maliciously and wrong- fully causing certain persons to re- fuse to deliver goods to the plaintiff by asserting that he had a lien upon then\ and ordering these persons to retain the goods until further orders from him. It was urged for the de- fendant in that case that as the per- sons in whose custody the goods were, were under no legal oWigation ta obey the orders of the defendant, it was a mere spontaneous act of these persons which occasioned the dam- age to the plaintitf: but the court held the notion maintainable tiiough the defendant did make the claim as of right, he having done so mali- ciously, and without any reasonable cause, and the damage accruing thereby." The doctrine of Vicars v, Wilcocks and cases of that class does not ex- clude responsibility when the dam- age results to the party injured through the intervention of the legal and innocent acts of third parties, for 92 COMPENSATION. [§ 29. from her home, against her father's objections, and employing lier to work in defendant's home, that she should be seduced by the latter's son.^ The killing of plaintiff's son, without wilful intent to injure plaintiff, does not give the latter a cause of action for the breach of a contract on the son's part to sup- port his father.^ There is no connection between defamatory statements made respecting one who desires employment and is required to give a bond to his employer and the refusal of a company to give such bond because of such statements; be- tween defendant's wrong and plaintiff's damage the voluntary act of a third party intervened, and such act was the proxi- mate cause of the loss of employment.' A claim of damages for goods frozen because defendant had taken a false and spurious deed of land, thereby preventing the digging of a cellar in which to put the goods, cannot be allowed.* Defend- ant negligently stored oil on a wooden platform of its freight house in a town, and had done so for such a length of time that the platform and the ground beneath it had become satu- rated with oil. A fire was caused by throwing a match upon the ground under the platform by a person not connected with the defendant, but who was rightfully on the premises. It was ruled that the defendant was not liable for the loss of buildings near the freight house as the result of the fire.^ But the rule is otherwise if the substance negligently exposed is liable to ignite spontaneously and produce damage.^ in such instances damage is regarded 87, 60 S. W. Rep. 105S, 83 Am. St 459; as occasioned by the wrongful cause Gregory v. Brooks, 35 Conn. 437, 95 and not by those which ai'e not Am. Dec. 278; Connecticut Mut. L. wrongful; as where one who desires Ins. Co. v. New York, etc. R. Co., 25 to make the customer of another be- Conn. 265, 65 Am. Dec. 571. lieve that the work done for him is 3 McDonald v. Edwards, 20 N. Y. badly done, and to accomplish that Misc. 523. 46 N. Y. Supp. 672; Pickett end loosens a shoe put on the custom- v. Wilmington & W. R Co., 117 N. C. er's horse. In such case the person 616. 23 S. E. Rep. 264, 53 Am. St. 611, who defames the horseshoer is re- 30 L. R. A. 257. sponsible to him for the loss of the ^ Cormier v. Bourque, 32 N. B. 283. patronage which may result from ^ Stone v. Boston & A. R. Co., 171 his act. Hughes v. McDonough, 43 Mass. 536, 51 N. E. Rep. 1, 41 L. R A. N. J. L. 459, 39 Am. Rep. 603. 794. 1 Stewart v. Strong, 20 Ind. App. ^ Vaughan v. Menlove, 8 Bing. N. CL 44, 50 N. E. Rep. 95. 468. 2 Brink v. Wabash R Co., 160 Mo. § 30.] CONSEQUENTIAL DAMAGES FOR TORTS. 93 § 30. Same subject, A lease of a canal was made by [50] commissioners of navigation under a statute providing that if the lessee should permit the work to be out of repair the com- missioners should give him notice to repair, and on his neglect- ing to make the repairs they might make them and pay the expenses out of the tolls. A lock forming part of the canal fell and detained a barge. In an action for that detention against the commissioners for neglecting to give notice to the lessee to repair, it was held that the action would not lie be- cause the detention was not a damage naturally flowing from the alleged neglect, it not being shown that if such notice had been given the lessee would have repaired or that the commis- sioners would have done so. Pollock, C. B. : "To say that the damage could be the consequence of the wrongful act or omission is, in our judgment, to assert a false proposition of law. The surmise is, — if the notice had been given the repairs would have been done and the lock would not have fallen in, and so not giving notice caused the lock to fall in. As we have said, this is not proved ; but it is not the proximate, nec- essary or natural result of not giving notice. The not giving notice is not sufficient to bring about the result; the giving of it would not be sufficient to hinder it.'" Here the immediate cause of the detention was the obstruction and want of repair of the canal ; the alleged wrong of the defendant did not [51] put the canal out of repair, and as the commissioners were not absolutely required to do anything but give notice, as a step towards repair, it could not be assumed as matter of law that doing so would have caused the repair to be made. The rela- tion of cause and effect between the wrongful act and the alleged injurious consequence was not established. It is indis- pensable that the plaintiff should show not only that he has sustained ^amftf/e, and that the defendant has committed ?itort, but that the damage is the clear and necessary consequence of the tort, and that it can be clearly defined and ascertained.^ 1 Walker v. Goe, 3 H. & N. 395. 20 Ky. L. Rep. 171, 45 S. W. Rep. 515, 2 Lamb V. Stone, 11 Pick. 527; Ver- 43 L. R. A. 302, citing the text; non V, Keys, 12 East, 632; Morgan v. Johnson v. Western U. Tel. Co., 79 Bliss, 2 Mass. Ill; Harrison v. Red- Miss. 58, 29 So. Rep. 787. See Mitch- den, 53 Kan. 265, 30 Pac. Rep. 325, ell v. Western U. Tel. Co., 12 Tex. citing the text; Smitha v. Gentry, Civ. App. 262, 33 S. W. Rep. 1016. 94 COMPENSATION. [§30. An action on the case was brought by a creditor against his debtor and another for confederating together to prevent the plaintiff from obtaining security for the payment of his debt; they were charged with having accomplished that wrong by removing the debtor's propert}^ from his possession to that of his confederate, who secured it or its proceeds, and thus pre- vented its attachment. The plaintiff had obtained judgment, and the debtor had relieved himself from the execution against his body by taking the poor debtor's oath, and the debt re- mained wholly unpaid. The case was proved except the con- spiracy. It was held that the action could not be maintained. Among other reasons for this conclusion was the uncertainty of the plaintiff's damage. Metcalf, J., said : " How could this plaintiff prove that he suffered any damage from the acts of the defendant which are averred in the declaration? How could he prove that he would have secured his debt by attach- ing the property of his debtor if the defendant had not inter- meddled with it? Other creditors might have attached it be- fore him, or it might have been stolen or destroyed while in the debtor's possession. The fact that the plaintiff has suffered actual damage from the defendant's conduct is not capable of legal proof, because it is not within the compass of human knowledge, and therefore cannot be shown by human testi- mony. It depends on numberless unknown contingencies and can be nothing more than a matter of conjecture." ^ The causation between a fire neg- a power of sale contained in a mort- ligently started and which is sup- gage without a notice to him; he posed to have been extinguished, but was afterwards induced by the false- which starts up again, is not severed hood of tlie defendants to assign the by the non-action of a third person mortgage to one M. for tlieir bene- af ter the second fire starts. Although fit, and then caused such foreclosure such failure to act is culpable, it to take place in a manner to avoid neither adds to the original force notice reaching the plaintiff, who nor gives it new direction, and hence was compelled to pay $500 to get a in tracing back the line of causa- deed of the property. The case was tion it will not be noticed as a potent determined on demurrer against the agency. Wiley v. West Jersey E. plaintiff. The promise of the mort- Co., 44 N. J. L. 247. ga-gee was gratuitous, and therefore 1 Wellington v. Small. 3 Cush. 145. neither he nor an assignee would do In Randall v. Hazelton, 12 Allen, any legal wrong by foreclosing ac- 412, a mortgagee voluntarily prom- cording to the power in the mort- ised the mortgagor not to act under gage. The damage was held to re- §31.] CONSEQUENTIAL DAMAGES FOK TORTS. 95 § 31. Same subject. A demurrer was sustained to a [52] declaration which stated that the defendant and a confederate conspired to and did obtain possession of a portion of the plaintiff's premises by falsely pretending that it was wanted suit from the foreclosure and not from the alleged wrong. " Damages," say the court, '"can never be recov- ered where they result from the lawful act of the defendant." The benefit of that gratuitous promise was not a matter of legal right, and though it would have been kept but for the defendant's fraudulent con- tract, and the plaintiff saved from the loss which resulted from the sale, yet that fraud was not action- able because it did not affect any legal right; it could not be said to be an invasion of such a right " to deprive the plaintiff even by false- hood of the benefit of this gratuitous undertaking." The court say: "In theTunbridge-Wells Dippers' case. 3 Wils. 414, while the court remark that there was a real damage in de- priving the plaintiff of some gratuity, they also say in the same sentence that the injury was by disturbing the dippers in the exercise of their right or employment, which it seems by some statutes they were entitled to." Hutchins v. Hutchins, 7 Hill, 104; Burton v. Henry, 90 Ala. 281, 7 So. Rep. 925. In Bradley v. Fuller, 118 Mass. 239, the court stated the material allegations of the declaration, which was held, on demurrer, not to state a cause of action, to be that the de- fendant orally represented to the plamtiff that a corporation of which he was treasurer, and whose overdue note the plaintiff then held, owed no other debts, and had no attachments upon its property; that the represen- tation was fraudulently and falsely made for the purpose of inducing the plaintiff not to commence suit ■upon his note until the corporate property could be placed beyond the reach of attachment by the plaintiff; that all the property of the company was afterwards attached and sold on execution upon another debt; and that the plaintiff, induced by the representations not to enforce his claim by suit, lost his debt against the company. In one count the plaintiff .stated that he " was induced to forbear securing payment of his note by an attachmant of said prop- erty, as he might and would have done but for said false representa- tion." The court say: "Under the law as laid down by this court, the facts stated in these counts do not show a legal cause of action, or that the plaintiff has suffered any legal damage. There is no attachment or attempt to attach, on the part of the plaintiff, alleged; it does not appear that by reason of the alleged repre- sentation he lost anything which he ever had. Taking these counts in the most favorable sense for the plaintiff, they simply charge that the plaintiff, induced by the falsehood alleged, refrained from carrying into effect an intention to attach; and that another creditor did attach and apply the company's property to the payment of his debt. It must neces- sarily be uncertain whether the plaintiff would have attached the property and applied it to the pay- ment of his debt if the alleged rep- resentation had not been made." It seemed to the author of this work that this case was erroneously decided. The law recognizes the value of the preference which one creditor by diligence may obtain by a first attachment of the property of an insolvent debtor. Its practical 96 COMPENSATION. [§ 31. for a lawful trade, and tlien set up an illicit still there; that by falsely pretending, and by divers false and fraudulent means and devices, they made it appear and be believed that it was [53] the plaintiff who set up such still and was the proprietor thereof; that thereby he was convicted of keeping illicit stills. It was held that the damage was not the natural and proximate consequence of the defendant's act.^ "Where a trespassing horse kicked a child, it was held that the injury was not the natural consequence of the trespass in the absence of evidence that the defendant knew that the horse was vicious. The court said to entitle the plaintiff to maintain an action it is necessary to show a breach of some legal duty due from the defendant to the plaintiff. And if there was negligence on the part of the owner of the horse in permitting him to be at large, it did not appear to be connected with the damage of which the plaintiff complains. " The owner of a horse must be taken to know that the animal will stray if not properly se- cured, and may find its way into his neighbor's corn or pasture. For a trespass of that kind the owner is, of course, responsible. [51] But if the horse does something which is quite contrary to his ordinary nature, something which his owner had no reason to expect him to do, he has the same sort of protection that the owner of a dog has, and everybody knows that it is not at all the ordinary habit of a horse to kick a child on a highway. It was assumed that the injury to the plaintiff was caused by the horse having viciously kicked him, as a horse of ordinary temper would not have done; therefore the plaintiff was bound to show, and did not, that the defendant knew that value was illustrated by that case, of law, that no damages can be re- The debtor was liable to attachment, covered on the basis of frustrating and had property. The plaintiff al- an intention, the carrying out of leged that he might and would have which, in the future, is lawful, and attached it but for the fraudulent rep- would secure an advantage or pre- resentations. Thecourt, on demurrer, vent a loss. That it maybe proved held it "necessarily uncertain" that that an intention will be carried out this purpose would be executed; and where the party has the ability, and so much so, that the law will not his interest requires it to be executed, accept the allegation as stating a is legally assumed in a multitude of provable fact, and it is therefore not cases. admitted by a demurrer. It certainly i Barber v. Lesiter, 7 C. B. (N. S.) cannot be maintained, as a matter 175. §31.] CONSEQUENTIAL DAMAGES FOR TORTS. 97 the horse was subject to that infirmity of temper." ' In a sub- sequent case a mare strayed into the plaintiff's pasture and there, from some unexplained cause, kicked the plaintilFs horse and broke his leg, and he was necessarily killed. Erie, C. J.: "The contest at the trial seems to have been whether or not the mare was of a ferocious or vicious disposition, and whether the defendant knew it. But I think it was not neces- sarj' to go into that question, because the act, which upon the evidence must be presumed to have caused the injury, was not one which was characteristic of vice or ferocity in the mare in the ordinary sense. The animal had strayed from its own pasture, and it was impossible that her owner could know how she would act when coming suddenly in the night-time into a field among strange horses. That constitutes the difference between this case and those relied on by the defendant, and supports the summing up of the judge when he said it was not a question of vice or scienter in the ordinary sense." The de- Expenses incurred by one whose property has been wrongfully levied on in trying to find buyers for it are too remote. Fatheree v. Williams, 13 Tex. Civ. App. 430, 35 S. W. Rep. 324. 1 Cox V. Burbridge, 13 C. B. (N. S.) 480; Jackson v, Smithson, 15 M. & W. 563; Hudson v. Roberts, 6 Ex. 697. In Dickson v. McCoy, 39 N. Y. 400. a child of ten years was passing de- fendant's stable upon the sidewalk of a populous street, when the de- fendant's horse came out of the stable, being loose and unattended, and, in passing, kicked the boy. The complaint alleged that the horse was of a malicious and mischievous dis- position, and accustomed to attack and injure mankind, but of this no proof was made. It was held that this was not material, that " it is not necessary that a horse should be vicious to make the owner respon- sible for injury done by him through the owner's negligence. The vice of Vou 1 — 7 the animal is an essential fact only when, but for it, the conduct of the owner would be free from fault," as, for instance, in the case of a horse, properly fastened in the highway, which should kick or bite a passer-by. In such a case the owner would be liable only if he had knowledge of the vicious disposition of the animal, but where a horse is allowed to run in the streets of a populous city it is obviously dangerous to the public, and the danger is none the less be- cause the running and kickmg of the horse are done in a playful mood, than if prompted by a vicious dis- position. Mills V. Bunke, 59 App. Div. 39, 69 N. Y. Supp. 96. In the absence of the owner of land his wife directed her child to drive off a horse trespassing thereon ; while domg so the hoi"se kicked the child. The court distinguisiied Cox V. Burbridge, supra, and sustained a recovery. Waugh v. Montgomery, 8 Vict. L. R. (law) 290. 98 COMPENSATION. [§ 32. fendant was held responsible for the mare's trespass, the dam- asfe not beinij: remote.^ Upon the trial of an action for the enticement of servants from the employment of another, it was held erroneous to permit evidence of consequential damages to the effect that the servants plaintiff first employed had provisions and those he subso(juently employed to take their places had not, by which he was compelled to furnish provisions, and, making a poor crop, such persons were unable to pay him for the pro- visions furnished out of their share of the crop, by which he was damaged.^ [55] § 32. Breach of statutory duties. Whenever an ac- tion is brought for breach of duty imposed by statute the party bringing it must show that he had an interest in the performance of the duty and that the duty was imposed for his benefit. But where the duty was created or imposed for the benefit of another and the advantage to be derived to the party complaining of its breach from its performance is merely incidental and no part of the design of the statute, no such right is created as forms the subject of an action. A private pei'son might make a profit by the performance of the duty, but the breach of that duty, while it would naturally deprive him of that benefit, is not a wrong to him. The loss of such a benefit is not in a legal sense an injury. Though actual, it is not a legal consequence of the delinquency. Thus, a post- master bound by an act of congress to advertise uncalled-for 1 Lee V. Riley, 18 C. B. (N. S.) 722; curing otlier labor, the damages re- Barnes V. Chapin, 4 Allen, 444, 81 suiting to crops from delay in plant- Am. Dec. 710; Dunckle v. Kocker. ing, or, if planted, from failure to 11 Barb. 387; Lyons v. Merrick, 105 work them, and such kindred dam- Mass. 71. ages as plaintiff could not have pre- 2 Salter v. Howard, 43 Ga. 601. vented by reasonable diligence and Under a statute which makes the which are attributable to the de- person who contracts with, decoys fendant's act. McCutchin v. Taylor, or entices away any person in the 11 Lea, 259. employ of another who was entitled The damages which may be recov- to the services of the person enticed ered for enticing away the servant liable for all such damages as the of another include the profits of the original employer may reasonably servant'slabor. and the loss sustained sustain by the loss of the labor of by the plaintiff's inability to improve such employee, it is competent to his property in consequence. Smith consider the reasonable cost of pro- v. Goodman, 75 Ga. 198. ^§ 33.] CONSEQUENTIAL DAMAGES FOR TOKTS, 99 letters in a newspaper of a particular description commits no legal wrong- to the proprietor of such a paper when he omits such publication or gives the business to a paper of a different description.^ If the non- performance of a duty results in injury to a third person the delinquent party is responsible to him. Thus, where the owner of a water channel or cut, made pursuant to authority of the state and open for the use of all vessels whose owners complied with the prescribed conditions, refused to allow to a tug, necessarily employed to tow a vessel through it, access to the vessel, he was responsible to her owner for damage resulting from the discharge of her cargo by light- ers.- It is the natural result of locating a pest-house within a forbidden distance of a residence that the disease affecting patients in the pest-house will be communicated to persons liv- inof or visiting in the neighborhood.^ " Whenever an act is en- joined or prohibited by law, and the violation of the statute is made a misdemeanor, any injury to the person of another, caused by such violation, is the subject of an action; and it is sufficient to allege the violation of the law as the basis of the right to recover, and as constituting the negligence complained of,"^ One who violates a statute by carrying a revolver is lia- ble to any person injured by him therewith, though such per- son consented to the other's carrying and use of the revolver.* The defendant while violently beating a horse slipped and un- intentionally injured the plaintiff. Because the beating was ■contrary to a statute forbidding cruelty to animals, there was liabilitj'' to the plaintiff.^ § 33. Injury through third person. "Where the plaintiff is injured by the defendant's conduct to a third person it is too remote, if he sustains no other than a contract relation to such third person, oris under contract obligation on his account, and the injury consists only in impairing the ability or incli- 1 Strong V. Campbell, 11 Barb. 145 (Ky.). See McKay v. Henderson, 135. 71 S. W. Rep. 625 (Ky.). 2 Buffalo Bayou Ship Canal Co. v. ^ Messenger v. Pate, 43 Iowa, 443. Mil by, 63 Tex. 492, 51 Am, Rep. 608. See § 4. 3 Henderson v. O'Haloran, — Ky. 5 Evans v. Waite, 83 Wis. 286, 53 . 24 Ky. L. Rep. 995, 20 S. W. Rep. N. W. Rep. 445. 662; Clayton v. Henderson, 44 S. W. 6 Qsborne v. Van Dyke, IIB Iowa, Rep. 667, 44 L. R A. 474; Henderson 557, 85 N. W. Rep. 784, 54 L. R. A. V. Clayton, 57 S. W. Rep. 1, 53 L. R. A. 367. 100 COMPENSATION. [§ 33. nation of such third person to perform his part, or in increas- ing the plaintiff's expense or labor of fulfilling such contract, unless the wrongful act is wilful for that purpose.^ A., who had ao-reed with a town to support for a specific time and for a fixed sum all the town paupers, in sickness and in health, was held to have no cause of action against S. for assaulting and beating one of the paupers, whereby A. was put to in- creased expense. The damage was too remote and indirect.- A stockholder in a bank cannot maintain an action against its directors for their negligence in so conducting its affairs that its whole capital stock is lost and the shares therein rendered worthless, nor for the malfeasance of the directors in delegat- ing the whole control of the affairs of the bank to the presi- dent and cashier, who wasted and lost the whole capital.^ The [56] direct injury is to the corporation, and only remotely to the stockholders. The latter have a remedy, in theory, though often inadequate, in the power of the corporation as such to obtain redress for injuries done to the common property by the recovery of damages.* A party who by contract was, he furnishing the raw material, to have all the articles to be manufactured by an incorporated company, was held not en- titled to maintain an action against a wrong-doer who by tres- pass stoi)ped the company's machinery so that it was prevented from furnishing, under that contract, manufactured goods to so great an extent as it otherwise would have done.^ A cred- itor can maintain no action against one who has forged a note by which the dividends from an estate were diminished.^ An insurance company cannot recover from a wrong-doer who causes the loss insured against the money paid to satisfy such loss.' A man drafted into the military service deserted, and 1 Brink v. Wabash R. Co., 160 Mo. < Id. 87, 60 S. W. Rep. 1058, 83 Am. St. 459; 5 Dale v. Grant, 34 N. J. L. 143. Gregory v. Brooks, 35 Conn. 437, 95 *• Cunningham v. Brown, 18 Vt. Am. Dec. 278; Lumley v. Gye, 2 EI. & 123, 46 Am. Dec. 140. Bl. 216; McKay v. Henderson, 71 S. "^ Rockingham Ins. Co. v. Bosher, W. Rep. 625 (Ky.). 39 Me. 253, 63 Am. Dec. 618: Connec- 2 Anthony v. Slaid, 11 Met. 290. ticut, etc. Ins. Co. v. New York, etc. 3 Smith V. Hurd, 12 Met. 371, 46 R. Co.. 25 Conn. 26.5, 65 Am. Dec. 571. Am. Dec. 690. See Bloom v. National See PacificPine Lumber Co. v. West- United Benefit Savings & L. Co., ern U. Tel. Co., 123 Cal. 428, 56 Paa 152 N. Y. 114, 46 N. E. Rep. 166. Rep. 103. § 34.] CONSEQUENTIAL DAMAGES FOK TORTS. 101 another who had been drawn as an alternate to serve in such a contingency, and was consequently obliged to and did serve, was held to have no legal claim against the deserter for the loss and injury of doing so.' But where a tradesman or me- chanic is defamed in his business or avocation by a false and fraudulent device practiced upon one of his customers, the per- son who is guilty of such fraud is responsible for a loss of patronage flowing therefrom, although the customer was also wronged.^ The exception indicated in the opening sentence of the section is illustrated by a case in which the defendant falsely claimed and represented himself to be a superintendent of wharves and harbor-master, and as such to have issued an order directing the captain of a vessel moored at the plaintiff's wharf to remove therefrom. At the time the order was given the captain was discharging, and the plaintiff was receiving, a cargo from the vessel. The plaintiff owned and kept such wharf for the purpose of letting it for hire. By means of such acts the captain w^as induced to remove from the plaint- iff's wharf and discharge his cargo at another wharf. The right to recover was adjudged if the defendant acted with a malicious and fraudulent design to injure the plaintiff.^ § 31. Liability as affected by extraordinary circumstances. There must not only be a legal connection between the injury and the act complained of, but such nearness in the order of events and closeness in the relation of cause and effect that the influence oi the injurious act may predominate over that of other causes, and concur to produce the consequence or be traced to thotje causes.* To a sound judgment must be left each particular case. The connection is usually, but not always, enfeebled and the influence of the injurious act controlled, where the wrongful act of a third person intervenes, or where any new agent, introduced by accident or design, becomes more powerful in producing the consequence than the first injurious act. The requirement that the consequences to be answered for should be natural and proximate is not that they should [57] 1 Jemmison v. Gray, 29 Iowa, o37. 3 Gregory v. Brooks, 35 Conn. 437, 2 Hughes V. McDonough, 43 N. J. 95 Am. Dec. 278. L. 459, 39 Am. Rep. 603. ^Coyle v. Baum, 3 Okla. 695, 716, 41 Pac. Rep. 389, quoting the text. 102 COMPENSATION". [§ 35. be such as upon a calculation of chances would be found likely to occur, nor such as extreme prudence would anticipate, but only that they should be such as have actually ensued one from another, without the occurrence of any such extraordinary con- juncture of circumstances, or the intervention of such an extraor- dinary result as that the usual course of nature should seem to have been departed frora.^ The general rule is that a de- fendant is not answerable for anything beyond the natural, ordinary and reasonable consequences of his conduct.^ We are not to link together as cause and effect events having no prob- able connection in the mind, and which could not, by prudent circumspection and ordinary thoughtfulness, be foreseen a& likely to happen in consequence of the act in which we are en- gaged. It may be true that the injury would not have occurred without the concurrence of our act with the event which im- mediately caused the injury, but we are not justly called to suffer for it unless the other event was the effect of our act, or was within the probable range of ordinary circumspection. If one's fault happens to concur with something extraordinary and therefore not likely to be foreseen he will not be answer- able for such unexpected result.'' §35. Illustrations of tlie doctrine of the preceding sec- tion. An injury by negligence was done to wool by wetting it, rendering it necessary to take it out of the original packages 1 Harrison v, Berkley, 1 Strobh. 525, Grew v. Stone, s^ipra; Fairbanks v. 549, 47 Am. Dec. 578. This case is Kerr, 70 Pa. 86, 10 Am. Rep. 664; criticised in a note on p. 830, 36 Am. People v. Mayor, 5 Lans. 524; Lee v. St., which criticism is approved in Burlington, 113 Iowa, 356, 86 Am. St. Meyer v. King, 72 Miss. 1, 12, 16 So. 379, 85 N. W. Rep. 618; Nelson v. Rep. 245, 35 L. R A. 474. Crawford, 122 Mich. 466, 81 N. W. 2 Bennett v. Lockwood. 20 Wend. Rep. 335, 80 Am. St. 577; Deisenrieter 223, 32 Am. Dec. 532; Grain v. Petrie, v. Kraus-Merkel Malting Co., 97 Wis. 6 Hill, 523, 41 Am. Dec. 765; McGrew 279, 286, 72 N. W. Rep. 735; Mil- V. Stone, 53 Pa. 436; Big Goose & waukee. etc. R Co. v. Kellogg, 94 Beaver Ditch Co. v. Morrow, 8 Wyo. U. S. 469. 475: Consolidated Electric 537, 547, 59 Paa Rep. 159, 80 Am. St Light & P. Co. v. Koepp, 64 Kan. 735, 955, citing the text. 67 Pac. Rep. 608. 'Stone V. Boston & A. R Co., 171 Some of the cases which deny the Mass. 536, 51 N. E. Repu 1, 41 L. R. A. right to recover for mental suflfering 7)4; Meyer v. King, 72 Miss. 1, 8, 16 or nervous shock do so on the ground So. Rep. 245, 35 L. R. A. 474, citing that the injury is too remote. See the text; Roach v. Kelly, 194 Pa. 24, § 21 et seq. 44 AtL Rep. 1090. 75 Am. St. 685; Mc- § o5.] CONSEQUENTIAL DAMAGES FOR TOKTS. 103 in which it had been imported. A few weeks afterwards an act of congress was passed under which, if the wool had re- mained in the original packages, the plaintiff would have been entitled to a return of duties. It was held that the loss of the right to claim a return thereof was not recoverable as a proxi- mate consequence of the negligence. It was remarked that if the market value of the wool in the original packages had been higher by reason of its being entitled to debenture under the laws existing at the time when the injury was done, the plaintiff would have had a right to an increase of damages in con- [58] sequence of being obliged to break the packages; so if the market value had been enhanced at that time by reason of a general expectation that an act of congress would be passed allowing a return of duties.' In trespass for taking two horses, a wagon and double harness, the declaration stated as special damage occasioned thereby that when it occurred the plaintiff was moving with his family and household goods to another state, and was employing his horses, wagon and har- ness for that purpose; that he was thereby prevented from pursuing his journey, and put to great expense for the support of himself and family; that when the property was taken the roads were frozen and the traveling good ; but while it was detained the frost left the ground and the roads became so muddy that it was quite impossible for the plaintiff to prose- cute his journey, by reason whereof he was detained with his family and prevented from putting in his crops in the state to which he was moving. It was held erroneous to admit evi- dence of these various circumstances. The court recognized the rule that to be recovered the damages must be the natural and proximate consequence of the act complained of; but it was said " no case can be found where a mere accident or event not resulting naturally from the act done by the defendant has been held sufficient to constitute a valid claim for damages."^ The law is correctly stated, but in other cases there has been recovery for some of the damages here denied. In the plaintiff's 1 Stone V. Coflman, 15 Pick. 297. consequence it is damaged in excess 2 Vedder v. Hildreth, 2 Wis. 4'27. of the value of the horses, he may If the owner of horses illegally recover for the injury to the crop. seized is unable to procure other Steel v. Metcalf. 4Tex. Civ. App. 813, means to cultivate his crop, and in 23 S. W. Rep. 474. 104 COMPENSATION, [§ 35. predicament increased expenses and loss of time were necessary r(.>sults of the taking of the property. In an English case ^ the plaintiff took passage to Australia in the defendant's vessel, but he was not allowed to sail on account of a mistaken belief that he had not paid his entire fare. The error was found out immediately and he was offered a passage in a ship which sailed in a week after the first. Instead of going by it, however, he remained in England to a later time to sue the defendant. It was held that the expense of his keep till trial could not be allowed as damages, since he might have gone earlier if he had wished. The suicide of one who was injured on a railway train eight months after the injuries were sustained, though they disordered his mind and body, is not a result which might naturally and reasonably be expected to follow. The court say: " The argument is not sound which seeks to trace this imme- diate cause of the death through the previous stages of mental aberration, physical suffering and eight months' disease and medical treatment to the original accident on the railroad. Such a course of possible or even logical argument would lead back to that ' great first cause least understood ' in which the train of all causation ends." ^ The fact that a passenger train three-fourths of an hour behind its schedule time was blown over by a windstorm which struck a portion of the track on which the train would not have been but for the delay, does not make the company liable for an injury thereby sustained by a passe nger.'* A convict, aged thirty-seven years, had been in the peniten- tiary twelve years, and had escaped therefrom five times. lie was in vigorous health, immoral, of vicious habits, violent passions and prone to desire for sexual intercourse, all of which facts his custodians knew. While at large, through their fault, the convict committed rape. Such act, it was ruled, was not one which the custodians ought to have fore- 1 An.sett V. Marshall, 22 L. J. (Q. B.) the wrong done him, the jury may 118. determine whether the injury w-as 2 Scheffer V. Railroad Co., 105 TJ. S. the proximate cause of death. Tur- 249. See § 36. ner v. Nassau Electric R. Co., 41 App. If the injury which a deceased per- Div. 218, 58 N. Y. Supp. 490. son received precipitated a malady ^ ]\icClary v. Sioux City & P. R. Ca, and he would not have had it but for 3 Neb. 44, 19 Am. Rep. 631. § 36.] CONSEQUENTIAL DAMAGES FOR TORTS. 105 seen as reasonably probable, and they were not liable for it.^ Because of the icy condition of a chute used for loading stock an animal thereon slipped and fell, knocking down a second, which fell upon and injured plaintiff. It was no defense that this connected series of causes produced the injury.- Though a snow storm causes animals to travel toward and into a dan- gerous excavation, the existence of the latter and the neglect of the person responsible therefor are the proximate cause of the loss of the animals.' Making an assault on a woman wait- ing in a railroad station at night in consequence of which her child of seven years becomes frightened, runs out on the tracks, and is killed by a train, is the proximate cause of the death.* While standing on a platform waiting for a train, the plaintiff was injured by being struck by the dead body of a person who was killed while attempting to cross the tracks of the railroad near where the plaintiff was. Assuming that neg- ligence on the part of the railroad company was shown, there was no liability.^ The Georgia court reached a different con- clusion where the company's engineer acted recklessly and wantonly.® § 36. Liability of carriers for consequential damages; extraordinary circumstances. The recent leading Ameri- can case on the liability of carriers of passengers for conse- quential damages was decided in 1882.^ Although the de- cision was not unanimous it has had a noticeable influence in courts which have since been called upon to consider similar questions. The principal facts involved are not essentiall}'' different from those in an English case decided in 1875;^ but the rules of law applied are in strong contrast. This is in part accounted for by the fact that in the Wisconsin case the action 1 Henderson v. Dade Coal Co., 100 5 Wood v. Pennsylvania R. Co., 177 Ga. 568, 28 S. E. Rep. 251. 40 L. R. A. Pa. 806, 35 Atl. Rep. 699, 35 L. R. A. 95: Hullinger v. Worrell, 83 111. 220. 199, 55 Am. St. 728, followed in Ev- 2Kincaid v. Kansas City, etc. R. ansville. etc. R, Co. v. Welch, 25 Ind. Co., 62 Mo. App. 365. App. 308, 58 N. E. Rep. 88. » Big Goose & Beaver Ditch Co. v. « Western & R. Co. v. Bailey, 105 Ga. Morrow, 8 Wyo. 537, 59 Pac. Rep. 159, 100, 31 S. E. Rep. 547. 80 Am. St. 955. " Brown v. Chicago, etc. R. Co., 54 *McGehee v. McCarley, 33 C. C. A. Wis. 342, 11 N. W. Rep. 356, 911. 29, 91 Fed. Rep. 462. 8Hobbs v. London, eta R. Co., L. R 10 Q. B. la lOG COMPENSATION. [§36. was held to be in tort, while the English case was considered as one for broach of the contract. In the former the plaintiffs were husband and wife. They had been the defendant's pas- sengers, and were directed to leave its train at a point three miles from M., their destination, being told that that place was reached. When they disembarked it was dark; a freight train stood on a side-track; there were no lights visible, and no platform on which to alight. There was a station-house near, but it was hid from their view by the freight train. The plaintiffs did not know their location, but supposed that they were one mile nearer M. than the}'' were; they started thither expecting to find a house in which they might remain, but did not find one until they were within one mile of M., when they concluded to go on rather than to seek shelter at the house, it being a considerable distance from the track. It was late at night when they reached M. and Mrs. B. was quite exhausted. She was pregnant at the time, and during that night suffered severe pains which continued for more than two months, when a miscarriage resulted and inflammation set in. The jury found that her sickness was caused by the walk, that the plaintiffs were not negligent in taking that walk, but were compelled to take it as the result of the defendant's wrongful act. The first question determined was that the action was in tort for the negligence and not upon the contract to carry, notwithstanding the complaint recited that the relation be- tween the parties was a contract relation, and that the defend- ant " wholly disregarded its duty in the premises, and its con- tract and obligations to and with the plaintiffs." ^ The court, 1 This view of the nature of the ac- tion is different from that entertained in Hobbs v. London, etc. R. Co., L. R. 10 Q. B. Ill (compare McMahon v. Field, 7 Q. B. Div. 591), where it was held that an action resting on facts ■which are quite like those in the principal case was upon contract, and that damages resulting from the walk taken by the plaintiff to reach his home and .sickness consequent thereupon could not be reco%ered. Tlie ca.se referred to is disapproved in Evans v. St. Louis, etc. R Co., 11 Mo. App. 463, 472; Cincinnati, etc. R. Co. V. Eaton, 94 Ind. 474, 48 Am. Rep. 179. The rule declared in the Wisconsin case as to the form of the action is in harmony with Sloane v. Southern California R. Co., Ill Cal. 668, '62 L. R A. 193, 44 Pac. Rep. 320; Head v. Georgia, etc. R. Co., 79 Ga. 538. 11 Am. St. 454, 7 S. E. Rep. 217; Seals v. Augusta Southern R Co., 102 Ga, 817. 29 S. E. Rep. 116; Carsten v. Northern Pacific R Co., 44 Minn. 454. 20 Am.- St. 589, 47 N. W. Rep. 49. 9 L. R A.. § 30.] CONSEQUENTIAL DAMAGES FOR TOETS. 107 Taylor, J., writing the opinion, said that the doctrine is clearly established that one who commits a trespass or other wrong i& liable for all the damage which legitimately flows directly therefrom, whether such damages might have been foreseen by the wrong-doer or not. Had the defendant wrongfully placed the plaintiffs off the train in the open country, where there was no shelter, in a cold and stormy night, and on ac- count of the state of health of the parties, in their attempts ta find shelter, they had become exhausted and perished, it would seem quite clear that the defendant ought to be liable. Its wrongful act would be the natural and direct cause of their deaths, and it would be a lame excuse for the defendant that if the plaintiffs had been of more robust health they would not have perished or have suffered any material injury. It was no excuse that the female plaintiff's condition was not known to the railroad employees.^ By wrongfully placing the parties in the position in which they were the defendant was also liable for the resulting injury, whether it was the immediate result of its act or of theirs in endeavoring to escape there- from. The case was within the rule that where an efficient adequate cause is found it must be considered the true cause unless some other cause independent of it is shown to have in- tervened between it and the result.^ In strong contrast with 688; Coy v. Indianapolis Gas Co., 146 Cincinnati, etc. R. Co. v. Eaton, 94 Ind. 655, 46 N. E. Rep. 17, 36 L. R. A. Ind. 474, 48 Am. Rep. 179. To the 535; Chicago, etc. R. Co. v. Spirk, 51 same effect are Winkler v. St. Louis. Neb. 167, 70 N. W. Rep. 926; L. & N. etc. R. Co., 21 Mo. A pp. 99; Augusta R. Co. V. Storms, 15 Ky. L. Rep. 333 & S. R. Co. v. Randall, 79 Ga. 304, 4 (Ky. Super. Ct.); Alabama & V. R, S. E. Rep. 764; Evans v. St. Louis, Co. V. Hanes, 69 Miss. 160, 13 So. etc. R. Co., 11 Mo. App. 463; Fitz Rep. 246; Toronto R. Co. v. Grinsted, patrick v. Great Western R. Co., 12 24 Can. Sup. Ct. 570. Up. Can. Q. B. 645; Baltimore City 1 Sloans V. Southern California R. P. R. v. Kemp, 61 Md. 74; Davis v. Co., supra; Mann v. Boudoir Car Co., Standard Nat. Bank, 50 App. Div. 4 C. C. A. 540, 54 Fed. Rep. 646, 21 L. 210, 63 N. Y. Supp. 764; Ehrgott v. R. A. 289; East Tennessee, etc. R. Co. Mayor, 96 N. Y. 264, 48 Am. Rep. 622; V. Lockhart, 79 Ala. 315. Toronto R. Co. v. Grinsted, 24 Can. 2 Brown v. R. Co., supra, has been Sup. Ct. 570; Yazoo, etc. R. Co. v. approved, as to the substantial point Aden, 77 Miss. 382, 27 So. Rep. 385. in it, in Sloane v. R. Co.; Coy v. Gas See Smith v. British, etc. Co., 86 N. Y. Co.; Chicago, etc. R. Co. v. Spirk, 408; Putnam v. Nevp^ York, etc. R. supra; Terre Haute & I. R. Co. v. Co., 47 Hun, 439; g?< 48. 49. Buck, 96 Ind. 346, 49 Am. Rep. 168; An agent viho wrongly informs a 108 COMPENSATION. [§36. the case stated is one decided in 1873/ in which it is held that a female passenger who suffers injuries through a carrier's neo'lio'ence cannot recover for such as are the result of the plij^sical condition she is in, as where illness follows arrested menstruation, although the negligence produces that con- dition. It is well observed concerning this case that it is un- sustained by authority and is supported by neither the prin- ciples of law nor humanity .^ If a passenger wrongfully put off a train at a flag-station, when it is dark and a storm is raging, and at a great distance from his starting point and destination, is injured by falling through a cattle-guard while on his way to the nearest station, the jury may decide whether the result is attributable to such wrong.^ If a shock or injury to the nervous system is occasioned by the wrongful ejection of a passenger from a car it will be re- garded as a physical injury, and the act which caused the shock will be taken to be the proximate cause of the injury if bodily suffering is the result of the shock.* If a passenger who informs a conductor when she boards his train that friends will meet her at her destination is carried beyond it and obliged to sit up all night in a car into which cold is admitted, and to change cars during the night and leave the train at an early hour in the morning, the jury may well find that the carrier is responsible for her subsequent sickness.'^ One who has bought a ticket and is waiting in a station to take a train is a passenger,^ and if the carrier's gateman, knowing that such passenger that a train she is about to take will make close connections with the train of another road at a designated place is not bound to foresee that she would procure a con- veyance, and, in the face of a storm, in a delicate state of health, drive over a rough road to her father's house, and that a miscarriage would result. Fowlkes v. Southern R Co., 96 Va. 743, 33 S. E. Rep. 464. 1 Pullman Palace Car Co. v. Barker, 4 Colo. 344, 34 Am. Rep. 89. - Brown v. Chicago, etc. R. Co., Terre Haute & I. R. Co. v. Buck, Ehrgott v. Mayor, siipra. 3 Evans V. St. Louis, etc. R. Co., 11 Mo. App. 463; Winkler v. Same, 21 id. 99. See Patten v. Chicago & N. R. Co., 32 Wis. 524; and compare Lewis V. Flint, etc. R. Co., 54 Mich. 55, 19 N. W. Rep. 744. *Sloane v. California Southern R Co., Ill Cal. 668, 33 L. R. A. 193, 44 Pac. Rep. 330. 5 Missouri, etc. R. Co. v. Hennesey, 20 Tex. Civ. App. 316, 49 S. W. Rep. 917; Grimsted v. Toronto R. Co., 21 Ont. App. 578. •'Grimes v. Pennsylvania Co., 36 Fed. Rep. 73; Warren v. Fitchburg R. Co., 8 Allen, 227; Wells v. New § 3G.] CONSEQUENTIAL DAMAGES FOR TOETS. 109 person is ill, is so waiting, and has bought his ticket, fails to comply with his request to notify him of the arrival of his train, and after the train has gone directs a policeman to eject such person from the station, saying that " he was not in a con- dition of mind to go on any train," and such person, after being ejected, and while wandering about the tracks near the station, is run over by a train and killed, the carrier is responsible,' If the agent of an express company receives a package for trans- portation with notice that it contains medicine for a sick per- son, and that it is important that it be sent at once, the carrier is liable for the physical and mental injury which its delay in forwarding the medicine may occasion to the sick person; but not for the mental suffering of the husband on account of his wife's condition. 2 Where a carrier had left a locked car marked "powder" near its warehouse, in which a fire broke out, and the cit}'' fire department refrained from making efforts to put out the fire through reasonable fear of the explosion of the powder supposed to be in the car, notwithstanding the car was empty, the negligence in so leaving the car is the proxi- mate cause of the loss of property in the warehouse, it being reasonably certain that the fire would have been controlled but for the apprehension of the firemen.^ On the other hand, a carrier is not presumed to contemplate that an accident may produce insanity in one of its passengers, no bodily harm being sustained.* To recover consequential damages, resulting from being ejected from a train, the plaintiff must show that his subsequent conduct in attempting to reach his destination was reasonable.* The failure to stop a train at a proper place does not justify a passenger in leaping off, unless he is invited to do so by the carrier's agent and the attempt was not obviously dangerous.^ In the absence of notice that a passenger whom a conductor has promised to awaken was to be met at a sta- York Central, etc. R. Co., 25 App. L. R. A. 774; Scheffer v. Railroad Co., Div. 365, 49 N. Y. Supp. 510. 105 U. S. 249; St. Louis, etc. R. Co. v. 1 Wells V. R. Co., supra. Bragg, 69 Ark. 402, 86 Am. St. 206, 2 Pacific Exp. Co. v. Black, 8 Tex. 64 S. W. Rep. 226. Civ. App. 363, 27 S. W. Rep. 830. 5 Chicago, etc. R. Co. v. Spirk, 51 SHardman v. Montana Union R. Neb. 167, 70 N. W. Rep. 926. Co , 27 C. C. A. 407, 83 Fed. Rep. 88. « Burgin v. Richmond & D. R. Co., * Haile v. Texas & Pacific R. Co.. 115 N. C. 673, 20 S. E. Rep. 473. 9 C, C. A. 134, 60 Fed. Rep. 557, 23 110 COMPENSATION. [§37. tion on another road by her father and carried thence to her sister's, where her sick child would receive medical treatment, there is no liability for her mental suffering caused by failure to meet her father and anxiety respecting the child though the ^conductor failed to keep his promise.^ If the negligence of a carrier results in an injury to a pas- senger by which his system is rendered susceptible to disease and less able to resist it when he is attacked by it, and death results, the injury is the proximate cause thereof, although the disease is to be regarded as an intervening agency, and the malady which attacked him was prevalent in the community.^ The court observe that if it " were to undertake to declare any other rule we should be involved in inextricable confusion, for it is clear that the passenger who suffers injuries of a serious character is entitled to some damages, and it is impossible for any one to pronounce, as a matter of law, at what point the injury flowing from the wrong terminated. The only possible practicable rule is that the wrongdoer whose act is the mediate cause of the injury shall be held liable for all the resulting damages, and that the question of whether his wrong was the mediate cause is one for the jury."^ [50] § 37. Intervening cause. Goods carried in a canal boat were injured by the wrecking of the boat, caused by an extraordinary flood which would not have been encountered 1 Chicago, etc. R. Co. v. Boyles, 11 Tex. Civ. A pp. 522, 33 S. W. Rep. 247. This case is of doubtful authority. Compare it with Missouri, etc. R. Co. V. Hennesey. 20 Tex. Civ. App. 316, 49 S. W. Rep. 917. 2 McCoy V. Indianapolis Gas Co., 146 Ind. 655, 667, 46 N. E. Rep. 17, 36 L. R A. 535, quoting the text. 3 Bradshaw v. Lancashire, etc. R. Co., L. R. 10 C. P. 109: Baltimore Passenger R. Co. v. Kemp, 61 Md. 619, 48 Am. Rep. 134: Oliver v. La Valle, 36 Wis. 592; Sloan v. Edwards, 61 Md. 89; Delie v. Chicago, etc. R. Co., 51 Wis. 400, 8 N. W. Rep. 265: Beau- champ v. Saginaw Mining Co., 50 Mich. 163, 45 Am. Rep. 30, 15 N. W. Rep. 65; Baltimore & P. R. Co. v. Reaney, 42 Md. 117; Lyons v. Second Avenue R. Co., 89 Hun, 374. 35 N. Y. Supp. 372, affirmed without opinion, 115 N. Y. 654; Purcell v. Lauer, 14 App. Div. 33, 43 N. Y. Supp. 988; Keegan v. Minneapolis, etc. R. Co., 76 Minn. 90, 78 N. W. Rep. 965; Terra Haute &; L R. Co. v. Buck, 96 Ind. 346, 49 Am. Rep. 168. The opinion in the last case reviews a large number of cases, including Ginna v. Second Avenue R. Co., 8 Hun, 494. affirmed 67 N. Y. 596; Brown v. Chicago, etc. R. Co., 54 Wis. 342, 11 N. W. Rep. 356, 911: Sauter v. New York, etc. R. Co., 66 N. Y. 50, 23 Am. Rep. 18. Compare Scheffer v. Railroad Co., 105 U. S. 249, and other cases cited in n. 4, p. 109. § 37.] CONSEQUENTIAL DAMAGES FOK TOKTS. Ill bat for a retarded passaf^e in consequence of the carrier em- ploying a lame horse. This fact was so unlikely to conduce to such an event that the defendant was not liable.^ A carrier was guilty of a negligent delay of six days in transporting wool which, while in his depot at the place of destination a few days after, was submerged by a sudden and violent flood. The flood was the proximate cause of the injury and the delay the remote cause.^ The same rule has been applied where there was negligent delay in dispatching goods and they were lost while in the carrier's hands by flood, sudden storm or other im- mediate cause; the damage occurring without his fault, he was not responsible.' In similar cases in I^ew York and other states a different conclusion has been reached. In one it was held that when a carrier is intrusted with goods for transpor- tation, and they are injured or lost in transit, the law holds him responsible. Pie is only exempted by showing that the injury was caused b}'" an act of God or the public enemy; and to avail himself of such exemption he must show that he was himself free from fault. His act or neglect must not concur and contribute to the injury. If he departs from the line of his duty and violates his contract, and while thus in fault, and in consequence of that fault, the goods are injured by the act of God, which would not otherwise have caused the injury, he is not protected,'' There was unreasonable delay on the part of the carrier in forwarding goods, and while they were in a railroad depot at an intermediate point they were injured by an extraordinary flood; the carrier was liable because the goods were exposed to the flood by his fault.^ These cases re- 1 Morrison v. Davis, 20 Pa. 171; Mc- 5 Read v. Spaulding, 30 N. Y. 630, Clary v. Sioux City & P. R. Co., 3 86 Am. Dec. 426: Wald v. Pittsburg, Neb. 44, 19 Am. Rep. 631. etc. R. Co., 162 111. 545, 44 N. E. Rep. 2 Denny v. New York Central R. 888, 53 Am. St. 332, 35 L. R. A. 356, Co., 13 Gray, 481, 74 Am. Dec. 645. citing McGraw v. Baltimore & O. R. 3 Railroad Co. v. Reeves, 10 Wall- Co.. 18 W. Va. 361, 41 Am. Rep. 696; 166; Daniels v. Ballentine, 23 Ohio Dening v. Grand Trunk R. Co., 48 St. 532, 13 Am. Rep. 264; Hoadley v. N, H. 455, 2 Am. Rep. 267; Read v. Northern Transportation Co., 115 St. Louis, etc. R. Co., 60 Mo. 199; Mass. 304, 15 Am. Rep. 106. Williams v. Grant, 1 Conn. 487, 7 Am. ^See McAlister v. Chicago, etc. R. Dec. 235; Davis v. Garrett, 6 Bing. Co., 74 Mo. 351, 4 Am. & Eng. R Cas. 617; Crosby v. Fitch, 12 Conn, 410, 31 '210. Am. Dec. 745; Rodgers v. Central 112 COMPENSATION. [§ lating to carriers or others held to an absolute responsibility, [GO] except as relieved by showing that the injury was caused by the act of God, are not wholly controlled by the considera- tion of the nearness of the injury to the fault. Davies, J., said: "It is to be observed that the foundation of this exemp- tion is that the party claiming the benefit and application of it must be without fault on his part." He refers to several cases.^ "These cases," he continues, "clearly establish the rule that the carrier cannot avail himself of the exception to his liability which the law has created, unless he has been free from negligence or fault himself. The policy of the law is to hold him to a strict liability; and this policy, for wise and just purposes, ought not to be departed from. But when the injury occurs from a cause which the carrier could not guard against nor protect himself from, from such an event the [61] law excuses him, but it only does it when he himself is not in fault and is free from all negligence."- It has been held Pacific R. Co., 67 Cal. 606. 8 Pac. Rep. 377; Higgins v. Dewey, 107 Mass. 494, 9 Am. Rep. 63; Philadelphia & R. R. Co. V. Anderson, 94 Pa. 360. 1 Davis V. Garrett, 6 Bing. 716. In this case the plaintiff put on board the defendant's barge lime to be conveyed from M. to L. The master of the barge deviated unnecessarily from the usual course, and during the deviation a tempest wetted the lime, and the barge thereby taking fire the whole was lost, and he was held liable. Tindal, C. J., observed that no wrong-doer can be allowed to apportion or qualify his own wrong, and that as a loss had act- ually happened whilst his wrongful act was in operation and force, and which was attributable to such act, he could not set up as an answer to tiie action the bare possibility of a loss if the act had never been done. It miglit admit of a different con- struction if he could show not only that the same loss might have hap- pened, but that it must have hap- pened, if the act complained of bad cot been dona Charleston Steam- boat Co. v. Bason, 1 Harp. 262; Camp- bell V. Morse, id. 468; Bell v. Reed, 4 Bin. 127. 5 Am. Dec. 398; Hart v. Allen, 2 Watts, 114; Hand v. Baynes. 4 Whart. 204: Williams v. Grant, Crosby v. Fitch, supra. 2 In Read v. Spaulding, 30 N. Y. 630. 639, 86 Am. Dec. 426. See last section. In Parmalee v. Wilks, 22 Barb. 539, the plaintiff, the owner of a raft of saw logs lying at Port Maitland, Canada, made a con- tract with the defendants, the own- ers of a steamboat, by which it was agreed that they would come to Port Maitland on the next Tuesday morn- ing with the steamboat, and proceed up the river about five miles t > D., and there land her passengers, and immediately return to Port Maitland and take the plaintiff's raft in tow, and tow it to Black Kock, a distance of about forty miles, which the steamboat could traverse in about fourteen hours with the raft in tow. The usuhI time for the arrival of the steamboat at Port Maitland, upon her §37.] CONSEQUENTIAL DAilAGES FOR TORTS. 113 that if an administrator deposits money of an estate in a bank and allows it to remain after the time when it should, by punct- ual performance of his duty, have been distributed and in the hands of those entitled to it, and the bank fails and the money is lost, he and his sureties are liable therefor, and the sum so lost is the measure of damages.^ It is immaterial what is the intermediate cause between the act complained of and the injurious consequence, if such act is the eificient and proximate cause, and the consequence was the probable result. There may be intervening operations of nature, acts produced by the volition of animals or of human beings, innocent acts of the injured party or of third persons, and even tortious acts of the latter, and the chain of cause and effect not be necessarily broken, or the result rendered remote. The test is not to be found in any arbitrary number of inter- vening events or agents, but in their character, and in the nat- ural and probable connection between the w^rong done and the trip up, was 3 o'clock in the morn- ing, and it generally took about two hours to proceed to D., land her passengers and return to Port Mait- land. On Tuesday morning the weather was fair, and the lake and river were calm, and so continued through the day. But the boat failed to call for the raft according to the agreement. In the evening, about sunset, she returned, and took the raft in tow for Black Rock. During the night a storm arose, and the raft went to pieces and was scattered along the shore. Held, that had the defendants entered upon the per- formance of the contract at the time specified, and used proper diligence in attempting to perform it, the plaintiff would have taken all the risk of storms or other casualties. But as they delayed for some four- teen hours to enter uj)on its perform- ance, and as such delay resulted in the raft being overtaken by the storm, they were responsible for tbe consequences; that when they took ihe raft in tow in the evening instead Vol. 1 — 8 of the morning, as agreed, they took the risk of any storm that should arise after a suflHcient time had elapsed for towing the raft to Black Rock, if they had commenced the towing in the morning. The plaint- iff had a right to fix the time in the contract, and make it an essential part of it, considering the dangers of navigation upon the lake, and the peculiar nature and condition of his property; he might determine when the voyage should commence, and make a special agreement to that effect. And upon the non-perform- ance of the agreement, at the time specified, the party in default was liable for the damages resulting from causes which would not have arisen had the agreement been performed. Michaels v. New Yorli Central R. Co., 30 N. Y. 564, 86 Am, Dec. 415; Maghee V. Camden & A. R. Co., 45 N. Y. 514, 6 Am. Rep. 134; Condict v. Grand Trunk R. Co., 54 N. Y. 500; Rawson V. Holland, 59 N. Y. 611, 17 Am. Rep. 394. 1 McNabb v. Wixom. 7 Nev. 16a 114 COMPENSATION. injur^^' In entering a slip a ferryboat, through negligence, struck the side of the rack with such violence as to cause the passengers to sway, in consequence of which one of their num- ber fell and was injured. The producing cause was negligence, and there was no interruption thereof by what the injured person did after his fall.^ One who builds a back lire to save his property from a fire negligently caused by another does only what he ought to do, and if the fire he started ruins the property it was designed to save there is no break in the chain of cause and effect as to the wrong-doer, if it is clear that the property would have been burned, had the second fire not been set.* Allowing a long ladder to rest outside a sidewalk in a village street and against a building was the proximate cause of an injury sustained by a passer-by through its fall in consequence of an unusual wind.* [62] § 38. Same subject. The primary cause may be the proximate cause of a disaster though it may operate through successive instruments, as an article at the end of a chain may be moved by a force applied at the other end, that force being the proximate cause of the movement. The question always is, was there an unbroken connection between the wrongful act and the injury, a continuous operation ? Did the facts con- stitute a continuous succession of events, so linked together as to make a natural whole; or was there some new and inde- pendent cause, disconnected from the primary fault and self- operating, which produced the injury? The inquiry must be answered in accordance with common understanding.* The 1 McDonald v. Snelling, 14 Allen, 296; Vandenburgh v. Truax, 4 Denio, 464; Kellogg v. Chicago, etc. R. Co., 26 Wis. 223. 7 Am. Rep. 69; Murdock V. Walker, 43 III. App. 590; Northern Pacific R. Co. V. Lewis, 2 C. C. A. 446, 51 Fed. Rep. 658. 2 Cash V. New York Central, etc. R Co., 56 App. Div. 473, 67 N. Y. Supp. 823. 3 McKenna v. Baessler, 86 Iowa, 197, 53 N. W. Rep. 103, 17 L. R A. 310; Owen v. Cook, 9 N. D. 184, 81 N. W. Rep. 285, 47 L. R A. 646. * Moore v. Townsend. 76 Minn. 64, 78 N. W. Rep. 880. See Parmenter v. Marion, 113 Iowa, 297, 85 N. W. Rep. 90; Trapp v. McCiellan, 68 App. Div. 362, 74 N. Y. Supp. 130. s Milwaukee, etc. R, Co. v. Kellogg, 94 U. S. 469. In Lowery v. Manhattan R Co., 99 N. Y. 158, 1 N. E. Rep. 608. 52 Am. Rep. 12, 12 Daly, 431, fire fell from a locomotive on an elevated road upon a horse and its driver. The horse ran, and, resisting an attempt to get him against a curbstone, ran over it and injured the plaintiff, who was on the sidewalk. The driver's effort § 38.] CONSEQUENTIAL DAMAGES FOR TORTS. 115 act of giving or selling liquor to a man in a stupidly drunken condition, with knowledge thereof, no duress, deception or persuasion being used,* although a statutory misdemeanor, is only the remote cause of his death; his act in drinking it is the proximate and intervening cause.^ The voluntary intoxica- tion of a person who has attained the age of discretion, but for which the injury resulting from the sale of chloroform to him in violation of law would not have happened, breaks the chain of cause and effect.^ The sale of poison without the label re- quired b}^ statute docs not make the vendor liable for the death of a man who took it while intoxicated. His acts in buyino- and taking it were thc'proximate cause of his death; they were independent acts, which intervened and broke all connection to stop the horse by turning him from the course he was taking was, whether prudent or not, a continu- ation of the result of the defendant's negligence, and its natural and prob- able consequence, as was the injury inflicted upon the plaintiff. A fire started by defendant's neg- ligence, after spreading one mile and a quarter to the northeast, near the plaintiff's property, met a fire, having no responsible origin, coming from the northwest. After the union, fire swept on from the northwest to and into plaintiff's property, causing its destruction. Either fire, if the other had not existed, would have reached the propertj' and caused its destruction at the same time. Held, that the rule of liability in case of joint wrong- doers does not apply; that the independent fire from the northwest became a superseding cause, so that the destruction of the property could not, with reasonable certainty, be attributed in whole or in part to the fire having a responsi- ble origin; that the chain of respon- sible causation was so broken by the fire from the northwest that the negligent fire, if it reached the prop- erty at all, was a remote and not the proximate cause of the loss. After the fire swept everything of a com- bustible character clean on both sides of defendant's right of way, plaintiff's horses, that were running at large,went upon the railway track and were killed by a passing train without negligence on the part of the train men. The right of way had never been fenced as required by law. Held, that the rule of absolute liability, under the statute requiring railway companies to fence their tracks, applies only where the loss is produced, in whole or in part, by reason of the failure to fence; that in the circumstances stated the chain of causation reaching from the fail- ure to fence was broken by the fire that would unquestionably have de- stroyed the fence if it had existed, so that the failure to fence cannot be said to have contributed to the entry of the horses upon the railway track. Cook v. Minneapolis, etc. R. Co., 98 Wis. 624, 74 N. W. Rep. 561, 40 L. R. A, 457 (as stated in the sylla- bus by Marshall, J.). 1 See McCue v. Klein, 60 Tex. 168, 48 Am. Rep. 260. 2 King V. Henkie, 80 Ala. 505, 60 Am. Rep. 119. 3 Meyer v. King, 72 Miss. 1, 16 So. Rep. 245, 35 L. R. A. 474. 116 COMPENSATION. [§ 39. between the omission to label and the death.' The owner of a ferryboat must foresee that horses thereon may take fright at the sound of whistles from other boats, and guard against such horses backing into the water, and if he fails to provide a suf- ficient rail to prevent that result his neglect is the efficient cause of the loss of the horses.^ One whose private way over the land of another is obstructed by a fence built under a claim of right, and who proceeds to have such way laid out as a public way, cannot recover the expense of so doing in a suit for the obstruction of the way.' Any wrongful act which ex- poses one to injury from rain, heat, frost, fire, water, disease, the instinctive or known vicious disposition or habits of animals, or any other natural cause, under circumstances which render it probable that such an injury will occur, is a primary, efficient and proximate cause if harm ensues."* Many such cases have been referred to in the preceding pages. Persons who dam water-courses are presumed to have knowledge of the fact that natural causes operate to fill up their beds and cause water to overflow adjacent lands; they cannot avoid liability for the resultant consequences because of such fact.-^ If a positive tort is committed by unnecessarily leaving an obstruction in the bed of a natural water-course the parties who commit the wronff must take notice of the violence of rainfalls in that locality.^ § 39. Acts of injured party; fraud and exposure to peril. The act of the injured party may be the more immediate cause of his injury; yet, if that be an act which was as to him reasonably induced by the prior misconduct of the defendant, and without any concurring fault of the sufferer, that miscon- duct will be treated as the responsible and efficient cause of the damage. Cases of fraud where, by some artifice or false representation, the plaintiff has been induced to incur obliga- iRonkerv. St.John, 2lOhioCt Ct. Ala. 453, 3 So. Rep. 813; Vogel v. 39. McAuliflfe, 18 R. L 79, 31 Atl. Rep. 1. 2Sturgis V. Kountz, 165 Pa. 358, 30 5 Mississippi & T. R. Co. v, Archi- Atl. Rep. 976, 27 L. R A. 390. bald, 67 Miss. 38, 7 So. Rep. 212; El- 3 Holmes v. Fuller, 68 Vt. 207, 34 der v. Lykens Valley Coal Co., 157 Atl. Rep. 699. Pa. 490, 27 Atl. Rep. 545, 37 Am. St. < Western & A. R, Co. v, Bailey, 742. 105 Ga. 100, 31 S. E. Rep. 547: Ala- « Brink v. Kansas City, etc. R. Co., bama, etc. R, Co. v. Chapman, 83 17 Mo. App. 177, '~02. I § 39.] CONSEQUENTIAL DAMAGES FOR TORTS. 117 tions, part with his property, or place himself in any predica- ment by which he suffers loss, are apt illustrations. The act by which he binds himself, pays money or alters his situation is his own, but superinduced by the superior vicious will of the defrauding party; and the latter is responsible for all the loss which ensues. A single instance will suffice. W. obtained goods from the plaintiff on credit, upon the representation of R. that "W. was responsible and worthy of credit and owed very little if anything. At the time of the sale and delivery of the goods W. was insolvent and R, knew it. R. himself had a judgment agamst W. for a considerable amount dock- eted only a month previous to the sale. On this judgment R. caused an execution to be issued and levied upon the [63] goods so obtained from the plaintiff before they reached W. It was held that for these representations R. was liable to the plaintiff for the value of the goods sold to W.^ If the plaintiff is placed in a situation of danger to person or property by the defendant's misconduct and is injured in a reasonable endeavor to extricate himself, such misconduct is the proximate cause of the injury, though it proceed more immediately, and it may be exclusively, from the plaintiff's own act. Thus, if through the default of a coach proprietor in neglecting to provide proper means of conveyance a pas- senger be placed in so perilous a situation as to render it pru- dent for him to leap from the coach, whereby his leg is broken, the proprietor will be responsible in damages, al- though the coach was not actually overturned,^ Nor is a person iBean v. Wells, 28 Barb. 466. N. Y. 158; Filer v. New York Cen- 2 Jones V. Boyce, 1 Stark. 493; In- tral R. Co., 49 N. Y. 47, 10 Am. Rep. galls V. Bills, 9 Met. 1; McKinney v. 337; Smith v. St. Paul, etc. R. Co., 30 Neil, 1 McLean, 540; Frink v. Potter, Minn. 169, 14 N. W. Rep. 797; Dim- 17 111. 406; Buel v. New York, etc. mitt v. Hannibal, etc. R Co., 40 Mo. R Co., 31 N. Y. 314, 88 Am. Dec. 271; App. 654; Knowlton v. Milwaukee McPeak v. Missouri Pacific R. Co., City R. Co., 59 Wis. 278, 18 N. W. 128 Mo. 617, 30 S. W. Rep. 170; Ep- Rep. 17; Knapp v. Sioux City & P. land V. Missouri Pacific R. Co., 57 R. Co., 65 Iowa, 91, 21 N, W. Rep. 198, Mo. App. 147; Southwestern R Ca 54 Am. Rep. 1, 71 Iowa, 41, 32 N. W. V. Paulk, 24 Ga. 356; Wilson v. Rep. 18; Schumaker v. St. Paul & D. Northern Pacific R Co., 26 Minn. R Co., 46 Minn. 39, 48 N, W. Rep. 278, 3 N. W. Rep. 33o, 37 Am. Rep. 559, 12 L. R A. 257; Budd v. United 410; Oliver v. La Valle, 36 Wis. 592; Carriage Co., 25 Ore. 314, 35 Pac. Twomley v. Central, etc R Co., 69 Rep. 660, 27 L. R A. 279; Nichols- 118 COMPENSATION. [§ 39. chargeable with contributoiy negligence — that is, with mak- ing his own act in part the efficient cause — for acting erro- neously in a position of sudden danger in which he is placed by the negligence or fault of another. If, therefore, a stage-coach is upset by the negligence of the driver, and a passenger therein, under the impulse of fear, acts in a manner which results in an injury to himself, where, had he remained calm and kept his place, he would have escaped harm, he will not thereby be precluded from recovering damages of the carrier.^ A case arose in Massachusetts in which the immediate cause of the injury was the act of the plaintiff, and yet a defect in a high- w^ay was held to be the proximate and efficient cause thereof, thou":h other circumstances contributed. The allesred defect was a culvert extending across the highway and a hole at one end of the culvert. As the plaintiffs (husband and wife) were driving together in their wagon along the traveled part of the [64] highway between the hours of eight and nine in the even- ing, a band of musicians, a little way in advance, commenced to pla3% by which the horse was alarmed; this happened near the alleged defect in the highway. In the course of the inci- dent the wife was taken up from the ground at or near the culvert, seriously injured; but the precise manner in which she came to the ground, whether by being forcibly thrown from the wagon, by leaping from it, or by the two actions concurring, and whether the wagon did or did not come into contact with the hole, were questions of fact. There was a variance between the proof and the declaration for which the judgment was reversed, but this instruction was approved: " When a party is traveling on a highway and there is a defect burg V. Second Avenue R. Co., 11 N. Co., 151 Mass. 463, 24 N. K Rep. 402, 7 Y. Misc. 433, 32 N. Y. Supp. 130; L. R. A. 843; Connell v. Prescott, 20 Baker v. North East Borough, 151 Ont, App. 49; EUick v. Wilson, 58 Pa. 234, 21 At!. Rep. 1079; Hookey v. Neb. 584, 79 N. W. Rep. 152; Galves- Oakdale, 5 Pa. Super. Ct. 404; Vallo ton, etc. R. Co. v. Zantzinger, 92 V. United States Exp. Co., 147 Pa. Tex. 365, 44 L. R. A. 553, 48 S. W. 404, 14 L. R. A. 743, 23 Atl. Rep. 594, Rep. 563; Postal Tel. Cable Co. v. 30 Am. St 741; Quinn v. Shamokin, Hulsey, 132 Ala. 444, 453, 31 So. Rep. etc. R. Co., 7 Pa. Super. Ct. 19; Wash- 537; Texas & P. R. Ca v. Watkins. ington, etc. R. Co. v. Hickey, 5 D. C. 26 S. W. Rep. 760 (Tex. Civil Ap- App. Cas. 430; South Covington & peals). See § 23a. C. R. Co. V. Ware, 84 Ky. 267, 1 S. W. i Id. ; Stokes v. Saltoustall, 13 Pet. Rep. 493; Cody v. New York, etc. R. 181. § 40.] CONSEQUENTIAL DAMAGES FOR TORTS. 119 in it, and the party, under apprehensions of an imminent peril, by the near approach of his carriage to the defect in the high- way, but without or previous to actual contact with the de- fect, leaps from his carriage and is injured thereby, then the rule of law is this: it is an element of reasonable care on the part of the plaintiff. If the plaintiff be placed, by reason of the defect in the highway and his approach thereto, in such a situation as obliges him to adopt the alternative of a danger- ous leap, or to remain at a certain peril, and he leaps and is injured, then, all the conditions of liability being fulfilled, he may recover damages of the party responsible for the repair of the highway." ' A lad aged ten years was forcibly put on a freight train and carried five miles. After being released he ran most of the distance to his home, was afterward taken sick and became permanently crippled. The jury found that this was the result of the trespass; a majority of the court re- fused to interfere with the verdict.^ It is a rule of general application that the concurrence of an infant plaintiff's nat- ural indiscretion with the defendant's negligence will not re- lieve the latter from responsibility for an act which results in injury to the former.' § 40. Act of third person. The innocent or culpable act of a third person may be the immediate cause of the injury, and still an earlier wrongful act may have contributed so ef- fectually to it as to be regarded as the efficient, or at least con- current and responsible, cause.^ The noted squib case is [65] iLund V. Tyngsboro, 11 Cush. 563; Atterton, L. R. 1 Ex. 239; Lynch v. Flagg V. Hudson, 142 Mass. 280, 56 Nurdin, 1 Q. B. 29. Am. Rep. 674, 8 N. E. Rep. 42. See < Burrows v. March, etc. Gas Co., §26. K R 5 Ex. 67; Lannen v. Albany 2 Drake V. Kiely, 93 Pa. 492. Gas Co., 44 N. Y. 459; Guille v. 'Pittsburg, etc. R. Co. v. Caldwell, Swan, 19 Johns. 381, 10 Am. Dec. 234; 74 Pa, 421; East Saginaw City R. Co. Scholes v. North London R. Co., 21 V. Bohn, 27 Mich. 503; Holly v. Bos- L. T. (N. S.) 835; Pastene v. Adams, 49 ton Gas Co., 8 Gray, 133, 69 Am. Dec. Cal. 87; Vandenburgh v. Truax, 4 233; Stillson v. Hannibal, etc. R Co., Denio, 464, 47 Am. Dec. 268; Lowery 67 Mo. 671; Lane v. Atlantic Works, v. Manhattan R Co., 99 N. Y. 158, 53 111 Mass. 136; Sheridan v. Brooklyn Am. Rep. 12, 1 N. E. Rep. 608, 12 Daly. & N. R Co., 36 N. Y. 39, 93 Am. Dec. 431; Lewis v. Terry, 111 Cal. 39, 43 490. See Singleton v. Eastern Coun- Pac. Rep. 398, 52 Am. St. 146, 31 L. ties R, Co., 7 C. B. (N. S.) 287; Hughes R A. 220; Grimes v. Bowerman, 93 V. Macfle, 2 H. & C. 744; Nangan v. Mich. 258, 52 N. W. Rep. 751, quoting 120 COMPENSATION. [§ 40. an example.' The defendant threw a squib into the market- house where it first fell; a person, to save himself, threw it off, and where it then fell it was again thrown for like reason, and struck and injured the plaintiff. It was held that the defend- ant's act so directly caused the injury that trespass would lie. A defendant stopped his team, and negligently left it in a business street without being hitched or otherwise secured. It started and ran violently along the street and collided with another team, which, though properly hitched at the side of the street, was frightened, broke from its fastenings and ran across the street against a horse and sleigh belonging to the plaintiff, injuring the former. It appeared that while the defendant's horses were running and before they had collided with the other horses, a crowd of persons came into the street, hallooed and raised their hats for the purpose of stopping the horses, which caused them to swerve from the course they were taking, and in this manner they came in contact with the sec- ond team. The law was said to be well settled that when the plaintiff has been injured in his person or property by the wrongful act or omission of the defendant or through his culpable negligence, the fact that a third party by his wrong or negligence contributed to the injury does not relieve him the text; Chicago City R. Co. v. the purpose of getting off the car the Cooney, 95 Hi. App. 471; Postal Tel. child was pushed therefrom. Such Cable Co. v. Zopfi, 93 Tenn. 369, conduct was not a justification to the 24 S. W. Rep. 633; Choctaw, etc. R. defendant for its negligence in plac- Co. V. Halloway, 114 Fed. Rep. 458, ing the child on the platform. 52 C. C. A. 260, and cases cited; Cole- In Macer v. Third Avenue R. Co., man v. Bennett, — Tenn- — , 69 S. 47 N. Y. Super. Ct. 461. the plaintiff's W. Rep. 734. injuries were increased by an effort The connection between the sale made by the defendant's servant to of unlabeled poison and the death of prevent them. The original negli- a child who takes it is not broken gence was held to be the proximate because its mother left the poison cause. within the infant's reach, she not A workman who is injured by a knowing it to be poison, nor by the defective instrument used by a fellow infant's act in taking it. Wise v. workman has a cause of action Morgan, 101 Tenn. 273, 48 S. W. Rep. against the master. Ryan v. Miller, 971, 44 L. R. A. 548. 12 Daly, 177. In Sheridan v. Brooklyn & N. R. i Scott v. Shepherd, 2 W. Bl. 892; Co., 36 N. Y. 39, 93 Am. Dec. 490, a Owen v. Cook. 9 N. D. 134, 81 N. W. child was on the platform of a car Rep. 285, 47 L. R A. 640; Bradley v. by direction of the conductor. By Andrews, 51 Vt. 530. the rusliing of another passenger for § 40.] CONSEQUENTIAL DAMAGES FOR TOKTS. 121 from liability. Ileferrinp^ to the facts, it was observed: "The running away, from the starting of the defendant's team till the collision, was a single transaction; and whatever influence the interposition of the crowd had in occasioning the collision, it was not the sole cause; the running away, which occurred through the defendant's negligence, was, in part at least, the occasion of it; both causes, therefore, in the most favorable view for the defendant, must have contributed to it; and as the defendant is responsible through his negligence for one of the agencies through which the collision occurred, under the rule we have stated, he is liable." Again: "All the conse- quences wiiich actually resulted in this case from the running away of the defendant's team might, we think, reasonably have been expected to occur from the running away of any team under similar circumstances in the principal business street of a town; and the running away of the defendant's team was the efficient cause of the injury to the plaintiff's [66] horse because it put in operation the force which was the im- mediate and direct cause of the injury." ^ In another case a team of horses, attached to a truck and unattended in a street, were stopped, after going a few yards, by a stranger, who, in trying to drive them to where they had been left, drove the truck against a push cart standing in the street, overturned the cart and injured the plaintiff. The negligence of the person who had charge of the horses was the proximate cause of the injury. They should not have been left in the middle of the •carriage way obstructing travel, besides subjecting other trav- elers to danger. The condition which authorized the by- stander to stop the horses also authorized him to drive them to a position where they would cease to be an obstruction and a menace to travel. A danger to be fairly anticipated from leaving horses unattended in a public street is that, if they start to run off, the persons who attempt to stop them may be careless or ignorant of the management of horses and thus jeopardize the safety of people on the highway. In such cases so leaving the horses is the proximate cause of the accident.^ 1 Griggs V. Fleckenstein, 14 Minn. E. D. Smith, 413; Pearl v, Macauley, 81, 100 Am. Dec. 199; Billman v. In- 6 A pp. Div. 70, 39 N. Y. Supp. 472. dianapolis, etc. R. Co., 76 Ind. 166, 40 -^Williams v. Koehler, 41 App. Div. Am. Rep. 230; McDonald v. Snelling, 426, 58 N. Y. Supp. 863. 14 Allen, 292; McCahill v. Kipp, 2 122 COMPENSATION. [§ 40.- An assessor of a town altered an assessment after it had been perfected and lodged with another officer, and after his power over it had ceased; he altered it in such a manner that the property of the plaintiff was rated at a higher sura. The se- lectmen made out a rate-bill by which the plaintiff was charged with an increased amount and procured a tax warrant which they placed in the hands of the collector. The plaintiff refus- ing to pay the illegal portion of the tax, the selectmen, with a full knowledge of all the facts, directed the collector to levy and collect it. The levy was made, the plaintiff then paid the tax and afterwards brought an action on the case against the assessor for the injury. The jury were rightly instructed that the action of the selectmen in directing the levy, although it might make them liable, would not affect the right of the plaint- iff to recover against the defendant for the wrono^ful altera- tion and he was entitled to recover for the injury resulting from the levy.^ x\n officer who makes a false return of non est to a summons is not relieved from liability because an order for service by publication intervened between his act and a judg- ment by default. Such order was the natural result of such re- turn, and the further action of the court was the legitimate consequence of it.^ It is negligence to leave a railroad turn- table in such condition that it may be revolved by children;^ and the negligence continues so as to render the owner liable for an injury caused to a child by the revolving of the table by other children.* A person who has the management and con- trol of a public place of amusement, which he invites the pub- lic, on payment of an admission fee, to attend and at which he sells to his customers intoxicating liquors, who sells to one in attendance there liquor in such quantity as to make him drunk and disorderly, well knowing that when in that condition he is likely to commit assaults upon others, without provocation or cause, is bound to exercise reasonable care to protect his other 1 Bristol Manuf. Co. v. Gridley, 28 * Nagel v. Missouri Pacific R. Co., Conn. 201, 27 id, 221, 71 Am. Dec. 56. 75 Mo. 653: Boggs v. Same, 18 Mo. estate V. Finn, 87 Mo. 310, revers- App. 274; Morrison v, Kansas City, ing 11 Mo, App. 400. etc. R. Co., 27 id. 418; Gulf, etc. Ry. 3Koons V. St. Louis, etc, R. Co., 65 Co. v. McWhirter, 77 Tex. 356, 19 Am. Mo. 592. St, 755, 14 S, W. Rep. 26. § 4 ] CONSEQUENTIAL DAMAGES FOR TORTS. 123 patrons from the assaults and insults of such person, and for a failure to so do is liable to a person assaulted by him.^ § 41. Same subject. The subject under consideration is well illustrated by those cases in which a party has suffered a special injury at the hands of third persons in consequence of the speaking of slanderous words. "Where the injurious act of the third person is shown with the requisite certainty to have been the consequence of the defendant's speaking such words the action has been sustained.^ In case for slanderous Avords by reason of which the plaintiff was turned out of her lodgings and employment, it appeared that the defendant com- plained to E., the mistress of the house and his tenant, that her lodgers, of whom the plaintiff was one, behaved improp- erly at the windows; and he added that no moral person would like to have such people in his house. E. stated in her evi- dence that she dismissed the plaintiff in consequence of the words, not because she believed them, but because she [67] was afraid it would offend her landlord if the plaintiff re- mained. The action was held maintainable, the special dam- ages, which were its gist, being the consequence of the slan- derous words used. The witness' statement that she did not dismiss the plaintiff because she believed the words spoken was not allowed to defeat the action. Lord Denman, C. J., said: "It would be speculating too finely on motives, and such a disposition in the court would too often put it in the power of the unwilling witness to determine a cause against the plaintiff. The proper question is whether the injury was sus- tained in consequence of the slanderous words having been used by the defendant."^ But the injury must be the natural and proximate consequence. Damage caused by the repeti- tion of the words by a third person who heard them uttered by the defendant is too remote,'' unless the latter authorized or suggested their repetition, or there was some duty on the hearer to repeat them.^ Such a spontaneous and unauthorized cora- 1 Mastad v. Swedish Brethren, 83 7 Bing. 211; Batetnan v. Lyall, 7 C. Minn. 40, 85 N. W. Rep. 913; Romnel B. (N. S.) 638; Williams v. Hill, 19 V. Schambacher, 120 Pa. 579, 11 Atl. Wend. 305. Rep. 779. 3 Knight v. Gibbs, 1 Ad. & E. 43. - Fuller V. Fenner, 16 Barb. 833; * Ward v. Weeks, 7 Bing. 211. Hallock V. Miller. 3 Barb. 630; Moody 5 Adams v. Kelly, Ry. & Moo. 157; V. Baker, 5 Cow. 351; Ward V. AVeeks, Parkes v. Prescott, L. R. 4 Ex. 169* 124: COMPENSATION. [§41. munication, it is said, cannot be considered as tbe necessary consequence of the original uttering of the words.^ If the injury inflicted is not the reasonable and natural result of a wrongful act of the defendant, but was caused by such act of a third person, though it was remotely induced by de- fendant's conduct, he is not liable.^ Thus, in an action by one engaged in the business of butchering for selling diseased sheep as sound and healthy, it appeared that the plaintiff had en- gaged one G. to take some of the mutton which might be on hand and sell it; Init in consequence of a report that the plaint- iff had purchased the defendant's diseased sheep, G. refused to perform his contract. It was held that the defendant was not [68] liable for G.'s refusal, nor for damages suffered by the plaintiff in consequence of his customers refusing to deal with him by reason of that report.* In an action against several per- sons, some of whom had sold the plaintiff's husband liquors on the day of his death and others of whom had done so previously, and were charged with having caused him to become an habit- ual drunkard, death was held to be the result of the sales last made; and the fact that the liquor last obtained was drank be- cause he was an habitual drunkard did not make those who had antecedently sold him liquor jointly liable with the other defendants, because the latter's intervening acts were inde- pendent and the proximate cause of the wrong.* This prin- ciple does not apply where the intervening act of a third per- son is not direct, wilful or criminal, as where a person who is intoxicated is run over by a train while lying on a track situ- ated between his home and the place where he procured the liquor which produced that condition."* If there intervenes Kendillon v. Maltby, Car. & M. 403; Deny v. Handley, 16 L. T. (N. S.) 263: Schoepflin v. Coffey, 163 N. Y. 13, 56 N. E. Rep. 502, and cases cited; Hastings v. Stetson, 126 Mass. 329, 30 Am. Rep. 683; Elmer v. Fessenden, 131 Mass. 359, 5 L. R A. 724, 24 N. E. Rep. 208; Haehl v. Wabash R Co., 119 Mo. 325, 24 S. W. Rep. 737. 1 Id. See Riding v. Smith, 1 Ex. Div. 91; Kelly v. Partington, 5 B. & Ad. 645; Morris v. Langdale, 2 B. & P. 284; Ashley V. Harrison, 1 Esp.48; Pilmore v. Hood, 5 Bing. N. C. 97; Allsop V. Allsop, 5H. & N. 534; Bent- ley V. Reynolds, 1 McMull. 16, 36 Am. Dec. 251; Underhill v. Welton, 33 Vt. 40; cb. 24. a Ward V. Weeks, 7 Bing. 211. sCrain v. Petrie, 6 Hill, 522, 41 Am. Dec. 765; Butler v. Kent, 19 Johns. 223, 10 Am. Dec. 219. ^Tetzner v. Naughton, 12 111. App. 148. See Shugart v. Egan, 83 IlL 56. 5 Schroeder v. Crawford, 94 111. 357; Emory v. Addis, 71 111. 273. § 4-2.] CONSEQUENTIAL DAMAGES FOR TORTS. 125 between defendant's act or omission a wilful, malicious and criminal act committed by a third person, which act defendant had no reason to apprehend, the connection between the orig- inal wrong and the result is broken.^ § 4:2. Same subject. "Where the immediate cause of the injury is the wrongful act of a third person, the injured party has, of course, an action against hira; and this, in some early cases, was thought to bar an action against any antecedent actor more remotely responsible; but it now seems to be set- tled that the liability of the more immediate party does not relieve any other party whose act can properly be treated as the efficient and proximate or concurrent cause. A vendor of property, who had been paid for it, was induced by the de- fendant's false and malicious representation that he had a lien on it and was entitled to control its custody, to refuse to de- liver it, whereby the purchaser suffered injury ; he was held entitled to his action although he had a remedy on his con- tract against the vendor. Knowingly making a false claim of lien was the gravamen of the action, and the special damage alleged, namely, the non-delivery of the property, was suffi- ciently connected with the wrongful act to support the action.^ In one case it appeared that the defendant, being about to sell a public house, falsely represented to B., who had agreed to purchase it, that the receipts were £180 a month; B. having, to the knowledge of the defendant, communicated this repre- sentation to the plaintiff, who became the purchaser instead of B., it was held that an action would lie for the circuitous deceit practiced.' The Indiana court announced a St. 685; White v. Conly, 14 Lea. 51. rule contrary to that stated in the In the last case W. and C. quarreled text in Krach v. Heilman, 53 Ind. and fought; during the fight W.'s 517; Collier v. Early, 54 Ind. 559. But son stabbed C. and caused his death, these cases are much restricted by This was done without the knowl- Dunlap V. Wagner, 85 Ind. 529, 44 edge of W. Am. Rep. 42. and are in effect over- 2 Green v. Button, 2 Cr., M. & R. ruled by Terre Haute & I. R. Co. v. 707. Buck, 96 Ind. 346, 355, 49 Am. Rep. 3 Piimore v. Hood, 5 Bing. N. C. 97. 168. Bosanquet, J., thus stated the facts iShugart v. Egan, 83 III. 56; Mars and the grounds of the defendant's V. Delaware & H. Canal Co., 54 Hun, liability: "It appears that the de- 625, 8N. Y. Supp. 107; Roach v. Kelly, fendant entered into a contract of 194 Pa. 24, 44 AtL Rep. 1090, 75 Am. sale of a public house with a person 126 COMPENSATION. [§42. [69] A stage-coach by the negligence of the driver was pre- cipitated into a dry canal; the lock-keeper thereafter negli- gently opened the gates of the canal and a passenger was drowned therein. Under Lord Campbell's act ^ the Irish court of queen's bench held that the death of the passenger was "caused" by the negligence of the driver. O'Brien, J., said : " The precipitation of the omnibus into the lock was cer- tainly one cause of her death, inasmuch as she would not have drowned but for such precipitation. It is true that the subse- quent letting of the water into the lock was the other and more proximate cause of her death, and that she would not have lost her life but for such subsequent act, which was not the necessary consequence of the previous precipitation by the neo-ljoence of the defendant's servant. But in mv opinion the [70j defendant is not relieved from liability for his primary neglect by showing that but for such subsequent act the death of the name of B. ; that when the agreement was entered into he repre- sented to B. that the public house was of a certain value in respect of its trade, and that representation he knew to be false at the time he made it. After this agreement had been entered into withB., B., finding him- self unable to complete the contract, entered into a negotiation with the plaintiff, P., and informed him what representation he had received of the value of this public house from the defendant; and taking it accord- ing to the plea, that B. had not any- particular authority from the de- fendant to make such communica- tion to P., the defendant had notice that the information had been given to P., and it is averred that both at the time of the original agreement with B., as also at the time of the agreement which subsequently took place with P., the defendant knew that the information was false. Then having notice that that communica- tion had been made, and knowing at the time that it was false, he enters into a new agreement with P. and B. that P. shall stand in the place of B. in the purchase of this public house. The record further states that P., confiding in that representation, paid money to the defendant. I think it is impossible, on the state- ment of these facts, not to see that the defendant when he entered into that contract with B., having thus himself made the fraudulent repre- sentation, and knowing it to have been communicated to the person with whom he was about to contract a second time, then withholding an explanation or denial of his author- ity for communication, and suffer- ing tlie plaintiff, on the faith of the communication, to enter into a con- tract, was as much guilty of a deceit on the plaintiff as if he had in terms repeated the statement himself. On these grounds, without entering further into the case, I think this action may be maintained. " See Langridge v. Levy, 2 M. & W. 519; Levy V. Langridge, 4 id. 337; Rich- ardson V. Dunn, 8 C. B. (N. S.) 655; § 1170. 1 9 and 10 Vict, ch. 93. § 42.] CONSEQUENTIAL DAMAGES FOE TORTS. 127 would not have ensued." ^ A railroad company placed a pusb- car in the hands of a foreman to be used for specific purposes; he loaned it for another purpose, and while the borrower was using it plaintiff was injured through the negligence of the borrower. The company was liable tliough such injury oc- curred at a time when there was no relation between it and the man who ran the car.^ Cases may be stated where the wrongful conduct of one per- son affords the opportunity or occasion for the illegal acts of another or for an injury from other causes; as where a street- car driver permits boys to ride on the platform without paying fare, and on their being ordered to get off one of them pushes another, who is injured. In such cases the injury is too re- mote,* unless it was such as would probably result; and the same rule applies where inaction offers an opportunity for in- jury. The neglect of duty by bailees and agents renders them liable for losses resulting, in co-operation with such neglect, by the torts of third persons.* The cases collected in the note following will give the reader an insight into various branches of the subject of consequential damages.* 1 Byrne v. Wilson, 15 Irish C. L. * Adams v. Lancashire, etc. R. Co., (N. S.) 332-342, Thompson's Car. Pass. L. R 4 C. P. 739; Smith v. Dobson, 3 290; Eaton v. Boston, etc. R. Co., 11 M. & Gr. 59; Rigby v. Hewitt, 5 Ex. Allen, 500, 87 Am. Dec. 730; Spooner 240; Greenland v. Chaplin, id. 243; V. Brooklyn City R. Co., 54 N. Y. 230, Barnes v. Ward, 9 C. B. 392; Collins 13 Am. Rep. 570. v. Middle L. Com'rs, L. R. 4 C. P. 279; 2 Erie R. Co. v. Salisbury, 66 N. J. Harrison v. Great Northern R. Co., 3 L. 233, 50 Atl. Rep. 117. The court H. & C. 231; Butterfield v. Forrester, was divided, 6 to 5. 11 East, 60; Martin v. Great Northern SLott V. New Orleans, etc. R. Co., R. Co., 16 C. B. 179; General Steam 37 La. Ann. 337, 55 Am. Rep. 500; Nav. Co. v. Mann, 14C. B. 127; Holden Cuff V. Newark, etc. R, Co., 35 N. J. L. v. Liverpool Gas Co., 3 C. B. 1 ; Cot- 30, 10 Am. Rep. 205; Scholes v. North ton v. Wood. 8 C. B. (N. S.) 568; London R. Co., 21 L. T. (N. S.) 835; Flower v. Adam, 2 Taunt. 314; Ellis Marks v. Rochester R. Co., 41 App. v. London, etc. R, Co., 2 H. & N. 424; Div. OG, 58 N. Y. Supp. 210. Singleton v. Williamson, 7 H. & N. *Norcross v. Norcross, 53 Me. 163; 410; Skelton v. London, etc. R. Co., Mason v. Thompson, 9 Pick. 280, 20 L. R. 2 C. P. 631; Thompson v. North- Am. Dec. 471; Shaw v. Berry, 31 Me. eastern R. Co., 2 B. & S. 106; Bridge 478. 52 Am. Dec. 628; Sibley v. Aid- v. Grand Junction R. Co., 3 M. & W„ rich, 33 N. H. 553, 66 Am. Dec. 745; 244: Glover v. London, etc. R Co., 3 Sasseen v. Clark, 37 Ga. 242; Clute v. Q, B. 25; The Flying Fish. 34 L. J. Wiggins, 14 Johns. 175; McDaniels v. (Adm.) 113; Everard v. Hopkins, 1 Hobinson, 26 Vt. 316. Bulst. 332; Hughes v. Quentin, 8 C. 128 COMPENSATION. [§4S. § 43. Wilful or malicious injuries. The authorities are [71] not agreed as to whether in cases of wilful or malicious injuries, injuries caused by reckless or illegal acts, or by posi- tive fraud, the damages are so strictly confined to proximate consequences as when none of these elements is present. On principle, at least where exemplary damages are allowed, it is not readily seen why the doctrine of proximate cause should be varied because of the presence or absence of facts which characterize the wrong. In Indiana the existence of any such reason is denied;* in some other states, as will be seen in the & P. 703; Peacock v. Young, 21 L. T. (N. S.) 527; Priestley v. Maclean. 2 F. & F. 288; Sneesby v. Lancashire R. Co., L. R. 9 Q. B. 263; Smith v. Con- dry, 1 How. 35; Loker v. Damon, 17 Pick. 284; State v. Thomas, 19 Mo. 613; Oil Creek, etc. R. Co. v. Keigh- ron, 74 Pa. 316; Tarleton v. McGaw- ley, Peake, 270; Carrington v. Taylor, 11 East, 571; Keeble v. Hickeringill, id. 574; Herring v. Skaggs, 62 Ala. 180, 34 Am. Rep. 4; Hanover R. Co. v. Coyle, 55 Pa. 396; Baldwin v. United States Tel. Co., 45 N. Y. 744, 6 Am. Rep. 165; Bartlett v. Hooksett, 48 N. H. 18; Ayer v. Norwich. 39 Conn. 376, 12 Am. Rep. 396; Dimock v. Suffield, 30 Conn. 129; Foshay v. Glen Haven, 25 Wis. 288, 3 Am. Rei?. 73; Morse v. Richmond, 41 Vt. 435, 98 Am. Dec. 600; Howard v. North Bridgewater, 16 Pick. 189; Kingsbury v. Dedham, 13 Allen, 186, 90 Am. Dec 191; Tisdale V. Norton, 8 Met. 388; Page v. Bucks- port, 64 Me. 51, 18 Am. Rep. 239; Bigelow V. Reed, 51 Me. 325; Lake v. Milliken, 62 Me. 240, 16 Am. Rep. 456; Cobb V. Standish, 14 Me. 198; Merrill V. Hampden, 26 Me. 234; Lawrence V. Mt. Vernon, 35 Me. 100; Davis v. Bangor, 42 Me. 522; Jewett v. Gage, 55 Me. 538, 92 Am. Dec. 615; Cook v. Cliarlestown, 98 Mass. 80; Card v. Ellsworth, 65 Me. 547, 20 Am. Rep. 722; Chicago v. Hoy, 75 111. 530; Pittsburgh, etc. R Co. v. Iddings. 28 Ind. App. 504, 62 N. E. Rep. 112; Wallin v. Eastern R. Co., 83 Minn. 149, 86 N. W. Rep. 76, 54 L. R A. 481; Butler-Ryan Co. v. Williams, 84 Minn. 447, 88 N. W. Rep. 3; Fezler v. Willmar, etc. R. Co., 85 Minn. 252, 88 N. W. Rep. 746; Schreiner v. Great Northern R Co., 86 Minn. 245, 90 N. W. Rep. 400; Illinois Central R Co. V. Seamans, 79 Miss. 106, 31 So. Rep. 546; Leeds v. New York Telephone Co., 64 App. Div. 484, 72 N. Y. Supp. 250; Harrison v. Weir, 71 App. Div. 248, 75 N. Y. Supp. 909; Koch v. Fox, 71 App. Div. 288, 75 N. Y. Supp. 913, Chambers v. Carroll, 199 Pa. 371, 4& Atl. Rep. 128; Forrow v. Arnold, 22 R I. 305, 47 Atl. Rep. 693; Butts v. Cleveland, etc. R. Co., 110 Fed. Rep. 329, 49 C. C. A. 69; Reynolds v. Pier- son. — Ind. App. — , 64 N. E. Rep. 484; Simonson v. Minneapolis, etc. R Co., — Minn. , 92 N. W. Rep. 459. 1 " There is, in truth, no case that has been recognized as sound, that holds that the rule as to the respon- sibility of the wrong-doer is different in cases of actionable negligence from that which prevails in cases of wilful or malicious torts. There is a difference as to the measure of dam- ages, for where the tort is malicious exemplary damages may be recov- ered, but such damages cannot be recovered in cases of negligenca This consideration has, however, no influence upon the question of a negligent wrong-doer's responsibility ^ 43.] CONSEQUENTIAL DAMAGES FOE TORTS. 129 next section, such distinction is recognized. The elements stated are aggravations which juries are apt to regard in de- termining their verdicts, and which courts consider in passing on them.^ It was said by Baldwin, J. i^ ""When a trespass is committed in a wanton, rude and aggravated manner, indi- cating malice or a desire to injure, the jury ought to be liberal in compensating the party injured in all he has lost in prop- erty, in expenses for the assertion of his rights, in feeling or reputation," and to superadd to such compensation a sum for punishment. In a case of wilful negligence the trial court in- structed the jury that they might take into consideration all the circumstances, and see whether there was anything to satisfy them that the defendant had behaved in an improper and unjustifiable manner; and if so, they need not give dam- ages strictly, but might give them with a liberal hand. This instruction was approved. Pollock, C. B., in giving judgment, said: "It is universally felt by all persons who have had oc- casion to consider the question of compensation, that there is a difference between an injury which is the mere result of such negligence as amounts to little more than an accident, and an injury, wilful or negligent, which is accompanied with expres- sions of insolence. I do not say that in actions of negligence there should be vindictive damages, such as are some- [72] times given in actions of trespass; but the measure of damage should be different according to the nature of the injury and the circumstances with which it is accompanied. . . . The for the consequences resulting from be a natural and direct result, the his act." Indianapolis, etc. R. Co. v. only exceptions being where a wil- Pitzer, 109 Ind. 179, 189, 58 Am. Rep. ful tort consists in the unlawful as- 387, 6 N. E. Rep. 310, 10 id. 70. Com- sumption of dominion over another's pare Kline v. Kline, 158 Ind. 602, 64 property, and where a carrier devi- N. E. Rep. 9. See Gatzow v. Buen- ates from its route, ing, 106 Wis. 1, 81 N. W. Rep. 1003, i Merest v. Harvey. 5 Taunt. 442; 49 L. R A. 475, 80 Am. ;St. 17; note Wright v. Gray, 2 Bay, 464; McDan- to Gilson V. Delaware, etc. Canal Co., iel v. Emanuel, 2 Rich. 455; Detroit 36 Am. St. 821, in which numerous Daily Post v. McArthur, 16 Mich, cases are summarized and the con- 447; West v. Forrest, 22 Mo. 344: elusion is reached that there is no Huckle v. Money, 2 Wils. 205; McAfee essential difference between the v. Crofford, 13 How. 447. measure of liability for wilful and 2 Pacific Ins. Co, v. Conard, Bald- negligent torts, and that in both win, 142. cases the injury complained of must Vol. 1 — 9 130 COMPENSATION. [§ 43. courts have always recognized the distinction between damages given with a liberal and a sparing hand."^ For this reason all the circumstances of the injurious act are provable and to be considered by the jury.'^ In an action of tort for a wilful injury to the person the manner and manifest motive of the wrongful act ma}'' be given in evidence as affecting the ques- tion of damages; for when the mere physical injury is the same it may be more aggravated in its effects upon the mind if it is done in wanton disregard of the rights and feelings of the plaintiff than if it is the result of mere carelessness.* The same view is expressed by another court: "The common sense of mankind has never failed to see that the damage done by a wilful wrong to person or reputation, and, in some cases, to property, is not measured by the consequent loss of money. A person assaulted may not be disabled or even disturbed in his business, and may not be put to any outlay in repairs or medical services. He may not be made poorer in money di- rectly or consequentially. He may incur no pecuniary dam- age whatever. . . . When the law gives an action for a wilful wrong it does it on the ground that the injured person, ought to receive pecuniary amends from the wrong-doer. It assumes that every such wrong brings damage upon the suf- ferer, and that the principal damage is mental and not phys- ical. And it assumes further, that this is actual and not meta- physical damage, and deserves compensation. When this is once recognized it is just as clear that the wilfulness and wickedness of the act must constitute an important element in the computation, for the plain reason that we all feel our in- dignation excited in direct proportion with the malice of the offender, and that the wrong is aggravated by it."* lEmblen v. Myers, 6 H. & N, 54; 4 Welch v. Ware, 32 Mich. 77; Davis Bixby V. Dunlap, 56 N. H. 463. v. Standard Nat. Bank, 50 App. Div. 2 Bracegirdle v. Orford, 2 M. & S. 210, 63 N. Y. Supp. 764; De Leon v. 79; Snively v. Fahnestock, 18 Md. McKernan, 25 N. Y. Misc. 182, 54 N. 391; Treat v. Barber, 7 Conn. 279; Ed- Y. Supp. 167; Rigney v. Monette, 47 wards V. Beach, 3 Day, 447; Churchill La, Ann. 648, 17 So. Rep. 211; Taylor V. Watson, 5 Day, 140, 5 Am. Dec. v. Howard. 110 Ala. 468, 18 So. Rep. 130; Post V. Munn, 4 N. J. L. 61, 7 311; Railway Co. v. Beard. 56 Ark. Am. Dec. 570. 309, 19 S. W. Rep. 923; Watson v. 3 Hawes v. Knowles, 114 Mass, 518, Dilts, Iowa, — , 89 N. W. Rep. 1068, 19 Am. Rep. 383. 57 L. R A. 559. See ^§ 1038, 1029. § 44.] CONSEQUENTIAL DAMAGES FOR TORTS. 131 § 44-. Same subject. There are, however, authorities -which go to the extent of holding that where a wrong is done wil- fully and with knowledge of all the facts which make the doing of it an aggravation, the scope of the natural and proximate consequence of such wrong is thereby enlarged. Where a ten- ant, whose wife was sick at the expiration of the lease, was de- nied a reasonable time in which to vacate the premises without out unnecessary risk to her, and the landlord, knowing that she was pregnant and confined to her bed by heart disease, began tearing down the house, thereby making a noise and causing adust, which aggravated the wife's illness, who, though removed from the premises the next day, died a week later, after having had a miscarriage, it was decided that the rule of the court of final appeal^ denying a recover}^ for injuries due solely to fright and excitement, unaccompanied by actual, im- mediate, personal injury, had no application. "In that case it was held that no recovery could be had for mere fright occa- sioned by negligence ; and as no action would lie for the fright alone, it necessarily followed that none could be maintained merely because the fright was followed by serious consequences. If the act complained of was not in itself actionable the grav- ity of the consequences would not make it so. In this case, however, the act of the defendants was in itself wrongful. It was a wilful and violent trespass upon the plaintiff's house for which an action will lie; and if the death of the plaintiff's wife can be clearly and directly traced to it as a natural and neces- sary consequence which they might, or should, have reason- ably anticipated, the defendants are liable even although no actual blow was struck in the course of the destruction of the building. The defendants knew her condition and the risk which was involved in their contemplated act, and it would be ridiculous to say that, without the shadow of a right, they could tear the house down from over her head with no liabil- ity for the consequences unless she chanced to be hit by a fall- ing beam."^ Substantially the same rule was applied where the 1 Mitchell V. Rochester R. Co., 151 UnderhilK 63 App. Div. 223, 71 N. Y. N. Y. 107, 45 N. E. Rep. 354, 56 Am. Supp. 291. See quotation from Spade St. 604,34 L. R. A. 781. See §§ 21-24. v. Lynn & B. R. Co., 168 Mass. 285, ^Preiser v. Wielandt, 48 App. Div. 47 N. E. Rep. 88, 38 L. R. A. 513, in 569, 62 N. Y. Supp. 890; Williams v. note to § 21. 132 COMPENSATION. [§44. defendant, intending- to have a practical joke, represented to a married woman, who was in an ordinary state of health and mind, that her husband had met with a fearful accident; the statement was made with intent that it should be believed, and it was believed; in consequence a violent nervous shock was produced which rendered plaintiff ill. Her right to maintain an action was vindicated, and judgment rendered on a verdict for £100 on account of the injury caused by the shock.' In an action for maliciously and wilfully making false statements respecting the plaintiff in his capacity as an apprentice to the defendant, and which had the effect to deprive the plaintiff of the employment on which he relied for support, there may be a recovery for injury to feelings. Such an accusation would naturally cause the plaintiff mental suffering and anxiety in reference not only to the estimation in which he would be likely to be held by his employer, or by others to whom the fact of his discharge might become known, but also as to its effect upon his income, through the loss of his situation.- In Yer- mont it is not necessary that an act be wanton in order that liability for all the injurious consequences result from it. If it is voluntary and not obligatory it is enough. Thus where 1 Wilkinson v. Downton, [1897] 2 Q. B. 57. After referring to cases which are discussed in ^§ 31-24, and admitting that the case was without precedent, the court said: A more serious difficulty is the decision in AUsop V. Allsop. 5 H. & N. 534, which was approved by the house of lords in Lynch v. Knight, 9 H. of L. Cas. 577. In that case it was held by Pol- lock, C. B., Martin, Bramwell, and Wilde. BB., that illness caused by a slanderous imputation of unchas- tity in the case of a married woman did not constitute such special dam- ages as would sustain an action for such slander. That case, however, ai> pears to have been decided on the ground that in all the innumerable actions for slander there were no precedents for alleging illness to be sufficient special damage and that it would be of evil consequence to treat it as sufficient, because such a rule might lead to an infinity of trump- ery or groundless actions. Neither of these reasons is applicable to the present case. Nor could such a rule be adopted as of general application without results which it would be difficult or impossible to defend. Suppose that a person is in a preca- rious and dangerous condition, and another person tells him that his physician has said that he has but a day to live. In such a case, if death ensued from the shock caused by the false statement, I cannot doubt that at this day the case might be one of criminal homicide, or that if a seri- ous aggravation of illness ensued damages might be recovered. See Nelson v. Crawford, 122 Mich. 466, 81 N. W. Rep 335, 80 Am. St. 577. 2 Lombard v. Lennox, 155 Mass. 70, 28 N. E. Rep. 1125, 31 Am. St. 528. § 44.] CONSEQUENTIAL DAMAGES FOR TORTS. 133 defendant shot at a fox that the plaintiff's dog had driven to cover, and accidentally hit the dog, he was liable.' Where a dog was wantonly and maliciously shot at, with intent to kill it, and was set wildly in motion, and that motion continued, without the interruption of any other agency, until the dog got into its owner's house and there knocked down and injured his wife, the defendant was liable for her injury.'^ In a case in which recovery for injury to business was sought the court said: The defendant's conduct was so lawless and malicious that on that ground alone he might properly be held respon- sible for damages more indefinite than in ordinary instances where elements of malice and oppression are lacking.' In an- other case it was observed: We have no doubt that where the act charged was wilfully, wantonly or maliciously done, and especially where its obvious purpose was to wound, humiliate or oppress another, substantial damages may be given for the mental suffering it entailed.* The effect of fraud in causing a loss on the amount re- [73] coverable beyond the measure of damages in analogous cases of breach of contract and tort is manifest in many particulars. A difference is made on this ground when there is a breach of the contract to sell and convey lands, and where there is a con- fusion of goods. Where one sells a chattel and delivers pos- session, so that he is taken to have warranted the title, his ven- dee cannot recover damages until he is dispossessed by the true owner; but if he sells property with a false and fraudulent rep- resentation of ownership, his vendee may recover damages for the deceit before he is disturbed in his possession and according to the measure of damages applicable to a breach of warranty.^ It was held by Lord Kenyon that an action lay for firing on negroes on the coast of Africa, and thereby deterring them from trading with the plaintiff, and that damages might be re- 1 Wright V. Clark, 50 Vt. 130 28, 14; Cooper v. Hopkins, 70 N. H. 271, Am. Rep. 496. 279. 48 Atl. Rep. 100; Kimball v. 2 Ishara V. Dow's Estate, 70 Vt 588, Holmes, 60 N. H. 163; Kline v. Kline, 41 Atl. Rep. 585, 67 Am. St. 691, 45 158 Ind. 603, 64 N. E. Rep. 9, 58 L. R. L. R. A. 87. A. 397. 3 Gildersleeve v. Overstolz, 90 Mo. » Case v. Hall, 24 Wend. 103, 35 Am. App. 518, 530. Dec. 605. * Hickey v. Welch, 91 Mo. App. i. 134: COMPENSATION. [§ 45. covered for loss of their trade.^ "Where a dealer in drugs and medicines carelessl}'' labels a deadly poison and sends it so la- beled into market, he will be held liable to all persons who, without fault, are injured by using it as such medicine as it purports to be.^ So, a party who fraudulently sold a gun falsely representing it to have been made by a particular maker and to be well made, was held liable to the purchaser whose son was injured by its explosion.^ "Without regard to the question of warranty, a vendor of disinfectant powder put up in a tin can who knows that it was likely to cause injury to a person who might open it, unless special care is taken in doing so, the danger not being such as presumably would be known to or appreciable by the purchaser, unless warned of it, is bound to give such warning or answer for the consequences of his neg- lect to the purchaser.* In several states the expenses of the suit, above taxable costs, to obtain redress for such wrongs, are allowed to be considered by the jury.* But in some states it is otherwise.^ Section 4. consequential damages foe breach of conteact. § 45, Recoverable only when contemplated by the parties. [74] In an action founded upon a contract only such damages can be recovered as are the natural and proximate consequence of its breach ; such as the law supposes the parties to it would have apprehended as following from its violation if at the time they made it they had bestowed proper attention upon the subject and had full knowledge of all the facts.'' As other- wise expressed, the damages which are recoverable must be 1 Tarletoa v. McGawley, Peake, Seeman v. Feeney, 19Minn. 79; Titus 205. V. Corkins, 21 Kan. 722; Marshall v. 2 Thomas v. Winchester, 6 N. Y. Betner, 17 Ala. 832; Thompson v. 397. Povvning, 15 Nev. 210; New Orleans, 3 Langridge v. Levy, 2 M. & W. etc. R. Co. v. Albritton, 38 Miss. 243, 519; Levy v. Langridge, 4 id. 337. 75 Am. Dec. 98. SeeRose V. Beattie, 2N. &McC. 538; «'Earle v. Tupper, 45 Vt. 274; Fultz V. Wycoff, 25 Ind. 321. Howell v. Scoggins, 48 CaL 355. * Clarke v. Army & Navy Co-opera- "^ Leonard v. New York, etc. Tel. tive Society, [1903] 1KB. 155, in the Co., 41 N. Y. 544, 567, 1 Am. Rep. 446; court of appeal. Meyer v. Haven, 70 App. Div. 529, 5 Dibble v. Morris, 26 Conn. 416; 535, 75 N. Y. Supp. 261; Smith v. Roberts v. Mason, 10 Ohio St. 278; Western U. TeL Co., 83 Ky. 104 § 45.] CONSEQUENTIAL DAMAGES FOE BREACH OF CONTRACT. 135 incidental to the contract and be caused by its breach ; such as may reasonably be supposed to have been in the contempla- tion of the parties at the time the contract was entered into.* Direct damages are always recoverable, and consequential losses must be compensated if it can be determined that the parties contracted with them in view.- It is not in the least essential to the existence of this liability that an actual breach of the agreement should have been in the minds of the parties or either of them. For anything which amounts to a breach of contract, whether foreseen or unforeseen, the party who is responsible therefor must answer.' Here an important dis- tinction is to be noticed between the extent of responsibility for a tort and that for breach of contract. The wrong-doer is answerable for all the injurious consequences of his tortious act which, according to the usual course of events and general experience, were likely to ensue, and which, therefore, when the act was committed, he may reasonably be supposed to have foreseen and anticipated.* But for breaches of contracts the parties are not chargeable with damages on this principle. "Whatever foresight, at the time of the breach, the defaulting party may have of the probable consequences, he is not gener- ally held for that reason to any greater responsibility; he is liable only for the direct consequences of the breach, such as usually occur from the infraction of like contracts, and w^ere within the contemplation of the parties when the contract was entered into as likely to result from its non-performance.^ 1 Williams v. Barton, 13 La. 404; ^Hadley v. Baxendale, 9 Ex.341; Jones V. George. 61 Tex. 345, 354, 48 Can dee v. Western U. Tel. Co., 34 Am. Rep. 280; Howe v. North, 69 Wis. 479, 17 Am. Rep. 452; Pacific Mich. 272, 281, 37 N. W. Rep. 213. Exp. Co. v. Darnell, 63 Tex. 639; 2 Rhodes v Baird, 16 Ohio St. 581; Thomas, etc. Manuf. Co. v. Wabash, Brayton v. Chase, 3 Wis. 456; Bridges etc. R. Co., 62 Wis. 642, 51 Am. Rep. V. Stickney, 38 Me. 361; Paducah 725, 22 N. W. Rep. 827; Jones v. Lumber Co. v, Paducah Water Nathrop, 7 Colo. 1, 1 Pac. Rep. 435; Supply Co.,. 89 Ky. 340, 25 Am. St. Smith v. Osborn, 143 Mass. 185, 9 N. 536, 12 S. W. Rep. 454, 13 id. 249, 7 E. Rep. 558; Froheich v. Gammon, L. R. A. 77; Meyer v. Haven, supra. 28 Minn. 476, 11 N. W. Rep. 88; West- 3 Wilson V. Dunville, 6 L. R. Ira ern U. Tel. Co. v. Hall, 124 U. S. 210; Hamilton v.Magill, 12 id. 186,203. 444, 8 Sup. Ct Rep. 577; Detroit * Grimes v. Bowerman, 92 Mich. White Lead Works v. Knaszak, 258, 53 N. W. Rep. 751, quoting the 13 N. Y. Misc. 619, U. N. Y. Supp. text. 924; Simpson Brick -Press Co. v. 136 COMPENSATION. [§45. Those damages which arise upon the direct, necessary and im- mediate effects are always recoverable, because every person is supposed to foresee and intend the direct and natural re- Marshall, 5 S. D. 528, 59 N. W. Rep. 728, citing the text; Guetzkow v. Andrews, 92 Wis. 214, 66 N. W. Rep. 119, 53 Am. St. 909; Dwyer v. Ad- ministrators, 47 La. Ann. 1232, 17 So. Rep. 796; Carnegie v. Holt, 99 Mich. 606. 58 N. W. Rep. 623; North v. Johnson, 58 Minn. 242, 59 N. W. Rep. 1012; Sloggy v. Crescent Creamery- Co., 72 Minn. 316, 75 N. W. Rep. 225; McConaghy v. Pemberton, 168 Pa. 121, 31 Atl. Rep. 996; Rockefeller v. Merritt, 22 C. C. A. 617, 76 Fed. Rep. 909, 35 L. R. A. 633; Central Trust Co. V. Clark, 34 C. C. A. 354, 93 Fed. Rep. 293; Krebs Manuf. Co. v. Brown, 108 Ala. 508, 18 So. Rep. 659, 54 Am. St. 188; Slaughter v. Denmead, 88 Va, 1019, 14 S. E. Kep. 833; Skirm v. Hilliker. 66 N. J. L. 410, 49 Atl. Rep. 679; Witherbee v. Meyer, 155 N. Y. 449, 50 N. E. Rep. 58; De Ford v. Maryland Steel Co., 113 Fed. Rep. 72, 51 C. C. A. 59. The rule was very strictly applied in a case in which it was held that the vendor of diseased sheep who sold them without knowledge of their condition was not responsible for damages resulting to the vendee from their being placed with cattle, the vendor not being informed that this would be done. Weaver v. Penny, 17 III. App. 628. The last reason given is of doubtful cogency. See Packard v. Slack, 32 Vt. 9; Smith V. Green, 1 C. P. Div. 92, where it IS said that one who sells diseased sheep may be charged witli knowl- edge that the purchaser intends, or is almost certain, to put them with other sheep. See, also, ch. 14. An employee who quits the service of his employer in violation of his contract is not liable for the loss of property following his act through the inability of the master to pro- cure other help. Riech v. Bolch, 68 Iowa, 526, 27 N. W. Rep. 507. A carrier who has not contracted to transport cattle received from a con- necting carrier in the cars in which they came to his care and who has no notice that they are of a kind which it is unlawful to unload in the state in which they are received is not liable to the shipper because they were seized and sold to pay a fine for such unloading, although the shipper protested against it. McAlister v. Chicago, etc. R. Co., 74 Mo. 351. Barges were not returned to their owner at the time agreed, and on ac- count of the delay were swept from their moorings by an extraordinary ice gorge and lost. "All that the defendants could foresee by ordinary forecast as a result of the breach of their contract to return the boats would be the expense to the plaintiff in taking them himself. They are liable for damages, the primary and immediate result of the breach of their contract, and not for those which arise from a conjunction of this fault with other circumstances that are of an extraordinary nature." Jones V. Gilmore, 91 Pa. 310. See Parmalee v. Wilks, 22 Barb. 539, stated in § 37. For the breach of a contract to re- pair a tool, the loss of the material on hand when it ought to have been repaii'ed may be recovered for; but not the profits which might have been made by working up such ma- terial with the tool, they being un- usual, considering the value of the implement, and notice not having been given him who was to repair it. Sitton V. Macdonald, 25 S. C. 68. The immediate result of the breach § 45.] CONSEQUENTIAL DAIIAGES FOE BREACH OF CONTRACT. 137 suits of his acts; those which ensue in the ordinary course of things, considering the particular nature and subject-matter of a contract not to engage in the hotel business within the limits of a designated city during the time the plaintiff was the proprietor of a cer- tain hotel therein, the agreement being part of the consideration for its purchase, is the diversion of pa- tronage therefrom; depreciation in the value of the hotel property is secondary: this last cannot be recov- ered for unless specially claimed. Lashus V. Chamberlam, 5 Utah, 140, 13 Pac. Rep. 361. Compare Burck- hardt v. Burckhardt, 42 Ohio St. 474, 51 Am. Rep. 842, in which it was held that one who purchased the real estate, personal property, firm name and good-will of a partnership busi- ness might prove as an element of his damage the value of the property with and without the good-will and trade-mark, and the difference in «uch value might, in the absence of more specific proof, be taken as the measure of damages. The Utah court remark of this case that it appears to stand alone. The code of Georgia, expressing the rule deduced from the decisions of the court therein (Coweta Falls Manuf. Co. v. Rogers, 19 Ga, 417, 65 Am. Dec. 602; Cooper v. Young, 22 Ga. 269. 68 Am. Dec. 502; Red v. Au- gusta, 25 Ga, 386), provides that " re- mote or consequential damages are not allowed, unless they can be traced solely to the breach of the contract or are capable of exact computation, such as the profits which are the immediate fruit of the contract and are independent of any collateral en- terprise entered into in contempla- tion of the contract." Sec. 2944. Under this provision it has been held that the purchaser of a saw-mill and outfit cannot recover against his vendor, who furnished machinery of a quality inferior to that called for by the contract, damages sustained from abandoning the business in which he had been engaged and in getting ready to use the mill, im- provements made to carry on the business of running the mill, loss of profits, purchase of material, pay- ments made for help, nor for his per- sonal services. The measure of his damages was the difference between the value of the machinery con- tracted for and the value of that in fact delivered at the time of delivery, or such difference as ascertained by a resale within a reasonable time thereafter. Willingham v. Hooven, 74 Ga. 233, 248, 58 Am. Rep. 435. Damages from injury to grain be- cause of the failure of a warranted machine to work to the capacity specified, and which was sold with the understanding that it was to be used in securing a large crop, were held not recoverable; they could not be fairly considered such as would naturally arise from the breach of the contract or to have been contem- plated by the parties as a probable result. Wilson v. Reedy, 32 Minn. 256, 20 N. W. Rep. 153; Osborne v. Poket, 33 Minn. 10, 21 N. W. Rep. 752; Brayton v. Chase, 3 Wis. 456. These cases carry the rule to the extreme. The Wisconsin case is probably over- ruled by cases referred to in Thomas, etc. Manuf. Co. v. Wabash, etc. R. Co., 63 Wis. 642, 650, 22 N. W. Rep. 827, 51 Am. Rep. 725. Contra, Smeed V. Foord, 1 E. & E. 602. See ch. 14. The breacli of a contract to furnish articles to be used in completing a building does not make the con- tractor liable for the loss of the rent, no extrinsic facts being alleged. LiU jengren Furniture & L. Co. v. Mead, 42 Minn. 420, 44 N. W. Rep. 306. 138 COMPENSATION. [§ 45.. of the contract.' It is conclusively presumed that a party vio- lating his contract contemplates the damages which directly ensue from the breach,^ There are fixed rules for measurin"- [76] damages of a pecuniary nature, which apply to all persons Though the breach of a contract to furnish guards for the shops and work-houses in a prison enables an incendiary toset fire to the building, and the loss resulting is the direct and immediate consequence of the fire, it was not, in legal contempla- tion, of the failure to provide a watch. Tennessee v. Ward, 9 Heisk. 100, 133. This ruling is open to ques- tion. The agreement to mamtain a guard, considered as a precaution contracted for to insure the safety of the plaintiff's property, was such as was apparently intended to pre-' vent, among other things, the loss which occurred, and hence that loss may properly be considered as within the contemplation of the parties when they contracted as a conse- quence of a breach. Paducah Lum- ber Co. V. Paducah Water Supply Co., 89 Ky. 340, 25 Am. St. 536, 13 S. W. Rep. 554, 13 id. 249, 7 L. R. A. 77. A warehouseman who agrees to store goods at a particular place is liable to the bailor for the loss of those intrusted to him and which are stored in another place and de- stroyed by fire, tlie latter having in- sured them at the place where the contract provided they were to be stored. If the destruction of the goods must have inevitably taken l)iace in the event they had been stored as agreed, the bailee might have been released. Lilley v. Double- day, 7 Q. B. Div. 510. A warehouseman who neglects to ship one bale of cotton out of a larger quantity is not liable for the cost of insurance for one day on the whole lot nor for the interest on money which was borrowed because of his refusal to so do, no notice hav- ing been given him of the liability of the owner for these expenses. Swift V. Eastern Warehouse Co., 86 Ala. 294, 5 So. Rep. 505. 1 Booth V. Spuyten Dnyvil Rolling Mill Co., 60 N. Y. 487; Hadley v. Baxendale, 9 Ex. 341. One who agrees to procure an as- signment of a mortgage being fore- closed and then to forbear for a specified time to enable the promisee to enforce it, and who, after procur- ing such assignment, sells it to one who immediately proceeds to a sale and thereby extinguishes the prom- isee's interest in the mortgaged prem- ises before the expiration of the agreed period of forbearance, is lia- ble for the net value of the prom- isee's interest. Gallup v. Miller, 25 Hun. 298. =^ Whether the parties who entered into a contract had in mind the dam- ages which might follow its breach or not does not in the least vary the question of their liability or the measure of recovery, under ordinary circumstances: this is governed by the injury proximately resulting. Collins V. Stephens, 58 Ala. 543:- Dougherty v. American U. Tel. Co., 75 Ala. 168, 177. 51 Am. Rep. 435: Cohn V. Norton, 57 Conn. 480, 492, 5 L. R. A. 572, 18 At). Rep. 595; Belt v. Washington Water Power Co., 24 Wash. 387, 64 Pac. Rep. 525; Farmers' Loan & Trust Co. v. Eaton, 114 Fed. Rep. 14, 51 C. C. A. 640; Eckington & S. H. R. Co. V. McDevitt, 18 D. C. App. Cas. 497. A railroad company which violates its contract to fence its track laid through a farm is supposed to have contemplated that animals on the- farm would be exposed to injury § -iC] CONSEQUENTIAL DAMAGES FOR BREACH OF CONTRACT. 139 without regard to their actual foresight of the particular ele- ments. And this is also true of the direct damages from torts.' § 46. Illustrations of liability under the rule. In an ac- tion to recover damages for the breach of a contract to har- vest oats, where the petition stated that by reason of such breach the oats were entirely lost, the verdict given for their value was retained, the court having refused to instruct the jur}^ that they were to be guided by the general rule of dam- ages, namely, the difference between the contract price and what the labor would have cost, and having instructed that the plaintiff was entitled to recover the value if he took all reasonable precaution to prevent such loss.^ Where ^ a party contracted with a manufacturer of bar iron to furnish pig iron in prescribed quantities at specified times, and made default, in consequence of which the manufacturer was obliged to get and use an inferior quality of iron in order to carry on his busi- ness, and thereby suffered loss with his customers, it was said : " When the vendor fails to comply with his contract the gen- eral rule for the measure of damages undoubtedly is the differ- ence between the contract and the market price of the article at the time of the breach.* This is for the evident reason that the vendee can go into the market and obtain the article con- tracted for at that price. But when the circumstances of the case are such that the vendee cannot thus supply himself the rule does not apply, for the reason of it ceases.* . . . If an article of the same quality cannot be procured in the market its market price cannot be ascertained and we are without the necessary data for the application of the general rule. This is from its trains; that damage would The text is cited in Anderson Elec- be done by trespassing animals and trie Co. v. Cleburne Water, Ice & L. pasturage injured. Louisville, etc. Co., 23 Tex. Civ. App. 328, 337, 57 S. R. Co. V. Sumner, 106 Ind. 55, 55 Am. W. Rep. 575. Rep. 719, 5 N. E. Rep. 404; Same v. » McHose v. Fulmer, 73 Pa. 865. Power, 119 Ind. 269, 21 N. E. Rep. 751 ; ^ Browning v. Simons, 17 Ind. App. Lake Erie & W. R. Co. v. Power, 15 45, 46 N. E. Rep. 86, citing the text. Ind. App. 179, 43 N. E. Rep. 959. 5 Bank of Montgomery v. Reese, 26 lEten V. Luyster, 60 N. Y. 252; Pa. 143; Laporte Imp. Co. v. Brock, Lovvenstein v. Chappell, 30 Barb. 99 Iowa, 485, 61 Am. St. 245. 68 N. W. 241; Horner v. Wood, 16 Barb. 389; Rep. 810, citing the text; Chalice v. § 13. Witte, 81 Mo. App. 84, also citing the ^ Houser v. Pearce, 13 Kan. 104. text. See Prosser v. Jones, 41 Iowa, 674. 140 COMPENSATION [§ 46. a contingency which must be considered to have been within the contemplation of the parties, for they must be presumed to know whether such articles are of limited production or not. In such a case the true measure is the actual loss which the vendee sustains in his own manufacture by having to use [70] an inferior article, or not receiving the advance on his contract price upon any contracts which he himself had made in reliance upon the fulfillment of the contract by the vendor. We do not mean to say that if he undertakes to fill his own contracts with an inferior article, and, in consequence, such article is returned on his hands, he can recover of his vendor, besides the loss sustained on his contracts, all the extraordi- nary loss incurred by his attempting what was clearly an un- warrantable experiment. His legitimate loss is the diff'erence between the contract price he was to pay his vendor and the price he was to receive. This is a loss which springs directly from the non-fulfillment of the contract." The rule under consideration was comprehensively stated in an early case.^ In general the delinquent party is holden to make good the loss occasioned by his delinquency. His lia- bilit}'^ is limited to direct damages, which, according to the nature of the subject, may be contemplated or presumed to result from his failure. Remote or speculative damages, al- though susceptible of proof and deducible from the non-per- formance, are not allowed. It was agreed between the owner of a rice mill and a planter that if the latter would bring his rice to the former's mill it should have priority in being beaten. Rice so brought was not so beaten, but was kept to await an- other turn, and before it was beaten the mill and the rice were consumed by an accidental fire. It was held that dam- ages for the loss could not be assessed as the consequence of the breach of the contract.^ The damages for a breach of con- tract must be such as the party suffers in respect to the par- ticular thing which is the subject of the contract, and not such as has been accidentally occasioned or supposed to be occasioned in his business or affairs.^ The defendant agreed 1 Miller v. Mariner's Church, 7 Me. 72 Am. Dec. 552. Contra, Lilley v. 55, 20 Am, Dec. 341. Doubleday, 7 Q. B. Div. 510. 2 Ashe V. De Rossett, 5 Jones, 299, 3 Batchelder v. Sturgis, 3 Cusli. 201; § 4G.] CONSEQUENTIAL DAMAGES FOR BREACH OF CONTRACT. 141 to rent to the plaintiff a store for a year, to commence some weeks in the future. Eelying upon this agreement the plaint- iff sold his lease of a store he then occupied to M., agreeing to give possession about the time he would be entitled to [77] occupy the store rented of the defendant, M. allowing the plaintiff to occupy a part of the store in the meantime. The defendant refused to give the lease in accordance with his agreement. The plaintiff's goods were packed by him to put them in the space they were permitted to occupy in M.'s store, and suffered some damage therefrom. It was held that this damage was not the result of the defendant's breach of con- tract; nor was he entitled to interest on the value of his stock of goods, which, by the defendant's refusal to fulfill his con- tract, the plaintiff had been obliged to keep elsewhere, and was prevented from exposing for sale for the period of fifteen days, as the defendant's act did not necessarily prevent a sale of the stock for that length of time.^ In a similar case the lessor was not liable to the lessee for money paid for clerk hire nor for losses resulting from the purchase of goods. "While the former may have supposed that the latter would make preparations to occupy the store he could not know what it would be necessary for him to do.^ One merchant agreed with another that he would not enter judgment on a bond given him except on a contingency named. The con- tract was violated, and as a result the fact that judgment was entered was published in a commercial journal known as the "Black List," with the effect of injuring the plaintiff's credit. Such publication was an event the parties could have foreseen.'* A case of first impression came before one of the appellate courts of Illinois not long since. The vendor of a safe war- Hay den V. Cabot, 17 Mass. 169; State 2Cohn v. Norton, 57 Conn. 480, 492, V. Thomas, 19 Mo. 613, 61 Am. Dec. 5 L. R. A, 572, 18 Atl. Rep. 595; 580; Webster v. Woolford, 81 Md. Friedland v. Myers, 139 N. Y. 482, 34 339, 32 Atl. Rep. 319; Clark v. Moore, N. E. Rep. 1058. 3 Mich. 55; Johnson v. Matthews, 5 Loss of profits is too remote to Kan. 118; Doud v. Duluth Milling be considered where there is a breach Co., 55 Minn. 53, 56 N. W. Rep, 463; of such a contract, Alexander v. Florida Central & P, R. Co. v. Bucki, Bishop, 59 Iowa, 572, 13 N. W. Rei>. 16 C. C. A. 42, 68 Fed. Rep. 864. 714. 1 Lowenstein v. Chappell, 30 Barb. 3 Blair v. Kinch, 10 L. R. Ire. 234. 241. 142 COMPENSATION. [§ 46. ranted it to be burglar proof if directions given for locking it were observed; these were incomplete and the safe was opened bj burglars without the use of force, and money therein was taken. It was said in the opinion: It seems to be no undue stretch of the well-established rule that if the damages suffered be such as may reasonably be supposed to have been in the contemplation of both parties at the time of the contract as the probable result of its breach, to hold that the very intervention of the burglar was the essential element that both parties con- templated as being the thing to be guarded against, and con- cerning which the warranty was interposed. If so, then the consequence that followed was the natural and proximate result of the breach, and the recovery was right.^ A vendor of powder broke his contract to furnish the plaintijff with the papers necessary to lawfully land the powder, knowing that the failure to do so would make plaintiff liable for the viola- tion of law in attempting to import an interdicted article. The defendant was liable for the fine paid by the plaintiff .^ A cor- poration which deducts a part of the wages of an employee to pay a physician employed under a contract to provide compe- tent medical service to him and his family is liable for the death of the child of the employee caused by the breach of the con- tract.' Where there was a delay of four months in delivering a wheel and pinion to a street railway company, in consequence of which its earning power was largely reduced, the defendant, not having been apprised of the facts, was not liable for the losses.* The breach of a contract between two railroad com- panies which confers a license upon one of them to run its trains over the track of the other does not make the party guilty thereof liable to the other for damage sustained to prop- erty which it was unable to carry because of such violation and which it was obliged to unload from its cars at a place iDeanev. Michigan Stove Co., 69 ing an employer liable to an em- IlL A pp. 106. ployee for tlie malpractice of its 2Hecla Powder Co. v. Sigua Iron hospital surgeon, money being de- Co., 157 N. Y. 437, 52 N. E. Rep. 650. ducted from the wages of employees 3 American Tin-Plate Co. v. Guy, for the support of the hospital. 25 Ind. App. 558, 58 N. E. Rep. 738, ^ Central Trust Co. v. Clark, 34 C. following Wabash R. Co. v. Kelly, C. A. 354, 93 Fed. Rep. 293. 153 Ind. 119, 25 N. E. Rep. 152, hold- ^ 4G.] CONSEQUENTIAL DAMAGES FOE BREACH OF CONTKACT. 143 where it was exposed to rain and mud.' The damages result- ing from the foreclosure of a mortgage are not proximately caused by the breach of a contract to loan the mortgagor raoney.^ The lessor of personalty must deliver it in a condi- tion for its safe use by the lessee; failing to do so, he is liable for any damages resulting from defects therein.' It is the proximate cause of the refusal of the purchaser of shares of stock to accept the same that the vendor shall become liable for assessments thereon.* If poor seed is sold in lieu of good, a crop of inferior quality and of less value is the natural re- sult.^ "Where the defendant contracted to make and deliver dies to be used in the manufacture of lanterns, in which business the plaintiff's assignor proposed to engage when, so far as ap- peared, the dies were furnished, it was not contemplated that he would rent premises and employ men in preparation for carrying on the business to be established , the natural and obvious consequence of the breach would be to compel him to obtain dies elsewhere; the assignee of the contract, of whose connection with it defendant had no notice, could only re- cover such damages as were contemplated when the contract was made.^ Pursuant to a contract of bailment the defendant delivered to the plaintiff, without warranty, seed which he believed to be clean, which was to be sown on the plaintiff's land, the produce thereof to be returned and delivered to and paid for by the defendant at a fixed price. Such seed was not pure, and the plants grown from the foreign seed, having be- come scattered on the ground during the harvesting, came up the following year. The damage thus caused was too remote.^ 1 Railway Co. v. Neel, 56 Ark. 279, ^ Stewart v. Scultborp, 25 Ont. 544. 19 S. W. Rep. 963. But in McMullen v. Free, 13 Ont. 2 Savings Bank v. Asbury, 117 Cal. 57, tlie vendor of seed grain, which 96, 48 Pac. Rep. 1081. was impure by reason of the pres- 3 Moriarty v. Porter, 23 N. Y. Misc. ence of the seed of noxious weeds, 536, 49 N. Y. Supp. 1107. was held liable to a farmer to wliom * Gay v. Dare, 103 CaL 454, 37 Pac. he sold such seed for the damage Rep. 466. done to his farm by reason of the 5 Hoopes v. East, 19 Tex. Civ. App. growth of such weeds, though the 53, 48 S. W. Rep. 764. crop raised from the seed of the <» Rochester Lantern Co. v. Stiles grain was not injured. See § 670 et & Parker Press Co., 135 N. Y. 209, 31 seq. N. E. Rep. 1018. 14-i COMPENSATION. [§ 4T^ But it is otherwise where there is a breach by a landlord of his contract to furnish his tenant with fertilizer.^ § 47, Liability not affected by eollaterjil ventures. Par- ties, when they enter into contracts, may well be presumed to contemplate the ordinary and natural incidents and conse- quences of performance or non-performance; but they are not supposed to know the condition of each other's affairs, nor to take into consideration any existing or contemplated transac- tions, not communicated nor known, with other persons.^ Few persons would enter into contracts of any considerable extent as to subject-matter or time if they should thereby incident- ally assume the responsibility of carrying out, or be held le- gally affected by, other arrangements over which they have no control and the existence of which are unknown to them. In awarding damages for the non-performance of an existing contract the gains or profits of collateral enterprises in which the party claiming them has been induced to engage by rely- ing upon the performance of such a contract, and of which no notice has been given the other party, cannot be included. In an action for breach of a warranty of a horse the plaintiff cannot recover as special damage the loss of a bargain for its resale at a profit, though the contract for such resale had act- ually been completed before the unsoundness was discovered.* 1 Herring v. Armwood, 130 N. C. Supp. 924; Scaramanga v. English, 177, 41 S. E. Rep. 96. 1 Commercial Cas. 99; Brauer v. 2 Horner v. Wood, 16 Barb. 386; Oceanic Steam Navigation Co., 66 Cuddy V.Major, 13 Mich. 368; Mas- App. Div. 605, 73 N. Y. Supp. 291; terton v. Mayor, 7 Hill, 61 ; Story v. Witherbee v. Meyer, 155 N. Y. 446. 50 New York R. Co., 6 N. Y. 85; Bridges N. E. Rep. 58; Dean Pump Works v. V. Stickney, 38 Me. 361 ; Barnard v. Astoria Iron Works, 40 Ore. 83, 66 Poor, 21 Pick. 378; Fox v. Harding, Pac. Rep. 605. 7 Cush. 516; Brauer v. Oceanic Steam The text is quoted with approval Navigation Co., 34 N. Y. Misc. 127, 69 in Mitchell v. Clarke. 71 Cal. 163, 11 N. Y. Supp. 465; Hay v. Williams, 8 Pac. Rep. 882, 60 Am. Rep. 529. which Ky. L. Rep. 434 (Ky. Super. Ct.). was an action for the breach of a 3 Clare v. Maynard, 6 Ad. & EL contract to pay the plaintiff's cred- 519; Walker v. Moore, 10 B. & C. 416; itor a sum of money intrusted to the Lawrence v. Ward well, 6 Barb. 423; defendant for that purpose. Dam- Williams V. Reynolds, 6 B. & S. 495; ages resulting to the plaintiff by Harper v. Miller, 27 Ind. 277; Jones reason of his creditor's attaching V. National Printing Co., 13 Daly, 92; and selling h's property were not Detroit White Lead Works v. suchas were the natural consequence Knazak, 13 N. Y. Misc. 619, 34 N. Y. of tlie bread.. To the same effect § 4S.] CONSEQUENTIAL DAMAGES FOR BREACH OF CONTRACT. 145 § 48. Distinction between consequential liability in tort and on contract. The distinction between the liability for [78] consequential damages resulting from a tort and the damages recoverable for a breach of contract is forcibly illustrated by comparing an English case ^ with two Wisconsin cases.^ In the first case a carrier negligently induced the plaintiff and his wife and child to leave the train in the night at a wrong station ; no conveyance could be had, and they were obliged to take a long walk through the rain to reach their destination. In con- sequence of the exposure and fatigue the wife was taken sick. The action to recover damages was considered as being brought on the contract for carriage, and they were held too remote. In the earlier of the Wisconsin cases the action was upon a contract to convey the plaintiff and about eighty others from one station to a given place and back on a named day by a special train, which was to leave on the return trip at a stated hour. It was alleged that they were convej^ed to the place designated, but no cars were furnished to convey them back, and the breach was charged to be wilful and fraudulent; that b\^ reason thereof the plaintiff was greatly injured in bodily health, suffered great pain and anxiety of mind, lost much time from business and was subjected to indignities and insults from employees of the carrier. It was held, the action being upon contract, that the trial court erred in charging that, if the de- fendant's conduct was wilful and malicious, the jury might award full compensatory, though not punitive, damages, " em- bracing such loss of time, such injury to health, such annoy- ance and vexation of mind, and such mental distress and sense of wrong as the jury might find was the immediate result of the defendant's misconduct, and must necessarily and reason- are Wallace v. Ah Sam, 71 Cal. 197, ^ Hobbs v. London, etc. R Co., L. 13 Pac. Rep. 46, 60 Am. Rep. 534; R, 10 Q. B. 111. Cohn V. Norton, 57 Conn. 480, 493, 18 2 Walsh v. Chicago, etc. R. Co., 43 Atl. Rep. 595; Wetmore v. Pattison, Wis. 23, 24 Am. Rep. 376; Brown v. 45 Mich. 439, 8 N. W. Rep. 67; Hunt Same, 54 Wis. 342, 11 N. W. Rep. 356, V. Oregon Pacific R. Co., 36 Fed. Rep. 911. The Walsh case is cited approv- 481 ; Illinois Central R. Co. v. United ingly in North German Lloyd Steam- States, 16 Ct. of Cls. 312, 334; Cates ship Co. v. Wood, 18 Pa. Super. Ct. V. Sparkman, 73 Tex. 619, 11 S. W. 488, 493. Rep. 846; Houston, etc. R Co. v. Hill, 63 Tex. 384, 51 Am. Rep. 642. Vol. I — 10 14G COMPENSATIO:l [§ 40. ably have been expected to arise therefrom to the plaintiff." Such damages were held too remote; they could not have been in contemplation when the contract was made. The court quoted and adopted the reasoning of the several judges in the English case. The other "Wisconsin case was an action for [71)J negligence, and the facts were nearly like those in the Ilobbs case. Recovery was allowed for the sickness caused by the necessary walk of the female plaintiff to her destina- tion.' §49. Same subject; criticism of the Hobbs case. The doc- trine of the Hobbs case which is stated in the preceding sec- tion made some impression upon the law in similar cases in a few states; its influence is most seen in cases ruled soon after the opinions of the judges who decided it were received in this country.^ As has been stated elsewhere * the tendency of Amer- ican authority is in opposition to the view promulgated therein.* In addition to the cases cited in the previous discussion atten- tion is directed to a Texas decision in which the English case and those which have followed it are said to be rested upon too narrow ground,^ and which holds that a railway company which has violated its contract by carrying a passenger beyond his destination is liable to him for the discomfort, inconven- ience, sickness, expenses, costs and charges which are the direct, natural and proximate result. The Hobbs case stands but little better in England than it does in this country; indeed, it is practically overruled there. The court of appeal, queen's bench division, has unanimously held that it is a probable result of turning horses which have been transported on a railway out of a stable in which it had been contracted that they should 1 This case has been discussed in is no connection between the agree- g 30, where other cases on the sub- nient and the arrest of the passenger ject are collected. by the conductor of tlie train, who ^See Walsh v. Chicago, etc. R. Co., was a police officer, and who wrong- 42 Wis. 23, 24 Am. Rep. 376; Indian- fully refused to receive the ticket apolis, etc. R Co. v. Birney, 71 III. tendered, and delivered the passen- 391. ger to another police officer by wlioni 8§ 36. he was confined in a cell with the re- * Massachusetts may be an excep- suit that illness followed. Murdock tion to the rule, it being held there v. Boston & A. R. Co., 133 Mass. 15. that in an action for the breach of a & I. & G. N. R. Co. v. Terry, 62 Tex. contract to carry on a railroad there 380. § 40.] CONSEQUENTIAL DAMAGES FOR BREACH OF CONTRACT. 147 be sheltered that some of them would take cold while their owner was finding room for them elsewhere, and that dam- ages resulting might be recovered.^ In the case last cited Bramwell, L. J., said, referring to the ITobbs case, " I do not see why a passenger who, by default of the railway company, was obliged to walk home in the dark might not recover in respect of such damage, it being an event which might not unreasonably be expected to occur." Brett, L. J., observed, " Why was the damage to the wife too remote? There was no accommodation or conveyance to be obtained wiiere the par- ties were put off the train, so that it was not only reasonable that the}'- should walk, but they were obliged to do so. Why was it that which happened was not the natural consequence of the breach of contract ? Suppose a man let lodgings to a woman and then turned her out in the middle of the night with only her night clothes on, would it not be a natural con- sequence that she would take a cold? . . . It is not, how- ever, necessary for me to say more than that I am not contented with it, for there is a difference between such a case and the present one. People do not get out of a train and walk home at night without catching cold, and it is not nearly so inevi- table a consequence that a person getting out of a train under such circumstances as in the Hobbs case should catch cold as that horses turned out as these were in this case should suffer. There is, therefore, a difference, though I own I do not see much between this case and that." The question has also been passed upon in Canada, and the view there taken is rested on a basis which is entirely satisfactory. In that case a passenger was ejected from a street car after an altercation with the con- ductor which put him in a state of perspiration; he took cold and suffered from rheumatism and bronchitis. The defendant contended that the right interfered with was one of contract, and that, as the illness was not reasonably contemplated at the time the contract was made, there was no liability on account of it. The recbvery of damages on account of the illness was sustained by the divisional court and the court of appeal. It was said in the opinion of the supreme court that when one, whether in performance of a contract or not, takes charge of iMcMahon v. Field, 7 Q. B. Div. 591. 148 COMPENSATION. [§ 50. the person or property of another, there arises a duty of rea- sonable care; and if by his own act he creates circumstances of danger and subjects the person or propert}'' to risk without exercising reasonable care to guard against injury or damage, he is responsible for such injury and damage as arises as the direct or natural and probable consequence of the wrongful act. The writer of the opinion shared in the doubts expressed by the court of appeal in England respecting the conclusive- ness of the reasoning in the Hobbs case, but thought the case in hand was independent of it. A dissenting judge approved of the Hobbs case, and thought it governed the one before the court.' § 50. Liability under special circumstances; Hartley v. Baxendale. The leading English case'-^ on the scope of recov- ery for the breach of a contract established two propositions which have been very generally accepted : " Where two parties have made a contract which one of them has broken, the dam- ages which the other ought to receive in respect to such breach of contract should be such as may fairly and reasonably be considered either as arising naturally — that is, according to the usual course of things — from such breach of contract it- self, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the con- tract as the probable result of a breach of it. Now, if the special circumstances under which the contract was actually made were communicated by the plaintiff to the defendant, and thus known to both parties, the damages resulting from the breach of such contract, which they would reasonably con- template, would be the amount of injury w^hich would ordina- rily follow from a breach of contract under the special circum- stances so known and communicated. But, on the other hand, if these special circumstances were wholly unknown to the party breaking the contract, he, at the most, could only be supposed to have had in contemplation the amount of injury which would arise generally, and in the great multitude of cases, not affected by any special circumstances, from such a breach of contract.'"' The first of these rules has been consid- 1 Toronto R Co. V. Grinsted, 24 Can. s Griffin v. Colver, 16 N. Y, 489; Sup. Ct. 570. Rochester Lantern Co. v. Stiles & ^ Hadley v. Baxendale, 9 Ex. 353. Parker Press Co., 135 N. Y. 209, 31 N. I 50.] CONSEQUENTIAL DAMAGES FOR BREACH OF CONTRACT. 149 ered in the preceding sections. It is to be remembered that there is no relaxation of the rule confining the recovery to the damages naturally and proximately resulting from the breach in cases where there are such known special circumstances. Indeed, the same strictness exists to confine the recovery to the immediate consequences. The general principle of com- pensation is that it should be equal to the injury. It is a rule based on that principle that the amount of the benefit which a party to a contract would derive from its performance is the measure of his damages if it be broken.^ It is a rule of inter- pretation, too, that the intention of the parties is to be ascer- tained from the whole contract, considered in connection with the surrounding circumstances known to them. If it appear by such circumstances that the contract was entered into, [80] and known by both parties to be entered into, to enable one of them to serve or accomplish a particular purpose, whether to S3cure special gain or to avoid an anticipated loss, the liability of the other for its violation will be determined and the amount of damages fixed with reference to the effect of the breach in hindering or defeating that object. The proof of such circum- stances makes it manifest that such damages were within the contemplation of the parties. Looking alone at a contract of this character, silent as to the circumstances which were in view, such damages are consequential and sometimes appear to arise very remotely and collaterally to the undertaking vio- lated. But when the contract is considered in connection with the extrinsic facts there is established a natural and proximate relation of cause and effect between its breach and the injury to be compensated.^ If all such facts as are admissible to jus- E. Rep. 1018. Criticisms upon the i Alder v. Keighley, 15M. & W. 117; language used in the extract quoted Guetzkow v. Andrews, 92 Wis. 214,66 in the text have been made by N. W. Rep. 119, 53 Am, St. 909; various judges and writers; but the Blagen v. Thompson, 23 Oreg. 239, 31 principles enunciated therein have Pac. Rep. 647, 18 L. R. A. 315. received general approval. Occa- 2 Machine Co. v. Compress Co., 105 sionally a judge intimates that the Tenn. 187, 204, 58 S. W. Rep. 270, conditions of business have so quoting the text, changed since that case was decided In Fox v. Everson, 27 Hun, 335, the that it is no longer applicable in its defendant sold the plaintiff clover entirety. See Daugherty v. Ameri- seed with which was mixed plain tain can U. Tel. Co., 75 Ala. 168, 178, 51 seed. A recovery was allowed for Am. Rep. 435. the difference between the value of 150 COMPENSATION. [§ 50. tify the proof of consequential damages were recited in the contract as the law connects them with it when known, or if the legal obligation which the law imposes by reason of them had been expressed in words by the parties, such damages would be direct and not consequential. In a case in Wisconsin the plaintiff was a butcher, and the defendant agreed to furnish him with what ice he might re- quire for a season, knowing that the plaintiff needed it to pre- serve fresh meat. About the hist of July the defendant stopped supplying ice and refused to furnish any more, in consequence of which plaintiff lost considerable meat. This loss the plaint- iff recovered. The court say: "As the defendant was ac- quainted with all the special circumstances in respect to this contract — knew for what purpose the ice agreed to be fur- nished by him was to be used, — he should fully indemnify the plaintiff for the loss he sustained by the non-delivery of the ice; and he was therefore justly chargeable in damages for the meat spoiled in consequence of the inability of the plaintiff to procure ice elsewhere."^ This case was not one of simple con- pure seed and that actually sown and for the depreciation in value of the farm on account of the plaintain seed. It was contended that there was no liability for the last item because it was not proven that the defendant knew the seed was bought for the purpose of being sown. The contention was overruled because that is the purpose for wliich such seed is usually purchased. But the vendor was not apprised of the fact that the seed sold was to be mixed with timothy seed, and hence was not liable for the loss of the latter. 1 Hammer v. Schoenf elder, 47 Wis. 455, 2 N. W. Rep. 1129. See Manning V. Fitch, 138 Mass. 273; Beeman v. Banta. 118 N. Y. 538, 16 Am. St. 779, 23 N. E. Rep. 887. The text is cited in New Orleans & N. E. R. Co. V. Meridian Water- works Co., 18 C. C. A. 519, 72 Fed. Rep. 227, where it was alleged that the de- fendant had failed to perform its contract to furnish at the plaintiff's shops the required pressure of water, which it had contracted to furnish for all purposes for which it might be desired or used; that one of such purposes was the extinguishment of fires in the plaintiff's shops, of which the defendant had knowledge; that at the time the fire which burned the shops broke out there was less than half the required pressure, and that, in consequence, the shops were burned. A good cause of action was stated. In Jones v. George, 61 Tex. 345, 48 Am. Rep. 280 (see s. c, 56 Tex. 149, 42 Am. Rep. 689), the plaintiff ap- plied to the defendant, a druggist, for a quantity of Paris green; by mistake he was supplied with chrome green, a substance similar in appear- ance but not possessing the same properties. The vendor knew that the article called for was desired to § 50.] CONSEQUENTIAL DAMAGES FOR BREACH OF CONTRACT. 151 tract of sale. The special circumstances, known to botii [81] parties, made it more than that in its aims and consequences, although the terms in which it was made, considered alone, imported only a contract of sale. The vendor, knowing the purpose for which the ice was wanted, was held, by implica- tion, to undertake to deliver it as agreed in order that tho vendee should not suffer loss on his fresh meat from his inabil- ity to preserve it for want of ice. Such being the contract, the loss which occurred from its breach was the direct conse- quence thereof. It is to be observed that the implication from the vendor's knowledge of the special circumstances required performance of no additional act to fulfill the contract. It merely enjoined on him the duty to perform it in view of more serious consequences than those which usually follow a ven- dor's default. The principle that the injured party is entitled to compensation proportioned to the actual injury is para- mount, and overrides any rule not adapted to measure com- pensation in such a special case. The vendor is thus admon- ished that if he fails to deliver the property as agreed he can- not satisfy the injury to the vendee by paying the difference of a higher market price unless the article can be obtained in prevent the destruction of the plaint- pears that the contract was made for iff's cotton crop by the cotton worm, the express purpose of avoiding a loss which had for years been very de- likely to occur from a known natural structive. Without knowing the cause, which could be controlled and mistake the chrome green was ap- avoided; that this was known to the plied to the cotton, and failed to pro- contracting parties, and that com- duce the desired result. Evidence pliance with the contract would was given to show that Paris green have prevented the injury by de- would have had a beneficial effect, stroymg the thing which immedi- It was ruled that there was not a ately inflicts it, then it is believed technical warranty that Paris green that the breach of such a contract was delivered, but an implied con- must be said, within the meaning of tract that such was the fact. In an- the law, to be the direct cause of the swer to the contention that it is not injury. In such case there is 'an enough to entitle a party to recover immediate and natural relation be- daniages lor breach of contract to tween tlie act complained of and the show that without the breach relied injury without the intervention of on the injury would not have been other and independent cause; ' for a received when it results from an un- cause which is subject to control foreseen or unexpected cause, or and contemplated by the parties to from a cause which no reasonable a contract, looking to its avoidance human exertion could counteract, or control, cannot be said to be an the court observed, "but if it ap- 'independent cause.'" 152 COMPENSATION. [| 51. market; that the loss will be the value of the property which the ice was needed to preserve.^ Where a vendor broke his contract to supply ice to a local dealer for the entire season at a fixed price, the latter was entitled to recover the increased price he was obliged to pay for ice bought from other parties, and for the loss of profits which he would have realized from his business from the time he was compelled to suspend the same because of inability to procure ice from any source.^ §51. Same subject; illustrations and discussion of the rule. In a case ^ in which the plaintiff had contracted to sell a large quantity of bullets of a certain quality and at a fixed price, he made a contract with the defendant by which the latter agreed to manufacture and deliver to him the same quantit}^ and quality of bullets; at the time of making it he informed the defendant of his arrangement and that he was contracting with him for the bullets in order to fulfill that agreement. The contract between these parties was in writ- ing, but did not contain any allusion to the special object of making it. It was held, notwithstanding, that it was compe- tent to prove such antecedent contract and parol proof was admissible to establish that the defendant was informed that [82] the plaintiff made the contract in question with a view to performing the other; and that the proper measure of dam- ages was the difference between the price at which the defend- ant was to furnish the bullets and that the plaintiff was to receive. It appeared that the market price advanced so that the bullets could not be obtained below the latter price; the market price was considerably higher, but the recovery was 1 The contract in suit provided that Am. St. 899, 7 S. E. Eep. 644; Dennis the manufacturer should furnish, de- v. Stoughton, 55 Vt. 371; Goodloe v. liver and put in running order by a Rogers, 10 La. Ann. 631; Lobdell v. specified day machinery for a cot- Parker, 3 La. 328. Compare Brayton ton-seed oil mill. By reason of a v. Chase, 3 Wis. 456, which is incon- breach a quantity of seed purchased sistent with Hammer v. Schoen- for grinding was damaged. Parol f elder, 47 id. 455, 2 N. W. Rep. 1129, evidence was received to show that stated supra. time was of the essence of the con- 2 Border City Ice & Coal Co. v. tract, and that the purchase of seed Adams, 69 Ark. 219, 62 S. W. Rep. in advance of the period fixed for the 591. completion of the mill was within * Messmore v. New York Shot & L. the contemplation of the parties. Co., 40 N. Y. 422. Van Winkle v. Wilkins, 81 Ga. 93, 12 § 51.] CONSEQUENTIAL DAMAGES FOE BREACH OF CONTRACT. 153 limited as above stated, for that gave the plaintiff compensa- tion for his actual loss, and that was the loss which was in. oontemplation by the parties when the contract was made. Where the contract relates to commodities commonly pur- chasable in the market the purchaser is made whole when he recovers the difference between the contract price and the value of the article in the market at the time and place of de- livery, because he can supply himself with this article by going into market and making his purchase at such price, and these are all the damages he is ordinarily entitled to recover, for nothing beyond this was within the contemplation of the parties when they contracted. If, however, the vendor knows that the purchaser has an existing contract for a resale at an advanced price, and that the purchase is made to fulfill such a contract, the profits on such resale are those contemplated by the parties. In other words, on the ordinary contract of sale the damages contemplated are those which would result with reference to market value if the subject of the contract have such a value; otherwise, on the basis of its actual value, as it may be ascertained by proof or for the use to which the prop- erty is commonly applied, whether known or not.^ But if the contract of purchase is made with a view to a known resale already contracted or any known special use, the damages which are contemplated to result from the vendor's breach are those which would naturally follow on the basis of the contract for resale or other special use, known to the vendor when the contract was made. The contemplation of damages will in- clude such as ordinarily arise according to the intrinsic nature of the contract and the surrounding facts and circumstances made known to the parties at the making of it.^ 1 Rhodes v. Baird, 16 Ohio St. 573; v. New York, etc. Tel. Co., 41 N. Y. Borries v. Hutchinson, 18 C. B. (N. 544, 1 Am. Rep. 446; Hexter v. Knox, S.)465. 63 N. Y. 561; True v. International 2 Davis V. Talcott, 14 Barb. 611; Tel. Co., 60 Me. 9; Fletcher v. Tay- Cobb V. I. C. R. Co., 38 Iowa, 601; leur, 17 C. B. 21; Squire v. Western Haven v. Wakefield, 39 111. 509; Illi- U. Tel. Co., 98 Mass. 232, 93 Am. Dec. nois Central R. Co. v. Cobb, 64 111. 157; Cory v. Thames Iron Works Co., 128; Winne v. Kelley, 34 Iowa, 339; L. R. 3 Q. B. 181: Borradaiie v. Brun- Van Arsdale v. Rundel, 82 111. 63; ton, 8 Taunt 535; In re Trent & H. Rogers v. Bemus, 69 Pa. 432; Hinck- Co., L. R. 6 Eq. 396; Dobbins v. Du- ley V. Beck with, 13 Wis. 31; Leonard quid, 65 111. 464; Richardson v. Ciiy- 154 COMrE^'SATION. [§ 51. This is illustrated by several recent cases. Plaintiff was a coal merchant and had contracted to supply coal to steamers; he had also contracted for coal with the defendant, who knew the purpose for which the coal was wanted. The defendant noweth, 26 Wis. G56; Wolcott v. Mount, 36 N. J. L. 262, 18 Am. Rep. 438; Benton v. Fay, 64 111. 417; Grin- die V. Eastern Exp. Co., 67 Me. 317, 24 Am. Rep. 31; Hamilton v. Magiil, 12 L. R. Ira 186, 204: Kramer v. Messner, 101 Iowa, 88, 69 N. W. Rep. 1142; Guetzkow v. Andrews, 92 Wis. 214. 53 Am. St. 909, 66 N. W. Rep. 119; Agius V. Great Western Colliery Co., [1897] 1 Q. B. 413; Chalice v. Witte, 81 Mo. App. 84; Uhlig v. Barnum, 43 Neb. 584, 61 N. W. Rep. 749; Waco Artesian Water Co. v. Cauble, 19 Tex. Civ. App. 417, 47 S. W. Rep. 588; Drug Co. V. Byrd, 92 Fed. Rep. 290, 34 C. C. A. 351; Central Trust Co. v. Clark, id. 354, 92 Fed. Rep.' 293; Liman v. Pennsylvania R. Co., 4 N. Y. Misc. 539, 24 N. Y. Supp. 824, cit- ing the text; Blagen v. Thompson, 23 Or& 239, 31 Pac. Rep. 647, 18 L. R. A. 315; Machine Co. v. Compress Co., 105 Tenn. 187, 58 S. W. Rep. 270; M'Neill V. Richards, [1899] 1 Ire. 79; Hirschhorn v. Bradley, Iowa, , 90 N. W. Rep. 592; Trigg v. Clay, 88 Va. 330, 335, 13 S. E. Rep. 434, 29 Am. St. 723. In Borries v. Hutchinson, 18 C. B. (N. S.) 445, the defendant contracted to sell to the plaintiff seventy-five tons of caustic soda, an article not ordinarily procurable in the market, at a given price, to be delivered on the rails at Liverpool for Hull, twenty-Sve tons in June, twenty-five tons in July and twenty-five tons in August; but he failed to deliver any until the 16th of September, between which day and the 26th of October he delivered twenty-six tons in all. At the time of entering into the contract the defendant was aware that the plaintiffs were buying the soda for a foreign correspondent, but did not know until the end of Au- gust tiiat it was designed for St. Pe- tersburg. The plaintiffs had, in fact, contracted to sell the soda to Heit- mann.a merchant at St. Petersburg, at an advanced price, and he had contracted to sell it to one Heinbur- ger, a soap manufacturer of tiiat place, for a still further advance. In consequence of the late delivery of the twenty-six tons, the plaintiffs were compelled to pay a higher rate of freight and insurance. This amounted to 40^. 17«. For their fail- ure to deliver the remainder to Heit- mann they were called upon to pay and actually paid 159Z., which he claimed as the compensation he bad been obliged to pay Heinburger for the failure to perform his subcon- tract with him. In this action by the plaintiffs to recover from the de- fendant for the breach of his con- tract with them, it was conceded that they were entitled to recover the difference between the price (on the forty-nine tons undelivered) at which he had sold the caustic soda to them, and the price at which they had contracted to sell it to Heit- mann, in other words, the loss of the profit on the resale; and it was held that they were also entitled to re- cover the 40Z. 17s., the excess of freight and insurance, which was the necessary result of the defend- ant's breach of contract, butth^t the defendant was not chargeable with the 1597. which the plaintiff had paid to Heitmann to compensate Hein- burger for the loss of his bargain; this was held too remote. As to the latter item, Erie, C. J.: "He (the de- fendant) had no notice cf the subse- f § 51.] CONSEQUENTIAL DAMAGES FOR BREACH OF CONTRACT. 155 broke its contract by failing to furnish coal as fast as it Avas needed ; in consequence a steamer was delayed, a claim made on the plaintiff for damages and a suit was brought to enforce that claim. The defendant refused to defend such suit, which was defended by the plaintiff, who satisfied the judgment therein, and then sued the defendant for reimbursement. His right to recover was held to be within the rule of Hadley v. Baxendale.^ In another case^ the defendant supplied a de- fective chain to a firm of stevedores for use in discharo-infj: a cargo from a vessel owned by a third party. He was taken to have known that such firm would employ men to do the un- loading, and was liable for the injury received by a man so employed, through a defect in the chain, notwithstanding such defect might have been discovered by the employer in the ex- ercise of reasonable care. Such injury was the natural conse- quence of the defect. The defendant's agent guaranteed that a theater troupe to whom he sold tickets should arrive at their destination by a stated time, which they did not do. A recovery was allowed of the damages sustained by missing engagements on account of the delay, but not for missing other engagements because of the breaking up of the troupe through failure to pay its members, which failure resulted from the loss of the money which would have been received from keeping the first-mentioned engagements; that result could have been avoided by a like sum of money realized from any other source.* The defendant contracted with the owner of a vessel to tow her to a designated point, where she was to be loaded, and to keep a tug there for the removal of the vessel. No tug was kept there in pursuance of the contract, and none was available for service there. The defendant failed to move the quent resale; and it is not to be as- Co., [1899] 1 Q. B. 418, approving Ham- sumed that the parties contemplated mond v. Bussey, 20 Q. B. Div. 79, and that he was to be held responsible doubting Baxendale v. London, etc. for the failure of any number of sub- R. Co., L. E. 10 Ex. 35, and Fisher v. sales. These could not in any sense Val de Travers Asphalte Co., 1 C. P. be considered as the direct, natural Div. 511; Scott v. Foley, 5 Commer- or necessary consequence of the cial Cas. 53. breach of the contract he was enter- ^ Mowbray v. Merry weather, [1895] inginto." Hinde v. Liddell, L. R. 10 1 Q. B. 857, [1895] 2 id. G40. Q. B. 265. 3 Foster v. Cleveland, etc. R. Co., 5G 1 Aguis v. Great Western Colliery Fed. Rep. 431. See note to J^ 52. 156 COMPENSATION. [§ 52. vessel to a place of safety, and in consequence of a storm she was greatly damaged and was sunk. The liability of the de- fendant was co-extensive with the loss suffered by the plaintiff.^ The breach of a contract for building a motor railway, entered into for the purpose of securing by performance the enhance- ment of the value of land, renders the party in default liable for the loss of the profits the purchaser of such land would have made if the road had been built.^ But this rule does not apply as a defense to an action by a railroad company upon a subsidy contract."'' One who has broken his contract with the stockholders of a corporation to loan it money is not bound to foresee that they would give their notes to another as a bonus to obtain a loan, and is not liable for the value of their shares.* [83] §52. Same subject; market value; resale; special circumstances. — "Where an article had been bargained for for a particular and exceptional purpose, unknown to the seller, [84] and had no market value, it was held that the vendor was liable for the damages which would have been sustained if it had been used for the purpose for which he supposed it would be used.^ If the vendor has notice that bis vendees have con- tracted to resell the article he will be held liable for loss of profits by such resale if he fails to fulfill his contract, though he was not informed of the price in the contract to resell, unless there is a market value for the article or the resell- ing price is of an unusual or exceptional character.^ Since the decision of Hadley v. Baxendale,'' the rule first stated in that case for ascertaining damages which are recoverable for breach of contract, namely, that they be such as arise " natu- rally, i. e., according to the usual course of things from such breach of contract itself," has been universally assented to; 1 Loud & Sons' Lumber Co. v. Peter, ^ Cory v. Thames Iron Works Co., 20 Ohio Ct. Ct. 73; Boutin v. Rudd, L. R. 3 Q. B. 181. 27 C. C. A. 526, 82 Fed. Rep. 685. <* Booth v. Spuyten Duy vil Rolling -'Blagen v. Thompson, 23 Ore. 239, Mill Co., 60 N. Y. 487; Home v. Mid- 18 L. R. A. 315, 31 Pac. Rep. 647; Belt land R Co., L. R. 8 C. P. 131; Lewis V. Washington Water Power Co., 24 v. Rountree, 79 N. C. 122; Guetzkow Wash. 387, 64 Pac. Rep. 525. v. Andrews, 92 Wis. 214, 53 Am. St. 3 Coos Bay R. Co. v. Nosier, 30 Ore. 909, 66 N. W. Rep. 119; Snell v. Cot- 547, 48 Pac. Rep. 361. tingham, 76 111. 161. 4 Kelly V. Fahrney, 38 C. C. A. 103, ^ 9 Ex. 341. 97 Fed. Rep. 176. § 52.] CONSEQUENTIAL DAMAGES FOE BREACH OF CONTRACT. 157 as also what is said in the opinion of Alderson, B., to the effect that if a contract be made under special circumstances, which arc unknown to the party breaking- it, they cannot be taken into consideration for the purpose of enhancing the damages; that such a defaulting part}'', at the most, can only be supposed to have had in his contemplation the amount of in- jury which would arise from such a breach generally in the great multitude of cases unaffected by special circumstances.^ His observations, however, in favor of a more extended liability, embracing damages brought within the contemplation of the parties at the time of contracting by communication of special circumstances, have been the subject of some criticism and conflict of opinion. In England, however, the cases have been uniformly decided in conformity to the doctrine of that case;^ but there have been dicta in several of a contrary tend- ency, especially with reference to its application to carriers, who were supposed to have no option to refuse to accept goods offered for transportation, in view of enlarged responsi- [85] bility on account of special circumstances, unless an increased compensation be paid.^ The tendency of the decisions there 1 GrifBn v. Colver, 16 N. Y. 490; and there is no market for the goods. Western U. Tel. Co. v. Graham, 1 the latter may recover as damages Colo. 230; Sanders v. Stuart, 1 C. P. for the breach the profit he would Div. 326; Great Western R. Co, v. have made had he been able to sup- Redmayne, L. R. 1 C. P. 329; Master- ply his customer, and also damages ton V. Mayor, 7 Hill, 61; Cuddy v. recovered against him by the latter Major, 13 Mich. 368; Johnson v. for the resulting breach. In esti- Mathews, 5 Kan. 118; Lawrence v. mating such last-mentioned dam- Wardwell, 6 Barb. 423; Portman ages the judgment of a foreign V. Middleton, 4 C. B. (N. S.) 322; court will be regarded as establish- Gee V. Lancashire, etc. R. Co., 6 H. ing a reasonable sum for their com- & N. 211; Hales v. London, etc. R. putation. The liability of the pur- Co., 4 B. & S. 66; Travis v. Duflfau, 20 chaser to his customer for a penalty Tex. 49; Fox v. Harding, 7 Cush. 516. if he failed to keep his contract with 2 Agius v. Great Western Colliery him must have been known to the Co., [1899] 1 Q. B. 413. original vendor. Grebert-Borgnis v. If the goods contracted for are of Nugent, 15 Q. B. Div. 85. a particular shape and description, 3 gee g§ 900, 913, 914. In Borries v. and the party who is to furnish Hutchinson, 18 C. B. (N. S.) 445, and them knows that the contract is in Smeed v. Foord, 1 E. & E. 602, the substantially like one the purchaser damages were larger and the recov- has made with a customer of his, ery sustained by reason of the de- aud that it is made to enable the fendant having notice of the purpose purchaser to fulfill such contract, of the other party in making the 158 COMPENSATION. [§ 52. [86] appears to be to require the special purpose of the con- tract to be so far in view when the contract is made that it is reasonable to infer a tacit acceptance of it as made for the ac- complishment of that object, and a tacit consent to be bound contract. Hobbs v. London, etc. R. Co.. L. R, 10 Q. B. Ill; Smith v. Green, 1 C. P. Div. 92; Simpson v. London, etc. R. Co., 1 Q. B. Div. 274; Wilson V. General Iron S. Co., 47 L. J. (N. S.) (Q. B.) 239. In Britipli Columbia Saw Mill Co. V. Nettleship, L. R. 3 C. P. 499, the plaintiffs delivered to the defendant for carriage to Vancouver's Island several cases of machinery intended for the erection of a saw mill. The defendant knew generally that the cases contained machinery. On the arrival of the vessel at her destina- tion, one of the cases which con- tained parts of the macliinery was missing, and without these parts the mill could not be completed. The plaintiffs were obliged to replace these parts from England at a cost, including freight, of 353/. 17s. M., and suffer a delay of twelvemonths. A fair rate of hire of the machinery, applied to the purposes for which it was required by the plaintiffs, would have been for twelve months 2,646Z. 2s. 3d., and the plaintiffs sought to recover that amount, but it was held not recoverable, because the defend- ant did not know that the missing case contained portions of the ma- chinery which could not be replaced at Vancouver's Island, and without which the rest could not be put to- gether. Willes, J., said: "The con- clusion at which we are invited to arrive would fix upon the ship-owner, beyond the value of the thing lost and the freight, the further liability to account to the intended mill-own- ers, in the event of a portion of the machinery not arriving at all or ar- riving too late through accident or his default, for the full profits they might have made by the use of the mill, if the trade were successful and without a rival. If that had been presented to the mind of the shii> owner at the time of making the con- tract, as the basis upon which he was contracting, he would at once have rejected it. And though he knew from the shippers the use they in- tended to make of the articles, it could not be contended that the mere fact of knowledge, without more, would be a reason for imposing upon him a greater degree of liability than would otherwise have been cast upon him. To my mind that leads to the inevitable conclusion that the mere fact of knowledge cannot increase the liability. The knowledge must be brought home to the party sought to be charged, under such circum- stances that he must know that the person he contracts with reasonably believes that he accepts the contract with the special condition attached to it. Several circumstances occur to one's mind in this case to show that there was no such knowledge on the defendant's part that would warrant the conclusion contended for by the plaintiffs. In the first place the carrier did not know that the whole of the machinery would be useless if any portion of it failed to ai'rive, or what that particular part was. And that suggests another con- sideration. He did not know that the part which was lost could not be replaced without sending to England. And applying what I have before suggested, if he did know this, he did not know it under such circum- stances as could reasonably lead to § 52.] CONSEQUENTIAL DAMAGES FOR BREACH OF CONTRACT. 159 to more than the ordinary damages, in case of default, on that account; otherwise tiie damages in respect to that object [87] are not deemed to have been within the contemphition of the parties. This is probably also the doctrine of the American the conclusion that it was contem- plated at the time of the contract that he would be liable for all these consequences in the event of a breach. Knowledge on the part of the carrier is only important if it forms part of the contract. It may- be that the knowledge is acquired casually from a stranger, the person to whom the goods belong not know- ing or caring whether he had such knowledge or not. Knowledge, in effect, can only be evidence of fraud or of an understanding by both par- ties that the contract is based upon the circumstances which are com- municated." In the subsequent case of Home v. Midland R. Co., L. R. 7 C. P. 583, the defendant, as a carrier, was guilty of a negligent delay in the transpor- tation of goods consigned to fill a special contract at an exceptionally high price. The carrier had notice that the goods were for a purchaser who would not take them unless they were offered on time, but the carrier was not informed of the con- tract price. It was considered that the notice was not sufiBcient to chai'ge the defaulting carrier with damages computed on the basis of the loss of the bargain for such an unusual and exceptional price. It was also held that the notice must be such as leads to the inference that the carrier accepts the goods assent- ing to the increased responsibility as part of the contract. Kelly, C. B., said on appeal (L. R. 8 C. P. 136): " The goods with which we have to deal are not the subject of any ex- press statutory enactment; the case in regard to them depends on the common law, taken in connection witii the acts relating to the defend- ant's railway company. Now it is clear, in the first place, that a rail- way company is bound, in general, to accept goods sucli as these and carry them as directed to the place of delivery, and there deliver them. But suppose that an intimation is made to the railway company, not merely that if the goods are not de- livered by a certain date they will be thrown on the consignor's hands, but in express terms stating that they have entered into such and such a contract, and will lose so many pounds if they cannot fulfill it; what is then the position of the company? Are they the less bound to receive the goods? I apprehend not. If then they are bound to re- ceive and so do without more, what is the effect of the notice? Can it be to impose on them a liability to damages to any amount, however large, in respect of goods which they have no option but to receive? I cannot find any authority for the proposition that the notice, witiiout more, could have any such effect. It does not appear to me that the railway company has any power such as was suggested to decline to receive the goods after such a notice, unless an extraordinary rate of car- riage be paid. Of course, they may enter into a contract, if they will, to pay any amount of damages for the non-pei'formance of their contract, in consideration of an increased rate of carriage, if the consignors are willing to pay it; but in the absence of any such contract expressly en- tered into, there being no power on 160 COMPENSATION. [§52. courts.^ The parties are not supposed to actually intend to pay damages oy any other than a legal standard, unless they [88] formally liquidate them, whether there are special cir- cumstances or not. They know the legal principle of com- the part of the company to refuse to accept the goods or to compel pay- ment of an extraordinary rate of carriage by tlie consignor, it does not appear to me that any contract to be liable to more than the ordi- nary amount of damages can be im- plied from mere receipt of the goods after such a notice as before men- tioned." In Elbinger Actien-Gesellschaftv. Armstrong, L. R. 9 Q. B. 473 (ap- proved in Grebert-Borgnis v. Nugent, lo Q. B. Div. 85), the plaintiff con- tracted for the purchase of six hun- dx-ed and sixty -six sets of wheels and axles, which he designed to use in the manufacture of wagons; and the wagons he had contracted to sell and deliver to a Russian company by a certain day, or forfeit two roubles a wagon per day. The defendant, who contracted to sell the wheels and axles, was informed of the other con- tract, but not of tlie amount of the penalties. Some delay occurred in the plaintiff's deliveries, by the de- fendant's fault, and in consequence the plaintiff had to pay lOOZ. in pen- alties; and the action was brought to recover that sum of the defendant. There was no market in which the goods could be obtained, and it was therefore contended in behalf of the defendant that only nominal dam- ages could be recovered. The court held the defendant liable for sub- stantial damages, not for the penal- ties the plaintiff had been obliged to pay, the defendant having no notice of them, but the reasonable value of the use of the wagons dur- ing the delay. A verdict of 1007. was sustained. But the court, by Blackburn, J., remarked: "If we thought that this amount could only be come at by laying down as a prop- osition of law that the plaintiffs were entitled to recover the penal- ties actually paid to the Russian com- pany, we should pause before we al- lowed the verdict to stand." After referring to Hadley v. Baxendale he continued: "But an inference has been drawn from the language of the judgment, that whenever there 1 Notice to a carrier, after goods have been shipped, of circumstances w'hich render special damages a prob- able consequence of delay does not affect the original contract so as to render the carrier liable for such damages although the subsequent delay is unreasonable. Bradley v. Ciiicago. etc. R. Co., 94 Wis. 44, 68 N. W. Rep. 410; Missouri, etc. R. Co. v. Belcher, 35 S. W. Rep. 6 (Tex. Sup. Ctl If the bill of lading is silent as to the time goods are to be delivered the fact that notice was given the carrier that unusual loss would re- sult if there was delay in delivery may be shown by parol. Central Trust Co. V. Savannah, etc. R. Co., 69 Fed. Rep. 683. " In the absence of a definite con- tract for carriage to a given point by a given time, with such reasons for its making as would naturally lead the agent of the carrier to con- template the profits the passenger expected to realize, it is clear that the damage claimed for the failure to realize such profits is too uncertain and remote." Southern R. Co. v. Myers, 32 C. C. A. 19, 87 Fed. Repu 149. § 52.] CONSEQUENTIAL DAMAGES FOR BREACH OF CONTRACT. 161 pensation and the rules subsidiary to it; and when they do not liquidate the damages they are content to enter into the con- tract and leave the measure of liability to be decided b}'' law; they know that the law will require them to make com- [89] has been notice, at the time of the contract, that some unusual conse- quence is likely to ensue, if the con- tract is broken the damages must in- clude th.at consequence; but this is not, as yet, at least, established law. In Mayne on Damages (p. 10, 2d ed. by Lumley Smith), in commenting on Hadley v. Baxendale, it is said: 'The principle laid down in the above judgment, that a party can only be held responsible for such con- sequences as may be reasonably sup- posed to have been in the contempla- tion of both parties at the time of making the contract, and that no consequence which is not the neces- sary result of a breach can be sup- posed to have been so contemplated, unless it was communicated to the other party, are, of course, clearly just. But, it may be asked, with great deference, whether the mere fact of such consequences being com- municated to the other party will be sufficient, without going on to show that he was told that he would be answerable for them, and consented to undertake such a liability. . . . The law says that every one who breaks a contract shall pay for its natural consequences; and, in most cases, states what those consequen- ces are. Can the other party, by merely acquainting him with a num- ber of further consequences, which the law would not have implied, en- large his responsibility, without any contract to that effect ? ' We are not aware of any case in which Had- ley V. Baxendale has been acted upon in any such way as to afford an an- swer to the learned author's doubts; and, in Home v. Midland R. Co., L. Vol. I — 11 R. 8 C. P. 131, much that fell from the judges in the exchequer cham- ber tends to confirm those doubts." In this case the court held that the plaintiff was not entitled to damages for the delay, exceeding the penalty he was bound for and had paid to his vendee. In Hinde v. Liddell, L. R. 10 Q. B, 265, the defendant contracted to sup- ply the plaintiff two thousand pieces of grey shirtings, to be delivered on the 20th of October, certain, at so much per piece, the. defendant being informed that they were for ship- ment. Shortly before the 20th of October the defendant informed the plaintiff that he would be unable to complete his contract by the time specified; and, thereupon, the plaint- iff endeavored to get the shirtings elsewhere, but, there being no market in England for it, that kind of shirt- ings could only be procured by a pi-evious order to manufacture it. The plaintiff, therefore, in order to ship according to his contract with his sub-vendee, procured two thou- sand pieces of other shirtings, of a somewhat superior quality, at an in- crease of price, which the sub-vendee accepted, but paid no advance in price to the plaintiff. The plaintiff recovered against the defendant this excess over the contract price. It is manifest that the plaintiff suffered damage to that amount, by reason of delivering the substituted article to his vendee, without realizing any- thing for having procured an article of superior quality. Is it possible that if there had been no subcontract which necessitated this loss, and the plaintiff had the article on hand. 1G2 COMPENSATION. [§ 52. pensation in case of a breach for damages which directly arise therefrom in view of the intrinsic nature of the contract, and of the special circumstances known to them when it was made that he could have recovered dam- ages by that standard? It would have been said that no loss could be inferred from such a purchase. Borries v. Hutchinson was approved and said to be directly in point, and tlie same judge, Blackburn, J., said, in giving judgment: " In the present case the goods are for a foreign market; and it was admitted that the only reasonable thing the plaint- iff could do was to put himself in the same position as if the defendants had fulfilled their contract, by ob- taining a somewhat dearer article. 1 do not see on what principle it can be said that the plaintiff is not en- titled to recover this difference in price. We do not decide anything as to what the effect of a notice of the plaintiff's subcontract might have been. Under the circumstances, the value of the goods contracted to be supplied by the defendants, at the time of their breach of contract, was the price the plaintiff had to give for the substituted article." In Grebert-Borgnis v. Nugent, 15 Q. B. Div. (1885) 85, it is said that a vendor who contracts with a pur- chaser knowing that the latter has a foreign customer for the articles contracted for must understand that if such purchaser fails to fulfill his contract he will be liable to his cus- tomer for damages; and while the judgment of a foreign court will not be held binding as to the amount of damages, it will be assumed that the sum fixed thereby is reasonable. In Simpson v. London, etc. R, Co., 1 Q. B. Div. 274, the plaintiff, who was a manufacturer of cattle food, was in the habit of sending samples of his goods to cattle sliows, with a show tent and banners, and attend- ing there himself to attract custom. He intended to exhibit some of these samples at the Newcastle show, and delivered them for transmission to the defendants. The contract was made with the defendants' agent at a cattle show at Bedford, where the plaintiff had been exhibiting his samples, and where the defendants had an agent and office on the show ground for the purpose of seeking traffic. The evidence as to the terms of the contract was that a consign- ment note was filled up by the plaint- iff's son consigning the goods as "boxes of sundries" to "Simpson & Co., the sliow ground, Newcastle on Tyne," and that he indorsed the note •' must be at Newcastle on Monday certain," meaning the next Monday, the 20th July. Nothing was expressly said as to the plaintiff's intention to exhibit the goods at Newcastle, nor as to the goods being samples. They did not arrive until several days after time, and when the show was over. It was found that the plaintiff ob- tained custom by exhibiting his samples at shows, but no evidence was given as to his prospects with regard to the Newcastle show in par- ticular. A verdict by consent was entered for 20/. bej'ond a sum which had been paid in, with leave to move to enter the verdict for the defend- ants, if the court should be of opinion that the plaintiff was not entitled to recover for either loss of time in waiting for the goods or loss of profits. It was held that the plaintiff was en- titled to the verdict. Cockburn, C. J., said: " The law, as it is to be found in the reported cases, has fluctuated; but the principle is now settled that, whenever either the object of the sender is specially brought to the no- § 52.] CONSEQUENTIAL DAMAGES FOB BREACH OF CONTRACT. 1G3 which disclose some particular ol)ject different from or [90] beyond that which would be suggested by the mere words of the contract.^ tice of tlie carrier, or circumstances are known to the carrier from which the object ought in reason to be in- ferred, so that the object may be taken to have been within the con- templation of both parties, damages may be recovered for the natural consequences of the failure of that object." See Kennedy v. American Exp. Co., 22 Ont. App. 278. In Jameson v. Midland R. Co., 50 L. T. Rep. 42G, tlie plaintiff delivered a parcel at the defendant's office ad- dressed to M.. Stand 23, Show Ground, etc.; nothing was said by him. The label so addressed was sufificient no- tice that the parcel was being sent to a show, and the defendant was liable for the loss of profits and ex- penses resulting from its delay. In Mayne on Dam. (6th ed.), p. 41, the author says: "In the present state of the authorities, therefore, I would suggest that in place of the third rule supposed to be laid down by Hadley v. Baxendale, the law may perhaps be as follows: "First — Where there are special circumstances connected with a con- tract, which may cause special dam- ages to follow if it is broken, mere notice of such circumstances given to one party will not render him lia- ble for the special damage, unless it can be inferred from the whole trans- action that he consented to become liable for such special damage. "Secondly — Where a person who has knowledge or notice of such special circumstances might refuse to enter into the contract at all, or might demand a higher remunera- tion for entering into it, the fact that he accepts the contract without re- quiring any higher rate will be evi- dence, tliough not conclusive evi- dence, from which it may be inferred that he has accepted the additional risk in case of breach. "Thirdly — Where the defendant has no option of refusing the contract and is not at liberty to require a higlier rate of remuneration, the fact that he proceeded in the contract after knowledge or notice of such special circumstances is not a fact from which an undertaking to incur a liability for special damages can be inferred. " Fourthly .— Even if there were an express contract by the defend- ant to pay for special damages, under the circumstances last supposed, it might be questioned whether such a contract would not be void for want of consideration. Take the case of a railway passenger who buys his ticket, informing the clerk of some particular loss which would arise upon his being late. Suppose the clerk were to undertake that the company should be answerable for the loss, and that such xmdertaking should be held to be within the sphere of his duty. Would it not be purely gratuitous? The considera- tion for any promise by the com- pany, arising from the payment of the fare, would be exhausted by their carrying the passenger to his destination or paying the ordinary damages for failui-e to do so. What would there be left to support the special undertaking to pay an excep- tional penalty? Of course, it would be different if a special payment were made by way of premium for incurring the inci'eased risk." But see Foster v. Cleveland, etc. R. Co., 56 Fed. Rep. 434, stated in g 51, as to the last suggestion. 1 Booth v. Spuyten Duyvil Rolling 164 COMPENSATION. [§52. Doubtless it is essential, in order to bring within the contem- plation of the parties damages different from and larger in amount than those which usually ensue, that the special cir- cumstances out of which they naturally proceed shall have Mill Co., 60 N. y. 487. In this case Churoli, C. J., said, referring to the English cases: "Some of the judges in commenting upon it (the doctrine under consideration) have held that a bare notice of special circum- stances which might result from a breach of the contract, unless under such circumstances as to imply that it formed the basis of the agreement, would not be sufficient. I concur with the view expressed in tiiese cases, and I do not think that the court in Hadley v. Baxendale in- tended to lay down any different doctrine." But the defendant in this case was held to be liable for the loss sustained on a contract which the plaintiffs had with the New York Central Railroad Co., by reason of the defendant's'breach. and that loss was held to be brought within the contemplation of the parties by mere notice, generally, that there was a contract depending on the defend- ant's performance. In Liman v. Pennsylvania R. Co., 4 N. Y. Misc. 539, 24 N. Y. Supp. 824, the plaintiff was under contract to exhibit one R. in Chicago for two weeks, and four days before the time fixed therefor applied to the defendant at its office in New York and stated the circumstances; the defendant agreed to deliver to R, a railroad ticket to Chicago, but failed to do .so. Judgment in favor of the plaintiff for the sum paid for the ticket and profits on R.'s engage- ment was affirmed. The court did not interpret Booth v. Spuyten Duy- vii Rolling Mill Co., swpra, as intend- ing that a contracting party may, notwithstanding that he has been sufficiently informed of the exist- ence of a certain other contract, the performance of which is dependent upon performance of the proposed contract with him, to put him upon reasonable inquiry in respect thereto, shield himself against consequential damages by wilfully or deliberately abstaining from the inquiry. If, under such circumstances, a party refrains from inquiry he cannot set up his ignorance to limit his liability. A manufacturer contracted to fur- nish machinery and make essential repairs upon the plant of a compress company by a fixed date, which was known by both parties to be the be- ginning of the season for the opera- tion of the plant, which could only be operated during a part of the year; both parties also knew that it was the intention to have the plant in readiness for the opening of the season. The notice to the defendant was sufficient to make it liable for special damages resulting from its delay. Machine Co. v. Compress Co., 105 Tenn. 187, 53 S. W. Rep. 270; Neal V. Pender-Hyman Hardware Co., 122 N. C. 104, 29 S. E. Rep. 96, 65 Am. St. 697. In Snell v. Cottingham, 72 111. 161, it was held that a contractor who fails to finish a railroad by the time limited in his contract cannot be held for the loss occasioned to the owner of the road by reason of an- other contract between him and a third party, for the use of the road after the time it should have been completed, even though he may have known of the existence and the terms of such other contract at the time of entering into his own, unless he ex- pressl}' agrees to such a rate of dam- ages. A similar doctrine is laid down § 52.] CONSEQUENTIAL DAMAGES FOR BREACH OF CONTRACT. 1G5 been known to the party sought to be made liable in such manner, at the time of contracting, as to make it manifest to him that if compensation in case of a breach on his part is ac- corded for actual loss it must be for a loss resulting from that special state of things which those circumstances portended. Damages are not the primary purpose of contracts, but are given by law in place of and as a compensation and equiva- lent for something else which had been agreed to be done and has not been done. What the damages would ordinarily [91] be on such a default is immaterial if the contracting party as- sume the obligation which he has broken with a knowledge of a peculiar state of facts connected with the contract which in- dicated that other damages would result from a breach, and the latter are claimed. To confine the injured party's recov- ery in such case to the lighter damages which usually follow such a breach, where no such known special facts exist, and. exclude those which were thus brought within the contempla- tion of the parties, would be to sacrifice substantial rights to arbitrary rule; to set aside the principle which entitles a party to compensation commensurate with his injury to give effect to a rule formulated to render that principle effectual; it would be to apply a subordinate rule where it has no applica- tion instead of the principle, which is paramount and always applicable. What are the usual damages which result from the breach of a contract? There is certainly no customary amount, nor is there any rule of damages which is universal in Bridges v. Stickney, 38 Me. 369; days would be most disastrous. Tiie Huut V. Oregon Pacific R. Co., 36 damages insisted upon exceed $44,000, Fed. Rep. 481. See Clark v. Moore, a sum enormously out of all propor- 3 Mich. 55. tion to the amount to be paid for the The Illinois case is, probably, not entire work. The same distinction to be taken as declaring a general is made in other cases. Thus, it is principle. The decision was doubt- said in Booth v. Spuyten Duy vil Roll- less influenced by the damages ing Mill Co., 60 N. Y. 487, 495: It is which would have been recovered if sufficient to hold, what appears to the rule had been applied. It is said me to be clearly just, that he is in the opinion: Had it been known, bound by the price unless it is shown that it was expected appellees would that the price is extravagant, or of be held responsible for such extraor- an unusual or exceptional character, dinary damages, it is hardly prob- See Guetzkow v. Andrews, 92 Wis. able that they would have entered 214, 53 Am. St 909, 66 N. W. R«p. into the contract, for the conse- 119. quences of a failure for only a few 166 COMPENSATION, [§52. like the principle for allowance of due compensation. If it is a contract of sale and the vendor refuses to complete it, one rule is to ascertain that compensation by the difference be- tween the contract price and the market value, because if the article which is the subject of the contract can be obtained in market at a market price the vendee is thereby enabled to supply him without loss unless the market price has increased. That rule goes no further, but the principle does. Where the vendee cannot obtain the article in the market, nor at all if the vendor refuses to perform his contract, that rule is not ap- [92] plicable, and then resort must be had to other elements of value; and recourse is had to the principle to determine the measure of redress; even a contract of resale made by the ven- dee and of which the vendor had no notice may be considered.^ 1 France v. Gaudet, L. R. 6 Q. B, 199; McHose v. Fulmer, 73 Pa. 365; Carroll-Porter Boiler & Tank Co. v. Columbus Machine Co., 5 C. C. A. 190, 55 Fed. Rep. 451; Hockersmith v. Han ley, 29 Ore. 27, 44 Pac. Rep. 497, citing the text. France v. Gaudet, supra, was an action for the conversion of the prop- erty sold, and hence is not to be con- sidered as authority to the full extent of the pro|)Osition to which it is cited. If the article the vendor has con- tracted to supply or an article of the same quality cannot be procured in the market, it is presumed that such fact was within the contemplation of the parties to the contract. McHose V. Fulmer, supra. But this rule is denied in an English case (Thol v. Henderson, 8 Q. B. Div. 457). There was a contract to deliver goods which were not obtainable in the market; the purchaser had entered into a con- tract for their sale. The vendor had DO knowledge of the particular con- tract, but was aware that the goods were ordered for the purpose of re- selling them. Such knowledge was held not to bring the case within the rule of Hadley v. Baxendale, so as to allow the recovery of profits which would have been made if there had not been a breach of the contract. This is too strict an application of tlie rule, because it was immaterial to the vendor who his purchaser's customer was; the former had knowledge suf- ficient to act as an incentive to the prompt fulfillment of his contract, and to apprise him of the fact that its breach would esi>ecially damage the vendee. See Loescher v. Dister- berg, 26 111. App. 520, which is in har- mony with McHose v. Fulmer, supra. In Hamilton v. Magill, 13 L. R. Ire. 186, one of the points especially relied upon by the defendant was that at the time the contract in suit was made the plaintiff had not actu- ally completed his contract for the sale of the property purchased, and that the case should be treated as if the defendant had no other notice than that it was bought for resale generally. The answer of the court was that it appears "illogical and con- trary to principle that a person who, having an offer, enters into a contract with another, which if carried out would enable him to accept that offer, but refrains from actually accepting it until he has entered into the con- tract, should be in a worse position i § 52.] CONSEQUENTIAL DAMAGES FOR BREACH OF CONTRACT. 167 And if the goods were not bought for resale and had no mar- ket value, but were intended for some special use, the dam- ages would be computed according to the value for the use to which the property was most obviously adapted unless the vendor know of the intention to apply them to a different one.^ Their delivery in the case where a contract of resale existed would have enabled the vendee to obtain the reselling price, and in the other to avoid the loss which has otherwise resulted from being deprived of the property. Such recoveries are not unusual. It may be said that sales are generallj'' made of arti- cles having a market value. True. But there is no uniform relativeness between the contract and market prices. The de- faulting vendor will pay nominal damages when the market price is less than the contract price, and substantial damages, accordino' to the excess of the former at the time the oroods should have been delivered. When the vendor refused to de- liver ice according to his contract, knowing when he made the agreement that it was wanted as a means of preserving fresh meat in the prosecution of the vendee's business, and the ice could not be obtained in market, what should be deemed the usual damages for a breach of the contract ? Certainly not what had been the market price when ice was plenty and could be had from other sources; but its value when it should, according to the contract, have been delivered and when the vendor, as the fact probably may be, alone could supply it, and when the vendee must have it or lose a certain amount of meat, or suspend business, notwithstanding his best endeavors by other means to preserve the meat or continue his business.^ If the contract is made to serve a particular purpose, not communicated and known to both parties, nor indicated by the subject-matter of the contract, and the loss in respect to that purpose is so exceptional as neither to be within the con- templation of the parties at the making of the contract, nor than one who makes a contract for i Cory v. Thames Iron Works Co., sale on the chance of afterwards pur- L. R. 3 Q. B. 181; Machine Co. v. chasing from another the goods which Compress Co., 105 Tenn. 187, 58 S. he has previously contracted to sell. W. Rep. 270. To establish such a distinction would 2 Hammer v. Schoenfelder, 47 Wis. place the speculator in a more ad- 455, 2 N. W. Rep. 1129; Border City vantageous position than the prudent Ice & Coal Co. v. Adams, 69 Ark. 219, merchant." ' 62 S. W. Rep. 591. 168 COMPENSATION. [§ 52. [93] within the first branch of the rule laid down in Hadley v. Baxendale, it cannot be recovered; but where the injury is within the contemplation of the parties, if they give the subject consideration when the contract is made, they are admonished by the prevalence of the principle of compensa- tion in the law that, if they do not perform, the alternative of making reparation on the scale of equivalence to the actual injury will be compulsorj'^; and there is no need of an}'" agree- ment to submit to such a legal consequence. The law as laid down in Hadley v. Baxendale has been generally accepted in this country ; it includes all such damages as may reasonably be supposed to have been in the contemplation of both parties at the time the}'' made the contract as the probable result of the breach of it.^ And in accordance with the doctrine of that case, it is sufficient if the special circumstances under which the contract was actually made were communicated to the party sought to be charged, and the damages resulting from the breach are such as both parties would reasonably contemplate would be the amount of the injury which would ordinarily follow from a breach under those circumstances. As said by Selden, J. : " The broad general rule ... is that the party injured is entitled to recover all his damages, including gains prevented as well as losses sustained; and this rule is subject to but two conditions. The damages must be such as may fairly be supposed to have entered into the con- templation of the parties when they made the contract ; that is, must be such as might naturally be expected to follow its violation; and they must be certain both in their nature and in respect to the cause from which they proceed." ^ And this leads naturally to the consideration of the certainty which is necessary to warrant the recovery of damages. 1 9 Ex. 358. tended for the rule that not only ^GrifiSn v. Colver, 16 N. Y. 494; must the parties have notice of the Savannah, etc. R Co. v. Pritchard, 77 contract for the furtherance of Ga. 412, 418, 4 Am. St. 92, 1 S. E. Rep. wliich the plaintiff made the con- 261; Benjamin v. Puget Sound Com- tract in suit, but there must be sorae- mercial Co., 12 Wash. 476. 41 Pac. thing in the terms of the latter, read Rep. 166, quoting the text; Collins v. in the light of surrounding circum- Lavelle, 19 R L 45, 31 Atl. Rep. 434, stances, which shows an intention citing the text. on the part of the vendor to assume In a late case the defendant con- a larger engagement, a wider re- §53.] KEQUIKED CEKTAINTY OF DAMAGES. 169 Section 5. kequired certainty of damages. § 53. Must be certain in their nature and cause. [94] Damages must be certain both in their nature and in respect to the cause from which they proceed. Judge Selden said that the requisite that the damages must not be the remote, but the proximate, consequence is in part an element of the required certainty.^ In the preceding pages the requirement that the damages be the natural and proximate result of the act com- plained of has been discussed; but mainly with reference to the consequences as a whole. Now it remains to consider the certainty necessary not only in regard to the consequences as a whole but also in detail. A fatal uncertainty may infect a case where an injury is easily provable, but the alleged responsible •cause cannot be sufficiently established as to the whole or some part of that injury.- So it may exist where a known and sponsibility, than is assumed in ordi- nary contracts for the sale and deliv- ery of merchandise. The answer was that where notice is brought home to the vendor that the goods are purchased to be put to a partic- ular use, he is chargeable with the consequences of a failure to perform, and with the results which such no- tice fairly apprised him would fol- low upon his default. Industrial Works V. Mitchell, 114 Mich. 29, 72 N. W. Rep. 25, citing Booth v. Spuy- ten Duyvil Rolling Mill Co., 60 N. Y. 487; Richardson v. Chynoweth, 26 Wis. 656; Illinois Central R. Co. v. Cobb,64 111. 128; True v. International Tel. Co., 60 Me. 9. 11 Am. Rep. 156. 1 Griffin v. Colver. 16 N. Y. 494. 2 See Beiser v. Grever & Twaite Co., 11 Ohio Dec. 444. As where there was a breach of a contract to elect one president of a bank for a term of years and at an agreed annual salary, when the elec- tion, if there had been no breach, could have been for only one year, to which time the recovery of the salary was limited. There could be no recovery for any of the subse- quent years within the contract term because the damages would be too remote and uncertain. Witham v. Cohen, 100 Ga. 670, 28 S. E. Rep. 505; Kenyon v. Western U. Tel. Co., 100 Cal. 454, 35 Pac. Rep. 75. Another example is afforded by a contract so vague and indefinite that it does not furnish a safe, satisfac- tory or proper basis for computing the damages caused by its breach. Hart V. Georgia R. Co., 101 Ga, 188, 28 a E. Rep. 637. See Fletcher v. Jacob Dold Packing Co., 41 App. Div. 30, 58 N. Y. Supp. 612. If, in an action of tort, it be impos- sible to distinguish between the damage arising from the actionable injury and the damage which has anotlier origin, the jury must make the best estimate in their power, and award compensation for the action- able injury. Jenkins v. Pennsylva- nia R Co., 67 N. J. L. 331. 51 Atl. 170 COMPENSATION. [§53. provable wrong or violation of contract appears, but the alleged loss or injury as a i^esult of it cannot be certainly shown.^ Many of the illustrations already given apply to the first, as where the injury is not the natural or proximate result of the act complained of; then the relation of cause and effect does not exist between the alleged cause and the alleged injury. This uncertainty may be further illustrated by the case of one who complained tliat the defendant had taken his flat from bis ferr}^ and that being obliged to go in search of it in order to cross the river he left his horses attached to a wagon stand- ing on the bank, and while he was gone they ran into the river and were drowned,- Their loss was not a natural consequence of the taking of the flat which the defendant could foresee as a probable result of his wrongful act; there was a more im- [95] mediate cause in the negligence of the owner; and after the event it cannot be ascribed with the requisite certainty to the defendant's act although it was the beginning of the series of facts which culminated in that loss.* A grantee of land cannot recover damages for the breach of the grantor's cove- nant against incumbrances because of an existing inchoate right of dower in the premises, a sum paid by himself to an auction- Rep. 704. See Ogden v. Lucas, 48 111. 492: Harrison v. Adamson, 86 Iowa, 693, 58 N. W. Rep. 334; Wash- burn V. Gil man, 64 Me. 163, 18 Am. Rep. 246; Chicago & N. R. Co. v. Hoag. 90 111. 339; Mark v. Hudson River Bridge Co., 103 N. Y. 28, 8 N. E. Rep. 243. 1 As where there has been a breach of contract by a water company to supply water to a municipality for extinguishing fires. Pothinger v. Owensboro Water Co., 6 Ky. L. Rep. 453. See Pacific Pine Lumber Co. v. Western U. Tel. Co., 123 Cal. 428, 56 Pac. Rep. 103; Kenyon v. Same, 100 Cal. 454, 35 Pac. Rep. 75. The pecuniary interest which a husband has in the chance that an embryo not quickened into life would become a living child is so absolutely uncertain that the loss of that chance cannot be recovered for. Butler V. Manhattan R. Co., 143 N. Y. 417, 38 N. E. Rep. 454, 42 Am. St. 738, 26 L. R. A. 46. 2 Gorden v. Butts. 2 N. J. L. 334. 3 See Walker v. Goe, 3 H. & N. 395, 4 id. 350; Dubuque Ass'n v. Du- buque, 30 Iowa, 176; Hofnagle v. I^ew York, etc. R., 55 N. Y. 608; Da- vis V. Fish, 1 G. Greene, 406, 48 Am. Dec. 387; Lewis v. Lee, 15 Ind, 499; Ashley v. Harrison, 1 Esp. 49; Barber V. Lesiter, 7 C. B. (N. S.) 175; Collins v. Cave, 4 H. & N. 225: Everard v. Hopkins, 2 Bulst. 332: Walker v. Moore. 10 B. & C. 416; Hayden v. Ca- bot, 17 Mass. 169; Green v. Mann, 11 111. 613; Hargous v. Ablon, 3 Denio, 406, 45 Am. Dec. 481; Brayton v. Chase, 3 Wis. 456; Chatter ton v. Fox^ 5 Duer, 64. § 53.1 EEQUIRED CERTAINTY OF DAMAGES. 171 eer for selling tbom to a person who refuses to complete the purchase on discovering the incumbrance.^ In an action for the wronfrful revocation of an agreement to subfhit a controversy to arbitration the plaintiff is not en- titled to recover damages for the trouble and expense incurred in making the agreement; but he can recover for his loss of time, and for his trouble and necessary expenses in preparing for a hearing, such as employing counsel, taking depositions, paying witnesses and arbitrators, so far as such preparations are not available for a subsequent trial in court,^ "Where it was agreed that a pending action between the parties should be discontinued and submitted to arbitration, and one of them subsequently revoked the submission, the other recovered the costs and expenses he incurred in the discontinued suit.* And •where one of the parties had released a cause of action against a third person upon the agreement of the other to pay such a sum as should be awarded, the one who revoked the submis- sion w^as liable for the costs of the other incurred in the arbi- tration, and also for the amount of his claim for the loss of his cause of action.* The Yermont cases cited are distinguished from one in which the contract to arbitrate was wholly exec- utory when the breach occurred. "Where nothing has been done in partial execution of the covenant, and the covenant does not fix anything b3'' way of penalty or liquidated dam- ages, the loss arising from a refusal to fulfill is usually wholly conjectural because it is impossible to prove that the party would have profited by the arbitration.^ A defendant chartered the plaintiff's vessel from Liverpool to Puerto Cabello at a stipulated freight; a clause was after- 1 Harrington v. Murphy, 109 Mass. ment, a pledge has been deposited 299. to secure the paj^ment of the award, 2 Pond V. Harris, 113 Mass. 114. it may be foreclosed to the extent of 3 Hawley v. Dodge, 7 Vt. 237. the damages fixed by statute for the *Day V. Essex County Bank, 13 revocation of a submission. The Vt. 97. damages so fixed for preparing for *Munson v. Straits of Dover S. S. and conducting the arbitration may Co., 43 C. C. A. 57, 103 Fed. Eep. 926. be recovered notwithstanding the When a party to a submission submission provides that the fees of agreement has covenanted therein arbitrators and witnesses shall be to pay the award by revoking the paid equally by the parties. Union submission he breaches the cove- Ins. Co. v. Central Trust Co.. 157 N. nant, and if, pursuant to the agree- Y. 633, 52 N. K Rep. 671. 172 COMPENSATION. [§ 54. wards added to the charter-party allowing the defendant to send on a part of the cargo to jNIaracaibo, with a proviso that any expense incurred by so doing sliould be borne by the char- terer. Under pretense of an attempt by the master to evade the customs on the part so shipped, the custom-house authori- ties at Puerto Cabello Avrongl'uUy imposed a line of $500 on him, and detained the vessel for several months; but would have allowed her to depart if the fine had been paid, which the master had not the means to pay and did not. The gov- ernment agreed afterwards to pay the master |5,000 for the wrongful detention, but did not. It was held that the owner of the vessel could recover from the charterer neither the loss [96] sustained by the detention nor the expense incurred in repairing the damage to the ship in consequence thereof, nor for the costs of legal proceedings taken by him in respect to the ship, nor for the fine.^ "Where the object of a bonus con- tract providing for the erection of a mill was to enhance the value of the property in the place in which the mill was to be, the damao'es resulting' from the sale of the mill without re- quiring the vendee to bind himself to fulfill the conditions of the original contract, as it stipulated for if a sale should be made, and the burning of the mill, without any obligation on the vendee's part to rebuild and operate it for the period re- quired, are not clearly ascertainable in their nature and origin, but are speculative.- One named as a director of a proposed corporation persuaded others so named and others who ex- pected to become members of it not to do so. For the mis- representations made to accomplish such result the person making them was not liable to those who were proposed as directors for the loss of the profits resulting from the failure to organize the corporation.^ § 54. Liability for the principal loss extends to details and incidents. Where the alleged wrong or breach of con- tract is shown with the requisite certainty to be the cause of the injur}'^ in question it is also to be deemed the cause of all its concomitant and incidental details which are constituent 1 Sully V. Duranty, 33 L. J. (Ex.) 3 Martin v. Deetz, 102 Cal. 55, 86 319. Pac. Rep. 368, 41 Am. St. 151. 2 Hudson V. Archer, 9 S. D. 240, 68 N. W. Rep. 54] § 5i.l REQUIRED CERTAINTY OF DAMAGES. 173 parts of the injury, including necessary and judicious expend- itures made to stay or efface the wrong or limit its conse- quences.' A riparian owner brought an action for polluting the waters of a stream running through his farm. He recov- ered for the loss of an opportunity of renting his grist-mill, the diminution in the rental value of his farm, and the incon- veniences he was put to in the use of the same, resulting di- rectly from the conduct of the defendant.- A plaintiff's house was injured by the partial falling in of the partition wall be- tween it and the defendant's house, which was caused by dig- ging too near the wall for the purpose of deepening the cellar under it. Xo notice was given by the defendant of his inten- tion to deepen his cellar, and evidence was offered to show that the excavation was done in a careless and negligent man- ner, and also to show that the business of the plaintiff, who kept an ice-cream saloon and made cakes and other articles in that line, was interrupted for several days. The court held that the plaintiff was entitled to such damages as would be sufficient to reinstate the wall and the house in as good con- dition as they were prior to the injury, and to compensate him for the loss consequent upon the interruption of his busi- ness; and to show the latter, he might prove its usual profits prior to the wrong.^ If a collision between vessels results in 1 McDaniel v. Crabtree, 21 Ark. the water to flow back upon the 431; Smith v. Condry, 1 How. 35; mill, and rendering it incapable of Loker v. Damon, 17 Pick. 384; Chalice being used. The plaintiffs were held V. Witte, 80 Mo. App. 84, 95, quoting entitled to recover the value of the the text. See § 26. use of their mill during the time 2 Gladfelter v. Walker, 40 Md. 3. they were necessarily deprived of its 3 Brown v. Werner, 40 Md. 15; use, and the amount which it was White V. Moseley, 8 Pick. 356; Sim- permanently diminished in value by mons V. Brown, 5 R. I. 299, 73 Am. the erection of the dam; but could Dec. 66; Allison v. Chandler, 11 not recover the amount of a loss Mich. 543; Collins v. Lavelle, 19 R. I. upon saw logs on hand at the time 45, 31 Atl. Rep. 434, citing the text, of the injury, sustained either in See § 70. consequence of a deterioration in Walrath v. Redfield, 11 Barb. 368 their value or by a depression in the (see s. C, 18 N. Y. 457), was an action market price. The damages in re- on the case for damages to the spect to the logs were too speculative, plaintiffs' saw-mill and other prop- uncertain, remote and contingent to erty, occasioned by the defendant be allowed even upon proof that the in constructing a dam and dike be- plaintiffs could not, by the use of or- low such mill, and thereby causing dinary diligence, have procured the 174 COMPENSATIOX. [§5i. clisablino- one of them so that her owners cannot use her for a voyage for which she has been engaged, though no regular charter-party has been entered into, the damages resulting from the loss of the profits of such vo3'^age are the result of the collision.^ If logs are deliberately stored in a stream, which is navigable for their transportation, so as to prev^ent the entry of logs owned by another, and in a stream which empties into the one so blocked, the person who is responsible therefor is liable to the other for the wages and board of the latter's men while waiting a reasonable time to get his logs out, for the ex- pense of moving one crew of men out and another in, for the increased cost of driving the logs the next season, and for in- terest on the contract price for making the drive during such time as the payment thereof was delayed; but not for the loss of supplies left in the woods.- logs to be sawed elsewhere, and could not have disposed of them before sawing. In actions of tort, where there has been no wilful injury, the plaintiff can only recover the dam- ages necessarily resultmg from the act complained of, and he cannot conduct himself in such a manner as to make them unnecessarily burden- some. A more reasonable rule and one in better accord with the principle of holding a wrong-doer liable for such consequences as would natu- rally and in the usual course of things result from his conduct was laid down in McTavish v. Carroll, 17 Md, 1, an action for damages for ob- structing a right of way for repairing a mill-race. The declaration alleged that the obstruction prevented the repair of the race, whereby the mill became idle and could not be worked, and the plaintiff lost the custom and trade thereof, " and the use of the same for grinding his own grain, and was, therefore, at great expense, obliged to carry it to other mills." Held, that under this declaration, evidence that the plaintiff was owner of a large body of land around his mill, and was accustomed to grind the grain raised thereon at this mill for his cattle, horses, hands and family, and in consequence of its stoppage had been compelled to carry his grain to another mill, at a greater distance, is admissible. Hinckley v. Beckwith, 13 Wis. 31. But in such a case there can be no recovery for diminished profits aris- ing from the manufacture of flour. Todd V. Minneapolis, etc. R Co., 39 Minn. 186, 39 N. W. Rep. 818. A more satisfactory rule is sus- tained by Terre Haute v. Hudnut, 113 Ind. 542, 13 N. E. Rep. 686, where the operations of a mill which had an established business were sus- pended by an overflow, and machin- ery in it was damaged to such an extent as to make repairs necessary. The net earnings of the past and present were proven as a basis of estimating the damages. 1 Owners of The Gracie v. Owners of The Argentiuo, 14 App. Cas. 519; affirming The Argentine, 13 Prob. Div. 191. '^ McPheters v. Moose River Log Driving Co., 78 Ma 329, 5 AtL Rep. 270. ^ 55.] KEQUIRED CKKTAINTY OF DAMAGES. 175 § 55. Only tlie items which are certain rccoverahle. [97] The charterer of a vessel who was suhjectod to expense in get- ting- her off from a gas pipe which wasanunhiwful obstruction to the navigation of a river, and upon which she caught in passing while navigating with due care, may maintain an ac- tion against those who laid the pipe to recover for such expense, hut for not for any delay in his business or other consequential damages.' "Where the defendant was enjoined from removing his negroes, and upon an order of seizure they were taken out of his possession and a decree subsequently rendered in his favor, it w^as held bis damages would, ordinarily, be what their labor would have been worth had they continued in his posses- sion. But he would also be entitled to damages for any [98] loss that was the direct, proximate and natural consequence of the removal of the negroes out of his possession, which were not remote and speculative, involving inquiries collateral to the consideration of the wrongful act. And so he could not recover as damages counsel fees incurred in defending the suit nor expenses involved in employing an agent to attend to his other business whilst he was engaged in such defense; nor what would or might have been the profits of his business had not his possession of the negroes been interrupted.^ The plaint- iff's oxen were stolen in Yermont and taken to the defendant, and being found in his possession in New York were demanded and refused. The plaintiff then resorted to legal process to gain possession, and succeeded, but incurred expense therein. He was held not entitled to recover such expense as part of his damages for the conversion, in a subsequent action.^ These expenses were not rejected because a remote or uncertain in- cident of the wrong, but because they were costs of a judicial proceedmg in which such allowable expenses are collectible, and if not thus compensated cannot be recovered. The ex- pense of regaining property tortiously taken is a part of the injury and recoverable.* "Where goods wrongfully seized are taken from the wrong-doer by another, their owner may, in an action against the former, recover the amount paid the other wrong-doer to get them back.* In an action upon an attach- 1 Benson v. Walden, etc. Gas L. * Bennett v. Lockwood, 20 Wend. €o.. G Allen, 149. 223, 32 Am. Dec. 532. ^ McDaniel v, Crabtree, 21 Ark. 431. * Keene v. Dilke, 4 Ex. 388. 3 Harris v. Eldred, 42 Vt. 39. 1T6 COMPENSATION. [§ 56. ment bond the rule restricting the recovery to the natural and proximate damages Avill exclude any claim for injuries to credit and business,^ and for mental suffering.^ But where a party took a lease of a ferry, and covenanted to maintain and keep the same in good order, but instead of doing so diverted trav- elers from the usual landing to another landing owned by him- self, by means whereof a tavern-stand belonging to the plaintiff situate on the first landing was so reduced in business [1)0] as to become tenantless, it was held in an action by the landlord for breach of the contract that he might assign, and was entitled to recover as damages, the loss of rent on the tavern-stand.^ Where a negro was hired to make a crop and was taken away by the owner in the middle of the year, whereby the crop was entirely lost, it was held that the proper measure of damages was the hire of the negro paid in advance, the rent of the land and the expenses incurred for the purpose of making the crop.* § 56. Recovery for successive consequences. Where the injury to be recovered for consists of several items, variously related consequentially to the alleged cause, the right to each must be decided upon the same principles as where only one inseparable injurious effect is in question. It may happen that such items are successive, and the first may in some sort oper- ate as cause in respect to later effects. When this is the case a recovery for items subsequent to the first will depend on whether the act complained of is the efiicient cause of the en- tire damage as represented by all such items, and whether they are consequences which ought reasonably to have been contemplated to ensue, or, in case of contract, whether they may fairly be supposed to have been within the contemplation of the parties at the time of contracting. This is well illus- trated by an English case. The defendant contracted to de- liver a threshing machine to the plaintiff, a farmer, within three weeks. It was the latter's practice, known to the de- 1 State V. Thomas, 19 Mo. 613, 61 69 Ala. 373, 44 Am. Rep. 519. See ch. Am. Dec. 580; Weeks v. Prescott, 53 25. Vt. 57, 74; Braunsdorf v. Fellner, 76 2TisdaIe v. Major, 106 Iowa, 1, 75 Wis. 1, 45 N. W. Rep. 97; Anderson N. W. Rep. 663, citing this section. V. Sloane, 73 Wis. 566, 78 Am. St. 885, 3 Dewint v. Wiltse. 9 Wend. 325. 40 N. W. Rep. 214; Pollock v. Gautt, ^Hobbs v. Davis, 30 Ga. 423. § 57.] REQUIRED CERTAINTY OF DAMAGES. 177 fenclant, to thresh his wheat in the field and send it thence direct to market. At the end of three weeks plaintiff's wheat was ready in the field for threshing, and, on his remonstrating at the delay in the delivery of the machine, the defendant several times assured him it should be sent forthwith. The plaintiff, having unsuccessfully tried to hire another machine, was obliged to carry home and stack the wheat, which, while so stacked, was damaged by rain. The machine was afterwards delivered and the contract price paid. The wheat was then threshed, and it was found necessary, owing to its deterioration by rain, to kiln-dry it. When dried and sent to market it sold for a less price than it would have fetched had it been threshed at the time fixed by the contract for the delivery of the ma- chine, and then sold, the market price of wheat having mean- while fallen. It was held, in an action for the non- [100] delivery of the machine, that the plaintiff was entitled to re- cover for the expense of stacking the wheat, the loss from the deterioration by the rain and the expense of kiln-drying it, but not for the loss by the fall in the market, the latter being too uncertain to have been contemplated and not the natural result of the breach.^ There is much reason for holding that the latter loss was also recoverable.^ The case referred to is much more satisfactory than a number of American cases which hold that a farmer cannot recover damages resulting to his crops from delayed delivery or the failure to work as war- ranted of a harvesting machine which was sold with knowledge that it was to be used in securing the purchaser's grain.* § 57. Illustrations of the rule of the preceding section. In an action for negligent driving, whereby the plaintiff's horse was injured, it appeared that the horse was sent to a iSmeed v. Foord, 1 E. & E. 603. 3 Fuller v, Curtis, 100 Ind. 237, 50 2Wardv. New York Central R. Co., Am. Eep. 786; Prosser v. Jones, 41 47 N. Y. 29; Sturgess v. Bissell, 46 Iowa, 674; Wilson v. Reedy, 32 Minn. N. Y. 462; Scott v. Boston, etc. Co., 256, 20 N. W. Rep. 153; Osborne v. 106 Mass. 468; Sisson v. Cleveland, Poket, 33 Minn. 10, 21 N. W. Rep, etc. R. Co., 14 Mich. 489; Collard v. 752; Brayton v. Chase, 3 Wis. 456, Southeastern R, Co., 7 H. & N. 79; probably overruled by cases referred Weston V. Grand Trunk R Co., 54 to in Thomas, etc. Manuf. Co. v. Wa- Me. 376, 92 Am. Dec. 552; Peet v. bash, etc. R. Co., 62 id. 642, 650, 51 Chicago, etc. R Co., 20 Wis. 594, 91 Am. Rep. 725, 23 N. W. Rep. 827. Am. Dec. 446. Vol. 1 — 13 178 COMPENSATION. [§ 57 farrier for six weeks for the purpose of being cured, and at the end of that time it was ascertained that it was damaged to the extent of 201. It was held that the plaintiff was entitled to recover for the keep of the horse at the farrier's, the amount of the farrier's charges, and the difference in its value at the time of the accident and at the end of the six weeks, but not for the hire of another horse during that period.^ Had a claim been made for the loss of the use of the injured horse during his treatment at the farrier's it would have been a proper item of damages.^ If a horse and vehicle are injured through a defect in a highway and in consequence thereof the horse be- comes frightened and unmanageable, continues to be a kicker and becomes spoiled for driving, there may be a recovery for the depreciation in his value as well as for the damage done the vehicle by the kicking and by the defect.^ A tradesman took a ticket to go from L. to H. On arriving at an inter- mediate station he found no train ready to take him to H. the same night, as there should have been according to the pub- lished time-bill. He slept at that place and in the morning paid Is. 4:d. fare to H. In consequence of the delay he failed to keep appointments with his customers, and was detained for many days. The latter was deemed within the contemplation of the parties. The court told the jury that the plaintiff would [101] have been entitled to charge the company with the ex- pense of getting to H., but he had no right to cast upon it the remote consequences of remaining the night at the intermediate place. He was entitled to the fare thence to H., and perhaps the 2s. for his bed and refreshments. A motion for a new trial on the ground of misdirection was refused. Pollock, C. B., said : " In actions for breach of contract the damages must be such as are capable of being appreciated or estimated. Mr. Wilde was invited at the trial to state what were the damages 1 Hughes V. Quentin, 8 C. & P. 703; 3 English v. Missouri Pacific R. Co., Glare v. Maynard, 7 C. & P. 741. 73 Mo. App. 232. See § 26. 2 Albert v. Bleecker Street, etc. R, One of the New York county- Co., 3 Daly, 393; Bennett v. Lock- courts has denied the right to recover wood, 20 Wend. 223, 33 Am. Dec. 532; for the depreciation in the value of Walrath v. Redfield, 11 Barb. 368; a horse caused by fright. Nason v. Gillett V. Western R, Co., 8 Allen, West, 31 N, Y. Misc, 583, 65 N, Y. 560; The Glaucus, 1 Lowell, 366; Supp. 651. Sweeney v. Port Bur well Harbor o„ 17 Up. Can. C. P. 574. § 57.] REQUIRED CERTAINTY OF DAMAGES. 179 to which the plaintiff was entitled. lie said general damages. The plaintiff is entitled to nominal damages at all events, and such other damages of a pecuniary kind as he may have really sustained as a direct consequence of the breach of the contract. Each case of this description must be decided with reference to the circumstances peculiar to it; but it may be laid down as a rule that, generally, in actions upon contracts no damages can be given which cannot be stated specifically, and that the plaintiff is entitled to recover whatever damages naturally re- sult from the breach of contract, but not damages for the disap- pointment of mind occasioned by the breach of contract." ^ A subsequent English case was decided by the queen's bench in 1S75 on this state of facts: The plaintiff, wife and two chil- dren of five and seven years old respectively, took tickets on the defendant's railway from W. to H. by the midnight train. They got into the train but it did not go to H., but along an- other branch to E. where the party were compelled to get out. It being late at night the plaintiff was unable to get a convey- ance or accommodation at an inn; and the party walked to his house, a distance of between four and five miles, where they arrived at about three o'clock in the morning. It was a drizzling night and the wife caught cold and was laid up for some time, and unable to assist her husband in his business as before, and expenses were incurred for medical attendance.^ Three items of loss and injury came under consideration: first, the incon- venience, as it was called, of having to walk home; second, the expense of the wife's sickness; and third, the loss of her services. The last two items being coincident in time [102] and relation to the defendant's breach of contract were con- sidered together. Only the first was allowed. It was remarked that the plaintiffs did their best to diminish the inconvenience to themselves, and they had no alternative but to w^alk; that it was not to be doubted that the inconvenience was the im- mediate and necessary consequence of the breach of the de- fendant's contract to convey them to H. Cockburn, C. J., said : "I am at a loss to see why that inconvenience should not be 1 Hamlin v. Great Northern R.Co., 2 jjobbs v. London, etc. R. Co., L. 3 H- & N. 40a See Denton v. Same, R 10 Q. B. 111. 5 El. & BL 860. 180 COMPENSATION. [§ ^7 compensated by damages in such an action as this. ... If the jury are satisfied that in the particular instance personal inconvenience or suffering has been occasioned, and that it has been occasioned as the immediate effect of the breach of con- tract, I can see no reasonable principle why it should not be compensated for." And again: " So far as the inconvenience of the walk is concerned, that must be taken to be reasonably within the contemplation of the parties; because if a carrier engages to put a person down at a given place and does not put him down there but puts him down somewhere else, it must be in the contemplation of everybody that the passen- ger put down at the wrong place must go to the place of his destination somehow or other. If there are means of convey- ance for getting there he may take those means and make the company responsible for the expense; but if there are no means I take it to be law that the carrier must compensate him for the personal inconvenience which the absence of those means has necessitated. That flows out of the breach of contract so im- mediately that the damage must be admitted to be a fair sub- ject-matter of damages. But in this case the wife's cold and its consequences cannot stand upon the same footing as the personal inconvenience arising from the additional distance which the plaintiffs had to go. It is an effect of the breach of contract in a certain sense, but removed one stage; it is not the primary but the secondary consequence of it." The ob- jection to what is termed the " secondary consequence " is that it is not a consequence so certain to occur as to be among those to be anticipated from such a breach, it happening from other than the usual state of the weather; but it was not any more a secondary consequence than is the burning of a second building by a continuous fire, or the injury to the grain by [103] rain in Smeed v. Foord. It is said in the same opinion already quoted from that " the nearest approach to anything like a fixed rule is this: That to entitle a person to damages by reason of a breach of contract, the injury for which com- pensation is asked should be one that may fairly be taken to have been contemplated by the parties as the possible result of the breach of contract. Therefore you must have something immediately flowing out of the breach of contract complained of, something immediately connected with it, and not merely §57.] KEQUIEED CERTAINTY OF DAMAGES. 181 connected with it through a series of causes intervening be- tween the immediate consequence of the breach of contract and the damage or injury complained of. To illustrate that I cannot take a better case than the one now before us: Suppose that a passenger is put out at a wrong station on a wet night and obliged to walk a considerable distance in the rain, catch- ing a violent cold which ends in a fever, and the passenger is laid up for a couple of months, and loses through this illness the offer of an employment which would have brought him a handsome salary^. No one I think who understood the law would say that the loss so occasioned is so connected with the breach of contract as that the carrier breaking the contract could be held liable." True, there the sickness would be the cause of an accidental loss, but in the case under discussion the question was not of such a loss. On the contrary it was the expense and loss of time incident to the sickness itself. AVas not that " a result of the breach " which was natural and proxi- mate, and to be contemplated under the other circumstances of the breach for which the defendant was held responsible ? ^ 1 Blackburn, J. : " It is a contract by which the railway company had undertaken to carry four persons to Hampton Court, and in fact that contract was broken when they landed the passengers at Esher in- stead of Hampton Court. The con- tract was to supply a conveyance to Hampton Court, and it was not sup- I)lied. Where there is a contract to supply a thing and it is not supplied, the damages are the difference be- tween that which ought to have been supplied and that which you have to pay for, if it be equally good; or, if the thing is not obtainable, the dam- ages would be the difference between the thing which you ought to have had and the best substitute you can get upon the occasion for the purpose. . . . When he is not able to get a conveyance at all, but has to make the jour- ney on foot, I do not see how you can have a better rule than that which the learned judge gave to the jury here, namely, that the jury were to see what was the inconvenience to the plaintiffs in having to walk, as they could not get a carriage." As to damages being recoverable for the illness of his wife, he said: **I think they are not, because they are too re- mote. On the principle of what is too remote, it is clear enough that a person is to recover in the case of a breach of contract the damages di- rectly proceeding from that breach of contract and not too remotely. Although Lord Bacon had, long ago, referred to this question of remote- ness, it has been left in very great vagueness as to what constitutes the limitation, and therefore I agree with what my lord has said to-day, that you make it a little more definite by saying such damages are recover- able as a man, when making a con- tract, would contemplate would flow from a breach of it. For my own 182 COMPENSATION. [§ 5S. One who has been injured may recover for the injury though in his care of himself thereafter, he may have misjudged as to the proper treatment. In such an event he is not a volunteer in the case of his ailment; that was caused by the defendant, and the plaintiff's honest misjudgmentis not negligence. The negligence of the defendant began a sequence of harmful effects ; an intervening innocently misjudged act of the injured person aggravated them; but the latter act would have been harmless if the original wrong were not still operative. It continues to operate more harshly, and it is from such operation that the plaintiff suffers. The original cause continues, and accom- plishes the whole result.^ [lOi] § 58. Same subject. In an action under the code it appeared that the defendant delivered tickets to the plaintiff about the 1st of March, 1S52, for transportation from XewYork to San Francisco; one entitled him to a passage to Graytown, at the mouth of Nicaragua river, in a specified ship which was to sail on the 5th of that month; another entitled him to a passage up that river and through the lake of that name to San Juan del Sur, on the Pacific ocean ; and the other from the latter place to his destination, on a steamer named, which part, I do not feel that I can go further than that. It is a vague rule, and as Bramwell, B., said, it is some- thing like laaving to draw a line be- tween night and day; there is a great duration of twilight when it is neither night or day; but on the question now before the court, though you cannot draw the precise line, you can say on which side the line the case is." Mellor, J.: "I quite agree . . . that for the mere inconvenience, such as annoy- ance and loss of temper or vexation, or for being disappointed in a par- ticular thing which you have set your mind upon, without real phys- ical inconvenience resulting, you cannot have damages. That is surely sentimental, and not a case where the word inconvenience, as I here use it, would apply. But I must say, if it is a fact that vou arrived at a place where you did not intend to go to, where you are placed by reason of the breach of contract of the car- riers at a considerable distance from your destination, the case may be otherwise. It is admitted that if there be a carriage you may hire it and ride home, and charge expenses to the defendant. The reason why you may hire a carriage and charge the expense to the company is with a view simply of mitigating the in- convenience to which you would otherwise be subject; so that where the inconvenience is real and sub- stantial, arising from being obliged to walk home, I cannot see why that should not be capable of being as- sessed as damages in respect of in- convenienca" i Hope V. Troy & L. R. Co., 40 Hun, 438, affirmed without opinion, 110 N. Y. 64a § 58.] EEQUIKED CERTAINTY OF DAMAGES. 183 was advertised to leave about fifteen days after th? plaintiff would arrive at the starting port according to the usual course of conveyances. The plaintiff was carried on his first [105] ticket, and arrived at Graytown March 15th, where he was de- tained eleven days. He then started for San Juan del Sur. He arrived at a place on the way on the 31st of March when he was taken sick. There he received news that the steamer on which he was entitled to take passage under his third ticket was lost on the 27th of the previous month, but the fact was not known to the defendant at the time of selling the tickets nor until about the 20th of ApTil. The plaintiff arrived at San Juan del Sur on the 4:th of April and remained there until the 9th of May, endeavoring, but unsuccessfully, to procure a pas- sage to San Francisco. He then returned to New York, and remained sick, until long after he returned home, with a fever peculiar to the climate of Nicaragua. It was held that the time he lost by reason of his detention on the isthmus, his ex- penses there, and of his return to New York, the time he lost by reason of his sickness after he returned home and the ex- penses of such sickness, so far as the same were occasioned by the defendant's negligence and breach of duty, as well as the amount originally paid for his passage, were damages which the plaintiff was entitled to recover.^ The damages which are recoverable for breach of contract are limited to the direct and immediate consequences ; but the right to indemnity is not satisfied by compensation for the first item of loss if there are others so identified with it that the injury as a whole naturally comprehends all and they to- gether constitute the immediate consequence. A party whose breach of contract leaves the other party in such a situation that sickness is its natural, immediate and probable conse- quence causes by the same act the direct pecuniary losses which are its usual and natural concomitants, as loss of time and the expense of medical and other. attendance. If by reason of the sickness some extraordinary or unusual loss occurs for want of ability on his part to attend to his affairs it is a loss which can- 1 Williams v. Vanderbilt, 28 N. Y. v. Pacific Mail S. S. Co., 1 Cal. 353; 217, 84 Am. Dec. 333; Heirn v. Mc- Pearson v. Duane, 4 Wall 605; The Caughan, 32 Miss. 17 ; Porter v. Steam- Zenobia, 1 Abb. Adm. 80; The Cana- boat New England, 17 Mo. 290; Yonge dian, 1 Brown Adm. 11. 184 COMPENSATION. [§58. not be considered as having entered into the contemplation of [100] the parties; and the same must be the conclusion, if the sickness were not the natural and probable consequence of the act complained of, but the result of some other or secondar}'' cause. Where sickness is the direct or proximate consequence of a wrongful act, the pain and suffering are also elements of the injury for which compensation may be recovered.^ The earlier cases, especially in jurisdictions in which exem- plary damages are recoverable, generally held that the person whose breach of contract, fraud or other wrongful act causes another to be sued, under such circumstances that the suit is an injurious consequence for which he is liable, is bound to re- spond in damages for the expenses which are the necessary and legal incidenits of the suit.^ But not in the absence of such circumstances.^ As given in a late case, the reason for denying counsel fees where the circumstances do not warrant the imposition of exemplary damages is that the law prescribes what costs shall be taxed and what shall be therein in- 1 Fillebrown v. Hoar, 124 Mass. 580; Meagher v. Driscoll, 99 Mass. 281; Pennsylvania R. Co. v. Books, 57 Pa. 339, 98 Am. Dec. 229; Ward v. Van- derbilt, 4 Abb. App. Dec. 521; In- dianapolis, etc. R. Co. v. Birney, 71 111. 391; Klein v. Jewett, 26 N. J. Eq. 474; Ransom v. New York, etc. R. Co., 15 N. Y. 415; Ohio, etc. R. Co. v. Dickerson, 59 Ind. 317; Whalen v. St. Louis, etc. R. Co., 60 Mo. 323; Pittsburg, etc. R. Co. v. Andrews, 89 Md. 329; Johnson v. Wells, eta Co., 6 Nev. 224, 3 Am. Rep. 245. See §§ 1242-1245. 2Philpot V. Taylor, 75 IlL 309, 20 Am. Rep. 241 ; Dixon v. Fawcus, 3 El. 6 El. 537; Collen v. Wright, 7 El. & B. 301; Randell v. Trimen, 18 C. B. 786; Anderson v. Sloane, 72 Wis. 566, 7 Am. Sfc. 885, 40 N. W. Rep. 214; Stevens v. Handley, Wright, 121; Roberts v. Mason, 10 Ohio St. 277; Peckham Iron Co. v. Harper, 41 Ohio St 100: Parsons v. Harper, 16 Gratt. 64; Marshall v. Betner, 17 Ala. 832; Lawrence v. Hagerman, 56 IlL 68; 8 Am. Rep. 674; Ziegler v. Powell, 54 Ind. 173; Closson v. Staples, 42 Vt. 209, 1 Am. Rep. 316; Eastin v. Bank of Stockton, 66 CaL 123, 56 Am. Rep. 77, 4 Pac. Rep. 1106; Magmer v. Renk, 65 Wis. 364, 27 N. W. Rep. 26; Greg- ory v. Chambers, 78 Mo. 294; Bolton v. Vellines, 94 Va. 793, 26 S. E. Rep. 847; First Nat. Bank v. Williams, 63 Kan. 431, 63 Pac.Rep. 744; Stevenson V. Whitesell, 10 Pa. Super. Ct. 306; Winkler v. Roeder, 23 Neb. 706, 37 N. W. Rep. 607, 8 Am. St. 155. 3 Burruss v. Hines, 94 Va, 413, 26 S. E. Rep. 875; St. Peter's Church v. Beach, 26 Conn. 355; Henry v. Davis, 123 Mass. 345; Warren v. Cole, 15 Mich. 265; Young v. Courtney, 13 La. Ann. 193; Flanders v. Tweed, 15 WalL 450; Oelrichs v. Spain, 13 How. 363; Yarbrougb v. Weaver, 7 Tex. Civ. App. 215, 25 S. W. Rep. 468; Landa v. Obert, 45 Tex. 542; Winstead v. Hulme, 32 Kan. 568, 4 Pac. Rep. 994; Bull V. Keenan, 100 Iowa, 144, 69 N. W. Rep. 433; Gibney v. Lewis, 6!» Conn. 392, 36 Atl. Rep. 799. § 58.] EEQUIKED CERTAINTY OF DAMAGES. 185 eluded as the fee of the successful party. In such case no greater fee should be allowed to be recovered. The litigants should be placed on an equality. If the defendant should be successful it is clear that he cannot recover from the plaintiff, in addition to the taxable costs, the fee paid by him to his at- torney; nor should the plaintiff, if successful, recover from the defendant the fee he may have paid or become liable for to his attorney.^ Counsel fees paid in the conduct of an unsuc- cessful suit against lot-owners to recover the amount of an as- sessment assigned by a city to such party in payment for the construction of a sewer, which suit failed because the assess- ment was invalid, are not recoverable in an action subsequently brought against the city for damages for the violation of its • contract though the city had stipulated that the assessment should be valid.^ The weight of authority is to the effect that counsel fees and court costs made necessary in the prosecution or defense of suits occasioned by the breach of contracts are not recoverable in actions ex contractu. There are some excep- tions, such as actions on injunction,' and attachment bonds,'' and the like, and actions on covenants of warranty or of seizin,^ where there has been an eviction reasonably resisted by the grantee. "Expenditures of this class, though growing 1 Buriuss V. Hines, 94 Va. 413, 26 S. One •who has succeeded in an E. Rep. 875. action cannot recover in a subse- A recovery of attorney's fees has quent action the expense of the first, been denied in an action by a stock- Lowell v. House of Good Shepherd, holder to compel the officers of a cor- 14 Wash. 211, 44 Pac. Rep. 253; Mar- poration to allov? an inspection of its vin v. Prentice, 94 N. Y. 295. books. Clason v. Nassau Ferry Co., Where provision is made by statute 20 N. Y. Misc. 315,45 N. Y. Supp. 675. for a reasonable attorney's fee to be And in an action against an execu- fixed by the court, and the court tor de son tort for wrongfully with- makes an allowance, it is error to holding property and resisting pro- allow in addition the statutory fee ceedings to punish him for contempt, provided for the successful party as Bishop V. Hendrick, 83 Hun, 323, 31 part of the costs. Montesano v. N. Y. Supp. 502, 146 N. Y. 398, 42 N. E. Blair, 13 Wash. 188, 40 Pac. Rep. Rep. 542, And against the usurper 731. of an oflSoe. Palmer v. Darby, 3 2 Gates v. Toledo, 57 Ohio St. 105, Ohio, N. P. 416, 1 Ohio Dec. 48. 48 N. E. Rep. 500. A plaintiff can recover attorney's ^ See § 524. fees as damages only when permitted * See § 512. by statute. Spencer v. Murphy, 6 6 See ^§ 617-619; also §§83, 84. Colo. App. 453, 41 Pac, Rep. 841. 186 COMPENSATION. [§ 59 out of the alleged breach, in the sense that bad there been no breach the occasion for them would not have arisen, are yet too remote to have been in the contemplation of the parties, and hence do not constitute an element of legal damage when the suit is on the contract, though the rule might be otherwise were it in case, setting out the contract as inducement merely.^ If one's property is taken, injured or put in jeopardy by an- other's neglect of duty imposed by contract, or by his wrong- ful act, any necessary expense incurred for its recovery, repair or protection is an element of the injury. It is often the legal duty of the injured party to incur such expense to prevent or limit the damages ; and if it is judicious and made in good faith, it is recoverable though abortive.^ § 59. Required certainty of anticipated profits. In an- other class of cases the question of the certainty of damages is more distinctly involved. They are cases in which the act complained of is plainly actionable and easy of proof, and the actual injury occasioned thereby consists in destroying or im- pairmg arrangements from which it is alleged that pecuniary advantages would have resulted. Such effects may be pr©- [107] duced by the refusal of a party to fulfill his contract, or by tortious acts by which some business scheme is frustrated. The pecuniary advantages which would have been realized but for the defendant's act must often be ascertained without the aid which their actual existence would afford. The plaint- iff's right to recover for such a loss depends on his proving with sufficient certainty^ that such advantages would have re- i.Burton v. Henry, 90 Ala. 281, 7 So. lin v. Great Northern R. Co., 1 H. & Rep. 925: Marvin v. Prentice, 94 N. Y. N. 408; Mailler v. Express Propeller 295; Copeland v. Cunningham, 63 Line, 61 N, Y. 312; Smeed v. Foord. Ala. 394. IE. &E. 602; Clark v. Russell, 110 2Nading v. Dennison, 32 Tex. Civ. Mass. 133; James v. Hodsden, 47 Vt. App. 173, 54 S. W. Rep. 412, quoting 127; First Nat. Bank v. Williams, 62 the text; Nashville v. Sutherland, Kan. 431, 63 Pac. Rep. 744, quoting 94Tenn. 356, 29S. W. Rep. 228; Wat- the text. See § 88. son v. Lisbon Bridge, 14 Me. 201; 3 "The rule that damages which Hughes V. Quentin, 8 C. & P. 703; are uncertain or contingent cannot Gillet V. Western R Co., 8 Allen, 580; be recovered does not embrace an Emery v. Lowell, 109 Mass. 197; uncertainty as to the value of the Hoffman v. Union Ferry Co., 68 N. benefit or gain to be derived from Y. 385; Jutte v. Hughes, 67 N. Y. 268; the performance of the contract, but Loker v. Damon, 17 Pick. 284; Ham- an uncertainty or contingency as tO' § 59.] REQDIEED CERTAINTY OF DAMAGES. 187 suited, and, therefore, that the act complained of prevented them.' The grounds upon which is founded the general rule of ex- cluding profits in estimating damages are, (1) that in the greater number of cases such profits are too dependent upon numerous and changing contingencies to constitute a definite and trust- worthy measure of damages; (2) because such loss of profits is ordinarily remote and not the direct and immediate >result of a non-fulfillment of the contract; (3) the engagement to pay such loss of profits, in cases of default in performance, does not form a part of the contract, nor can it be said, from its nature and terms, that it was within the contemplation of the parties. Cases arise, however, in which loss of profits is said to be clearly within the contemplation of the parties, although not provided for by the terms of the contract, and where such profits are not open to the objection of uncertainty or remote- ness. An instance of the latter kind is where the contract is entered into for the purpose, in part at least, of enabling the party to fulfill a collateral agreement from which profits would arise, of the existence of which he informed the other party prior to the making of the contract. In such cases the loss of profits from the collateral agreement is clearly within the con- templation of the parties, and is not remote or speculative.'^ whether such gain or benefit would injured from giving attention totlie be derived at all. It only applies to business in which he is engaged, it is such damages as are not the certain error to receive testimony of the result of the breach, and not to such average profits made therein as a as are the certain result but uncer- basis for estimating damages. Bier- tain in amount." In the latter case bach v. Goodyear Rubber Co., 54 the law will adopt that mode of es- Wis. 208, 41 Am. Rep. 19, 11 N. W. timating the damages which is most Rep. 514; Masterton v. Mount Ver- certain and definite. Blagen v. non, 58 N. Y. 391; Blair v. Mil wau- Thompson, 23 Ore. 239, 254, 18 L. R. kee, etc. R. Co., 20 Wis. 262. This A. 315, 31 Pac. Rep. 647. rule is disapproved of in Terre Haute " Certainty " means reasonable cer- v. Hudnut, 112 Ind. 542, 552, 13 N. E. tainty. Baltimore & O. R Co. v. Rep. 686, and the New York case Stewart, 79 Md. 487, 29 Atl. Rep. 964; cited pronounced not in harmony Stewart v. Patton, 65 Mo. App. 21. with later cases in that state. See 1 Myerle v. United States, 33 Ct. of Wakeman v. Wheeler & W. Co., 101 Cls. 1, 26, quoting the text; Fell v. N. Y. 205, 54 Am. Rep. 676, 4 N. E. Newberry, 106 Mich. 542, 64 N. W. Rep. 264; § 1246. Rep. 474. See § 78. 2 Per Parker, Ch. J., in Witherbee In actions to recover for personal v. Meyer, 155 N. Y. 446, 453, 50 N. E. injuries which disqualify the person Rep. 85. 188 COMPENSATION. [§59. If a vendor fails to deliver property pursuant to his contract, the vendee, having paid for it, is deprived of such benefit as such sale completed would have conferred, which is a loss equal to the value of the property at the time it should have been delivered, with interest from that time. This value can generally be proved with certainty. If the property has not been paid for, the compensation is still adjusted with reference to the value, and is the difference between the contract price and the value. Thus, the vendee is entitled to recover accord- ing to the advantage he would have derived from performance of the contract, namely, the profit he could have made by the bargain. He is entitled to such sum as would enable him to obtain the property if it is obtainable.^ On the other hand, where a vendee breaks his contract, the property is left on the [108] vendor's hands; his loss is equal to the difference be- tween the contract price and any less sum the property is worth when the vendee was bound to take and pay for it. The loss he suffers is the profit he would have made by the com- pletion of the sale.2 1 In Haskell v. Hunter, 23 Mich. 305, an action was brought for dam- ages for breach of a contract to sell and deliver lumber, and it appeared that a portion of the lumber had been delivered to the plaintiffs at a. place other than that specified in the contract, and subject to a heavy bill of freight in consequence thereof. In the absence of any proof that the plaintiffs had accepted the same in satisfaction to that extent of the contract, or had waived their right to compensation to that extent for the breach thereof.it was not proper to deduct the amount so delivered from the whole amount to be de- livered. An instruction to the jury that the proper measure of damages is the difference between the con- tract price of the lumber not deliv- ered and the wholesale price at the place of delivery was held to be erroneous. The true measure is the difference between the contract price and what it would have cost the plaintiffs to procure, at the place of delivery, and at the time or times when it was reasonable and proper for them to supply themselves with lumber of the kind and quality they were to receive on the contract: and if it were impracticable to supply themselves, except at retail rates, they were entitled to demand those rates of the defendants. 2 Gordon v. Norris, 49 N. R 376; Haines v. Tucker, 50 N. H. 307; Col- lins V. Delaporte, 115 Mass. 159; Ullmanv. Kent, 60111. 271; Sanborn V. Benedict, 78 IlL 310; Camp v. Hamlin, 55 Ga. 259; McCracken v. Webb, 36 Iowa, 551; Dustan v. Mc- Andrew, 44 N. Y. 72; Hay den v. Demets, 53 N. Y, 426; Beardsley v. Smith, 61 111. App. 340. The loss of profits based upon the sale of town lots at prices beyond their value and which are dependent upon the working up of a boom can- § 60.] KEQUIEED CERTAINTY OF DAMAGES. 189 § 60. Same subject. In many cases the sum which shall represent the value to a vendee who has been disappointed in the receipt of property bargained for cannot be ascertained from proof of a market value, either because the article is not obtainable in market or because it is contracted for and must be obtained from the vendor to answer a particular purpose, and not for resale. Then, in applying the general rule that the damages for breach of contract are to be measured by the benefits which would have been received if the contract had been performed, resort must be had to the known or custom- ary use of the property and such practical elements of value as the case presents. If the sale is made with a warranty, ex- press or implied, that the article is of a particular description or suitable for a designated use, on a breach by the vendor the damages are properly computed according to the actual loss in respect to that object. The ascertainment of the damages may involve an inquiry into the advantages derivable from the delivery of articles of the required description or suitable for the contemplated use, and of losses occasioned by the breach with reference to the particular purpose of the contract as known to the parties. In such cases the same degree of certainty is not always attainable and there is much conflict of authority as to the proper scope of inquiry. The same con- siderations apply to the question of the proper mode of arriv- ing at the amount of damage whatever be the nature of the contract. The injured party is entitled to gains prevented and losses sustained if he can prove them with sufficient cer- tainty.^ In Fletcher v. Tayleur^ the action was brought not be recovered. Carbondale In- A. R. Co., 128 Mo. 224, 27 S. W. Rep. vestment Co. v. Burdick, 58 Kan. 517, 568; Stewart v. Patton, 65 Mo. App. 50 Pac. Rep. 442. 21; Wittenberg v. Mollyneaux, 60 iHoge V. Norton, 22 Kan. 374; Neb. 583, 83 N. W. Rep. 842, 59 Neb. Brown v. Had ley, 43 Kan. 267, 23 203, 80 N. W. Rep. 824; Lakeside Pac. Rep. 493; Arkansas Valley Town Paper Co. v. State, 45 App. Div. & Land Co. v. Lincoln, 56 Kan. 145, 112, 60 N. Y. Supp. 1081; Burruss v. 43 Pac. Rep. 706; New Market Co. v. Hines, 94 Va. 413, 26 S. E. Rep. 875; Embry, 20 Ky. L. Rep. 1130, 48 S. W. Carroll-Porter Boiler & Tank Co. v. Rep. 980; Washington County Water Columbus Machine Co., 5 C. C. A. Co. V. Garver, 91 Md. 398, 46 Atl. Rep. 190, 55 Fed. Rep. 451 ; Hitchcock v. 979; Wiggins Ferry Co. v. Chicago & Anthony, 28 C. C. A. 80, 83 Fed. Rep. 217 C. B.21. 190 COMPENSATION. [§60. af^amst a ship-builder to recover damages for non-delivery of an iron ship at the time appointed in the contract. The ship [109] was intended by the plaintiffs and from the nature of her fitting's the defendant must have known she was intended for 779; Safety Insulated Wire & Cable Co. V. Mayor, 13 C. C. A. 375, 66 Fed. Eep. 140; Fontaine v. Baxley, 90 Ga. 41G, 17 S. E. Rep. 1015; Border City Ice & Coal Co. v. Adams, 69 Ark. 219, 62 S. W. Rep. 591. In an action brought to recover the price of nine and one-half tons of fertilizer the defendant set up that the plaintiff agreed to sell and deliver to him twenty tons of fertilizer at a stipulated price, with notice that it was intended for use on the defend- ant's cotton crop. The defendant was unable to buy the remaining quantity elsewhere, and the plaintiff refused to deliver it. The land upon which the fertilizer was designed to be used was cultivated in a farmer- like manner. Upon a portion the fertilizer delivered was used. This portion produced between three hun- dred and four hundred pounds of seed cotton per acre more than that adjoining, which was also planted in cotton — the quality and cultivation of each part being precisely the same. The court say: "The true rule seems to be that [the loss of] 'profits which have been sustained as the natural consequence of the breach or the wrongful act complained of are re- coverable unless they are objection- able either on the ground of remote- ness or of uncertainty. Those profits are usually considered too remote, among many others, which are not the immediate fruits of the princi- pal contract, but are dependent upon collateral engagements and enter- prises not brought to the notice of the contracting parties, and not therefore brought within their con- templation or that of the law. Those are considered uncertain which are purely speculative in their nature, and depend upon so many incalcula- ble contingencies as to make it im- practicable to determine them defi- nitely by any trustworthy mode of computation. We would not be willing to say that the damages here claimed by the defendant by waj^ of lost profits would have been recover- able if their ascertainment had been left to mere conjecture. The amount of cotton or other crops which land produces is dependent upon so many varying contingencies as to render it very indeterminata It will vary with the seasons, the adaptation of soil and climate, and its compara- tive exemption from the ravages of worms or other destructive insects. Speculative opinions of witnesses as to the probable influences of these operative causes would be a poor criterion for the measure of values. In this case, however, these diflicul- ties are entirely removed. The char- acter of the season is absolutely known. So is the precise effect of the fertilizer used during this par- ticular season. No speculation is needed as to how much rain and how much sunshine were requisite to produce a given amount of crops to the acre, nor as to the probable effect of the fertilizer upon the differ- ent kinds of soil, or even the propor- tion of it best suited to the land, and, therefore, what would necessarily have been produced on the remain- der, which is shown to have been in precisely the same state of cultiva- tion, and similar in quality of soil." Bell V. Reynolds, 73 Ala. 511. See Goodsell V. Western U. Tel. Co., 53 K Y. Super. Ct 46, 58 id. 26, 9 N- Y. Supp. 425. g GO.] KEQUIKED CEKTAINTY OF DAMAGES. 191 a passenger ship in the Australian trade. The witnesses called on the part of the plaintiff stated that the vessel would, in all probability, have obtained, if completed by the time men- tioned in the contract, at the then current rates, an outward freight of about 7,000^., and a gross freight home of about 9,500^., and that, allowing for the necessary outlay and ex- penses, the profits would in all probability have been a sum somewhat exceeding 7,000^. The amount of freight received by the plaintiffs when the ship sailed was 4,280^. The court submitted the case to the jury, to be decided by the rule laid down in Hadley v. Baxendale, and the jury returned a verdict in favor of the plaintiffs for 2,7501., which was sustained. Under the particular circumstances it is to be inferred that the data for ascertaining what the ship would have earned if she had been finished at the proper time were not purely con- jectural, but were nearly as reliable as is the proof of market values. But while this case on its facts is quite satisfactory and no doubtful principles are announced in it, the damages were ar- rived at in a manner which the courts in this country have gen- erally refused to adopt; that is, where there is any other and more certain method of ascertaining the damages they will not generally attempt to ascertain what profits could be real- ized by conducting a business.^ In actions for damages for not fulfilling in time contracts for particular works to be com- pleted at a stipulated date, the plaintiff cannot recover dam- ages estimated on the value of profits which would have been realized by the use of the works if the contract had been per- formed. The value of such use for general purposes to which they are adapted or some known use for which they were in- tended, during the delay, with any expenses which have to be 1 Taylor V. Maguire, 12 Ma 313; Rep. 799; Douglas v. Railroad Co., 51 Blanchard v. Ely, 21 Wend. 342; W. Va. 523, 41 S. E. Rep. 911; Central Walker v. Ellis, 1 Sneed, 515; Porter Coal & Coke Co. v. Hartman, 111 V. Woods, 3 Humph. 56, 39 Am. Dec. Fed. Rep. 96, 49 C.C. A. 244; Armistead 153; Singer v. Farnsworth, 2 Ind. 597; v. Shreveport, etc. R. Co., — La. — , Glidden v. Pooler, 50 111. App. 36; 32 So. Rep. 456; Asher v. Staoey, 23 Lanahan v. Heaver, 79 Md. 413, 29 Ky. L. Rep. 1586, 65 S. W. Rep. 603; Atl. Rep. 1036; Delp v. Edlis, 190 Pa. Silurian Mineral Spring Co. v. Kuhn, 25, 42 Atl. Rep. 462; Sharpe v. South- — Neb. — , 91 N. W. Rep. 508. ern R. Co., 130 N. C. 613. 41 S. E. 192 COMPENSATION. [g 60. incurred in the meantime, is usually the measure of damages.^ Where the plaintiff took possession of a store under a contract of purchase and carried on a profitable business in it for sev- eral months and was then ejected by the defendant and kept out of possession, the latter was liable for the value of the business lost, which was provable by evidence of the profits made.^ On the breach of a contract for the loan of money to be used in erecting houses, none of which were built until three years after its breach, there cannot be a recovery for the loss of their rental value. The fact that the plaintiff was un- able during that time to borrow the money from any other source on the same security offered the defendant, and which he did not impair, was taken as evidence of the uncertainty and speculative character of the anticipated profits.' [110] In particular cases there may be losses in outlays made by the injured party in anticipation of the performance by the other party, and actual loss of wages of men kept idle, and various other like items which are easily proved ; these, with the rental value of the agreed structure, enable the court to ascertain the damages with more certainty than by con- sideration of profits to be made in conducting a business where nearly all the factors in the calculation are supposititious.* But 1 Griffin v. Colver, 16 N. Y. 489; ham, 14 Neb. 369,45 Am. Rep. 121, Taylor V. Bradley, 39 N. Y. 129; Mcv 15 N. W. Rep. 704; Witherbee v. Boyle V. Reeder, 1 Ired. 607; Benton Meyer, 155 N. Y. 446, 50 N. E. Rep. V. Fay, 64 III 417; Green v. Mann, 85; Rogers v. Bemus, 69 Pa. 432; 11 IlL 614; Priestly v. Northern I. & Pennypacker v. Jones, 106 Pa. 237; C. R Co., 26 111. 207, 71 Am. Dec. Finnegan v. Allen. 60 111. App. 354; 369; Strawn v. Coggswell, 23 111. 461; Paola Gas Co. v. Paola Glass Co., 56 Fleming v. Beck, 48 Pa. 309; Lewis Kan. 614, 54 Am. St. 598, 44Pac. Rep. V. Atlas Mut. L. Ins. Co., 61 Mo. 534; 621; Williams v. Island City Milling Green v. Williams, 45 111. 206; Dean Co., 25 Ore. 573, 37 Pac. Rep. 49, cit- V. White, 5 Iowa, 266; Rogers v. ing the text; Watson v. Kirby, 112 Beard, 36 Barb. 31; Snell v. Cotting- Ala. 436, 20 So. Rep. 624; Atlantic & ham, 72 111. 161; Cassidy v. Le Fevre, D. R. Co. v. Delaware Construction 45 N. Y. 562; Parker v. Gilliam, 1 Co., 98 Va. 503, 37 S. E. Rep. 13; Ired. 545; Lecroy v. Wiggins, 31 Ala. Sharpe v. Southern R. Co., 130 N. C. 13; Pettee v. Tennessee Manuf. Co., 1 613, 41 S. E. Rep. 799. Sneed. 381; Heard v. Holman, 19 C. 2 Collins v. Lavelle, 19 R. L 45, 31 B. (N. S.) 1; Davis V. Cincinnati, etc. Atl. Rep. 434. R. Co., 1 Disney, 23; Blair v. Kilpat- 3 j^yinski v. Middlesex Banking rick, 40Ind. 312; Thompson v. Shat- Co., 34 C. C. A. 452, 92 Fed. Rep. 449. tuck. 2 Met 615; Corbet v. Johnson, < Gates v. Northern Pacific R. Co., 10 Ont. App. 564; Bridges v. Lan- 64 Wis. 64, 24 N. W. Rep. 494; United § CO.] REQUIRED CERTAINTY OF DAMAGES. 193 where there is not such a certain mode of estimating damages, the court will not dismiss the injured party with nominal dam- ages, unless the case is such there is no certainty that he has suffered actual injury. In a suit by an agent against a life insurance company for damages resulting from hrs discharge during the term of his engagement, his measure of damages is the amount he has lost in consequence. And testimony of actuaries as to the probable value of renewals for the remain- der of his term on policies already obtained is competent to assist in arriving at the result.^ J3ut an estimate of the prob- able earnings thereafter, derived from proof of the amount of his collections and commissions before the breach, without other proof relating thereto, was held too speculative to be admissible.- In estimating the damages sustained bj' a company for the laying out of a highway across its railroad or for permitting another railroad to cross it at grade, the jury have no right to take into consideration any supposed future damage to it, from a probable increase in the expense of doing business in conse- quence of the establishment of the new highway or crossing; and evidence of payments of money on account of accidents at the several crossings, and of the comparative profit of travel over the railroad between different stations, is inadmissible; it is too uncertain and contingent.^ The conjectural or pos- [111] sible profits of a whaling or other voyage cannot be taken into consideration in estimating the damage against a master for running away with the vessel and abandoning the voyage.* states V. Behan, 110 IT. S. 338, 4 Sup. 2 Lewis v. Atlas Mut L. Ins. Co., Ct. Rep. 81; Taylor Manuf, Co. v. 61 Mo. 534. Hatcher Manuf. Co., 39 Fed. Rep. 3 Boston, etc. R. Co. v. Middlesex, 1 440; Mandia v. McMahon, 17 Ont. Allen, 324; Portland & R. R. Co. v. App. 34; cases cited in n. 1, p. 192. Deering, 78 Me. 61, 57 Am. Rep. 784, The right to be reimbursed for out- 2 Atl. Rep. 670; Massachusetts, etc. lay and expenses does not depend R. Co. v. Boston, etc. R. Co., 121 upon proof of the right to recover Mass. 124; Chicago & A. R. Co. v. profits. United States v. Behan, Joliet, etc. R. Co., 105 111. 388, 44 Am. Taylor Manuf. Co. V. Hatcher Manuf. Rep. 799; Boston & M. R Co. v. Co., supra. County Com'rs, 79 Me. 386, 10 Atl. i^tna L. Ins. Co. v. Nexsen, 84 Rep. 113. See § 1077 ei seg. Ind. 347: Lewis v. Atlas Mut. L. Ins. * Brown v. Smith, 12 Cush. 366; Co., 61 Mo. 534; Tilles v. Mutual L. Schooner Lively, 1 Gall. 314; Boyd v. Ins. Co., 1 Mart. Ch. Dec. 313. See §69. Brown, 17 Pick. 453; The Anna Maria, Vou I — 13 194: COMPENSATION. [§ 60. Where there was a breach of a contract to give a theatrical performance on one occasion only, proof of the leading actor's repute and popularity, that during the previous year he had played to a large house in the same place, the inhabitants of which largely patronized such performances, and the testimony of the plaintiff, based upon experience in the management of the theater in which the play was to have been rendered, of the cash receipts of similar plays given there, as to what the receipts might have been if the play had been given, was in- sufficient to sustain a judgment for substantial damages.^ And where the breach was of a theatrical " sharing terms " agree- ment, which contemplated a considerable period for its execu- tion, the loss of profits was not shown by the previous receipts of the plaintiff's theater and by proof of the success of the play, which was to have been given therein, in other cities.- The damages which will result from a contemplated advance in the price of real estate because of the proposed erection and opera- tion of a factory on adjoining land cannot be recovered in an action for the breach of a contract for the erection and opera- tion thereof.^ But if lands are exchanged with an agreement as part of the consideration by one of the parties that he will make valuable improvements upon the tract conveyed by him, the damages resulting from his breach are not too uncertain if the complaint alleges the difference between the value of the tracts at the time the exchange was made.* In a Wisconsin case there was a breach of contract to purchase and work a stone quarry, of which the plaintiff was to have one-half of the net profits so long as it could be profitably worked. The de- fendant refused to perform before any profits were realized. It was proven that the quarry had been worked at a profit for three years preceding the trial, and an estimate was made of profits based in part on earnings for another year. The court considered the loss of profits sufficiently established, and held 2 Wheat. 337; Del Col v. Arnold, 3 Cutting v. Miner, 30 App. Div. 457,52 Dall. 333. N. Y. Supp. 288, which see. 1 Todd V. Keene, 167 Mass. 157, 45 3 DuUea v. Taylor, 35 Up. Can. Q. B. N. E. Rep. 81. 395; Rock ford, etc. R. Co. v. Becke- 2 Moss V.Tompkins, 69 Hun, 288, 23 meier, 72 111. 267; Waterson v. Alle- N. Y. Supp. 623, aflfiirnied without ghany Valley R. Co., 74 Pa. 208. opinion, 144 N. Y. 659; approved in ■* Wilson v. Yocum, 77 Iowa, 569,42 N. W. Rep. 446. § 61.] EEQUIKED CERTAINTY OF DAMAGES. 195 that the time during which a recovery might be had therefor ■was for the jury.' § 61. Warranties of seeds and breeding quality of animals, etc. Where a vendor falsely warranted that seed sold would produce Bristol cabbages the damages recoverable were the value of a crop of Bristol cabbages such as would ordinarily have been produced that year, deducting the expense of rais- ing it and the value of the crop actually raised.- What would have been produced from other seed and of the kind warranted, of course, could not be proved directly, and it was not at- tempted; but the regularity of production under usual condi- tions is such that a judicial conclusion may be based upon it as sufficiently certain. Mere speculative profits, such as might be conjectured would be the probable result of an adventure xlefeated by the breach of contract, the gains from which are entirely conjectural and with respect to which no means exist of ascertaining even approximately the probable results, cannot under any circumstances be brought within the range of damages recoverable. In Georgia the rule is that for the breach of an im- plied warranty of the merchantable quality of seed for planting the damages are limited to the purchase-money with interest thereon and expenses incurred in planting and preparing for the planting of the seed.^ In Tennessee only the difference in value between the seed purchased and that delivered can be re- covered.* The cardinal rule in relation to the damages to be compensated on the breach of a contract is that the plaintiff must establish the quantum of his loss by evidence from which the jury will be able to estimate the extent of his injury; this will exclude all such elements of damage as are incapable of being ascertained by the usual rules of evidence to a reason- 1 Treat v. Hiles, 81 Wis. 280, 50 N. Pavey, 8 C. & P. 769; Randall v. W. Rep. 896, approved in Hitchcock Raper, 96 Eng. C. L. 82: Flick v, V. Supreme Tent Knights of Macca- Weatheibee, 20 Wis. 392; Wagstaff bees, 100 Mich. 40, 58 N. W. Rep. 640, v. Short Horn Dairy Co., 1 Cab. & E. and in Schumaker v. Heinemann, 99 324; Phelps v. Eyria Milling Co., 13 Wis. 251, 74 N. W. Rep. 785. Ohio Dec. 692, quoting the text. See 2 Piissinger v. Tiiorburn, 34 N. Y. Reiger v. Worth, 127 N. C. 230, 37 S. 634; Wolcott v. Mount, 36 N. J. L. E. Rep. 217, 52 L. R A. 362. 262. 13 Am. Rep. 438; Van Wyck v. 3 Butler v. Moore, 68 Ga. 780, 45 Allen, 69 N. Y. 61, 25 Am. Rep. 136; Am. Rep. 508. White V, Miller, 71 N. Y. 133; Ferris * Hurley v. Buchi, 10 Lea, 346. V. Comstock, 33 Conn. 513; Page v. 196 COMPENSATION. [§61. 1112] able degree of certainty.^ Instances of such uncertain damages are profits expected from a whaling voyage and the gains which depend in a great measure upon chance; they arQ too purely conjectural to be capable of entering into compen- sation for non-performance of a contract.- For a similar rea- son the loss of the value of a crop for which seed had been sown, the yield of which would depend upon the contingencies of weather and season, would be excluded as incapable of esti- mation with the degree of certainty which the law exacts in the proof of damages.^ The loss of profits following the breach of a contract to publish an advertisement have been held to be incapable of being estimated;* a conclusion which has been denied in a recent English case.^ The damages re- 1 Wolcott V. Mount. 36 N. J. L. 271, 13 Am. Rep. 438; Brigham v. Carlisle, 78 Ala, 243, 56 Am. Rep. 28, quoting the text; Hair v. Barnes, 26 111. App. 580. 2 Wolcott V. Mount, supra. 3 Injuries done to growing crops must be estimated with reference to their condition at the time they are inflicted. Their value cannot be proven by showing the worth of sim- ilar crops which matured. Drake v. Chicago, etc. R. Co., 63 Iowa, 302, 50 Am. Rep. 746, 19 N. W. Rep. 215; Sa- bine, etc. R. Co. V. Joaciiim. 58 Tex. 456; Texas, etc. R. Co. v. Young, 60 id. 201; G., C. & S. F. R. v. HoUiday. 65 id. 512: Jones v. George, 61 id. 345, 48 Am. Rep. 280, 56 Tex. 149; Gres- ham V. Taylor, 51 Ala, 505. Contra, Payne v. Railroad, etc. Co.. 38 La. Ann. 164. 168, 58 Am. Rep. 174. And on account of the uncertainty involved in the maturing of crops the damage sustained by injuries done thereto cannot be reduced by efforts to show what might have been realized if another crop had been planted on the land on which that injured was growing. G., C. & S. F. R. V. HoUiday, supra. * Tribune Co. v. Bradshaw, 20 111. App. 1. The damages for the breach of an agreement to advertise certain rem- edies over the name of a druggist who gives an order for such remedies are too speculative to permit of a recovery. Stevens v. Gale, 113 Mich. 680, 72 N. W. Rep. 5. ^ The plaintiff, on beginning busi- ness as a ladies' tailor, made a con- tract with the defendant for the insertion of an advertisement in a special place in a newspaper. The publication was made for only a part of the stipulated time. The jury was instructed as to the meas- ure of damages according to the rule of Hadley v. Baxendale, and returned a verdict for substantial damages. Kennedy, J., said: The defendant knew the object of the advertise- ment. If it be material, I think he ought to be taken to have known at the time that if he broke the con- tract the result would be, as a nat- ural consequence, loss to the plaint- iff in his business. The plaintiff said he suffered loss to the extent of £100, which he attributed to the loss of the advertisement. No sugges- tion was made by the defendant as to any other cause for the loss of business. The defendant knew that the plaintiff could not get the adver- § 62.] REQUIRED CERTAINTY OF DAMAGES. 197 suiting from the breach of a warranty of the breeding qualities of an animal are too contingent and uncertain to support a re- covery when compensation for the services he renders is to be paid only when the animals served actually foal.^ The same is true of the reduction of the number of members in a given class in a mutual benefit society, the effect being that the amount realized by the beneficiary under a certificate is thereby lessened. What the result would have been if the chanere which brought about such reduction had not been made is a mere matter of speculation.^ But if a vessel is under charter or engaged in a trade the earnings of which can be ascertained by reference to the usual schedule of freights in the market, or if a crop has been sown and the ground prepared for culti- vation, and the complaint is that because of the inferior qual- ity of the seed a crop of less value is produced, by these cir- cumstances the means would be furnished to enable the jury to make a proper estimate of the injury resulting from the loss of profits of this character.' § 62. Prospective growth of orchard aiul of animals. An instructive case arose in Ohio involving this question of un- certainty.* The action was on a contract by which the de- tisement inserted in a journal of 3 Wolcott v. Mount, 36 N. J. L. 271, such unique position in such a place 13 Am. Rep. 438; Owners of The Gra- ss he had contracted to give him. I cie v. Owners of The Argentino, 14 am of opinion that the evidence of App. Cas. 519, affirming The Argen- loss of business was proper for the tino, 13 Prob. Div. 191; Bell v. Rev- consideration of the jury in assess- nolds, 78 Ala. 511, 56 Am. Rep. 52, ing tlie damages. Marcus v. Myers, quoted from in note to preceding 11 T. L. Rep. 327 (1895). section. Where there was a breach of a * Rhodes v. Baird, 16 Ohio, 573. 'It contract to permit a party to put is said of this case that if it goes so up signs at drinking stations on far as to hold that deprivation of the grounds of the Columbia expo- future profits cannot be ground for sition advertising a water filter, damages, it is not in accord with testimony of qualified witnesses giv- the current of authority. See § 107. ing opinions as to the value of the The case in which this observation right under that contract was ad- was made ruled that evidence of the niissible. World's Columbian Expo- value of an orchard at the time of sition Co. v. Pasteur-Chamberland trial, in the prospective profits of Filter Co., 82 III. App. 94. which the plaintiff was interested, ^ Connoble v. Clark, 38 Mo. App. was admissible, and it was not to be 476. presumed in favor of a wrong-doer 2 Supreme Lodge Knights of Pyth- that such value will become less. ias V. Knight, 117 ind. 489, 500, 20 Slioemaker v. Acker, 110 Cal. 239, 4a N. E. Rep. 479, 3 L. R. A. 409. Pac. Rep. 62. 19S COMPENSATION. [§ G2. fendant agreed to make a lease to the plaintiff for the term of ten years of certain lands on which to plant and cultivate a peach orchard. The breach consisted in the failure to make a lease and in defendant causing the plaintiff, within two years from his taking possession, and after the peach trees were planted, to be evicted from the premises. On the trial the plaintiff was permitted to give evidence of the probable profits that might in the future be realized from the orchard, judging from the number of crops and the prices of peaches in th& county for the last ten or fifteen years. This testimony was held by the appellate court to be incompetent, because too un- certain and speculative: "To the extent that the damages de- pended on the loss of the use of the propertj', its market value at the time of the eviction, subject to the performance of the contract on the part of the plaintiff, furnished the standard for assessing the damages. If it had no general market value its value should have been ascertained from the witnesses [113] whose skill and experience enabled them to testify di- rectly to such value in view of the hazards and chances of the business to which the land was to be devoted.^ This would only be applying the same principle for ascertaining the value of property which, by reason of its limited use, had no mar- ket value, which is adopted with reference to proving the present worth of the future use of property which, by reason of its being in greater demand, has a market value. In the case of property of the former description, the range for ob- taining testimony as to the value is, of course, more circum- scribed than it is in the case of property of the latter descrip- tion. But in either case the proving of the value of the property by witnesses having competent knowledge of the subject is more certain and direct than to undertake to do so by submitting to the jury, as grounds on which to make up their verdict, the supposed future profits. The profits testified to . . . were remote and contingent, depending on the character of the future seasons and markets, and a variety of other causes of no certain and uniform operation." Where the plaintiff sought to recover the value of his stock in a 1 Gritfin v. Colver, 16 N. Y. 489; Giles v. O'Toole, 4 Barb. 261; Newbrough V. Walker. 8 Gratt. 16, 56 Am. Dec. 127. § 03.] KEQUIRED CERTAINTY OF DAMAGES. 199 green-house, which was damaged or destroyed by a defective heating apparatus, he was permitted to show the value of the plants by testifying as to the number of flowers cut from them the year previous, he having had long experience in cultivat- ing plants by artificial heat and knowing how many flowers could be produced from a plant.' The damages resulting from the failure to furnish an agreed number of steers to be cared for and sold at a profit, the plaintiff to be compensated for his services by a share of the profits resulting from their improvement in condition, are not too uncertain. In the ab- sence of any agreement as to the weight or age of the steers it was assumed that they were such as were ordinarily purchased for feeding purposes in the community.^ g 63. Profits of special contracts. The liability for the profits which w^ould have resulted from the performance of a contract is co-extensive with the power to contract; and the government is liable therefor to the same extent as an indi- vidual.^ The right of a party to recover the profits he would have made in fulfilling a contract depends solely upon the fault of the other party to it, and plaintiff's ability to show that the profits claimed were reasonably certain to have been real- ized but for the wrongful act complained of.* It is not an in- superable objection to their recovery that they cannot be directly and absolutely proved. The general uncertainty at- tending human life and the special contingencies as to its du- ration on account of the physical condition of an individual whose rights are involved do not prevent the recovery of damages for causing his death or injuring his person. An agreement by one person to support another during life is an entire continuing contract upon the total breach of which the obligor is liable for full and final damages estimated to the 1 Laufer v. Boynton Furnace Co., 81 Wis. 280, 50 N. W. Rep. 896; Amer- 84 Hun, 311, 32 N. Y. Supp. 363. icau Contract Co. v. Bullen Bridge 2 Rule V. McGregor, Iowa, — , Co., 29 Ore. 549, 561, 46 Pac. Rep. 138, 90 N. W. Rep. 811; Schrandt v. citing the text; Rule v. McGregor, Young, 89 N. W. Rep. 607 (Neb.). Iowa, , 90 N. W. Rep. 811; 3 Danolds v. State, 89 N. Y. 36, 42 Schrandt v. Young, 89 N. W. Rep. 607 Am. Rep. 277. (Neb.): Farmers' Loan & Trust Ca * Schumaker v. Heinemann, 99 Wis. v. Eaton, 114 Fed. Rep. 14, 51 C. C. A. 251, 74 N. W. Rep. 785; Treat v. Hiles, 640. 200 COMPENSATION. [§63. time the person who was to bo supported would probably die.' It is the constant practice to so assess damages in actions to recover for personal injuries. In the nature of things where performance has been prevented the proof of profits cannot be direct and absolute. The injured party must, however, in- troduce evidence legally tending to establish damage and suf- ficient to warrant a jury in coming to the conclusion that the damages they find have been sustained; but no greater degree of certainty in this proof is required than of any other fact which is essential to be established in a civil action. If there is no more certain method of arriving at the amount the in- jured party is entitled to submit to the jury the particular facts which have transpired and to show the whole situation which is the foundation of the claim and expectation of profit, so far as any detail offered has a legal tendency to support such claim.^ The law does not require that the party seeking iSchell V. Plumb, 55 N. Y. 592; First Nat. Bank v. St. Cloud, 73 Minn. 219, 75 N. W. Rep. 1054; Ironton Land Co. v. Butchart, 73 Minn. 39, 75 N. W. Rep. 749; Morrison v. Mc- Atee, 23 Ore. 530, 32 Pac. Rep. 400; Freeman v. Fogg. 82 Me. 408, 19 Atl. Rep. 907. 2 Griffin v. Colver, 16 N. Y. 489; Giles V. O'Toole, 4 Barb. 261; New- brough V. Walker, 8 Gratt. 16, 56 Am. Dec. 127; Taylor Manuf. Co. v. Hatcher Manuf. Co.. 39 Fed. Rep. 440, 446, 3 L. R. A. 587, quoting the text; Brewing Co. v. McCann, 118 Pa. 314, 12 Atl. Rep. 445; Dart v. Laimbeer, 107 N. Y. 664, 14 N. E. Rep. 291; Wakeman v. Wheeler & W. Manuf. Co., 101 N. Y. 205, 217, 54 Am. Rep. 676, 4 N. E. Rep. 264, quoting the text; Shoemaker v. Acker, 116 Cal. 239, 48 Pac. Rep. 62; Lavens v. Lieb, 12 App. Div. 487. 42 N. Y. Supp. 901 ; Dickinson V. Hart, 1 42 N. Y. 183, 36 N. E. Rep. 801 ; United States Trust Co. v. O'Brien, 143 N. Y. 284, 38 N. E. Rep. 266; Skin- ner v. Shew. [1894] 2 Ch. 581. The difficulty of fairly estimating the injury done an unknown author by the breach of a contract to pub- lish his first book is not necessarily insuperable. Gale v. Leckie, 2 Stark. 107; Bean v. Carleton, 51 Hun, 318, 4 N. Y. Supp. 61. Compare Bean v. Carleton, 12 N. Y. Supp. 519. Nor the net proceeds which might have been derived from the sale of tickets to hear a noted lecturer. Savery v. In- gersoll, 46 Hun, 176. This is a very doubtful proposition in the absence of proof of an advance sale of tickets. See Bernstein v. Meech, 130 N. Y. 354, 29 N. E. Rep. 255, and § 60. Nor the damages resulting to a hotel from the violation of a contract to main- tain a depot at a certain point. Hous- ton, etc. R. V. Molloy, 64 Tex. 607. But it is otherwise with the breach of a contract to furnish a mule for the cultivation of laud; in such case the damage resulting to crops is too uncertain. Harper v. Weeks, 89 Ala. 577, 8 So. Rep. 39; Luce v. Hoising- ton, 56 Vt. 436. The damages following the breach of a contract to issue an annual rail- way pass during the life of a party are not too uncertain to be recovered. Curry v. Kansas, etc. R. Co., 58 Kan. 6, 48 Pac. Rep. 579. ^G3.] KEQUIRED CERTAINTY OF DAMAGES. 201 to recover for gains prevented shcill furnish data from which they can be mathematically computed. " When one breaks a contract which the other party has partly performed, and the violator then performs the work himself, from which he reaps the profits which the (fther party might have made, he cannot escape liability for damages if such other party can show the profits made while he was executing it, and the benefits re- ceived from its subsequent completion.^ ' Hitchcock V. Supreme Tent Knights of Maccabees, 100 Mich. 40, 58 N. W. Rep. C40. Where the plaintiff was permitted to sink but one of five wells which he had contracted to sink not less than two hundreJ feet in depth and five hundred feet if practicable and jiossible in the defendant's judg- ment, it was sufficient to show as a basis for damages what profit was made in sinking other wells in the vicinity of an average depth of four hundred feet. Sanford v. East River- side Irrigation District, 101 Cal. 275, o5 Pac. Rep. 805. If the trial does not occur until long after the cause of action arose and the contract contemplated a long period for its performance, the plaintiff may show the facts as they then exist. Shoemaker v. Acker, 1 1(5 Cal. 239, 48 Pac. Rep. 62. See § 107. There are some cases in Michigan which are not in harmony with the principle stated in the text nor with tlie current of modern authority. In McKiunon v. McEwan, 48 Mich. 106, there was a breach of a contract to furnish boilers at the time agreed upon. The purchaser alleged that the boilers were to be used in his steam mill and salt block for running and operating the same; that they were the only boilers he would have to furnish steam; that the capacity of his salt block was two hundred barrels per day; that without the boilers he could not manufacture any salt, — all of which facts were known to the vendor. The purchaser sought to recoup, as damages resulting from inability to prosecute his business, what he might have made from the use of the boilers. The court, by Marston, J., said: "In the present case the contract is silent as to the particular business which was to be carried on in the use of these boilers. That, it is said, was well known to both the contracting parties. But ad- mitting all this, would not the profits to be made in the manufacture of salt be dependent upon many other things besides the performance of this con- tract — a necessary supply of fuel, which the defendant claims to have had, of brine, of machinery for pump- ing the same, of proper vats, of grain- ers, pipes and other things necessary to carry on successfully and profit- ably the manufacture of that com- modity, the certainty or probability even, even if all these things did exist and were in proper order, of their re- maining in like condition? But sup- posing the party had completed the boilers and had put them in place, but liad failed to make all the neces- sary connections; no use could be made of the boilers in such a con- dition; would the damages be the same ? In other words, • where the chattel was itself only part of some- thing else, which* was rendered use- less for want of it, should the profit of the entire chattel be recovered? If a vessel were delayed in port for want of a bowsprit, should a loss of freight, to the amount perhaps of 202 COMPENSATION. [§64. § 61. Same subject; Masterton v. Mayor. In the leading [114] case inNew York,^ which has been extensively cited and approved, the plaintiffs agreed to furnish and deliver marble wrought in a particular manner, from a designated quarry, for thousands of pounds, be obtained in damages?' Very many questions similar to this might be put, and if the I'ule contended for by plaintiff in error were to prevail, in many cases the breach of a very simple contract, or failure in some part, might bring ruin upon the parties failing, where no such loss was con- templated. The adoption of such a rule would be extremely dangerous. If such consequences are to follow, it is much better that the parties, when contracting, expressly provide for such enlarged responsibility. Where the damages claimed, as in this case, largely exceed the contract price of the materials and labor to be furnished and performed by the party in default, we may well ques- tion the justice of such a conclusion in the absence of a clear showing that such a result was anticipated by the parties." In AUis V. McLean, 48 Mich. 428, 12 N. W. Rep. 640 (cited approvingly in Williams v. Island City Milling Co., 25 Ore. 573. 590, 37 Pac. Rep. 49), the vendor sold machinery for use in connection with a saw-mill. When the contract was made he was noti- fied that one condition of the pur- chase was that the machinery was to be received on a day certain, and notice was given that for every day's delay the purchaser would be dam- aged $150. Cooley, J., speaking for the court, said: "The profits of run- ning a saw-mill are proverbially un- certain, indefinite and contingent. They depend upon many circum- stances, among which are capital, skill,supplyof logs, supply and steadi- ness of labor; and one man may fail while another prospers, and the same man may fail at one time and pros- per at another, though the prospect- ive outlook seems equally favorable at both times. Estimates of profits seldom take all contingencies into the account, and are therefore sel- dom realized; and if damages for breach of contract were to be de- termined on estimates of probable profits, no man could know in ad- vance the extent of his responsibil- it}'. It is therefore very properly held, in cases like the present, that the party complaining of a breach of contract must point out elements of damage more certain and more di- rectly traceable to the injury than prospective profits can be. Fleming V. Beck, 48 Pa. 309; Pittsburg Coal Co. V. Foster, 59 id. 365; Strawn v. Coggswell, 28 111. 457; Frazer v. Smith, 60 id. 145; Howe Machine Co. V. Bryson, 44 Iowa, 159. But this case is thought to be different be- cause here the fair rental value of the mill is proved, and it is said that this was certainly lost. But we do not know that that was the case. If tlie mill had been in condition to rent at that time, there may have been no customer for it on terms the owner would have consented to grant; and if customers were abun- dant and satisfactory, it cannot be assumed that the whole rental value 1 Masterton v. Mayor, 7 Hill, 61. See Jones v. Judd, 4 N. Y. 411; Dan- olds v. State, 89 id. 36, 42 Am. Rep. 277; Taft v. Tiede, 55 Iowa, 370, 7 N. W. Rep. 617; Bernstein v. Meech, 130 N. Y. 354, 29 N. E. Rep. 255; James H. Rice Co. v. Penn Plate Glass Co., 88 111. App. 407. §C4.J EEQUIKED CERTAINTY OF DAMAGES. 2Uc a public building. The quantity necessary to fill their contract was eighty-eight thousand eight hundred and nineteen feet, for which they were to be paid a specified price. They afterwards contracted with the proprietors of that quarry for the marble. is lost when a mill stands idle. The vveai" and tear of machinery and buildings in use is something, and it is not improbable that the landlord would take this among other things into account in determining what should be the rent. But in this case it does not appear that rent was lost or could have been lost, for it is not shown that defendants desired to rent or would have consented to do so if a customer had offered." To the same effect are Talcott v. Crip- pen, 52 Mich. 633, 18 N. W. Rep. 392; Petrie v. Lane, 67 Mich. 454, 35 N. W. Rep. 70. Talcott v. Crippen, supra, is limited in Leonard v. Beaudry, 68 Mich. 318, 36 N. W. Rep. 88; Fell v. Newberry. 106 Mich. 542,64 N. W. Rep. 474; and Barrett v. Grand Rapids Veneer Works, 110 Mich. 6, 67 N. W. 976. See First Nat. Bank v. Thurman, 69 Iowa, 693, 25 N. W. Rep. 909. Allis V. McLean, supra, is approved in Moulthrop V. Hyett, 105 Ala. 493, 17 So. Rep. 32, and followed in John Hutchinson Manuf. Co. v. Pinch, 91 Mich. 156, 51 N. W. Rep. 930. The latter modifies Allis v. McLean as to the recovery of rental value. It is conceded by the writer of the opinion in McKinnon v. McEwan, supra, that profits vphich would arise as the direct result of work done at the contract price may be recovered, and that they may be re- covered in cases of torts. Both these propositions are established in Mich- igan. Burrell v. New York, etc. Salt Co., 14 Mich. 39: Allison v. Chandler, 11 id. 558; Mueller v. Bethesda Spring Co., 88 Mich. 390, 50 N. W. Rep. 319; Oliver v. Perkins, 92 Mich. 304, 52 N. W. Rep. 609. ^It is also admitted that there is another class of cases, within which the case before the court came, where the authorities differ as to the right of the injured party to recover such profits as were claimed. The infer- ence from these statements is that the court did not intend to hold that profits are never recoverable. This is made more clear by the observa- tions of Cooley, J., in Ailis v. McLean, supra. But it is not clear from both cases that their result is not to estab- lish the rule that profits are not re- coverable for the breach of a con tract, unless it is so stipulated therein or the article which is the subject of the contract is one which "at all times finds a ready sale at a current market price," or unless contracts are dependent one upon another, in which case, if the second contract is broken, "the loss of definite and fixed profits under the other is a necessary and immediate conse- quence." Allis V. McLean, supra. See Industrial Works V.Mitchell, 114 Mich. 29, 72 N. W. Rep. 25. In McKinnon v. McEwan, Mars- ton, J., said that in Hadley v. Baxen- dale "the court held the loss of profits while the mill was kept idle could not be recovered, because it did not appear the carrier knew that the want of the shaft was the only thing which was keeping the mill idle. The court also intimated that a different rule might have pre- vailed had the facts been fully known to the carrier. Of course, no such question was before the court in that case, and intimations given upon facts tliat may perhaps appear in some future case are not usually relied upon." The opinion lays stress on the fact that the contract was 204 COMPENSATION. [§ 64. When the plaintiffs had delivered fourteen thousand seven hundred and seventy-nine feet and had on hand at the quarry three thousand three hundred and eight feet ready for deliv- ery, the defendants suspended the performance of the con- tract without any fault of the plaintiffs. They sought to re- cover the profits of the contract and also the damages to which they were subjected for the consequent violation of silent as to the business to be carried on with the boilers which were to be furnished, and the knowledge of the parties was not regarded as material. It is conceded by Cooley, J., in Allis V. McLean, that the machinery was purchased with a view to the profits which its use was expected to pro- duce, and that "the contract" to furnish it "would not be entered into if the profits were not expected and counted upon." It necessarily results, according to the general rule established by the authorities, that whei'e the vendor has knowledge of the use to which the article he sells is to be put, though the written con- tract is silent, that he contemplates the injury which the vendee will sustain from his failure to comply with his agreement. The test which Judge Marston lays down that "the profits to be recovered must not be conjectural or speculative in their nature or dependent upon the chances of business or other contin- gencies, and must have reference to the nature of the contract and breach complained of," is as to the second alternative too latitudinarian, and, strictly applied, is not consistent with the recoveiy of profits in any case. Profits are the result of busi- ness; the desire for them is the cause of business. It is true that profits will not be recoverable as a measure nor as an element of damages if they are purely conjectural, nor if they are .speculative in th'^ sense of depending on contingencies whicli are possible and not probable. The chances of business include many things, both sufficiently certain as a basis for the administration of jus- tice and too uncertain therefor. The authorities cited in the discussion devoted to this subject, and espe- cially the more recent ones, are op- posed to the view taken by the Michigan court in both the cases considered. The uncertainty con- nected with the profits claimed was magnified. Damages resulting from the discontinuance or interruption of an established business are proved with sufficient certainty by showing what the profits of the business have been. See Oliver v. Perkins, 92 Mich. 304, 53 N. W. Rep. 609. Of course, if there has been a change in the conditions it is taken into ac- count. Cases in which damages are allowed for the breach of partner- ship agreements are an example. There are three recent and well con- sidered cases in Wisconsin which are in harmony with the writer's view of the law, and which are not materially difl'erent in their facts from the Michigan cases considered. Jones V. Foster, 67 Wis. 296, 30 N. W. Rep. 697; Cameron v. White, 74 Wis. 425, 43 N. W. Rep. 155, 5 L. R. A. 493; Treat v. Hiles. 81 Wis. 280, 50 N. W. Rep. 896. The profits lost to a mill owner be- cause of the non-delivery of logs as contracted for, to be manufactured into lumber at a fixed price, are not too speculative. Barrett v. Grand Rapids Veneer Works, 110 Mich. 6, 67 N. W. Rep. 976. § Gi.] KEQUIKED CEKTAIXTY OF DAMAGES. 205 their subcontract for the marble at the quarry, Kelson, C. J., said: " It is not to be denied that there are profits or gains derivable from a contract which are uniformly rejected as too contingent and speculative in their nature and too dependent upon the fluctuation of the markets and chances of business to enter into a safe or reasonable estimate of damages. Thus any supposed successful operation the party might have made if he had not been prevented from realizing the proceeds of the contract at the time stipulated is a consideration not to be taken into the estimate. Besides the uncertain and con- tingent issue of such an operation in itself considered it has no legal or necessary connection with the stipulations between the parties and cannot, therefore, be presumed to have en- tered into their consideration at the time of contracting. It has accordingly been held that the loss of any speculation or enterprise in which a party may have embarked, relying on the proceeds to be derived from the fulfillment of an existing contract, constitutes no part of the damages to be recovered in case of breach.^ So, a good bargain made by a vendor, in anticipation of the price of the article sold ; or an advantageous contract of resale made by a vendee confiding in the vendor's promise to deliver the article, are considerations excluded as too remote and contingent to affect the question of dam- ages. . . . When the books and cases speak of the profits anticipated from a good bargain as matters too remote and uncertain to be taken into account in ascertaining the true measure of damages they usually have reference to de- [115] pendent and collateral engagements entered into on the faith and in expectation of the performance of the principal con- tract. The performance or non-performance of the latter may, and doubtless often does, exert a material influence upon the collateral enterprises of the party; and the same may be said as to his general affairs and business transactions. But the in- fluence is altogether too remote and subtle to be reached by legal proof or judicial investigation. And besides, the conse- quences, when injurious, are as often, perhaps, attributable to the indiscretion and fault of the party himself as to the con- duct of the delinquent contractor. His condition, in respect 1 Shoemaker v. Acker, 116 Cal. 239, 245, 48 Pac Rep. 62. See § 47. •20G COMPENSATION. [§ 64. to the measure of damages, ought not to be worse for having failed in his engagement to a person whose affairs are embar- rassed than if it had been made with one in prosperous or af- fluent circumstances.^ But profits or advantages which are the direct and immediate fruits of the contract entered into be- tween the parties stand upon a different footing. These are part and parcel of the contract itself, entering into and con- stituting a portion of its very elements ; something stipulated for, the right to the enjo3'ment of which is just as clear and plain as to the fulfillment of any other stipulation. They are presumed to have been taken into consideration and deliberated upon before the contract was made, and formed, perhaps, the only inducement to the arrangement.^ The parties may have entertained different opinions concerning the advantages of the bargain, each supposing and believing that he had the best of it ; but this is mere matter of judgment, going to the for- mation of the contract, for which each has shown himself will- ing to take the responsibility, and must, therefore, abide the hazard." Applying these principles to the case the learned judge said: " The plaintiffs' claim is substantially one for not accepting goods bargained and sold ; as much so as if the sub- ject-matter of the contract had been bricks, rough stones or other article of commerce used in the process of building. The only difficulty or embarrassment in applying the general rule grows out of the fact that the article in question does not ap- pear to have any well-ascertained market value. But this can- not change the principle which must govern, but only [116] the mode of ascertaining the actual value, or rather the cost to the party producing it. AVhere the article has no market value an investigation into the constituent elements of the cost to the party who has to furnish it become necessary, and that, compared with the contract price, will afford the meas- 1 Dom., B. 3, tit. 5, § 2, art. 4. Treat v. Hiles, 81 Wis. 280, 50 N. W. 2 Shoemaker v. Ackei", supra,qnot- Rep. 896; Anvil Mining Co. v. Burn- ing the text; Goldhammer v. Dyer, ble, 153 U. S. 540, 14 Sup. Ct. Rep. 7 Colo. App. 29, 42 Pac. Rep. 177; 876; Farmers' Loan & Trust Co. v. Paola Gas Co. v. Paola Glass Co., 56 Eaton, 114 Fed. Rep. 14, 51 C. C. A. Kan. 614, 633, 44 Pao. Rep. 631, 54 640; Owensboro-Harrison Telephone Am. St. 598; Hirschhorn v. Bradley, Co. v. Wisdom, 23 Ky. L. Rep. 97, 63 Iowa, — , 90 N. W. Rep. 592; S. W. Rep. 529. § 64.] EEQUIRED CERTAINTY OF DAMAGES. 207 ure of damages. The jury will be able to settle this upon evi- dence of the outlays, trouble, risk, etc., which enter into and make up the cost of the article in the condition required by the ■contract at the place of delivery. ... It has been ar- gued that, inasmuch as the furnishing of the marble would have run through a period of five years — of which about one year and a half only had expired at the time of the suspension — the benefits which the party might have realized from the ex- ecution of the contract must necessarily be speculative and con- jectural ; the court and jury having no certain data upon which •to make the estimate. If it were necessary to make the esti- mate upon any such basis the argument woukl be decisive of the present claim. But in my judgment no such necessity ex- ists. When the contract, as in this case, is broken before the arrival of the time for full performance, and the opposite party elects to consider it in that light, the market price on the day of the breach is to govern in the assessment of damages. In other words, the damages are to be settled and ascertained ac- cording to the existing state of the market at the time the cause of action arose and not at the time fixed for full per- formance. ... It will be seen that we have laid alto- gether out of view the subcontract . . . and all others that may have been entered into by the plaintiffs as preparatory and subsidiary to the fulfillment of the principal one with the defendants. Indeed, I am unable to comprehend how these can be taken into the account, or become the subject-matter p\ consideration at all in settling the amount of damages to be recovered for a breach of the principal contract. The defend- ants had no control over or participation in the making of the subcontracts, and are certainly not to be compelled to assume them if improvidently entered into. On the other hand, if they were made so as to secure great advantages to the plaint- iffs, surely the defendants are not entitled to the gains which might be realized from them. In any aspect, therefore, [117] these subcontracts present a most unfit as well as unsatisfac- tory basis upon which to estimate the real damages and loss occasioned by the default of the defendants. . . . And yet, the fact that these subcontracts must ordinarily be entered into preparatory to the fulfillment of the principal one shows -the injustice of restricting the damages m cases like the pres- 208 COMPENSATION. [§ G5. ent to compensation for the work actually done, and the item of the materials on hand. AYe should thus throw the whole loss and damage that ^vould or might arise out of contracts for further materials, etc., entirely upon the party not in de- fault. If there was a market value of the article in this case, the question would be a simple one. As there is none, how- ever, the parties will be obliged to go into an inquiry as to the actual cost of furnishing the article at the place of delivery; and the court and iurv should see that in estimatinfj this amount it be made upon a substantial basis, and not left to rest upon loose and speculative opinions of witnesses. The constituent elements of the cost should be ascertained from sound and reliable sources; from practical men, having experi- ence in the particular department of labor to which the con- tract relates. It is a very easy matter to figure out large profits upon paper; but it will be found that these, in a great majority of the cases, become seriously reduced when sub- jected to the contingencies and hazards incident to actual per- formance. A jury should scrutinize with care and watchful- ness any speculative or conjectured account of the cost of furnishing the article that would result in a very unequal bar- gain between the parties, by which the gains and benefits, or, in other words, the measure of damages against the defend- ants, are unreasonably enhanced. They should not overlook the risks and contingencies which are almost inseparable from the execution of contracts like the one in question, and which increase the expense independently of the outlay in labor and capital." § 65. Tiolation of contract to lease. The plaintifi' agreed with the defendant to take a lease of premises belonging to the latter for the purpose, as he knew, of carrying on a trade wdiich plaintiff was about to commence. The defendant wil- fully refused to carry out his agreement, and plaintiff was unable for fifteen weeks to commence business. Specific per- formance of the agreement was decreed and damages were awarded for loss of profit.^ The damages resulting from the 1 Jaques v. Millar, 6 Ch. Div. 153. 36 Ark. 518; Beidler v. Fish, 14 111. Alexander v. Bishop, 59 Iowa, 572, 13 App. 623, are not in accord with the N. W. Rep. 714; Brock way v. Thomas, English case. I CO.] KEQUIEED CERTAINTY OF DAMAGES. 209 failure to perform a contract to rent premises is tlie difference between what they were worth and the rent agreed upon.^ Where the lease of a farm which was to be worked on shares for several years stipulated that if the owner exercised his re- served right to sell the farm during the term he should pay any damages which the lessee sustained by giving up posses" sion, the latter's rights are the same as they would have been if the sale had been made wrongfully; he was entitled to re- cover the value of his contract — what the privilege of occu- pying and working the farm was worth, subject to the terms of the contract and under all the contingencies liable to affect the result.^ But time spent by the person who was to be the lessee in securing other premises is not an element of the dam- ages.' If the lessee of business premises is evicted and his business broken up he may recover the prospective profits thereof for the remainder of the term.^ If the lessor of busi- ness property fails to keep it in repair as he agreed to do the lessee may recoup for the loss of custom and the profits he might have made but for the breach; and it will be enough for him to show facts which enable the jury to approximate his losses.* A lessee who violates covenants in the lease as to posting a notice " to let " and allowing the premises to be shown will be liable for the loss of rent resulting.*^ § 66. Profits of labor. Where a party has contracted to perform labor from which a profit is to spring as a direct re- sult of the work done at the contract price, and is prevented from earning this profit by the wrongful act of another party, its loss is a direct and natural result which the law will pre- sume to follow the breach of the contract; and he is en- [118] 1 Eastman v. Mayor, 152 N. Y, 468, Trust Co. v. Eaton, 114 Fed. Rep. 14, 46 N. E. Rep, 461. 51 C. C. A. 640, applying the rule to - Depew V. Ketchum, 75 Hun, 227, the termination of tlie lease of a 27 N. Y. Supp. 8; Taylor v. Bradley, railroad executed by a receiver; 39 N, Y. 129; Shoemaker v. Craw- Owensboro-Harrison Telephone Co. ford, 82 Mo. App. 487; Cilley v. v. Wisdom, 23 Ky. L. Rep. 97, 62 S. Hawkins, 48 111. 808; North Chicago W. Rep. 529 (violation of lease for Street R. Co. v. Le Grand Co., 95 111. use of telephone). App. 435. 5 Stewart v. Lanier House Co., 75 3 Schultz V. Brenner, 24 N. Y. Misc. Ga, 582. 522, 53 N. Y. Supp. 972. 6 United States Trust Co. v. ^Snow V. Pulitzer. 142 N. Y. 263, 36 O'Brien, 143 N. Y. 284, 38 N. E. Rep. N. E. Rep. 1059; Farmers' Loan & 266. See ch. 20. Vol. 1 — 14 210 COMPENSATION. [§ 67. titled to recover it without special allegations in his declara- tion. The amount of damage may be established by showing how much less than the contract price it will cost to do the work or perform the contract.^ Actual damages clearly in- clude the direct and actual loss which a plaintiff sustains j^^ro/;- ter rem ipsam non habitam. And in case of such contracts the loss of profits, among other things, is the difference between the cost of doing the work and the price to be paid for it. This difference is the inducement and real consideration which causes the contractor to enter into the contract. For this he expends his time, exerts his skill, uses his capital and assumes the risks which attend the enterprise. Where profits are ad- visedly spoken of as not a subject of damages it will be found that something contingent upon future bargains, or specu- lations, or state of the market is referred to, and not the dif- ference between an agreed price of something contracted for and its ascertainable value or cost.^ § 67. Profits from coniniercial ventures. The success of busi- ness ventures is not antecedently certain in an absolute sense; they are generally undertaken in reliance upon probabilities 1 Leonard v. Beaudry, 68 Mich. 310, 10 Bush, 185: Wallace v. Tumlin, 42 13 Am. St. 344, 36 N. W. Rep. 88; Ga. 462; United States v. Smith, 94 Mississippi & Rum River Boom Co. U. S. 214; Somers v. Wright, 115 V. Prince, 34 Mich. 71, 24 N. W. Rep. Mass. 292; Richmond v. D. & S. C. 344; Oldham v. Kerchner, 79 N. C. R. Co., 40 Iowa, 264; Fail v. McRee, 106; Jolly v. Single, 16 Wis. 280; 36 Ala. 61; Goldman v. Wolff. 6 Mo. Kinney v. Crocker, 18 id. 74; Hinck- App. 490; Dennis v. Maxfield, 10 ley V. Beckwith, 13 Wis. 31; McAn- Allen, 138; Skagit R. & L. Co. v. drews v. Tippett, 39 N. J. L. 105; Cole, 2 Wash. 57, 25 Pac. Rep. 1077; United States v. Speed, 8 Wall. 77; Fell v. Newberry, 106 Mich. 542, 64 Doolittle V. McCullough. 12 Ohio St. N. W. Rep. 474: O'Connor v. Smith, 360; Middekauff v. Smith, 1 Md. 343; 84 Tex. 232, 19 S. W. Rep. 168; Bar- Clark V. Mayor, 4 N. Y. 338. 53 Am. ret v. Grand Rapids Veneer Works, Dec. 379; Cook v. Commissioners of 110 Mich. 6, 67 N. W. Rep. 976; Ram- Hamilton, 6 McLean, 612; Frye v. sey v. Holmes Electric Protective Maine, etc. R. Co., 67 Me. 414; Lentz Co., 85 Wis. 174, 55 N. W. Rep. 391; V. Choteau, 42 Pa. 435; James v. Equitable Mortgage Co. v. Wedding- Adams, 8 W. Va. 568; Cramer v. ton, 2 Tex. Civ. App. 373, 21 S. W. Metz, 57 N. Y. 659; Devlin v. Mayor, Rep. 576. See ch. 15. 63 N. Y. 8; Hoy v. Gronoble, 34 Pa. 2 Philadelphia, etc. R. Co. v. How- 9, 75 Am. Dec 628; Thompson v. ard, 13 How. 344; O'Connor v. Smith, Jackson, 14 B. Mon. 114; Fox v. Hard- 84 Tex. 232, 19 S. W. Rep. 168; Hirsch- ing, 7 Cusli. 516; Milburn v. Belloni, horn v. Bradley, — Iowa, — , 90 N. 39 N. Y. 53, 100 Am. Dec. 403; Eliza- W. Rep. 592. bethtown, etc. R Co. v. Pottiuger, ^ 67.] EEQUIEED CERTAINTY OF DAMAGES. 211 based upon the law of demand and supply. Though specula- tive in their inception, by anticipating future values, they are generally retrospectively examined when they become subjects of judicial investigation, and then such values are capable of proof. If the business, the profits from which are in ques- tion, is a trading business they must depend on a succession of purchases of stock of some sort for sale, or the emj)loyment of labor or material to be purchased for its production, and a succession of sales to prospective customers. Where the [110] injury complained of is an interruption or prevention of such a business, or causes a diminution of it, it is scarcely pocsible to establish damages to a very high degree of certaint3^^ In many cases the best conclusion will be merely a probable one. The rule of law is the same in all cases that the damages be proved with certainty ; but a greater degree of certainty being attainable in some cases than is possible when the result sought depends on the chances of future bargains, the law will not permit the proof which is certain to be neglected, and resort be made to that which is less satisfactory; though the latter, in other cases, is the best the nature of the case admits of, and must be received as the only guide to the proper amount of compensation, and is then available.^ The damages resulting from the breach of an agreement to furnish the plaintiff facil- ities for carrying on his business in a store during a fixed term were sufficiently shown by proof of the gross receipts made 1 See Paola Gas Co. v. Paola Glass Dr. Harter Medicine Co. v. Hopkins, Co., 56 Kan. 614. 623, 44 Pac. Rep. 83 Wis. 309, 53 N. W. Rep. 501. 621, 54 Am. St. 598. In an action to recover for mis- ■"i Fairchild v. Rogers, 33 Minn. 269, representations concerning liis busi- 20 N. W. Rep. 191; Alexander v. ness the plaintiff alleged injury to Breeden, 14 B. Mon. 154; Houston, his credit, whereby he was unable etc. R. Co. V. Hill, 70 Tex. 51, 7 S. W. to obtain goods to sell, and that lie Rep. 659: Same v. MoUoy, 64 Tex. therefore lost profits. The damage 607; Kelly v. Miles, 58 N. Y. Super, claimed under the latter head was Ct. 495, 12 N. Y. Supp. 915: Oliver v. too remote. Bradstreet Co. v. Os- Perkins, 53 N. W. Rep. 609. 92 Mich, wald, 90 Ga. 396, 23 S. E. Rep. 423. 304; Treat v. Hiles. 81 Wis. 280, 50 One cannot recover the loss of the N. W. Rep. 896; World's Columbian prospective profits of a business Exposition Co. v. Pasteur-Chamber- which is illegal, and which he dis- land Filter Co., 82111. App. 94; Eraser continued because of threats. Prude V, Echo Mining & Smelting Co., 9 v. Sebastian, 107 La. 64, 31 So. Rep. Tex. Civ. App. 210, 28 S. W. Rep. 714; 764» 212 COMPENSATION. [§ 68. during the two years business was done there, the net profits, the income obtained elsewhere during the succeeding year, and what plaintiff was able to earn after his business in the store was broken up.^ § 68. Profits on dissolution of partnership. One partner may maintain an action at law against another for a breach of the copartnership articles in dissolving before the time lim- ited therefor, and may do so before the expiration of the period for which the partnership was to continue. The damages are the profits which would have accrued to the plaintifi: from the continuation of the partnership business, and which are lost by its unauthorized dissolution.- The only legitimate beneficial consequence of continuing a partnership is the making of profits. The most direct and legitimate injurious consequence which can follow upon an unauthorized dissolution of a partnership is the loss thereof. Unless that loss can be made up to the in- jured party it is idle to say that any obligation is imposed by a contract to continue a partnership for a fixed period.^ It is safe to say that such profits cannot be proved except to a rea- sonable probability. The profits immediately before the dis- solution may be shown as a competent fact for the considera- 1 Dickinson v. Hart, 143 N. Y. 183, and having the means to buy? As 36 N. E. Rep. 801. illustrating this question the actual 2 Bagley v. Smith, 10 N. Y. 489, state and condition of the property, 61 Am. Dec. 756; Treat v. Hiles, 81 business and assets of the firm at the Wis. 280, 50 N. W. Rep. 896. time, together with proof of actual 'Bagley v. Smith, supra; McNeill results accomplished, whether of V. Reid. 9 Bing. 68; Gale v. Leckie, profit or loss or both, in the past, 2 Stark. 107; Mitchell v. Read, 84 would be competent evidence. Be- N. Y. 556; Burckhardt v. Burck- yond this, at least so far as conjec- hardt, 4J Ohio St. 474, 498, 58 Am. tural profits in the future are con- Rep. 842, citing the text and apply- cerned, it would not be .safe to go." ing the principle to the breach of a Where one partner rendered serv- contract for the sale of the good-will ices and the otlier furnished the cap- of a business. ital, there being no time fixed for the In Reiter v. Morton, 96 Pa, 229, 242, duration of the partnership, the dam- the measure of damages for the ages recoverable by the former for wrongful dissolution of a manufac- its wrongful dissolution were tha turing partnership was held to be the value of his services, skill, etc., in actual money value of the plaintiffs conducting the partnership business, interest in the firm at the time of and not his share of profits for any the breach. "What would the inter- specific time. Ball v. Britton, 58 est sell for to a person willing to buy Tex. 57. § GS.] EEQUIKED CEETAINTY OF DAMAGES. 213 tion of the jury. In Bagley v. Smith ' Judge Johnson said: "It seems to me quite obvious that outside of a court of [120] justice no man would undertake to form an opinion as to pros- pective profits of a business without in the first place inform- ing himself as to its past profits, if that fact were accessible. As it is a fact in its nature entirely capable of accurate ascer- tainment and proof, I can see no more reason why it should be excluded from the consideration of the tribunal called upon to determine conjecturally the amount of prospective profits than proof of the nature of the business, or any other circumstances connected with its transaction. It is very true that there is great difficulty in making an accurate estimate of future profits, even with the aid of knowing the amount of past profits. This difficulty is inherent in the nature of the inquiry. We shall not lessen it b}^ shutting our ej^^es to the light which the pre- vious transactions of the partnership throw upon it. Kor are we more inclined to refuse to make the inquiry, by reason of its difficulty, when we remember that it is the misconduct of the defendants which has rendered it necessary." In a subse- quent case, where the business in the past had been a losing one, it was held error to charge, as the plaintiff requested, that the jury were not confined in estimating damages to the rate of profits at the time of dissolution, but might consider and give damages for profits that would probably have been made by the higher prices; and might consider the present and prob- able future rate during the balance of the partnership, though the court added: " It requires some care. You are not to guess about this matter. If you can rationally see through this that the profits would have been greater in the future, and are greater at the present time than at the time of the dissolution, and you believe that the present increased profits, if such there would be, are likely to continue and increase, and you can sat- isfy yourselves of this in your own mind, then you have the right to look through the remainder of the time of the partnership, making a very careful estimate in regard to what the profits might probably be." The supreme court regarded the instruc- tion to give damages for profits that would prohdbly have been made by the higher prices, and authorizing the jury to consider 1 10 N. Y. 489, 61 Am. Dec. 756. 214 COMPENSATION. [§ 60. the present and probable future rate, as going beyond any pre- vious case in favor of speculative and contingent profits; the former case was referred to as adhering to the rule of certainty. The court say, also, " The case at bar differs from that case, [121] and the cases cited therein, inasmuch as in those cases where the court was submitting the question of damages to the jury they were no longer prospective; but at the time of the trial in those cases respectively, the time had expired up to which the profits in question were to be estimated. In such cases all the data for ascertaining what profits might have been obtained from the business could be furnished by witnesses and there was no need of resorting to conjecture." ^ This case insists on a more rigid rule than the former one. It was, how- ever, a case in which there was very little data for finding even a probable profit.^ If one partner fails to pay in a portion of his share of the capital and the copartner continues in the firm until it is dissolved by mutual consent, there cannot be a re- covery of profits which might have been made if such share had been fully paid; the payment of interest will adjust the parties' rights.'' Where a copartner to whom a premium has been paid wrongfully brings an action to dissolve the partner- ship the premium may be apportioned and an equitable part of it be adjudged in such action to be returned.^ § 69. Commercial agencies. The contracts between com- mercial agents and their principals embody as many elements of uncertainty as are usually found in combination; among others (at least where the compensation is based upon com- missions) the state of trade, quality and price of the goods of- fered, the skill, energy and industry with which the business is prosecuted, the credit of the parties to whom the sales are made, and the acceptance of the agent's orders by his princi- pal, are all considerations which tend to make the damages 1 Van Ness v. Fisher, 5 Lans. 236. Iowa, 423; Satchwell v. Williams, 40 2See Dobbins V. Duquid, 66 111.464; Conn. 371; Schile v. Brokhahus, 80 Park V. C. & S. W. R Co., 43 Iowa, N. Y. 614; Treat v. Hiles, 81 Wis. 280, 636; Smith v, Wunderlich,70Ill. 426; 50 N. W. Rep. 896. Sewall's Falls Bridge v. Fisk. 28 N. H. ^Delp v. Edlis, 190 Pa. 25, 43 Atl. 171; Shafer v. Wilson, 44 Md. 268; Rep. 463. Lacour v. Mayor, 3 Duer, 406; St. * Corcoran v. Sumption, 79 Minn. John V. Mayor, 13 How. Pr. 527; 108, 81 N. W. Rep. 761. Richmond v. Dubuque, etc. R. Co., 33 § C9.J REQUIRED CERTAINTY OF DAMAGES. 215 sustained by an agent by reason of the wrongful revocation of his agency so uncertain as to be diificult, if not impossible, of ascertainment.^ Past sales do not afford a safe basis for esti- mating future profits because the conditions may not remain as they were,- and also because the time and service of the salesman, which have been given to the making of them, will be his, on the termination of the employment, to use other- wise.^ The damages in cases of this class are not speculative or remote, and the difficulty in ascertaining them does not deter courts from awarding such compensation for their breach as the evidence shows with reasonable certainty the wronged party is entitled to. It would be a reproach to the law if he could not recover all the damages sustained.* Where an agent selling on commission was discharged three months before the expiration of his contract the court said it could see no great difficulty in proving facts that would enable a jury to determine approximately the amount of goods the plaintiff would have sold during that time. He had been a traveling salesman for the defendant during the two preced- ing years, and his sales during the corresponding months of those 3^ears could have been shown, as might the state of the markets, the number of his regular customers, etc.^ If the agent, at the time of the revocation of his authority, had agreements for sales which he could have consummated but for the wrong:- ful act of his principal he is entitled to his commissions on them, if it is clear that they would have been made. Mere expectations, doubtful offers or other vague or indefinite as- surances of intention to purchase are speculative.^ The loss of employment is an element of damage, but no standard can be fixed for ascertaining the extent of it.^ If the principal 1 Union Refining Co. v. Barton, 77 ^ Baldwin v. Marqueze, 91 Ga. 404, Ala. 148; Brigliam v. Carlisle, 78 id. 18 S. E. Rep. 309. 243, 56 Am. Rep. 28; Stern v. Rosen- ^Cranmer v. Kohn, 7 S. D. 247, 64 heim, 67 Md. 503, 10 Atl. Rep. 221, N. W. Rep. 125. 307. See Noble v. Hand, 163 Mass. ^See Dowagiac Manuf. Co. v. Cor- 289, 39 N. E. Rep. 1020. bit, 127 Mich. 473, 86 N. W. Rep. 2 Id.; Washburn v. Hubbard, 6 954, 87 id. 886. Lans. 11; Hair v. Barnes, 26 111. App. ' Beck v. West, 87 Ala. 213, 6 So. 580. Rep. 70. 3 Ray V. Lewis, 67 Minn. 365, 69 N. W. Rep. 1100. 216 COMPENSATION. [§ 69. has accepted orders from his agent and refused to fill them the commission thereon may be recovered ; ^ but not damages which resulted to the business of the agent otherwise.'^ A more liberal rule has been held in a case which has been often cited.^ The contract sued upon provided that if the plaintiff should sell fifty of defendant's machines to one firm in Mexico for every such sale he should have the exclusive agency of the machines in that locality, they to be furnished by the defendant at the lowest price, and the plaintifl" to receive a commission. Two such sales were made, the order for one of which was filled; the other order was not filled; the contract was repu- diated. Agencies were established by the plaintiff at the places where these sales were made. The court observed that these agencies were to be exclusive, and to have some permanency. They were valuable to the plaintiff, and though there was diSiculty in ascertaining the damages he sustained, it was not greater than existed in other cases where profits had been recovered. There were some facts upon which a jury could base a judgment, not certain nor strictly accurate, but sufficiently so for the administration of justice; such as the fact that sales had been made before the breach and after- wards; the qualifications of the agent and those who operated under him to make sales; the facilities for carrying on busi- ness, and like facts would have warranted a verdict which would have approached as near the proper measure of justice as the nature of the case and the infirmity which attaches to the administration of the law will allow.'' In another case 1 Taylor Manuf. Co. v. Hatcher 476, 95 Fed. Eep. 222, 53 L. R. A. Manuf. Co., 39 Fed. Rep. 440, 3 L. R 33, approving the Wakeman case, A. 587. supra; Hitchcock v. Supreme Tent 2 Id. Knights of Maccabees, 100 Mich. 40, 3 Wakeman v. Wheeler & W. 58 N. W. Rep. 640, 43 Am. St. 423; Manuf. Co., 101 N. Y. 205, 54 Am. Hirschhorn v. Bradley, Iowa, Rep. 671, 4 N. E. Rep. 264; Bannatyne 90 N. W. Rep. 592. See Meylert v. Gas V. Florence Milling & Mining Co.. 77 Consumers' Benefit Co.. 26 Abb. N. Hun, 289, 28 N. Y. Supp. 334, apply- C. 262, 14 N. Y. Supp. 148; ^ 62, and ing the rule in the Wakeman case, Mechanics' & Traders' Ins. Co. v. Mc- supra; Crittenden v. Johnston, 7 Lain, 48 La. Ann. 109, 20 So. Rep. 278. App. Div. 258, 40 N. Y. Supp. 87; < In Howe Machine Co. v. Bryson, More V. Knox, 52 App. Div. 145, 44 Iowa, 159, 24 Am. Rep. 735, a ma- 64 N. Y. Supp. 1101; Wells v. jority of the court held that an National L. Ass'n, 39 C. C. A. agent could not recover as damages § G9.] KEQUIKED CERTAINTY OF DAMAGES. 217 there was an unauthorized revocation of the sole agency for the sale of an article. The agent's recovery was measured by the profits he might have realized if there had been no breach of the principal's contract. In order to determine what they would have been, proof of the actual sales of the article made by the agent's successor during the term the former was enti- tled to the agency was admissible.^ On the revocation of the sole agency for the sale of an article in prescribed territory evidence of the sales made by the agent after the breach and up to the time of the trial is competent to establish his claim for the loss of profits.- The breach of a contract giving the plaintiff a general ■agency for a term of years, within a specified territory, of a life insurance company, he to have sole charge of such terri- tory, establish sub-agencies and receive as compensation com- missions on the first and subsequent premiums paid, gives a cause of action for loss of commissions on premiums to be- come due afterward. It was said : " It is evident that all the schemes of insurance referred to in the contract to be offered to the public contemplated the keeping of the policies alive by payments made from time to time subsequent to the first year's premium. Between the parties to the contract, the presumption is that the policies would be kept alive, and these subsequent payments — renewal premiums as they are called — would be received by the defendant companj'-. The conduct of that company in breaking the contract entitles the plaintiff to this presumption and puts upon the defendant the burden for the breach of a contract to fur- view, see Wells v. National L. Ass'n, nish him machines to sell on com- 39 C. C. A. 476, 95 Fed. Rep. 222, 53 mission the proiits which might have L. R. A. 33. been realized if the contract had i Mueller v. Bethesda Mineral been performed. The New York Spring Co.. 88 Mich. 390, 50 N. W. court in the case considered in the Rep. 319, approved in Cranmer v. text concurs with the two Iowa Kohn, 7 S. D. 347. 64 N. W. Rep. 125; judges who dissented. It is said in Hirschhorn v. Bradley, — Iowa, — , Hirschhornv. Bradley, SMpra; If the 90 N. W. Rep. 592. Schumaker v. question considered in Machine Co. Heinemann, 99 Wis. 251, 74 N. W. v. Bryson, supra, were now before Rep. 785, is in harmonj- with the us for the first time, we might, in cases sustaining the right to recover view of the later authorities, incline profits. to the view expressed in the dissent- - Hirschhorn v. Bradlej', supi^a. ing opinion. As supporting that 218 COMPENSATION. [§ 69.. of showing the contrary, if it exists, and the extent to which it does exist. So all uncertainty is eliminated from this branch of the plaintiff's claim for loss of profits. As to the other branch, assuming, as we must for the present do, that the de- fendant breached the contract as alleged in the petition, en- tered the territory allotted to the plaintiff, and has through other agents and agencies, since the date of the breach, writ- ten a large amount of other insurance, such as the contract between the parties contemplated would be obtained by and through the action of the plaintiff and his sub-agents, the amount of such insurance so taken and carried by the defend- ant up to the time of the trial may be exactly shown by the testimony of the managing agents of the defendant, or by its books, or by both. . . . There can be, therefore, no substan- tial difficulty in arriving at this amount, at least with substan- tial accuracy. . . . Whether he could, and with reason- able probability would, have done all or a definite portion of this work, had the defendant not breached the contract, is a proper subject for the finding of a jury on the proof that may be offered as to the means which the plaintiff had organized and was using for the efficient prosecution of this work, compared with the means and effort which the defendant has used in its accomplishment of the work so done by it in the territory allotted to the plaintiff. He is not necessarily or even probably entitled to receive the full specified rate of per cent, on the first year's and subsequent premiums paid and to be paid on policies so issued by defendant through its other agents and agencies, for some deduction must necessarily be made on account of the fact that he could incur no current expenses, nor render any personal services in the procurement of this insurance thus obtained by the defendant through its other agents and a2:encies. The condition of the business " in the territory assigned to the plaintiff " at the time of the breach ; the means that had been used and were being used by the plaintiff to work the territory allotted to him; the machinery which he had organized for the purpose of that work; the reasonable cost of its continued operation; the extent of the territory allotted to him ; the number of persons therein who were fit subjects for such insurance as the defendant proposed to write; the reasonable relative proportion of cost for th& § 70.] KEQUIRED CERTAINTY OF DAMAGES. 219 first year of organizing the business and putting it in opera- tion to the cost of continuing its conduct during the subse- quent years; the machinery actually used by the defendant after it entered the territory allotted to the plaintiff, and its success, through the use of this machinery, and the agencies it established, in obtaining applicants for insurance and hold- ers for its policies, should all be given to the jury." ' A manu- facturer of a particular style of hats who gives a local dealer the exclusive agency for their sale cannot, upon withdrawing the agency, refuse to fill orders sent by the agent and accepted prior to the termination of the agency; and where such agency is transferred to another dealer in the same city, so that it was impossible for the deposed agent to buy the hats at whole- sale, he may prove the retail price charged by the new agent as tending to show the market value of the hats called for by such orders, and as establishing the measure of recovery for the profits lost. The plaintiff's right to such profits was not affected because he sold other hats as valuable as those made by the defendant, nor though he sold as many of such as he would formerly have sold of those furnished by the defend- ant.^ In ascertaining the value of such an agency no account is to be taken of the stock in the hands of the agent which he has paid for, the principal not having bound himself to take it from the agent.* § 70. Tortious interference with business. In actions for torts injurious to business the extent of the loss is provable by the same testimony as in actions to recover for the loss of profits caused by the breach of contracts, and recovery may be had for 1 Wells V. National L. Ass'n, 39 C. the goods so bought within a certain C. A. 476, 489, 99 Fed. Rep. 222, 58 L. territory, in which the vendor has a R A. 33; Hitchcock v. Supreme Tent monopoly, and he, violating his con- Knights of Maccabees, 100 Mich. 40, tract, sells goods to other persons 58 N. W. Rep. 640, 43 Am. St. 423. within such territory, he is liable to See Lewis v. Atlas Mut. L. Ins. Co., the first person for the profits he 61 Mo. 534; Pellett v. Manufacturers' may show, with reasonable certainty, & Merchants' Ins. Co., 43 C. C. A. would have been his if there had 669, 104 Fed. Rep. 502. not been a breach of the contract. 2 More V. Knox, 52 App. Div. 145, Russell v. Horn, etc. Manuf. Co., 41 64 N. Y. Supp. 1101. Neb. 567, 59 N. W. Rep. 901. Where a person has the exclusive 3 Vosburg v. Mallory, 70 App. Div. right to buy from another and resell 247, 75 N. Y. Supp. 480. 220 COMPENSATION. [§ 70. such as is proved with reasonable certainty; it is enough to show what the profits would probabl}^ have been.^ Certainty is very desirable in estimating damages in all cases; and where from the nature and circumstances of the case a rule can be discov- ered by which adequate compensation can be accurately meas- ured, it should be applied to actions of tort as well as to those upon contract. The law, however, does not require impossi- bilities; and cannot, therefore, demand a higher degree of cer- tainty than the nature of the case admits. If a regular and established business is wrongfully interrupted the damage thereto can be shown by proving the usual profits for a reason- able time anterior to the wrong complained of.^ But it is other- wise where the business is subject to the contingencies of weather, breakages, delays, etc." There is no good reason for requiring any higher degree of certaintj^ in respect to the amount of damages than in respect to any other branch of a cause. Juries are allowed to act upon probable and inferential as well as direct and positive proof. And when from the nat- ure of the case the amount of the damages cannot be estimated with certainty, or only a part of them can be so estimated, no 1 Allison V. Chandler, 11 Midi- 543; 661, 26 N. W. Rep. 524: Schriver v. Dennery v. Bisa. 6 La. Ann. 365; Johnstown. 71 Hun, 232, 24 N. Y. Shepard v. Milwaukee G. L. Co., 15 Supp. 1083, affirmed without opin- Wis. 318, 82 Am. Dec. 679: SewalPs ion, 148 N. Y. 758; Langan v. Potter, Falls Bridge v. Fisk, 23 N. H. 171; 8 N. Y. Misc. 541, 28 N. Y. Supp. 752; Schile V. Brokhahus, 80 N. Y. 614; Williams v. Island City Milling Co., Oliver v. Perkins, 92 Mich. 304, 52 N. 25 Ore. 573, 589, 37 Pac. Rep. 49, cit- W. Rep. 609: Jackson v. Stanfield, ing the text; Paul v. Cragnaz, 25 137 Ind. 592, 36 N. E. Rep. 345; White Nev. 293, 320, 47 L. R. A. 540, 59 Pac. V. Moseley, 8 Pick. 356; French v. Rep. 57. 60 id. 982; Exchange Tel. Connecticut River Lumber Co., 145 Co. v. Gregory, [1896] 1 Q. B. 147; Mass. 261, 14 N. E. Rep. 113; Terre Hartman v. Pittsburgh Incline Co., Haute V. Hudnut, 112 Ind. 542, 13 N. 159 Pa. 442. 28 Atl. Rep. 145; Leach E. Rep. 686; National Fibre Board v. New York, etc. R Co., 89 Hun. 377, Co. V. Lewiston & A. Electric Light 35 N. Y. Supp. 305; Butler v. Man- Co., 95 Me. 318, 49 Atl. Rep. 1095; hattan R. Co., 143 N. Y. 417, 38 N. E. Paul E. Wolff Shirt Co. v. Franken- Rep. 454, 42 Am. St. 738. 26 L. R A. thai, 70 S. W. Rep. 378, — Mo. App. 46; Goebel v. Hough, 26 Minn. 252, ; Pacific Steam Whaling Co. v. 2 N. W. Rep. 847: Terre Haute v. Alaska Packers' Assn, — Cal. — , Hudnut, 112 Ind. 542, 13 N. E. Rep. 72 Pac. Rep. 161. 686; National Fibre Board Co. v. li Willis v. Perry, 92 Iowa, 297, 306, Lewiston & A. Electric Light Co., 60 N. W. Rep. 727, 26 L. R. A. 124; 95 Me. 318, 49 AtL Rep. 1095. Kyd V. Cook, 56 Neb. 71, 71 Am. St. •■* Cushing v. Seymour, 30 Minn. 301, §T0.] EEQUIRED CERTAINTY OF DAMAGES. 221 objection is perceived to placing before the jury all the facts and circumstances of the case having any tendency to [122] show damages or their probable amount, so as to enable them to make the most intelligible and accurate estimate which the nature of the case will permit. This should, of course, be done with such instructions and advice from the court as the circum- stances may require, and as may tend to prevent the allowance of such damages as may be merely possible, or too remote or fanciful in their character to be safely considered as the result of the injury.^ If the business interfered with was conducted 15 N. W. Rep. 209. In this case plaintiff had entered into contracts for threshing grain before the con- version of the machine which he was to use in executing them. In Jones v. Call, 96 N. C. 337, 60 Am. Rep. 416, 2 S. E. Rep 647, a manufacturer of machines, unlaw- fully prevented from carrjdng on his business, recovered damages to the extent that the machines then con- tracted for would have yielded him a profit. The estimated profits be- yond that point were considered too speculative and remote. See Clem- ents V. State, 77 N. C. 143, doubted in the preceding case. 1 Allison V. Chandler, supra. In this case Christiancy, J., said: " Since, from the nature of the case (one of injury to business), the damages can- not be estimated with certainty, and there is risk of giving by one course of trial less, and by the other more, than a fair compensation — to say nothing of justice — does not sound policy require that the risk should be thrown upon the wrong-doer in- stead of the injured party? However tliis question may be answered, we cannot resist the conclusion that it is better to run a slight risk of giving somewhat more than actual compen- sation than to adopt a rule which, under the circumstances of the case, will, in all reasonable probability, pre- clude the injured party from the re- covery of a large proportion of the damages he has actually sustained from the injury, though the amount thus excluded cannot be estimated with accuracy by a fixed and certain rule." Gilbert v.Kennedy,22Mich.l29. See Jenkins v. Pennsylvania R. Co., 67 N. J. L. 331, 51 AtL Rep 704; Cos- griff V. Miller, — Wyo. — , 68 Pac. Rep. 206, 215. In Hoi den v. Lake Co., 53 N. H. 552, the action was case for so inter- fering with the natural flow of the river, on which the plaintiffs had a mill for the manufacture of woolen goods, as to diminish its production. Upon the question of damages one of the plaintiffs was permitted to state that the cost of the raw ma- terial manufactured at their mill in producing a yard of cloth was about one-half the value of a yard of cloth when finished. There was no evi- dence as to the cost of manufactur- ing a yard of cloth, nor the number of yards manufactured, either monthly or otherwise, but only the aggregate amount of business in dol- lars annuall}'; and the falling off in the aggregate business during the dry months of summer, when the plaintiffs claim they were injured, as compared with the average of the other months of the year. The court say: " It is difficult to see what other rule could have been applied to show what the effect of the alteration 222 COMPENSATION. [i'To. under a license granted by public officers and the issue of a new license depends upon their discretion, profits which might have been realized for a time beyond the existence of the license in was, than by showing the facts before and after the change, and how the change affected the stream and the plaintiffs' rights. . . . The cost of the cloth would be made up of tlie cost of raw materials and of the labor expended in the manufacture. The profits, if anything, would be ascer- tained by deducting from the market value, first, the cost of material, and then the expense of manufacture. But it seems that the expense was not ascertamed in that way, nor the profits. When the mill-owner keeps his whole force through the year on full pay, then the amount he manu- factures less than the full amount for the year would be so much dead loss, without regard to the profits on a single yard; and the value of the ■work lost by lack of water would be found by deducting the cost of raw material from the value of the cloth that would have been made with a full supply of water." In Richmond v. Dubuque, etc. R. Co., 33 Iowa, 422, the railroad com- pany and an elevator company at Dubuque entered into an agreement containing these stipulations: tiiat the latter would erect a building suit- able " for receiving, storing, deliver- ing and handling all grain that shall be i-eceived by the cars of said rail- road company not otherwise con- signed." In a supplement to this contract it was further provided that the elevator company "should re- ceive and discharge for the said rail- road company all through grain at one cent a bushel," etc., and that the elevator should have the handling of all through grain at that price per bushel. It was also provided that in case the grain was held in store for the railroad company more than ten days, then the elevator company should have a certain per cent, per bushel. The contract, by its terms, extended for a period of fifteen years, and at the option of the railroad company it was to be extended fifteen years more, but no times of payment were provided for therein. In an action against the railroad company for refusing to give the elevator company the hand- ling of grain according to the con- tract, the court held that in the estimate of damages the plaintiffs were entitled to recover not only loss of profits which would have re- sulted to them had the " through grain " been delivered as per con- tract, but also the loss of profits re- sulting from the plaintiffs being deprived of the storage of the grain as stipulated. There was allowed $57,750 for the prospective profits of handling through grain at one cent per bushel during the period of the contract, and .$11,250 for prospective profits on storage of grain. The court say, in reference to the last item: " There is not entire certainty as to the amount that ought to be allowed, but this is no reason why none should be given. The law is satisfied with a just and true approx- imation to the true amount." See Howe Machine Co. v. Bryson, 44 Iowa, 159, 24 Am. Rep. 735; Fultz v. Wycoff, 25 Ind. 321; Flick v. Weth- erbee, 20 Wis. 392: Heard v. Holman, 19 C. B. (N. S.) 1; Simmons v. Brown, 5 R. I. 299, 73 Am. Dec. 66; Mc- Knight v. Ratcliff, 44 Pa. 156: The Narragansett, Olcott, 388; Douty v. Bird, 60 Pa. 48; Hanover R. Co. v. Coyle, 55 Pa. 396; Chapman v. Kirby, 49 111. 211; Ludlow v. Yonkers, 43 Barb. 493; Todd v. Minneapolis, etc. .^ 71.] EEQUIKED CERTAINXr OF DAMAGES. 22S force when the wrong was done cannot be recovered.^ A per- son who has been forcibly prevented from fishing in public waters may show the quantity of fish he might have caught, the value of the same, and the probable profits he would have made. As an aid in determining these questions, he may prove the quantity of fish caught in the waters from which he was excluded by the defendant.^ § 71, Chances for prizes and promotions. In an [123] action against a carrier for negligently delaying the transpor- tation of models made to compete for a prize until the award was made, the judges differed as to the measure of damages, and it was left undecided whether they should be given for the labor and materials used in making the models, or whether the chance for the prize might be taken into consideration. Patteson, J., favored the latter: "The goods were made for a specific purpose, which had been defeated by the negligence of the defendant, and they have become useless." Erie, J., said: "I have great doubts whether that chance was [124] not too remote and contingent to be the subject of damages."* In a similar case the plaintiff had delivered to the defend- ants, who were carriers, a box containing plans and specifica- tions to be forwarded to a committee at a distant place, who had offered a premium of 8500 to the successful com- petitor for the best plans for a public building. In conse- quence of the defendants' negligence they were not delivered at their destination until after the premium had been awarded. There was no evidence on the part of the plaintiff to show that there was any probability that his plans would have been adopted, and there was some evidence to the contrary. On this ground it was held that the plaintiff was entitled to only nominal damages. But it Avas held that such proof was ad- missible to show the value of his opportunity to compete, and R Co., 39 Minn. 186, 39 N. W. Rep. i Porter v. Johnson, 96 Ga, 154, 23 318; Swain v. Schiefielin, 134 N. Y. S. E. Rep. 123. 471, 31 N. E. Rep. 1025, 18 L. R. A. 2 Pacific Steam Whaling Co. v. 385; Dickinson v. Hart, 142 N. Y. Alaska Packers* Ass'u, — Cal. — ,72 183, 36 N. E. Rep. 801; Malone v. Pac. Rep. 161. Weill, 67 App. Div. 169, 73 N. Y. » Watson v. Ambergate R. Ca, 15 Supp. 700; Ingram v. Lawson, 6 Bing. Jur. 448. N. C. 212; Savery v. Ingersoll, 46 Hun, 176. 22-i COMPENSATION. [§ 71. that the loss of this was the direct and immediate effect of the neo-lio-ence complained of.^ "It is doubtless true that in all actions for breach of contract the loss or injury must be a proximate consequence of the breach. A remote or possible loss is not sufficient for compensation. There is no measure for those losses which have no direct and necessary connection with the stipulations of the contract, or which are dependent upon contingencies other than the performance of the con- tract, and which are, therefore, incapable of being estimated. "With no certainty can it be said that such losses are attribu- table to the wrongful act or omission of him who has violated his engagement. But, on the other hand, the loss of profits or advantages which must have resulted from a fulfillment of the contract may be compensated in damages when they are the direct and immediate fruits of the contract, and. must^ therefore, have been in the contemplation of the parties when it was made. Applying this rule to the present case, why was. not the loss of the opportunity to compete for the premium (whatever may have been its value) an immediate consequence of the breach of the contract ? The company undertook to transport the box to the committee appointed to award the [125] premium. The purpose of the contract was to secure tO' the plaintiff the privilege of competition. Certainly, he must have had that in contemplation, and, if the company was in- formed of the object of the transmission, the loss of this privi- lege was in view of both parties at the time they entered into the contract. But whether known or not by the compan}^ the loss was an immediate consequence of the negligent breach. We do not now stop to inquire whether the defendants can be held liable for every consequence, even though immediate, which cannot reasonably be supposed to have been in the con- templation of both parties at the time they made the contract as the probable result of the breach of it. Perhaps if the special circumstances under which the contract was made, and which occasioned special and unusual injury to attend its breach, were unknown to the party which broke it, they could not be held to make compensation for more than the amount of injury which generally results from the breach of such con- 1 Adams Exp. Co. v. Egbert. 36 Pa, 360, 72 Am. Dec. 882. § Tl.] EEQUIKED CERTAINTY OF DAMAGES. 225 tracts in cases unattended by any special circumstances. . . . Suppose the engagement of the company had been directly to afford to the plaintiff an opportunity to compete for the pre- mium offered, could he, for the breach of such an agreement, recover more than nominal damages without any proof that any actual injury had resulted from the breach ? We think not. To entitle a plaintiff in an action founded on a contract to recover more than nominal damages for its breach, there must always be evidence that an actual, substantial loss or in- jury has been sustained, unless the contract itself furnishes a guide to the measurement of the damages; and even when there is some such proof and the amount is uncertain, courts have sometimes directed the jury to allow the smallest sum which would satisfy the proof.^ A plaintiff claims compensa- tion. The amount of that compensation is a part of his case. Whether, in the present case, the plaintiff sustained any actual injury depended upon the degree of probability there was that he would be a successful competitor if the contract had not been broken. If his plans were entirely defeated ... it cannot be claimed that he was damaged. He introduced, how- ever, no evidence to show there was the least probability that the premium would have been awarded to him had his plans been submitted to the committee in time." [126] Damages cannot be recovered against a telegraph company because the inaccurate transmission of a message prevented a horse from being entered in competition for a purse.^ The fact that an injured person was in the line of promotion from the position of fireman to engineer cannot be considered in awarding him damages.^ A person who, in connection with others, has arranged for the capture of one accused of crime and for whose arrest a reward has been offered, may recover the amount of the reward from a telegraph company which has negligently failed to deliver a message relating to the cap- ^ Lawton v. Sweeney, 8 Jur. 964; Eep. 334 Contra, Gulf, etc. R. Co. v. Clunnes v. Pezzey, 1 Camp. 8. John, 9 Tex, Civ. App. 343, 29 S. W. 2 Western U. Tel. Co. v. Crall, 39 Rep. 558. Kan. 580, 18 Pac. Rep. 719; Hessee v. 3 Brown v. Chicago, etc. R Co., 64 Columbus, etc. R. Co., 58 Ohio St. 167, Iowa, 652, 21 N. W. Rep. 193. But 50 N. E. Rep. 354; Bonnet v. Galvea- see ch. 36. ton, etc. R. Co., 89 Tex. 72, 33 S. W. Vol. 1—15 220 COMPENSATION. [§§ 72-7^. ture if the jury find that the arrest would have been made but for the negligence.^ The defendant failed to deliver to plaintiff a message sent him by the comptroller of the currency : " Would you accept receivership of a bank named? Bond |35,000; compensation $200 per month, subject to future modification." Because there would have been no binding obligation, if the message had been received and an affirmative answer sent, to make the appointment there could not be a recovery.- The defeat of a candidate for office because of a slander is a dam- age too remote, uncertain and speculative to justify a re- covery.' § 72. Contingent advantage. The fact that the value of a contract or the advantage to be derived from it is contingent — that is, that the expected advantage depends on the concur- rence of circumstances subsequently to transpire, and which may by possibility not happen — is not an insuperable objec- tion to recovering damages for its loss. The chance, so to speak, of obtaining that advantage by performance of the con- tract and the conjunction of the necessary subsequent facts may be valuable. The nature of the contingency must be considered. If it is purely conjectural and cannot be reason- ably anticipated to happen in the usual course of things it is too uncertain. There must be proof legally tending to show and sufiicient to satisfy the jury that it would happen. The chance that a father would pay a son's debt to procure his re- lease from custody has been held capable of estimation.'' § 73. Uncertain mitigation of breach of marriage prom- ise. In assessing damages for the breach of a promise of mar- riage it would not be a legitimate subject for the jury to con- sider the consequences to the plaintiff, in mitigation of dam- ages, of marrying the defendant and thereby forming an unhappy alliance, by reason of a want of that love and affection that a husband should bear his wife.^ § 74. Failure to provide sinking fund. The damages to a creditor for the failure of a municipal corporation to fulfill its iMcPeek v. Western U. Tel. Co., s Field v. Colson. 93 Ky. 347, 20 S. 107 Iowa, 356, 78 N. W. Rep. 63, 70 W. Rep. 264. Am. St. 205, 43 L. R. A. 214. * Macrae v. Clarke, L. R 1 C. P. 2Walser v. Western U. TeL Co., 403. See § 71. 114 N. C. 440, 19 S. R Rep. 366. s Piper v. Kingsbury, 48 Vt 480. § 75.] ELEMENTS OF DAMAGE. 227 contract to provide a sinking fund as security for the debt have been held not capable in their nature of legal computa- tion; there is no legal standard by which they can be fixed; they are shadowy, uncertain and speculative.' Section 6. THE constituents OF COMPENSATION, OR ELEMENTS OF DAMAGE. §75. Elementary limitation of damages. The ele- [127] mentary limitation of recovery to a just indemnity for actual iujury, estimated upon the natural and proximate consequences of the injurious act, fixes a logical boundary of redress in the form of compensation and furnishes a general test by which any particulars may be included or rejected. Kecovery beyond nominal damages requires that actual injury be shown except in those cases where there are no pecuniary elements or meas- ure, and the amount of the recovery is necessarily left to the discretion of the jury, as in cases of personal injury or defama- tion of character.- What are the elements of injury which may be compensated ? This inquiry is a legal one and must be de- termined by the court; where the details are capable of pe- cuniary valuation the law affords some standard for measuring compensation for them. The elements of damage are always correlative to the right violated by the act complained of; and the amount of compensation, whether measured by legal rules or referred to the discretion of the jury, must depend on the nature of the right and the mode, incidents and consequences of the violative act.' Each party to a contract has a legal right 1 Memphis v. Brown, 20 Wall. 289. prentice had suffered by the master's 2 In Scott V. Williams, 1 Dev. 376, improper treatment; but it did not an action for assault and battery and appear to what extent it had been false imprisonment, its object being injured. It was ruled not to be to determine whether the plaintiff error to instruct the jury that they who was held as a slave was not a might determine if there was dam- freeman, more than nominal dam- age from that cause and fix the ages were given, though there seems amount. to have been no proof of the actual ^ if land is injured by a wrongful damages. act or taken under the power of emi- In Creech v. Creech, 98 N. C. 155, nent domain the owner may have 3 S. E. Rep. 814, an action upon an his damages fixed with regard to its apprentice bond, evidence was given adaptabilitj' to any use to which it to show that the health of the ap- may be applied; he is not restricted 228 COMPENSATION. [§ 76. to performance by the other according to its legal import and effect. Any default is a violation of that right. The injured [l;2SJ party is entitled to a measure of compensation which will place him in as good condition as if the contract had been ful- filled. In other words, all the natural and proximate results of the act complained of will be considered with a view to giv- ing him compensation for all gains prevented and all losses sustained. The particular stipulations of the contract and the alleged breach will circumscribe the inquiry, and the facts establishing the breach and its consequences will constitute its subjects. § 76. Damages for non-payment of money. On a contract for the mere payment of money the unpaid principal, together with the stipulated, or after maturity the lawful, rate of inter- est is the measure of damages. It is the invariable measure of recovery in a creditor's action against his debtor.^ The failure to pay a debt when due may disappoint the creditor and embarrass him in his affairs and collateral undertakings; he may consequentially suffer losses for which interest is a very inadequate compensation; but they are remote and do not result alone from the default of his debtor. Money, like the staples of commerce, is, in legal contemplation, always in market and procurable at the lawful rate of interest; and the same principle which limits a disappointed vendee's recovery against his defaulting vendor to the market value of the com- to such damages as it sustained for der v. Fromberger, 4 Dall. 436; Lou- the purpose it was used when the don v. Taxing District, 104 U. S. 771 ; injury was done or it was taken. Hoblit v. Bloomington, 71 111. App. Boom Co. V. Patterson, 98 U. S. 403; 204: Greene v. Goddard, 9 Met. 212, Fort Worth, etc. R. Co. v. Wallace, 232; Ladies' Building Ass'n v. Rob- 74 Tex. 581. 12 S. W. Rep. 227; Same bins, 1 Mart. Ch. 134, 152; Western V. Hogsett, 67 Tex. 685, 4 S. W. Rep. Wagon & Property Co. v. West, 365. See ch. 26. [1892] 1 Ch. 271, 277; South African The damages for the loss of a grove Territories v. Wallington, [1898] wholly situated upon a part of a App. Cas. 309; Henderson v. Bank of farm which is separated from the Hamilton, 25 Ont. 641; Bethel v. larger tract included in it by a rail- Salem Imp. Co.. 93 Va. 354, 25 S. E. road are to be awarded with regard Rep. 304, 33 L. R. A. 602; Arnott v. to its usefulness to the whole farm. Spokane, 6 Wash. 442, 33 Pac. Rep. Brooks V. Chicago, etc. R Co., 73 1033; Blue v. Capital Nat. Bank, 145 Iowa, 179, 34 N. W. Rep. 805. Ind. 518, 45 N. E. Rep. 655; Morrill v. 1 Fletcher v. Tayleur, 17 C. B. 21; Weeks. 70 N. H. 178, 180, 46 AtL Short V. Skipwith, 1 Brock. 103; Ben- Rep. 32. § 77.] ELEMENTS OF DAMAGE. 229 raodity which is the subject of his contract restricts the cred- itor to the principal and interest. The practical difficulty to a creditor of borrowing the money, where the .debtor is with- holding the sum he owes and which is wanted, and that of a vendee in making a new purchase, after he has paid the de- faulting vendor for the goods needed, is the same. No party's condition, in respect to the measure of damages, should be worse for having failed in his engagement to a person whose affairs are embarrassed than if the same result had occurred with one in prosperous or affluent circumstances.^ § 77. Greater damages than interest for failure to pay money. Where the obligation to pay money is special and has reference to other objects than the mere discharge of a debt, as w^here it is agreed to be done to facilitate trade, and to maintain the credit of the promisee in a foreign coun- [129] try, to take up commercial paper, pay taxes, discharge liens, relieve sureties, or for any other supposable ulterior object, damages beyond interest for delay of payment, according to the actual injury, may be recovered. The contract implied between a bank and its depositors is that the former will hold the funds and pay them out on the order of the latter; for failing so to do the bank is liable either in tort or upon con- tract.^ If the action be brought on the contract and the fail- ure to pay was not wilful, and no special damages are proved, and the check has been paid, only nominal damages can be re- covered.' If the depositor is not a trader and has made his deposit subject to special terms, on the wrongful refusal to pay him in person he can recover only interest on the amount.* He cannot recover for injury to his credit because no public- ity is given to the refusal to pay.* In the absence of proof of 1 Domat, B. 3, tit. 5, § 3, art. 4; Mas- 2 Citizens' Nat. Bank v. Importers' terton v. Mayor, 7 Hill, 61; Lowe v. & Traders' Bank, 119 N. Y. 195, 23 N. Turpie, 147 Ind. 653, 677, 44 N. E. Rep. E. Rep. 540; Burroughs v. Trades- 25, 37 L. R. A. 333, quoting the text; men's Nat. Bank, 87 Hun, 6, 33 N. Y. Smith V. Parker, 148 Ind. 127, 45 N. Supp. 864, affirmed without opinion, R Rep. 770; Fox v. Poor Ridge & 156 N. Y. 663. Sugar Creek Turnpike Road Co., 8 ^ Burroughs v. Tradesmen's Nat. Ky. L. Rep. 437 (Ky. Super. Ct.); Hob- Bank, supra. lit V. Bloomington, 71 111. App. 204; * Henderson v. Bank of Hamilton, McGee v. Wineholt, 23 Wash. 748, 63 25 Ont. 641. Pac Rep. 571. ^ Hanna v. Drovers' Nat Bank, 92 111. App. 611. 230 COMPENSATION. [§77. special damage a farmer whose check is not honored can re- cover only a nominal sura.^ But a depositor who proves special damage to himself as a stock and share-broker and stock-iob- bar may recover Yery substantial damages, though he is not a trader.^ One who breaks his contract to lend money at a less rate than is fixed by law is liable to the other party if he borrows elsewhere and pays a rate in excess of that fixed by such contract for the difference between such rates inside the legal rate.' Under various circumstances an enlarged liability results from the failure to pay checks of customers who have provided funds to meet them; in such cases the business stand- ing and especially the credit of the drawers may be impaired.'* In one such case for refusal to pay a check of 48Z. the jury gave a verdict of 500^. damages, and there was no evidence that special damage had been sustained. This was deemed excessive and was reduced by consent to 2001.^ The rule of \ 1 Bank of New South Wales v. Mil- Tain, 10 Vict. L. R (law) 3. 2 Dean v. Melbourne Stock Ex- change Agency & Banking Corpora- tion, 16 Vict. L. R. 403. In this case the plaintiff was rendered unable to meet his business engagements and was suspended by a stock exchange of which he was a member, and suf- fered damage to his reputation. A judgment for 2,900/, was sustained. 3 Gooden v. Moses, 99 Ala. 230, 13 So. Rep. 765; Thorp v. Bradley, 75 Iowa, 50, 39 N. W. Rep. 177; Luce v. Hoisington, 56 Vt. ^436. A bank agreed to advance money to a customer with knowledge of the use he designed to make of it, and subsequently refused to do so. He was unable to procure the money elsewhere and was obliged to aban- don his enterprise. There was a re- covery of the actual damages sus- tained. Manchester & O. Bank v. Cook, 49 L. T. Rep. 674 (1883). ^Svendsen v. State Bank, 64 Minn. 40, 58 Am. St. 532, 31 L. R. A. 552, 65 N. W. Rep. 1086, citing the text: Bank of Commerce v. Goos, 39 Neb. 437, 58 N. W. Rep. 84, 23 L. R A. 90; Patter- son V. Marine Nat. Bank, 130 Pa. 419, 18 Atl. Rep. 632, 17 Am. St. 779; First Nat. Bank v. Railsback, 58 Neb. 248, 78 N. W. Rep. 512; Marzetti v. Will- iams, 1 B. & Ad. 415; Birchall v. Third Nat. Bank, 17 Phila, 139; J. M. James Co. v. Continental Nat. Bank,. 105 Tenn. 1, 58 S. W. Rep. 261, 51 L. R. A. 255; Fleming v. Bank of New Zealand, [1900] App. Cas. 577. SRolin V. Steward, 14 C. B. 595; Boyd V. Fitt, 14 Ir. C. L. (N. S.) 43; Larios v. Gurety, L. R. 5 P. C. 346; Prehn v. Royal Bank, L. R 5 Ex. 92: Patterson v. Marine Nat. Bank, 130 Pa. 419, 17 Am. St. 779, 18 Atl. Rep. 632. In Schaflfner v. Ehrman, 139 111. 109, 28 N. E. Rep. 917, a verdict for $400 was sustained for a mistaken refusal to cash checks amounting to $900. In the absence of proof of special damage a bank which failed to pay a check sent it by mail, solely through the negligent mistake of an em- ployee, was liable for "temperate damages;" judgment for $200 was affirmed. Atlanta Nat. Bank v, Davis, 96 Ga. 334, 23 S. E. Rep. 190, 51 Am. St. 139. § 77.] ELEMENTS OF DAMAGE. 231 Hadley v. Baxendale is applied to such cases.^ Bankers at Liverpool by letter of credit delivered to a customer undertook to accept drafts drawn abroad to be paid with his money de- posited for that purpose. Before maturity they gave notice that they would be unable to pay the drafts at maturity and the customer was put to the expense of a commission to an- other party to take up the bills, of protesting them and of tel- egrams. These were held proper elements of damage.^ In another case the defendant's failure to meet the plaintiff's drafts caused a suspension of the latter's business at one place, injured it at another, and caused the loss of a valuable agency; all resulting losses were recoverable.^ The elements of dam- age for the non-payment of a check include time lost, expense incurred, and loss of business sustained ; but punitive damages should not be allowed in the absence of proof showing actual malice, oppression or bad motive. The fact that the drawer of an unpaid check had a nervous chill in consequence of its non-payment is too remote to be considered.* The arrest and imprisonment of the drawer of a check is not a result which may be considered in awarding him compensation for the non- payment of his check.^ If the plaintiff pleads and proves that On the dishonor of a note because a bank to pay a note for $517 which of the breach of an agreement to re- was payable there out of a deposit of new it, although pecuniary loss was $611 should result in the entry of notshown, a judgment for the plaint- judgment for over $8,000, and the iflf's expenses and 150Z. for general seizure of the business of the maker damages was sustained; but a re- of the note. Brooke v. Tradesmen's covery of lOl. for attorney's expenses Nat. Bank, 69 Hun, 202, 23 N. Y. Supp. was disallowed. Dowling v. Jones, 802. 2 N. S. W. 359. Where a check has been dishon- 1 Parker v. Cunningham, 5 Vict. L. ored the plaintiff may show, as evi- R. (law) 202, and cases cited supra, dence of damage to his business repu- except Boyd v. Fitt, 14 Ir. C. L. (N. tation, the loss of a partnership; but S.) 43, in which it is suggested that such loss is too remote to be regarded it is for the jury to find whether the as special damage. Dyson v. Union damages are the natural and proxi- Bank of Australia, 8 Vict. L. R. (law) mate consequence of the breach of 106. contract. * American Nat Bank v. Morey, 2Prehn v. Royal Bank, supra; Ur- 24 Ky. L. Rep. 658, 69 S. W. Rep. 759, quhart v. Mclver. 4 Johns. 103; Riggs 58 L. R. A. 956. V. Lindsay, 7 Cranch, 500. 5 Bank of Commerce v. Goos, 39 » Boyd V. Fitt, supra. Neb. 437, 58 N. W. Rep. 84, 23 L. R, A. It is not according to the usual 90. course of events that the refusal of 232 COMPENSATION. [§ 77. he is a trader he may show a general impairment of his credit as the result of dishonoring his checks without alleging special damage;^ but if loss of custom and credit from particular persons is relied upon it must be specially pleaded.^ "Where a depositor's checks had been refused payment four times in close succession, with knowledge that his deposit was sufficient to pay them, the plaintiff recovered damages for his actual money loss because of the notice of protest and expend- itures made in arranging matters after he knew of the dis- honor of his checks, substantial damages for the impairment of his credit, notwithstanding he was not a trader. On this feature of the recovery it was said that plaintiff was engaged in actual business, and that it was in the course of that business that the checks had been drawn. Ordinarily, an honest man draws checks only on a bank where he has an account, and though sometimes by mistake he may draw checks when he has overdrawn his account, yet, if he does that repeatedly, any one knowing it would be sure to conceive an unfavorable opinion, not only as to his honesty, but also as to his credit; so that the act of a bank in refusing to pay its customer's checks is something more than a mere nominal breach of the contract to be paid for by requiring the bank to make good the money which its act has cost him. From these repeated refusals the jury might infer that the credit of the plaintiff was impaired thereby. A further recovery was sustained for injured feelings and mental anxiety over the matter; so far as these resulted di- rectly and proximately from the defendant's acts if these were committed maliciously through wrongful and improper mo- tives. As to this head the court said: As we have seen, when the animus is a question for the jury, they are at liberty, when they find that damages are suffered because of the tort, not only to award the actual money damages sustained, but dam- ages for the mental suffering and anxiety which accompany the material damages resulting from the wrongful act. . . . If it can be fairly inferred that, as the result of the act, the plaintiff, who was a prosperous business man in good standing, ij. M. James Co. v. Continental 2 Fleming v. Bank of New Zealand, Nat. Bank, 105 Tenn. 1, 58 S. W. Rep. [1900] App. Cas. 577. 261, 51 L. R. A. 255. ^ 77.] ELEMENTS OF DAMAGE. 233 has suffered damage to his credit, so that his status in that re- gard has been changed, and that has taken place because of the wrongful and intentional act of the defendant, it is not too much to infer that, as a result of that act, and the damages caused by it, the plaintiff has suffered anxiety and the feeling of humiliation which would necessarily follow the consciousness of a loss of one's business reputation. The case is quite analo- gous to an action of slander. It is quite true that in such a case as this the bank says nothing which can be laid hold of as the basis of the action, but hy its act it affirms that the per- son who has drawn checks upon it has made an effort to obtain money from the bank and to impose his checks upon his neigh- bors with w^hom he deals, knowing that they would not be honored when presented; and that is substantially saying that in respect to that matter his dealing is dishonest, and neces- sarily impairs his credit as an honest man. The jury were, therefore, justified in considering that an act of the bank which raised an inference that the plaintiff was not an honest man, necessarily inflicted upon him that humiliation and mental iinxiety which follows upon the knowledge by a man that he has been accused of the dishonest act, which the action of the bank has given rise to.^ The rule which supports a recovery i-ov the loss of credit where a bank refuses to pay a depositor's check has no application in the case of unintentional delay in the delivery of money by a telegraph company whereby the plaintiff's note was protested, unless he shows a pecuniary loss because of the protest,^ Where the plaintiff gave up certain claims against the defendant as a consideration for the supply of funds by the latter for specified purposes and for a fixed time, and at the expiration of three-fourths of that time the defendant broke his contract, the plaintiff was not entitled to recover the value of such claims, the failure of consideration not being total; he did recover the expenses directly entailed upon him by the breach, a liberal sum in respect to loss and embarrassment, to avoid which he surrendered those claims, which loss and embarrassment were in the contemplation of the parties when they contracted. The first head of damage 1 Davis V. Standard Nat. Bank, 50 . 2 Smith v. Western U. Tel. Co., 150 App. Div. 210, 63 N. Y. Supp. 764. Pa. 561, 24 AtL Rep. 1049. 234 coMrE.\sATio::T, [§ 7T.. consisted of the expense of transferring the loan, and it was allowed notwithstanding the transfer would necessarily have been made three months later.' In order that the liability for the breach of a contract to loan money to pay an incumbrance shall exceed a nominal sum it must appear that the contract was made with knowledge of the purpose for which the money was to be used, the necessity for its use, and also that the land was lost to the owner because of the incumbrance, and without his knowledge and solely through the fault of him who was to make the loan ; or, if the other person had notice of the neglect or refusal to make the loan, it came at a time when he was deprived of the opportu- nity to procure the money elsewhere and pay the incumbrance or redeem the land if it had been sold.- The breach of a con- tract to advance money and supplies to carry on a logging business, the contract having been made with knowledge that the obligee could not procure these elsewhere, renders the party guilty thereof liable for the profits which could have been made by putting logs in the market.^ The general rule that a person. can recover only nominal damages because of the refusal of another to advance money of w^hich he may immediately de- mand the repayment,^ does not apply where the circumstances indicate that the parties did not intend the transaction to be a demand loan though it was such in terms; in such a case the plaintiff may prove the damages he has sustained because of the breach of contract.^ Where one person furnishes money to another to discharge an incumbrance upon the land of the person furnishing the money, and the person undertaking to discharge it neglects to 1 Parker v. Cunningham, 5 Vict. L. ^ Lowe v. Turpie, 147 Ind. 652, 675, R. (law) 203. 44 N. E. Rep. 25, 37 L. R. A. 233. On the breach of a contract to ex- " Graham v. McCoy, 17 Wash. 63, tend a loan the only damages recov- 48 Pac. Rep. 780, 49 id. 235. erable are those represented by the * Bradford, etc. R. Co. v. New York, difference in the rate of interest to etc. R. Co., 123 N. Y. 316, 25 N. E. Rep. be paid, unless the plaintiff shows 499, 11 L. R. A. 116. his inability to obtain the money 5 Goldsmith v. Holland Trust Co., from other sources to discharge the 5 App. Div. 104, 38 N. Y. Supp. 1032. debt which, by his default in the pay- See Bank of Commerce v. Bright, 23- ment of interesr, has matured. West- C. C. A. 586, 77 Fed. Rep. 949. em U. Tel. Co. v. Hearne, 7 Texi Civ. App. 67, 73, 26 S. W. Rep. 478. § 78.] ELEMENTS OF DAMAGE. 235 do SO, and the land is lost to the owner by reason of the neg lect, the measure of damages may be the money furnished with interest, or the value of the land lost, according to cir- cumstances.^ If the land-owner has knowledge of the agent's failure in time to redeem the land himself his damages [130] will be the money furnished with interest. But if the land- owner justly relies upon his agent to whom he has furnished money to discharge the incumbrance, and the land is lost with- out his knowledge, and solely through the fault of the agent, the latter will be liable for the value of the land at the time it is lost.^ § 78. Liability for gains and losses. For the breach of other contracts than to pay money the injured party is entitled to compensation for gains prevented ^ and losses sustained. The gains prevented are those which would accrue to the contract- ing parties from the mutual performance of the contract. The damages for the total breach of a contract should include the value of it to the injured party. This is generally the meas- ure. There are some exceptions, as in case of contracts for the sale of land where title unexpectedly cannot be made, and generally on covenants for title in conveyances of real estate.* 1 In actions upon covenants against himself the amount thus advanced, incumbrances or covenants to pay and where, after receiving the deed, off specific incumbrances, the dam- he refuses to make the advance- ages are the diminution in value of ments. The liability of such person the estate by reason of the incum- is not for the value of the land nor brances, and where the contract the sum which was to be advanced, broken was to pay off a specific lien but for the actual damages sustained the owner may recover the whole by the other party. Turpie v. Lowe, amount of it, although no damage 114 Ind. 37, 54, 15 N. E. Rep. 834; has been proved- Lethbridge v. Myt- Stanley v. Nye, 51 Mich. 232, 16 N. ton, 2 B. & Ad. 772; Carr v. Roberts, W. Rep. 387. 5 id. 78; Loosemore v. Radford, 9 ^ See ^% 59 et seq. M. & W. 657; Hodgson v. Wood, 2 * Flureau v. Thornhill, 2 W. BL H. & C. 649. See Paro v. St. Mar- 1078; Worthington v. Warrington, tin, 180 Mass. 29. 61 N. E. Rep. 268. 8 C. B. 134; Buckley v. Dawson, 4 Ir. 2 Blood V. Wilkins, 43 Iowa, 565; C. L. (N. S.) 211; Sikes v. Wild, 1 B. Gallup V. Miller, 25 Hun, 298. & S. 594; Bain v. Fothergill, L. R, 6 The rule stated in the text does not Ex. 59, L. R 7 Eng. & Irish App. 158; apply where an individual accepts a Baldwin v. Munn, 2 Wend. 399, 20 deed for the land of another, and Am. Dec. 627; Conger v. Weaver, 20 agrees with him to advance money N. Y. 140; Pumpelly v. Phelps, 40 id. to pay his debts, and to sell the land 60; Sweem v. Steele, 5 Iowa, 352; to raise money with which to repay Drake v. Baker, 34 N. J. L. 358; Vio- 236 COMPENSATION. [§78. By this general rule the party thus injured by a total breach is entitled to recover the profits of the particular contract which he shows, with sufficient certainty, would have accrued if the other party had performed. He is entitled to recover proportionately for a partial breach. And to ascertain these profits the nature and the special purpose of the contract, a subcontract, or other subsidiary and dependent arrangement, within the contemplation of the parties at the time of con- tracting, may be taken into consideration.^ The objection let V. Rose, 39 Neb. 661, 58 N. W. Rep. 216. See ch. 13. 1 Mason v. Alabama Iron Co., 73 Ala. 270; Jones v. Foster, 67 Wis. 296, 30 N. W. Rep. 697; Cameron v. White, 74 Wis. 425, 43 N. W. Rep. 1.55, 5 L. R A. 493; Treat v. Hiles. 81 Wis. 280, 50 N. W. Rep. 896; Oliver v. Perkins, 92 Mich. 304, 52 N. W. Rep. 609; Morgan v. Hefler, 68 Ma 131; Hadley V. Baxendale, 9 Ex. 341; Mc- Hose V. Fulmer, 73 Pa. 305; Van Arsdale v. Rundel, 82 111. 63; True v. International Tel. Co., 60 Me. 9; Booth V. Spuyten Duyvil Rolling Mill Co., 60 N. Y. 487; Cassidy v. Le Fevre, 45 id. 562; Hexter v. Knox, 63 id. 561; Frye v. Maine Central R, Co., 67 Me. 414; Fultz v. Wycoff, 25 Ind. 321; Holden v. Lake Co., 53 N. H. 552; Coweta Falls Manuf. Co. v. Rogers, 19 Ga, 416, 65 Am. Dec. 602; Fox V. Harding, 7 Cash. 516: Fletcher V. Tayleur. 17 C. B. 21; Masterton v. Mayor, 7 Hill, 61; Wolcott v. Mount, 86 N. J. L. 262, 13 Am. Rep. 438; Pas- singer V. Thorburn, 34 N. Y. 634; Smith V. Chicago, etc. R. Co., 38 Iowa. 518; Van Wyck v. Allen, 69 N. Y. 61, 25 Am. Rep. 136; Ferris v. Comstock, 33 Conn. 513; France v. Gaudet, L. R. 6 Q. B. 199; Richmond T. D. & S. C. R Co., 40 Iowa, 264; Sisson V. Cleveland, etc. R. Co., 14 Mich. 489; Burrell v. New York, etc. Co., 14 Mich. 34; Maynard v. Pease, 99 Mass. 555; Bell v. Cunningham, 3 Pet. 69; Farwell v. Price, 30 Mo. 587; James H. Rice Co. v. Penn Plate Glass Co., 88 IlL App. 407, citing the text; Smith v. Los Angeles & P. R Co., 98 CaL 210, 33 Pac. Rep. 53; Post V. Davis, 7 Kan. App. 217, 52 Pac. Rep. 903; McNeill v. Richards, [1899] 1 Irish, 79; Consolidated Coal Co. v. Schneider, 93 111. App. 88, cit- ing the text; Curry v. Kansas, etc. R Co., 58 Kan. 6, 48 Pac. Rep. 579. 61 Kan. 541, 60 Paa Rep. 325; Watson V. Needham, 161 Mass. 404, 37 N. E. Rep. 204, 24 L. R A. 287; Knowles v. Steele, 59 Minn. 452, 61 N. W. Rep. 557; Farr v. Griffith, 9 Utah, 416. 35 Pac. Rep. 506, citing the text; Ken- dall Bank Note Co. v. Commissioners of Sinking Fund, 79 Va. 563; Bratt V. Swift, 99 Wis. 579, 75 N. W. Rep. 411; Crosby Lumber Co. v. Smith, 2 C. C. A. 97, 51 Fed. Rep. 63; Tinsley V. Jemison, 20 C. C. A. 371, 74 Fed, Rep. 177; Lindsay v. Stevenson, 17 Vict. L. R 112; Marcus v. Myers, 11 T. L. Rep. 327. In Pell V. Shearman, 10 Ex. 766, the defendant covenanted with the plaintiff that if he would surrender to his lessor a certain lease they would, within two years or such period as should be agreed in a new lease, which the lessor had agreed to grant them, sink upon the demised premises a pit to the depth of one hundred and thirty yards for the purpose of finding coal, and, in case a marketable vein of coal should be reached, pay the plaintiff 2,500i, § 79.] ELEMENTS OF DAMAGE. 237 that the nature of the business to which the contract has reference and in which profits might have been earned fur- nishes no reasonable basis upon which to malce an estimate of loss is not controlling where the contract sued upon, or the collateral contract, if, in the latter case, the defendant is re- sponsible for its breach, consists of an undertaking to do specific work for a specified price, although in the performance of that work machinery as well as labor may be employed and the weather may affect the profits by interfering with the work.^ § 79. What losses elements of damage. Losses, aside from gains prevented, may be sustained in various ways in conse- quence of the breach of a contract. First, a loss may consist of money, property or valuable rights which may be directly taken from the injured party by the breach,'^ A servant im- properly discharged before the period of his engagement has expired and unable to find any other employment, or one equally remunerative, is thereby deprived of the right to earn the stipulated wages. By that breach of contract he loses the whole or a part of what he was entitled to earn during the term he was engaged for, and he is entitled to recover accord- ingly.* An agent or bailee who, by breach of duty, converts There was a breach of the contract, 56 Kan. 614, 44 Pac. Eep. 621, 54 Am. and evidence showing a reasonable St. 598; Hughes v. Robinson, 60 Mo. probability that if the pit had been App. 194; Athletic Baseball Ass'n v. sunk such coal would have been dis- St. Louis Sportsman's P. & C. Ass'n, covered. Plaintiffs measure of dam- 67 Mo. App. 653; Hutt v. Hickey, 67 age was the amount of his loss by N. H. 411, 29 Atl. Rep. 456; Friedland being deprived of the opportunity to v, Myers, 139 N. Y. 432, 34 N. K Rep. find coal. 1055: Cutting v. Miner, 30 App. Div. Machinery put into a mill failed 457, 52 N. Y. Supp. 288; Wells v. to possess the capacity as to the National L. Ass'n, 39 C. C. A. 476, 99 quantity and quality of flour it was Fed. Rep. 222; Sutherland v. Wyer, warranted to produce. The damages 67 Me. 64; Gifford v. Waters, 67 N. Y. were measured by the amount paid 80; Gillis v. Space, 63 Barb. 177; Em- upon it. the loss by reason of its de- erson v. Howland. 1 Mason, 45; Howe fects, and the cost incurred in re- Machine Co. v. Bryson, 44 Iowa, 159, pairing the mill and putting it in 24 Am. Rep. 735; Williams v. Ander- condition to produce the quantity son, 9 Minn. 50; Williams v. Chicago and quality of flour stipulated for. Coal Co., 60 111. 149; Smith v. Thomp- Pennypacker v. Jones, 106 Pa. 237. son, 8 C. B. 44. 1 Industrial Works v. Mitchell, 114 The measure of damages recover- Mich. 29, 72 N. W. Rep. 25. able from the usurper of an office is - Smith V. Los Angeles & P. R. Co., the salary or emoluments received. 98 Cal. 210, 33 Pac. Rep. 53. Palmer v. Darby, 64 Ohio St. 520, 60 3Paola Gas Co. v. Paola Glass Co., N. K Rep. 626. 238 COMPENSATION. [§79. his principal's property, or by neglect suffers it to be lost or destroyed, or by failure to assert his rights or by doing it in a careless or inefficient manner subjects him to loss, must re- spond in damages according to the injury thus occasioned.^ In some cases such losses are the measure of recovery, as where there is a breach of contract by one person to adopt another and make him his heir. The value of the services rendered or outlay incurred on the faith of the promise, and not the value of the promised share of the estate, measures the recovery.^ And when a lessee occupies premises for the entire term, but is compelled to pay more rent than was stipulated for, he may recover the excess.'^ The same rule applies in tort actions, as where egress and ingress is cut off from adjacent lands or water is caused to run or stand on them, the recovery is measured by the expense of remedying the wrong.^ One who breaches his contract to permit the owner of mortgaged lands to redeem them after foreclosure and sale by selling the same to innocent purchasers is liable for the value of the lands in excess of the mortgage debt, including foreclosure costs; if but a small part of the lands were sold at the time suit was begun, the remainder not being thereby depreciated in value, he is liable for the value of those sold and the plaintiff may recover those unsold upon payment of the mortgage debt and charges ; if the defendant continued to sell the remaining lands after suit was begun he is responsible for their value, unless the plaintiff elected to proceed against the purchasers, who were not entitled to the rights of innocent holders.* I White V. Smith, 54 N. Y. 523; Dodge V. Perkins, 9 Pick. 368; Clark V. Moody, 17 Mass. 145; Frothingham V. Everton, 12 N. H. 239; Webster v. De Tastet, 7 T. R 157: Blot v. Boiceau, 3 N. Y. 78; Maynard v. Pease, 99 Mass. 555; Stearine, etc. Co. v. Heintzmaun, 17 C. B. (N. S.) 56; Allen V. Suydam, 20 Wend. 331, 33 Am. Dec. 555; Mallough v. Barber, 4 Camp. 150; Nickerson v. Soesman, 98 Mass. 364; Trinidad Nat. Bank v. Denver Nat. Bank, 4 Dill. 290; De Tastet V. Crousillat, 2 Wash. C. C. 133; Lilley v. Doubleday, 7 Q. B. Div. 510. 2Sandham v. Grounds, 36 C. C. A. 103, 94 Fed. Rep. 83; Graham v. Graham, 34 Pa. 475, overruling Jack V, McKee, 9 Pa. 240; Kauss v. Rohner, 173 Pa. 481, 33 AtL Rep. 1016, 51 Am. St. 763. 3 Myers Tailoring Co. v. Keeley, 58 Mo. App. 491. 4 Louisville & N. R, Co. v. Finley, 7 Ky. L. Rep. 139 (Ky. Super. Ct). 5 Silliman v. Gano, 90 Tex. 637, 39 S. W. Rep. 559. § 80.] ELEMENTS OF DAMAGE. 239 §80. Same subject; labor and expenditures. Second, losses sustained may consist of labor or expenditures prudently incurred in preparation to perform or in part performance of the contract on the part of the plaintiff. Where a contract is partly performed by one party and, without his being in any default, the other stops him and prevents further performance, such part performance, in addition to the profits which could be made by completing the contract, will enter into the esti- mate of damages for such breach. Should a vendor who had received part payment for goods bargained and sold refuse to go on with the contract the vendee would be entitled to [132] recover, in addition to the profits — the excess of the value of the goods above the contract price — the amount which he had paid towards the latter, for the same reason which sup- ports his claim where he has paid the whole purchase price for the value of the property.^ If a contract for particular work is partly performed and the employer then puts an end to the undertaking recovery may be had against him, not only for the profits the contractor could have made by performing the contract, but compensation also for so much as he has done towards performance.^ Preparations for performance, which were a necessary preliminary to performance or within the contemplation of the parties as necessary in the particular case, rest upon the same principle.^ Maintaining a shop and waiting 1 Copper Co. v. Copper Mining Co., (quoting the two preceding proposi- 33 Vt. 92; Woodbury v. Jones, 44 N. tions, but allowing profits only under H. 206; Owen V. Routh, 14 C. B. 327; the circumstances); Bernstein v. Bush V. Canfield, 2 Conn. 485; Loder Meech, 130 N. Y. 354, 29 N. E. Rep. V. Kekule, 3 C. B. (N. S.) 128; Smith 255; Friedland v. Myers, 139 N. Y. V. Berry, 18 Me. 122; Berry v.Dwinel, 433, 34 N. E. Rep. 1055; Nelson v. 44 Me. 255; Wyman v. American Hatch, 70 App. Div. 206, 75 N. Y. Powder Co., 8 Cush. 168; Pinkerton Supp. 389; Grififin v. Sprague Electric V. Manchester & L. R., 42 N. H. 424. Co., 116 Fed. Rep. 749; Masterton v, 2 McCuUough V. Baker, 47 Mo. 401 ; Mayor, 7 Hill, 61. In the last case Jones V. Woodbury, 11 B. Mon. 167; the marble at the quarry was taken Derby V. Johnson, 21 Vt. 17; Cham- into account in the estimate of dani- berlin v. Scott, 33 Vt. 80; Friedlander ages. V. Pugh, 43 Miss. Ill; Polsley v. An- In Nurse v. Barnes, T. Raym. 77, derson, 7 W. Va. 202, 23 Am. Rep. 613; the defendant, in consideration of Danforth v. Walker, 37 Vt. 239. lOZ., promised to demise a mill to the 'United States v. Behan, 110 U. S. plaintiff, who laid in a large stock 338, 4 Sup. Ct. Rep. 81 ; Hale v. Hess, to employ it, which he lost, because 30 Neb. 42, 58, 46 N. W. Rep. 261 the defendant refused to give him 240 COMPENSATION. [§80. for orders which are dae under a contract is the equivalent of an expenditure under this principle.^ If, by partial perform- ance of the contract, a contractor has enjoyed a part of the benefits of his expenditure for full performance, the damages he is entitled to are proportionately lessened.^ possession. A verdict of 500Z. was approved. The stock so procured may more properly be classed as an expenditure on the faith of perform- ance by the other party. See § 81. But the allowance of a loss for such expenditures rests on a similar prin- ciple. In Skinner v. Tinker, 34 Barb. 333, an action was brought to recover damages for the breach of a contract for a partnership. The plaintiff, a den- tist of Brooklyn, and the defendant, a dentist of Havana, Cuba, entered into an agreement, in writing, at the latter place, in March, 1858, by which they were to do a joint business as dentists at Havana, to begin in Octo- ber or November following, if the plaintiff should present himself. The agreement was silent as to the dura- tion of the partnership. Thereupon the plaintiff sold his business at Brooklyn and entered into bonds not to resume practice there, and made ail preparations for carrying out his agreement. In May he received a letter from the defendant, declining to carry out the agreement on his part On the trial the plaintiff proved these facts, and his readiness and an offer to fulfill, and recovered a verdict for $4,000. On appeal In- graham, J., said: "Performance on the part of the plaintiff by appearing in Havana, in October or November, as stated in the contract, was unnec- essary because the defendant had given notice of his determination not to form a partnership. The plaintiff was then entitled to damages, if any were sustained, up to that time,, but not to prospective damages." Johnson v. Arnold, 2 Gush. 46, was an action to recover damages for the breach of a special contract by which, upon certain terms, the defendant agreed to furnish and keep the plaint- iff supplied with a stock of goods for carrying on business in the defend- ant's store in another state, and the plaintiff undertook to carry it on for a share of the profits for a given term. It was held that in estimat- ing the damages it was competent to allow the plaintiff compensation for the loss of his time and for the ex- penses of removing his.family to and from the place where the business was to be carried on. Noble V. Ames Manuf. Co., 112 Mass. 492. is apparently not consist- ent with the principle stated. The defendant, doing business in Massa- chusetts, wrote the plaintiff in the Sandwich Islands: "I am ready to offer you a foreman's situation at these works as soon as you may get here; pay, $1,500 a year." The plaint- iff accepted the proposition and came^ but the defendant refused to employ him. The court rejected the claim oJ compensation for the time and ex- penses in coming from the Sandwich Islands onthe ground thatthose items preceded the takingeffect of the con- tract, and were not in part perform- ance. Morton, J., said: "All the plaintiff can claim is that he should be placed in as good condition as he would have been in if the contract had been performed. But the ruling 1 Speirs v. Union Drop Forge Co., 180 Mass. 87, 90, 61 N. E. Rep. 825. - O'Connell v. Rosso, 56 Ark. 603, 20 S. W. Rep. 531. §81.] ELEMENTS OF DAMAGE. 241 §81. Same subject; damages by relying on performance. Third, such losses may consist of expenditures made by [1*^3] one party to a contract and damages from his own acts done on the faith of its being performed by the other, in further- ance of the object for which the contract purports to be [l-J-i] made, or the object which was in the contemplation of the parties at the time of contracting.^ Such losses cannot be re- (allowing these items) puts him in a better condition." On the trial those were the only items claimed. It was stated by the plaintiffs counsel that no claim was made for business sacri- fices in leaving the Islands and com- ing to the defendant to perform the contract, and none for any loss of time or other loss or damage after the refusal of the defendant to em- ploy him. The contrary view is expressed in Moore v. Mountcastle, 73 Mo. 605, where plaintiff was allowed to re- cover for loss of time and expense in going to perform a contract. The expense incurred in taking another person with him to assist in the work he was to do was disallowed. His personal expenses and the loss of his time were "such damages as may be presumed necessarily to ha ve resulted from the breach of the contract," and hence did not need to be specially pleaded. In Smith v. Sherman, 4 Gush. 408, it was held that loss of time and ex- penses incurred in preparation for marriage are directly incidental to the breach of the marriage promisa In Durkee v. Mott, 8 Barb. 423. on a contract to pay a certain price for rafting logs which the defendant put an end to before the labor began, it was held the plaintiff might recover the immediate loss in preparing to perform the contract by providing men for that purpose. Woodbury v. Jones, 44 N. H. 206, afiSrms the same doctrina There the defendant proposed to the plaintiff, Vol. 1—16 who was then living in Minnesota, that if he would come back to N. B. he might move into the defendant's house, and he would give the plaintiff and his wife a years board, and he might carry on the defendant's farm on any terms he might elect, lie ac- cepted, and came back; defendant failed to make his offer good; the court held that it was competent for the jury to take into consideration in assessing the damages the expenses of removing to N. B. In an action against the proprietor of a school for the breach of a contract to employ the plaintiff as a teacher, made for her by her father during her absence in Europe, the plaintiff was held not entitled to recover as part of her damages the expenses of her journey home, it not appearing that they were incurred in conse- quence of the contract, or were in the contemplation of the parties when it was made. Benziger v. Miller, 50 Ala. 206. See Williams v. Oliphant, 3 Ind, 271; Bulkley v. United States, 19 Wall. 37: Dillon v. Anderson, 43 N. Y. 231; Hosraer v. Wilson, 7 Mich. 294, 74 Am. Dec. 416. 1 Wolters V. Schultz, 1 N. Y. Misc. 196, 21 N. Y. Supp. 768; Gordon v. Constantino Hydraulic Co., 117 Mich. 620, 76 N. W. Rep. 142; Cole v. Stearns, 23 App. Div. 446, 48 N. Y. Supp. 318; People's Building, Loan & Savings Ass'n V. Pickerell, 21 Ky. L. Rep. 1386, 55 S. W. Rep. 194; Kelly v. Da- vis. 9 Ky. L. Rep. 647 (Ky. Super. Ct.); Dean v. White, 5 Iowa, 266; Grand Tower Co. v. Phillips, 23 Wall. 471; 242 COMPENSATION. [§82. covered if incurred after notice of the refusal of the other party to perform the contract.^ § 82. Same subject ; liability to third persons ; covenants of indemnity. Fourth, such losses may consist of sums neces- sarily paid to third persons, or of suras recovered and expenses incurred in actions brought by third persons in consequence of the defendant's breach of contract. They are those losses [135] which may result from suretyship or the breach of any duty or obligation of indemnity.'-' In such cases the practical question will always be what the plaintiff was obliged or au- thorized to pay both in respect to the principal and incidental costs or expenses. If there has been a voluntary payment by the indemnified party or a compulsory payment resulting from Driggs V. Dwight, 17 Wend. 71. 31 Am. Dec. 283; Bunney v. Hopkinson, 1 L. T. (N. S.) 53; Smith v. Green, 1 C. P. Div. 92; Randall v. Newson, 2 Q. B. Div. 102; Leffingwell v. Elliott, 10 Pick. 204; Milburn v. Belloni, 39 N. Y. 53, 100 Am. Dec. 403; Thomas V. Dingley, 70 Me. 100, 35 Am. Rep. aiO; Randall v. Raper, E. B. & E. 84 Borradaile v. Bruntou, 8 Taunt. 535 Brown v. Edgington, 2 M. & G. 279 French v. Vining, 102 Mass. 132, 3 Am. Rep. 440; Johnson v. Meyer's Ex'r, 34 Mo. 255; Rowland's Adm'r V. Shelton, 25 Ala. 217; Ferris v. Comstock, 33 Conn. 513; ZuUer v. Rogers, 7 Hun, 540; Fisk v. Tank, 12 Wis. 276, 78 Am. Dec. 737; Reggio v. Braggiotti, 7 Gush. 166; Jeter v. Glenn, 9 Rich. 374; Skagit R. & L. Co. V. Cole, 2 Wash. 57, 25 Pac. Rep. 1077: Bernstein v. Meech, 130 N. Y. 354, 29 N. E. Rep. 255. See Mason v. Alabama Iron Co., 73 Ala. 270. 1 James H. Rice Co. v. Penn Plate Glass Co., 88 111. App. 407. 2 Rogers v. Riverside Land & Irri- gating Co., 132 Cal. 9, 64 Pac. Rep. 95; Mowbray V. Merry weather, [1895J 1 Q. B. 57, [1895J 2 id. 640; French v. Parish, 14 N. H, 496: Newburgh v. Galatian, 4 Cow. 340; Holdgate v. Clark, 10 Wend. 215; Lincoln v. Blanchard, 17 Vt. 464; Chamberlain v. Godfrey, 36 Vt. 380, 84 Am. Dec. 690; Westervelt v. Smith, 2 Duer, 449; lilies v. Fitzgerald, 11 Tex. 417; Braman v. Dowse, 12 Cush. 227; Spear v. Stacy, 26 Vt. 61; Howard v. Lovegrove, L. R. 6 Ex. 43; Fiuckh v. Evers, 25 Ohio St. 82; Webb v. Pond, 19 Wend. 423; Rockfeller v. Don- nelly, 8 Cow. 623; Warwick v. Rich- ardson, 10 M. & W. 284; Gerrish v. Smyth, 10 Allen, 303; Ray v. Clemens, 6 Leigh, 600; Kip v. Brigham, 6 Johns. 158: Colter v. Morgan's Adm'r, 12 B. Mon. 278; Lowell v. Boston, etc. R. Co., 23 Pick. 24; Baynard v. Har- rity, 1 Houst. 200; Robbins v. Chi- cago, 4 Wall. 657; Crawford v. Turk, 24 Gratt. 176; Duxbury v. Vermont, etc. R Co., 26 Vt. 751: Annett v. Terry, 35 N. Y. 256: Spalding v. Cakes, 42 Vt. 343; Chamberlain v. Beller, 18 N. Y. 115; Bridgeport Ins. Co. V. Wilson, 34 N. Y. 275; Propri- etors of L. & C. V. Lowell Horse R Co., 109 Mass. 221; Briggs v. Boyd, 37 Vt. 534; Colburn v. Pomeroy, 44 N. H. 19; Thomas v. Beck man, 1 B. Mon. 31; Robertson v. Morgan's Adm'r, 3 id. 309; Littleton v. Rich- ardson, 32 N. H. 59; Gibson v. Love, 2 Fla. 598. § 82.] ELEMENTS OF DAMAGE. 243 a suit by which the indemnitor is not bound by his contract or in consequence of the lack of notice to defend, the question of the liability of the indemified party to make such payment is, according to some authorities, open in his action for in- demnity.^ In a recent case -a contractor for machinery supplied an article made for him by the defendant. It was defectively constructed and in consequence the plaintiff was subjected to a judgment for damages resulting from the breaking of that article, such judgment being rendered in Canada. No offer of the defense of the action on which such judgment was rendered was made to the plaintiff. The conclusion of the court was that where a subvendee or a subcontractor has a legal claim for indemnification, and has, under fear of the consequences, made an adjustment or been compelled to yield to a judgment under circumstances indicating good faith and a reasonable amount of resistance, the amount thus determined, either by the adjustment or by the litigation, becomes evidence of the amount of damages to be awarded against the principal con- tractor.^ This conclusion was aside from the question whether the judgment should stand as of conclusive effect or only ^rima facie evidence as to the measure of damages. If there is an express indemnity against the result of a particular suit, whether the indemnitor is a party or not, the judgment binds him for the purposes of that contract.^ But under a general covenant of indemnity against suits the covenantor has a right to defend either in the action against the indemnified party or in the latter's action upon the covenant of indemnity. There is a marked distinction between covenants which stipulate against the consequences of a suit and those which contain no such undertaking. In the latter class the judgment is res inter alios acta^ and proves nothing except rem ijjsam against the 1 Douglas V. Howland, 24 Wend. ^ citing Smith v, ComiDton, 3 B. & 35; Lee v. Clark, 1 Hill, 56; Duffield Ad. 407, and the text. V.Scott, 3 T. R. 374; Aberdeen v. 4 Patton v. Caldwell, 1 Dall. 419; Blackmar, 6 Hill, 324; Rapelye v. Rapelye v. Prince. 4 Hill, 119, 40 Am. Prince, 4 Hill, 119, 40 Am. Dec. 267. Dec. 267; Thomas v. Hubbeli, 15 N. 2 Nashua Iron & Steel Co. v. Brush, Y. 405, 69 Am, Dec. 619: Chamberlain 33 C. C. A. 456, 91 Fed. Rep. 213. . v. Godfrey, 36 Vt. 380, 84 Am. Dec. 690. 244: COMPENSATION. [§ 82. indemnitor, unless he has had notice and an opportunity to defend. The want of notice does not go to the cause of action ; the judgment is prima facie evidence only against the indem- nitor and he is at liberty to defend against the demand on which it is founded.' If notice is expressly stipulated for the want of it will defeat the action.^ [130] As to the right to costs and expenses of defending a former suit brought to enforce a liability, against which there is an agreement or duty to indemnify, there is some conflict of decision. If a surety for a liquidated debt is sued upon it he io not bound to pay it to save costs; and he may recover of the principal the costs which he is compelled to pay as in- cident to a default judgment, and, in addition, the sum he is obliged to pay of the debt.* And where the action is founded on a disputable liability or an unliquidated demand the rule in England, and generally in this country, allows the surety or indemnified party to give notice of the suit to the party ultimately liable and abide his directions; if he gives none, to make no defense; or if the facts are such as to render some defense reasonable and judicious and there is a probability of success, he is at liberty to defend ; and such costs and expenses as are reasonable and incurred in good faith he will be entitled to recover as part of his indemnity. He may recover not only the costs taxed against him by the prevailing adverse party, but the costs of his defense.* A man has no right, merely be- 1 Bridgeport Ins. Co. v. Wilson, 34 Weed, 24 Barb. 546; Wynn v. Brooke, N. Y. 275; Smith v. Compton, 2 B. & 5 Rawle, lOG; McKee v. Campbell, 27 Ad. 407; Reggie V. Braggiotti, 7Cush. Mich. 497; Wright v. Whiting, 40 166; Marlatt v. Clary, 20 Ark, 251; Barb. 240; Wallace v. Gilchrist, 24 Boyd V. Whitfield, 19 Ark. 447; Col- Up. Can. C. P. 40; Craig v. Craig, 5 lingwoodv. Irwin, 3 Watts, 306: Paul Rawle, 91; Robertson v. Morgan's V. Witman, 3 W. & S. 407: Pitkin v, Adm'r, 3 B. Hon. 307; Colter v. Same, Leavitt, 13 Vt. 379; Train v. Gold, 5 12 id. 278. See Pierce v. Williams. Pick. 380; Baynard v. Harrity, 1 23 L. J. (Ex.) 322. Houst. 200. 4 Duxbury v. Vermont Central R. 2 Bridgeport Ins. Co. v. Wilson, 34 Co., 26 Vt. 751; Smith v. Compton, 3 N. Y. 275. B. & Ad. 407; Pitkin v. Leavitt, 13 3Hulett V. Soullard, 26 Vt. 295; Vt. 379; Hayden v. Cabot, 17 Mass. Kemp V. Finden, 12 M. & W. 421; 169; Wynn v. Brooke, 5 Rawle, 106; Ex parte Marshall, 1 Atk. 262; Baker New Haven & N. Co. v. Hayden, 117 V. Martin, 3 Barb. 634; Elwood v. Mass. 433; Bonney v. Seely, 2 Wend. Deifendorf, 5 Barb. 412; Bleaden v. 481; Howard v. Lovegrove, L. R 6 Charles, 7 Bing. 246; Holmes v. Ex. 43; Ottumwa v. Parks, 43 Iowa, § 83.] ELEMENTS OF DAMAGE. 245 cause he has an indemnity, to defend a hopeless action and put the person guarantying to useless expense.' The rule formerly laid down was that if the defendant in the first action placed the facts before the person whom he sought ultimately to charge, and that person declined to intervene and left him to take his own course, it would be a question for the jury whether it was reasonable to defend or whether the de- [137] fense was conducted in a fair manner; in deciding that ques- tion the jury would have to consider whether it was more pru- dent to settle the matter by compromise, pay the money into court, or let judgment go by default.^ And this is still prob- ably the law. An agent, surety, or one expressly indemnified in respect to the liability sought by action to be fixed on him, who relies on the indemnit}' for security against loss, has no personal interest to defend where he can connect the indem- nitor with that action so as to conclude him. But where no- tice cannot be given or for any reason is omitted, the defend- ant who depends on another for indemnity must necessarily so far defend the action as to obtain the best practicable assur- ance that the amount which he pays he will have a legal right to have reimbursed. §83. Same subject; indemnity to municipalities ; counsel fees. Municipal corporations charged with the duty of keep- ing public ways in repair have a right of indemnity against parties contracting to perform this duty if they fail to fulfill; and against parties who, by abuse of license or tortiously, put such ways out of repair, when such corporations have been com- pelled to pay damages to some person injured in consequence of such defect or want of repair.* The corporation, not being 119; Baxendale v. London, etc. R. the judgment was rendered. Nashua Co., L. R. 10 Ex. 35; CoUen v. Wright, Iron & Steel Co. v. Brush, 33 C. C. A. 7 El. & Bl. 301; Westfield v. Mayo, 456, 91 Fed. Rep. 213. 122 Mass. 100,23 Am. Rep. 292; Aguis i Wrightup v. Chamberlain, 7 V. Great Western Colliery Co., [1899] Scott, 598; Kiddle v. Lovett, IG Q. 1 Q. B. 413. B. Div. 605; Gillett v. Rippon, Moody But if the action is to enforce an & M. 406. unliquidated demand and the person 2 M^yne on Dam., 6th ed., p. 95; against whom the judgment has Mors-le-Blanch v. Wilson, L. R 8 C. been rendered has had no opportu- P. 227. nity to defend it, he is not liable for ^ Rochester v. Montgomery, 72 N. the costs and expenses of the defense Y. 65; Port Jervis v. First Nat Bank, made by the person against whom 96 id. 550; Chicago v. Robbins, 2 246 COMPENSATION. [§ 83. injpari delicto^ is not subject to the principle which excludes contribution or indemnity between wrong-doers, and has aright of recovery over against the party by whose fault the injury was suffered. Where notice has been given to the person pri- marily at fault to take upon himself the defense, he is bound by the judgment as to the damages paid and costs.' In such cases [138] the demands for damages are unliquidated and gener- ally disputable, and a defense would be proper and judicious, whether the party ultimately liable has notice and assumes it or not. The costs taxed against the corporation, where a rea- sonable defense is made, in case of recovery, and the expense of the defense, including counsel fees, are proper items of dam- age for which it may claim indemnity. They are among the direct consequences of the defendant's fault and the breach of the implied promise or duty to save harmless. In a Massachusetts case^ Lord, J., said: "The diflRculty is not in stating the rule of damages, but in determining whether in the particular case the damages claimed are within the rule. Natural and necessary consequences are subjects of damages^ remote, uncertain and contingent consequences are not. Whether counsel fees are natural or necessary, or remote and contingent, in a particular case, we think may be determined upon satisfactory principles; and, as a general rule, when a party is called upon to defend a suit founded upon a wrong for which he is held responsible in law without misfeasance on his part, but because of the wrongful act of another against whom he had a remedy over, counsel fees are the natural and reason- Black, 418; Eobbins v. Chicago, 4 i Id.; Mayor r. Brady, 151 N. Y. 611, Wall. 657; Woburn v. Henshaw, 101 45 N. E. Rep. 1122. Mass. 193, 3 Am. Rep. 833; Stoughton In Ottumwa v. Parks, 43 Iowa, V. Porter, 13 Allen, 191; Boston v. 119, where the party sought to be Worthington, 10 Gray, 496, 71 Am. made liable to the city assumed the Dec. 678; Lowell v. Boston, etc. R. defense of the action against it, the Co., 23 Pick. 24; Brooklyn v. Brook- taxable costs of that action were al- lyn City R, Co., 47 N. Y. 475, 7 Am. lowed so far as they were paid by Rep. 469; Ottumwa v. Parks, 43 Iowa, the city; but the costs of an appeal 119; Duxbury v. Vermont Central were disallowed, there being no evi- R. Co., 26 Vt. 751; Littleton v. Rich- dence that the appeal was taken at irdson, 32 N. H. 59; Proprietors of L. the defendant's request. & C. V. Lowell H. R. Co., 109 Mass. 2 Westfield v. Mayo, 122 Mass. 100, 221; Corsicana v. Tobin, 23 Tex. Civ. 23 Am. Rep. 292. App. 492, 57 S. W. Rep. 319. §83.] ELEMENTS OF DAMAGE. 24^ ably necessary consequence of the wrongful act of the other, if he has notified the other to appear and defend the suit. When, however, the claim against him is upon his own contract or for his own misfeasance, though he may have a remedy against another, and the damages recoverable may be the same as the amount of the judgment recovered against himself, counsel fees paid in defense of the suit against himself are not recov- erable." ^ It appears to the writer that such expenses being rec- ognized as not remote and contingent, the test here given for their allowance or rejection is not sound. They were allowed in that case, the plaintiff, a municipal corporation, having de- fended a suit for damages brought against it for a defect in a sidewalk caused by the defendant; but by the rule laid down, an innocent agent who does at the request of his principal a wrongful and injurious act, on being sued therefor would have no recourse for fees of counsel employed to defend that action.^ 1 In Chase v. Bennett. 59 N. H. 394, an action for neglect of a clerk to indexamortgage,whereby the plaint- iff was induced to take a mortgage of tlie property supposing it to be unincumbered, it was held that counsel fees paid in defending a suit by the prior mortgagee for the proi> erty were not damages for which the defendant was liable because they were not the natural and rea- sonable consequence of his neglect, and because he was not notified to defend that suit. Such fees are not recoverable against the person liable over for a defect in a highway. Corsicana v. Tobin. 23 Tex. Civ. App. 492, 500, 57 a W. Rep. 319. 2 See Howe V. Buffalo, etc. R. Co., 37 N. Y. 297. Ill Reggio V. Braggiotti, 7 Cush. 166, the defendant sold to the plaint- iff an article which he warranted to be one known in commerce as opium, with a view of its being sold as such; but it was not opium, or of any value; the plaintiff having sold with like warranty, relying on the defendant's warranty, had been sued by his vendee and compelled to pay damages and costs; he gave the de- fendant notice of that suit and re- quested him to defend it, and in- curred large expense in and about it. Shaw, C. J., said: "As they (the plaintiffs) gave notice to the defend- ants of the pendency of the first ac- tion, they are entitled to recover their taxable costs. See Coolidge v. Brigham, 5 Met. 68. But the counsel fees cannot be allowed. They are expenses incurred by the party for his own satisfaction, and they vary so much with the character and dis- tinction of the counsel that it would be dangerous to permit him to im- pose such a charge upon an oppo- nent; and the law measures the expenses incurred in the manage- ment of a suit by the taxable costs." Counsel fees are here treated as in some sense uncertain in amount, and for this reason the party having a right of recovery over should not impose such a charge; but it is not correct to say that such services are so uncertain iq value as to be inca- 24:8 COMPENSATION. [§ 84. And yet in this opinion the learned judge says: " Within this [139] rule a master who is immediately responsible for the wrongful acts of a servant, though there is no misfeasance on his part, might recover against such servant not only the amount of the judgment recovered against him, but his reason- able expenses, including counsel fees, if notified to defend the suit." Where there is an implied or express indemnity which covers the consequences of being sued and having to defend an action, all the usual concomitants of such a situation are necessarily within the contemplation of the parties; and if there is no objection of improvidence or bad faith the expense of counsel is obviously as proper to be allowed as the fees of witnesses, the clerk of the court or the sheriff. Davis, J.,^ said, speaking generally: " All the cases recognize fully the liability of the principal where the relation of master and servant or principal and agent exists; but there is a conflict of authority in fixing the proper degree of responsibility where an inde- pendent contractor mtervenes." ^ § 84. Same subject; liability for losses and expenses. In cases of express indemnity or where there is a duty of that [14:0] nature springing from those relations the obligation is pable of being estimated. Nor is it Pennell v. Woodburn, 7 C. & P. 117; satisfactory reasoning that because Penley v. Watts, 7 M. & W. 601; the charges of counsel vary no allow- Jones v. Williams, id. 493; Walker v. ance whatever should be made for Hatton, 10 id. 249; Smith v. Howell, such an expense when it is among 6 Ex. 730. the natural and proximate conse- In Kiddle v. Lovett, 16 Q. B. Div. quences of the breach of contract. 605, a platform put up, under con- It was obviously as natural and prox- tract, for the plaintiff by the defend- imate a consequence as the other ex- ant, to enable the former to paint a pensesof the suit. house, fell because of defective con- 1 Chicago V. Robbins, 2 Black, 418. struction and hurt a workman in the 2See Randell v, Trimen, 18 C. B. plaintiff's employ. The latter settled 786; Moule v. Garrett, L. R 7 Ex. 101; an action brought by his employee, Baxendale v. London, etc. R., L. R. and then sued defendant. The latter 10 Ex. 85; Fisher v. Val de Travers was held liable for nominal damages Asphalte Co., 1 C. P. Div. 511; Mors- for the breach of his contract: but le-Blanch v. Wilson, L. R. 8 C. P. inasmuch as the plaintiff had era- 227; Randall v. Raper, 96 Eng. C. L. ployed a competent contractor to 84; Richardson v. Dunn, 8 C. B. (N. build the platform and was free from S.) 655; Ronneberg v. Falkland Isl- negligence, he was not liable to the ands Co., 17 id. 1; Brown v. Haven, injured man and the amount paid 37 Vt. 439; Neale v. Wyllie, 3 B. & C. him could not be recovered from the 533; Lewis v. Peake, 7 Taunt. 153: defendant. I § 84:.] ELEMENTS OF DAMAGE. 249 directly to reimburse expenses and losses; they are the im- mediate subjects of the contract or duty rather than the dam- Ages for the breach of either. But in many other cases suits against one person or party may result from the tort or breach of contract of another; and then, whether damages therefor, including the cost and expenses, may be recovered for such wrong or breach of contract will depend on whether such suits, with the consequences and incidents in question, were the natural and proximate result of the act complained of or were within the contemplation of the parties.^ Where a per- son falsely profess'^sto act as an agent there is an implied war- ranty that he is such. If he have no authority and his pre- tense is false, either the party whom he assumed to represent^ or the party dealing with him on the faith of his being an agent ^ may hold him answerable for all damages resulting from his unauthorized contracts ; and among other things for costs of actions brought or defended in consequence of such contracts. So a party who sells property with an express or implied war- ranty of title is liable for the costs of a successful action, as well as damages recovered therein against his vendee, by which such title is overthrown and the vendee dispossessed or com- pelled to pay for the property to another person.^ The right of a party who has bought ])roperty with a war- ranty of title to defend a suit brought against him based upon an adverse claim, after he has given notice to the vendor [111] and requested him to assume the defense, and his failure to reply or refusal to defend, stands upon somewhat different considerations from those which apply to sureties and others in similar situations. A vendee has a right to the property 1 Agius V. Great Western Colliery Am. Eep. 480; Boyd v. "Whitfield, 19 Co., [1899] 1 Q. B. 413. Ark. 447; Ryerson v. Chapamn, 66 ijPhilpot V. Taylor, 75 111. 309, 20 Me. 557; Williamson v. Williamson, Am. Rep. 241. 71 Me. 442; Brewster v. Countryman, sCoUen v. Wright, 7 El. & B. 301; 12 Wend. 446: Marlattv. Clar3% 20 Hughes V. Graeme, 33 L. J. (Q. B.) Ark. 251; Giffert v. West, 33 Wis. 335. 617; Eaton v. Lyman, 24 Wis. 438; 4Staatsv. Ten Eyck,3 Caines, 111; Stewart v. Drake, 9 N. J. L. 139; Pitcher v. Livingston, 4 Johns. 1, 4 Holmes v. Sinnickson, 15 id. 313, 29 Am. Dec. 229; Rickert v. Snyder, 9 Am. Dec. 687; Monis v. Rowan, 17 Wend. 416; Bennet v. Jenkins, 13 N. J. L. 304; Coleman v. Clark, 80 Johns. 50; Harding v. Larkin, 41 111. Mo. App. 339, citing the text. -113; Crisfield v. Storr. 86 Md. 129, 11 250 COMPENSATION. [§ Si. which he has purchased, as between him and the vendor; and unless he is made aware that the vendor's title was defective, or that the suit of a third person for the property cannot for- some reason be defended, he has a right to defend in reliance upon the warrant}'' to the end that he may have and enjoy the fruit of his purchase. So if there is a warranty of kind or- quality the purchaser has a right to act upon the assumption that such warranty is true, and sell with like warranty, and defend suits for its breach.^ But if he has notice that his- title is bad or that the warranty cannot be maintained he is- under the same restrictions as all other parties who have a right of recovery over against unnecessary expense or an un- righteous resistance of an action which cannot be defended.^ In an action on a warranty of the soundness of a horse which had been sold with like warranty, and in which the plaintiff had been beaten in a suit against him on his warranty, it was held he was not entitled to recover as special damage the cost incurred by him in the defense of the former action, for the jury found that by reasonable examination of the horse he might have discovered that it was unsound at the time he sold it.' An examiner and guarantor of titles to real estate em- ployed to conduct the purchase of a house procured from its owner, who also owned the adjoining house, a deed which through its negligence covered the wrong house; the grantee procured the reformation of such deed and, on obtaining pos- session of the house he desired, found it incumbered by a mort- gage not disclosed to him by the examiner. After eviction by foreclosure, the grantor being insolvent, he recovered from the examiner the money paid on the purchase price, that being less than the amount of the undisclosed mortgage.* 1 Hammond v. Bussey, 20 Q. B. * Ehmer v. Title Guarantee & Trust Div. 79, stated in note to § 87; Clare Co., 156 N. Y. 10, 50 N. E. Rep. 420. V. Maynard, 7 C. & P. 741; Curtis v. Moneys paid by a corporation to Hannay, 3 Esp. 82; Sweet v. Patrick, establish the business in which it is 12 Me. 9; Ryerson v. Chapman, 66 engaged cannot be recovered by the Me. 561. shareholders in an action against 2 Sliort V. Kalloway, 11 A. & E. the directors for negligence. Bloom 28; Wrightup v. Chamberlain, 7 v. National United Benefit Savings Scott, 598; Lunt v. Wrenn, 113 111. & Loan Co., 152 N. Y. 114, 46 N. E.. 168. Rep. 166. ' Wrightup v. Chamberlain, supra. §85.] ELEMENTS OF DAMAGE. 251 §85. Same subject; bonds and undertakings ; damages and costs. Upon statutory bonds and undertakings to pay damages and costs resulting from the issue of certain writs, as an injunction, sequestration or attachment, incase it shall be decided that the party obtaining it was not entitled to it, the recovery depends mainly upon the terms of the instrument; but " damages and costs " include, among other things, the costs incident to the particular writ and of the proceedings to procure its discharge, including counsel fees, except in the fed- [142] eral courts.^ On principle and the weight of authority, where the prosecution or defense of suits is rendered naturally and proximately necessary by a breach of contract or any wrong- ful act, the costs of that litigation, reasonably and judiciously conducted, paid or incurred, including reasonable counsel fees, are recoverable as part of the damages.^ 1 Corcoran v. Judson, 24 N. Y. 106; Hovey v. Rubber Tip Pencil Co., 50 N. Y. 335; Groat v. Gillespie, 25 Wend. 383; Edwards v. Bodine, 11 Paige, 223; Rose v. Post, 56 N. Y.603; Rosser v. Timberlake. .78 Ala. 162; Pettit V, Mercer, 8 B. Mon. 51 ; Meshke V. Van Doren, 16 Wis. 319; An- drews V. Glenville Woolen Co., 50 N. Y. 282; Gear v. Shaw, 1 Pin. 608; Barton v. Fisk, 30 N. Y. 171; Tama- roa V. Southern Illinois University, 54 111. 334; Elder v. Sabin, 66 111. 126; Wilson V. McEvoy, 25 Cal. 170; Cum- mings V. Burleson, 78 111. 281; Prader V. Grim, 13 Cal. 585; Guild v. Guild, 2 Met. 22'J; Brown v. Jones, 5 Nev. 874; Baggett v. Beard, 43 Miss. 120; Raupman v. Evansville, 44 Ind. 392; Alexander v. Colcord, 85 111. 323; Steele v. Thatcher, 56 111. 257; Miller V. Garrett, 35 Ala. 96; Holmes v. Weaver, 52 id. 516; Noble v. Arnold, 23 Ohio St. 264; Riddle v. Cheadle, 25 id. 278; McRae v. Brown, 12 La, Ann. 181; Campbell v. Metcalf, 1 Mont. 378; Derry Bank v. Heath, 45 N. H. 524; Langworthy v. McKelvy, 25 Iowa, 48; Behrens v. McKenzie, 23 Iowa, 333, 92 Am. Dec. 428: Wal- lace V. York, 45 Iowa, 81 ; Bonner v. Copley, 15 La. Ann. 504; Sandback V. Thomas, 1 Stark. 306; Pritchet v. Boevey, 1 Cr. & M. 775; Holloway v. Turner, 6 Q. B. 928. See Day v. Wood- worth, 13 How. 363; Oelrichs v. Spain, 15 Wall 211: §§512. 524. Attorney fees not allowed in an action for infringement of a patent. Teese v. Huntingdon, 23 How. 2. Counsel fees for services rendered in the supreme court on appeal may be recovered for. Boiling v. Tate, 65 Ala. 417, overruling earlier cases, 2 Hughes v. Graeme, 33 L. J. (Q. B.) 335'; Ziegler v. Powell, 54 Ind. 173; Lawrence v. Hagerman, 56 111. 68, 8 Am. Rep. 674; Krug v. Ward, 77 111. 603; Westfield v. Mayo, 122 Mass. 100, 23 Am. Rep. 292; New Haven & N. Co. V. Hayden, 117 Mass. 433; Noyes V. Ward, 19 Conn. 2)0; Pond v. Har- ris, 113 Mass. 114; White v. Madison, 26 N. Y. 117; Henderson v. Squire, L. R. 4 Q. B. 170; Webber v. Nicholas, 4 Bing. 16; Noble v. Arnold, 23 Ohio St. 264; Alexander v. Jacoby, id. 358; Godwin v. Francis. L. R. 5 C. P. 295; Ryerson v. Chapman, 66 Me. 557; Du- bois V. Hermance, 56 N. Y. 673; Call V. Hagar, 69 Me. 521; Bonesteel v. Bonesteel, 30 Wis. 511; Ah Thaie v. 252 COMPENSATION. [§ 86. § 8G. Same subject; necessity of notice to indemnitor to fix liability. Where a judgment recovered may, by notice to one ultimately liable, fix the amount which the latter is liable to pay to the party against whom the judgment is ob- tained, in some states notice is required in order to entitle the party sued to the ulterior recourse for the costs of defending; because the defense is to be made or not solely in the interest [143] of the party who must in the end be chargeable with the proper consequences of the liability upon which the judgment is founded; therefore, he is entitled to be consulted, and to have no expenses incurred and charged to him except at his request or with his sanction. Confined to cases covered b}'^ an obligation of indemnity and those where there is no right of the immediate defendant or party to the suit peculiar to him- self to be asserted in the action, the rule is a wholesome one and rests upon sound principles. Of this class are actions against an agent, servant or surety for acts of which the mas- ter or principal must bear the whole responsibility; suits against which there is an express indemnity and those in which the party proceeded against is sought to be made liable without actual misfeasance for the acts of another who must respond for the consequences of that liability.^ The object of the notice is not to give a ground of action. If a demand be sued which the person indemnifying is bound to pay, and no- tice be given to him and he refuse to defend the action, in consequence of which the person to be indemnified is obliged to pay the demand, the other party is estopped after such no- tice from disputing it or from claiming that the party sued was not bound to pay it.^ Its effect is to let in the party who Quan Wan, 3 Cal. 216 ;Henay V.Hand, 79; Murrell v. Fysh, 1 Cab. & E. 80; 36 Ora 492, 59 Pac. Rep. 330, citing § 58. the text See Barnard v. Poor, 21 i Lowell v. Boston, etc. R. Co., 23 Pick. 878; Rice v. Austin, 17 Mass. Pick. 24; Proprietors of L. & C. v. 197; Guild v. Guild, 2 Met. 229; Ar- Lowell H. R. Co., 109 Mass. 221; Ot- canibel v. Wiseman, 3 Dall. 306; tuniwa v. Parks, 43 Iowa, 119; Apgar Gould V. Barratt, 2 Mood. & Rob. v. Hiler, 24N. J. L. 812; Beckley v. 171; Maiden v. Fyson. 11 Q. B. 292; Munson, 22 Conn. 299; Holmes v. In re United Service Co., L. R. 6 Ch. Weed, 24 Barb. 546; Fisher v. Fal- 212; Tindall v. Bell, 11 M. & W. 228; lows, 5 Esp. 171; Brooklyn v. Brook- Dixon V. Fawcas, 3 E. & E. 537; lyn City R. Co., 57 Barb. 497; Finckh Hammond v. Bussey, 20 Q. B. Div. v. Evers, 25 Ohio St. 82. 2 Duffield V. Scott, 3 T. R 374 § 87.] ELEMENTS OF DAMAGE. 253 is bound to indemnify to defend the suit against the indemni- fied party and to preclude the former from showing, when sued for such indemnity, that the phiintiff has no claim for the alleged loss, or not to the amount alleged; that he made an improvident bargain, and that the defendant might have ob- tained better terms if the opportunity had been given to him.' It is not necessary to the production of this result that the indemnitor should have notice in writing, or even express no- tice, of the action; notice may be implied from his knowledge of the action and participation in its defense.^ A formal re- quest that he assume the defense of the action is not essential.' In such actions two questions arise: first, has the plaintiff a legal cause of action; second, to what extent has he been dam- nified? The indemnifying party is entitled to his day in court on these questions. If he has notice to defend a suit brought against another who has a right of recovery over against him, that opportunity is offered him; and the right to defend [144] at his expense will depend on his answer, and he cannot be charged with costs of an improvident defense or one made con- trary to his expressed will.'* If notice cannot be given it is reasonable that the indemnified party should exercise some judgment whether to defend or not, where the amount is un- liquidated or the demand disputable. AVhere he does so with- out notice and judgment is recovered against him it is res inter alios acta as to the first of these questions, and jprivia facie evidence on the second, though the contract of indemnity is general. § 87. Same subject. There are not the same reasons for notice to the party ultimately liable, though there are reasons for notice, where the action, the costs of which are claimed, is brought on some independent contract, or is the alleged result of a tortious act of such party; and where the party claiming for the costs of defending such action defended it to maintain 1 Smith V. Compton, 3 B. & Ad. Y. 614; Port Jervis v. First Nat. 407; French v. Parish, 14 N. H. 496; Bank, 96 id. 550. Port Jervis v. First Nat. Bank, 96 N. 3 jjeiser v. Hatch, svpra; Nashua Y. 550. Iron & Steel Co. v. Brush, 33 C. C. A. 2 Barney v. Dewey, 13 Johns. 224, 456, 91 Fed. Rep. 213. 7 Am. Dec. 372; Beers v. Pinney, 12 * See New York State M. Ins. Co. Wend. 309; Heiser v. Hatch, 86 N. t. Protection Ins. Co., 1 Story, 458. 254: COMPENSATION. [§ 87. his own legal rights derived from that party, and does not make the defense in his interest, he may still have his recourse to him for indemnity. A vendee, having a warranty of title, may defend a suit brought by a third person for the property without consulting his vendor. He has a right, as between himself and the latter, to retain the property and maintain, if he can, the title warranted to him; he is not obliged to con- tent himself with a remedy on his warranty and acquiesce in any adverse claim that may be set up unless the circumstances show that it cannot be contested ; he may defend a suit brought on his own warranty made to his vendee on the faith of the warranty of his vendor. A person purchasing from another who falsely pretends to be an agent may sue the supposed principal on that contract to enforce it. In case of defeat the expenses of such litigation are the natural and proximate re- sult of the breach of contract and, if not improvidently in- curred, are recoverable on the same principle as expenses incurred in other ways after a breach in furtherance of the object of a contract, or to lessen the damages which would otherwise result from its infraction.^ And such items will presently be considered as a distinct topic- [145] The authorities are in conflict on the necessity of no- tice, and no clear rule or principle can be deduced from them; but the foregoing views appear to be those supported by the best considered cases and most in harmony with the principles applied in other analogous cases. Under certain conditions a notice may make the judgment conclusive evidence against the party notified in favor of one giving the notice and having a right of recovery over against him. This is the case where notice is given to a vendor by his vendee of proceedings founded upon an adverse title which becomes paramount.^ So in case of other warranties, where the warrantee has acted upon them in such manner as was within the contemplation of the parties [146] at the time of contracting, as by giving like warranty and iSee Nashua Iron & Steel Co. v. 3 Thurston v, Spratt, 52 Me. 202; Brush. 33 C. C. A. 456, 91 Fed. Rep. Boyd v. Whitfield, 19 Ark. 447; Mar- 218; Chase v. Bennett, 59 N. H. 394. latt v. Clary, 20 Ark. 251; Harding 2 Hughes V. Graeme, 39 L. J. (Q. B.) v. Larkin. 41 111. 413; Castleton v. 335;Ryersonv. Chapman, 66 Me. 561; Miner, 8 Vt. 209; Crisfield v. Storr, § 88. 36 Md. 129, 11 Am. Rep. 480. ■-§ ST.] ELEMENTS OF DAMAGE. 255 has been sued upon it.' It is a part of the contract of war- ranty that the warrantor shall defend the title; and by the warrantee giving notice when the title is attacked two objects are attained: first, it gives the defendant the advantage of the iReggio V. Braggiotti, 7 Cush. 166; CoUen V. Wriglit, 8 El. & B. 647; Randell v. Trimen, 18 C. B. 786; Brown v. Haven, 37 Vt. 439; Moule V. Garrett, L. R. 7 Ex. 101; Mors-le- Blanch v. Wilson, L. R. 8 C. P. 227. In Baxendale v. London, etc. R Co., L. R. 10 Ex. 35, tiie case was •that H. having contracted with the plaintiffs who were carriers for the carriage of two pictures from Lon- don to Paris, the plaintiffs contracted with the defendants for the carriage by them of the pictures over a part ■of the distance. The pictures were damaged on the journey by the de- fendants' negligence. H. thereupon brought an action against the plaint- iffs, who gave notice of it to the de- fendants and requested them to de- fend it. They refused and told the plaintiffs to take their own course. The latter defended the action brought against them by BL without success, and then sued the defend- ants to recover not only the dam- ages found by the jury to have been sustained by H., but also the costs of the unsuccessful defense. The court held that the costs were not recover- able, inasmuch as they could not be regarded as the natural consequence of the defendants' default, the con- ti'acts between H. and the plaintiffs, and between the plaintiffs and the defendants, being separate and inde- pendent. The decision of the court of exchequer was in favor of recov- ery for these costs. Cleasby, B., said : "Now, in the first instance, the plaintiffs could obtain very little in- formation to guide them either in defending the action or in settling it. They could not pay money into 'Court, for the damage done by the water to the pictures was diflScult to ascertain without a regular inquiry by persons con)petent to deal with the matter. Having regard to the nature of the claim, we certainly think they could not be expected either to settle the claim before ac- tion or to pay money into court; and we think it was the necessary con- sequence of the defendants' neglect that the plamtiffs should be put to the expense of ascertaining in a proper way the amount of their lia- bility to Harding, in order that they might recover over against the de- fendants. . . . Clearly the plaint- iffs were entitled to some costs. . . . The plaintiffs are entitled to recover from the defendants all costs incurred in having the amount of their liability ascertamed. . . . They are not entitled to the costs of any defense peculiar to themselves, such as that they were mere for- warding agents and not carriers." But a different view was taken in the exchequer chamber. Coleridge, C. J., said: " The defense was not, in my judgment, a reasonable defensa It was without any foundation in law, and there was no authority from the defendants, either express or im- plied, to set it up. This, however, does not dispose of the whole of the plaintiffs' claim. For it may be said, •True, the defense was ill-advised and unauthorized; still tlie plaintiffs were obliged to do something to as- certain their liability, and they at least are entitled to such an amount of costs as they would have incurred had they allowed judgment to go by default upon a writ of inquiry.' But I think this contention fails also be- cause it seems to me that the whole 256 COMPENSATION. [§87 better information which the warrantor is supposed to possess in relation to the title; and second, saves the necessity of try- [147] ing the same title again in an action against the war- rantor. The notice to the latter makes him privy to the rec- ord, and he is bound by it to the extent to which his rights have been tried and adjudged; and, in an action against him at the suit of the warrantee, in addition to the record, all that is necessary to be shown is that his title was in issue, and judg- ment given upon it.' The warrantor is at liberty to show any other fact not involved in that adjudication which will be bene- ficial to his defense, as that the defect of title arose after he sold the property, and, therefore, that he had no interest in the determination of the question tried.^ of the costs were incurred for the plaintiff's own benefit, and were not in any sense the natural or proxi- mate result of the defendants' breach of duty." Keating. Quain and Lush, JJ., were of the same opinion, and tliought the damages too remote. The case of Mors-le-Blanch v. Wilson, supra, was overruled. The latest exposition of English law upon this question is given in Hammond v, Bussey, 20 Q. B. Div. (1887), 79, where Baxendale v. London, etc. R. Co., supra, is distinguished. The question decided is thus stated by the reporter: "The defendant con- tracted for the sale of coal of a par- ticular description to the plaintiffs, knowing that they were buying such coal for the purpose of reselling it as coal of the same description. The plaintiffs did so resell the coal. The coal delivered by the defendant to the plaintiffs under the contract and by them delivered to their sub-ven- dees did not answer such description, but this could not be ascertained by inspection of the coal, and only be- came apparent upon its use by the sub-vendees. The sub- vendees there- upon brought an action for breach of contract against the plaintiffs. The plaintiffs gave notice of the ac- tion to the defendant, who, however, repudiated all liability, insisting that the coal was according to contract. The plaintiffs defended the action against them, but at the trial the verdict was that the coal was not according to contract, and the sub- vendees accordingly recovered dam- ages from the plaintiffs. The plaint- iffs thereupon sued the defendant for breach of contract, claiming as dam- ages the amount of the damages re- covered from them in the action by their sub-vendees, and the costs wliich had been incurred in such ac- tion." Liability for costs was de- nied. Held, that the defense of the previous action being, under the cir- cumstances, reasonable, the costs incurred by the plaintiffs as defend- ants in such action were recoverable under the rule in Hadley v. Baxen- dale as being damages which might reasonably be supposed to have been in the contemplation of the parties, at the time when they made the con- tract, as the probable result of a breach of it. 1 Davis V. Wilbourne, 1 Hill (S. C), 27, 26 Am. Dec. 154; Miner v. Clark, 15 Wend. 425; Barney v. Dewey, 13 Johns. 225, 7 Am. Dec. 372; Pickett V. Ford, 4 How. (Miss.) 246: Col burn v. Pomeroy, 44 N. H. 19; Shelby v. Missouri Pacific R. Co., 77 Mo. App. 205, citing the text. ■i Thurston v. Spratt, 52 Me. 202. §88.] ELEMENTS OF DAMAGE. 25: § 88. Expenses incurred to prevent or lessen damages. Fifth, such losses may consist of labor done and expenses [148] incurred to prevent or lessen damages which would otherwise ■ result from the defendant's default or misconduct. The law imposes upon a party injured by another's breach of contract or tort the active duty of using all ordinary care and making all reasonable exertions to render the injury as light as pos- sible. If by his negligence or wilfulness he allows the dam- ages to be unnecessarily enhanced, the increased loss, that which was avoidable by the performance of his duty, falls upon him.* This is a practical obligation under a great variety of circum- stances, and as the damages which are suffered by a failure to perform it are not recoverable it is of much importance. Where it exists the labor or expense which its performance involves 1 Ohio & M. R. Co. V. McGehee, 47 111. App. 348; Hartford Deposit Co. v. Calkins, 18G III. 104, 57 N. E. Rep. 863, quoting the text; Southern R. Co. v. Ward, 110 Ga. 793, 36 S. E. Rep. 78; McCarty v. Boise City Canal Co., 2 Idaho, 225, 10 Pac. Rep. 623; Factors' & Traders' Ins. Co. v. Werlein, 42 La. Ann. 1046, 8 So. Rep. 435, 11 L. R. A. 361; Gniadck v. Northwestern Imp. & Boom Co., 73 Minn. 87, 75 N. W. Rep. 894; Sweeney v. Montana Cen- tral R. Co., 19 Mont. 163, 47 Pac. Rep. 791; Loomer v. Thomas, 38 Neb. 277, 56 N. W. Rep. 973, quoting the text; Gulf, etc. R. Co. V. Simonton, 2 Tex. Civ. App. 558, 22 S. W. Rep. 285; Southern Kansas R. Co. v. Isaacs, 20 Tex. Civ. App. 466, 49 S. W. Rep. 690; Austin V. Chicago, etc. R. Co., 93 Wis. 496, 67 N. W. Rep. 1129; Culler- ton V. Miller, 26 Ont. 36, 45, quoting the text; FuUerton v. Fordyce, 144 Mo. 519, 44 S. W. Rep. 1053: Sherman Center Town Co. v. Leonard, 46 Kan. 854, 26 Pac. Rep. 717, 26 Am. St. 101; Fowle V. Park, 48 Fed. Rep. 789; Pennsylvania R. Co. v. Washburn, 50 id. 335; Hamilton v. McPherson, 28 N. Y. 72, 8 1 Am. Dec. 380-, Rexter v. Starin, 73 N. Y. 601; Costigan v. Mo- hawk, etc. R. Co., 2 Denio, 609; Tay- VOL. 1 — 17 lor V. Read, 4 Paige, 572; Dillon v. Anderson, 43 N. Y. 231; Dorwiu v. Potter, 5 Denio, 306; Hochster v. De la Tour, 2 El. & B. 678; Loker v. Damon, 17 Pick. 284; French v. Vin- ing, 102 Mass. 132, 3 Am. Rep. 440; Cherry v. Thompson, L. R. 7 Q. B. 573; Driver v. Maxwell, 56 Ga. 11; Roper V. Johnson, L. R. 8 C. P. 167; Simpson v. Keokuk, 34 Iowa, 568; Beymer v. McBride, 37 Iowa, 114; Frost V. Knight, L. R. 7 Ex. Ill; Hecksher v. McCrea, 24 Wend. 304; Davis V. Fish, 1 G. Greene, 406, 48 Am. Dec. 387; Allender v. C. K. I. & P. R. Co., 37 Iowa, 264; Dobbins v. Duquid, 65 111. 464; Chamberlain v. Morgan, 68 Pa. 168; New Orleans, etc. Co. V. Echols, 54 Miss. 264; Hathorn V. Richmond, 48 Vt. 557; Pinuey v. Andrus, 41 Vt. 631; Bradley v. Den- ton, 3 Wis. 557; Gordon v. Brewster, 7 Wis. 355; Fitzpatrick v. Boston & M. R., 84 Me. 33, 24 Atl. Rep. 432; Williams v. Yoe, 19 Tex. Civ. App. 281, 46 S. W. Rep. 659; Dietrich v. Hannibal, etc. R. Co., 89 Mo. App. 36; Webb V. Metropolitan Street R. Co., id. 604; Warren v. Stoddart, 105 U. S. 224; William E. Peck & Co. v. Kansas City Metal Roofing & C. Co., — Mo. App. — , 70 S. W. Rep. 169. 258 COMPENSATION. II is chnt'geable to the party liable for the injury thus mitigated; in other words, the reasonable cost of the measures which the injured party is bound to take to lessen the damages, whether adopted or not, will measure the compensation the party in- jured can recover for the injury or the part of it that such measures have or would have prevented,^ This is on the prin- ciple that if the efforts made are successful the defendant will have the benefit of them ; if they prove abortive it is but just that the expense attending them shall be borne by him.^ » Id. ; Monroe v. Lattin, 25 Kan. 351; Board of Com'rs v. Arnett, 116 Ind. 438, 19 N. E. Rep. 299; Texas & P. R. Co. V. Levi, 59 Tex. 674; Long v. Clapp. 15 Neb. 417. 19 N. W. Rep. 467, quoting the text; Travis v. Pierson, 48 Hi. App. 579; Hewson-Herzog Suj)- ply Co. V. Minnesota Brick Co., 55 Minn. 530, 57 N. W. Rep. 129; Monroe V. Connecticut River Lumber Co., 68 N. H. 89, 39 AtL Rep. 1019; Hughes V. Austin. 12 Tex. Civ. App. 178, 33 S. W. Rep. 607, citing the text; Nad- ing V. Deuisou & P. R. Co., 22 Tex. Civ. App. 173, 54 S. W. Rep. 412, quoting the text; Nelson v. St. Louis, etc. R. Co., 49 Kan. 165, 30 Pac. Rep. 178; Uhlig v. Barnum, 43 Neb. 584, 594, 61 N. W. Rep. 749, quoting the text; Galbreath v. Carnes, 91 Mo. App. 512, quoting the text; Armi- Btead V. Shreveport, etc. R. Co., — La. — , 32 So. Rep. 456, citing the text. "Legal expenses are recoverable as damages when incurred in pro- ceedings taken by the injured party to prevent or reduce the damage which he would incur by the con- tinuance of the wrong which he has abated by resort to such proceed- ings." Clason V. Nassau Ferry Co.. 20 N. Y. Misc. 315, 45 N. Y. Supp. 675, citing this section. In an action to punish defendants for contempt in violating an injunc- tion the expense of a second injunc- tion was included in the fine im- posed on them, it being considered that such expense was incurred in an action brought expressly to re- strain a continuance of the damaga Jewelers' Mercantile Agency v. Rothschild, 6 App. Div. 499, 39 N. Y. Supp. 700. A corporation which wrongfully refuses to register shares in the name of a purchaser must respond to him for the value of other shares he bought to lessen the responsibility he was under to his vendee. Balkis Consolidated Co. v. Tomkinson, [1893] App. Cas. 396; Tomkinson v. Balkis Consolidated Co., [1891] 2 Q. B. 614 2 Watson V. Proprietors Lisbon Bridge, 14 Me. 201, 31 Am. Dec. 49; Summers v. Tarney, 123 Ind. 560, 24 N. K Rep. 678. See § 693. In Miller v. Mariner's Church, 7 Ma 51, 20 Am. Dec. 341, is a sound exposition of this dutj'. Weston, J., said: '■ If the party injured has it in his power '.to take measures by which his loss may be less aggravated this will be expected of him. Thus in a contract of assurance, where the as- sured may be entitled to recover for a total loss, he, or the master em- ployed by him, becomes the agent of the assurer to save and turn to the best account such of the property as- sured as can be preserved. The pur- chaser of perishable goods at auction fails to complete his contract. What shall be done ? Shall the auctioneer leave the goods to perish and throw §8S.] ELEMENTS OF DAMAGE. 259 "When, after a contract has been entered into, notice is [140] given by one of the parties that it is rescinded on his part, he is only liable for such damages and loss as the other has suf- fered by reason of such rescinding; and it is the duty [150] of the latter, upon receiving such notice, to save the former, as far as it is in his power, all further damages though to do so may call for affirmative action.^ If a person hired for service for a given term is wrongfully dismissed he is entitled to the stipulated wages for the terra of his engagement if that is his loss. It is prima facie his loss; but the law imposes on him the wliole loss upon the purchaser ? That would be to aggravate it un- reasonably and unnecessarily. It is his duty to sell them a second time, and if they bring less he may recover the difference, with commissions, and other expenses of resale, from the first purchaser. If the party entitled to the benefit of a contract can pro- tect himself from a loss arising from a breach at a trifling expense or with reasonable exertions, he fails in social duty if he omits to do so, regardless of the increased amount of damages for which he may intend to hold the other contracting party liable. Qui non proJiibet, cuvi proliibere possit, mbet. And he who has it in his power to prevent an injury to his neighbor and does not exercise it is often in a moral, if not in a legal, point of view, accountable for it. The law will not not permit him to throw a loss, resulting from a damage to himself, upon another, arising from causes for which the latter ma}' be re- sponsible, which the party sustaining the damage might by common pru- dence have prevented. For example, a party contracts for a quantity of bricks to build a bouse, to be deliv- ered at a given time; and engages masons and carpenters to go on with the work. The bricks are not de- livered. If other bricks of an equal qualitj' and for tlie stipulated price ■can be at once purchased on the spot it would be unreasonable, by neglect- ing to make the purchase, to claim and receive of the delinquent party damages for the workmen, and the amount of rent whicli might be ob- tained for the house if it had been built. The party vvlio is not charge- able with a violation of his contract should do the best he can in such cases; and for any unavoidable loss occasioned by the failure of the other he is justly entitled to a liberal and complete indemnity." In Hogle V. New York, etc. R. Co., 28 Hun, 363. the trial court refused to charge that when plaintiff discov- ered a fire on his premises he could not recover for subsequent damages if he neglected to use reasonable practicable means to suppress it, on the ground that the fire was not at- tributable to his fault. This was considered as not being far from say- ing that he might do what he could to increase it. He was bound to use all reasonable efforts in his power to stop the fire. Bevier v. D. & H. C. Co., 13 Hun, 254; Milton v. Hudson River S. Co., 37 N. Y. 214. See O'Neill v. New York, etc. R. Co., 45 Hun, 458, as to an excuse for non-perform- ance of duty. 1 Hewson-Herzog Supply Co. v. Minnesota Brick Co., 55 Minn. 530, 57 N. W. Rep. 129, quoting the text; Dillon V. Anderson, 43 N. Y. 231. 2G0 COMPENSATION. [§ 88. the duty to seek other employment; and to the extent that he obtains it and earns wages, or might have done so, his dam- ages will be reduced.^ The rule as stated was deemed appli- cable where the owner of water lots upon a lake front, subject to the reservation of free passage thereon, refused to allow the plaintiff to haul ice cut from the lake over such lots, when frozen, to the wharf from which the plaintiff desired to ship the ice for the purposes of his business, unless he paid toll, which he refused to do; the defendant having acted without malice and under a honafide mistake as to his rights, the plaint- iff ought to have paid the toll under protest, and because he did not, he could not recover for the loss of his business conse- quent on the failure to ship ice.^ In an action for damages re- sulting from alleged defects in the construction of a building so that the roof leaked and injured the interior work or prop- erty therein,^ or for breach of a contract to repair a building from which similar injuries ensued,'' or for injury to crops through default of the defendant in not building or repairing a fence, or his tortious opening of the same,^ where the party suffering from the injury is aware of the fact and the cause and that by a little timely labor and expense the damage could be avoided, the law imposes the duty on him to stay the in- jury, when he is in a favorable situation to do it, and enforces the duty by confining his redress for the injury thus avoid- able to compensation for the necessary and proper means of prevention.^ The duty in such cases is not arbitrarily im- posed on the injured party and exacted of him in all cases, to do or amend the work of the other party, or to finish it; but 1 Borden Mining Co. v. Barry, 17 Cook v. Soule, 56 N. Y. 420; Thomp- Md. 419; Sutherland v. Wyer,67 Me. ^on v. Shattuck, 2 Met. 615. 64; Gillis v. S|jace, 63 Barb. 177; 5 Andrews v. Jones, 36 Tex. 149; Heavilon v. Ki-amer, 31 Ind. 241; Campbell v. Miltenberger, 20 La. Heilbrouer v. Hancock, 83 Tex. 714; Ann. 72; Loker v. Damon, 17 Pick. Howard V. Daly, 61 N. Y. 362, 19 Am. 284; Fisher v. Goebel, 40 Mo. 475; Rep. 285; Williams v. Chicago Coal Waters v. Brown, 44 Mo. 302; St. Co., 60 111. 149; Raleigh v. Clark, 71 Louis, etc. R. Co. v. Ritz. 33 Kan. 404; S. W. Rep. 857, Ky. , quoting Same v. Sharp. 27 id. 134; Smith v. the text. C. C. & D. R. Co., 38 Iowa, 518. 2CuUerton v. Miller, 26 On t. 36. egherman Center Town Co. v. 3 Mather v. Butler County, 28 Iowa, Leonard, 46 Kan. 354, 26 Am. St. 101. 253; Haysler v. Owen, 61 Mo. 270. 26 Pac. Rt^p. 717. 4 Dor win v. Potter, 5 Denio, 306; § 89.] ELEMENTS OF DAMAGE. 261 only when in view of all the circumstances of the particular case it is a reasonable duty which he ought to perform instead of passively allowing a greater damage.^ AVhere the party whose duty it is primarily to do the work necessary to fulfill the contract and to prevent damage from past failure or to stay injuries resulting from his negligence or other wrong is [151] in possession or has equal knowledge and opportunity, he alone may be looked to to fulfill that duty, and it will not avail him to say the injured party might have lessened the damages by performing the duty for him.^ § 89. Same subject; between Tendor and vendee. If the party claiming damages is a purchaser he can recover no more than it would cost him, with reasonable diligence, to supply him- self with the same property by resort to the market ' or other source or means of supply.* So where property is sold with a warranty of fitness for a particular purpose, if it be of such a nature that its defects can be readily, and in fact are, ascer- tained, yet the purchaser persists in using it, whereby losses and expenses are incurred, they come of his own Avrong and he cannot recover damages for them as consequences of the breach of warranty .•"* A. sold toB. a quantity of pork in bar- rels with a warranty that the barrels would not leak; B. stored it in a suitable place, but found afterwards that some of the barrels were leaking. In order to preserve the pork he filled 1 Armistead v. Shreveport, etc. R. Mackie, 71 Tex. 491, 10 Am. St. 766, Co., — La. ,32 So. Rep. 456, 459,quot. 9 S. W. Rep. 451, 1 L. R. A. 667. ing the text; Raleigh v. Clark, — » Parsons v. Sutton, 66 N. Y. 92; Ky. , 71 S. W. Rep. 857, quoting McHose v. Fulmer. 73 Pa. 365;Gains- the text. ford v. Carroll, 2 B. & C. 624; Barrow 2 Myers v. Burns, 35 N. Y. 269; t. Arnaud, 8 Q. B. 604; Hassard- Hexter v. Knox. 63 id. 561; Schwin- Short v. Hardison, 114 N. C. 483, 19 ger V. Raymond, 83 id. 192, 38 Am. S. E. Rep. 728; Creve Couer Lake Ice Rep. 415; Keys v. Western Vermont Co. v. Tamm, 90 Mo. App. 189; Law- Slate Co., 34 Vt. 81; Haysler v. rence v. Porter, 63 Fed. Rep. 62. Owen, 61 Mo. 270; Fisher v. Goebel, * Benton v. Fay, 64 III. 417; Bey- 40 Mo. 475; Green v. Mann, 11 111. mer v. McBride. 37 Iowa, 114; Grand 613; Waters v. Brown, 44 Mo. 302; Tower Co. v. Phillips, 23 Wall. 471; Smith V. Chicago, etc. R. Co., 38 Iowa, Hinde v. Liddell, L. R. 10 Q. B. 265. 518; Chicago, etc. R. Co. v. Ward, 16 * Draper v. Sweet, 66 Barb. 145; 111. 522; Flynn v. Trask, 11 Allen, Maynard v. Maynard, 49 Vt. 297; 550; Priest V. Nichols, 116 Mass. 401; Frick Co. v. Falk, 50 Kan. 644,33 Gardner v. Smith, 7 Mich. 410, 74 Am. Pac. Rep. 360. Dec. 722; St. Louis, etc. R. Co. v. 2()2 COMPENSATION. [§ 90. the leakinir barrels from time to time with new brine; but they continued to leak and a considerable quantity of the pork was spoiled. B. did not give notice to A. of the condi- tion of the barrels, nor offer to return the pork. It was the established practice among persons dealing in pork, of which B. was presumed to be cognizant, where the leaking of the barrels continued after they had been filled with new brine, to take out the pork and repack it in new barrels. In a suit brought by A. for the price of the pork, B. claimed a deduc- tion of the damages for breach of the warranty; it was held that the only deduction he was entitled to w^as the sum which [152] he would have been compelled to pay for new barrels in the place of the leaky ones, and for the repacking of the pork in them. If B., without knowledge that the barrels were leaky, and without care in informing himself of their condi. tion, had suffered the pork to remain in them for a reasonable time, and it had thereby become spoiled, he could have recov- ered in an action on the warranty the value of the pork spoiled. But as he knew that the barrels were leaky and might have prevented the injury to the pork by procuring new ones and repacking it, the loss of the pork should be regarded as attrib- utable to his own want of care rather than to the defect of the barrels.^ §90. Same subject; extent of the duty. The principle that the injured party must reasonably exert himself to pre- vent damage applies alike to cases of contract and tort.^ He is not required to commit a tort to prevent damages;' nor to anticipate and provide against a threatened trespass.* The plaintiff had a lease of a grazing farm, which he had occasion to use to its capacity in grazing his cattle intended for sale; the defendant wrongfully turned other cattle of bis own upon the farm and persisted, against the plaintiff's remonstrance, in keeping them there; in consequence the plaintiff suffered seri- 1 Hitchcock V. Hunt, 28 Conn. 343. Meigs, 50 N. Y. 480. See Wing Chung 2 Factors' & Traders' Ins. Co. v. v, Los Angeles. 47 Cal. 531. Werlein, 43 La. Ann. 1046, 1053, 8 So. * Plummer v. Penobscot Lumber- Eep. 435, 11 L. R. A. 361, quoting the ing Ass'n, 67 Me. 363; Reynolds v. text: Sutherland v. Wyer, 67 Me. 64. Chandler River Co., 43 Me. 513. See ^ Wolf V. St. Louis Independent Driver v. Western Union R. Co., 32 Water Co., 15 Cal. 319; Hubbell v. Wis. 569, 14 Am. Rep. 726. 00.1 ELEMENTS OF DAMAGE. 2G: ous loss to his stock for want of suflBcient pasturage. It was held not to be the duty of the plaintiff under such circum- stances to provide other pasturage for his cattle to lessen The measure of damages in exoneration of the defendant,^ iGilbert v. Kennedy, 22 Mich. 117. Compare Hughes v. Austin, 12 Tex. Civ. App. 17S, 33 S. W. Rep. 607. In tlie Michigan case the duty in question is recognized, but Christ- iancy, J., said: " Whether it is appli- cable at all to the facts of the present case is only important, so far as it bears on the duty of the plaintiff, when the defendant's cattle were wrongfully turned in, to remove his own cattle from the pasture before they should be injuriously affected by the overfeeding of the defend- ant's cattle; or to prevent at any par- ticular time further injury from this cause. . . . The rule in question (if based upon the supposed duty) is simply one of good faith and fair dealing. If a man tortiously injures the roof of my dwelling, and I obsti- nately leave it in that condition, and, having the opportunity, refuse or neg- lect to repair until the furniture and the bedding in the house are injured or destroyed by the rains, I cannot recover of him for this injury to my furniture and bedding, which I might have avoided by timely re- pairs. And if a man come to my field, where my cattle are grazing, turn them out into the street, and turn his own cattle in, thus ousting me from the possession, and claim- ing and holding exclusive possession against me, I cannot leave my cattle in the street to starve, and then charge him with their full value, if it be practicable by reasonable effort on my part to procure other pasture or feed for them; but I can recover only such damages as I have suffered beyond what I might have avoided by reasonable diligence. But, if h Western U. Tel. Co. v. Simpson, 73 Tex. 422, 11 S. W. Rep. 385. A telegram was received at G., Texas, by the agent of a woman who sent it from L., California, informing him that her husband had died at L., and that she would leave there the next day, and requesting him to send her $200. When received at G. the mes- sage purported to have been sent from S. It was not repeated. The woman's agent expressed to the com- pany's agent his belief that the mes- sage was sent from L., but after being assured that there was no mis- take in this respect applied for the transfer of the money to S., which was done, without any effort on de- fendant's part to ascertain whether an error had been made. The money did not reach the applicant. The company was held liable for her mental suffering. 6 Russell V. Western U. Tel. Co., 3 Dak. 315, 19 N. W. Rep. 408; Western U. Tel. Co. V. Brown, 71 Tex. 723, 3 L. R. A. 766, 10 S. W. Rep. 323; West- ern U. Tel. Co. V. Kirkpatrick, 76 Tex. 217, 18 Am. St. 37, 13 S. W. Rep. 70. 286 COMPENSATION. [| 98. company upon inquiry as to the relationship, and inform it that its object is to afford the person to whom it is addressed an opportunity to attend upon his relative in his last sickness, or to be present at the funeral in case of death.^ A different view is taken in Indiana. The message delivered read " my tvife is very ill, not expected to live." In an action by the sender to recover for mental suffering it was ruled that the language was not a hinderance thereto. The court say: It is true there was nothing in the telegram to indicate the kin- ship that existed between the appellant and the person to whom it was addressed; nor did it request his presence at the bedside of the sick person; but this affords no excuse to the appellee for its failure to deliver the telegram. It was bound to know that the message pertained in some way to the serious illness of the appellant's wife, and therefore that prompt com- munication with the person to whom the message was ad- dressed was much desired, and was bound to know that mental anguish might and most probably would come to some person in case it failed to act promptly in transmitting and delivering the dispatch; and therefore such a result was contemplated when the message was delivered to its agent. Whether such mental suffering would be caused by the failure of a brother- in-law and his wife to go at once to the bedside of a dying sis- ter-in-law or from the failure of a physician to reach his patient while there was still hope that something might be done to bring relief, and possibly a restoration to health, or for some other cause, is unimportant. It was not the particular cause but the effect which might be produced that was contemplated by the parties, and which is to be looked to in determining the question of liability.^ § 98. Right to compensation not affected by motive. So far as pecuniary elements of damage and full compensation for injury are concerned, either in actions of tort or for breach of contract, the right of recovery is wholly independent of the motive which induced the act or omission which constitutes 1 Western U. Tel. Co. v. Moore, 76 844; Same v. Feegles, 75 Tex. 537, 13 Tex. G6, 18 Am. St. 25, 12 S. W. Rep. S. W. Rep. 860. 949; Same v. Adams, 75 Tex. 531, 16 - Reese v. Western U. Tel. Co., 123 Am. St. 920, 12 S. W. 857, 6 L. R. A. Ind. 294, 300, 24 N. E. Rep. 163, 7 L. R. A. 58a § 99.] ELEMENTS OF DAMAGE. 287 the cause of action.* In tort the motive may increase the in- jury and give a right to greater compensation; but in actions upon contract this can seldom occur, because contracts are not often made for such objects that a breach can be committed in such manner as to involve other than pecuniary consequences.' In cases of tort, if the defendant's motive does not enhance the actual injury, it cannot necessitate the allowance of larger damages to compensate it; though, by possibility, it may afford cause for imposing exemplary damages. § 90. Distinction made for bad motive ; contracts. Im- portant distinctions, however, are made against parties who break their contracts as well as against wrong-doers, where the cause of action originates in a bad motive. On executory contracts for the sale of land the vendor who wilfully breaks his contract or is unable to fulfill for causes known to him when he entered into it will be subject to damages for the loss of the bargain; ' while a vendor who, in good faith and [IGO] without fault, finds himself unexpectedly unable to fulfill is only liable to refund the consideration with interest and ex- penses.* The general rule undoubtedly is that in actions upon contracts the motives which induce breaches of them cannot be considered in awarding damages. In addition to the cases above stated and those indicated in the next paragraph of this section, as coming within the exception to this rule, actions for breach of marriage promise may be added.* There is a 1 Krom V. Schoonmaker, 3 Barb, nin, 21 Mich. 374, 4 Am. Rep. 490; 647; Bridgewater Gas Co. v. Home Foley v. McKeegan, 4Iowa. 1, 66 Am. Gas Fuel Co., 7 C. C. A. 652, 59 Fed. Dec. 107: Engel v. Fitch, 9 K &S. 85, Rep. 40; Bromfield v. Jones, 4 B. & C. 10 id. 738. See § 581. 380. See J< 43. * Flureau v. Thornhill, 2 W. Bl. 2 In Endersv. Skannal, 35 La. Ann. 1078; Walker v. Moore, 10 B. & C. 1000, it is ruled that if a breach of 416; Sikes v. Wild, 1 B. & S. 587, 4 contract is made in a way and ac- id. 421; Bain v. Fothergill, L. R. 6 companied by acts which constitute Ex, 59, L. R 7 H. of L. 158; McNair an offense against the law, the dam- v. Compton. 35 Pa. 23; Conger v. ages are not limited to the actual Weaver, 20 N. Y. 140. See § 578, pecuniary loss. See § 77. ^Duche v. Wilson, 37 Hun, 519; sPumpelly v. Phelps, 40 N. Y. 59; Houston, etc. R. Co. v. Shirley, 54 Bush V. Cole, 28 id. 261, 84 Am. Dec. Tex. 125, 142, 148. 343; Drake v. Baker, 34 N. J. L. 358; The standard writer on the law of Plummer v. Rigdon, 78 111. 222, 20 damages in England says: "With Am. Rep. 261; Stephenson v, Harri- the single exception of actions for son, 3 Litt 170; Hammond v. Han- breach of promise of marriage I am 288 COMPENSATION. [§ 99. probability that, owing to the complete obliteration of the dis- tinction formerly existing as to the forms of actions, some mis- understanding may arise on this question. The rule prevails in some states that where the injuries complained of grew out of a contract, though a tort was connected with it, if the claims for both wrongs are so related that they may be conveniently and appropriately tried together, this may be done.^ An action so tried cannot be said, with any regard to legal accuracy, to be an action upon contract. It is an action brought upon the theory that legal rights growing out of a contract have been violated or legal duties resting thereon neglected. As applied to a carrier, the contract it makes with a passenger gives him the right to be carried safely and put down at the place he has designated; the failure to do either is a tort. The carrier is engaged in an employment which devolves a duty upon him ; an action on the case will lie for a breach of that duty, al- though it may consist in doing something contrary to an agree- ment made in the course of such employment by the party upon whom the duty is cast.^ A distinction may very properly be made as to the measure of damages for the breach of a con- tract where the manner of the party in the wrong is offensive or such as to cause reasonable apprehension of danger to the other.' A quantum meruit claim for services which were rendered in part performance of a special contract has been made in some jurisdictions to depend on the motive of the servant or con- tractor in his abandonment of the contract; and compensation for such performance has been allowed only to the laborer or contractor who has acted in good faith ; has broken his con- not aware of any cases in which it id. 542, 46 Am. Rep. 269; New Or- has been held in England that the leans, etc. R. Co. v. Hurst, 36 Miss, motives or conduct of a party break- 660; Wadsworth v. Western U. Tel. ing a contract, or any injurious cir- Co., 86Tenn. 695, 6 Am. St. 864, 8 S. cumstance not flowing fn-m the W. Rep. 574: Mentzer v. Western U. breach itself, could be considered in Tel. Co., 93 Iowa, 752, 62 N. W. Rep. damages where the action is on the 1, 57 Am. St. 294, 28 L. R. A. 72. contract." Mayne's Dam. (6th ed.) 2jarvis, C. J., in Courtenay v. p. 43, Earle, 10 C. B. 73, 83, interpreting 1 Houston, etc. R Co. v. Shirley, 54 Brown v. Boorman, 11 CI. & F. 1. Tex. 125, 148; Ball v. Britton, 58 id. ^Enders v. Skannal, 35 La. Ann. 57; G., G & S. F. R. Ca v. Levy, 59 1000. § 100.] ELEMENTS OF DAMAGE. 2S0 tract through inability or mistake; and has been denied to the party who has wilfully and selfishly abandoned it.' Other cases may be cited where a more liberal scope is allowed in estimating damages for a fraudulent or wanton violation of contract than is ordinarily given in the absence of the element of fraud.^ § 100. Motive in tort actions. The motive with which a wrong is done in some cases affects the rule by which compen- sation is measured or losses estimated. Where there is [101] fraud or other intentional wrong compensatory damages are given with a more liberal hand b}'^ juries and their verdicts in such cases are less closely scanned by courts than in cases where that element is absent. There is a tendency, too, to be less strict in the exclusion of remote and uncertain damages, though for this there is doubtful warrant.' Where the damaj^es are certain, as for the taking or destruction of property having a well-known and provable value, the rule of compensation is generally the same, whether the loss is by tort or by breach of contract and whether the wrong was wilful or not. But there is a more liberal allowance of damages where the tort is an aggressive one, and the entire damages or some part of them are not capable of measurement by some standard of 1 Yeats V. Ballentine, 56 Mo. 530; 2 W. Va. 104; Gleason v. Smith, 9 Keliy V, Bradford, 33 Vt. 35; Austin Cush. 484, 57 Am. Dec. 62; Tliorntoa V. Austin, 47 Vt. 311; Britton v. v. Place. 1 M. & R. 218; Newman v. Turner, 6 N. H. 495; Sinclair v. Tall- McGregor, 5 Ohio, 349, 24 Am. Dec. madge, 35 Barb. 602; Hay ward v. 293; Carroll v. Welch, 26 Tex. 147; Leonard, 7 Pick. 181: Atkins v. Barn- Hillyard v. Crabtree, 11 Tex. 264, 62 stable. 97 Mass. 428; Snow v. Ware, Am. Dec. 475; Dermott v. Jones, 23 18 Met. 42; McKinney v. Springer, 3 How. 220; Norris v. School District, Ind. 59; Porter v. Woods, 3 Humph. 12 Me. 293, 28 Am. Dec. 182. 56, 39 Am. Dec. 153; McDonald v. 2 Dewint v. Wiltse, 9 Wend. 325; Montague, 30 Vt. 357; Cullen v. Jeffrey v. Bigelow, 13 id. 518, 28 Am. Sears, 112 Mass, 299; Cardell v. Dec. 476; Chitty on Conts. 684; Bridge, 9 Allen. 355; Walker v. Or- Sondes v. Fletcher, 5 B. & Aid. 835; ange, 16 Gray, 193; Patnote v. San- Rose v. Beattie, 2 Nott & McC. 538; ders, 41 Vt. 66, 98 Am. Dec. 564; Nurse v. Barns, T. Raym. 77; Stuarfc Veazie V. Bangor, 51 Me. 509; Laton v. Wilkins, 1 Doug. 18; Williamson V. King, 19 N. H. 280; Bertrand v. v. Allison, 2 East, 446; Ferrand v. Byrd, 5 Ark. 651; Wilson v. Wagar. Bouchell, Harp. 83; Muilett v. Mason, 26 Mich. 452; Horn v. Batchelder, 41 L. R. 1 C. P. 559; Smith v. Thomp- N. H. 86; Tait v. Sherman, 10 Iowa, son, 8 C. B. 44. See § 77. 60; Baltimore & O. R Co. t. Lafferty, » See § 43. Vou 1 — 19 290 COMPENSATION. [§ 100. value or definite rule.^ This is justified not only on the ground that the wrong was wilful or malicious, but on certain considerations which emphasize the distinction between un- certain damages caused by torts and by breaches of contracts generally. Contracts are made only by the mutual consent of the respective parties; and each party for a consideration thereby consents that the other shall have certain rights as against him which he would not otherwise possess. In enter- ing into the contract the parties are supposed to understand its legal effect, and consequently the limitations which the law for the sake of certainty has fixed for the recovery of dam- ages for its breach. If not satisfied with the risk which these rules impose the parties may decline to contract or may fix their own rule of damages, when in their nature the amount must be uncertain. Hence when suit is brought upon such contract and it is found that the entire damages actually sus- tained cannot be recovered without a violation of such rules, the deficiency is a loss the risk of which the party voluntarily assumed on entering into the contract for the chance of bene- fit or advantage which it would have given him in case of performance. His position is one in which he has voluntarily placed himself and in which, but for his own consent, he could not have been placed by the wrongful act of the oppo- * A husband who properly demeans ing person was pure, and the appear- himself is entitled to the society and ances seemed to indicate necessity assistance of his wife against all the for interference, there can be no re* world. Whoever deprives him tliereof covery, though nooccasion for inter- is liable to an action. In estimating ference really existed. Much will damages each case must be deter- be forgiven the parents of a wife mined by the circumstances attend- who honestly interfere in her behalf, ing it, and the motive of the inter- though the interference was wholly vening person must be ever kept in unnecessary and may have been det- view. The cases may properly be rimental to her interest and happi- divided into two classes: One, where ness as well as that of her husband; a villain interferes for the purpose of still, where the motive is not protec- seduction, or the sole ground of in- tion of the wife, but hatred and terference is malice; the other, where ill-will of the husband, it is no an- f riends, usually parents, interfere for swer to his action for such interfer- the protection of the wife and the ence that the offenders were his offsprii.g, if any. In the first class, wife's parents. Holtz v. Dick, 42 the husband, if without fault, is al- Ohio St. 23, 51 Am. Rep. 791, per ways entitled to damages: in the Okey, J. latter, if the motive of the interven- § 100.] elem2;nts of damage. 291 site party alone. Again, in a majority of cases upon contract there is little dilficulty from the nature of the subject in find- ing a rule by which substantial compensation may be readily estimated; and it is only in those cases where this cannot be done and where, from the nature of the stipuhitions or the sub- ject-matter, the actual damages resulting from a breach are more or less uncertain in their nature or dillicult to be [1G-] shown with accuracy by the evidence under any definite rule, that there can be any great failure of justice by adhering to such rule as will most nearly approximate to the desired result. And it is precisely in these classes of cases that the parties have it in their power to protect themselves against any loss to arise from such uncertainty by estimating their own dam- ages in the contract itself, and providing for themselves the rules by which the amount shall be measured in case of a breach; and if they neglect this they may be presumed to have assented to such damages as may be measured by the rules which the law, for the sake of certainty, has adopted. None of these considerations have any bearing in an action purely of tort. The injured party has consented to enter into no re- lation to the wrong-doer by which any hazard of loss should be incurred; nor has he received any consideration or chance of benefit or advantage for the assumption of such hazard; nor has the wrong-doer given any consideration or assumed any risk in consequence of any act or consent of his. The in- jured party has had no opportunity to protect himself by con- tract against any uncertainty in the estimate of damages; no act of his has contributed to the injury; he has yielded noth- ing by consent; and, least of all, has he consented that the wrong-doer might take or injure his property or deprive him of his right for such sum as, by the strict rules which the law has established for the measurement of damages in actions upon contract, he may be able to show with certainty he has sustained by such taking or injury. Especially would it be unjust to presume such consent and to hold him to the recov- ery of such damages only as may be measured with certainty by fixed and definite rules when the case is one which, from its ver}'^ nature, affords no elements of certainty by which the loss he has actually suffered can be shown with accuracy by any evidence of which the case is susceptible. Nor is he to 292 COMPENSATION. [§ 101. blame because the case happens to be one of this character, lie has had no choice, no selection. The nature of the case is sucli as the wrong-doer has chosen to make it; and upon every consideration of justice he is the party who should be made to sustain all the risk of loss which may arise from the uncer- tainty pertaining to the nature of the case and the difficulty [163] of accurately estimating the results of his own wrongful act.' §101. How motive aifects conseiiuences of confusion of goods. In case of a wrongful confusion of goods, that is, where one fraudulentl}'^ or wrongfully intermixes his money, corn or hay with that of another man, without his approbation or knowledge, or casts gold in like manner into another's melting pot or crucible, the law, to guard against fraud, allowed no remedy in such case according to the older authorities, but gave the entire property without any account to him whose original domain was invaded.^ There is a tendency in the later adjudications, however, to confine the forfeiture to cases where otherwise the innocent owner of property so mixed cannot be adequately protected. It accords with the preceding views to charge the party whose fraudulent or tortious act caused the confusion with the duty of separating and identifying his own and with any loss resulting from his inability to do so.' And greater loss cannot properly be charged to him for the purpose of compensation. A person is not damnified by mixing his property in a mass, if from it he can withdraw what will be substantially and to all intents and purposes identical with it; and where a man can obtain all that he is entitled to, in order to be in full enjoyment of his own, the law should not bestow [164] on him the property of another.^ A reasonable rule, 1 Per Christiancy, J., in Allison v. 433; Claflin v. Continental Jersey Chandler, 11 Mich. 552; Sharon v. Works, 85 Ga. 27, 11 S. E. Rep. 721; Mosher, 17 Barb. 518; Guille v. Swan, First Nat. Bank v. Schween, 127 III. 19 Johns. 381, 10 Am. Dec. 234; Cats 573, 11 Am. St. 174, 20 N. E. Rep. 681; V. Gate, 50 N. H. 144, 9 Am. Rep. 179. Franklin v. Gumersell, 9 Mo. App. 84 2 2 Black. Com. 404; Warde v. Eyre, SHolloway Seed Co. v. City Nat. 2 Bulst. 323; Ryder v. Hathaway, 21 Bank. 92 Tex. 187, 47 S. W. Rep. 95. Pick. 298; Willard v. Rice, 11 Met. < Per Campbell, J., in Stephenson v. 493, 45 Am. Dec. 296; Hesseltine v. Little, supra: Hart v. Ten Eyck, 2 Stockwell, 30 Me. 237, 50 Am. Dec. Johns. Ch. 62; Roth v. Wells, 29 N. 637; Stephenson v. Little, 10 Mich. Y. 486; Nowlen v. Colt, 6 Hill, 461, § 101.] ELEMENTS OF DAMAGE. 293 which has much authority to support it, is that one who has confused his own property with that of other persons shall lose it when there is a concurrence of these two things: first, that he has fraudulently caused the confusion; and second, that the rights of the other party after the confusion are not capable otherwise of complete protection.^ But the principle of for- feiture, except when necessary to save the rights of the inno- cent owner, if there has been a fraudulent admixture, cannot be said to be eliminated from our jurisprudence.^ It is a doc- 41 Am. Dec. 756; Samson v. Rose, 65 N. Y. 411; Brackenridge V. Holland, 2 Blackf. 377, 20 Am. Dec. 123; King- gold V. Ringgold, 1 Har. & Gill, 11, 18 Am, Dec. 250; Bryant v. Ware, 30 Me. 295; Stearns v. Raymond, 26 Wis. 74; Single v. Barnard, 29 id. 463; Scliulenburg v. Harriman, 2 Dill. 398, 21 Wall. 44; The Distilled Spirits. 11 Wall. 356; Robinson v. Holt, 39 N. H. 557, 75 Am. Dec. 233; Stuart V. Phelps, 39 Iowa, 14; Moore V. Bowman, 47 N. H. 494; Goodenow V. Snyder, 8 G. Greene, 599; Wood v. Fales. 24 Pa. 246, 64 Am. Dec. 655; Wooley V. Campbell, 37 N. J. L. 163; Bond V. Ward, 7 Mass. 123, 5 Am. Dec. 23; Smith v. Sanborn, 6 Gray, 134; Armstrong v. McAlpin, 18 Oliio St. 184; Holbrook v. Hyde, 1 Vt. 286; Treat v. Barber, 7 Conn. 274; Tufts V. McClintock, 28 Me. 424, 48 Am. Dec. 501; Colwill v. Reeves, 2 Camp. 575; Albee v. Webster, 16 N. H. 362; Weil V. Silverstone, 6 Bush, 698; Wellington v. Sedgwick, 12 Cal. 469; Shumway v. Rutter, 8 Pick. 443, 19 Am. Dec. 340; Ames v. Mississippi Boom Co., 8 Minn. 467; Bartlett v. Hamilton, 46 Me. 435: Leonard v. Belknap, 47 Vt. 602; Wyly v. Bur- nett, 43 Ga. 438; Griffith v. Bogardus, 14 Cal. 410; Frey v. Deraarest, 16 N. J. Eq. 236; Elmer v. Loper, 25 id. 475; Alley v. Adams, 44 Ala 609; Adams v. Wildes, 107 Mass. 123; Cochran v. Flint, 57 N. H. 514; Gray V. Parker, 38 Mo. 160; Fowler v. Hoff- man, 31 Mich. 215; Fellows v.Mitchel, 1 P. Wms. 81; Taylor v. Plumer, 3 M. & S. 562; 2 Kent's Com. 365; Reed V. King, 11 Ky. L. Rep. 615, 12 S. W. Rep. 772; Stone v. Quaal,36 Minn. 46, 29 N. W, Rep. 326; Osborn v. Cargill Elevator Co., 62 Minn. 400, 64 N. W. Rep. 1135; Blodgett v. Seals, 78 Miss. 522, 29 So. Rep. 852; Clark v. William Munroe Co., 127 Mich. 300, 86 N. W. Rep. 816. lid.; Wright v. Skinner. 34 Fla. 453, 16 So. Rep. 335, citing the text; Claflin V. Beaver, 55 Fed. Rep. 576. 2 Osborne v. Cargill Elevator Co., 62 Minn. 400, 64 N. W. Rep. 1135; Hal- loway Seed Co. v. City Nat. Bank, 93 Tex. 187, 47 S. W. Rep. 95; Ryder v. Hathaway, 21 Pick. 298; The Idaho, 93 U. S. 575; Jenkins v. Steanka, 19 Wis. 126, 18 Am. Dec. 675; Root v. Bonnema. 22 Wis. 539; Ste|iheuson v. Little, 10 Mich. 433; Johnson v. Bal- lon, 25 Mich. 460; Willard v. Rice. 11 Met. 493,45 Am. Dec. 226; Lupton v. White, 15 Ves. 442; Wingate v. Smith, 20 Me. 287; Dole v. Olmstead, 36 111. 150, 85 Am. Dec. 397; Loomis V. Greer, 7 Me. 386; McDowell v. Ris- sell, 37 Pa. 164; Beach v. Schmultz, 20 111. 185; Jewett v. Dringer, 30 N. J. Eq. 291; Wooley v. Campbell, 37 N, J. L. 163; Claflin v. Continental Jersey Works, 85 Ga. 27, 11 S. E. Rep. 721; First Nat. Bank v. Schween, 127 111. 573, 11 Am. St. 174, 20 N. E. Rep. 681; Franklin v. Gumersell, 9 Mo. A pp. 84. ^Oi COMrENSATION. [§ 102. trine to prevent fraud.^ The general rule which favors the in- nocent when there has been a confusion of property so that it cannot be separated according to ownership should not be ap- plied to the prejudice of the rights of third parties if full protection can be given to the innocent person whose goods have been thus wrongfuU}'- used.^ § 102. Where property sued for improved by Tvrong-doer. In another class of cases, closely analogous to those relating to confusion of goods, where a tortious taker of property has by his labor enhanced its value, the owner's title not being divested, the latter may retake the same, subject to certain limitations, in its improved condition.^ He is precluded from [1G5] exercising this right when property so taken has lost its identity. But the change which will be deemed to destroy identity where the wrong-doer took the property in good faith, supposing it to be his own, or through some other mistake or inadvertence, will not so destroy it as to determine the owner's title and put him to his action for damages, if the taking was an intentional wrong. While the authorities are in great con- fusion on this subject, there is a manifest discrimination against the wilful wrong-doer. By the civil law and the common law alike the owner of the original materials is precluded from fol- lowing and reclaiming the property after it has undergone a transmutation which converts it into an article substantially different,'' as by making wine out of another's grapes, oil from his olives, or bread from his wheat; but the product belongs to the new operator, who is only to make satisfaction to the former proprietor for the materials converted.^ And a very large increase in the value of the property by labor has been 1 Wooley V. Campbell, 37 N. J. L. Cal. 574, 76 Am. Dec. 551 ; Moody v. 163. Whitney, 34 Me. 563; Chandler v. 2 National Park Bank v. Goddard, Edson, 9 Johns. 362; Riddle v. Driver, 9 N. Y. Misc. 626, 30 N. Y. Supp. 417. 12 Ala. 590; Hyde v. Cookson, 21 See Hall V. Hagardine-McKittrick Barb. 92; Dunn v. Oneal, 1 Sneed, 106, Dry Goods Co., 23 Tex. Civ. App. 149, 60 Am. Dec. 140; Silsbury v. McCoon, 55 S. W. Rep. 747. 3 N. Y. 379, 53 Am. Dec. 753. 3 Final v. Backus, 18 Mich. 218; < 2 Bl. Com. 404. Brown v. Sax, 7 Cow. 95; Bennett v. ^jfj, ; Wether bee v. Green, 22 Mich. Thompson, 13 Ired. 146; Smith v. 311, 7 Am. Rep. 653; Forsyth v. Gonder, 22 Ga. 353; Curtis v. Groat, Wells, 41 Pa. 291, SO Am. Dec. 617; 6 Johns. 168; Halleck v. Mixer, 16 Swift v. Barnum, 23 Conn. 523. § 102.] ELEMENTS OF DAMAGE. 29: held to have the same effect in favor of such an involuntary wronf^-doer.' The law allows liim in such cases to make title by his own wrong, it not being- wilful, to prevent his suffering the loss of his labor, and not because of the supposed impossi- bility of tracing the original materials into the more valuable property made therol'roui. The authorities, however, are so much in conflict that no test can be deduced from them by by which it can be determined what change will suffice to destroy the identity of property so as to prevent the owner from retaking it. It is not enough that trees are converted into saw-logs or timber,' into rails or posts,^ into railroad [160] ties, staves, fire wood,* or shingles;^ that saw-logs are made into boards,^ fire wood,'' or coal.^ • Wetherbee v. Green, supra. 2PieiTepont v. Barnard, 5 Barb. 364; Synies v. Oliver, 13 Mich. 9; Grant v. Smith, 26 id. 201; Gates v. Rifle Boom Co., 70 id. 309, 38 N. W. Rep. 245; Arpin v. Burch, 68 Wis. 619, 32 N. W. Rep. 681. 3 Snyder v. Vaux, 2 Rawle, 423, 21 Am. Dec. 466; Millar v. Humphries, 2 A. K. Marsh. 446. 4 Smith V. Gonder, 22 Ga. 353; Heard v. James, 49 Miss. 236; Brewer V. Fleming, 51 Pa. 102; Moody v. Whitney, 34 Me. 563. 5 Betts V. Lee, 5 Johns. 348; Chand- ler V. Edson, 9 id. 362. <> Brown v. Sax, 7 Cow. 95; Baker V. Wheeler, 8 Wend. 505; Davis v. Easley, 13 111. 192. "' Eastman v, Harris, 4 La. Ann. 193. 8 Riddle v. Driver, 12 Ala, 590; Cur- tis V. Groat, 6 Johns. 168. In Silsbury v. McCoon. 3 N. Y. 386, 53 Am. Dec. 753, it is said: "In one case (5 Hen. 7, fol. 15) it is said that the owner may reclaim the goods so long as they may be known, or, in other words, ascertained by inspection. But this, in many cases, is by no means the best evidence of identity; and the examples put by way of il- lustration serve rather to disprove than to establish the rule. The court say that if grain be made into malt it cannot be reclaimed by the owner because it cannot be known. But if cloth be made into a coat, a tree into squared timber, or iron into a tool, it may. Now, as to the cases of the coat and the timber, they may or may not be capable of identification by the senses merely; and the rule is entirely uncertain in its application; and as to the iron tool, it certainly cannot be identified as made of the original material, without other evi- dence. This illustration, therefore, contradicts the rule. In another case (Moore's Rep. 20) trees were made into timber, and it was adjudged that the owner of the trees might re- claim the timber, 'because the greater part of the substance remained.' But if this were the true criterion it would embrace the cases of wheat made into bread, milk into cheese, grain into malt, and others which are put into the books as examples of a change of identity. Other writers say that when the thing issochanged that it cannot be reduced from its new form to its former state its iden- tity is gone. But this would include many cases in which it has been said by the courts that the identity is not gone; as the cases of leatlier made 206 COMPENSATION. [§ 103. [167] § 103. Same subject. There is not the same difficulty under the authorities in determining when the identity of the property is lost where the tortious taking and conversion were fraudulent. In such a case it is well settled in New Tork into a garment, logs rcade into lum- ber or boards, cloth into a coat, etc. There is therefore no definite settled rule on this question. . . . There is no satisfactory reason why the wrongful conversion of the original materials into an article of a differ- ent name or a different species should work a transfer of the title from the true owner to the trespasser, pro- vided the real identity of the thing can be traced by evidence. The dif- ficulty of providing the identity is not a good reason. It relates merely to the convenience of the remedy, and not at all to the right. There is no more difficulty or uncertainty in proving that the whisky in question was made of Wood's corn than there would have been in proving that the plaintiff had made a cup of his gold, or a tool of his iron; and yet, in those instances, according to the English cases, the proof would have been un- objectionable. In all cases where the new product cannot be identified by mere inspection the original mate- rials must be traced by the testimony of witnesses from hand to hand through the process of transforma- tion." Cooley, J., in Wetherbee v. Green, 23 Mich. 311, 7 Am. Rep. 6o3, said of making out the identity by the senses, that it is obviously a verj' unsatis- factory test, and in many cases would wholly defeat the purpose which the law has in view in recognizing a change of title in any of these cases. That purpose is not to establish any arbitrary distinctions, based upon mere physical reasons, but to adjust the redress afforded to the one party, and the penalty inflicted upon the other, as near as circumstances will permit, to the rules of substantial justice. It may often happen that no difficulty may be experienced in determining the identity of a piece of timber which has been taken and built into a house; but no one dis- putes that the right of the original owner is gone in such a case. A par- ticular piece of wood might perhaps be traced without trouble into a church organ or other equally val- uable article: but no one would de- fend a rule of law which, because the identity could be determined by the senses, would permit the owner of the wood to appropriate a musical instrument, a hundred or a thou^nd times the value of the original ma- terials, when the party who, under like circumstances, has doubled the value of another man's corn by con- verting it into malt is permitted to retain it and held liable for the orij- inal value only. Such distinctions in the law would be without reason and could not be tolerated. When the right to the improved article is the point m issue, the question, how much the property or labor of each has contributed to make it what it is, must always be one of first im- portance. The owner of a beam built into the house of another loses his property in it because the beam is insignificant in value or importance as compared to that to which it has become attached, and the musical instrument belongs to the maker rather than to the man whose timber was used in making it, — not because the timber cannot be identified, but because in bringing it to its present condition the value of the labor has swallowed up and rendered insignifi- cant the value of the original mate- § 100.] ELEMENTS OF DAMAGE. 297 that the wrong-doer is not permitted to acquire property in the goods of another by any change wrought in them by bis labor or skill, however great the change may be, provided it can be proven that the improved article was made from [168] the original material.^ The action was trover in which this doctrine was first lield, and the value of whisky was recov- ered by the owner of the corn from which it was made. There is a general inclination elsewhere to find some middle ground upon which the rights of the owner may be maintained, and yet moderate and adjust the consequences of even a wilful trespass more nearly to the standard of compensation, espe- cially where there is not an actual taking of the property and the owner by choice or otherwise seeks to recover the value in damages.'^ And if an actual retaking is impossible or [109] rials. The labor, in the case of the musical instrument, is just as much the principal thing as the house is in the other case instanced; the timber a Impropriated is in each case compar- atively unimportant. No test which satisfies the reason of the law can be applied in the adjustment of the question of title to chattels by ac- cession, unless it keeps in view the circumstance of relative values. When we bear in mind the fact that what the law aims at is the accom- plishment of substantial equity, we shall readily perceive that the fact of the value of the materials having been increased a hundred fold is of more importance in the adjustment tlian any chemical change or me- chanical transformation which, how- ever radical, neither is expensive to the party making it nor adds mate- rially to the value." See Silsbury v. McCoon. 4 Denio, 332; Herdic v. Young, 55 Pa. 176, 93 Am. Dec. 739; Single V. Schneider, 30 Wis. 570. ' Silsbury v. McCoon, sttpra; Baker V. Hart, 52 Hun, 363, 5 N. Y. Supp. 345; Guckenheimer v. Angevine, 81 N. Y. 394. See Silsbury v. McCoon, (> Hill, 425, 41 Am. Dec. 753, 4 Denio, •332; Hyde v. Cookson, 21 Barb. 92. 2 In Single v. Schneider, 24 Wis. 301, Paine, J., said: "There is proof tending to show a mistake as to a part (of the timber tortiousiy cut by defendants on the plaintiff's land). . . . They are not to be regarded, therefore, as wilful trespassers. Upon these facts it seems contrary to the dictates of natural justice that the plaintiff should be allowed to wait quietly until the defendants had manufactured tlie logs into lumber, enhancing their value four or five fold, and then recover against them that entire value. True, it is gener- ally i-ecognized that a wrong-doer cannot by the change of another's property change the title. The owner may pursue it and reclaim it specifically by whatever remedy the law gives him for that purpose. If he gets it, it is his. But the appar- ent injustice of allowing one to avail himself of the labor and money of another, in cases similar to this, has led to a modification of this strin- gent rule of ownership, wherever the question is resolved into one of mere comjiensation in money for what- ever injury the party may have br.lfered." This case came before the court again (30 Wis. 570), when it 29S COMrENSATION, [§ 103. does not take place, and the question is one of mere compeK' sation for the property, the law is not quite settled that the improved value may be recovered even of the party who in- tentionally converted it.^ In such actions the question whether the property has so changed as to be no longer capable of appeared and was found by the jury that a part of the logs sued for in the action, which was replevin, were cut wilfully, and Cole, J., said: "The counsel for the defendant con- tends that, so far as the measure of damages is concerned, it is quite im- material whether the logs were cut intentionally or through mistake; that the damages given in law as compensation for an injuiy should be precisely commensurate with the injury, neither more nor less; and that the plaintiff is not entitled to recover the value of the property in its improved state under the circum- stances of this case. He concedes that if there was anything tending to show that the trespass was wan- ton or malicious, committed under circumstances of insult or aggrava- tion, then, upon the authorities, ex- emplai-y damages might be allowed in the discretion of the jury, which might exceed or fall below the value of the property enhanced by the labor of the defendants. But he claims that when a person, though intentionally, cuts pine logs upon the wild, unoccupied land of another, to say as a matter of right the owner shall recover the enhanced value of the property manufactured into lumber or into the most expensive furniture is a rule contrary to the principles of natural justice, and not in accordance with the doctrine of the common law. We are inclined to adopt this view of the matter, al- though we are aware that by so doing we lay down a rule in conflict with some adjudications which may be found. But it seems to us that if the owner is entirely indemnified for the injury he has sustained, it is quite immaterial whether the logs were cut by mistake or intentionally, un- less in the latter case the trespass was of such a character as to make the doctrine of exemplary damages applicable. This was the view ex- pressed by Mr. Justice Paine in Wey- mouth V. Chicago & N. R. Co., 17 Wis. .550-555, 84 Am. Dec. 763, and it seems to us that it is consonant with sound principle and natural justice. It is true that was an action of trover and this is an action of replevin. But here the defendants gave the undertaking under the statute and retained possession of tlie property. The judgment was in the alternative for the delivery of the property to the plaintiff, in case delivery could be had, or for its value. The plaintiff does not really expect to recover the specific property, and therefore there is no valid reason for a distinction between this case and that of trover, as regards the rule of damages; it should be the same in both cases." He restates with approbation the views of Bronson, C. J., in Silsbury V. McCoon, 4 Denio, 833. Herdic v. Young. 55 Pa. 176, 93 Am. Dec. 739. lid.; Moody v. Whitney, 34 Me. 563; Reid v. Fairbanks, 14 C. B. 729; Cushing V. Longfellow, 26 Me. 306., If the owner brings trespass or trover instead of replevin he elects- to take damages according to the measure awarded in such actions — a just and fair compensation for his property as it was before the ti'espass. Gates v. Rifle Boom Co.,. 70 Mich. 309, 38 N. W. Rep. 24.5. § 103.] ELEMENTS OF DAMAGE. 299 identification is not important. The wrong-doer who has taken and converted another's property through mistake is charge- able with its value at the time of conversion; and the wilful wrong-doer by that standard, or the value at some intermedi- ate point, or the final value of the improved article, according to the views of the particular court.^ The liability of the in- nocent purchaser of property from a wilful trespasser whose labor has improved it is the value of the property when it was taken from the original owner. The defendant in such a case is not the proper subject of punishment; the plaintiff's loss is no greater than it would have been if the tresj)asser had been free from intentional wrong; nor is the defendant's culpability increased thereby .^ To allow the owner of the original mate- rials to recover the value increased by the subsequent [170] labor of the wrong-doer is to antagonize two fundamental rights: the right of property, and the right to due compensa- tion for injury. The law gives its sanction to the former by 1 ajartin v. Porter. 5 M. & W. 351; MorgMii V. Powell, 3 Q. B. 278; Llynvi Co. V. Brogden, L. R. 11 Eq. 188; Maye T. Tappan, 23 Cal. 306; GoUer v. Fett, 30 Cal. 481 : Nesbitt v. St. Paul L. Co., 21 Minn. 491; Foote v. Merrill, 54 N. H. 490. 20 Am. Rep. 151; Adams v. Blodgett, 47 N. H. 219; Dresser Manuf. Co. V. Waterston, 3 Met. 9; Stock- bridge Iron Co. V. Cone Iron W^orks, 103 Mass. 80; Winchester v. Craig, 33 Mich. 205; Bennett v. Thompson, 13 Ired. 14fi: Smitii v. Gonder, 22 Ga. 353; Wood v. More wood, 3 Q. B. 440. note; Hyde v. Cookson, 21 Barb. 92; Heard v. James. 49 Miss. 289; Riddle V. Driver. 12 Ala. 590; Greeley v. Stil- son, 27 Mich. 153. See Isle Royale M. C. Co. V. Horton, 37 Mich. 332. 2 Railroad Co. v. Hutchins, 37 Ohio St. 282, 32 id. 571. And if he purchases part only of the property converted his liability is limited to the value of such part. Moody V. Whitney, 34 Me. 563. Where minerals are mined fraud- ulently the trespasser is liable for their value after they are severed from the earth, without any deduc- tion for the expense of mining. Martin v. Porter, 5 M. & W. 351; Barton Coal Co. v. Cox, 39 Md. 1, 17 Am. Rep. 525; Coleman's Appeal, 62 Pa. 252; Ege v. Kille, 84 id. 333: the last two cases are distinguished and limited in Fulmer's Appeal, 128 id. 24, 15 Am. St. 662, 18 Atl. Rep. 493. If the mining is done inadvertently or under a boi^a fide belief of right the damages are the fair value of the mineral as if tiie mine had been purchased. Wood v. Morewood, 3 Q. B. 440, note; Hilton v. Woods. L. R. 4 Eq. 433; Forsyth v. Wells, 41 Pa. 291. 80 Am. Dec. 617. In an action between tenants in common, plaint- iff being out of, and defendant in, possession, the damages for working an opened and developed mine are the fair marketable value of the mineral in place — the royalty due for the privilege of removing and manufacturing it in view of all the special circumstances. Fulmer's Ap- peal, supra; Neel's Appeal, 3 Penny. (Pa.) 66. 300 COMPENSATION. [§ 103. allowing the owner to retake his property by his own act or by the legal process of replevin if it still exists and can be found. Certain changes made in it or its annexation to some- thing else which the law regards as the principal, as to certain wrong-doers at least, have been accepted as putting an end to the owner's right to retake the property though it may in fact exist, or what was obtained from or for it is still in the hands of the wrong-doer and ascertainable by testimony. There is no more necessity for severe consequences to discourage trespass or tortious conversion of propert}' which the wrong-doer im- proves than where he destroys it or retains it in the same con- dition. The owner is entitled to no greater measure of repa- ration in the one case than in the other. The wrong-doer is no more culpable when he improves the property than when he does not. Therefore, since there is a recognized though in- definite limit to the owner's right to reclaim his property with any accession, and this limit is short of the ultimate point to which testimony would enable him to trace it, there is no more violation of the fundamental right of property by fixing that limit at the point of the first change than at any subse- quent one. But when the redress which is given to the owner in his suit is the value or damages to compensate him for the wrong of depriving him of his property, the question is not one of allowing him to retake it, but solely of compensation for the loss of it. What is due compensation in such a case is to be ascertained on the same principles as in all other cases: the injured party is to be made good for the loss he has sus- tained. If his corn has been taken he is to be compensated for corn; he is no more entitled to have its value estimated by the amount of whisky which has been, than by the amount of whisky that can be, made from it, with no deduction for the manufacture, or than the amount the defendant has subse- [171] quently sold it for in consequence of the general appre- ciation of the commodity.^ 1 Railroad Co. v. Hutchins, 37 Ohio judgment. He says: "The question St. 282, 294 is not, as it lias been sometimes art- The language of Bronson, C. J., in fully put, whether the common law the reverred case in New York (Sils- will allow the owner to be unjustly bury V. McCoon, 4 Denio, 336, 337 1, is dej^rived of his property, or will give replete with good sense and sound encouragement to a wilful tres- f § 104.] ELEMENTS OF DAMAGE. 301 § lOi. Distinetious in the matter of proof. In [172] cases of tort the principles governing the measurement oi compensation are not, as a general thing, different from those which apply in actions upon contract if the tort be not wilful ; there are, as we have just seen, some exceptions; and in cer- tain cases within the influence of considerations mcntionetl in a preceding section,^ where the injury is of such a nature or committed under such circumstances that the damaires, or some part of them, cannot be ascertained by any definite or certain proof, the investigation is conducted by such rules in respect to the quantity, quality and burden of proof that the injured party may suffer no irreparable loss from the stealth, secrecy or complexity of the wrong. The purpose of the law is thus facilitated. Lord Brougham interrogatively expressed it:^ "When did a court of justice, whether administered ac- passer. It will do neither. But in protecting the owner and punishing the wrong-doer, our law gives such rules as are capable of practical ap- plication, and are best calculated to render exact justice to both parties. Tiie proper inquiry is, in what man- ner, and to what extent, should the trespasser be punished; and what should be the kind and measure of redress to the injured party. A trespasser who takes iron ore and converts it into watch springs should not be hanged; nor should he lose the whole of the new product. Either punishment would be too great. Nor should the owner of the ore have the watch springs; for it would be more than a just measure of redress. Our law has, therefore, wisely provided other remedies and punishments. The owner may retake his ore, either with or without pro- cess, so long as its identity remains; and may also recover damages for the tortious taking. Or, without re- possessing himself of the property, he may have an action of trespass in which the jury will not fail to give the proper damages. But the law will not allow the owner to wa:t until the ore has been converted into different species of property and then seize the new product, either with or without process. Nor is the value of the new product the measure of damages, if he bring an action of trespass or trover. Although there will not be many cases where the difference between the value of the rude material and the new product will be so striking as in the case which has been mentioned, yet, in almost every instance where the chattel has been converted into a different species of property, the value of tiie new product will be more than the trespasser ought to pay or the owner of the chattel ought to receive. . . . As an original ques- tion. 1 think the owner should either reclaim the property before the new possessor has greatly increased its value, either by bestowing his labor and skill upon it. or by joining it to other materials of his own; or else that he should be restricted to a remedy by action for the damages which he ha< sustained." i§100. 2 In Docker v. Somes, 2 Myl. & K. 674, 302 COMPENSATION. [§ 105. cording to the rules of equity or law, ever listen to a wrong- doer's argument to stay the arm of justice grounded on the steps he himself had successfully taken to prevent his iniquity from being traced? Rather, let me ask, when did any wrong- doer ever yet possess the hardihood to plead in aid of his es- cape from justice the extreme difficulties he had contrived to throw in the way of pursuit and detection, saying, you had better not make the attempt, for you will find I have made the search very troublesome. The answer is, 'the court will try.' " The intrinsic nature of many wrongs precludes any estimate by witnesses of damages upon the items which a jury may consider, such as bodily or mental pain, disfigurement or im- paired faculties; but the jury in many cases involving ele- ments of this nature may be aided by proof of extrinsic facts showing the status of the injured part3^ Either a tort or a breach of contract which destroys or injures anything of a lawful nature belonging to another is a wrong and injury for which, in some reasonable and practicable manner, the law will enable the injured party to measure and recover adequate compensation. An}'- such act which directly and injuriously affects an established business, as by destruction of the build- [173] ing in which it is conducted, obstructing the approaches necessary to it, fraudulently diverting custom where there was a duty to maintain the good will, by enticing away serv- ants, or by slander or the breach of any agreement of which the profits of a business are the consideration or inducement, may require the estimate of a very uncertain loss; but the party whose misconduct or default has necessitated the in- quir}'' cannot object to it on the ground of the uncertainty, though a court will, in such a case, proceed with caution and will not award damages upon mere conjecture.^ § 105. Yaliie of property. The value of property consti- tutes the measure or an element of damages in a great variety of cases both of tort and of contract, and where there are no such aggravations as call for or justify exemplary damages, in actions in which such damages are recoverable, the value is ascertained and adopted as the measure of compensation for being deprived of the property the same in actions of tort as 1 Shoemaker V. Acker, IIG Cal. 239, 48 Pac. Rep. 63. § l^'^-] ELEMENTS OF DAMAGE. 303 in those upon contract. In both cases the value is the legal and fixed measure of damages, and there is no discretion with the jury. It is so between vendor and vendee on the failure of either to fulfill a contract of sale and purchase; between emploj'er and employee on a contract for the manufacture of specific articles; where there is a departure from instructions by an agent or a loss thr;mgh his negligence or misconduct, or that of a bailee or trustee, as well as where there is a tortious taking or conversion by one standing in no contract relation to the owner. And, moreover, the value is fixed in each instance on similar considerations at the time when, by the defendant's fault, the loss culminates.^ And a party [174] 1 Watson V. Loughran, 112 Ga. 837, 38 S. E. Rep. 82; Western Union Cold Storage Ck). v. Ermeling, 73 111. App. 394; Sanderson v. Read. 75 id. 190, quoting the text; Bank of Montgom- ery V. Reese, 26 Pa. 148; Owen v. Routh, 14 C. B. 327: Day v. Perkins, 3 Sandf. Ch. 359; Shaw v. Holland, 15 M. & W. 136; Rand v. White Mts. R, Co., 40 N. H. 79; Piukerton v. Man- chester & L. R. Co.. 42 N. H. 424: Bull V. Douglass, 4 Munf. 303, 6 Am. Dec. 518: Enders v. Board of Public Works, 1 Gratt. 364; Dana v. Fiedler, 12 N. Y. 48, 62 Am. Dec. 130; Clement & H. Manuf. Co. v. Meserole. 107 Mass. 362;'Danforth v. Walker, 37 Vt. 239; Girard v. Taggart, 5 S. & R, 19, 5 S. & R. 539, 9 Am. Dec. 327; Ganson v. Madigan, 13 Wis. 67; Hale v. Trout, 35 Cal. 229; Springer v. Berry, 47 Me. 330; Dustan v. Mc Andrew, 44 N. Y. 72; Marshall v. Piles, 3 Bush, 249; Camp V. Hamlin, 55 Ga. 259; Boze- man v. Rose. 40 Ala. 212; Grand Tower Co. v. Phillips, 23 Wall. 471; Underhill v. Galf, 48 111. 198; Bick- nall V. Waterman, 5 R. I. 43; West v. Pritchard, 19 Conn. 212; Gregg v. Fitzhugh. 36 Tex, 127; Bush v. Holmes, 53 Ma 417; Rider v. Kelley, •SI Vt. 268. 76 Am. Dec. 176; Kribs v. Jones, 44 Md. 396; Moorehead v. Hyde, 38 Iowa, 382; WJiitesett v. Forehand, 79 N. C. 230; Bell v. Cunningham, 3 Pet. 69: Farwell v. Price, 30 Mo. 587; Schmertz v. Dwyer, 53 Pa. 335; Hein- nemann v. Heard, 50 N. Y. 27; Han- cock V. Gomez, id. 668; Parsons v. Martin, 11 Gray. Ill: Scott v. Rogers, 31 N. Y. 076; Stearin e, etc. Co. v. Heintzmann, 17 C. B, (N. S.) 56; Hutchings v. Ladd, 16 Mich. 494; Suydam v. Jenkins, 3 Sandf. 641; Kennedy v. Whitwell, 4 Pick. 466; Adams v. Sullivan, 100 Ind. 8. In Ingram v. Rankin, 47 Wis. 406, 32 Am. Rep. 762, 2 N. W. Rep. 755, the court say: "The rule fixing the measure of damages in actions for breaches of contract for the delivery of chattels, and in all actions for the wrongful and unlawful taking of chattels, whether such as would formerly have been denominated trespass de bonis or trover, at the value of the chattels at the time when delivery ought to have been made, or at the taking or conversion, with interest, is certainly founded upon principle. It harmonizes with the rule which restricts the plaintiff to compensation for his loss, and is as ]ust and equitable as any other general rule which tiie courts have been able to prescribe, and lias greatly the advantage of certainty over all others." 304 COMPENSATION. [§ 105. who is entitled to recover and must accept its value in place of the property itself should always be allowed interest on that value from the date at which the property was lost or destroyed or converted. Whether he recovers the value for the failure of a vendor or bailee to deliver, or by reason of the destruction, asportation or conversion of the property by a wrong-doer, interest is as necessary to a complete indemnity as the value itself.^ The injured party ought to be put in the same condition, so far as money can do it, in which he would have been if the contract had been fulfilled or the tort had not been committed, or the loss had been instantly repaired when compensation was due.^ 1 Watson V. Loughran, 112 Ga. 837, v. Pennsylvania Central R. Co., 49 N. 88 S. E, Rep. 82; Sanderson v. Read, Y. 303; Hamerv. Hathaway, 38 Cal. 75 111. App. 190, quoting the text; 117; Arpin v. Burch, 68 Wis. 619, 32 Chapman v. Chicago, etc. R Co., 26 N. W. Rep. 681. Wis. 295, 7 Am. Rep. 81 ; McCormick 2 Suydam v. Jenkins, 3 Sandf. 620. ENTIRETY OF DAMAGES. 305 CHAPTER lY. ENTIRETY OF CAUSES OF ACTION AND DAMAGES. Section 1. general principles. § 106. Cause of action not divisibla 107. Present and future damages. 108. What is an entire demand? 109. Entire demand may be severed. 110. Contracts to do several tilings successively or one thing continuously. 111. Items of account. 112. Continuing obligations. 113. Damages accruing subsequent to the action. 114-116. Damage to real property.) 117. Contracts of indemnity. 118. Damage to property and injury to person by same act. 119. What is not a double remedy. 120. Prospective damages. 121. Certainty of proof of future damages. 123. Action for enticing away apprentice, servant or son. 123. Future damages for personal injuries. 124 Only present worth of future damages given. 125. Continuous breach of contract or infraction of rights not an entirety. 126. Continuance of wrong not presumed. 127. Necessity of successive actions. Section 2. PARTIES TO sue AND BE SUED, 128. Damages to parties jointly injured entire. 129. Actions under statutes. 130. Must be recovered by person in whom legal interest vested. 181. Not joint when contract apportions legal interest. 132. Implied assumpsit follows the consideration. 133. Effect of release by or death of one of several entitled to entire dam- ages. 134. Misjoinder of plaintiffs, when a fatal objection. 135. Joinder of defendants; effect of non-joinder and misjoinder. 136. How joint liability extinguished or severed, 137. Principles on which joint right or liability for tort determined. 138. Tortious act not an entirety as to parties injured. 139. General and special owners. 140-142. Joint and several liability for torts. Vol. I — 20 306 ENTIKETY OF DAMAGES. [§ 106. Section 1. GENERAL PKINCIPLES. [175] § 106. Cause of action not divisible. A cause of ac- tion and the damages recoverable therefor are an entirety. The party injured must be plaintiff, and must demand all the damages he has suffered or which he will suffer from the in- jury, grievance or cause of action of which he complains. He cannot split a cause of action and bring successive suits for parts because he may not be able at first to prove all the items of the demand, or because all the damages have not been suf- fered. If he attempt to do so a recovery in the first suit, though for less than his whole demand, will be a bar to a sec- ond action.^ The failure of a party to recover because he has Pierce v. Tennessee Coal, Iron & R Co., 173 U. S. 1, 19 Sup. Ct. Rep. 335; Trabing v. California Naviga- tion & Imp. Co., 121 Cal. 137, 53 Pac. Rep. 644; Sloane v. Southern Cali- fornia R. Co., Ill Cal. 685, 44 Pac. Rep. 320, 33 Lu R. A. 193; Kapischki v. Kocli, 180 111. 44, 54 N. E. Rep. 179; Teel V. Miles, 51 Neb. 542, 71 N. W. Rep. 296; Wadleigh v. Buckingham, 80 Wis, 230,49 N. W. Rep. 745; Wells V. National L. Ass'n, 39 C. C. A. 476, 99 Fed. Rep. 222; Alie v, Nadeau, 93 Me. 282, 44 At!. Rep. 891, 74 Am. St. 346; Reynolds v. Jones, 63 Ark. 259, 38 S. W. Rep. 151; Thisler v. Miller, 53 Kan. 515, 42 Am. St. 302, 36 Pac, Rep. 1060; Cockley v. Brucker, 54 Ohio St. 214, 44 N. E. Rep. 590; Porter V. Mack, 50 W. Va. 581. 592, 40 S. E. Rep. 459; North British & Mercantile Ins. Co. V, Cohn, 17 Ohio Ct. Ct, 185; State v. Morrison, 60 Miss. 74; Walton V. Ruggles, 180 Mass. 24, 61 N, E. Rep. 267; Deering v. Johnson, 86 Minn. 172, 90 N. W. Rep. 363; Macdougall v. Knight, 25 Q. B. Div. 1; Commerce Exchange Nat, Bank V, Blye. 123 N. Y. 132, 25 N. E. Rep. 208; Bracken v. Atlantic Trust Co., 167 N. Y. 510, 60 N, E. Rep. 772; Baird V. United States, 96 U. S. 430; Zirker V. Hughes, 77 Cal, 235, 19 Pac. Rep. 235; Colvin v. Corwin, 15 Wend. 557; Wagner v. Jacoby, 26 Mo, 532; Smith V. Jones, 15 Johns. 229; Butler v. Wright, -2 Wend. 369; Cornell v. Cook, 7 Cow. 310: Ross v. Weber, 26 111. 221: Logan v. Caffrey,30 Pa. 196; Mason v. Alabama Iron Co., 73 Ala. 270; Howard College v. Turner, 71 id. 429, 46 Am. Rep. 326; Richardson V. Eagle Machine Works, 78 Ind. 422, 41 Am, Rep. 584; Nortli Vernon v. Voegler, 103 Ind. 314, 2 N. E. Rep. 821, quoting the text; Wichita & W. R. Co. V. Beebe, 39 Kan. 465, 18 Pac. Rep. 502. A statute providing that "succes- sive actions may be maintained upon the conti'act or transaction when- ever, after the former action, a new cause of action has arisen thereon," does not apply to actions for addi- tional damages happening or dis- covered because of some particular breach of a contract. Russell v. Polk County Abstract Co., 87 Iowa, 233, 54 N. W. Rep. 212, 43 Am. St, 381, Various tests have been suggested for determining whether the judg- ment recovered in one action is a bar to a subsequent action. " The princi- pal consideration is whether it be § IOC] GENEEAL PKINCIPLES. 301 mistaken his remedy does not preclude him from asserting his rights in a proper proceeding. Thus, the failure of a mortgagee of chattels to recover them by replevin from an officer by whom they were seized under execution, because the law pro- vided a different remedy, does not bar a proper proceeding.' Nor is a judgment for the defendant in replevin, because of the statute of limitations, a bar to an action in trover not af- fected by that statute.'^ Where a sheriff recovers the value of goods taken from him in replevin, because it was not the proper remedy, the owner may recover their value in trover.' If one fails to replevy a chattel because the defendant is only a tenant in common that does not affect his title.'' A judg- ment against the plaintiff in replevin, rendered because he failed to prove a demand, does not bar a subsequent action of that kind.^ The principle forbidding the splitting of causes of action does not prevent one whose property is taken by a sin- gle trespass from maintaining replevin for so much of it as was his, and trover for the remainder, of which he was a joint owner.* precisely the same cause of action in both, appearing by proper aver- ments in a plea, or by proper facts stated in a special verdict or a spe- cial case. And one great criterion of this identity is that the same evi- dence will maintain both actions." Kitchen v. Campbell, 3 W. Bl. 837; Martin v. Kennedy. 3 B. & P. 69, 71; Brunsden v. Humphrey, 14: Q. B. Div. 141. "The question is not whether the sum demanded might have been re- covered in the former action, the only inquiry is whether tiie same cause of action lias been litigated and con- sidered in the former action." Sed- don V. Tutop, 6 T. R. 607. '• Though a declaration contain counts under which the plaintiff's whole claim might have been recov- ered, yet if no attempt was made to give evidence upon some of the claims, they might be recovered in another action." Thorpe v. Cooper, 5 Bing. 129. " It is evident, therefore, that the application of the rule depends, not upon any technical consideration of the identity of the forms of action, but upon matter of substanca" Brunsden v. Humphrey, 14 Q. B. Div. 141. " It is not a test of the right of a plaintiff to maintain separate actions that all the claims miglit have been prosecuted in a single action.'" Perry V. Dickerson, 85 N. Y. 345. 350, 39 Am. Rep. 663. If different allegations are required in the pleading and different evi- dence on the hearing, the cause of action is not split. Stark v. Starr, 94 U. S. 477, 485. 1 Conn V. Bernheimer, 67 Miss. 498, 7 So. Rep. 345. 2 Johnson v. White, 31 Miss. 584. 8 Kittredge v. Holt, 58 N. H. 191. 4 Gaar v. Hurd, 93 111. 315. 5 Roberts v. Norris, 67 Ind. 386. 6 Huffman v. Knight, 36 Ore. 581, 60 Pac. Rep. 307. 308 ENTIRETY OF DAMAGES. [§ 107. § 107. Present and fntnre damages. If one party to a contract prevents the other from performing and thereby earn- ing wages or realizing profits, the latter in an action brought [176] at once after the breach may recover damages which will compensate him for his loss.^ Although by performance the benefits of the contract would accrue at a future time, yet, upon a breach by which such future advantages will be pre- vented, the injured party maj'^ immediateh'' thereafter recover damages equivalent to the loss, so far as he can prove it. And to facilitate the proof the court will not oblige him to antici- pate the future state of the market, but will give the plaintiff the benefit of market rates at the time of the breach. Thus, in the leading case in New York ^ it was argued that inasmuch as the furnishing of the marble would run through a period of five years, of which only about one year and a half had ex- pired at the time of the breach, the benefits which the con- tractor might have realized from the execution of the contract must be speculative and conjectural, the court and jury having no certain data upon which to make the estimate. The court say: "Where the contract . . . is broken before the ar- rival of the time for full performance, and the opposite party elects to consider it in that light, the market price on the day of the breach is to govern in the assessment of damages. In other words, the damages are to be settled and ascertained according to the existing state of the market at the time the cause of action arose and not at the time fixed for full performance." ^ But the parties are entitled to the benefit of any facts transpiring subsequently to the bringing of the 1 Standard Oil Co. v. Denton, 24 v. Hemenway, 64Me. 373; Richnaond Ky. L. Rep. 906, 70 S. W. Rep. 282, v. Dubuque, etc. R. Co., 40 Iowa, 264; quoting text, Tippin v. Ward, 5 Ore. 450; Howard ^ Masterton v. Mayor, 7 Hill, 61, 71. v. Daly, 61 N. Y. 363, 19 Am. Rep. 3 Wolcott V. Mount, 36 N. J. L. 262, 285; Gifford v. Waters, 67 N. Y. 80; 13 Am. Rep. 438; McAndrews v. Tip- Crabtree v. Hagenbaugh, 25 111. 233, pett, 39 N. J. L. 105; Burrell v. New 79 Am. Dec. 324; James v. Allen York & S. Solar Salt Co., 14 Mich. County, 44 Ohio St. 226, 6 N. E. Rep. 34; Roper v. Johnson, K R 8 C. P. 246; Eastern Tennessee, etc. R. Co. 167; Frost v. Knight. L. R. 5 Ex. 325; v. Siaub, 7 Lea, 397; Litchenstein v. Sutherland v. Wyer, 67 Me. 64; Du- Brooks, 75 Tex. 196, 12 S. W. Rep. gan V. Anderson, 36 Md. 567, 11 Am, 975; Kahn v. Kahn, 24 Neb. 209. 'lO Rep. 509; Schell v. Plumb, 55 N. Y. N. W. Rep. 135. See McEvoy v. 592; Sibley v. Rider, 54 Me. 463; Fales Bock, 37 Minn. 402, 34 N. W. Rep. 740. § 108.] GENERAL PEINCIPLES. 309 action which show more clearly the gains prevented by the breach of contract complained of, or the damages sustained from such a cause of action, or any other, the injurious effects of which extend into the future. This point will receive fur- ther elucidation when we come to speak of prospective damages. § 108. AVhat is an entire demand ? The reader's attention is now directed to what constitutes an entire demand or cause of action. Whether a contract be single and entire or [177] apportionable, if there is a total abandonment or breach by one party the other has a single cause of action upon the en- tire contract if he think proper to act upon the breach as a total one; the better opinion is that he is obliged to do so. A party has a right to break his contract on condition of being liable for the damages which will accrue therefrom at the time he elects to do so. And it is the duty of the other party Avhen notified thereof to exert himself to make the damaires as light as possible.^ What default a party may treat as a total breach of a contract is not always an easy question, and its solution should be looked for in works upon contracts rather than damages, for it depends upon interpretation. Like most other questions of construction it rests upon the intention of the parties and must be discovered in each case by considering the language and the subject-matter of the contract.^ If it is single and entire, or to the extent that it is so, it can be the subject of but one action against the defaulting party and the plaintiff must have performed all precedent conditions to place the other in default.* After the renunciation of a con- ^Kalkhofl V. Nelson, 60 Minn. 284, and entire the contract is so though Q2 N. W. Rep. 332; Parker v. Rus- the subject of it consists of two or sell, 133 Mass. 74; Dillon v. Anderson, more distinct and independent items. 43 N. Y. 231; Hartland v. General Cockley v. Brucker, 54 Ohio St. 214, Exchange Bank, 14 L. T. (N. S.) 863; 44 N. R Rep. 590; Miner v. Bradley, Willoughby v. Thomas, 24 Gratt 522. 22 Pick. 457; Fish v. FoUey, 6 Hill, 54. 2Pars. on Cont. 517. Ud.. pp. 517-527; Shinn v. Bodine, Demands resting on contracts 60 Pa. 182, 100 Am. Dec. 5C0; With- with separate parties, though the ers v. Reynolds. 2 B. & Ad. 882; party liable for part of them has as- Shaw v. Turnpike Co., 2 P. & W. 454; j^umed liability for the others, are Davis v. Maxwell, 12 Met 286; Harris not entire. Gottlieb v. Fred. W. v. Ligget, 1 W. & S. 301; Hopf v. Wolf Co., 75 Md. 126, 23 Atl. Rep. Meyers, 42 Barb. 270; Crips v. Tal- 198. vande, 4 McCord, 20; Herriter v. Por- \V/ien the consideration is single ter, 23 Cal. 385; Brown v. Smith, 13 310 ENTIRETY OF DAMAGES. [§ 109- tinuing agreement by one of the parties the other may con- sider himself absolved from its obligations and may sue for damages; his recovery will be based on what he would have lost by the continued breach down to such time as the con- tract would be fully performed, less any benefit resulting to the other party b}'' advantages the plaintiff may reasonably enjoy by reason of his release from performance. The latter may defer his action for the breach until the expiration of the time for the full performance of the contract.' g 109. Entire demand may be severed. A contract origi- nally entire may be severed afterwards by the parties so as ta [178] give a right of action for a part performance.^ This was the case where there was an entire contract for the deliv- ery of logs, and on delivery of a part the purchaser paid there- for partly in money and gave notes for the residue delivered. Cush. 366; Messiok v. Dawson, 2 Harr. 50; Folsom v. Clemence, 119 Mass. 473; Brannenburg v. Indian- apolis, etc. R. Co., 13 Ind. 103, 74 Am. Dec. 250; Hutchinson v. Wetniorv^, 2 Cal. 310, 56 Am. Dec. 327; Camp v. Morgan, 21 111. 255; Morgan v. Mc- Kee, 77Pa. 228; Cassel berry v. For- quer, 27 111. 170; Larkin v. Buck, 11 Ohio St. 561; Hall v. Clagett, 2 Md. Ch. 151; White v. Brown, 2 Jones, 403; Wagner v. Jacoby, 26 Mo. 532; Walter v. Richardson, 11 Rich. 466; Quigley v. De Haas, 82 Pa. 267; Sweeny v. Daugherty, 23 Iowa, 291; Stevens v. Lockwood, 13 Wend. 644; Blakeney v. Ferguson, 18 Ark. 347; Pinney v. Barnes, 17 Conn. 420; Far- rington v. Payne, 15 Johns. 432; Phillips V. Berick, 16 Jolins, 136, 8 Am. Dec. 299; Cunningham v. Jones, 20 N. Y. 486; James v. Lawrence, 7 Harr. & J. 73; Shaflfer v. Lee, 8 Barb. 412: Campbell v. Hatchett, 55 Ala. 548; Parker V. Russell, 133 Mass. 74; Norris v. Harris, 15 Cal. 226, 256, 76 Am. Dec. 480; McGrath v. Cannon, 55 Minn. 457, 57 N. W. Rep. 150; Rey- nolds V. Jones, 63 Ark. 259, 38 S. W. Rep. 151. 1 Roehm v. Horst, 178 U. S. 1, 20 Sup. Ct. Rep. 780 (1899), following the rule of Hochster v. De la Tour, 2 El. & Bl. 678. Contra, Clark v. National Benefit & Casualty Co, 67 Fed. Rep. 222 (1895); Daniels v. Newton, 44 Mass. 530, 19 Am, Rep. 384. The argument in the latter case is said to have been well and sufficiently an- swered by Judge Lowell in Dingley V. Oler, 11 Fed. Rep. 372, where the question is examined and cases cited. To the same effect as Roehm v. Horst, supra, are several cases in the fed- eral courts earlier than the decision therein : Dingley v. Oler, supra; Foss- Schneider Brewing Co. v. Bullock, 8 C. C. A. 14.59 Fed. Rep. 83; Edward Hines Lumber Co. v. Alley, 19 C. C. A. 599, 73 Fed. Rep. 603; Horst v. Roehm, 84 Fed. Rep. 565. Speirs v. Union Drop Forge Co.. 180 Mass. 87, 91, 61 N. E. Rep. 825, is in harmony with Roehm v. Horst. 2 0'Beirne v. Lloyd, 43 N. Y. 251; Lee V. Kendall, 56 Hun, 610, 11 N. Y. Supp. 131; Fourth Nat, Bank v. Noo- nan, 88 Mo. 372: Ryallv. Prince, 82 Ala. 264. 2 So. Rep. 319. § 110.] GENEEAL PKIN0IPLE8. 311 It was held that the notes could be collected notwithstanding any default in the deliver}^ of other logs to fulfill the contract, but subject to recoupment of the damages for such breach.^ Under an agreement that if the creditor would forbear suinir upon the whole of his demand and sue upon a part of it only, and in case of a recovery upon that part the debtor would pay the balance, it was held that such agreement was a waiver of the rule in his favor concerning the division of actions, and that the recovery upon the part sued upon was not a bar to an action upon the balance of the claim.^ So a quantum meruit claim may arise for a part performance on account of the ben- efit derived from it.' A city splits up a demand against it by drawing warrants on account of it in different amounts, and cannot defend an action on one of them on the ground that it had previously been sued on another.^ " In such cases the rights of the plaintiff as assignee serve as the consideration for the new contract, which becomes the ground of the action. The action is on the defendant's promise to the plaintiff, and not upon the assignment or upon any right growing out of it."* While a general assignment for the benefit of creditors does not usually effect a rescission or termination of an executory contract of the assignor,^ it may be otherwise where the sub- ject-matter of the contract establishes a relation of confidence between the parties, and the exercise of peculiar skill or knowl- edge is required. In such a case the plaintiff should not be compensated for what he cannot perform.'' § 110. Contracts to do several things successively or one thing continuously. A contract to do several things at dif- ferent times is divisible in its nature, and an action will lie 1 Fessler v. Love, 43 Pa. 313. * Little v. Portland, supra; Getch- '-i Mills V. Garrison, 3 Keyes, 40; ell v. Maney, 69 Me. 442; James v. Mandeville v. Welch, 5 Wheat. 277, Newton, 143 Mass. 36G, 56 Am. Rep. 288; Secor v. Sturgis, 16 N. Y. 548. 692, 8 N. E. Rep. 122. See Bliss v. New York Central, etc ''New England Iron Co. v. Gilbert R, Co.. 160 Mass. 447, 36 N. E. Rep. 65. E. R. Co., 91 N. Y. 153; Vandegrift v. » See §90. Cowles Engineering Co., 161 N. Y. < Little V. Portland, 26 Ore. 235, 37 435, 55 N. R Rep. 941, 48 L. R A. Pacs. Rep. 911; Grain v. Aldrich, 38 685. Cal. 514, 99 Am. Dec. 423; National "' United Press v. Abell Co., 79 App. Exchange Bank v. McLoon, 73 Ma Div. 550, 80 N. Y. Supp. 454, 461. 498, 40 Am. Rep. 38a 312 ENTIRETY OF DAMAGES. [§ 110. upon each default.^ The defendant, being the keeper of an office for procuring crews of vessels, in consideration of the plaintiff's agreement to furnish such supplies and advances as might be necessary in the business, promised to pay the latter a certain sum for each man shipped and to repay the advances; the de- fendant's undertaking was several.^ But when a party has dis- tinct demands or existing causes of action growing out of the same contract or resting in matter of account, which may be joined and sued for in the same action, they must be joined ; they constitute an entire cause of action or demand; and if they be split up and a suit brought for a part only, and subsequently a second suit for the residue, the first action, if determined on the merits, will be a bar.^ This is not to be carried so far as to bar an action on the contract because judgment has been obtained against the party who failed to perform for a tort resulting from the breach. Claims for a wrongful dismissal from em- ployment and to recover wages earned prior thereto are sep- arate and distinct causes of action. The right to wages is the result of the contract; the right to damages grows out of the wrongful termination of it. The amount due under the con- tract was definite or ascertainable at the time of its breach, and was then payable; the damages were incapable of exact ascer- tainment until the period covered by the contract expired, as they might be mitigated by the acts of the plaintiff.'* But if a servant performs no laborafter his discharge he can maintain but one action for the breach of the contract.* "Where an em- ployee who was permanently disabled in the service of his em- 1 Badger v. Titcomb, 15 Pick, 409; Easier v. Nichols, 8 lud. 260; Terry V. Beatrice Starch Co., 43 Neb. 866, 63 N. W. Rep. 255; Coleman v. Hud- son, 2 Sneed, 465. '^ Badger v. Titcomb, supra. 3 Bendernagle v. Cocks, 19 Wend. 207; James v. Lawrence, 7 Harr. & J. 73; Atwood v. Norton, 27 Barb. 638; Cassel berry v. Forquer, 27 111. 170; Geiser Threshing Machine Co. v. Farmer, 37 Minn. 438, 8 N. W. Rep. 141; Bowe v. Minnesota Milk Co., 44 Minn. 460. 47 N. W. Rep. 151; Hodge V. Shaw, 85 Iowa. 137. 52 N. W. Rep. 8, 29 Am. St. 290; Gilbert v. Boak Fish Co., 86 Minn. 365. 90 N. W. Rep. 767; Olmstead v. Bach. 78 Md. 132, 37 Atl. Rep. 501, 33 L. R. A. 74, 44 Am. St. 373. Compare Williams v. Luck- ett, 77 Miss. 394, 26 So. Rep. 967. * Perry v. Dickerson, 85 N. Y. 345, 39 Am. Rep. 663. 5 Waldron v. Hendrickson, 40 App. Div. 7, 57 N. Y. Supp. 561; Barnes v. Coal Co., 101 Tenn. 354, 47 S. W. Rep. 498; Olmstead v. Bach, 78 Md. 142, 44 Am. St. 273, 27 Atl. Rep. 501, 23 L. R. A. 74; Wright v. Turner, 1 Stew. 29, 18 Am. Dec. 35. § 110.] GENERAL PRINCIPLES. 313 ployer compromised his claim for damages in consideration of an agreement that he should receive certain wages monthly and be furnished with specified supplies so long as his ability to work should continue, and the plaintiff, on his part, was to do for the defendant such work as he was able to do and re- lease the defendant from liability for damages, and the defend- ant denied its obligation to pay the stipulated wages and en- tirely abandoned the contract, the plaintiff was entitled to con- sider the contract as entirely broken, and recover all that was due him when the action was brought and all that mio-lit be- come due under it, which would be its value to him at the time of the breach.^ A contract to issue or procure the issuance of an annual railroad pass to be renewed from year to year during the pleasure of the promisee is divisible.^ In an action on a lease which contained distinct cove- [179] nants to pay for manure and for work and labor, the defend- ant pleaded in abatement that a prior action brought for the breach of certain of the covenants was still pending. The plaint- iff replied that the covenants upon which that suit was brought were distinct and different from those involved in the pending action. The defendant's demurrer to this replication was sus- tained and he obtained judgment.^ It is observed of this ruling tliat if it is subject to any criticism it is because of its applica- tion to the facts involved. It may be inferred from the opin- ion of Judge Cowen that all the covenants in the lease were for the payment of different amounts of money by the lessee to the lessor; and he seemed to regard it like the case of a con- tract to pay money in instalments, and in this way reached the conclusion that the different breaches constituted a sino:le ■cause of action.* But it is now established in JSTew York that the breach of an agreement to pay money in instalments is not 1 Pierce v. Tennessee Coal, Iron & 207. See Badger v. Titcomb, 15 Pick. R Co., 173 U. S 1, 19 Sup. Ct. Rep. 409; Mcintosh v. Lawn, 47 Barb. 550. 335; Eastern Tennessee, etc. R. Co. V. The recovery of past-due instal- Staub. 7 Lea, 397. ments of rent which accrued under 2Kans;is, etc. R Co. v. Curry, 6 a lease for a term at a fixed monthly Kan. App. 561, 51 Pac. Rep. 576; rental does not bar another action Curry v. Kansas, etc. R. Co., 58 Kan. for instalments which became due •6, 48 Pac. Rep. 579. subsequently. Barnes v. Coal Co., 3 Bendernagle v. Cocks, 19 Wend. 101 Tenn. 354, 47 S. W. Rep. 498. •* Perry v. Dickerson, supra. 314 ENTIRETY OF DAMAGES. [§ 110. a breach of the entire contract, and will not permit a recovery of all the damages in advance.^ " There seems to be a distinc- tion, whether well grounded in principle or not, between a con- tract for the payment of money in future instalments and a contract for the delivery of goods in future instalments ^ as well as a contract for future employment and service.'"* A contract which, for an entire consideration, stipulates for the performance of several acts for the benefit of the same person at the same time is entire.* [180] The principle is settled beyond dispute that a judg- ment concludes the rights of the parties in respect to the cause of action stated in the pleadings on which it is rendered, whether the suit embraces the whole or only a part of the demand constituting the cause of action. It results from this principle, and the rule is fully established, that an entire claim [181] arising either upon a contract or from a wrong cannot be divided and made the subject of several suits ;^ and if sev- eral suits be brought for different parts of such a claim the pendency of the first may be pleaded in abatement of the others, and a judgment upon the merits of either will be avail- able as a bar in the others. But it is entire claims only which [182] cannot be divided within this rule: those which are single and indivisible in their nature. The cause of action in the dif- ferent suits must be the same. The rule does not prevent, nor is there any principle which precludes, the prosecution of sev- eral actions upon distinct causes of action. The holder of a [183] number of promissory notes may maintain an action on each; a party upon whose person or property successive and distinct trespasses have been committed may bring a separate suit for every trespass, and all demands of whatever nature aris- ing out of independent transactions may be sued upon sepa- rately. It makes no difference that the causes of action might 1 Wharton v. Winch, 140 N. Y. 287, 390, 54 N. Y. Supp. 773 (contract for 35 N. E. Rep. 589; McCready v. Lin- publication of advertisement in des- denborn, 173 N. Y. 400, 408, 65 N. E. ignated newspapers at stated inter- Rep. 208. vals for a gross sum); Indianapolis, 2 Nichols V, Scranton Steel Co., 137 etc. R. Co. v. Koons, 105 Ind. 507, 5 N. Y. 471, 33 N. E. Rep. 561. N. E. Rep. 549. 3 Howard v. Daly, 61 N. Y. 362,19 » Standard Oil Co. v. Denton, 24 Am. Rep. 285. Ky. L. Rep. 966, 7 S. W. Rep. 283,.. * Ailing V. Trevor, 25 N. Y. Misc. quoting the text. § no.] GENERAL PRINCIPLES. 315 be united in a single suit; the right of the party in whose favor they exist to separate suits is not affected by that circumstance.' The true distinction between demands or rights of action which are single and entire, and those which are several and distinct, is that the former immediately arise out of one and the same act or contract, and the latter out of different acts or contracts.- Perhaps as simple and safe a test as the subject admits of by which to determine whether the case belongs to one class or the other is by inquiring whether it rests upon one or sev- eral acts or agreements. In the case of torts each trespass, conversion or fraud gives a cause of action, and but a single iSecor V. Sturgis, 16 N. Y. 554, overruling Colvinv.Corwin, 15 Wend. 557, and disapproving the reasoning in Guernsey v. Carver, 8 id. 492. See Perry v. Dickerson, 85 N. Y. 345. 39 Am. Rep. 663. 2 Thisler v. Miller, 53 Kan. 515. 36 Pac. liep. 1060. Where the grade of a street has been established and the plaintiff has made improvements upon prop- erty abutting thereon in conformity with such grade, and subsequently the city provides by ordinance for changing the grade, and in fact alters it from curb to curb, and afterwards adapts the sidewalk to the grade as finally established, an action for changing the sidewalk cannot be maintained after a recovery has been had for cutting down the grade from curb to curb. Hempstead v. Des Moines, 63 Iowa, 36, 18 N. W. Rep. 676; Stickford v. St. Louis, 7 Mo. App. 217 (injury to fee of one lot and to leasehold interest with rent of ad- joining lot). If goods are sold on credit at vari- ous times each sale is separate and distinct, and an independent cause of action arises on the expiration of the agreed period of credit and as the several amounts become due. Zimmerman v. Erhard, 83 N. Y. 74, 38 Am. Rep. 396. Where property is purchased in several quantities at different times in the execution of a conspiracj-, tlie damage done to tiie vendor is the gist of tiie action, and the cause of it is not single and entire; each pur- chase is a distinct and .several fraud for which a separate action lies. Lee V. Kendall, 56 Hun, 610, 11 N. Y. Supp. 131. Where a train was in motion and a mare and colt veere running on the track in front of it, and the colt was struck and killed, and the train after running on five hundred feet struck and killed the mare, the killings were sepai-ate and independent acts; causes of action based upon tl.em were necessarily composed of differ- ent elements, because, while the kill- ing of the colt might have been pre- vented by the prompt exercise of ordinary care, the last killing was the result of gross negligence. Mis- souri Pacific R. Co. V. Scammon, 41 Kan. 521, 21 Pac. Rep. 590. See Bricker v. Missouri Pacific R. Co., 83 Mo. 391; Pucket v. St. Louis, etc. R. Co., 25 Mo. App. 650. The seizure on the same day and under the same writ of two distinct lots of animals in different places, though they are owned by the same person, constitutes distinct tres- passes. Millikin v. Sinoot, 71 Tex. 759, 10 Am. St. 814, 12 S. W. Rep. 59. 316 ENTIRETY OF DAMAGES. [§ 110. [184] one;Mn respect to contracts, express or implied, each affords one and only one cause of action.^ The case of a con- tract containing several stipulations to be performed at dif- ferent times is no exception; although an action may be main- tained upon each stipuhition as it is broken before the time for the performance of the others, the ground of action is the stipulation which is in the nature of a several contract.^ The 1 Munro v. Pacific Coast Dredging & R. Co., 84 Cal. 515, 24 Pac. Rep. 303, 18 Am. St. 248; Lee v. Kendall, 56 Hun, 610,11 N. Y. Supp. 131; Secor V. Sturgis, 16 N. Y. 554; Binicker v. Hannibal, etc. R. Co., 83 Mo. 660; Steiglider v. Missouri Pacific R. Co., 38 Mo. App. 511; Knowlton v. New York. etc. R. Co., 147 Mass. 606, 18 N. E. Rep. 580, 1 L. R. A. 625; Brannen- burg V. Indianapolis, etc. R. Co., 13 Ind. 103, 74 Am. Dec. 250; Hicenbo- them V. Lowenbein, 6 Robert. 557; Marble v. Keyes, 9 Gray, 221; East- man V. Cooper, 15 Pick. 276; Bennett V. Hood, 1 Allen, 47, 79 Am. Dec. 705; Traok v. Hartford, etc. R. Co., 2 Allen, 331; Doty v. Brown, 4 N. Y. 71. But one cause of action arises from the conversion of various chattels at the same time; after judgment for the plaintiff for some of those con- verted an action cannot be main- tained for the others, although he was unable to include them in the first action because of the defend- ant's fraudulent conduct (McCaffrey V. Carter, 125 Mass. 330); or because of the accidental failure to sue for them in the first action. Folsom v. Clemence, 119 Mass. 473; Herriter v. Porter, 23 Cal. 385; Farrington v. Payne, 15 Johns. 432; Funk v. Funk, 35 Mo. App. 246. See Bowker Fer- tilizer Co. V. Cox, 106 N. Y. 555, 13 N. E. Rep. 94.3. This is the rule, al- though part of the property taken was held by the plaintiff as a trustee and part in his own right. O'Neal V. Brown. 21 Ala. 482. A tenant who sues for damage to his crops may re- cover for the whole injury done. Texas & P. R. Co. v. Bayliss, 62 Tex. 570. Injuries done to distinct pieces of property owned by the same per- son, by a single act, must be sued for together. Beronio v. Southern Pacific R. Co., 86 Cal. 415, 21 Am. St. 57, 24 Pac. Rep. 1093. If the plaintiff has interests in pos- session and reversion he may recover in tiie same action for an injury af- fectmg both. Irving v. Media, 10 Pa. Super. Ct. 132, aflSrmed without opinion, 104 Pa. 648. 2 Shires v. O'Connor, 4 Pa. Super. Ct. 465: Huyett & Smith Manuf. Co. V. Chicago Edison Co., 167 111. 233, 59 Am. St. 272, 47 N. E. Rep. 384; Sam- uel V. Fidelity & Casualty Co., 76 Hun, 308, 27 N. Y. Supp. 741. ^Alkire Grocer Co. v. Tagart, 60 Mo. App. 389; Gentles v. Finck, 23 N. Y. Misc. 153, 50 N. Y. Supp. 726; Secor V. Sturgis, 16 N. Y. 554; Ryall V. Prince, 82 Ala. 264, 2 So. Rep. 319; Wilkinson v. Black, 80 Ala. 329; Strauss v. Meerteif, 64 id. 299: Wil- cox V. Plummer, 4 Pet. 172; Moore v. Juvenal, 92 Pa. 484; Reformed, etc. Church V. Brown, 54 Barb. 191; Campbell v. Hatchett, 55 Ala. 548; O'Beirne v. Lloyd, 43 N. Y. 248; Pin- ney v. Barnes, 17 Conn. 420; Rudder v. Price, 1 H. Black. 550: Cobb v. L C. R., 38 Iowa. 601; Clayes v. White, 83 111. 540; Blakeney v. Ferguson, 18 Ark. 347; Kendall v. Stokes, 3 How. 87. In Mcintosh v. Lown, 49 Barb. 550, it was held that the lease in question contained seven distinct and inde- § 111.] GENEKAL PEINCIPLE8. 317 same rule governs in torts arising from contracts and those which have their origin in ollicial misfeasance. The cause of action arises when the breach of duty occurred, not on the dis- covery of the effects thereof.^ § 111. Items of account. Where there is an account for goods sold or labor performed, where money has been lent to or paid for the use of a party at different times, or several items of claim springing in any way from contract, whether one or separate rights of action exist will, in each case, depend on whether the case is covered by one or by several or sep- arate contracts. The several items may have their origin in one contract, as an agreement to sell and deliver goods, per- form work, or advance money ; and usuali}^, in case of a run- ning account, it may be fairly implied that it is in pursuance of an agreement that an account may be opened and continued either for a definite period or at the pleasure of one or both of the parties. But there must be either an express contract or the circumstances must be such as to raise an implied contract embracing all the items to make them, where they arise [185] at different times, a single or entire demand or cause of action.^ pendent covenants, the tbird of which torney are usually rendered pursuant was to keep the buildings and fences to some general contract, and what- in repair, and the seventh to build, ever is due therefor at the termina- during the continuance of the lease, tion of the service or employment one hundred and twenty-five rods of must be recovered in one action, fence. It was held that a former ac- Hughes v. Dundee Mortgage Trust tion by the lessor upon the covenant Investment Co., 26 Fed. Rep. 831. for not building the fence was not ^ Owen v. Western Saving Fund, a bar to an action subsequently 97 Pa. 47, o9 Am. Rep. 794. brought upon the covenant to repair; ^Secor v. Sturgis. 16 N. Y. 554; that the two covenants were distinct Borngesser v. Harrison, 13 Wis. 544; and had no connection with each Walter v. Richardson, 11 Rich. 466; other, except that they were con- Magruder v. Randolph, 77 N. C. 79; tained in the same instrument; that American Button-hole & S. M. Co. v. the former action must have been to Thornton, 28 Minn. 418, 10 N. W. recover for the same identical cause Rep. 425; Oliver v. Holt, 11 Ala. 574, of action, or for some part thereof, as 46 Am. Dec. 228; Buck v. Wilson, tiie plaintilf seeks to recover in the 113 Pa. 423, 6 Atl. Rep. 97; Wren v. second in order to be a bar. See Winter, 6 Ohio Dec. 176. Warner v. Bacon, 8 Gray, 497, 69 The Pennsylvania case cited holds Am. Dec. 253; Clark v. Baker, 5 Met. that if several notes are given for 452. the amount of an entire book ac- The services of a regularly ap- count, without being taken as an pointed or permanently employed at- extinguishment of the debt or as 318 ENTIEETY OF DAMAGES. [§ 111, The very fact that there is a running account imports that the parties have not been accustomed to treat every separate mat- ter of charge as a distinct debt, but on the contrary to enter it in the account to become a part thereof and going to make up the debt which consists of the entire balance due.^ A cred- itor cannot bring an action for an amount admittedly due upon an account resulting from a single contract, the whole debt being mature, enforce payment of that amount, and maintain a second action for a sum alleged to be due on the same ac- count in excess of that first sued for; the fact that the peti- tion in the first case recited that the right to bring such sec- ond action was reserved was immaterial.^ If bills are payable a,t the end of every month an action, brought after two months, to recover the sum due at the end of the first month, does not bar an action to recover the amount due at the end of the sec- ond month.' The business of ship carpenters was carried on in one part of a building under the direction of two of the partners in a firm, and the business of ship chandlers in an- other part of the same building under the direction of the third partner. Separate books of account were kept by difi'erent clerks in the two branches of business, and the partners con- fined themselves respective!}^ to the management of one of the branches without personally taking part in the other. Work was done and materials furnished from the carpentry branch in the repairing and equipping of a brig, upon the order of her captain, to the amount of $139, and immediatel}'^ there- after goods and articles of ship chandlery to the value of $521 were furnished to the same brig, on the order of the same <;aptain, at different times through a period of a month. The consideration for an extension of ' Memmer v. Carey, 30 Minn. 458, time, that a suit brought upon the 15 N. W. Rep. 877; Borngesser v. account after some of the notes be- Harrison, 12 Wis. 544; Avery v. Fitch, came due, in which judgment for 4 Conn. 362; Lane v. Cook, 3 Day, the amount of those due was given, 255. See note to § 110. bars a subsequent suit upon the 2 Atlanta Elevator Co. v. Fulton same account for the amount of the Bag & Cotton Mills. 106 Ga. 427, 32 notes wliich became due after the S. E. Rep. 541; Bolen Coal Co. v. suit was brought. Contra, Badger Whittaker Brick Co., 52 Kan. 747, 35 V. Titcomb. 15 Pick. 409, 26 Am. Dec. Pac. Rep. 810. (511; Cummington v. Wareham 8 3 Beck v, Devereaux, 9 Neb. 109. 2 Cash. 590. N. W. Rep. 365. § 112.] GENERAL PRINCIPLES. 319 two accounts did not constitute an entire claim. ^ In an action for money had and received it appeared that the defendant, as -steward of the plaintifl", had, between April and November, 1822, received large sums of money for timber sold, and in December, 1821, 4GZ. for rents. In a former action a judg- ment had been taken by default for all that the plaintiff's agent thought the defendant could pay, but afterwards it was ascertained for the first time that the steward had received the said amount for rents. All the sums which the plaintiff knew the defendant had received at the time when he commenced the former action were considered as included in and constituting one entire cause of action, and the recovery was confined in the last action to the 46Z., [186] though the defendant's actual receipts for timber were very much greater than the default judgment.- "Where the captain of a steamboat hired a barge and exe- cuted to the owner a contract to pay $10 per day until returned in good order as received, but fixed no time when it should be returned or the money paid, it was held that the barge was to be returned in a reasonable time considering the circumstances of the service for which it was hired, the stipulated rent or hire would then be payable, the contract was entire and not divisible, and an action brought thereon after the expiration of such reasonable time for the amount then due for the hire of the barge at the rate specified in the contract was a bar to a subsequent action on the same contract for hire accruing after the period embraced in the judgment recovered in the former action.' " If the barge were not returned upon demand in a reasonable time it would be a breach of the contract for the return. The right of the party in such a case is not to ex- act the $10 a day perpetually, but to charge at that rate for a reasonable time, and then to collect the value of the barge, and by suing . . (in the former action) . . he in effect averred that the reasonable time had expired and the whole became due."* § 112. Continuing obligations. Where the defendant had ■covenanted, in 1822, that the plaintiff should have a con- •Secor V. Sturgis, 16 N. Y. 554. 3 stein v. Steamboat Prairie Rose, 2 Bagot V. Williams, 3 B. & C. 235; 17 Ohio St. 472, 93 Am. Dec. 631. Hisley v. Squire, 53 Barb. 280. < See Bradley v. Washington, etc Co., 9 Pet 107. 320 ENTIRETY OF DAMAGES. [§ 112. tinual supply of water for a mill from his dam, and totally failed to perform after 1826, and in 1835 the plaintiff brought an action for the breach and recovered damages sustained by him up to that time, it was held a bar to a second action aris- ing from a subsequent failure to perform.^ "It is true the cov- enant stipulated for a continued supply of water to the plaint- iff's mill, and in this respect it may be appropriately styled a continuing contract. Yet, like any other entire contract, a total breach put an end to it, and gave the plaintiff the right to sue [187] for an equivalent in damages. He obtained that equiv- alent, or should have obtained it, in the former suit." The principle has been applied to an action to recover rent under a lease for a term of years where a suit was brought to recover the rent for one month which was due when another suit was instituted ;^ and to an action to recover the expense of support- ing a non-resident pauper, such expense accruing after the re- covery in a former suit of the amount due when the trial was had.* An agreement by one party to support another during life is a similar continuing, entire contract,* if it is uncondi- tional.'^ A separate action may be maintained whenever there is a new cause of action, whether it arises at the same time as another cause or at a different time; but it must exist and be complete before the action is brought." "Where the contract is indefinite as to time and negative in its character successive actions may be brought for its violation, as where one who has sold his interest in a business violates bis contract not to re- engage in business in that place.'' 1 Fish V. Folley, 6 Hill, 54 See Pa. 114; Carpenter v. Carpenter, 66 Amerman v. Deane, 133 N. Y. 355, Hun, 177; Sbover v. Myrick. 4 Ind. 28 Am. St. 584. 30 N. E. Rep. 741. App. 7, 30 N. E. Rep. 207. See Fer- 2 Burritt v. Belfy, 47 Conn. 323; guson v. Ferguson, 2 N. Y. 360. Reynolds v. Jones, 63 Ark. 259, 38 S. & Fay v. Guynon, 131 Mass. 31. W. Rep. 151. See § 110, particularly « Howell v. Young, 5 B. & C. 267; the late New York cases cited. Warner v. Bacon, 8 Gray, 397, G9 Am. 3 Marlborough v. Sisson, 31 Conn. Dec. 253; Prince v. Moulton, 1 Ld. 383. SeePinney V. Barnes, 17 id. 420. Raym. 248; Harbin v. Green, Hob. * Parker v. Russell, 133 Mass. 74; 189; Coggeshall v. Coggeshall, 2 Amos V. Oakley, 131 id. 413; Schell Strobb. 51. See State Bank v. Fox, V. Plumb, 55 N. Y. 592; Sibley v. 3 Blatchf. 431. Rider, 54 Me. 466; Fales v. Hemen- i Just v. Greve, 13 111. App. 302- way, 64 Me. 373; Miller v. Wilson, 24 Pierce v. Woodward, 6 Pick. 206. § 113.] GENERAL P1.INCIPLES. 321 § 113. Damages accruing subsequent to the action. It is not essential, however, that all the injurious effects of the act which constitutes the cause of action should have been devel- oped and suffered before suit; it is immaterial to the right to recover for them when the effects manifest themselves with reference to the time of bringing the suit. Eut it is practi- cally material to the plaintiff that the effects be so manifest, before and at the time of the trial, as to be susceptible of proof. The actual effects down to the time of the trial are provable; and whether those which may ensue later may be taken into ac- count will depend on whether they are imminent and suffi- ciently certain.^ Interest which is the accessory of the prin- cipal does not stop at the commencement of the action, but may always be computed down to the verdict.^ But whether continuing damages may be computed after the commence- ment of the suit will depend on whether they, proceed from the act complained of in that suit as the cause of action, or from some later act constituting a fresh cause of action.' [188] A judgment creditor in lieu of her judgment agreed to accept the bond of another conditioned for her maintenance during life, or to pay her if she preferred it $150 per annum; the bond to be secured by a mortgage on the land of the obligor. The defendant was employed to prepare the instrument and to have the mortgage entered of record; he withheld it from 1 Bryson v. McCone, 121 Cal. 153, Am. Rep. 451 (violation of contract 53 Pac. Rep. 637; Samuel v. Fidelity to pass plaintiff and his family dur- & Casualty Co., 76 Hun, 308, 27 N. ing their lives over defendant's Y. Supp. 741; Salzgeber v. Miclvel, 37 road). Ore. 216, 60 Pac. Rep. 1009; Conlon 2 Robinson v. Bland. 2 Burr. 1077; V. McGraw, 66 Mich. 194, 33 N. W, Hovey v. Newton, 11 Pick. 421; Dun- Rep. 388: Coles v. Thompson, 7 Tex. can v. Markeley, Harp. 276. Civ. App. 666, 21 S. W. Rep. 46; Cook 3 Eastern Tennessee, etc. R. Co. v. V. Redman, 45 Mo. App. 397, citing Staub, 7 Lea, 397; Pierce v. Tennes- the text: Galveston, etc. R. Co. v. see Coal, Iron & R. Co., 173 U. S. 1, Borsky, 2 Tex. Civ. App. 545, 21 S. W. 19 Sup. Ct. Rep. 335; Haskell County Rep. 1011; Filer v. New York Cen- Bank v. Bank of Santa Fe, 51 Kan. tral R. Co., 49 N. Y. 42; Hayden v. 39, 32 Pac. Rep. 624; Troy v. Cheshire Albee, 20 Minn. 159; Hagan v. Riley, R. Co., 23 N. H. 102; Hicks v. Her- 13 Gray, 515; Spear v. Stacy, 26 Vt. ring, 16 Cal. 566; Phillips v. Terry. 3 61; Fort v. Union Pacific R. Co., 2 Keyes,313;Cosgriff v. Miller, — Wyo. Dill. 259; Mobile & M. R. Co. v. Gil- — ", 68 Pac. Rep. 206, 216, quoting the mer, 85 Ala. 422, 5 So. Rep. 138; Erie text. & P. R. Co. V. Douthet, 88 Pa. 243, 32 Vol. 1 — 21 322 ENTIRETY OF DAMAGES. [§ 113. record until the property became otherwise incumbered by claims to an amount beyond its value and the debtor in- solvent. It was held in an action on the case that the injured party could recover all that she had lost or was likely to lose by the default; all that the mortgage if duly recorded would have been worth to her.^ Where the defendant under- 1 Miller v. Wilson, 24 Pa. 114 Black, C. J., said: ''The argument is made that the plaintiff has not yet suffered any loss from the defend- ant's violation of duty, and that she can recover from Miller only in case Carson (the obligor in the bond) makes default, because the mortgage being but a security for the bond there is nothing due on the former until the condition of the latter is broken. But we hold it clear law that Miller did not merely substitute his personal responsibility in place of the mortgage; that he did not be- come Carson's surety in the bond; but that he subjected himself to an immediate action in which the plaintiff may recover compensation for all she has lost and all she is likely to lose through his miscon- duct." (See Walton v. Ruggles, 180 Mass. 24, 61 N. E. Rep. 267; Paro v. St. Martin, 180 Mass. 29, 61 N. E. Rep. 268.) "On a contract to pay money at stipulated periods there may be as many suits as there are instalments; for every failure to pay is a fresh breach of the contract, and there can be no recovery except for what is due at the tiiue of suit brought. But on a tort, or on a duty or promise which has already been violated as grossly as it ever can be, there is but one action, and in that the injured party must have full justice. When, in the language of Chief Justice Best (2 Bing. 229), the thing has but one neck, and that is cut ofif by the act of tlie defendant, it would be mischiev- ous to drive the plaintiff to a second, third or fourth action as the sticces- sive consequences of the wrong m^y arise. It is not true, even as a gen- eral rule, that courts will not antici- pate a loss in futuro. If a man de- stroys my orchard I may demand full reparation at once, and I am not com- pelled to sue every year for each crop of fruit I lose. In slander the dam- ages are swelled by all the sufferings which the want of a good name may occasion subsequently. In an action for batter}- the plaintiff shall recover for all the injuries likely to result from the wounds inflicted by his ad- versary (1 Ld. Raym. 339). He who sues for the loss of an office or em- ployment is entitled to a verdict at once for the whole value of it with- out waiting until the profits would have reached his pocket (2 Bing, 229). But we need not resort to analo- gies. A case directly in point is that of Howell V. Young, 5 B. & C. 259. There an attorney was employed to ascertain whether certain mortgages were a sufficient security for a loan of £3.000, and falsely informed his client that they were. It was held that in an action againi-t the attor- ney the client might recover for all the probable loss he was likely to sus- tain from the invalidity of the secu- rity. The right of action in such cases accrues at the time when the con- tract or duty of the defendant is vio- lated, and if suit be not brought within six years afterwards the stat- ute of limitations is a flat bar, no matter when the consequential loss may have happened. '• The defendant has deprived the § 113.] GENERAL PRINCIPLES. 323 took with the plaintiff to be suret}'^ for another if the [IS^] plaintiff would let to hira a specified house at a rent stated, and wotdd execute an agreement to that effect, but did not, it was held that the defendant's undertaking was entire, not to pay the rent as it became due from time to time, but to execute an obligation to do so, and that only one action could [190] be brouiiht on his contract.^ plaintiff of what she relied on for a living; and this judgment is less than it ought to be if it does not place her in as good a condition, present and prospective, as he would have left her in by doing his duty. It is vain to say she has suf- fered no real loss. A debt worth to her $1,800 has been converted into a thing of no value. The defendant found her in possession of what her frugal habits taught her to think sufficient; he left her 'as poor as winter.' If he had taken the sum out of her pocket in money, she must, according to his reasoning, suf- fer the extremity of the consequences before she has a right of action; and therefore she can bring no suit until she starves. But human nature will not endure such logic. The law is made for practical uses. It listens to no metaphysical subtleties; and will not consent on any terms to call that right which every sound heart feels to be wrong. The value of wealth, beyond what is barely neces- sary for the present hour, consists in the consciousness of liaving it, and the comfortable security it af- fords the possessor against fviture want. A cautious providence for the uime of need, which may come hereafter, is one of the attributes which distinguish the race of man from the lower animals. The fear of becoming de^stitute is a sentiment as universal as it is necessary for the well-being of the world. When that fear is grounded on the absence of any accumulation which may serve as a support, it is poverty, — a real, substantial, and sore evil, from which every well constituted person who feels will seek relie'f by the ut- most exertion of mind and body. Here was a woman who consented to give up all she had in considera- tion that $150 per annum for the term of her life should be secured to her beyond the reach of accidents by a mortgage. That mortgage was everything in the world that lay be- tween her and the poor-house. By withholding it from the record the defendant left her to meet the ad- versities of life unarmed, naked, de- fenseless, and ' steeped in poverty to the very lips.' Her counsel would send her to Carson for support — to Carson who has no means of keeping the wolf from his own dooi*. Why did they not tell her that she might possibly be fed and clothed by public charity ? She must be made whole now or never — in this action or in none. That can be done by allowing her to recover all that the security she lost was worth — what a prudent person in her circumstances would be willing to give it up for — the dif- ference in value between her debt made absolutely safe by a mortgage, and the same debt with no security except the personal responsibility of an insolvent man. How much is that ? The court fairly and carefully put this question to the jury, and their verdict is the answer." 1 Waterbury v. Graham, 4 Sandf. 215. 324 ENTIEETY OF DAMAGES. [§ 114. "Where a personal injury is committed by a single tortious act, that act is a cause of action, and all the consequences for which compensation may be recovered are an entirety; recov- ery therefor may be had once for all in one action, and only in one, which may be brought any time after the act is com- mitted.^ So of any act done or default made which is a breach of any stipulation in a contract; it is a single and en- tire cause of action, embracing all ensuing consequences for which compensation is allowed; and however multifarious may be the stipulations in it any act which amounts to a total breach constitutes but a single cause of action;^ unless perhaps where the stipulations are so distinct and relate to subjects so disconnected as to have no relation or unity but such as results from being made at the same time or contained in one instrument.' Kor can an entire claim be severed by partial assignments so as to become the foundation of several suits instead of one unless the debtor consents thereto.* § 114. Damage to real property. Actions for single and continuing nuisances and acts which are wrongful only when they result in damage may be successively brought; the dam- ages recoverable are ordinarily confined to those which accrued prior to the time each action was begun.^ In an action for 1 Bower v. The Water Witch, 19 76 id. 488; Chicago & A. R. Co. v. How. Pr. 241; Curtis v. Rochester, Maher, 91 III. 312. etc. R Co., 18 N. Y. 584; Drew v. 5 Blunt v. McCormick, 3 Denio, 283; Sixth Avenue R Co., 26 N. Y. 49; Fet- Cumberland & O, Canal Co. v. Hitch- ter V. Beale, 1 Salk. 11; Hochster v. ings, 65 Me. 140: Thayer v. Brooks. 17 De la Tour, 2 El. & B. 678; Miller v. Ohio, 489; Loweth v. Smith, 12 M. & Wilson, 24 Pa. 114; Veghte v. Hoag- W. 582; Beach v. Crain, 2 N. Y. 86; land, 29 N. J. L. 125; Thompson v. St. Louis, etc. R. Co. v. Biggs, 52 Ark. Ellsworth, 39 Mich. 719; Dailey v. 240,12 S. W. Rep. 331, 6 L. R. A. 804; Dismal Swamp C. Co., 2 Ired. 222; Cobb v. Smith, 38 Wis. 21; Hazeltine Chicago & E. R. Co. v. Kern. 9 Ind. v. Case, 46 id. 301, 32 Am. Rep. 715; App. 505, 36 N. E. Rep. 381. See ch. Burnett v. Nicholson, 86 N. C. 99; 36. McConnel v. Kibbe, 29 111. 482, 33 id. 2 Jacobs V. Davis, 34 Md. 204; Wa- 175, 85 Am. Dec. 265; Holmes v. Wil- terbury v. Graham, 4 Sandf. 215; son, 10 A. & E. 503; Kinnaird v. Bancroft v. Winspear, 44 Barb. 209; Standard Oil Co., 89 Ky. 468, 25 Am. Spear v. Stacy, 26 Vt. 61. St. 545, 7 L. R. A. 451, 12 S. W. Rep. 3 Mcintosh v. Lown, 47 Barb. 550. 937; Illinois Central R, Co. v. Wil- * Chicago, etc. R. Co. V. Nichols, 57 bourn, 74 Miss. 284, 21 So. Rep. 1; 111.464; Fourth Nat. Bank v. Noo- Lamm v. Chicago, etc. R. Co., 45 Minn, nan, 88 Mo. 372; Loomis v. Robinson, 71, 47 N. W. Rep. 455, 10 L. R. A. 268. § 114.] GENEBAL PEINCIPLES. 325 damages occasioned by flooding land a recover}' was allowed for killing growing trees though they did not in fact die until after the action was commenced.^ In an equity suit to obtain damages for acts done and to restrain their continuance, if a temporary injunction is disregarded a supplemental bill will lie to recover damages accruing after the bringing of the orig- inal bill.2 In Minnesota the abatement of a nuisance and re- covery of damages predicated thereon and incident thereto constitute but one cause of action : and where suit was brouo-ht to abate a nuisance the judgment therein barred a subsequent proceeding for damages based upon the same facts, notwith- standing the pleading in that case would not sustain an award of damages and none were recovered.' Until recently it has been regarded as established by the English decisions that, where injuries to the land of one per- son result from digging, mining or building upon the property of another, all the damages, past and prospective, were recover- able in one suit brought upon the original cause of action.* Late adjudications have established another rule. In 1861 the house of lords passed upon a question based upon the fol- lowing facts: A. B. was the owner of a house; C. D. was the owner of a mine under the house and under the surroundino- o land; C. D. worked the mine, and in so doing left insufficient support to the house, which was not damaged nor the enjoy- ment of it prejudiced until sometime after the workings had ceased. The question submitted by the lord chancellor to the lords was: "Can A. B. bring an action at any time within six years after the mischief happened, or must he bring it within six years after the working rendered the support in- sufficient?" The opinion was that the action was not barred if brought within six years from the time the mischief was done.^ In an earlier case® an excavation had been made and a subsidence had resulted, the injury from which had been sat- iHayden v. Albee, 20 Minn. 159; 3 Gilbert v. Boak Fish Co., 86 Minn. Clark V. Nevada Land & Mining Co., 365, 90 N. W. Rep. 767. 6 Nev. 202; Baltimore v. Merry naan, * Mayne's Dam. 138. 86 Md. 584, 39 Atl. Rep. 9a See Crab- » Backhouse v. Bonomi, 9 H. of L. tree v. Hagenbaugh, 25 IlL 214, 76 Cas. 503: Bonomi v. Backhouse, El. Am. Dec. 793. B. & E. 622, 654. '■J Waterman v. Buck, 63 Vt. 544, 23 CNicklin v. Williams, 10 Ex. 259 Atl. Rep. 15. (1854). 32G ENTIRETY OF DAMAGES. [§ 114. isfied. Subsequently another subsidence from the same exca- vation caused additional injury. In an action to recover lor the latter the defense was that the cause of action in respect to the subsidence had been satisfied. The plaintiff pleaded that he was not suing for that cause of action, but for a new and different cause, the subsequent subsidence. The defendant contended that the pleading was bad because it was only a new assiornment of damao:e which was the result of the former cause of action; with this contention the court agreed. In an- other case' the trustees of a turnpike road made a covered drain by the side of the highway; it was so made that it col- lected water in it, and the water was caused to flow into the plaintiff's mines, and could not go elsewhere. It was answered that the action was barred; but it appeared that the plaintiff had been injured within the time constituting the limitation. The court said the causa cavsans of the injury to the property was a continuing cause; but that cause alone gave to the mine- owner no right of action: it was a cause which if thereby any damage was occasioned to the mine-owner's property would immediately give him a cause of action; it had given him a cause of action sometime ago, but since that the trustees con- tinued it; they might have stopped it; the continuing causa causans remained and remained in the power of the trustees, and that caused a new injury to the mine-owner's property, that was a new right of action because it was an injury to his property in each case. In a case ^ later than any referred to it was held by a majority of the court, Cockburn, C. J., dissent- ing, that, where land and buildings are injured by the removal of lateral support through mining operations carried on by the defendant on his own land, future damages are recoverable. Up to this point it seems clear that these cases are in conflict; AVhitehouse v. Fellowes not being harmonizable with Nicklin V. Williams, and the latter being in antagonism with Back- house V. Bonomi. This is the view of the court of appeal in a case decided in 1884,' and in which the conclusion of the dis- senting member of the court in Lamb v. Walker was adopted iWhitehouse v. Fellowes, 10 C. B. ^ Mitchell v. Darley Main Colliery (N. S.) 765 (1861). Co., 14 Q. B. Div. 125. 2 Lamb v. Walker, 3 Q. B. Div. 389 (1878). § 114.] GENERAL PRINCIPLES. 327 as a correct exposition of the law, and as being in harmony with the decision of the house of lords in Backhouse v. Bonomi. As stated by the master of the rolls in ]\Iitchell v. Darley Main Colliery Co. the views of the chief justice in Lamb v. Walker were that where an excavation had been made and a subsidence had taken place, it may be true that for all the ef- fects, both existing and prospective, of that subsidence, the person injured ought to sue at once. But what is to be done as to a new subsidence ? The mine-owner has excavated in his own property; he knows that he has caused a subsidence to his neighbor's property, and he knows that that neighbor is entitled to damages for it; will he run the risk of allowing that excavation to continue, the effects of which he may ob- viate by immediately putting in a wall or propping up his own property? There is nothing to prevent him; will he allow that to continue or will he not? If he does nothing, he is not counteracting the effects on his neighbor's property of some- thing which he has done on his own; he is not counteracting that mischief to his neighbor by doing something on his own property; and if there is a new subsidence that will give his neighbor a new cause of action. It is diflBcult to conceive that the jury which is to give damages for the first subsidence that is existing ought to give damages for a prospective new subsidence which the defendant has the option and right to prevent; so that, although before the verdict of the first jury is given, or although at the time that that verdict is given, the mine-owner is doing that which will prevent any future dam- age, nevertheless the jury in the first action ought to take into consideration the prospective injury which might be thought likely to occur at the time when the action was brought. Ex- pressing his own views, the master of the rolls continued : " That seems to me a proposition which, when it is well sifted out and examined, cannot stand, and therefore the chief jus- tice's reasoning, of itself, and without reference to Backhouse v. Bonomi, is conclusive to show that each subsidence is a fresh cause of action. Besides that, it seems to me to be in accord- ance with what was decided in Backhouse v. Bonomi, and to be the logical result of Backhouse v. Bonomi. . . . There- fore, I agree with the lord chief justice's view that each sub- sidence is a new cause of action, although the causa causaus of 528 ENTIEETY OF DAMAGES. [§ 115. each subsidence may be the same. Jt may be argued that the causa causans is not the same. The causa causans of the first is the excavation, the causa causans of the second is, as a mat- ter of fact, the excavation unremedied, or the combining of the excavation and of its remaining unremedied." A similar rule has been applied where the ^icts complained of were not continuous, as where temporary flash-boards were erected on a dam from time to time or the gates thereof were opened at intervals; ^ and where the wate^ in a stream has been diverted by placing obstructions therein,^ The cases in the state courts are generally in accord with the existing English doctrine.' In Pennsylvania the rule is otherwise.* § 115. Same subject. W/iere injuries result from a tem- porary trespass upon land all the damage done must be re- covered for in a single action. If there has been a recovery for the injury inflicted upon a special part of a tract a subse- quent action cannot be maintained to recover for that done to another portion of it at the same time and by the same act. -^ 1 Noyes v. Stillman, 24 C/^nn. 15. 2Beckwith v, Griswold, 29 Barb. 294. See Williams v. Missouri Fur- nace Co., 13 Mo. App. 70. 3 Smith V. Seattle, 18 Wash. 484,51 Pac. Eep. 1057; St. Louis, etc. R. Co. v. Biggs, 52 Ark. 240, 12 S. W. Rep. 331, 6 L. R. A. 804; Church of Holy Com- munion V. Paterson Kxtension R. Co., 66 N. J. L. 218, 49 Atl. Rep. 1030; Bank of Hartford County v. Water- man, 26 Conn. 324. 4 Noonan v. Pa -dee, 200 Pa. 474, 50 Atl. Rep. 255, 55 L. R. A. 410, 86 Am. St. 722, approved in Guarantee Trust & Safe Deposit Co. v. Farmers' & Mechanics' Nat. Bank, 202 Pa. 94, 100, 51 Atl. Rep. 765. See Pantall v. Rochester & P. Coal & Iron Co., 18 Pa. Super. Ct. 341, 53 Atl. Rep. 751, — Pa. — , which is to the same effect. 6 Pierro v. St. Paul, etc. R. Co., 39 Minn. 451, 40 N. W. Rep. 530, 12 Am. St. 673; Child v. Boston & F. L Works, 19 Fed. Rep. 258; Williams v. Pome- roy Coal Co., 37 Ohio St 583; Jack- son V. Emmons, 19 D. C. App.jCas. 250; Dick V. Webster, 6 Wis. 481; Mar- shall V. Ulleswater Steam Nav. Co., L. R. 7 Q. B. 166; Lord Oakley v. Ken- sington Canal Co., 5 B. & Aid. 138; Clegg V. Dearden, 12 Q. B. 575; Ved- der V. Vedder, 1 Denio. 257; Beronio V. Soutliern Pacific R. Co., 86 Cal. 415, 21 Am. St. 57, 24 Pac. Rep. 1093; Hoffman v. Mill Creek Coal Co., 16 Pa. Super. Ct. 631. See Pantall v. Rochester & P. Coal & Iron Co., 18 id. 341, — Pa. — , 53 Atl. Rep. 751. Where damage was done to crops by animals which got access to them through a defective fence from June to December, a recovery for the whole damage alleged in one count was proper. Darby v. Mis- souri, etc. R, Co., 156 Mo. 391, 57 S. W. Rep. 550; Cook v. Redman, 45 Mo. App. 397. A recovery by a cotenant for dam- age to land inclosed and used by him does not bar a subsequent ac- tion by another cotenant for damage § 115.] GENEEAL PKI^OIPLES. 329 Where the trespass is continuing or is repeated each repeti- tion or the continuation after suit broufjht is a fresh wrong and affords ground for a new action. So where the plaintiff was seized of an ancient house with liofhts therein, and the de- done by the same act. Gillum v. St. Louis, eto, R. Co.. 4 Tex. Civ. App. 62-', 2a S. W. Rep. 716. In Kansas Pacific R Co. v. Mihl- man, 17 Kan. 224, Brewer, J., dis- cussed this question in an interest- ing way. It was there ruled that where A. enters upon the land of B. -and digs a ditcli thereon, there is a direct invasion of the riglits of B., a completed trespass, and the cause of action for all injuries resulting therefrom commences to run at the time of the trespass; the fact that A. does not re-enter B.'s land and fill up the ditch does not make him a continuous wrong-doer and liable to repeated actions as long as the ditch remains unfilled; no one can be charged as a continuing wrong-doer who has not the right, and who is not under the duty, of terminating that which causes the injury; a party who has dug a ditch upon the land of another has no right to re- enter and fill it up; though unfore- seen injury results from a completed act there does not arise a new cause •of action for which a recovery may be had after the original wrong has been satisfied. Clegg V. Dearden, 13 Q. B. 576, is interesting upon the same distinc- tion. There the owner of a coal mine excavated as far as the bound- ary (which he was by custom en titled to do), and continued the ex- cavation wrongfully into the neigh- boring mine, leaving an aperture in the coal of that mine, through which water passed into it and did damage. It was held that the party so exca- vating was liable in trespass for 4L)reaking into the neighboring mine, but not in an action on the case for omitting to close up the aperture on his neighbor's soil, though a contin- uing damage resulted from its being unclosed. It was also held that a new action could not be maintained for damages occasioned by the flow of water in consequence of the aper- ture remaining unclosed after an ac- tion on the case had already been brought for making the aperture and letting in the water, which ac- tion was referred to arbitration, and the plaintiff being made a party to the reference in respect of any in- jury to him by any of the matters alleged in the declaration in such action, had had damages awarded and paid for such injury, although the damage last complained of was subsequent to the award and pay- ment. Lord Den man, C. J., said: " The gist of the action as stated in the declaration is the keeping open and unfilled of an aperture and ex- cavation made by the defendant into the plaintiff's mine. By the custom the defendant was entitled to excavate up to the boundary of his mine without leaving any barrier; and the cause of action, therefore, is the not filling up the excavation made by him on the plaintiff's side of the boundary and within his mine. It is not, as in the case of Holmes v. Wilson, 10 A. & E. 503, a continuing of something wrongfully placed by the defendant upon the premises of the plaintiff; nor is it a continuing of something placed upon the land of a third person to the nuisance of the plaintiff, as in the case of Thompson v. Gibson, 7 M. & W, 456. There is a legal obii- 330 ENTIKETY OF DAMAGES, [§ 115. fendant erected a building whereby the former's lights wore estopped, a recovery for the erection did not bar an action for its continuance.^ In another case there had been an action of trespass for placing stumps and stakes on the plaintiff's land, which action had been satisfied ; a subsequent action for leav- in**- them there was sustained on the ground that a new tres- pass was thereby committed.^ In Holmes v. Wilson* trespass was brought against a turnpike company for continuing but- tresses on the plaintiff's land to support its road. He had re- covered compensation in a former action. After refusing to- remove the buttresses on request another action of trespass was brouo^ht. It was arfjued for the defendant that the dam- ages given in the first action were to be regarded as full com- pensation for all injuries and were to be taken as the full esti- mated value of the land occupied by the buttresses; that the judgment operated as a purchase of the land. In reply Pat- terson, J., said : " How can you convert a recovery and pay- ment of damages for the trespass into a purchase ? A recov- ery of damages for a nuisance to land will not prevent an- other action for continuing it. As to the supposed effect of the judgment in changing the property of the land, the con- sequence of that doctrine would be that a person who wants his neighbor's land might always buy it against his will, pay- ing only such purchase-money as a jury might assess for dam- ages up to the time of the action. If the property was changed when did it pass ? Suppose the plaintiff had brought eject- ment for the part occupied by the defendant's buttresses, would the recovery of damages in trespass be a defense ? There gation to discontinue a trespass or such an omission is neither a con- remove a nuisance; but no such ob- tinuation of a trespass nor of a nui- ligation upon a trespasser to replace sance; nor is it the breach of any what he has pulled down or de- legal duty." Cumberland & O. Canal stroyed upon the land of another, Co. v. Hitchings, 65 Me. 140. though he is liable to an action of Successive actions lie for the un- trespass to compensate in damages lawful diversion of water. Irving v. for the loss sustained. The defend- Media, 10 Pa. Super. Ct. 132, affirmed ant having made an excavation and without opinion, 194 Pa, 648. aperture in the plaintiff's land was ^ Rosewell v. Prior, 2 Salk. 459. liable to an action of trespass; but 2 Bowyer v. Cook, 4 M, G, & S. 236. no cause of action arises from his Compare Kansas Pacific R. Co. v.. omitting to re-enter the plaintiff's Mihlnian, 17 Kan. 224. land and fill up the excavation; s lo A. & E. 503. § 110.] GENERAL PKINCIPLES. 331 is no case to show that when hind is vested in a party and fresh injuries are done upon it fresh actions will not lie." Where the defendant dug holes in and deepened the bed of a stream in order to increase its water supply, with the result that the water flowed more rapidly past the land of the plaint- iff and was of less depth, so that such land was liable to be trespassed on by cattle, the plaintiff was entitled to bring suc- cessive actions for separate acts of trespass.' These cases may be distinguishable from the Kansas decision- on the irround that the request to remove the things complained of may be considered as a license to enter for that purpose; but other- wise it is difficult to harmonize them with it. It may be that the true ground of distmction is stated in a ]\[aine case:' "When something has been unlawfully placed upon the land of another, which can and ought to be removed, then, inas- much as successive actions may be maintained until the wrong- doer is compelled to remove it, the damages in such suit must be limited to the past and cannot embrace the future." § 116. Same subject. The authorities are not agreed as to the right to bring successive actions where the result of a tort to real property is to create a permanent appropriation of it to the public use, as for railroads, streets, sewers and the like; or to change its condition so as to adapt it to the grade of streets. Where property is taken for public use under the statutes which provide therefor prospective damages as well as others are assessed; they are an entirety, and all such as proceed from the appropriation of it to the use for which it is taken are presumed to have been anticipated.'* If land is 1 Clarke v. Midland Great West- Schoick v. Delaware Canal, 20 N. J. ern R. Co.. [1895] 2 Irish, 294. L. 249; Water Co. v. Chambers, 13 2 Kansas Pacific R. Co. v. Mihl- N. J. Eq. 199; Waterman v. Connee- man, supra. ticut R. Co., 80 Vt. 610, 73 Am. Dec. 3 Cumberland & O. Canal Co. v, 326; Chesapeake Canal v. Grove, 11 Hitchings. 65 Me. 140. Gill & J. 398; Furniss v. Hudson * White V. Chicago, etc. R. Co., 122 River R. Co.. 5 Sandf. 551; Baltimore Ind. 317, 23 N. E. Rep. 782, 7 L. R. A. R. Co. v. Magruder, 34 Md. 79, 6 Am. 257; Perley v. B., C. & M. R. Co., 57 Rep. 310; Missouri R. Co. v. Haines, N. H. 212; Sawyer v. Keene, 47 id. 10 Kan. 439; La Fayette R. Co. v. New 173; Aldrich v. Cheshire R. Co., 21 Albany, 13 Ind. 90, 74 Am. Dec. 246; id. 359, 53 Am. Dec. 212; Fowle v. Montmorency R. Co. v. Stockton, 43 New Haven & N. Co., 107 Mass. 352, Ind. 328; Evans v. Haefner, 29 Mo. 112 id. 334, 17 Am. Rep. 106; Van 141; Baker v. Johnson, 2 Hill, 342; 332 ENTIKETY OF DAMAGES. [§ 116. damao-ed by a permanent structure lawfully erected, which, without any further act except to keep it in repair, must con. tinue to cause the result which is complained of, the owner may recover in one action for damages sustained and those which will fall upon him. The judgment in the action first brouo-ht will bar another like action for subsequent injuries from the same cause.^ A recovery of prospective damages in such a case will bar an action for subsequent damages though caused by an unusual event.- In some cases this principle has been extended to the unlawful entry upon land by railroads and the building of tracks thereon,^ and in others to the right- ful improvement of a street, though the work was negligently done, and the negligence was the cause of the action.* These decisions are rested on the principle that the parties have elected to consider the trespass as permanent, and they apply the rule applicable in condemnation proceedings which requires a final adjustment of the liability of the party condemning. Call V. Middlesex, 2 Gray, 232; Veghte V. Hoagland, 29 N. J. L. 125; Gait V. Chicago, etc R. Co., 157 111. 125, 140, 41 N. E. Eep. 648, citing the text. But see Lancashire R. Co. v. Evans, 15 Beav. 322. It is said in North Vernon v. Voeg- ler, 103 Ind. 314, 3 N. K Rep. 821, that the construction of works of a public character by municipal of- ficers is clearly analogous to the seiz- ure of land under the right of emi- nent domain, and that all the dam- ages occasioned thereby must be assessed in one action. But this posi- tion is controverted by a case con- sidered in the text of this section. 1 Fowle V. New Haven & N. Co., 107 Mass. 352; Troy v. Cheshire R Co., 23 N. H. 83; Chicago & A. R. Co. v. Maher, 91 111. 312; Same v. Schaffer. 2G 111. App. 280: Same v. Loeb, 118 111. 203, 8 N. E. Rep. 460; Swantz v. MuUer, 27 111. App. 320; Elizabeth- town, etc. R. Co. V. Combs, 10 Bush, 382, 19 Am. Rep. 67; Jeffersonville, etc. R. Co. v. Esterle, 13 Bush, 667; North Vernon v. Voegler, 103 Ind. 314, 2 N. E. Rep. 821; Central Branch Union Pacific R. Co. v. Andrews, 26 Kan. 702; Ohio & M. R. Co. v. Wach- ter. 123 111. 440, 15 N. E. Rep. 279; Bizer v. Ottumwa Hydraulic Co., 70 Iowa, 145, 30 N. W. Rep. 172; Powers V. Council Bluffs, 45 Iowa, 652, 24 Am. Rep. 792; Indiana, etc. R. Co. v. Eberle, 110 Ind. 542, 59 Am. Rep. 225, 11 N. E. Rep. 467; Lafayette v. Nagle, 113 Ind. 425, 15 N. E. Rep. 1; Frankle V. Jackson, 33 Fed. Rep. 371. 2 Fowle v. New Haven & N. Co., 113 Mass. 334, 17 Am. Rep. 106. 3 Chesapeake & O. R. Co. v. Moats, 20 Ky. L. Rep. 1757, 50 S. W. Rep. 31; International, etc. R. Co. v. Giesel- man, 13 Tex. Civ. App. 133, 34 S. W. Rep. 658: Frankle v. Jackson, 33 Fed. Rep. 371; Central Branch Union Pacific R. Co. v. Andrews, 26 Kan. 702; Indiana, etc. R Co. v. Eberle, supra; Baldwin v. Chicago, etc. R. Co., 35 Minn. 354, 29 N. W. Rep. 5. * North Vernon v. Voegler, 103 Ind. 314, 2 N. E. Rep. 831; Powers v, Coun- oil Bluffs, supra. § IIG.] GENERAL PKINCIPLES. 333 As will appear there are strong objections and weighty au- thorities in opposition. Some of the courts which entertain this view hold that if the gist of the complaint is not the un- lawful entr}^ and occupation, but the improper use, that the wrong may be redressed in successive actions.^ For damages resulting from the negligent erection or con- struction of a building or culvert which is erected or con- structed pursuant to law, successive actions may be brought.'^ Damage to crops by the annual overflow of water is suscep- tible of apportionment, and compensation therefor may be re- covered in successive actions.^ In a New York case, which was fully considered,* it is held that, if a railroad is constructed upon or over a highway in which or in the soil of which in- dividuals have private rights, unless the public right is obtained and private rights are lawfull}' acquired the builders thereof are trespassers; and an adjacent owner may recover only the damages he has sustained up to the commencement of the action ; for damages thereafter resulting successive actions may be brought.^ There is no presumption that the trespass will be continued, and title to land cannot be acquired otherwise than by purchase or condemnation proceedings.® Criticising the rule held by some courts to the effect that where the character of the injury is permanent, and the complaint recognizes the de- fendant's right to continue in the use of the property, and to acquire as the result of the suit the owner's right thereto, in pur- suance of which the damages are assessed on the basis of the permanent depreciation of the property, and with special ref- erence to a case which holds that damages may be so assessed ^ Lindquest v. Union Pacific R. Co., New York. New York Nat. Bank v. 33 Fed. Rep. 372. Metropolitan E. R. Co., 108 N. Y. 660, ^ Ohio & M. R. Co. V. Wachter, 123 15 N. E. Rep. 445 : Pond v. Same, 112 N. 111. 440. 15 N. E. Rep. 279; Chicago, Y. 186, 8 Am. St. 734, 19 N. E. Rep. 487. etc. R. Co. V. Schaffer, 26 111. App. 280, See Lahr v. Same. 104 N. Y. 270, 10 N. 124 III. 112, 16 N. E. Rep. 239. E. Rep. 528; Henderson v. New York 3 Oldfield V. Wabash, etc. R. Co., 22 Central R. Co., 78 N. Y. 423; Schell Mo. App. 607; Van Hoozier v. Han- v. Plumb, 55 id. 592. nibal, etc. R. Co., 70 Mo. 145; Dick- 6 Carl v. Sheboygan, etc. R. Co., 46 son V. Chicago, etc. R. Co., 71 id. 575. Wis. 625, 1 N. W. Rep. 295; Blesch v. 4] very inconvenient postponement of that class of actions or a renunciation of a large part of the compensation due to the injured party When a cause of action accrues there is a right, as of that date, to all the consequent damages which will ever ensue.^ They are recoverable in one action if they can be proved, and only one can be maintained; it may be brought at any time after the accrual of the right. The question is a practical and legal one in each case whether the cause of ac- tion IS of such a nature that the injurious consequences of the wrong complained of can reach into the future or whether any subsequent damages will be owing to a continuous fault which may be the foundation of a new action. So is the ques- tion whether any offered evidence tends to prove future dam- ages which are the legal result of the wrong which constitutes the cause of action, and whether the sum of the evidence in 1 V:ncent v. McNamara, 70 Conn. Milk Co., 47 Minn. 460, 46 N. W. Rep. 332, -69 Ati. Rep. 444. 142; Erie & P. R. Co. v. Douthet, 88 ^ Empie v. Empie, 35 App. Div. 51, Pa. 243, 32 Am, Rep. 451: Commerce .•^4 N. Y. Supp. 402; Morrison v. Mc- Excliange Nat. Bank v. Blye, 123 N. Atee, 23 Ore. 530, 32 Pac. Rep. 400; Y. 132. 25 N. E. Rep. 208; Bracken v. Fales V. Hemenway, 64 Me. 373; Atlantic Trust Co., 167 N. Y. 510, 60 Paige V. Barrett, 151 Mass. 67, 23 N. N. E. Rep. 772, 82 Am. St. 731; Am- E. Rep. 725; Cook v. Redman, 45 Mo. erman v. Deane, 132 N. Y. 355, 30 N. App. 397, citing the text; Ennis v. E. Rep. 741. SeeDrummond v. Crane, Buckeye Pub. Co.. 44 Minn. 105, 46 159 Mass. 577, 35 N. E. Rep. 90,38 Am. N. W. Rep. 814; Bowe v. Minnesota St. 460, 23 L. R. A. 707. ■§ 120.] GENERAL PRINCIPLES. 339 the particular case is sufficient for the consideration of the If a growing crop is destroyed it can, of course, never be shown with absolute certainty that but for its destruction it would have matured; nor that one party who is stopped by the other in the performance of a special contract would other- wise have proceeded to a complete execution of it so as to en- title himself to its full benefits. Nor is it matter of law that the jury shall assume that the crop would have matured, or that the contract would have been fulfilled. The jury may estimate, with the aid of testimony, the value of the crop at the time of its destruction, in view of all the circumstances existing at any time before the trial, favoring or rendering doubtful the conclusion that it would attain to a more valuable condition, and all the hazards and expenses incident to the process of supposed growth or appreciation;^ and so of the in- crease of a flock of sheep and the growth of the wool thereof.^ The same uncertainties and a greater surface of them are en- countered in actions upon warranties that seeds sold for plant- ing are of particular varieties.' In actions upon contracts which contemplate a series [195] •of acts and a considerable period of time for performance a party complaining of a total breach by the other sufficiently maintains his right to recover if he has performed without default up to the time of the breach and is ready to proceed, though his right to the value of the contract depends on his ability and inclination to prosecute the performance on his part to completion. He is entitled to recover the profits which iShoemakerv. Acker, 116 Cal. 239, 62 Tex. 570; Chicago, etc. R. Co. v. 48 Pac. Rep. 62, citing the text; Slioe- Schaffer, 26 111. App. 280. maker v. Crawford, 82 Mo. App. 487; 2 Schrandt v. Young, 89 N. W. Rep. Railway Co. v. Yarborough, 56 Ark. 607 (Neb.), citing the text; Rule v. 012. 619, 20 S. W. Rep. 515, quoting McGregor, Iowa, — , 90 N. W. the text; Railway Co. v. Lyman, 57 Rep. 811. Ark. 512, 22 S. W. Rep. 170: Taylor 3 Randall v. Raper. El, B. & E. 84; V. Bradley, 39 N. Y. 129; People's Ice Passinger v. Thorburn. 34 N. Y. 634; Co. V. Steamer Excelsior, 44 Mich. 229, White v. Miller, 7 Hun, 427, 71 N. Y. 6 N. W. Rep. 686; Smith v. Chicago, 118, 27 Am. Rep. 13; Van Wyck v. etc. R. Co., 38 Iowa, 518; Richardson Allen, 69 N. Y. 61, 25 Am. Rep. 136; V. Northrup. 66 Barb, 85; Folsom v. Wolcott v. Mount, 36 N. J. L. 262, 13 Apple River Log Driving Co., 41 Wis. Am. Rep. 438; Ferris v. Comstock, 602; Texas Pacific R. Co. v. Bayliss, 33 Conn. 513. "40 ENTIRETY OF DAMAGES. [§ 121. he would have made, — the contract price less what he would have to do or expend to earn or otherwise entitle himself to it. This deduction may be the price of labor or the value of property at a future day. The action for damages recoverable for such a breach may be brought and tried before that day arrives. If so, the prices prevailing at the time of the breach may be acted upon as the test of values at the times mentioned in the contract;^ but if the trial be delayed until the date fixed for performance the parties may show the prices actually prevailing then or any other conditions, favorable or other- wise, affecting the cost of fulfilling the contract,^ § 121. Certainty of proof of future damages. The con- servatism pervading the law is opposed to allowing compen- sation for probable loss. It manifests itself more particularly in respect to those damages which might be proved with cer- tainty if they were real; and, if not fanciful and imaginary, are past damages: not such as are contemplated to arise in the future from such causes as, according to general experience, produce them. The decided cases which relate to prospective damages w^arrant the statement that the injured party is en- titled to recover compensation for such elements of damage as are likely to occur; the jury may proceed upon reasonable probabilities, and accept as sufficiently proved those results which, under like circumstances, generally come to pass.' It is [196] not, however, to be hence inferred that prospective dam- 1 Masterton v. Mayor, 7 Hill, 61. Mo. 534 (disapproved in Pellet v. 2 Burrell v. New York & S. Solar Manufacturers' & Merchants' Ins. Salt Co., 14 Mich. 34; People's Ice Co., 104 Fed. Rep. 503, 43 C. C. A. 669); Co. V. Steamer Excelsior, 44 Mich. Howell v. Young, 5 B. &C. 259; Mac- 229, 6 N. W. Rep. 636; Chicago v. rae v. Clarke, L. R. 1 C. P. 403; Frye Greer, 9 Wall. 726; Hochster v. De v. Maine Central R. Co.. 67 Me. 414; laTour,2 Ei. & B. 678; Frost v.Knight, Richmond v. Dubuque, etc. R. Co., 40 L. R. 5 Ex. 323, 7 id. Ill; Taylor v. Iowa, 264; Schell v. Plumb, 55 N. Y. Bradley. 39 N. Y. 129; Howard v. 592; Missouri, etc. R. Co. v. Fort Scott, Daly, 61 id. 362, 19 Am. Rep. 385; 15 Kan. 435; Roper v. Johnson, L. R. Richmond v. Dubuque, etc. R. Co., 40 8 C. P. 167; Peltz v. Eichele, 63 Mo. Iowa, 264; Jacobs v. Davis, 34 Md. 171; Sutherland v. Wyer, 67 Me. 65; 204; Grover v. Buck, 34 Mich. 519; Gifford v. Waters. 67 N. Y. 80; Rich. Shoemaker v. Acker, supra. ardson v. Mellish, 2 Bing. 229; Wil- 3 James v. Kibler, 94 Va. 165, 26 S. sou v. Northampton, etc. R Co., L R Rep. 417, citing the text; Treat v. R. 9 Ch. 379, quoted from in i? 590. Hiles, 81 Wis. 278, 50 N. W. Rep. 896; See ch. 36. Lewis V. Atlas Mut. L. Ins. Co., 61 § 122.] GENERAL PRINCIPLES. 341 ages may be recovered on every plausible anticipation, nor that no allowance is to be made for the uncertainties which affect all conclusions depending on future events; it is only intended that such uncertainties, where the damages are shown by evidence reasonably certain, do not exclude them wholly from consideration. The price of an average colt cannot be fixed by deducting the cost of its keep from the value of an average horse, for there is not a certainty of exemption from accidents and disease. All the damaores from a single tor- tious act are an entirety, and must be assessed and recovered once for all.' Successive actions cannot be maintained for their recovery as they may accrue from time to time. The injured party is entitled to recover in one action compensation for all the damages resulting from the injury, whether present or prospective. And in respect to the latter, the rule is that ho can recover for such as it is shown with reasonable certainty will result from the wrongful act complained of.^ § 122. Action for enticing away apprentice, servant or son. In an action for enticing away an apprentice damages cannot include the loss of his services for the residue of his term, for he may return.^ Where an action on the case was brought to recover for the defendant's enticement of the plaintiff's minor son from his service and inducing him to en- list in the army for three years, it was held that the plaintiff could only recover damages for the loss of service up to [197] the time of the commencement of the action, or at most up to the time of trial.'' 1 § 120; Galligan v. Sun Printing & pp. 187, 193-198 of the text of the 1st Publishing Ass'n, 25 N. Y. Misc. 355, ed.; Grotenkemper v. Harris, 25 Ohio 54 N. Y. Supp. 471. St. 514: Hamilton v. Great Falls 2 Filer v. New York Central R. Co., Street R. Co., 17 Mont. 334, 352, 43 49 N. Y. 42; Miller v. Wilson, 24 Pa. Pac. Rep. 860, 43 id. 713, citing tlie 114; Fetter V. Beale.l Salk. 11; Hod- text. See ^ 1251. soil V. Stallebrass, 11 A. & K 301 ; ^Fay v. Guynon, 131 Mass. 31; Short V. McCarthy, 3 B. & Aid. 620; Hambleton v. Veere, 2 Saund. 170; Ilowell V. Young, 5 B. & C. 259; In- Moore v. Love, 3 Jones, 215; Hodsoll gram v. Lawson, 8 Scott, 471; Clegg v. Stallebrass, 11 A. & E. 301; Trigg V. Dearden, 12 Q. B. 576; Stroyan v. v. Northcut, Litt Sel. Cas. 4l4, Lewis Knowles, 6 H. & N. 454; East Jersey v. Peachey, 1 H. & C. 518; Drew v. Water Co. v. Bigelow, 60 N. J. L. 201, Sixth Avenue R. Co., 26 N. Y. 49. 3S Atl. Rep. 631; Smith v. Pittsburgh See McKay v. Bryson. 5 Ired. 216. & W. R. Co., 90 Fed. Rep. 783, citing * Covert v. Gray, 34 How. Pr. 450. 'A2 ENTIRETY OF DAMAGES. [§ 123. § 123. Future damages for personal injuries. In ascer- taining the amount of damages resulting from a personal in- jury the jury may consider the bodily pain and mental suffer- ing which have occurred and are likely to occur in the future In this case there were numerous contingencies with elements of prob- ability in each: the enlisted man might be discharged by reason of sickness or wounds: his enlistment being illegal, it was the duty of the war department to discharge him; there was no presumption that the war would continue for three years. In Moore v. Love, 3 Jones, 215, Battle, J., thus discusses the distinc- tion between cases u iiere the cause of action is an entirety and those which admit of a succession of suits: "It is clearly stated bj' Lord Mans- field, in the case of Robinson v. Bland, 2 Burr. 1077, 'When a new action may be brought and satisfaction ob- tained thereupon for any duties or demands which may have arisen since the commencement of the de- pending suit, that duty or demand shall not be included in the judg- ment u|ion the former action. As in covenant for the non-payment of rent, or of an annuity payable at diflferent times, you may bring a new action toties quoties as often as the respective sums become due and pay- able. So in trespass and in tort, new actions may be brought as often as new injuries ana wrongs are re- peated; and therefore damages shall be assessed only up to the time of the wrong complained of. But where a man brings an action of assumpsit for principal and interest upon a con- tract obliging the defendant to pay such principal money, with interest froni such a time, he complains of the non-payment of both; the inter- est is an accessory to the principal, tvnd he cannot bring a new action for any interetst grown duo between the commencement of his action and the judgment in it.' What is here so well said about the interest being the accessory to the principal money, and therefore recoverable down to the time of the trial, applies with equal force to the case of trespass and tort where the wrong done is not repeated or continued, though the damage resulting from it may not cease being developed until after the time when the writ was issued. In the latter case the plaintiff is not limited solely to the consequential damage which has actually occurred up to the trial of the cause, but he may go on to claim relief for the prospective damages which can then be estimated as reasonably certain to occur. " This brings us to the considera- tion of tlie case of McKay v. Bryson, 5 Ired. 216, which may seem at first view to militate against the distinc- tion by which we have endeavored to reconcile the decisions which have been made upon the subject of pros- pective damages. It was an action on the case brought to recover dam- ages for enticing the plaintiff's ap- prentice from his service and convey- ing him out of the state. The testi- mony showed that the boy was bound apprentice to learn the business of a tailor, and that he continued in the service of his master until he was carried away by the defendant, and when last heard from he was in Ten- nessee. The suit was brought some time before the expiration of the term of service, and the jury were in- structed that they might give dam- ages as for a total loss of service during the whole period of appren- § 123] GENERAL PRINCIPLES. 343 in consequence thereof, as well as the loss of time, expense [198] of medical and other attendance and the diminution of ability to earn money. ^ The inquiry cannot bo extended to cover the merely possible consequences of the injury, as by the possible ticeship, subject to a deduction on ac- count of the plaintiff's chance of re- gaining the boy. Tiie charge given to the jury in the court below was approved in this court upon the au- thority of the case of Hodsoll v. Stal- lebrass, 11 A. & E. 301. No other case appears to have been cited and the court do not advert to the fact that in Hodsoll v. Stallebrass the injury from which the loss accrued to the plaintiff was a single act of wrong; but they do advert to and state the fact that the loss caused l)y the tort of the defendant was in effect a total loss of the plaintiffs apprentice. The onl^- wrong alleged in the declaration or proved on the trial was that of carrying the apprentice beyond the limits of the state, which caused a total loss of his services to his master. In this view the case may well be sustained upon the principle appli- cable to the second class of cases to which we have referred. That the removal of the apprentice out of the state may be regarded in the same light as if a permanent injury had been inflicted upon him, we have the strong analogy of the case of trover by one tenant in common against another for the destruction of the article held in common. If the article be sent off by the defendant to a place unknown to the plaintiff, so that, as to him, it is totally lost, it is equivalent to its destruction. Lucas V. Wasson, 3 Dev. 398. 24 Am. Dec. 266. The circumstances of the present case are very different from those in McKay v. Bryson. The apprentices were carried by the defendant to his residence in an adjoining county, only twenty-five miles distant from the plaintiff. They were not con- cealed from him ; and it appears from the proof that he knew where they were. The continued detention of them by the defendant was a suc- cession of torts for which he might bring new actions from time to time; and hence his case falls into the class with Hambleton v. Veere, and all those on which damages can be given for the loss of service up to the com- mencement of the suit only." ' The true distinction is undoubtedly pointed out in the foregoing opinion, that the damages in an action can- not include those arising after suit is brought if a new action could be brought for them; but it may admit of a doubt if the case was properly disposed of upon that test. A tres- passer who takes personal property and retains it may be said to commit a succession of torts while he retains the property; but in an action for such a taking the injured party would undoubtedly be obliged to make his full claim of damages. He would not be entitled to a succession of actions. In cases where apprentices have been enticed away, and the enticer has not, by the injury or otherwise, made it reasonably certain that the appren- tice will not return, prospective dam- ages are not denied because a new action may be brought for them but because they are not susceptible of proof: they are not certain. But if the defendant has control, and will have it in the future, he may be charged with depriving the master of the services of an apprentice for the whole term for the same reason that he might be charged with the full value of a horse tortiously taken. See Herriter v. Porter, 23 Cal. 3S5. 1 Swift V. Raleigh, 54 IIL App. 44; S44 EXTIKETY OF DAMAGES. [§§ 12i, 125. outbreak of a new disease or other sufferings having their cause in the original wrong done the plaintiff; in such a case there is a double speculation — one that the result may possibly occur, and the other that if it does it will be a product of the original injury instead of some other new and, perhaps, unknown cause.* § 124. Only present worth of future damages given. An award on account of prospective damages is like payment in advance, and in fixing the same that fact may be taken into consideration and the amount may properly be reduced to its present worth.^ § 125. Continuous breach of contracts or infraction of rights not an entirety. A continuous breach of contract or infraction of a right is not an entirety. It is at any time sev- erable for the purpose of redress in damages for the injury already suffered. This is the case whenever a continuous duty imposed by law or by contract is uninterruptedly neglected, whether such departure from the line of duty be by positive acts or by culpable inaction.^ There is a legal obligation to Griswold v. New York Central, etc. R. Co., 115 N. Y. 61, 12 Am. St. 775, 21 N. E. Rep. 726; Hamilton v. Great Falls Street R, Co., 17 Mont. 834, 353, 42 Pac. Rep. 860, 43 id. 713, citing the text; Ayres v. Delaware, etc. R. Co., 158 N. Y. 254, 53 N. K Rep. 22; Denver Consolidated Tramway Co. v. Riley, 14 Colo. App. 132, 59 Pac. Rep. 476; Bay Shore R. Co. v. Harri.s, 67 Ala. 6; Curtiss v. Rochester, etc. R. Co., 20 Barb, 282; Atchison v. King, 9 Kan. 550; Welch v. Ware, 32 Mich. 77: Birchard v. Booth, 4 Wis. 67; Merely v. Dunbar, 24 Wis. 183; Wil- son V. Young, 31 Wis. 574; Goodno V. Oshkosh, 28 Wis. 300; Spicer v. Chicago, etc. R Co., 29 Wis. 580; Karasich v. Hasbrouck, 28 Wis. 569; Pennsylvania R. Co. v. Dale, 76 P* 47; Tomlinson v. Derby, 43 Conn. 562; Fulsome v. Concord, 46 Vt. 135; Nones v. Northouse. id. 587; Metcalf V. Baker, 56 N. Y. 662; New Jersey Exp. Co. V. Nichols, 33 N. J. L. 434, 97 Am. Dec. 722; Walker v. Erie R. Co., 63 Barb. 260; Bradshaw v. Lan- cashire R. Co.. L. R, 10 C. P. 189; Col- lins V. Council Bluffs, 32 Iowa. 324; Russ V. Steamboat War Eagle, 14 Iowa, 363; Dixon v. Bell, 1 Stark. 287; McLain v. St Louis & S. R. Co., — JVIo. App. — , 73 S. W. Rep. 909. 912, citing the text. See ch. 36. 1 Strohm v. New York, etc. R. Co., 96 N. Y. 305; Toser v. New York Cen- tral, etc. R Co., 105 N. Y. 659, 11 N. E. Rep. 369; Turner v. Newburgh, 109 N. Y. 301, 16 N. E. Rep. 344; Ayres v. Delaware, etc. R Co., 158 N. Y. 254, 53 N. E. Rep. 22. 2 Pickett V. Wilmington & W. R. Co., 117 N. C. 616, 23 S. E. Rep. 264, 53 Am. St. 611, 30 L. R. A. 257; Good- hart V. Pennsylvania R Co., 177 Pa. 1, 35 Atl. Rep. 191, 50 Am. St. 787; Morrisey v. Hughes, 65 Vt 553, 27 Atl. Rep. 205; Alabama G. S. R Co. V. Carroll, 28 C. C. A. 207, 84 Fed. Rep. 772: Morrison v. McAtee, 23 Ore. 530, 32 Pac. Rep. 400; Fulsome v. Con- cord, 46 Vt 135. See §§ 1251. 1265. 3 Lake Shore, etc. R. Co. v. Rich- ards. 152 IlL 59, 38 N. E. Rep. 773, 30 120.] GENERAL PKIXCIPLES. 345 discontinue a trespass or to remove a nuisance.^ So a covenant to keep certain premises in repair for a specified period im- poses a continuous duty, and when neglected gives a continuous ■cause of action.^ AVhen an action is brought the injury to that time is segregated and the recovery is confined to such dam- ages as result from the breach or wrong continued to the com- mencement of the action.' § 126. Continuance of wrong not presumed. [199-201] The law will not presume the continuance of a wrong, nor al- low a license to continue it, or a transfer of title to result from the recovery of damages for prospective misconduct.* But in ■equity the owner of real property upon which a trespass has been committed may restrain the continuance of the wrong and thus prevent a multiplicity of actions at law to recover •damages. In such an action the court may determine the amount of damages the owner would sustain if the trespass were permanently continued, and decree that upon their pay- ment the plaintiff shall give a deed or convey the right to the defendant.* L. R. A. 33; Van Keurenv. Miller, 78 Hun, 173, 28 N. Y. Supp. 971; Con- nolly V. Coon, 23 Ont. App. 87; Powers V. Wai'e, 4 Pick. 106; Pierce V. Woodward, 6 Pick. 206; McConnel V. Kibbe, 33 111. 175, 85 Am. Dec. 265. See Drummond v. Craue, 159 Mass. 577, 35 N. E. Rep. 90, 38 Am. St. 460, 2:3 L. R. A. 707; Wilson v. Sullivan, 17 Utah, 341, 53 Pac. Rep. 994. iPer Lord Denman in Clegg v. Dearden, 12 Q. B. 601; Savannah, etc. .R. Co. V. Davis, 25 Fla. 917, 7 So. Rep. •29; Adams v. Hastings & D. R. Co., 18 Minn. 260. 2 Cooke V. England, 27 Md. 14; Beacli V. Crain, 2 N. Y. 86; Bleecker V. Smith, 13 Wend. 530; Phelps v. New Haven, etc. Co., 43 Conn. 453; Keith v. Hinkston, 9 Bush, 283. 8 Id. ; Sackrider v. Beers, 10 Johns. 241; Shaw v. Etheridge, 3 Jones, 301; Brastield v. Lee, 1 Ld. Raym. 329; Whitehouse v. Fellowes, 10 C. B. (N. S.) 765; Mahon v. New York Central 11. Co., 24 N. Y. 658; Phillips v. Terry, 3 Keyes, 313; Hayden v. Albee, 20 Minn. 159; Thompson v. Gibson, 7 M. & W. 456; Beck with v. Griswold, 29 Barb. 291: Bi-adiey v. Amis, 2 Hayw. 890; Caruthers v. Tillman, 1 id. 501; Duncan v. Markley, Harp. 276; Moore v. Love, 3 Jones, 215; Cole v. Sprowl, 35 Me. 101, 56 Am. Dec. 696; Hudson V. Nicholson, 5 M. & W. 437. * Adams v. Hastings & D. R. Co., 18 Minn. 260; Ford v. Chicago, etc. R. Co., 14 Wis. 609. 80 Am. Dec. 791; Uline V. New York, etc. R. Co., 101 N. Y. 98, 54 Am. Rep. 661, 4 N. E. Rep. 536; Savannah & O. Canal Co. v. Bour- quin, 51 Ga. 378; Hanover Water Co. v. Ashland Iron Co., 84 Pa. 279; Whitmore v. Bischoff, 5 Hun, 176; Sherman v. Milwaukee, etc. R. Co., 40 Wis. 645; Russell v. Brown, 63 Me. 203: Bowyer v. Cook, 4 C. B. 236; Holmes v. Wilson, 10 A. & E. 503; Battishill v. Reed, 18 C. B. 696; Cum- berland & O. Canal Co. v. Hitchings, 65 Me. 140. 6 Pappenheim v. Metropolitan E. 346 ENTIRETY OF DAMAGES. [§ 127. [202] § 127. Necessity of successive actions. The neces- sity and advantage of successive actions to recover, damages which proceed from a continuous and still operating cause are very obvious; for, besides the considerations which have al- ready been mentioned, the injurious effects so blend together that in most instances it would be wholly impracticable to ac- curately apportion them. Therefore, the right to recover for all damages which have been suffered to the time of bringing the first action, in the next, all damages which have been suf- fered from that time to that of commencing such second ac- tion, and so on while the cause continues, is the most conven- ient course for practical redress that can be devised.^ In cases of contracts imposing a continuous duty, or a duty the con- tinued neglect of which is an uninterrupted breach, from which results a steady accretion of damage, the injured party may bring a succession of actions or treat defaults having that significance as a total breach,^ and recover damages accord- ingly. Of this nature was the contract in Grain v. Beach,^ where the plaintiff had granted to the defendants a perpetual right of way over his land and covenanted to erect agate of a specified description at the terminus, to which the defendants covenanted in the same instrument to make all necessary re- [203] pairs. The plaintiff erected the gate, which was subse- quently removed by some unknown person. It was held that the defendants were bound to replace it; the covenant was continuing; an action brought thereon after the removal of the gate for damages occasioned by cattle coming on the plaintiff's land in consequence of there being no gate, and a recovery therein, were no bar to another action on the same covenant for damages accruing after the commencement of the first suit. The defendants' default was not a total breach, nor declared and recovered on as such, and hence they were R. Co., 128 N. Y. 436, 28 N. E. Rep. 518, Dusen, 29 Mich. 431; Royalton v. 13 L. R. A. 401; Amerman v. Deane, Royalton & W, Turnpike Co. 14 Vt. 133 N. Y. 355, 28 Am. St. 584, 30 N. 311; Withers v. Reynolds, 2 B. & Ad. K Rep. 741. 882; Fish v. Folley, 6 Hill, 54, ex- 1 Ulinev. New York Central R. Co., plained in Crain v. Beach, 2 Barb. 101 N. Y. 88, 54 Am. Rep. 661, 4 N. 124; Keck v. Bieber, 148 Pa. 645, 24. E. Rep. 536; Mitchell v. Darley Main Atl. Rep. 170. Colliery Co., 14 Q. B. Div. 125. 3 2 N. Y. 86, 2 Barb. 120. 2 Grand Rapids, etc. R. Co. v. Van § 12S.] PARTIES TO SUE AND BE SUED. 34:7 not thereby relieved of the continuing obligation of the cov- enant. If it were an entire contract, however, any breach would be or might be treated as a total breach.^ Covenants for support and maintenance during life are entire, and any breach entitles the injured party to recover entire damages for a total breach,^ but as they impose a continuous duty the in- jured party may have a succession of actions treating any acts of breach as partial only.' Section 2. parties to sue and be sued. § 128. Damages to parties jointly injured entire. Before leaving the subject of the entirety of causes of action and damages it is proper to notice some points relative to parties. At common law all the parties who are jointly injured by a tort or breach of contract may sue jointly for damages; in ac- tions ex contractu the rule is imperative. All the parties [204] with whom the violated contract was made must join as plaint- iffs unless their interests are severed in the contract, so that upon a breach a distinct cause of action accrues to each or less than all.* Actions for personal injuries to a married woman must be in the names of the husband and wife;^ except where 1 Fish V. Folley, 6 Hill, 54. 3 Woodb. & M. 277; Little v. Hobbs, •-iSchell V. Plumb, 55 N. Y. 592; 8 Jones, 179, 78 Am. Dec. 275; Grid- Dresser V. Dresser, 35 Barb. 573; ley v. Starr, 1 Root, 281; Farmer v. Shaffer v. Lee, 8 id. 412; Trustees of Stewart, 2 N. H. 97; Eastman v. Howard College v. Turner, 71 Ala. Ramsey. 3 Ind. 419; Millard v. Bald- 439, 46 Am. Rep. 326; Carpenter v. win, 3 Gray, 484; Dow v. Clark, 7 Carpenter, 66 Hun, 177, 20 N. Y. Supp, Gray, 198; Weathers v. Ray, 4 Dana, 928; Empie v. Empie, 35 App. Div. 474; Frankem v. Trimble, 5 Pa. 520; 51, 54 N. Y. Supp. 402. See Wriglit Ross v. Milne, 12 Leigh, 204, 37 Am. V. Wriglit, 49 Mich. 624, 14 N. W. Dec. 646; Thompson v. Page, 1 Met. Rep. 571. 566; The Ship Potomac, 2 Black, 581; 3 Id.; Fiske v. Fiske, 20 Pick. 499; Archer v. Bogue, 4 111. 526; Robert- Berry V. Harris, 43 N. H. 376; Fergu- son v. Reed, 47 Pa. 115; Sawyer v. son V. Ferguson, 2 N. Y. 360; Turner Steele, 4 Wash. 227; Newcomb v. V. Hadden, 62 Barb. 480. Clark, 1 Denio, 226; Law v. Cross, 1 < Bigelow V. Reynolds, 68 Mich. 344, Black, 533; Beetle v. Anderson, 98 36 N. W. Rep. 95; Hall v. Leigh, 8 Wis. 6, 73 N. W. Rep. 560. Cranch, 50; Fugurev. Mutual Society ^Larnb v. Harbaugh. 105 Cal. 680, of St. Joseph, 46 Vt. 362; Cleaves v. 39 Pac. Rep. 56; White v. Vicks- Lord, 3 Gray, 66; Jewett v. Cunard, burg, etc. R Co., 42 La. Ann. 990, 8 So. 348 ENTIRETY OF DAMAGES. [§ 129. statutes have so enlarged the property rights of married women as to enable them to maintain such actions in their own names.^ In an action for malicious prosecution of hus- band and wife each has a separate right of action, and they cannot join their causes of action; but the husband is a neces- sary co-plaintiff with the wife in her action.- If the duty of supporting a child devolves upon the father and he is alive when the mother sues for an injury to the child she cannot maintain the action, notwithstanding she has been divorced and the care and custod}^ of the child were awarded her.^ § 129. Actions under statutes. In actions brought under statutes which create a liability where none existed at com- mon law, the parties who sue thereunder must bring them- selves clearly within the language used by the legislature. Such statutes will not be extended or enlarged by construc- tion.^ The relief or remedy is not available to any person who is not included therein.-^ If the right to sue for an injury which has resulted in death is given to a "child," an illegiti- mate child cannot recover for its mother's death in England,^ nor in Canada;^ but it is otherwise in Ohio under a statute Rep. 475; Gallagher V.Bowie, 66 Tex. v. Pope, 122 Cal. 253, 54 Pac. Rep. 265, 17 S. W. Rep. 407; Ezell v. Dod- 847. See ch. 38. son, 60 Tex. 331; Tell v. Gibson. 66 Cal. ^ Williams v. Casebeer, 126 Cal. 77, 247, 5 Pac. Rep. 223; King v. Thorn p- 58 Pac. Rep. 380. son, 87 Pa. 365, 30 Am. Rep. 364; » Keller v. St. Louis, 152 Mo. 596, Northern Central R. Co. v. Mills, 61 54 S. W. Rep. 438, 47 L. R A. 391. Md. 355: Blair v. Chicago & A. R. ''Sutherland, Const, of Stats., g 371. Co., 89 Mo. 384. Compare Bennett v. sid.; McNamara v. Slavens, 76 Bennett, 116 N. Y. 584, 23 N. K Rep. Mo. 330; Gibbs v. Hannibal, 82 id. 17, 6 L. Pu A. 553. 143; Warren v. Englehart. 13 Neb. 1 Chicago, etc. R. Co. v. Dunn, 52 283. 13 N. W. Rep. 401; Woodward v. 111. 260; Mussel man v. Galligiier. 33 Chicago & N. R, Co., 23 Wis. 400; Iowa, 383: Chadron v. Glover, 43 Dickins v. New York Central R. Co., Neb. 733, 63 N. W. Rep. 63. 23 N. Y. 158: Tennessee Coal, Iron & A wife may maintain an action in R. Co. v. Herndon, 100 Ala. 451, 14 her own name against a woman who So. Rep. 287; Woodward Iron Co. v. has alienated from her the affection Cook, 124 Ala. 349, 27 So. Rep. 455; and deprived her of the society of Maule Coal Co. v. Partenheimer, 155 her husband, although they live to- Ind. 100. 109, 55 N. E. Rep. 751. gether as husband and wife. Foot v. ^ Dickinson v. Northeastern R Co., Card, 58 Conn. 1, 18 Am. St. 258, 18 2 H. & C. 735. Atl. Rep. 1027, 6 L. R A. 839; Ben- ^ Gibson v. Midland R. Co., 2 Ont. nett v. Bennett, 116 N. Y. 584, 24 N. 658, 15 Am. & Eng. R R Cas. 507. E. Rep. 17, 6 L. R. A. 553; Humphrey § 130.] PARTIES TO SUE AND BE SUED. 3i9 which uses the words "next of Icin."^ "Where an action is given for the benefit of the widow and next of kin it may be brought, though there be no widow, if there are next of kin, and vice ve?'sa.- Kor are the " next of kin " required to be so nearly related to the person whose death is sued for as to re- quire any duty of sustenance, support or education.' § 130. Must be recovered by person in whom legal inter- est is vested. The suit must be brought in the name of the party in whom is vested the legal interest though the equitable interest be in another person.* The funds of a voluntary as- sociation were put under the control and management of trustees who took a note payable to themselves on lending the funds to some other members. It was held that the trustees in their individual names were entitled to maintain an action on the note, as it was payable to them, though the defendants as well as themselves were members of the association bene- ficiall}'' interested in the collection." One who pays the con- sideration for a privilege or benefit which he may confer upon another may sue for the denial of it.® A trustee who has sold trust property without assigning a claim for damages resulting from a wrong done thereto prior to the sale may bring suit to recover therefor.' In an action by a firm the name of a dormant partner need not and ought not to be used® unless iMuhl V. Michigan Southern R, Ball, Hempst 541; Lord v. Carnes. 98 Co., 10 Ohio, 272. See ch. 37. Mass. 308; Hart v. Stone, 30 Conn. 94; 2 Sutherland. Const, of Stat^, g 371, Pierce v. Robie, 39 Me. 205, G3 Am. citing McMahon v. Mayor, 33 N. Y. Dec. 614; Yeager v. Wallace. 44 Pa, 642, 647. 94; Morton v. Webb, 7 Vt. 123; 3Tilley v. Hudson River R Co., 24 Boardman v. Keeler, 2 Vt. 65; Clark- N. Y. 474; Galveston, etc. R. Co. v. son v. Carter. 3 Cow. 84; Mitchell v. Kutac, 72 Tex. 643, 37 Am. & Eng. Dall, 2 H. & G. 159; Lord v. Bald- R R Cas. 470, 11 S. W. Rep. 127; win, 6 Pick. 352; Wilson v. Wallace. Petrie v. Columbia, etc. R Co.. 29 S. 8 S. & R 55; Warner v. Griswold. 8 C. 303, 7 S. E. Rep. 515; Railroad Co. Wend. 666; Clark v. Miller, 4 Wend. V. Barron, 5 Wall. 90; Baltimore, etc. 628. R Co. v. Hauer. 60 Md. 449, 12 Am. * Pierce v, Robie, 89 Me. 205, 63 Am. & Eng. R. R Cas. 149. 155. Dec. 614. nChitty PI. 2-6; Treat V. Stanton, « Trustees of Howard College v. 14 Conn. 445; Denton v. Denton. 17 Turner, 71 Ala. 429, 46 Am. Rep. 326. Md. 403; Sunapee v. Eastman, 32 N. "Lancaster v. Connecticut Mut. L. H. 470; Pike v. Pike, 24 N. H. 384; Ins. Co., 92 Mo. 460, 1 Am. St. 739. 5 Phillips V. Pennywit. 1 Ark. 59; Lap- S. W. Rep. 23. ham V. Green, 9 Vt 407; Governor v. 8 Clark v. Miller, 4 Wend. 628. 350 ENTIRETY OF DAMAGES. [§ 131. he is one of the parties disclosed in the contract.^ The parties to a contract are the persons in whom the legal interest in the subject of it is deemed to be vested, and who therefore must be the parties to the action which is instituted for the purpose of enforcing it or recovering damages for its violation.^ An agent who has sold property on credit, pursuant to authority from and for his principal, may sue the purchaser in his own name if he is bound to account to the owner or if he has ac- counted to him for it.*' An undisclosed principal may sue on a contract made for his benefit by an agent.* An agreement to relinquish a business and not to carry it on thereafter in a designated place, no limit being specified as to time, and a bond conditioned for the observance thereof, are not so personal to the obligee that he cannot sue thereon for a breach of the agreement after he has transferred the property and busi- ness for the benefit of his vendee. There seems no doubt, upon the authorities, that the agreement could be transferred with and as an incident of the property, the purchase being made with knowledge of the condition of the bond.^ The contrary doctrine is held in Oregon.^ The English cases referred to in the note are not considered in that case; and the California case cited is distinguished because the word " heirs " was used in the contract there passed upon while it was not employed in the one before the court. The breach of a covenant which runs with land gives the widow who occupies it as a home- stead a right of action though she was not to pay for it.^ [205] § 131. Not joint when contract apportions the legal interests. Where the contract separates and apportions the legal interests, the injury in case of a breach is correspondingly 1 Clark V. Carter, 2 Cow. 84: Lord V. Baldwin, 6 Pick. 353. 2 Treat v. Stanton, 14 Conn. 445; Dauglierty v. American U. Tel. Co., 75 Ala. 168, 51 Ana. Rep. 435. 3 Fuller V. Curtis. 100 Ind. 237, 50 Am. Rep. 786; Jackson v. Mott, 76 Iowa, 263, 41 N. W. Rep. 12. 4 Bell V. Lee, 78 Ala. 511, 56 Am. Rep. 52. 5 Webster v. Buss, 61 N. H. 40, 6 Am. Rep. 317; Guerand v. Bandelet, 32 Md. 562, 3 Am. Rep. 164; Cali- fornia Steam Nav, Co. v. Wright, 6 Cal. 258, 8 id. 585; Pemberton v. Vaughan, 10 Q. B. 87; Hastings v. Whitley, 2 Ex. 611. It was held in the last case that a suit might be brought by the executors of the ob- ligee for a breach arising after his death. 6 Hillman v. Shannahau, 4 Ore. 163, 18 Am. Rep. 281. 7 St. L.. L M. & S. R. V. O'Baugh, 49 Ark. 418, 5 S. W. Rep. 71L §§ 132, lo3.] PARTIES TO SUE AND BE SUED. 351 separate and distinct. Thus a promise to pay the respective owners of land taken for a road such sums as a referee named shall award gives each a separate action lor the amount awarded him.' A contract between a fruit company and a number of fruit growers to receive, dry, and market their crops, at speci- fied rates per pound, that delivered by each person being weighed and dried separately, and then weighed out to the ■owner and mingled with other fruit, a receipt being given each owner, is several.- § 132. Implied assumpsit follows the consideration. Where the assumpsit is implied it will follow the consideration.' A committee appointed by a school district to repair a school- house took the job among themselves, each performing work and furnishing a separate portion of materials. Each had a distinct cause of action.^ B}" the failure of 1. to fulfill a prom- ise made to G. and S. to enter satisfaction of a judgment against them the judgment was collected entirely out of the property •of G. ; he could recover in an action by himself alone for money paid.* If money is deposited with a stakeholder on the event oi a wager by one who acts as an agent for several others, each ■of the latter may bring a separate action to recover the money deposited for him, though the stakeholder was ignorant of the principals on whose account the deposit was made.^ Several plaintiffs claiming distinct rights cannot join in the same action.'' § 133. Effect of release by or death of one of several en- titled to entire damages. Where a cause of action ex con- tractu accrues to several jointly it is an entirety; they must all join in an action upon it; no others can, except where as- signments are sanctioned by statute as a transfer of the legal right of action, or unless that right devolves upon others by operation of law as in case of death or marriage. It cannot be severed by partial assignment,* nor by the giving of a re- 1 Farmer v. Stewart, 3 N. H. 97; » Taylor v. Gould, 57 Pa. 152. Jewett V. Cunard. 3 Woodb. & M. 277; « Yates v. Foot, 12 Johns. 1. State Ins. Co. v. Belford, 2 Kan. A pp. ^ Barry v. Rogers, 2 Bibb, 314; 280, 43 Pac. Rep. 409. Hinchman v. Paterson R, Co., 17 N. 2 Arnold v. Producers' Fruit Co., J. Eq. 75, 86 Am. Dec. 252; Chambers .128 Cal. G37, 61 Pac. Rep. 283. v. Hunt, 18 N. J. L. 339. 8 Lee V. Gibbons, 14 S. & R. 110. sciiicago, etc. R. Co. v. Nichols, 57 * Geer v. School Disti ict, 6 Vt. 76. Ill 404. 352 ENTIRETY OF DAMAGES. [§ 134. [206] lease by one of several jointly entitled to sue. Such a release would operate to extinguish the right of action at law; for if, for such a reason, all to whom the right of action ac- crued cannot join in a suit upon it no action can be main- tained.^ But one of several joint creditors between whom no partnership exists cannot release the common debtor so as wholly to conclude his co-creditors who do not assent. He may defeat an action at law, but they will be entitled to as- sert their rights in equity. It is a general rule that joint creditors cannot, by a division of their claim between them- selves, acquire a separate right of action against their debtor, either at law or in equity; but when a debtor procures a re- lease from a part of them he cannot object to the others pro- ceeding against him in equity.- On the death of one of two- persons who have a joint right of action upon contract, it sur- vives, and the survivor alone is entitled to sue. The personal representatives of the deceased cannot be joined with him.^ By consent a joint demand may be severed so that several suits may be brought.* So an assignee of the whole or a part may sue in his own name, if the debtor promise to pay him/ but not otherwise.® § 134:. Misjoinder of plaintiffs, when a fatal objection. In such action it is a fatal objection, available on the trial, that there is a misjoinder of plaintiffs.'^ It is equally so in actions ex delicto? And in actions ex contracUib the non-joinder of all the parties in whom the right of action is vested is fatal, and [207] the objection may be taken on the trial.® But in ac- iHall V. Gray, 54 Me. 230; Kim- ball V. Wilson, 3 N. H. 96; My rick v. Dame, 9 Cush. 248, 69 Am. Dec. 284; Tuckerman v. Newhall. 17 Mass. 581; Eaton V. Lincoln, 13 Mass. 424. See Eisenhart v. Slaymaker, 14 S. & R 154. 2 Upjohn V. Ewing, 2 Ohio St. 13; Hosack V. Rogers, 8 Paige, 229; Car- rington v. Crocker, 37 N. Y. 386. 3 Jackson v. People, 6 Mich. 154; Smith V. Franklin, 1 Mass. 480; Walker v. Maxwell, id. 113; Morri- son V. Winn, Hardin, 480; Beebe v. Miller, Minor, 364; Brown v. King, 1 Bibb, 462: Clark v. Parish, id. 547; Chandler v. Hill, 2 Hen. & Mun. 124. 4 Parker v. Bryant, 40 Vt. 291; Car- rington v. Crocker, 37 N. Y. 836. 5 Page V. Danforth. 58 Me. 174. 6 Hay V. Green, 12 Cush. 282. 7 Brent v. Tivebaugh, 12 B. Mon. 87; Blakey v. Blakey, 2 Dana, 460: Doremus v. Selden, 19 Johns. 213; Waldsmith v. Waldsmith, 2 Ohio, 338, 15 Am. Dec. 547; Robinson v. Scull, 3 N. J. L. 817. 8 Glover v. Hunnewell, 6 Pick. 222; Ainsworth v. Allen, Kirby, 145. 9 Dob V. Halsey, 16 Johns. 34; Ehle § 135.] PARTIES TO SUE AXD BE SUED. 353 tions of tort the non-joinder of a party who ought to join as co-plaintiff can only be taken advantage of by plea in abate- ment or upon the trial by an apportionment of damages.^ § 135. Joinder of defendants ; etfect of non-joinder and misjoinder. By the common law all joint promisors should be joined as defendants; and all should be sued, or only one, on a joint and several contract.- On a joint and several jirom- issory note made by a firm in the firm name and l>y another person in his individual character, a suit may be maintain( d against the members of the firm without joining the other maker, they, for this purpose, being considered but one person, the non-joinder of the other being no ground of objection.^ Where, some weeks after the execution of a lease of real estate, a third person, by writing obligatory, became surety for the lessee they were not jointly liable and could not be joined as defendants.* Two or more persons cannot be sued jointly un- less a joint liability is proved.^ On the death of one joint promisor the liability survives at law against the remaining or surviving promisor, and the personal representative of the de- ceased cannot be joined as co-defendant.® Many persons may join in one instrument without making themselves jointly bound. AVhether they have done so or not is a question [208] of intention to be determined by the construction of the entire contract. The undertaking of each may be several, as is usual in subscriptions for some common purpose, and sometimes in V. Purdy, 6 Wend. 629; Hansel v. Merrick v. Trustees of Bank, 8 Gill, Morris, 1 Blackf. 307; Mcintosh v. 59; Minor v. Mechanics' Bank, 1 Pet. Long, 2 N. J. L. 274; Hilliker v. 73; Bangor Bank v. Treat. 6 Me. 207, Loop. 5 Vt. 116, 26 Am. Dec. 286; 19 Am. Dec. 210; Fielden v. Lahens, Ellis V. McLemoor, 1 Bailey, 13; Cof- 9 Bosvr. 436; Claremont Bank v. fee V. Eastland, Cooke, 159; Swei- Wood, 12 Vt. 252; Keller v. Biasdel, gart V. Berk, 8 S. & R. 308; Morse v. 1 Nev. 491. Chase, 4 Watts, 456; Connolly v. ^ Van Tine v. Crane, 1 Wend. 524. Cottle, Breese, 364; Beach v. Hotch- ^Tourtelott v. Junkin, 4 Blackf. kiss, 2 Conn. 697; Baker v. Jewell, 6 483. Mass. 460, 4 Am. Dec. 162; Halliday 5 Rowan v. Rowan, 29 Pa. 181. V. Doggett, 6 Pick. 359; Gordon v. « Sigler v. Interest, 3 N. J. L. 724; Goodwin, 2 N. & McC. 70, 10 Am. Gillin v. Pence. 4 T. B. Mon. 304; Dec. 573. Murphy v. Branch Bank. 5 Ala. 421; 1 Wright V. Bennett, 2 Barb. 451; Poole v. McLeod, 1 Sm. & IL 391; White V. Webb, 15 Conn. 302. Union Bank v. Mott, 27 N. Y. 633; - Damron v. Sweetser, 16 III. App. Voorhis v. Childs' Ex'r, 17 id. 354. 339; Deloach v. Dixon, Hempst. 428; Vol. 1 — 23 354 ENTIRETY OF DAMAGES. [§ 136. other promises to pay.^ Joining too many persons as defend- ants in an action upon contract is a fatal objection and may be taken advantage of on the trial ;'^ but if less than all those jointly liable are sued the objection of the non-joinder of others can only be taken advantage of by plea in abatement unless it appears on the face of the declaration.' § 136. Mow joint liability extinguislied or severed. If one jointly or jointly and severally liable is released by a satis- faction, all are discharged.* So a specialty taken from one merges any simple contract liability, not only of the person giving the specialty, but of others who were jointly liable with him.' Thus where a mercantile business was carried on in a sino-le name and the merchant in whose name it was con- ducted bought goods and executed a specialty for the price, the vendor, though ignorant at the time that such purchaser had a dormant partner, but who discovered that fact after the death of the purchaser who executed the specialty, was held not entitled to maintain assumjjsit on the simple contract against the dormant partner because that contract was extinguished.^ According to some authorities the satisfaction and discharge of one who was not in fact liable to the person injured does iLarkin v. Butterfield, 29 Mich. 254. 2Tuttle V. Cooper, 10 Pick. 281; Walcott V. Canfield, 3 Coun. 194; Livingston v. Tremper, 11 Johns. 101; Erwin v. Devine, 2 T. B. Mon. 124; Jenkins v. Hart, 2 Rand. 446. 3 Bragg V. Wetzell. 5 Blackf. 95; Burgess v. Abbott, 6 Hill, 135; Nash V. Skinner, 12 Vt. 219, 36 Am. Dec. 338; Hicks v. Cram, 17 Vt. 449; Means v. Milliken, 33 Pa. 517; Douglas V. Cliapin, 26 Conn. 76. * Chetwood v. California Nat. Bank, 113 Cal. 414, 45 Pac. Rep. 704; Donald- son V. Carmichael, 102 Ga. 40, 29 S. E. Rep. 135; Lord v. Tiffany, 98 N. Y. 412, 50 Am. Rep. 689; Ellis v. Esson, 50 Wis. 138, 36 Am. Rep. 830, 6 N. W. Rep. 518; Gross v. Pennsyl- vania, etc. R. Co., 65 Hun, 191, 20 N. Y. Supp. 28; Blackman v. Simpson, 120 MiclL 377, 79 N. W. Rep. 573; State V, Watson, 44 Mo. 305; Heck- man V. Manning, 4 Colo. 543; Gunther V. Lee, 45 Md. 60, 24 Am. Rep. 504; Line v. Nelson, 38 N. J. L. 358; Bon- ney v. Bonney, 29 Iowa, 448; Prince V. Lynch, 38 Cal. 528. Where judgment was rendered against two defendants upon a ver- dict which apportioned their liabil- ity, a motion to vacate it and dismiss the action as to one was denied oa the ground that it might operate as a discharge of both. McCool v. Ma- honey, 54 Cal. 491. See Minor v. ]\Iechanics' Bank. 1 Pet. 46, 87. A similar verdict was considered as being against one defendant, and a finding in favor of the other against whom the smaller sum was charged. Clissold V. Machell, 25 Up. Can. Q. B. 80, 26 id. 422. 5 Ward V. Motter, 2 Rob. (Va.) 53a 6 Id. § 130.] partip:s to sue and be sued. 355 not affect the rights of the latter against those who are liable; ^ several courts take the opposing view.'^ Joint tort-feasors may be sued jointly in the same action or in separate actions, and several judgments may be rendered in either action; these do not affect the liability of any of tiie parties unless satisfaction in some form is made.^ But the issue of an execution or the granting of an order for issuance seems to be considered a satisfaction in Indiana."* The satisfaction of a judgment against a builder for the substitution of inferior material and for doing work in an unworkmanlike manner bars an action by the same plaintiff against the architect who made the plans for the building and contracted to supervise its erection in ac- cordance therewith. It is said the former suit ae:ainst the builder was based on his violation of the building contract, while this suit appears to have been brought for the purpose not only of recovering damages from the defendant for his al- leged neglect as an architect, but also to recover damages aris- ing in consequence of the omissions, negligence, unfaithfulness and wrongdoing of the builder. It is true that the acts of the builder which formed the basis for the damages awarded in the suit against him are now alleged to have been allowed to occur by reason of the architect's negligence in the perform- ance of his duty. But whether the wrongdoing complained of in the former case be the joint act of the builder and the defendant, or the several tort of each, can make no difference in determining the validity ot" the plea or the admissibility of the record in evidence in this case. If the defendant and the 1 Missouri, etc. R. Co, v. McWher- Rep. 8?.8; Tompkins v. Clay Street ter, 59 Kan. 345, 53 Pac. Rep. 135, R. Co.. 66 Cal. 163; Miller v. Beck, citing Turner v. Hitclicock, :20 Iowa, lOS Iowa, 575, 79 N. W. Rep. 344; 310; Bloss V. Plymale, 3 W. Va. 393, Butler v. Ashworth, 110 Cal. 614, 43 100 Am. Dec. 752; Wilson v. Reed, 3 Pac. Rep. 380. Johns. 175; Wardell v. McConnell, ^ Grundel v. Union Iron Works. 127 25 Neb. 558, 41 N. W. Rep. 548; Snow Cal. 438, 59 Pac. Rep. 826, 78 Am. V. Chandler, 10 N, H. 92,34 Am. Dec. St. 75, 47 L. R. A. 407; Vincent v. 140; Bell v. Perry, 48 Iowa, 368; Owen McNamara. 70 Conn. 332, 39 Atl. Rep. V. Brockschmidt, 54 Mo. 285;Pogel V. 444; Lovejoy v. Murray. 3 Wall. 1; Meilke, 60 Wis. 248, 18 N. W. Rep. Norfolk Lumber Co. v. Simmons, 3 927. • Marvel, 317, 43 Atl. Rep. 163. See 2 Leddy v. Barney, 139 Mass. 394, 3 g 216. N. E, Rep. 107; Leither v. Philadel- ^Ashcraft v. Knoblock, 146 Ind. phia Traction Co., 125 Pa. 397, 17 Atl. 169, 45 N. E. Rep. 69. 356 ENTIRETY OF DAMAGES. [§ 137. builder had both been sued in the first case for the injury there alleged, there could have been but one recovery. And it would seem to be very clear reason, and authority as well, that the same result must follow when the same injury is caused by the independent acts of several wrong-doers. The reason of this rule is apparent. It is neither just nor lawful that there should be more than one satisfaction for the same injury whether that injury be done by one or more.' § 137. Principles on which joint right or liability for tort determined. Whether actions in tort are joint as to the [209] parties injured or as to those liable depends on very plain principles. The injury is joint where it at once affects property or interests jointly owned ; in other words, there must be a community of interest between the parties injured in that which the injury affects. And to render wrong-doers jointly liable there must be concert or a common purpose between them.2 Persons w^ho are jointly interested in the damages re- coverable for an injury to property may unite in a suit for their recovery although they are not joint owners of the prop- erty itself. Thus two persons in possession of land carrying on business in a mill which belongs to one of them only may unite in an action for damages for a negligent burning of it.* 1 Berkley v. Wilson, 87 Md. 219. 39 Atl. Rep. 503, citing Cleveland v. Bangor, 87 Me. 264, 32 Atl. Rep. 892; Brown v. Cambridge, 3 Allen, 474; Lovejoy v. Murray, 3 Wall. 1; Gun- ther V. Lee, 45 Md. 67, 24 Am. Rep. 504. 2 If one or more persons conspire with another to commit, or two or more persons combine together to ef- fect, the violation of a contract, and their object be effected to the dam- age of a third person, the latter may recover against him who broke the contract, and against those so con- nected with the wrong. Martens v. Reilly, 109 Wis. 464, 84 N. W. Rep. 840. See Quinn v. Leathem, [1901] App. Cas. 495. Where the complaint alleged that each of two defendants was negli- gent in not having a sufficient wall to sustain his building, by reason whereof both buildings fell upon and destroyed the plaintiff's building, at the same time and on the whole of said building and both of which be- came an undistinguishable mass, as was the building on which they fell, so that it could not be said which produced the greater damage, and it could not be determined as to the ex- tent of the damage either did, both defendants were liable for the whole damage and neither could complain that both were sued jointly. If the evidence showed that either was not negligent he would not be liable, in which case the others would have no reason to complain of the mis- joinder. Johnson v. Chapman, 43 W. Va. 639, 28 S. E. Rep. 744. 3 Cleveland v. Grand Trunk R. Co., 42 Vt. 449; Rhoads v. Booth, 14 Iowa, 575. § 13S.J PARTIES TO SUE AND BE SUED. 357 If injuiy is done both to the possession and the freehold, and the interests of both owners are affected, though in dif- ferent degrees, the life tenant and the remainder-man may- join in case for the recovery of the damages.' All joint own- ers of personal property are rightly joined in actions for tor- tious injuries thereto.^ At common law the rule was that " when two or more persons are jointly entitled, or have a joint legal interest in the property affected, they must, in gen- eral, join in the action or the defendant may plead in abate- ment.'" As to tenants in common who briny: actions asrainst third parties a distinction existed between real and personal actions. " When the action is in the realty they must sue sep- arately;* when in the personalty they must join."^ This rule must give way if the effect of enforcing it will be to deny a remedy. The remedy for it — to protect defendants from a multiplicity of suits — is good; but if adherence to it will cause a failure of justice the reason for departing from the rule is stronger than that for applying it because there is a possibility that no other suit will be brought on the cause of action; while there is a certainty that adherence to it will work the loss of a remedy. These considerations induced the Minnesota court to permit one tenant in common of personalt}'' to maintain an action against a stranger for a ^vrong done to it, the co-tenants refusing to join as plaintiffs; and being non-residents they could not be made defendants.^ § 138. Tortious act not an entirety as to parties injured. A tortious act is not an entirety as to the persons affected by 1 McTntire v. Westmoreland Coal elude parol proof that the purchase Co., 118 Pa. 108, 11 Atl. Rep. 808. of each machine was made by one of 2 Glover v. Austin, 6 Pick. 209; them as agent for the other and on Pickering v. Pickering, 11 N. H. 141. their joint account; such evidence But in California one joint owner will sustain a joint action for breach can recover but one-half the damages of warranty of the machines. Fox for the injury done to the joint prop- v. Stockton Harvester, etc. Works, erty. Loveland v. Gardner, 79 Cal. 83 Cal. 333, 23 Pac. Rep. 295. 317, 21 Pac. Rep. 766, 4 L. R. A. 395. » 1 Chitty Plead. 64. If two machines are bought on * Carley v. Parton, 75 Tex. 98, 12 S. joint account and paid for out of W. Rep. 950. joint funds the fact tliat the purchas- ^ Hill v. Gibbs, 5 Hill, 56; Rowland ers entered into a separate contract v. Murphy, 66 Tex. 534, 1 S. W. Rep. for each machine and that each con- 658. tract was signed by one of them only ^Peck v. McLean, 36 Minn. 228, 1 in his individual name does not pre- Am. St. 605, 30 N, W. Rep. 754. 358 ENTIRETY OF DAMAGES. [§ 139. it; it mav affect many persons and do a several injury to each. A single trespass upon real estate, injurious to the possession and to the inheritance, will be an entire cause of action if one person has the whole title and is in possession. But if one person has the possession and another a reversionary title a distinct wrong is done to each, for which each may bring a separate and independent action,* One having a special in- terest in real estate injured by the tortious act of another may recover damages therefor wliether the wrong-doer is a stranger or has another interest in the same premises.^ The purchaser of a crop of growing grass is entitled to the exclusive enjoy- ment of the crop standing on the land during the proper pe- riod of its full growth and removal, and may maintain tres- pass qiiare clausum fregit against a stranger who during that time wrongfully enters and cuts and carries away the grass.' [210] He could maintain a like action against the general owner of the land for such a trespass.* § 139. General and special owners. In such case the dam- ages will be according to the tenure b}'' which the plaintiff holds and such as result from the injury he has suffered. He must show that his title gives him an interest in the damages he claims, and can recover none except such as affect his right.* In actions against a stranger for taking or converting personal property, a bailee, mortgagee or other special property man is- entitled to recover its full value, but must account to the gen- eral owner for the surplus recovered beyond the value of his own interest; but against the general owner, or one in privity 1 Wood V. Williamsburgh, 46 Barb. 601; Gilbert v. Kennedy, 22 Mich. 5; Files V. Magoon, 41 Me. 104: Stevens V. Adams. 1 Thomp. & C. 587; Stoner V. Hunsicker, 47 Pa. 514; Adams v. Emerson, 6 Pick. 57; Robbins v. Bor- man, 1 Pick. 122; Jordan v. Ben- wood, 42 W. Va. 312, 26 S. E. Rep. 266, 36 L. R. A. 519; Yeager v. Fair- mont, 43 W. Va. 259, 27 S. E. Rep. 234. In Pennsylvania a joint action may be maintained. Mclntire v. West- moreland Coal Ca, 118 Pa. 108, 11 Atl. Rep. 808. 2 Hasbrouck v. AVinkler, 48 N. J. L. 4:^1, 6 Atl. Rep. 22; Luse v. Jones, 39 N. J. L. 707; Turnpike Co. v. Fry, 88 Tenn. 296, 12 S. W. Rep. 720. 3 Dolloflf V. Danforth, 43 N. H. 219; Howard v. Lincoln, 13 Me. 122; Aus- tin V. Hudson River R Co., 25 N. Y. 334. •* Clap V. Draper, 4 Mass. 266, 8 Am. Dec. 215; Caldwell v. Julian, 2 Mills, 294. 5 Gilbert v. Kennedy, 22 Mich. 5. One who has borrowed property cannot maintain an action for its loss. Lock hart v. Western & A. R. Co.. 73 Ga. 472, 44 Am. Rep. 883. § 139.] PARTIES TO SUE AND BE SUED. 359 with him, only the value of the special property.' "Where goods assigned to a creditor in trust to pa}'^ himself and other cred- itors were attached at the suit of some of the creditors as prop- erty of the assignor before the assignment was assented to by any creditor but the assignee, and the value of the goods ex- ceeded the amount of the latter's demand, in an action of tres- pass brought by the assignee against the attaching officer, the measure of damages was the amount of the plaintiff's demand against the assignor and not the value of the goods.^ An offi- cer, with an execution against one of two partners, who makes himself a trespasser ab initio by levying on the entire property of the concern, still represents the interest of the execution debtor, and the owner of the other interest can recover against him only the value thereof.' Several persons having separate and distinct interests in a chattel cannot unite in replevin for it;* two persons cannot join in suing for an injury done to one of them.^ Where [211] two constables levy on the same goods by virtue of separate executions they cannot join in an action against one who takes away the goods.^ One of several joint debtors whose separate goods are taken on execution and wasted must sue alone for redress; and so if the officer extorsively demand and receive of the debtors illegal fees.'' Actions for torts connected with the matter of a contract, where the tort consists in the mere omission of a contract duty, must be brought by the party in- 1 Denver, etc. R, Co. v. Frame, 6 Fed. Rep. 662; The Mercedes, 108 Colo. 382; White v. Webb, 15 Conn. Fed. Rep. 559. 302; Seaman v. Luce, 23 Barb. 240; A recent English case holds that a Chad wick v. Lamb, 29 Barb. 518; bailee wlio is under no liability to Rhoads V. Woods, 41 Barb. 471;Sher- his bailor cannot recover for an in- nian v. Fall River Iron Co.. 5 Allen, jury to the property held by him. 213; Bartlett V.Kidder, 14 Gray, 449; Claridge v. South Staffordshire Russell v. Butterfield, 21 Wend. 300; Tramway Co., [1892] 1 Q. B. 422. Fallon V. Manning, 35 Mo. 271; Chaf- 2 Boyden v. Moore, 11 Pick. 362; fee V. Sherman, 26 Vt. 237; Soule v. Mantonya v. Martin Emerich Out- White, 14 Me. 436; Mead v. Thomp- fitting Co., 172 111. 92, 49 N. E. Rep. son. 78 111. 62; Guttner v. Pacific 721, citing the text. Steam Whaling Co., 96 Fed. Rep. 617, 3 Berry v. Kelly. 4 Robert. 106. citing the text; Armory v. Dela- * Chambers v. Hunt, 18 N. J. L. 339. mire, 1 Str. 505; The Jersey City, 2 ^ Winans v. Denman, 3 N.J. L. 124. C. C, A. 365, 51 Fed. Rep. 527; Knight « Warne v. Rose, 5 N. J. L, 809. V. Carriage Co., 18 C. C. A. 287, 71 ''uimer v. Cunningham, 2 Me. 117. 3G0 ENTIRETY OF DAMAGES. [§ lio. jured.* In one suit the court will not take cognizance of dis- tinct and separate claims of different persons. "Where the damage as well as the interest is several each party must sue separately.^ "Whether the plaintiffs in a joint action are co- partners or not is immaterial so long as their cause of action is shown to be joint.' § 140. Joint and several liability for torts. If injuries or damage are sustained through the affirmative acts or negli- gence of several persons an action may be brought against all or any of them.* If separate judgments are obtained the 1 Fairmount R Co. v. Stutler, 54 Pa. 375, 93 Am. Dec. 714. The assignment by one member of a firm of all his right, title and in- terest in and to the partnership as- sets gives the assignee such an inter- est in a claim secured by a mortgage on crops as makes him a proper co- plaiutitf with the other partner in an action for the conversion of the crops or a special action on the case in tiie nature of trover for damages thereto. Keith v. Ham, 89 Ala. 590, 7 So. Rep. 234. 2 Hufnagel v. Mt. Vernon, 49 Hun, 286, 1 N. Y. Supp. 787; Governor v. Hicks, 12 Ga. 189; Rhoads v. Booth, 14 Iowa, 575; Schaeffer v. Marien- thal, 17 Ohio St. 183. 3 Wood V. Fithian, 24 N. J. L. 33. 4 Williams v. Sheldon, 10 Wend. <554; Merryweather v. Nixan, 8 T. R. 186; Wheeler v. Worcester, 10 Allen, 591; Murphy v. Wilson, 44 Mo. 313, 100 Am. Dec. 390; Moore v. Appleton, 26 Ala. 633. Some authorities state the rule thus: If injuries or damage are sus- tained through the affirmative acts or negligence of several persons act- ing jointly, or, if contributed to by each, in pursuance of a joint purpose, an action may be brought agamst all or any of them. Others, and the weight of authority favors the rule as stated in the text, ignore the ne- cessity for joint action or the exist- ence of a common purpose; as where, by the separate, but concurrent, neg- ligence of two carriers a passenger is injured by a collision, or a person is simultaneously arrested on two warrants issued at the instance of two persons. Colgrove v. New York, etc. R. Co., 20 N. Y. 492, 75 Am. Dec. 419; Slater v. Mersereau, 64 N. Y. 147; Boyd V. Watt, 27 Ohio St. 268; City Electric St. R. Co. v. Conery, 61 Ark. 381, 54 Am. St. 262, 31 L. R. A. 570; 33 S. W. Rep. 426; Pine Blufif Water & Light Co. V. McCain, 62 Ark. 118, 35 S. W. Rep. 227; Klauber v. Mc- Grath, 35 Pa. 118, 78 Am. Dec. 329; Peckham v. Burlington, Brayton,134; Allison V. Hobbs, 96 Me. 26, 51 Atl. Rep. 245: Boston & A. R. Co. v. Shanly, 107 Mass. 568; Newman v. Fowler, 37 N J. L. 89: Lake Erie & W. R. Co. V. Middlecoff, 150 III 27, 37 N. E. Rep. 600; Kansas City v. Slang- strom, 53 Kan. 431, 36 Pac. Rep. 706: Pugh v. Chesapeake & O. R. Co., 101 Ky. 77, 72 Am. St. 392, 39 S. W. Rep. 695; Stone v. Dickson, 5 Allen, 29, 81 Am. Dec. 727; Cuddy v. Horn, 46 Mich. 603, 10 N. W. Rep. 32; Flaherty V. Minneapolis, etc. R. Co., 39 Minn., 328, 40 N. W. Rep. 160, 12 Am. St. 654; Grand Trunk R. Co. v. Cummings, 106 U. S. 700, 1 Sup. Ct. Rep. 493; Brown v. Coxe. 75 Fed. Rep. 689. See § 141 and note. But this doctrine has been doubted. Lull v. Fox & Wisconsin Imp. Co., 19 Wis. 100; Trowbridge v. § 140.] PARTIES TO SUE AND BE SUED. 301 plaintifif may enforce the one which is for the largest sum.* The rule concerning the bringing of actions applies in ecjuity as well as at law."^ Such persons may participate so as to be thus liable by preconcert to do tlie wrong complained of, or to Forepaugh, 14 Minn. 133; Larkins v. Eckwurzel. 43 Ala. 822, 94 Am. Dec. 651; Powell v. Thompson, 80 Ala, 51. It has been said, arguendo, of a compkunt which set up the separate and distinct wrongs of the respective defendants and sought to enforce a joint liability for acts which were not joint in themselves nor bound together by the tie of a common pur- pose, that this cannot be done; the wrong done must be jointly done in fact by the defendants, or if con- tributed to by each, a joint purpose must be imputable to them before they can be said to be joint tort-fea- sors, and responsible jointly and sev- •erally for the resulting injury. It will not suffice, as a general propo- sition at least, that the separate wrongful acts or omissions of two persons, having no connection with -each other, the motive of each being foreign to that of the othei", have in their unintended coalescence and co- action produced an injury. Rich- mond & D. R. Co. V. Greenwood, 99 Ala. 501, 14 So. Rep. 495; Ensley Lumber Co. v. Lewis, 121 Ala. 100, 25 So. Rep. 729. This appears to be in conformity with the rule in England. In a re- cent case the plaintiff brought an action for negligently excavating near his house, whereby it was dam- aged; the defendant attributed the damage, wholly or in part, to the negligence of a water company in leaving a main insufficiently stopped. The court declined to join such company as a defendant be- cause the torts were separate, though the resulting damage was the same in each case. Thompson v. London •County Council, [1897J 1 Q. B. 84. In an earlier case against two de- fendants it was alleged that each of them, by their several acts, and that they by their combined acts, ob- structed the plaintiffs access to his premises, and an injunction and damages were prayed against each of them; it was determined that the action could not be maintained; that one of the defendants must be struck out. Sadler v. Great Western R. Co., [1896] App. Cas. 450, affirming [1895] 2 Q. B. 088. Wliere a municipality is bound to see that its streets and sidewalks are kept in proper condition, it cannot be joined as a defendant with a resi- dent property owner whose duty it is to see that the walk adjoining his premises is in good repair for an in- jury resulting from his neglect. Their co-operation is not of a nature which makes them joint wrong- doers. Button v. Lansdowne, 198 Pa. 563, 48 Atl. Rep. 494. See Wiest v. Electric Traction Co., 200 Pa. 148, 49 Atl. Rep. 891. 1 Roodhouse v. Christian, 55 111. App. 107; Kansas City v. Slangstrom, 53 Kan. 431, 36 Pac. Rep. 706; Pugh V. Chesapeake & O. R. Co., 101 Ky. 77, 72 Am. St. 392, 39 S. W. Rep. 695; Blackman v. Simpson, 120 Mich. 377, 79 N. W. Rep. 573; Berkson v. Kansas City Cable R. Co., 144 Mo. 211, 45 S. W. Rep. 1119; Burk v. Howley, 179 Pa. 539. 36 Atl. Rep. 327, 57 Am. St. 607; Koch v. Peters, 97 Wis. 492. 73 N. W. Rep. 25. 2 Hopkins v. Oxley Stave Co., 28 C. C. A. 99, 103, 83 Fed. Rep. 912, citing Cunningham v. Pell. 5 Paige, 607; Wall V. Thomas, 41 Fed. Rep. 620. 362 ENTIRETY OF DAMAGKa [§ 1^0. procure it to be done, as well as by jointly taking part in it, or b}' subsequently adopting the act done or neglect suffered as principals.^ The extent of individual participation in, or of expected benefit from, a joint tort is immaterial; each and all of the tort-feasors are liable for the entire damage.^ The law [212] is thus accurately and comprehensively laid down in a Nev/ York case: " To entitle the plaintiff to a verdict against all the defendants as joint trespassers it must appear that they acted in concert in committing the trespass complained of; if some aided and assisted the others to commit the trespass or assented to the trespass committed by others, having an inter- est therein, they are all jointly guilty ; ... it would not be material if they had unequal interests in the avails of the trespass; for those who confederate to do an unlawful act are deemed guilty of the whole although their share in the profits may be small. But if any of the defendants are not guilty at all, or if any of them, though guilty, were acting separately and for themselves alone without any concert with the others, they ought to be acquitted and those only found guilty who Avere acting jointly."^ The fact that one who orders an act done, which results in injury to a third person, gave such order as the officer of a municipal or private corporation does not 1 Northern Trust Co. v. Palmer, 171 111. 383, 49 N. E. Rep. 553; Dono- van V. Consolidated Coal Co., 187 111. 28. 58 N. E. Rep. 290, 88 111. App. 589; Lewis V. Read. 13 M. & W. 834; Davis V. Newkirk, 5 Denio, 92; Cook V. Hopper, 23 Mich. 511; Bonn el v. Dunn, 28 N. J. L. 153; Ford v. Will- iams, 13 N. Y. 584; Ball v, Loomis, 29 N. Y. 412; Hyde v. Cooper, 26 Vt. 552; Lewis v. Johns, 34 Cal. 629; Adams v. Freeman, 9 Johns. 118; Guille V. Swan, 19 Johns. 381, 10 Am. Dec. 234; Hume v. Oldacre, 1 Stark. 351; Stewart v. Wells, 6 Barb. 81; Wheeler v. Worcester, 10 Allen, 591, -McCool v. Mahoney, 54 Cal. 491; Learned v. Castle, 73 id. 454, 18 Pac. Rep. 872, 21 id. 11; McCalla v, Shaw, 72 Ga. 458; Everroad v. Gabbert, 83 Ind. 489; Westbrook v. Mize, 35 Kan. 299, 10 Pac. Rep. 881; Sharpe v. Will- iams, 41 Kan. 56; Boaz v. Tate. 43 Ind. 60; Breedlove v. Bundy, 96 id. 319;. Page V. Freeman, 19 Mo. 421; Wright v. Lathrop, 2 Ohio, 275; Knicker- backer v. Colver, 8 Cow. Ill; Turner V. Hitchcock, 20 Iowa, 310; Nelson v. Cook, 17 111. 443; McMannus v. Lee, 43 Mo. 206, 97 Am. Dec. 386; Brown V. Perkins, 1 Allen, 89; Barden v. Felch, 109 Mass. 154; Williams v. Sheldon, 10 Wend. 654; Currier v. Swan, 63 Me. 323; Mason v. Sieglitz, 22 Colo. 320. 44 Pac. Rep. 588; Hunter v. Wakefield, 97 Ga. 543, 25 S. E. Rep. 347; Sternfels v. Metropolitan Street R. Co., 73 App. Div. 494, 77 N. Y. Supp. 309; Hill v. Ninth Avenue R. Co., 109 N. Y. 239, 16 N. E. Rep. 61. 3 Williams v. Sheldon, 10 Wend. 6-54 ; Howard v. Daj^ton Coal & Iron Co.,. 94 Ga. 416, 20 S. E. Rep. 336. § 140.] PARTIES TO SUE AND BE SUED. 303 absolve him from liability for the consequences.' The rule is that two or more persons cannot be held jointly liable for verbal slander.2 While admitting this it is said in a recent case in which slander of title was the ground of the action, that under circumstances where all the defendants are jointly concerned and interested and participate in the general purpose, their concert and co-operation may be shown although the false and malicious statements may have been made b\' one alone.' Where a master is liable for the tort of his servant, a principal for that of his agent or deputy, they are jointly liable.* If an officer takes property of a wrong person on process he, as well as the party or attorney who directs it and even the sureties who execute a bond of indemnity to the officer covering that tort, may be held jointh'^ liable.^ An action for deceit in the nature of a conspiracy cannot be sustamed against a principal for the unauthorized fraudulent acts and representations of the agent alone.^ According to the Iowa court if one joint wrong- doer was actuated by malice his condition of mind will be at- tributed to the others, and each will be liable for all the dam- ages, actual and exemplary, resulting from the wrong.'' But this we regard as a very doubtful proposition. In Kentucky a cause of action under the common law^ against one party for compensatory damages cannot be joined with an action against another party for punitive damages, the right thereto resting on a statute, although both causes of action arose out of the same transaction.^ 1 Jenne V. Sutton, 43 N. J. L. 257, & M. 278; Armstrong v. Dubois, 4 39 Am. Eep. 578; Myers v. Dauben- Keyes, 291. biss, 84 Cal. 1, 23 Pac. Rep. 1027. & Murray v, Lovejoy, 2 Cliff. 191; 2 Blake v. Smith, 19 R. I. 476. 34 Lovejoy v. Murray, 3 Wall. 1; Lewis Atl. Rep. 995. See State v. Marlier, v. Johns. 34 Cal. 629; Knight v. Nel- 46 Mo. App. 233; Butts v. Long, 94 id. son, 117 Mass. 458; Ball v. Loomis, 29 687, 692. N. Y. 412; Herring v. Hoppock, 15 3 Chesebro v. Powers, 78 Mich. 472, N. Y. 409; Root v. Chandler, 10 Wend. 44 N. W. Rep. 290. See Thomas v. 110, 35 Am. Dec. 540; Vincent v. Rumsey, 6 Johns.' 26. McNamara, 70 Conn. 332, 39 Atl. Rep. 4Balme v. Button, 9 Bing. 471; 444. Waterbury v. Westervelt, 9 N. Y. 6 Page v. Parker, 40 N. H. 47. 598; Morgan v. Chester. 4 Conn. 387; 7 Reizenstem v. Clark, 104 Iowa, Barker v. Braham, 3 Wils. 368; Bates 287, 292, 73 N. W. Rep. 588, citing this V. Pilling, 6 B. & C. 38; Newberry v. section. See ch. 9. Lee, 3 Hill, 523; Crook v. Wright, R. » Clayton v. Henderson, 103 Ky. 228, 44 S. W. Rep. 667, 44 L R. A. 474. JGi ENTIKETY OF DAMAGES. [§ 141. § 141. Same subject. In an action for diverting water from a natural water-course so as to flood the plaintiff's land it ap- peared that the defendant did it by walling the banks on his [213,214] own land to preserve them. A third person, by cer- tain acts wholly independent of defendant's and without con- cert with him, increased the volume of water that flowed upon such land. The defendant was only liable for the flood- ing caused b}' him, and not for that part of the plaintiff's dam- ages resulting from the increased volume of water caused by such third person.^ But where nine different creditors, act- ing without concert and without knowing that they were em- ploying a common agent, wrongfully caused their debtor to be arrested by the same officer on their several writs, service being made simultaneously, and by virtue thereof committed the debtor to jail where he was confined upon all of the writs at the same time, they were deemed joint trespassers, and full satisfaction recovered by the debtor from one of them was held a bar to an action against the others.- It is not possible to 1 Wallace v. Drew. 59 Barb. 413. 2 Stone V. Dickinson, 5 Allen, 29, 81 Am. Dec. 727; Allison v. Hobbs, 96 Me. 26, 51 Atl. Rep. 245. Bigelow, J., said in the Massachusetts case: As a matter of iirst impression, it might seem that the legal inference from . . . (the fact that the de- fendants acted separately and inde- pendently of each other without any appai'ent concert among themselves) , . . is that the plaintiflf might hold each of them liable for his tor- tious act, but that they could not be regarded as co-trespassers, in the absence of proof of any intention to act together, or of knowledge that they were engaged in a common enterprise or undertaking. But a careful consideration of the nature of the action, and of the injury done to the plaintiff, for which he seeks redress in damages, will disclose the fallacy of this view of the case. The plaintiff alleges in his declara- tion that he was unlawfully arrested and imprisoned. This is the wrong which constitutes the gist of the ac- tion, and for which he is entitled to indemnity. But it is only one wrong, for which in law he can re- ceive but one compensation. He has not in fact suffered nine separate arrests, or undergone nine separate terms of imprisonment. The writs against him were all served simul- taneously, by the same officer, acting for all the creditors, and the confine- ment was enforced by the jailor on all the processes, contemporaneously, during the entire period of his im- prisonment. The alleged trespasses on tlie person of the plaintiff were, therefore, simultaneous and contem- poraneous acts, committed on him by the same person, acting at the same time for each and all of the plaintiffs in the nine writs upon which he was arrested and imprisoned. It is, then, the common case of a wrongful or unlawful act, committed by a com- mon agent, acting for several and distinct principals. Ul.] PARTIES TO SUE AND BE SUED. 3G5 harmonize the cases on the extent of the co-operation -which makes parties jointly liable. It seems perfectly })roper that an unlawful act done by one person, though it be in further- ance of a hiwful purpose in the accomplishment of which others are engaged, should not make the latter liable if it is done without their concurrence, and no benefit is received by them from it.^ Where the effects of the independent acts of two. "It does not in any way change or affect the injury done to the phiintiff, or enhance in any degree the dam- ages wliich he has suffered, that the immediate trespassers, by whom the tortious act was done, were the agents of several different plaintiffs, who without preconcert had sued out separate writs against him. The measure of his indemnity cannot be made to depend on the number of principals who employed the officers to arrest and imprison him. We know of no rule of law by which a single act of trespass committed by an agent can be multiplied by the number of principals who procured it to be done, so as to entitle the party injured toa compensation graduated, not according to the damages actu- ally sustained, but bj' the number of persons through whose instrumental- ity the injury was inflicted. The error of tlie plaintiff consists in sup- posing that the several parties who sued out writs against him, and caused him to be arrested and im- prisoned, cannot be regarded as co- trespassers, because it does not ap- pear that they acted in concert, or knowingly employed a common agent. Such preconcert or knowl- edge is not essential to the commis- sion of a joint trespass. It is the fact that they all united in the wrong- ful act, or set on foot or put in mo- tion the agency by which it was committed, that renders them jointly liable to the party injured. Whether the act was done b}' the procure- ment of one person or of many, and, if by many, whether they acted from a common purpose and design in which they all sliared, or from sep- arate and distinct motives, and with- out any knowledge of the intentions of each other, the nature of the in- jury is not in any degree changed, or the damages increased which the party injured has a right to recover. He may, it is true, have a good cause of action against several per- sons for tlie same wrongful act, and a right to recover damages against each and all tlierefor, with the priv- ilege of electing to take his satisfac- tion de melioribus damnis. But there is no rule of law by which he can claim to convert a joint into a several trespass, or to recover more than one satisfaction for his dam- ages, when it appears that lie has suf- fered the consequences of a single tortious act only." See Wehle v. Butler, 12 Abb. Pr. (N. S.) 139. 1 Wert v. Potts. 76 Iowa, 612, 14 Am. St. 252, 41 N. W. Rep. 374. One does not become a partici- pator in an assault and battery by witnessing and mentally approving it, no word or sign being used. Lis- ter v. McKee, 79 111. A pp. 210. After mortgaged goods were wrongfully attached by creditors of the mortgagor other creditors placed their writs in the officer's hands and he indorsed returns of a levy upon the same goods, subject to the first levy. It appears to have been the opinion of the court that if such subsequent attaching creditors did nothing further they might not have Z66 ENTIRETY OF DAMAGES. [§ 1^1. persons on opposite sides of a street united in causing injury, there being no concert of action, they were held not jointly liable.^ So where a dam was filled with deposits of coal dirt from different mines on the stream above the dam, worked by persons having no connection with each other, it was held that they were not jointly liable for the combined results of throw- ing coal dirt into the river by all the workers of the mines; that the ground of action was not the deposit of dirt in the dam by the stream but the negligent act above. Throwing the dirt into the stream was the tort; the deposit in the dam only the consequence. The tort of each was several when committed and did not become joint because its consequences united with other consequences.^ Agnew, J., referring to the [216] instructions of the trial court asserting a joint liability or the liability of each for the combined results, said : " The doctrine of the learned judge is somewhat novel, though the case itself is new; but if correct is well calculated to alarm all riparian owners who may find themselves by slight negli- gence overwhelmed by others in gigantic ruin. It is imma- terial what may be the nature of their several acts or how small their share in the ultimate injury. If instead of coal dirt others were felling trees and suffering their tops and branches to float down the stream finally finding a lodgment in the dam with the coal dirt, he who threw in the coal dirt and he who felled the trees would each be responsible for the been liable jointly with the officer and the original attaching creditor, in the absence of proof showing con- cert of action (Sparkman v. Swift, 81 Ala. 231, 8 So. Rep. 160; Lee v. Maxwell, 98 Mich. 496, 57 N. W. Rep. 581); but they afterward joined to- gether in directing and assisting the officer in selling the goods, and in bringing a suit in equity to set aside the mortgage as fraudulent, and to enjoin a sale of the property by the mortgagee, in consequence of which acts they and the indemnitors of the officer became jointly liable with the officer and the first attach- ing creditors. Koch v. Peters, 97 Wis. 492, 73 N. W. Rep. 25, citing Lovejoy v. Murray, 3 Wall. 1. Where creditors employed the same attorney and separate attacli- ments were levied on the property of their debtor, neither creditor being in any way interested in the claim of any other creditor or its prosecution, the creditors were not joint tort-feasors. Miller v. Beck, 108 Iowa. 575, 79 N. W. Rep. 344. 1 De Donato v. Morrison, 160 Mo. 581, 61 S. W. Rep. 641: Bard v. Yohn, 26 Pa. 482; Leidig v. Bucher, 74 Pa. 67; Wiest v. Electric Traction Co., 200 Pa. 148, 49 Atl. Rep. 891. 2 Little Schuylkill, etc. Co. v. Rich- ards. 57 Pa. 142, 98 Am. Dec. 209. § 141.] PARTIES TO SUE AND BE SUED, 367 acts of the other. In the same manner separate trespassers who should haul their rubbish upon a city lot and throw it upon the same pile would each be liable for the whole if the final result be the only criterion of liability," The court re- jected this view and held as above. The judge further said: " True, it may be dillicult to determine how much dirt came from each colliery, but the relative proportions thrown in by each may form some guide, and a jury in a case of such diffi- culty caused by the party himself would measure the injury of each with a liberal hand. But the dilKculty of separating the injury of each from the others would be no reason that one man should be held to be liable for the torts of others without concert. It would be simply to say because the plaintiff fails to prove the injury one man does him he may therefore recover from that one all the injury that others do. This is bad logic and hard law. Without concert of action no joint suit could be brought against the owners of all the col- lieries, and clearly this must be the test."^ 1 In Hillman v. Newington, 56 Cal. 57, the plaintiff was entitled to four hundred inches of the water in a creek; the defendants severally and without concert of action diverted water ro such an extent that he did not receive that quantity. In pass- ing upon the question of misjoinder of parties defendant the court said: "It is not at all improbable that no one of the defendants deprives the plaintiff of the amount to which he is entitled. If not, upon what ground could he maintain an action against any one of them ? If he were en- titled to all the water of the creek, then every person who diverted any of it would be liable to him in an action. But he is only entitled to a certain specific amount of it, and if it is only by the joint action of the defendants that he is deprived of that amount, it seems to us that tlie wrong is committed by them jointly because no one of them alone is guilty of any wrong. Each of them Ji verts some of the water; and the aggregate reduces the volume below the amount to which the plaintiff is entitled, although the amount di- verted by any one would not. It is quite evident, therefore, that with- out unity or concert of action no wrong could be committed, and we think that in such a case all who act must be held to act jointly. If there be a surplus [of water] tlie defend- ants can settle the priority of right to it among themselves. That can in no way affect the plaintiff's right to the amount to which he is enti- tled. It does not seem to us that the defendants' answer that each one of them is acting independently of every other one shows that the wrong complained of is not the re- sult of their joint action; and if it does not the answer in that respect is in.sufficient to constitute a de- fense. The case so far as we are ad- vised is sill generis. No parallel case is cited by either side." See § 142. As to the measure of co-operation necessary to make persons joint 3C8 ENTIKETY OF DAMAGES. [§ 141. Separate owners are not jointly liable for injuries jointly committed by their respective animals though the latter hap- pen to unite in a single transaction. Each owner is liable only for the injury committed by his own animal; and his liability is based on his duty to restrain it and his neglect in allowing it to go at large where, in pursuing its known nat- ural inclination, it may do damage.^ If, however, separate owners keep animals in common and by a concurring negli- gence or design suffer them to run at large as one herd, they are jointly liable for all damages by the united trespass of all or any of them.^ Where three persons, on returning from a horseback ride, opened a gate leading to a vacant lot in which was a horse owned by a fourth person, and turned their horses into such lot, and one of these three horses injured such other horse, each of those persons was liable as a joint tort-feasor for such injury, regardless of whether they owned the horses they turned in or knew that they were vicious.^ Two railroad companies used the same track by joint arrangement, gov- erned by common rules; their trains collided owing to mutual and concurring negligence and caused a single injury. They were held jointly liable.* The same rule applies to adjoining wrong-doers in a conspiracy to ruin every owner or keeper of a dog en- the Vjusiness of another, see Doreraus engaged in doing damage to sheep, V. Hennessy, 176 111. 608, 53 N. E. lambs, or other domestic animals Rep. 924, 68 Am. St. 203, 43 L. R. A. shall be liable in an action of tort to 797; Martens v. Reiliy, 109 Wis. 464, the county for all damages so done, 84 N. W. Rep. 840: State v. Huegin, the liability is for all the damages 110 Wis. 189, 89 N. W. Rep. 1046. in the doing of which the dog en- 1 Dyer v. Hutchins, 87 Tenn. 198, gages. Worcester County v. Ash- 10 S." W. Rep. 194; Auchmuty v. worth, 160 Mass. 186, 35 N. E. Rep. Ham, 1 Denio, 49.'); Wilbur v. Hub- 773; Nelson v. Nugent, 106 Wis. 477, bard. 35 Barb. 303; Partenheimer v. 82 N. W. Rep. 287. The same con- "Van Order, 20 id. 479; Russell v. elusion has been reached under a Toralin.son, 2 Conn. 206; Adams v. statute less general in its language. Hall, 2 Vt. 9 (the rule in Vermont Kerr v. O'Connor. 63 Pa. 341. has been changed by statute. Rem- 2 jack v. Hudnall, 25 Ohio St. 255, ele V. Donohue, 54 Vt. 555; Fairchild 18 Am, Rep. 298. V. Rich, 68 Vt. 202, 34 Atl. Rep. 692); 3 Martin v. Farrell, 66 App. Div. Van Steinburgh v. Tobias, 17 Wend. 177, 77 N. Y. Supp. 934. See § 140, 562; Buddington v. Shearer, 20 Pick. note. 477; Nierenberg v. Wood, 59 N. J. L, < Colegrove v. New York, etc. R. 112, 35 Atl. Rep. 654. Co., 20 N. Y. 493, 75 Am. Dec 4ia Under a statute expressing that See § 140, note. § liJ:2.] . PARTIES TO SUE AND BE SUED. 369 land-owners by whose concurring negligence an insecure party- wall is maintained.' § 142. Same subject. A statute giving a joint action to any person who shall be injured in his means of support by any intoxicated person, or in consequence of the intoxication, habitual or otherwise, against any person or persons who shall, b}' selling or giving intoxicating liquors, have caused the in- toxication in whole or in part of such person or persons, gives a right of action against all such persons who participate in causing a particular or several particnhar intoxications of a person; if damages result therefrom the person injured may sue such persons jointly or severally; and also all persons who, only by the sale of liquor to any person, materially con- tribute to make him a habitual drunkard may be sued jointly by the person injured in consequence. But the two classes cannot be sued jointly, and those who alone contributed to cause habitual intoxication made responsible jointly with those who only contributed to the particular intoxication and the reverse.^ Under the Iowa statute concerning liability for the results of the sale of liquors, whoever contributes to a single act of intoxication, though by sales of liquor made in sepa- rate places, whereby distinct damages are caused, is a joint wrong-doer.' But there is no joint liability unless the persons made defendants contributed to a specific act or acts of intox- ication.* In an earlier case the court say: "A joint liabil- 1 Klauder v. McGrath, 35 Pa 128, so continuoJ until his death in 18G9. 78 Am. Dec. 329. of which the defendant had notice; 'Tetzner V, Naughton, 12 111. App. that during that period and at sun- 148. dry and divers times the defendant 3 Kearney v. Fitzgerald, 43 Iowa, sold him in quantities of from one 580. pint to a quart intoxicating liquors, * Richmond v. Shickler, 57 Iowa, causing said Watt to become intoxi- 486, 10 N. W. Rep. 882. cated and an habitual drunkard ; and Boyd V. Watt, 27 Ohio St. 259, is a by reason thereof during said period, novel and interesting case. The and resulting therefrom, he became widow of Dr. Watt brought an ac- incapable of attending to his usual tion; the complaint alleged that he business, and squandered his estate, was a physician with an extensive and so deprived her of her means of practice, from the profits of which support. Johnson, J., speaking for a he was able to furnish her comfort- majority of the court, said: "The able means of support; that about statute gives the action against 'any April, 1865, he became and was in person who shall . . . have caused the habit of getting intoxicated, and the intoxication.' This intoxication Vol. 1 — 24 370 ENTIRETY OF DAMAGES. [§ I'iS. ity arises where an immediate act is done by the co-operation or joint act of two or more persons. Mere successive wrongs, being the independent acts of the persons doing them, will not create a joint liability although the wrongs may be corn- may be 'habitual or otherwise.' A right of action is given for damages resulting from single cases of intoxi- cation or from habitual intoxication. Under the code several distinct causes of action may be joined in one action for damages growing out of distinct cases of intoxication, where each cause of action is sep- arate and distinct, and is between the same parties; but if on trial it ap- pears that some of the acts of intox- ication were caused by others, no re- covery as to them could be had. In such case the causes of action are separate, and the damages resulting from each are distinct and discon- nected; and the causes of action should be separately stated and num- bered. " In such a case the question would be as to each case of intoxication, who caused it, and what damages resulted from it. What would con- stitute a causing of a single act under thestatuteto render one liable would then arise. That question is not made in this case. The charge is of causing habitual intoxication for a series of years. The damages alleged are not the proximate results from distinct cases, but the ultimate re- sult of habitual intoxication. This continuedhabitof drinking is alleged to have rendered the husband inca- pable of attendmg to his business, and caused him to squander his estate. This final result deprived the plaint- iff of her means of support. It is a charge of repeated illegal acts, pro- ducing by their united effects an ul- timate sfaie or condition ot Dr. Watt, out of which the damages arise. The plaintiff asks to recover the dam- ages resulting from this stateov con- dition of her husband, caused by repeated illegal sales for a series of years, and not the damages from a single case of intoxication, nor of a series of distinct cases at different times, caused by separate and dis- tinct illegal sales. The means used were sales in quantity by the pint and quart. To a person of Dr. Watt's habits, frequent sales in such quan- tity were calculated to produce the result complained of. Every person is presumed to have intended the natural and probable consequences of his acts. The defendant was, in violation of law, using means calcu- lated to produce the alleged injury. If the jury found that this was so, and that the means so employed were so continued as to produce the con- dition of the husband alleged, then they had the right to presume he in- tended the result which followed, though others, with or without pre- concert, contributed to cause it. The intent with which the act or acts are done is alwaj's an important element in the case. In this case it is pecul- iarly so. The means used, the force or agency employed, are to be con- sidered in ascertaining that intent. If, as seems to be claimed, a defend- ant can only be liable, except in cases of conspiracy or agreement, when he is the sole cause of the habitual in- toxication, and no recovery can be had unless the damages can be sep- arated (an impossibility in most cases of this class), then this part of the statute is virtually a dead letter. " Why should the defendant be exonerated from the injury he has caused by his habitual wrongs for a series of years by showing that others, without his knowledge, have § 1^2.] PAKTIES TO SUE AND BE SDED. 71 mitted against the same person. There must be concurrent action, co-operation or a consent or approval in the accom- plishment by the wrong-doers of the particuhir wrong in order also contributed by like means to this result? He was using adequate means to produce the result, and may, therefore, fairly be presumed to have intended it. True, he may not have enjoyed a monopoly in the profits accruing, by reason of the competition of others in a common business; but that certainly is no reason why he should not be liable for the injuries he was intentionally engaged in causing. If such is the law, then he could take advantage of his own wrong by showing that during this four years another or others had also contributed. Such is not the law in criminal cases at common law, as will be shown here- after; and we know no reason for greater strictness under this statute than in cases of the highest crimes known to the law. This section of tlie statute, we take it, is to be con- strued by ordinary canons of con- struction." The foregoing views of the court presuppose that the defendant in- sisted on complete exemption from responsibility because other persons made sales to Dr. Watt. But the case as reported does not disclose that any sueli position was taken. The de- fendant asked the court to charge the jury "that the defendant was only liable for damages to the plaint- iff occasioned by intoxication pro- duced by the intoxicating liquor which the defendant himself had sold to said Dr. Watt, and that the defendant was not liable for any damages produced by the intoxica- tion of said Dr. Watt, occasioned by intoxicating liquors sold to him dur- ing said period by other persons;" which charge the court refused to give except with the following qual- ifications: "Siiould you find tliatthe defendant sold intoxicating licjuor to Joseph Watt in violation of law within the time charged in the peti- tion, and that the plaintiff sustained damages by reason of the intoxica- tion of said Watt, caused tliereby to her person, property or means of support, the fact that other persons also sold liquor to said Watt, in vio- lation of law, within that period, and which liquor may have contributed to increase the intoxication, and con- sequently to enhance the injury re- sulting to the plaintiff therefrom; such facts, if they be shown to have existed, will not exonerate tiie de- fendant from the consequence of his wrongful acts; but, on the contrary, he will still be responsible for all the injury resulting to the plaintiff from the intoxication of Joseph Watt, caused by his illegal sale of liquor to him. If yoii can separate the dam- ages resulting from the intoxication caused by illegal sales to Watt by de- fendant from the damages resulting from sales by others, you must do so; but if such separation cannot be made you will render your verdict against the defendant for all the act- ual pecuniary damages residting to the plaintiff in person, property or means of support by reason of the intoxication of the said Joseph Wait, to ichich intoxication the illegal sales of intoxicating liquor by the defend- ant contributed." The judgment for the plaintiff was afiirmed. And upon the state of facts supposed by the defendant's request, the appellate court treat the defend- ant and all other persons wiio sold liquor to Dr. Watt as jointly and sev- erally liable — as joint tort-feasors. On that point the learned judge who 372 ENTIRETY OF DAMAGES. [§ 142. to make them jointly liable."^ But where it is provided that the person who furnishes the liquor which causes the intoxica- tion "in whole or in part," habitual or otherwise, shall be liable, the damages cannot be apportioned; full recovery may be had against any one who contributed to the result com- plained of.^ delivered the majority opinion states the defendant's position and the an- swer as follows: "Counsel properly admit that where two or more act by concert in an unlawful design each is liable for all damages, but claim if each acts independently, or without the knowledge of the other, then he is only liable for his own acts. In the former case the acts of others co- operating are his acts, because they are only in furtherance of a com- mon unlawful design. If there is no common intent there can be no joint liability, but each is responsible for his own act. If there is a common intent, or one without such intent aids one with it in doing an unlaw- ful act, the latter is nevertheless guilty, though not the sole cause. They claim this principle is limited to cases of conspiracy or concerted action. In this we think they mis- take the authorities. We hold that this common intent, which is suffi- cient to create mutual liability, may exist without previous agreement or a common understanding to do the unlawful act, and that it may be pre- sumed to exist when the means em- ployed create that presumption as well as by proving an express agree- ment." This " common intent which is suf- ficient to create mutual liability " is, further on in the opinion, thus eluci- dated: "If the defendant was usmg the means calculated to produce the injury, the law presumes that he in- tended to produce it If others, with or without concert, were concur- rently co-operating with him, using like means, they were acting with the same common design, and if the injury resulted each is liable, though each was acting without the knowl- edge of whattheotherwas doing. So if the defendant alone was using such means as created this presumption of intent to do the act and another, without concert, free from such in- tent, was contributing to the injury, the former is liable for all damages, notwithstanding the other also con- tributed." The majority of the court came to the conclusion that vendors of intox- icating liquors who separately sell to a man, who, by thus imbibing, in a period of several years, becomes an habitual drunkard, are in law jointly and severally liable for that re- sult, though they have no concert in the sense of communicating with each other on the subject; though they do not act together, that is. no two of them join in any one sale, and each may be unacquainted with the others, and perhaps may not even know that there are others; though the only circumstance that is supposed to join and unify them is they are engaged in the same kind of business and each is doing such a business as has a tendency to make drunkards, and in a particular case they have thus made one. 1 La France v. Krayer, 43 Iowa, 143; Hitchner v. Ehlers, 44 id. 40; Faivre v. Manderscheid, Iowa, — , 90 N. W. Rep. 76. 2 Neuerberg v. Gaulter, 4 111. App. 348: Bryant v. Tidgewill, 133 Mass. 86; Werner v. Edmiston, 24 Kan. § 142.] PARTIES TO SUE AND BE SUED. 573 Each partner is an agent of the firm of which he is a mem- ber for the purpose of carrying on its business in the way it is usually prosecuted; hence an ordinary partnership is liable for the results of the negligence of any one of its members in con- ducting its affairs in the usual way.^ Such liability extends to the fraudulent or malicious conduct of one partner though the others had no knowledge of it, if the act was done for the benefit of the firm and was within the scope of the partner- ship.2 j^^^ [^ (jQgg not embrace acts done beyond such scope,' unless they are authorized or adopted by the firm.'* A part- nership is also responsible for the negligence of its servants subject to the same limitations.* 147; Rantz v. Barnes, 40 Ohio St. 43; Aldrich v. Parnell, 147 Mass. 409, 18 N. E Rep. 170. TJiis is the rule applied in Michi- gan, although the statute does not contain the words " in whole or in part." Steele v. Thompson, 43 Mich. 596, 4 N. W. Rep. 536. See Suther- land's Stat. Const, § 377. 1 Lindley's Part. (2d Am. ed.) *149; Linton v. Hurley, 14 Gray. 191; Buckie v. Cone. 25 Fla. 1, 6 So. Rep. 160; Mode v. Penland. 93 N. C. 292; Gerhardt v. Swaty, 57 Wis. 24, 14 N. W. Rep. 851; Robinson v. Goings, 63 Miss. 500; Wiley v. Stewart, 122 111. 545. 14 N. E. Rep. 835; Hall v. Younts, 87 N. C. 285; Hyrne v. Erwin, 23 S. C. 226; Stroher v. Elting, 97 N. Y. 102, 49 Am. Rep. 515. 2Lothropv. Adams, 133 Mass. 471, 43 Am. Rep. 528; Locke v. Stearns, 1 Met 560, 35 Am. Dec. 382; Durant V. Rogers, 87 111. 508; Chester v. Dick- erson, 54 N. Y. 1, 13 Am. Rep. 550; Guillou V. Peterson, 89 Pa. 163; Rob- inson V. Goings, 63 Miss. 500. But see Gilbert v. Emmons, 43 111. 143, 89 Am. Dec. 412; Grund v. Van VIeck, 69 111. 478; Rosen krans v. Barker, 115 id. 331, 56 Am. Rep. 169, 3 N. E. Rep. 93. 3 Gwynn v. DufEeld. 66 Iowa, 708, 55 Am. Rep. 286, 24 N. W. Rep. 523; Schwabacker v. Riddle, 84 111. 517. < Graham v. Meyer, 4 Blatch. 129; Heirn v. McCaughan, 32 Miss. 17; Taylor v. Jones, 42 N. H. 25; Ernst- man V. Black, 14 111. App. 381; Wood- ling V. Knickerbocker, 31 Minn. 268, 17 N. W. Rep. 387. 6 Roberts v. Johnson, 58 N. Y. 613; Stables v. Eley, 1 C. & P. 614; Brent V. Davis, 9 Md. 217; Linton v. Hur- ley, 14 Gray, 191. 374 LEGAL LIQUIDATIONS AND KEDUOTIONS. CHAPTER Y. LEGAL LIQUIDATIONS AND REDUCTIONS. Section 1. circuity of action. 143. Defense of. 144. Agreement not to sue. 145. Principle operates in favor of plaintiff. 146. Damages must be equal 147. Reciprocal obligations. Section 2. mutual credit. 148. Compensation by mutual demands. Section 3. mitigation of damagea 149. Equitable doctrine of. 150. Abseuce of malice. 151. Words as provocation for assault; agreements to fights 153, 153. Provocation in libel and slander. 154. Mitigating circumstances in trespass and other actions. 155. Plaintiff's acts and negligence. 156, 157. Measures of prevention; return of property; discharge of plaint- iff's debt. 158. No mitigation when benefit not derived from defendant. 159. Fuller proof of the res gestce in trespass, negligence, etc. 160. Official neglect. 161. Same subject; modification of the old rule. 162. Plaintiff's consent. 163. Injuries to character and feelings. 164. Reduction of loss or benefit. 165. 166. Pleading in mitigation. 167. Payments. Section 4. recoupment and counter-claim; 168, 189. Definition and history of recoupment. 170, 171. Nature of defensa 172. Constituent features of recoupment. 173. Remedy by counter-claim. 174. Validity of claim essential. 175. 176. Parties. 177. Maturity of claim or demand; statute of limftations. 178. Cross-claim must rest on contract or subject-matter of action. 179. 180. Recoupment for fraud, breach of warranty, negligence, etc. § 143.] CIRCUITY OF ACTION. 375 § 181. What acts may be the basis of recoupment. 183. Cross-claims between landlord and tenant. 183. Cause of action, connection between and cross-claim. 184. Recoupment between vendor and purchaser. 185. Liquidated and unliquidated damages may be recouped. 186. Affirmative relief not obtainable. 187. Election of defendant to file cross-claim or sue upon his demand. 188. Burden of proof; measure of damages. 189. A cross-claim used in defense cannot be sued upon. 190. Notice of cross-claim. Section 5. marshaling and distribution. 191. Definition. 192. Sales of incumbered property in parcels to different purchasers. 193. Sale subject to incumbrance. 194. Effect of creditor releasing part. 195. Rights where one creditor may resort to two funds and another to only one. 196. Same where the funds belong to two debtora 197. Principles on which priority determined. Section 6. set-off of judgments. 198. Power to direct set-off inherent. 199. When it will or will not be granted. 200. Interest of the real parties considered. 201. Set-otf not granted before judgment. 203. Assignee must make an absolute purchasa 203. Nature of action immaterial. 804. Liens of attorneys. Section 1. circuity of action". § 143. Defense of. The defense of circuity of action [220] is available where the parties stand in such legal relation ta each other that if the plaintiff recovers against the defendant the latter, thereupon and by reason thereof, has a cause of action against the former for the very sum so recovered. The- plaintiff's demand is then neutralized by his liability, conse- quent upon recovery, to pay back such sum; by a legal equa- tion the plaintiff has no cause of action. This defense ac- complishes the same result as would the circuity of action. Thus in an action against the surviving partner upon the prom- issory note of a partnership an indenture by which the plaintiff and others had covenanted to indemnify the defendant against 376 LEGAL LIQUIDATIONS AND REDUCTIONS. SS 144, 145. all debts due from the partnership and against all actions brought against him by reason of such debts was a bar to the action.^ Under a statute which imposes a personal liability upon stockholders for the debts of a corporation, a creditor, who is himself a stockholder, cannot maintain an action to en- force such liability against a co-stockholder.^ One who is a surety upon an official bond can not recover from his fellow- sureties the full amount of damages he has sustained by its breach.' § 144. Agreements not to sue. On this principle if a cred- itor makes a valid agreement never to sue his debtor upon a specified demand it operates to extinguish the debt like a re- lease.* But when the covenant is that a demand shall not be put in suit within a limited time a breach thereof cannot be [221] pleaded in bar of that demand. The reason is that the damacjes for the breach of the latter covenant being uncertain and not determinable by the amount of the demand, the prin- ciple of circuity of action is not applicable. § 145. Principle operates in favor of plaintiff. The prin- ciple of avoiding circuity of action will sometimes operate in favor of the plaintiff. A town was compelled to pay dam- ages for an injury resulting from a defect in a highway occa- sioned by the want of repair of a cellar way constructed in a sidewalk and leading to an adjoining building occupied by a ' Whitaker v. Salisbury, 15 Pick. 534; Austin v. Cummings, 10 Vt. 26. 2 Gray v. Coffin, 9 Gush. 193, 206; Bailey v. Bancker, 3 Hill, 188. 38 Am. Dec. 625. 3 Alderson v. Mendes, 16 Nev. 298. The plaintiff declared on a note made by C. and payable to the plaint- iff or his order, and afterwards in- dorsed by him to the defendant, who re-indorsed it to the plaintiff. After verdict for the latter the ju igment was arrested. Bishop v. Hayward, 4 T. R 470. But if it appears that the plaintiff's name was originally used for form only, and tliat it was understood by all the parties to the instrument that the note, though nominally made payable to the plaintiff, was substantially to be paid to the defendant, and the declaration so alleges, the defense of circuity of action is not good. Id.; Wilders v. Stevens, 15M. &W. 208. * Robinson v. Godfrey, 2 Mich. 408; Cuyler v. Cuyler, 2 Johns. 186; Phelps V. Johnson, 8 id. 54; Lane V. O wings, 3 Bibb, 247; Millett v. Hayford, 1 Wis. 401; Pveed v. Shaw, 1 Blackf. 245; McNeal v. Blackburn, 7 Dana, 170; Jackson v. Stackhouse, 1 Cow. 122, 13 Am. Dec. 514; Sewall V. Sparrow, 16 Mass. 24; Gibson v. Gibson, 15 id. 106, 8 Am. Dec. 94; Jones V. Quiunipiack Bank, 29 Conn. 25; Clark v. Bush, 3 Cow. 151; Dear- born V. Cross, 7 id. 48. § 140.] CIRCUITY OF ACTION. 377 tenant; it was held that the occupant, and not the owner, was liable to the town for such damages, and vfixs, prima facie liable to third persons suffering injury from any such defect; but if there be an express agreement between the landlord and tenant that the former shall keep the premises in repair, so that in case of a recovery against the tenant he would have his remedy over, then the party injured, to avoid circuity, may bring his suit in the first instance against the landlord.' § 146. Damages must be equal. If a deed contains recip- rocal covenants which are governed by the same rule of dam- ages one covenant may be pleaded in bar to another to avoid circuity of action. But where the covenants are distinct and independent they cannot be so pleaded, for the damages may not be commensurate and each party must recover against the ■other separate damages according to the justice of the case.^ This defense has been termed a setting off of one right of ac- tion against another.* It is available though the damages be unliquidated, but the damages on the two causes of action must be the same in amount as matter of law, and must so appear by ttie pleadings.^ In other words, a good plea in avoidance •of circuity of action must show that the sum which the de- fendant is entitled to recover from the plaintiff is necessarily the same as that in respect of which the plaintiff is suing. [222] The rigid severity and precision of this test are illustrated in the following case. By a charter-party it was agreed between the master and the charterers that one-third of the stipulated freight should be paid before the sailing of the vessel, the same to be returned if the cargo was not delivered at the port of destination, the charterers to insure the amount at the owners expense, and deduct the cost of doing so from the first payment of freight. The charterers paid the one-third freight, deduct- ing the premium for insurance. The vessel and cargo did not ■reach their destination. In an action by the charterers to re- 1 Lowell V. Spaulding, 4 Gush. 277; 3 Mayne on Dam. (6th ed.X p. 130. Payne v. Rogers, 2 H. Bl. 349. * Id. ; Turner v. Thomas, L. R. 6 C. -'Gibson v. Gibson, 15 Mass. 106, P. 610; De Mattos v. Saunders, 7 id. 112, 8 Am. Dec. 94; Guard v. White- 570: Walmesley v. Cooper, 11 A. & side, 13I1L 7; Millett v. Hay ford, 1 E. 216; Carr v. Stepliens. 9 B. & C. Wis. 401; Thurston v. James, 6 R. L 759; Connop v. Levy, 11 Q. B. 769. 103; Hovvland v. Marvin, 5 Cal. 501; Bac. Abr. Gov. L. 878 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 146.. cover the freight so paid, the owner pleadod that the loss of the part of the freight to be returned was such a loss as was by the charter-party to be insured against b}^ the charterers at the owners expense, and such insurance, if effected, would have indemnified the defendant against the loss of the freight stip- ulated to be returned ; that although the plaintiffs might, with the use of reasonable care and diligence, have effected an in- surance, whereby the defendant and the owner of the ship Avould have been fully indemnified against the loss of the one- third freight so to be returned, yet the plaintiffs effected the insurance so negligently and in such disregard of the usual course of business that the same became of no use or value, and the defendant, by reason of such improper conduct, had sus- tained damages to the amount of the said third freight so in- sured, and the plaintiffs thereby became liable to the defendant for the same, and liable to make good to him such amount as he should have to return to the plaintiffs under the charter- party, and any sum paid or returned by the defendant to the plaintiffs in respect of the freight would be the damage sus- tained by the defendant by reason of such improper conduct and deviation, and he would be damnified to that extent. The court held that the plea was bad inasmuch as the conclusion it drew was not warranted by the facts stated, for the liability of the plaintiffs in respect of their negligence in effecting the insurance was a liability for damages which were not neces- sarily identical in amount with the claim set up by them in their action. Jervis, C. J.: " It is not denied that the rule in question is plain and well ascertained, viz. : that to justify a de- fendant in setting up a demand in avoidance of circuity of [2'23] action he must show that the sura which he claims to be entitled to recover back is of necessity the identical sum which the plaintiff is suing for. The only difficulty arises from the application of the rule. I was somewhat struck by a difficulty arising from the allegation in the plea that, by and through the negligent and improper conduct of the plaintiffs in effecting the insurance, the insurance became of no use or value and the defendant thereby sustained damage to the amount of one-third of the freight so insured; and that the plaintiffs thereby be- came liable to the defendant for the same, . . . and liable to make good to the defendant such amount as he should have- § 146.] CIRCUITY OF ACTION. 379 to return to the plaintiffs under the charter-party; and that the sum paid by the defendant to the plaintiffs, or received by them, . . . would be the damages sustained by the de- fendant by reason of such improper conduct. But I think my brother Channell has relieved me from that difficulty by sug- gesting that it is a mere conclusion drawn from the previous allegations, — not a conclusion of law necessarily resulting from such previous allegations, one which a jury might or might not arrive at. I think that unless the judge would be bound to tell the jury that the amount which the defendant claims by his plea is necessarily the same amount as the plaint- iffs claim by their declaration the plea does not bring the case within the rule as to circuity of action. The case differs ma- terially from those which were cited, ... in which the defendant was bound to a liquidated and ascertained sum on the failure of the plaintiff to perform a duty. This is a matter which sounds in damages. The plaintiffs had under- taken to effect an insurance for the defendant with third per- sons; and it may be that in the result the defendant will be entitled to recover from the plaintiffs precisely the same amount of damages that the plaintiffs will recover in this ac- tion; but there are various circumstances which might by pos- sibility arise to reduce the damages in that action to a lesser or even to a nominal amount; and unless the defendant could negative all these possible circumstances, he could not make this a good plea." ^ 1 Charles v. Altin, 15 C. B. 46. these plaintiffs recover back the one- Crowder, J., doubted in this case. He third freight to-day and the defend- said: " I have entertained consider- ant were to bring a cross-action able doubts during the argument, against them, and to allege and prove and I must confess that these doubts what is stated in this plea, the jury are not altogether removed; and would be directed to give damages although my lord and my two learned to precisely the same amount." After brothers think otherwise, it is with quoting the language of Mr. Justice considerable reluctance that I should Washington in Morris v. Summerl, 3 come to the conclusion that the plea Wash. C. C. 203, he continued: "It is no answer to the declaration. The is not said that, as a positive matter rule as to the avoidance of circuity of law, he is responsible to that ex- of action is in my opinion a just and tent. It probably amounts to this, valuable one, and it is important that that the loss would be the reasonable a case should be brought within it if measure of damages. The learned possible. In point of fact and com- judge is referring to a course of deal- mon sense nobody can doubt that, if ing. The case before us arises upon 380 LEGAL LIQUIDATIONS AND KEDUCTIONS. [§§ 147, 148. [224] § 147. Reciprocal obligations. The reciprocal obliga- tions of the parties may be such that the action of one may be barred by a counter covenant which is not only a good de- fense on the ground of avoiding circuity of action, but also as a release. Of this nature is a covenant never to sue.^ To sustain a bar in that form, however, the contract must be technically such as to amount to a release. But the defense of circuity of action does not depend on the principle of a re- lease, but on the policy of the law against unnecessary litiga- tion and the convenience of admitting a party to his ultimate right by the shortest and most direct process. Section 2. MUTUAL credit. §148. Compensation by mutual demand. Mutual debts or credits do not compensate each other except when pleaded [225] under statutes of set-off, unless they are so connected that the parties have reciprocally the right to retain out of the moneys they owe the amount they are creditors for. Then the accounts are reciprocal payments, and no demand exists upon either side except for the net balance. This is the case w^here the demands of both parties are, with their mutual con- sent, brought into one account as debit and credit;- and also wherever a party has a lien on moneys in his hands or which he holds for the satisfaction of a cross-demand in favor of himself, as in the case of factors, brokers and others. In an a contract to insure the amount, — Johnson v. Carre. 1 Lev. 152; Harvey the precise amount, — which the v. Harvey, 3 Ind. 473; Reed v. Shaw, plaintiffs are claiming under the 1 Blackf. 245; Jackson v. Stackhouse, charter-party to have returned to 1 Cow. 122, 13 Am. Dec. 514; Phelps them; and the question is whether v. Johnson, 8 Johns. 54; Jones v. the breach of the engagement to in- Quinnipiack Bank, 29 Conn. 25; sure does not so clearly entitle the Walker v. McCuUoch, 4 Me. 421; defendant to recover from the plaint- Lane v. Owings, 3 Bibb, 247; Hast- iffs the precise sum which they by ings v. Dickinson, 7 Mass. 153, 5 Am. their action are seeking to recover Dec. 341; Shed v. Pierce, 17 Mass. 623. from him, as to warrant the plea. If See § 6. this had been a contract of indem- ^pond y, Clark, 47 Vt. 565; McNeil nitj-, there could have been no v. Garland, 27 Ark. 343; Sanfora v. doubt." Alston v. Herring, 11 Ex. Clark, 29 Conn. 457; Myers v. Davis, 822. 26 Barb. 367; Ang. on Lim., g 138. 1 Smith V. Mapleback, 1 T. R. 441; § 148.] MUTUAL CKEDIT. 381 early case a ship broker rocovered for his principal a sum of money for damages done to his ship by collision; the broker paid over all but his charges for services, and it was held in a suit by the principal for the reasonable sum so retained that the defendant had a right to it. The action was for money had and received, and it was said the plaintiff should not re- ceive more than he was in equity entitled to, and this could not be more than what remained after deducting all just allow- ances which the defendant was entitled to out of the very sum demanded; it was not in the nature of a cross-demand or mut- ual debt, but a charge which makes the sum received for the plaintiff's use so much less.^ In conformity to a natural equity that one debt shall com- pensate another, and for the convenience of commerce, the courts favor liens and recognize them, first, where there is an express contract; second, where one may be implied from the usage of trade; third, where it may be implied from the manner of dealing between the parties in the particular case; fourth, where the defendant has acted in the capacity of a factor.^ Where it was part of the contract between a servant and his master that the former should pay out of his wages the value of his master's goods lost by his negligence it [226] was an agreement that the wages were to be paid only after deducting the value of the things lost, and their loss was provable under the general issue. ^ So where by the custom of the hat trade the amount of injury done to hats in dyeing was to be deducted from the dyer's wages, evidence of injury from this cause was admitted in reduction of damages.'' iDale V. Sollet, 4 Burr. 2133; 1 ^Le Loir v. Bristow, 4 Camp. 134; Chitty's PI. 563; Rawson v. Samuel, Cleworth v. Pickford, 7 M. & W. 314. Cr. & Ph. 161; Green v. Farmer, 4 ^Bamford v. Harris, 1 Stark. 343. Burr. 2214; Patrick v. Hazen, 10 Vt. See Alder v. Keighley, 15 M. & W. 183: Saltus v. Everett, 20 Wend. 267; 119. In this case the bankrupt had MuUer v. Pondir, 55 N. Y. 325; Dres- given tlie defendant a bill drawn by ser Manuf. Co. v. Waterson, 3 Met. himself for 600Z., which the defend- 9; Turpin v, Reynolds, 14 La, 473; ant agreed to discount, retaining lOOZ. Holbrook v. Receivers, 6 Paige, 220. and the discount. He never paid the See Taft V. Aylwin, 14 Pick. 33G; bankrupt anything. The action was Schermerhorn v. Anderson, 2 Barb, brought by the assignees for breach 584; Citizens' Bank v. Carson, 32 Mo. of the agreement. The jurj' gave a 191. verdict for 495/., being the amount - Id. of the bill, minus the lOOZ. and dis- 382 legal liquidations and reductions. [§§ 149, 150. Section 3. mitigation of damages. § 149. Equitable doctrine of. Mitigation of damages is what the expression imports, a reduction of their amount; not by proof of facts which are a bar to a part of the plaintiff's cause of action, or a justification, nor of facts which constitute a cause of action in favor of the defendant; but rather of facts i| which show that the phiintiff's conceded cause of action does not entitle him to so large an amount as the showing on his side would otherwise justify the jury in allowing him. Facts [227] for mitigation are addressed to the equity of the law, and are admitted to assist in the application of the paramount rule that damages should not exceed just compensation unless the case calls for severity in the form of exemplary damages. But if a wrong is wilfully done courts are not inclined to allow the resulting damages to be mitigated by taking into account lawful acts of the wrong-doer which have benefited the other party.^ There are, however, few, if any, exceptions to the rule that any circumstance competent as evidence to reduce the damages may be proven on the trial for that purpose although it may not have been effective until after the suit was begun.^ § 150. Absence of malice. Matters may be proved in miti- gation which tend to excuse or justify the act complained of, though they are not a full excuse or justification. Thus, where the plaintiff was taken into custody for an offense not justify- ing an arrest, evidence of the offense was allowed to be given, for it was in the nature of an apology for the defendant's con- count. This was held correct, though of the bill, minus lOOZ. and discount, the bill had become worthless on ac- The bankrupt would have to receive count of the bankruptcy. Pollock, that sum, and his assignees are en- C. B., said: "If this had been an titled to recover the same amount action of trover for the bill, no doubt which he would be entitled to re- it would have been altogether a ques- ceive, had he continued solvent, by tion for the jury as to the amount of reason of the breach of contract." damages. So, also, if it had been an ^ Whorton v. Webster, 56 Wis. 356, accommodation bill, or the bank- 14 N. W. Rep. 280. See Ji 155. rupt's own bill. But this is not an - Marsh v. McPherson. 105 U. S. 709, action of trover, but of breach of 716; Gabay v. Doane, 77 App. Div. contract. The defendant promised 413, 79 N. Y. Supp. 312. to deliver to the bankrupt the amount § 151.] MITIGATION OF DAMAGES. 383 duct.' In trespass for false imprisonment the void warrant of arrest and proceedings had under it are admissible in evidence to disprove malice and prevent the recovery of exemplary dam- ages,^ but not to mitigate those which are compensatory.^ § 151. Words as provocation for assault ; agreements to fight. Although it is well settled that no words of provoca- tion whatever will justify the offended party in inflicting a blow upon the offender,* they generally constitute an excuse which will mitigate the damages, and may be proved for that purpose.^ But such provocation must be so recent as to induce the presumption that the violence was committed under the immediate influence of the passion thus excited.^ The lan- guage of the parties is often so immediately associated and identified with the transaction that it is impracticable to sup- press it in giving evidence of their conduct; and, indeed, the 1 Linford v. Lake, 3 H. & N. 276; Warwick v. Foulkes. 12 M. & W. 507; Wells V. Jackson, 3 Munf. 458; Paine V. Farr, 118 Mass. 74 ^ Woodall V. McMillan, 38 Ala. 622; Wells V. Jackson, 3 Munf. 458. 3 Lewis V. Lewis, 9 Ind. 105. See §.:; 1257, 1258. * Willey V. Carpenter, 64 Vt 212, 23 Atl. Rep. 630, 15 L. R. A. 853. 5 Prindle v. Haight. 83 Wis. 50, 52 N. W. Rep. 1134; Burke v. Melviii, 45 Conn. 243; Kiff v. Youmans, 86 N. Y. 324, 50 Am. Rep. 543: Bonino v. Caledonio. 144 Mass. 299, 11 N. E. Rep. 98: Frazer v. Berkeley, 7 C. & P. 789; Perkins v. Vaughan, 5 Scott N. R. 681; Thrall v. Knapp, 17 Iowa. 468; Lund V. Tyler, 115 Iowa, 236, 88 N. W. Rep. 333; Cushman v. Ryan, 1 Story, 91: Avery v. Ray, 1 Mass. 12; Lee v. Woolsey, 19 Johns. 319, 10 Am. Dec. 230; Maynard v. Beardsiey, 7 Wend. 560. 22 Am. Dec. 595; Genung v. Bald- wm, 77 App. Div. 584, 79 N. Y. Supp. 569; Rochester v. Anderson, 1 Bibb, 428; Mc Alexander v. Harris, 6 Munf. 465;McBridev. McLaughlin, 5 Watts. 375; Waters v. Brown, 3 A. K. Marsh. 557; Corning v. Corning, 6 N. Y. 97; Currier v. Swan, 63 Me. 323; Mat- thews V. Terry, 10 Conn. 455; Dele- van V. Bates, 1 Mich. 97; Saltus v. Kipp, 12 How. Pr. 342. See g§ 162, 1255. 6 Corning v. Corning. Rochester v. Anderson, supra; Ellsworth v, Thompson, 13 Wend. 658. A provocation in the morning does not mitigate an assault made in the afternoon of the same day. Kei-ser V. Smith, 71 Ala. 48, 46 Am. Rep. 342. And so with an assault made one day after the alleged cause. Gronan V. Kuckkuck, 59 Iowa, 18, 12 N. W. Rep. 748; Carson v. Singleton, 23 Ky. L. Rep. 1626. 65 S. W. Rep. 821. In Brooks v. Carter, 34 Fed. Rep. 505, the defendant gave the plaintiff thirty minutes in which to retract statements made by him, and on his declining to do so made an assault. There was too much deliberation to allow the facts to mitigate the dam- ages. In Irwin v. Porter, 1 Hawaiia, 159, a provocation given on Saturday was allowed to be proven in mitiga- tion of damages for an assault com- mitted the following Monday. 3Si LEGAL LIQUIDATIO^'S AND EEDUCTIONS. [§ 151. suppression of it, if practicable, would only tend to exhibit the transaction in false and deceitful colors.^ The law mer- cifully makes this concession to the weakness and infirmities of human nature, which subject it to uncontrollable influences [228] when under great and maddening excitement, superin- duced by insult and threats. But it wholly discountenances the cruel disposition which for a long time broods over hastily and unguardedly spoken words, and seeks, when opportunity offers, to make them an excuse for brutal behavior. "With such a temper it has no sympathy.^ The mitigating effect of a provocation in words is spent when there has been time for reflection, and for the passion excited by it to cool. Other antecedent facts, however, may be proved in mitigation, where they are connected with the acts complained of, and afford an explanation of the motives and conduct of the defendant, and show him less culpable than he would other- wise appear. Thus where the injury is inflicted in an attempt to prevent the execution of previous threats, the defendant may prove such threats in mitigation of damages, as conduc- ing to show that an excusable motive governed him, as well as the motives with which the other acted in the rencounter.^ In a case in Maine ^ there was an affray between the plaintiff and one of the defendants in the afternoon. In the evening of the same day the defendant assaulted the plaintiff at his own house. It was held that the defendants might show the fact of the affray in the afternoon, but not its details, in miti- gation of damages for the last assault. " It was to show the object and purpose of the second assault, or the state of mind with which it was done. Otherwise there would have been been nothing to indicate to the jury but that the house was entered for the purpose of robbery and plunder, or something of the kind. The fact of the previous affray might have some weight on the question of the amount of damages recoverable, 1 Cases cited in notes 5 and 6, p. 383. rent of decisions in this country for 2 Carson v. Singleton, 23 Ky. L. the past three-quarters of a century. Rep. 1626, 65 S. W. Rep. 821, quoting Gaither v. Blowers, 11 Md. 536. the text In Keiser v. Smith. 71 Ala. ^ Waters v. Brown, 3 A. K. Marsh. 481, 46 Am. Rep. 342, the text is 557; Rhodes v. Bunch, 3 McCord, 66; quoted, and the rules stated are said McKenzie v. Allen, 3 Strobh. 546. to be sustained by the uniform cur- * Currier v. Swan, 63 Me. 323. § 151.] MITIGATION OF DAMAGES. 385 and might legitimately be regarded as part of the transaction to be investigated in this suit." And in a case in Wisconsin^ it was held in an action for an injury to the person, committed in an affray, that evidence offered should have been received that the plaintiff for several years had frequently tried to pro- voke a quarrel with the defendant, and on various occasions tlireatened his life, some of these being made to the de- [229] fendant, and all of them brought to his knowledge before the occasion in question. The defendant may show that the parties fought by agree- ment;* but, the fighting being unlawful, the consent of the plaintiff does not defeat a recovery,' Where a battery pro- ceeds from a dispute in which the parties impugn each other's veracity courts have differed as to whether the defendant may prove in mitigation that his statement in the altercation was true. Such jjroof has been excluded in Indiana,* but in Mary- land where the parties disputed and blows ensued from ques- tioning each other's veracity the defendant was allowed to show that he told the truth.^ Proof by the plaintiff in aggra- vation of damages that the defendant threatened to beat him because he had circulated slanderous words concerning the defendant does not entitle the latter to give evidence that the plaintiff had in fact circulated the slander.^ Some question has been raised as to the extent to which damages may be mitigated by proof of provocation in words. Judge Story said they might be reduced to nominal when the words were 1 Fairbanks v. Witter, 18 Wis. 287, » Shay v. Thompson, 59 Wis. 540, 18 86 Am. Dec. 765. N. W. Rep. iT3, 48 Am. Rep. 538; Bell Where there lias been a persistent v. Hansley, 8 Jones, 131; Stout v. continuation and repetition of insults Wren, 1 Hawks, 420, 9 Am. Dec. 653; for the sole purpose of exciting and Lund v. Tyler, 115 Iowa. 236, 88 N. irritating another, and these have W. Rep. 333; McCue v. Klein, 60 Tex. been repeated from day to day, the 168, 48 Am. Rep. 260; State v. Burn- case is not to be controlled or limited ham, 56 Vt. 445, 48 Am. Rep. 801. by a few hours or a single day. Compare Galbraith v. Fleming, 60 Dolan V. Fagan, 63 Barb. 73. Mich. 408, 27 N. W. Rep. 583; Smith -i Willey V. Carpenter, 64 Vt. 212, v. Simon, 69 Mich. 481, 37 N. W. Rep. 23 AtL Rep. 630, 15 L. R. A. 853; 518. Adams v. Waggoner, 33 Ind. 531, 5 * Butt v. Gould, 34 Ind. 552. Am. Rep. 230; Logan v. Austin, 1 5 Marker v. Miller, 9 Md. 338. Stew. 476; Barholtv. Wright, 45 Ohio *> Rochester v. Anderson, 1 Bibb, SL 177, 4 Am St. 535, 12 N. E. Rep. 428. 185. Vol. 1 — 25 3SG LEGAL LIQUIDATIONS AND KEDDCTIONS. [§ 151. "very gross and reprc4iensible and calculated from the cir- cumstances to draw forth strong resentment." ^ This has been doubted,- but it seems to be supported by authority. When the wrong is done under circumstances arising without the plaintiff's fault, and these furnish a reasonable excuse for the violation of public order, considering the infirmities of human temper, there is no foundation for exemplary damages, but the plaintiff is entitled to compensation. But where there is a reasonable excuse for the violation of public order arising from the provocation or fault of the plaintiff, but not sufficient to entirely justify the wrong done, there can be no exemplary damages and the circumstances of mitigation must be applied to the actual damages.* Dixon, C. J.,^ said : " This seems to fol- low as the necessary and logical result of the rule which per- [2»iO] mits exemplary damages to be recovered. Where motive constitutes a basis for increasing the damages of the plaintiff above those actually sustained, there it should, under proper circumstances, constitute the basis for reducing them below the same standard. If the malice of the defendant is to be punished by the imposition of additional damages or smart money, then malice on the part of the plaintiff, by which he provoked the injury complained of, should be subject to like punishment, which, in his case, can only be inflicted by with- holding the damages to which he would otherwise be entitled. The law is not so one-sided as to scrutinize the motives and punish one party to the transaction for bis malicious conduct and not punish the other for the same thing; nor so unwise as not to make an allowance for the infirmities of men when smarting under the sting of gross and immediate provocation. If it were, then, as has been well said, it would frequently hap- pen that the plaintiff would get full compensation for damages occasioned by himself, — a result which would be contrary to every principle of reason and justice. And so I find the un- interrupted course of decision both in England and this country." ^ In opposition to this view there are several dis- 1 Cushman V. Ryan, 1 Story. 100. v. Baldwin, 77 App. Div. 584, 79 2 Birchard v. Booth, 4 Wis. 67. N. Y. Supp. 569; Irwin v. Porter, 1 SRobison v. Rupert, 33 Pa. 523; Hawaiia, 159. Reed v. Bias, 8 W, & S. 189; Ellsworth * Moreley v. Dunbar, 24 Wis. 183. V. Thompson, 18 Wend. 663; Genung ^ Citing Robison v. Rupert, 23 Pa. § 151.] MITIGATION OF DAMAGES. 387 sents including the supreme court of Wisconsin and other courts of high repute. The argument of Judge Dixon seems to the editor to be fully answered by the court of Vermont* which, like the other courts that deny that words of provoca- tion may mitigate compensatory damages, grant that they 533; Fraser v. Berkeley, 7 C. & P. 621; Millard v. Brown, 35 N. Y. 297; Finnerty v. Tipper, 2 Camp. 72; Avery v. Rae, 1 Mass. 11; Cushman -v. Ryan, 1 Story, 100; Gaither v. Blowers, 11 Md. 551, 552; Child v. Homer, 13 Pick. 503; Keyes v. Dev- lin, 3 E. D. Smith, 518; Rochester v. Anderson, 1 Bibb, 428; Lee v. Wool- sey, 19 Johns. 319, 10 Am. Dec. 230; Ireland v. Elliott, 5 Iowa. 478,68 Am. Dec. 715; Mayuard v. Beardsley, 7 Wend. 560, 22 Am. Dec. 595: Waters V. Brown, 3 A. K. Marsh. 557; Pren- tiss V. Shaw, 56 Me. 427, 96 Am. Dec. 475; Rhodes v. Bunch, 3 McCord, 65; McKenzie v. Allen, 3 Strobh. 546; Matthews v. Terry, 10 Conn. 459; Coxe V. Whitney, 9 Mo. 531 ; Collins V. Todd, 17 Mo. 539; Corning v. Corn- ing, 6 N. Y. 103; Willis v. Forrest, 2 Duer, 310; Tyson v. Booth, 100 Mass. 258; Marker v. Miller. 9 Md. 338; Bingham v. Garnault, Buller's N. P. 17. In Wilson v. Young, 31 Wis. 574, the subject was again under discus- sion, and a majoi'ity of the court held to a middle ground between the doctrine of Birchard v. Booth and Morely v. Dunbar — that in an action for assault and battery compensa- tory, as distinguished from punitive, damages are of two kinds: 1. Those wliich may be recovered for the actual personal or pecuniary Injury and loss, the elements of which are loss of time, bodily suffering, im- paired physical or mental powers, mutilation and disfigurement, ex- penses of surgical and other attend- ance and the like. 2. Those which may be recovered for injuries to the feelings arising from the insult or indignity, the public exposure and contumely, and the like. That com- pensatory damages of the first kind are to be determined without refer- ence to the question whether the de- fendant was influenced by malicious motives in the act complained of; and, on the other hand, evidence of threatening or aggravating langiiage or malicious conduct on the plaint- iff's part, not constituting a legal justification of the defendant's acts, cannot be considered in mitigation of such damages. That compensa- tory damages of the second kind de- pend entirely upon the malice of the defendant; and as evidence of such malice may be given to increase that kind of damages, so evidence of threatening and malicious words or acts on the plaintiff's part, just pre- vious to the assault, though not con- stituting a legal justification, should be admitted to mitigate or even de- feat such damages. The distinction above made between the kinds of compensatory damages is disap- proved of in Craker v. Chicago, etc. R. Co., 36 Wis. 657, 17 Am. Rep. 504. There are other Wisconsin cases which declare that " personal abuse which may have had something to do with inducing and bringing upon another an assault may be con- sidered by a jury in mitigation of damages. But a man commencing an assault and battery under such circumstances is liable for the actual damages which result. " Fenelon v. Butts, 53 Wis. 344, 10 N. W. Rep. 501; Corcoran v. Harran, 55 Wis. 120, 12 N. W. Rep. 468. See Yates v. New York, etc. R. Co., 67 N. Y. 100. 388 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 151. mitigate exemplary damages. " If provocative words may mitigate, it follows that they may reduce the damages to a mere nominal sum and thus practically justify an assault and battery. But why, under this rule, may they not fully justify ? If in one case the provocation is so great that the jury may award onl}'' nominal damages, why, in another in which the provocation is far greater, should they not be permitted to acquit the defendant and thus overturn the well settled rule of law that words cannot justify an assault. On the other hand, if words cannot justify they should not mitigate. A defendant should not be heard to say that the plaintiff was first in the wrong by abusing him with insulting words, and therefore, though he struck and injured the plaintiff, he was only partly in the wrong and should pay only part of the actual damages. If the right of the plaintiff to recover actual damages were in any degree dependent on the defendant's intent, then the plaintiff's provocation to the defendant to commit the assault upon him would be legitimate evidence bearing upon that ques- tion, but it is not. Even lunatics and idiots are liable for actual damages done b}'' them to the property or person of another,^ and certainly a person in the full possession of his faculties should be held liable for his actual injuries to another unless done in self-defense or under reasonable apprehension that the plaintiff was about to do him bodily harm. The law is that a person is liable in an action of trespass for an assault and battery, although the plaintiff made the first assault, if the defendant used more force than was necessary for his protec- tion, and the symmetry of the law is better preserved by hold- ing that the defendant's liability for actual damages begins with the beginning of his own wrongful act."^ The fact that the offending person in an action for assault and battery has been subjected to fine in a criminal prosecu- 1 See § 16. McBride v. McLaughlin, 5 Watts. 375; •-« Goldsmith v. Joy, 61 Vt. 488, 499, Donnelly v. Harris, 41 111. 126; Gizler 17 Atl. Rep. 1010, 4 L. R A. 500, 15 v. Witzel, 82 111. 322; Johnson v. Am. St 923; Grace v. Dempsey, 75 McKee, 27 Mich. 471; Prentiss v. Wis. 813, 43 N. W. Rep. 1127; Prmdle Shaw, 56 Me. 712; Mangold v. Oft, 63 V. Haight, 83 Wis. 50, 52 N. W. Rep. Neb. 397, 88 N. W. Rep. 507; Arm- 1134; Jacobs v. Hoover, 9 Minn. 204; strong v. Rhoades (Del.), 53 AtL Rep. Cushman v. Waddell, 1 Baldwin, 57; 435, § 152.] MITIGATION OF DAMAGES. 3S0 tion does not bar or mitigcate his liability to exemplary* or compensatory - damages in a civil action. This question will be more fully considered in the chapter on exemplary damages.' The character of the party assaulted cannot affect the damages which he is entitled to recover;^ nor can proof be made of the generally peaceable character of the defendant to rebut malice or mitigate the damages.* Immediately after the civil war the plaintiff, having [231] publicly and indecently exulted over the assassination of President Lincoln, was arrested, pursuant to a general order of the defendant as commander of a military department. The order w^as illegal but was issued without malice and was in- tended as a means of preserving the public peace. The plaint- iff was held not entitled to exemplary damages for his arrest and imprisonment, but, having been manacled and compelled to labor with other prisoners during the time he was held in custody, these circumstances were held to be good ground for enhancement of the damages.® § 152. Provocation in libel and slander. In actions for libel or verbal slander it may be proved in mitigation that tbere was an immediate provocation in the acts and declara- tions of the plaintiff.' The defendant cannot, however, prove such acts and declarations done or made at a different time or any antecedent facts which are not fairly to be considered part of the same transaction, however irritating and provoking they may be.^ It has been held that a criminatory retort made iHoodley v. Watson, 45 Vt. 289, ^Reddin v. Gates, 52 Iowa, 210,3 12 Am. Rep. 197; Cook v. Ellis, 6 N. W. Rep. 1079. Hill, 406. 41 Am. Dec. 757; McWill- CMcCall v. McDowell, Deady, 233; iams V. Bragg, 3 Wis. 424; Brown v. Roth v. Smith, 54 111. 431. S%vineford, 44 id. 282, 28 Am. Rep. •? Miles v. Harrington, 8 Kan. 425; 582; Wilson v. Middleton, 2 Cal. 54; Jauch v. Jauch, 50 Ind. 135; Beards- Corwin v. Walton, 18 Mo. 71, 59 Am. ley v. Maynard, 4 Wend. 33G; Moore Dec. 285. Contra, Smithwick v. v. Clay, 24 Ala. 235, 60 Am. Dec. 461 Ward, 7 Jones, 64, 75 Am. Dec. 453. Powers v. Presgroves, 38 Miss. 227 See § 402 and ch. 26. McClintock v. Crick, 4 Iowa, 453 -Id.; Reddin V.Gates, 52 Iowa, 210, Duncan v. Brown, 15 B. Mon. 186 2 N. W. Rep. 1079. Ranger v. Goodrich, 17 Wis. 78; Free- 3 Ch. 9. man v. Tinsley, 50 111. 497; Mousler v. -• Corning v. Corning, 6 N. Y. 97, Harding, 33 Ind. 176, 5 Am. Rep. 195. 104: Smithwick V.Ward, 7 Jones, 64; 8 Hamilton v. Eno, 81 N. Y. 116; Ward V. State, 28 Ala. 53. See § 94. Lee v. Woolsey, 19 Johns. 319, 10 Am- Dec. 230. 390 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 152. after three days is not part of the same transaction, nor when it has no relation to the previous publication and there is no [232] perceptible connection between them.^ It has also been held that where a party is sued for republishing a libelous article in a newspaper, and the republication is accompanied by remarks tending to a justification of the article, but not amounting to it, the defendant is not permitted to prove the truth of the remarks in mitigation of damages because the evi- dence would tend to prove the charge well founded; that evi- dence in mitigation must be such as admits the charge to be false.^ The defendant may show that he was drunk or insane when he spoke the words.* Upon common principles the general issue in an action on the case for slander would put in issue, not only the speaking of the slanderous words, but their alleged falsity and the malice. The early adjudications were in harmony with this view, but upon consultation of the judges in England about one hundred and seventy years ago it was resolved that in the future, if the defendant intend to justify, he shall plead his justification that the plaintiff may know what he has to meet.* The rule then promulgated has ever since prevailed in Eng- land and has been followed in this country.^ It has also ensued that, under the general issue in such actions, the defendant cannot prove the truth of the words spoken either to rebut malice or mitigate damages.^ It has been deemed as import- ant that the plaintifif should have notice that the truth of the iBeardsley v. Maynard, 4 Wend, lor v, Robinson, 29 Me. 323; Kay v. 336. See Graves V. State, 9 Ala. 448: Fredrigal, 3 Pa. 221; Jarnigan v. Maynard v. Beardsley, 7 Wend. 560; Fleming, 43 Mis& 710; Douge v. Lister v. Wright, 2 Hill, 320; Under- Pearce. 13 Ala. 127; Henson v. Veatch, hill V. Taylor, 2 Barb. 348; Richard- 1 Blackf. 369; Gilman v. Lowell, 8 son V. Northrup, 56 Barb. 105. Wend. 573; Wagstaff v. Ashton. 1 2 Cooper V. Barber, 24 Wend. 105. Harr. 503; Snyder v. Andrews, 6 3 Howell V. Howell, 10 Ired. 84; Barb. 43; Shirley v. Keathy, 4 Cold. Gates V. Meredith, 7 Ind. 440; Jones 29; Barns v. Webb, 1 Tyler, 17; Up- V. Townsend, 21 Fla. 431, 57 Am. degrove v. Zimmerman, 13 Pa. 619; Rep. 171. Contra, Mix v. McCoy, 22 Root v. King, 7 Cow. 613; Swift v. Mo. App. 488. Dickerman, 31 Conn. 285. * Underwood v. Parker, 2 Strange, « Knight v. Foster, 39 N. H. 576; 1200. Bailey v. Hyde, 3 Conn. 463; Swift 5 Bod well V. Swan, 3 Pick. 376; v. Dickerman, 31 Conn. 291; Shepard Knight V. Foster, 39 N. H. 576; Tay- v. Merrill, 13 Johns. 475. § 152.] MITIGATION OF DAMAGES. 391 words is intended to be proved when the purpose is mitigation of damages, as when the proof is intended for any other ob- ject.i In some jurisdictions, therefore, the defendant has been precluded from all proof under the general issue which [tJ33] implies the truth of the charge or tends to prove it.^ To get the opportunity to adduce any such proof he was required to plead the truth of the words as a justification; then if he suc- ceeded he was exonerated from all liability; but if he failed, the plea, being a repetition of the defamatory words, aggra- vated the damages, for malice was conclusively presumed.' In New York by such an unsustained plea the defendant was held to admit the malice on his part, and he could not resort to any defense based on its absence.* While he had technic- ally a right to introduce evidence in mitigation, still without a plea of justification he could establish no fact which would show that he had good reason to believe the charge to be true when the words were spoken, and if he put in the only plea which would give him a right to introduce such proof he lost the benefit of it by the stubborn presumption of malice unless his proof was sufficient to establish the truth of the charge. There was therefore very little scope for mitigation in that class of actions.* The injustice of such a rule induced the courts in some of the states, as well as in England, to admit proof of facts and circumstances tending to show the truth of the words spoken, but falling short of proving it; in other words, the defendant might show that he had reason to believe 1 Wolcott V. Hall, 6 Mass. 514, 4 an inference of express malice the Am. Dec. 173; Jarnigan v. Fleming, defendant may rebut that inference 43 Miss. 710; Treat v. Browning, 4 by explanatory evidenca Reiley v. Conn. 408, 10 Am. Dec. 156. Timme. 53 Wis. 63, 10 N. W. Rep. 5. 2 Oilman v. Lowell, 8 Wend. 573; Md.; Gorman v. Sutton, 32 Pa. Knight V.Foster. 39 N. H. 576; Moyer 247; Lamed v. Buffinton, 3 Mass. V. Pine, 4 Mich. 409; Regnier v. Cabot, 546,3 Am. Dec. 185; Robinson v. Drum- 7 111. 34; McAlexander v. Harris, 6 mond, 24 Ala, 174: Pool v. Devers, Munf. 465; Porter v. Botkins, 59 Pa. 30 Ala. 672; Downing v. Brown, 3 484; Chamberlin v. Vance, 51 Cal. Colo. 571; Cavanaugh v, Austin, 42 75; Pease v. Shippen, 80 Pa. 513, 21 Vt 576. Am. Rep. 116; Wormouth v. Cramer, < Oilman v. Lowell, 8 Wend. 573; 3 Wend. 395, 20 Am. Dec. 706; Mc- Purple v. Horton, 13 id. 9, 27 Am. Gee V. Sodusky, 5 J. J. Marsh. 185, 20 Dec. 167; Fero v. Ruscoe. 4 N. Y. 162. Am. Dec. 251. 5 See Bush v. Prosser, 11 N. Y. 347; If the plaintiff puts in evidence a Bisbey v. Shaw, 12 id. 67. fact not pleaded tending to create 392 LEGAL LIQUIDATIONS AND EEDUCTIONS. [§ 152. ■when he uttered the words that they were true.' Under this rule it has been allowed to be proved that there were reports [234] in the neighborhood that the plaintiff had been guilty of practices similar to those imputed to him,^ or that general reports that he was guilty of the very offense were, previouslj'' to the speaking of the words, in circulation.'^ But the defend- ant to mitigate damages and repel the presumption of malice cannot give in evidence facts of which he was ignorant at the time of uttering the words complained of.* The fact that re- ports were in circulation prior to the uttering of the words, to the effect that plaintiff was guilty of the offense imputed to him cannot generally be proven in mitigation in courts which admit pi'oof which is not full justification but which tends to show the truth of the words spoken.-^ The general character of the plaintiff at the time the defamatory words were spoken is uniformly deemed in issue, for it is the foun- dation of his claim for damages, and he is at all times, with- 1 Knobell v. Fuller, Norris' Peake Add. Cas. 32; v. Moor, 1 M. & S. 285; Leicester v. Walter, 2 Camp. 251; East v. Chapman, 2 C. & P. 570; Bailey v, Hyde, 3 Conn. 463, 8 Am. Dec. 202; Bridgman v. Hopkins. 34 Vt. 532; Williams v. Miner, 18 Conn. 464; Haywood v. Foster, 16 Ohio, 88; Wagner v. Holbrunner, 7 Gill, 296; Huson V. Dale, 19 Mich. 17, 2 Am. Rep. 66; Rigden v. Wolcott, 6 Gill & J. 413; Morris v. Barker, 4 Harr. 520: Galloway v. Courtney, 10 Rich. 414; Williams v. Cawley, 18 Ala. 206; Brown v. Brooks, 3 Ind. 518; Wilson V. Apple, 3 Ohio, 270; Minesinger v. Kerr, 9 Pa. 312; Van Derveer v. Sut- phin, 5 Ohio St, 293; Farr v. Rasco, 9 Mich. 353, 80 Am. Dec. 88. 2 V. Moor, 1 M. & S. 285. See oh. 34. 3 Calloway v. Middleton, 3 A. K Marsh. 372, 12 Am. Dec. 409; Ken- nedy V. Gregory, 1 Bin, 85; Treat v. Browning, 4 Conn. 408, 10 Am. Dec. 156; Case v. Marks, 20 Conn. 248; Bndgman v. Hopkins, 34 VL 532; Blickenstafif v. Perrin, 27 Ind. 527; Morris v. Barker, 4 Harr. 520: Hen- son V. Veatch, 1 Blackf. 369; Church V. Bridgman, 6 Mo. 190; Easter wood V. Quin, 2 Brev. 64, 3 Am. Dec. 700: Shilling V. Carson, 27 Md, 175, 92 Am. Dec. 632; Cook v. Barkley, 2 N. J. L. 169, 2 Am. Dec. 343; Wetherbee V. Marsh, 20 N. H. 561, 51 Am. Dec. 244; Bowen v. Hall, 20 Vt. 232; Fletcher v. Burroughs, 10 Iowa. 557; Sheahan v. Collins, 20 111. 325, 71 Am. Dec. 271; Kimball v. Fernandez, 41 Wis. 329. See ch. 34. 4 Bailey v. Hyde, 3 Conn. 463, 8 Am. Dec. 202; Hatfield v. Lasher, 81 N. Y. 246; Willower v. Hill, 72 id. 36; Barkly v. Copeland, 74 Cal. 1, 15 Pac. Rep. 307,5 Am. St. 413; Whit- ney V. Janesville Gazette, 5 Biss. 330; Edwards v. Kansas City Times Co., 32 Fed. Rep. 813. 5 Anthony v. Stephens, 1 Mo. 254; Fisher v. Patterson, 14 Ohio. 418; Wilson V. Fitch, 41 CaL 363; Bush v. Prosser, 11 N. Y. 347, 361. See Bowen V. Hall, 20 Vt. 232. § 153.] MITIGATION OF DAMAGES. 393 out special notice in the pleadings, supposed to be prepared to sustain it against any attack.^ 153. Samo subject. It is held in Michigan that where only the general issue is pleaded and evidence is offered in mitiga- tion tending to show the truth of the words spoken, the offer conclusively admits that the charge was false though at the time the defendant made it he believed it to be true. [235] Such an offer, under such pleadings, should be treated as in- volving a disclaimer of the truth of the words and a conclu- sive admission that they were not true; but not as inconsistent with the idea that the defendant at the time he uttered them may have believed them to be true. He therefore has a right to introduce any facts and circumstances tending to show grounds for such belief at the time of the speaking of the words.^ The same doctrine is held in Ohio. The whole reason of the rule for admitting such evidence is to relieve the defendant from the consequences which attach to malice in the speaking of the words. He may show particular acts of the plaintiff which, unexplained, gave him a just reason to believe the truth of the declarations which he uttered; but which, when ex- plained and understood, may be found to be compatible with the plaintiff's innocence. This is permitted upon the ground that the proof when introduced may serve to show that the defendant was mistaken in making the charge, that he miscon- strued the act or conduct of the party by supposing it to be criminal, while in fact it was not. When the testimony can have no other effect than to make apparent the plaintiff's guilt and prove the truth of the words spoken, its introduction to the jur}" must tend to justify the speaking; not to mitigate damages by showing the absence of malice. To be competent for the former purpose the facts relied on must be pleaded spe- 1 Buford V. McLuny, 1 N. & McC. well v. Swan, 3 id. 376; McNutt v. 2f)S; Sawyer v. Eifert, 2 id. 511, 10 Young, 8 Leigh, 543; Dewit v. Green- Am. Dec, 633; Douglass v. Tousey, 3 field, 5 Oliio, 225; Fitzgerald v. Stew- Wend. 353; Haraer v. McFarlin, 4 art. 53 Pa. 343; Powers v. Presgroves, Denio, 509; Pallet v. Sargent, 36 N. 38 Miss. 227; Warner v. Lockerby. H. 490; Sanders v. Johnson, 6 Blackf. 31 Minn. 421, 18 N. W. Rep. 145, 821; 53; Rhodes v. Ijams, 7 Ala. 574; Wol Maxwell v. Kennedy, 50 Wis. 645, 7 cott V. Hall, 6 Mass. 514, 4 Am. Dec. N. W. Rep. 657. 173; Moyer v. Moyer, 49 Pa. 310; ^Huson v. Dale, 19 Mich. 17, 2 Am. Alderman v. French, 1 Pick. 1; Bod- Rep. 06. 394 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 153. daily and cannot be given in evidence under the general issue.^ The rule has been far from universal that an unsustained plea of justification shall in all cases be deemed proof of malice or have the effect to exclude evidence of the absence thereof. Where a plea of justification is interposed without any expecta- tion of sustaining it, there is no reason why such deliberate rep- etition of the slander should not be taken into consideration in the assessment of damages. But it has not been deemed just to hamper a bona fide defense with the hazard of such a con- sequence as matter of law. Perley, C. J., said : " If he believed when he spoke the words that they were true, and makes a honafide defense to the action under the plea of justification, [236] we do not see why he should make it under the penalty of being punished by increased damages if he should fail to satisfy the jury of the fact any more than in other cases where a defendant does not succeed in a honafide defense. We think it should be left to the jury to decide the weight and character of the evidence introduced in support of the plea and the man- ner and spirit in which the defense is conducted ; whether the real object of the plea and evidence was to defend the action with reasonable expectation of success or to repeat the orig- inal slander." ^ These principles have now been established by statute in iriany states where the harsher rule formerly prevailed. In liTew York, as well as in many other jurisdictions having codes, it is provided that the defendant may allege both the truth of the matter charged as defamatory and any mitigating cir- cumstances to reduce the amount of damages, and whether he prove the justification or not he may give evidence of such circumstances. This statute does not mean that he must con- nect them together, that he cannot allege one without the other ; but that he should not be prohibited from alleging either ; 1 Reynolds v. Tucker, 6 Ohio St. Am. Dea 212; Chalmers v. Shackell, 516, 67 Am. Dec 353; Wilson v. 6 C. & P. 475; Sanders v. Johnson, 6 Apple, 3 Ohio, 270; Dewit v. Green- Blackf. 50, 36 Am. Dec. 564: Thomas field, 5 Ohio, 225; Haywood v. Foster, v. Dunaway,30 111. 373; Cummerford 16 Ohio, 88. V. McAvoy, 12 111. 311; Corbley v, 2 Pallet V. Sargent, 36 N. H. 496; Wilson, 71 111. 209, 22 Am. Rep. 98;. Byrkett v. Mouobon, 7 Blackf. 88, 41 Rayner v. Kinney, 14 Ohio St. 283. § 154.] MITIGATION OF DAMAGES. 395 accordingly the defendant, without pleading the truth of the words spoken, may allege facts tending to establish their truth and prove such facts in mitigation.^ If a pica of justification or in mitigation is interposed in bad faith, and for the purpose of injuring the plaintiff's reputation, the fact may be consid- ered by the jury.^ § 154. Mitigating circumstances in trespass and other actions. In trespass for levying on the plaintiff's proporty under an execution against a third party the defendant may show in mitigation of damages on a writ of inquiry, after judg- ment by default, that at and prior to the levy the property was in his possession, or that the plaintiff was not the owner; but he is estopped by the judgment from showing that the plaintiff had not such interest as would entitle him to maintain the suit.' Where a building was blown up without authority to [237] stay the progress of a conflagration, the fact was allowed to be shown; and the jury in estimating the damages, it was held, should consider the circumstances under which the buildintr and its contents were and their chance of being saved, even though not at the time on fire, and should determine the dam- ages with reference to the peril to which they were exposed.* So if a landlord enters to make repairs which are necessary and which the tenant ought to have made, but neglected to make, or if he enters to make repairs which he is bound to make, but which the tenant forbids him to make, the damages will be estimated with reference to these circumstances and will be less than if the entry were made without color of ex- cuse.* A person sued for entering and cutting down trees may show in mitigation a verbal license from the plaintiff,^ or, when sued for breach of a contract, that performance would have been useless.'' In actions for false imprisonment or ma- iBush V. Prosser, 11 N. Y. 347; Bis- Am, Dec. 506; Lowell v. Parker, 10 bey V. Shaw, 12 N. Y. 67. Met. 309, 43 Am. Dec. 436. 2Cruikshank v. Gordon, 118 N. Y. ^parsons v. Pettingell, 11 Allen, 178, 23 N. E. Rep. 457; Distin v. Rose, 507; Reed v. Bias, 8 W. & S. 189. 69 N. Y. 122; Bennett v. Matthews, See Workman v. Great Northern R. 64 Barb. 410. See Doe v. Roe, 33 Co.. 32 L. J. (Q. B.) 279, Hun, 62a 5 Reeder v. Purdy, 41 IlL 279. 3Sterrett v. Kaster, 37 Ala. 366; 6 Wallace v. Goodall, 18 N. H. 439. Squire v. Hollenbeck, 9 Pick. 551, 20 ^ Louisville & P. Canal Co. v. Rowan, 4 Dana, 606. 396 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 155. licious prosecution the fact that the defendant acted under in- structions of his employer will not mitigate damages.^ The ad- vice of counsel, if given lonajide, is a circumstance which may be considered to disprove malice and mitigate exemplary dam- ages,^ if it was given on a full disclosure of the facts.' The damages recoverable for the breach of a marriage promise are not lessened because the defendant withdrew his affections from the plaintiff without cause."* Any act done, no matter by whom, by which the injury resulting from a trespass is put an end to or mitigated may be proved.^ § 155. Plaintiff's acts and negligence. The acts and neg- ligences of the plaintiff which have enhanced the injury re- sulting from the defendant's act or neglect may be shown in mitigation of damacjes. The defendant is liable for the nat- ural and proximate consequences of his violations of contract and of his unlawful acts; but if the plaintiff has rendered these consequences more severe to himself by some voluntary act from which it w^as his duty to refrain, or if by his neglect to exert himself reasonably to limit the injury and prevent dam- age, in the cases in which the law imposes that duty, and thereby he suffers additional injury from the defendant's act, evidence is admissible in mitigation to ascertain to what extent the damages claimed are to be attributed to such acts or omis- sions of the plaintiff.^ If he omit to use his opportunities and ['i3S] does not reasonably exert himself to lessen the damages which may result from such act he is not entitled to compensation for the injury which he might and ought to have prevented, ex- cept to the extent of proper compensation for such measures or acts of prevention as the case required and were within his knowledge and power.'^ The measure of his duty in this regard 1 Josselyn v. McAllister, 22 Mich. Co., 118 Mo. 328, 23 S. W. Rep. 159, 300. quoting the text. 2 Fox V. Davis, 55 Ga. 298; Bohm nd.; Dietrich v. Hannibal & St. V. Dunphy, 1 Mont. 333. J. E. Co., 89 Mo. App. 36; Kumberger 3 Shores v. Brooks, 81 Ga. 468,13 v. Congress Spring Co., 158 N. Y. Am. St. 332, 8 S. E. Rep. 429. See ch. 339, 345, 53 N. E. Rep. 3; Warren v. 25. Stoddart, 105 U. S. 224; Goshen v. 4 Richmond v. Roberts, 98 III. 472. England, 119 Ind. 368, 21 N. E. Rep. 5 Alabama Midland R. Co. v. Cos- 977, 5L. K A. 253; Louisville, etc. R kry, 92 Ala. 254, 9 So. Rep. 202. Co. v. Jones, 108 Ind. 551, 9 N. E. Rep. •i Boggess V. Metropolitan Street R. 476; Sherman Center Town Co. v. § 155.] MITIGATION OF DAMAGES. )[)7 is ordinary care and diligence.' " To require one who has been injured to take "proper and immediate steps to prevent future consequences is demanding of him a degree of care and an in- fallibility of judgment which the most skilful physician does not possess."^ " An injured person who, from the circumstances, might reasonably believe that her injury was of a character that rest alone would afford a speedy recovery from, should not be required to incur the heavy expenses of nursing and medical attendance as a condition to her right of recovery of adequate damages."' If an injured person selects and uses all reasonably accessible means to cure his hurt and, for a time upon his own judgment and without medical advice, adopts and pursues such treatment as a physician of ordinary care, prudence and skill uses in treating a similar injury, his duty is fully discharged, though it appears that a more skilful treat- ment might have produced a more favorable result.* The rule which requires reasonable conduct on the part of one whose Leonard, 46 Kan. 354, 26 Am. St. 101, 26 Pac. Rep. 717; Miller v. Mariners' Cliurch, 7 Me. 51,20 Am. Dec. 341; Mather v. Butler County, 28 Iowa, 253; Maynard v. Maynard, 49 Vt. 297; Arden v. Goodacre, 11 C. B. 371; Howard v. Daly, 61 N. Y. 362, 19 Am. Rep. 285; Sutherland v. Wyer,67 Me. 64; V^illiams v. Chicago Coal Co., 60 111. 149: Benziger v. Miller, 50 Ala. 206; Dunn v, Johnson, 33 Ind. 54, 5 Am. Rep. 177; Keyesv. Western Ver- mont Slate Co., 34 Vt. 81; Cook v. Soule, 56 N. Y. 420; Campbell v. Miltenberger, 26 La. Ann. 72; Par- sons V. Sutton, 66 N. Y. 92; Bisher v. Ri(;hards. 9 Ohio St. 495; Dobbins v. Duquid, 65 111. 464; Hayden v. Cabot, 17 Mass. 169; Emery v. Lowell, 109 Mass. 197; True v. International Tel. Co., GO Me. 9; Grindle v. Eastern Exp. Co., 67 Me. 317, 24 Am. Rep. 31; Luse V. Jones, 39 N.J. L. 707; United States V. Smith, 94 U. S. 214; Bey- mer v, McBride, 37 Iowa, 114; Le Blanche v. London, etc. R. Co., 1 C. P. Div. 286; Hamlin v. Great North- ern R Co., 1 H. «& N. 408; Smeed v. Foord, 1 E. & E. 602; Fullerton v. Fordyce, 144 Mo. 519, 44 S. W. Rep. 1053; Uhlig v. Barnum, 43 Neb. 584, 01 N. W. Rep.749;Loomer v.Thomas, 38 Neb. 277, 56 N. W. Rep. 973; Packet Co. v. Hobbs, 105 Tenn. 29, 45, 58 S. W. Rep. 278: Nashua Iron & Steel Co. V. Brush, 33 C. C. A. 456, 91 Fed. Rep. 213, citing the test; Friedenstein v. United States, 35 Ct. of Cls. 1; Bickham v. Hutchin- son, 50 La. Ann. 765, 23 So. Rep. 902; Gooden v. Moses, 99 Ala. 230, 13 So. Rep. 765; Raymond v. Haverhill, 168 Mass. 382. 47 N. E. Rep. 101. Com- pare Wieting v. Millston, 77 Wis. 523, 46 N. W. Rep. 879, which is dis- approved in the Massachusetts case. 1 Louisville, etc. R Co. v. Falve}', 104 Ind. 409, 4 N. E. Rep. 908. 2 Fullerton v. Fordyce, 144 Mo. 519, 533, 44 S. W. Rep. 1053. 3 Kennedy v. Busse, 60 111. App. 440. See Williams v. Brooklyn, 33 App. Div. 539, 53 N. Y. Supp. 1007. 4 Packet Co. v. Hobbs, 105 Tenn. 29, 44, 58 S. W. Rep. 278. 59S LEGAL LIQUIDATIONS AND KEDUCTIONS. [§ 155. legal rights have been violated should not be invoked by a de- fendant as a basis for a critical examination of the conduct of the injured party, or merely for the purpose of showing that the injured person might have taken steps which were wiser or more advantageous to the defendant. Reasonably prudent action is required; not that action which the defendant, upon afterthought, may be able to show would have been more ad- vantageous to him.' In some states contributory negligence to a certain extent is not a defense if the defendant was also at fault. There such negligence diminishes the damages which the plaintiff may re- cover,^ except where the defendant has been responsible for a positive, continuous tort.^ In Tennessee the plaintiff's negli- gence may be considered in mitigation whether the defendant's conduct has been merely negligent or reckless and wanton.^ The rule requiring the wronged party to lessen the damage done has been held not to apply to a case of wilful injury. " Since one who has committed an assault and battery upon another cannot urge in his defense that the plaintiff might, by the use of due care, have avoided the battery, we think where the injury is intentional he should not be permitted to say in reduction of damages that the plaintiff might have pre- vented them at least in part by careful conduct on his part. If negligence contributing to the injury cannot be set up to defeat the action when the act of the defendant was wilful, by a parity of reasoning, the defendant in such a case should not ba permitted to say that, but for the negligence of the defend- ant in failing to avoid the consequences of the wrong, he would have suffered no damage, or only a part of the damages for which he claims a recovery." * 1 The Thomas P. Sheldon, 113 Fed. ^Satterfield v. Rowan, 83 Ga. 187, Eep. 779, 781. 9 S. E. Rep. 677. 2 Atlanta, etc. R. Co. v. Wyly, 65 * Railway Co. v. Wallace, 90 Tenn. Ga. 120; Hardin v. Ledbetter, 103 N. 52, 62, 15 S. W. Rep. 921. C. 90. 9 S. E. Rep. 641; East Tennes- * Galveston, etc. R. Co. v. Zant- see. etc. R. Co. v. Fain, 12 Lea, 35; zinger, 92 Tex. 365, 44 L. R. A. 553, Louis%nlle & N. R. Co. v. Conner, 2 48 S, W. Rep. 563, 71 Am. St. 859. Bax. 38'2; East Tennessee, etc. R. Co. The general subject of mitigation, V. Thompson, 12 Lea. 200; Railway or preventable damages, has been Co. V. Howard, 90 Tenn. 144, 19 S. considered in §§ 88-90. W. Rep. 116. § 15G.] MITIGATION OF DAMAGES. 399 § 156. Measures of prevention; return of property; dis- charge of plaintiff's debt. Acts of the plaintifl" or the defend- ant, and in some cases of third persons, by which the jtyr/witi facie loss or injury from the act complained of has been re- duced or partially compensated may be shown in reduction of damages. Measures of prevention taken by the plaintiff to prevent loss or to avert some of the consequences of the wrong complained of, and which have had an ameliorating effect, may be proved: and the damages will be mitigated, according to the particular facts, to the actual loss. Where goods have been taken from the owner, and sold by an officer who cannot justify for want of a plea or because his writ would not avail for that purpose, such officer or any person liable for his tort may show that the plaintiff bought the goods at the tortious sale for less than their value.' Whenever the owner recovers his property after any [239] wrongful taking or detention the expense of procuring its re- turn is the measure of damages, in the absence of special dam- age, if the property itself has not been injured or diminished in value. In other words, the wrong-doer is jprima facie liable for the value of property at the time he tortiously took or converted it, with interest; but if it has been returned and accepted by the owner its value then, or, if he has incurred ex- pense to recover it, then its value less such expense, will be deducted by way of mitigation from the amount which would otherwise be the measure of damages.^ Where one recovers 1 Forsyth v. Palmer, 14 Pa. 96, 53 Pick. 356; Lucas v. Trumbull, 15 Am. Dec. 519; Murray v. Burling, 10 Gray, 306; Perkins v. Freeman, 26 Johns. 175; Baker v. Freeman, 9 111. 477; Hallett v. Novion, 14 Johns. "Wend. 36, 24 Am. Dec. 117; Ford v. 273; Delano v. Curtis, 7 Allen. 470; Williams, 24 N. Y. 359; Baldwin v. Cook v. Hartle, 8 C. & P. 568; Ben- Porter, 12 Conn. 473; Hurlburt v. nett v. Lockwood, 20 Wend. 223, 32 Green, 41 Vt. 490; Mclnroy v. Dyer, Am. Dec 532; Burn v. Morris, 2 47 Pa. 118; Tamvaco v. Simpson, H. Cromp. & M. 579; Doolittle v. Mc- & R. 374; Kaley v. Shed, 10 Met. Cullough, 7 Ohio St. 299; Wheelock 317; Sprague v. Brown, 40 Wis. 612; v. Wheelwright, 5 Mass. 104; Cook v. Reynolds v. Shuler. 5 Cow. 323. Loomis, 26 Conn. 483; Hepburn v. '-i Leonard v. Maginnis, 34 Minn. Sewell, 5 Har. & J. 211, 9 Am. Deo. 506, 26 N. W. Rep. 733; Dailey v. 512; Sprague v. Brown, 40 Wis. (il 2: Crowley, 5 Lans. 301; Greenfield Ewing v. Blount, 20 Ala. 694; Hurl- Bank V. Leavitt, 17 Pick. 1, 28 Am. burt v. Green, 41 Vt. 490; Johannes- JDeo. 268; Pierce v. Benjamin, 14 son v. Borschenius, 35 Wis. 131; 400 LEGAL LIQUIDATIONS AND KEDUCTIONS. [§ 156. property which had been unlawfully taken he is considered as having accepted it in mitigation of damages upon the principle that he has thereby received partial compensation for the in- jury suffered.^ In an action of trespass for goods taken and carried away it appeared that the plaintiff, before suing, had demanded their return, and the defendant had promised to return them, but while preparing to do so they were attached on a writ against the plaintiff; it was held that the measure of damages was the same as though the defendant had re- turned them.- If restoration is obtained by the offer and pay- ment of a reasonable reward this amount, with interest from the time of payment, is to be deducted from the value of the property returned.^ Trouble and loss of time may be taken into consideration as part of the expense of obtaining restora- tion.* Where there is a diminution in value from any cause [2-1:0] intermediate the taking or conversion and return, the loss falls on the wrong-doer, and will lessen the mitigation to which he is entitled because of the return of the property.^ A mere offer to return will not lessen the damages ;'' nor will the tender of part of the value by an officer who has sold under a void process." A court may in a proper case, if the action is trover or trespass de honis, order the plaintiff to ac- cept the property in mitigation of damages, which will then be reduced to those actually sustained by the taking, with in- tervening: costs and losses.^ In an action for damages for Blewett V. Miller, 131 Cal. 149, 63 Pac. Rep. 157, quoting the text; First Nat. Bank v. Rush, 29 C. C. A. 333, 85 Fed- Rep. 539, citing the text. 1 Muenster v. Fields, 89 Tex. 102, 33 S. W. Rep. 852, affirming Fields V. Muenster, 32 S. W. Rep. 417, quot- ing the text; Kline v. McCandless, 139 Pa. 223, 20 Atl. Rep. 1045; Fields T. Williams, 91 Ala. 502, 8 So. Rep. 808; Dodson v. Cooper, 37 Kan. 346, 15 Pac. Rep. 200, quoting the text; Sgrague v. Brown, 40 Wis. 612; Lazarus v. Ely, 45 Conn. 504; First Nat. Bank v. Rush, 29 C. C. A. 333, 85 Fed. Rep. 539, citing the text; Mer- rill V. How, 24 Me. 126. 2 Kaley v. Shed, 10 Met 317; Low- ell V. Parker, id. 309, 43 Am. Dec. 436. 3 Greenfield Bank v. Leavitt, 17 Pick. 1, 28 Am. Dec. 268. * Johannesson v. Borschenius, 35 Wis. 131. 5 Lucas V. Trumbull, 15 Gray, 306; Perham v. Coney, 117 Mass. 102; Bar- relett v. Bellgard, 71 IlL 280; First Nat. Bank v. Rush. 29 C. C. A. 333, 85 Fed. Rep. 539. •> Norman v. Rogers, 29 Ark. 365; Stickney v. Allen, 10 Gray, 352. See Worman v. Kramer, 73 Pa. 378; Dow V. Humbert, 91 U. S. 294. 7 Clark V. Hallock, 16 Wend. 607. 8 Yale V. Saunders, 16 Vt. 243. § 157.] MITIGATION OF DAMAGES. 401 withhoUling or not conveying property, a tender of it or a part of it or a conve3'^ance of the whole or a portion of it may be allowed at the trial in mitigation, if under the circum- stances such a course is reasonable.^ But this cannot be done in actions of assumpsit for breach of contract.- By a wrongful conversion of property a cause of action arises which cannot be discharged except by the owner's act.^ And his acceptance of a return of it is in general required to relieve the wrong- doer of any part of his liability for the value; but as damages in trover are assessed on equitable principles, as is the allow- ance of mitigations generally, if property wrongfully taken or its proceeds have been applied to the payment of the plaint- iff's debts, or otherwise to his use, though without his direc- tion or consent, such application may, under certain circum- stances, be received in mitigation. An executor de son tort may show that he has applied the proceeds of the property with which he intermeddled in payment of the debts of the deceased.* § 157. Same subject. Where a guardian, having no power to commit waste by cutting and removing timber, unauthor- izedly gave a license to another to commit such waste, and the latter, with the former's assent, applied the proceeds of the timber to the payment of taxes upon or debts against the in- fant's estate, such payments were allowed to be shown by hira in mitigation.* But it has been held that a voluntary pur- chaser from an executor de son tort, when sued in trover by the rightful representative, cannot show in mitigation of dam- ages that since his purchase the executor de son tort has paid debts which the administrator was bound to pay in due course of administration.^ A defendant in an action of trespass de honis 1 Towle V. Lawrence, 59 N. H. 501. » Probate Court v. Bates, 10 Vt. 2 Colby V. Reed, 99 TJ. S. 560. 285: Torry v. Black, 58 N. Y. 185. 3 Livernaore v. Northrup, 44 N. Y. ^ Carpenter v. Going, 20 Ala. 587. 107; Franke v. Eby, 50 Mo. App. 579; In this case Dargan, C. J., said: "But Clark V. Brott, 71 Mo. 475. the question is, can the purchaser * Mountford V. Gibson, 4 East, 441; from the executor de son tort be Saam v. Saam, 4 Watts, 432; Hostler substituted to this equitable defense V. Scott, 2 Haywood, 179; Cook v. that the executor de son tort might Sanders, 15 Rich. 63, 94 Am. Dec. himself make? We think he cannot, 136; Hanson v. Herrick, 100 Mass. at least in a court of law. We do 323; Perry v. Chandler, 2 Cush. 237. not intend to deny the common say- VOL. 1 — 26 402 LEGAL LIQUIDATIONS AND EEDUCTIONS. [§ 157. asportatis who is a mere trespasser cannot take any benefit from the application to the plaintiff's use of property seized by him without the latter's express or implied authority or consent, although a lien held by a third party thereon is sat- isfied.^ "One who has wrongfully taken property cannot mitigate the damages by showing that he has himself applied the property to the owner's use without his consent; but when the property has been so applied by the act of a third person and the operation of law, that fact should be taken into the account in estimating the plaintiff's damages."^ In trover by the mortgagee of crops against a purchaser with notice, or in a special action for damages in the nature of trover, the un- authorized sale and conversion being admitted, the defendant cannot prove in mitigation of damages that a part of the pro- ceeds of the sale received by the mortgagor was applied by him to the discharge of a lien for rent which was superior to the mortgage.^ \ ing that trover is an equitable action and that the plaintiff can recover damages only to the extent of the injury actually sustained; as if the mortgagee bring trover against the mortgagor he can recover only the amount of the debt; or if the goods be sold illegally to discharge a lien the owner can recover of the pur- chaser only the value of the goods, deducting the value of the lien. But we hold that this equity or right must be personal to the defendant himself; that is, it must have existed in him at the time he became liable to the action: or if acquired after- wards it must have been acquired by his own act; for at law he cannot be subrogated to the equities of an- other which have sprung up after the liability of the defendant has be- come perfect." iBird V. Womaclc. 69 Ala. 390; McMichael v. Mason, 13 Pa. 214 (wrongful levy by sheriff); Dallam v. Fitler, G W. & S. ;323; Hundley v. Chadick, 109 Ala. 575. 584. 19 So. Rep. 845, citingthe text, and disapproving a statement in City Nat. Bank v. Jeffries, 73 Ala. 123, to the effect that if it be shown that the property at- tached has yielded its full value, this may be considered in mitigation of damages. 2 Higgins v. Whitney, 24 Wend. 379. 3 Keith V. Ham, 89 Ala, 590, 7 So. Eep. 234. The court say: Had this action been against the mortgagor, there would have been more force in the position that the damages should be mitigated, for it was his dut}- to discharge the landlord's lien for rent; or had the case involved the general ownership of the property, and it appeared that the fruits of the conversion had been applied by the consent, express or implied^ of the plaintiff, or through legal pro- ceedings, had at the instance of a third person, to the payment of his debt, or in relieving his property from a lien, the damages recoverable by him in trover might be mitigated by the amount thus paid. Bird v. Womack, 69 Ala. 392; Street v. Sin- § 157.] MITIGATION OF DAMAGES. 40J Where a tax collector became a purchaser at a sale [2-tl] made by him the sale was declared voidable in trover against him; but as the proceeds were applied to pay the plaintiff's tax the amount so paid was deducted from the damages. ^ So a sale by a sheriff without giving notice has been held a con- version, but the damages should be only the diminution of price caused by such omission.- If goods are tortiously taken and a creditor of the owner afterwards attaches and disposes of them according to law, and applies the proceeds in satis- faction of a judgment against the owner, such proceeding may be shown, not as a justification of the taking but in mitigation of damages. This is because it would be palpably unjust for the owner to receive the full value of his goods in their appli- cation to the payment of his debts, and afterwards recover clair. 71 id. 110. Or, had a recovery been had in favor of the landlord against tlie defendant, it may be that evidence of that fact naiglit go in re- duction of the mortgagee's damages. But here, even concetling that the payment was in some sort to the ad- vantage of the plaintiff, we cannot conceive how that fact will avail tlie defendant in this action, the grav- amen of which is the wrongful pur- chase and possession. The wrong was fully consummated, the injury resulting from it had been sustained, and the plaintiff's right to sue had attached before the alleged payment to the landlord. The payment was not made by the defendant, but by the mortgagor. To hold that he is entitled to a credit for the amount would be to subrogate him to an equity created, if it exists at all, by an act with which he had no connec- tion and to give him the benefit of a payment which he has not made. If personal property is sold under a condition that the title shall be and remain in the vendor until a note given for the purchase price of it is fully paid, a purchaser of a part of such property who is chargeable with notice of the Contract is liable to the original vendor for the value of the property purchased, and can- not claim a mitigation of the dam- ages because the money he paid his vendor was by him paid to the owner and indorsement thereof made on the note he held. The person in whom was the title had a right to the whole security until his demand was fully paid. That was not affected by the diminution of the debt by payments. Defendant's vendor had no right to dispose of the property in order to make a payment. The wrong to the plaintiff, resulting from the sale and conversion, was to di- minish his security. If the proceeds of the property sold had paid the whole debt, there would be good rea- son for mitigating the damages, al- though the sale took place before the debt was paid; but under the facts the mitigation would not benefit the plaintiff because, though the debt due him was lessened, he had lost an equivalent amount of property. Mor- gan v. Kidder, 55 Vt. 3G7. 1 Pierce v. Benjamin. 14 Pick. 356. ^Wright v. Spencer, 1 Stewart, 576, 18 Am. Dec. 76. 404 LEGAL LIQUIDATIONS AKD REDUCTIONS. [§ 157. that value from another who has derived no substantial benefit from his property. This rule is not only in conformity with justice, but has the sanction of authority.^ It is not the fact [242] of the seizure that gives the defense, but that it has been seized under such circumstances that the owner has had or 1 Scanlan v. Gulling, 63 Ark. 540, 39 S. W. Rep, 713; Curtis v. Ward, 20 Conn. 204 In the last case Ward, an attaching creditor, and the officer who exe- cuted the writ, were defendants. Ward sued out an attachment and attached property, after which that writ was abandoned and the in- dorsement of service erased. Sub- sequently a new attachment was sued out, followed by judgment and execution, on which the goods were sold. The defendant in the execution brought trover for the original tak- ing. As the defendants could not justify that taking by any return vipon the first attachment they suf- fered judgment by default, but they were allowed to show the subse- quent disposition of the property in mitigation, on the authority of pre- vious cases cited. Baldwin v. Por- ter, 12 Conn. 473; Clark v. Whitaker, 19 id. 330. Referring to the cases in New York denying the benefit of such mitigation to the wrong-doer when the sale is made upon process sued out by his agency or for his benefit, Waite, J., said: "We are un- able to yield our assent to the cor- rectness of that doctrine as applied to a case like the present, where there has been a legal appropriation of the property. Ward, the defend- ant, had a legal right to attach the goods in question; and as they were subsequently legally appropriated to the payment of the plaintiff's debt, he has in that way received the full value of his property. The defend- ants admit that they have commit- ted a trespass in taking the goods; and that they are liable to pay the plaintiff all the damage he has sus- tained thereby, and no more. These are for the original taking and de- tention until the second attachment. Beyond this they have done him no wi"ong. He has no more right to complain of a second attachment than he would if made by any other creditor, or if there had been no previous taking of the property. When the goods were attached the second time the copy left in service with him showed their situation. It was then at his option to regain the possession either by writ of re- plevin or by the payment of the debt upon which they were attached, or suffer them to be applied in satisfac- tion of that debt. Had he obtained his goods in either of the former modes it would hardly be claimed that he could afterwards recover their value of the defendant. The same result ought to follow if he suf- fered them to be applied in due form of law to the payment of his debt." See Wehle v. Butler, 61 N. Y. 245, which was apparently a similar case, in which the New York doctrine was applied and mitigation denied. See Bates v. Courtwright, 36 111. 518; Wannamaker v. Bowes. 36 Md. 42; Squire v. Hollenbeck, 9 Pick. 551, 20 Am. Dec. 506. The defendant in trespass for the wrongful levy of an attachment may show in mitigation that the property which he wrongfully took from the plaintiff has been applied for the benefit or advantage of the owner thereof, and it is immaterial that such defendant was not the plaintiff in the attachment suit. Grisham v. Bod man, 111 Ala. 194, 20 So. Rep. I 157.] MITIGATION- OF DAMAGES. 405 could have the benefit of it.^ But in Xew York, as the law is settled, to protect the wrong-doer or to entitle him to prove such sale and application of proceeds in mitigation the seizure must be at the instance of a third person and not at the in- stance of the wrong-doer or upon process in his favor.^ Where the wrong-doer is not thus excluded by the policy of the law in reprobation of his tort from the benefit of such mitigation it is generally available to him.^ If animals are killed through negligence it is the duty of their owner, if their carcasses are of any appreciable value for any purpose, to use such measure of diligence, as is reasonable considering the circumstances, to realize for them all they are worth. If he fails to do so their net value must be estimated and deducted from the damages claimed.* Where two ships were injured in a collision, the liability of one for the damage being admitted, and the injured ship was dry docked for repairs, and while in dock had her bottom cleaned and painted, and her bilge keels fitted, things the doing of which had been contemplated, but not decided upon, before the collision, and the doing of which in no way delayed or otherwise interfered with the making of the repairs, the wrong-doer was not entitled to a reduction of the dock charges because of these facts.'* There is no principle of law which requires a person to contribute to an outlay merely because he had derived a material benefit from it." Nor is one who has been injured in his right of property to receive less than com- pensation because he did not contemplate the full use of the property, as where water at a dam was appropriated.'' 514, citing Squire v. Hollenbeck, 9 Wetmore v. San Francisco, 44 Cat 294, 300. Britton v. Bishop, 11 Vt. 70; Bischof 7 Thame v. Boast. 12 Q. B. 808; v. Lucas, 6 Ind. 26; Moore v. Mc- Beudit v. Annesley, 27 How. Pr. 184. Nairy, 1 Dev. 319; NichoU v. Will- 8 Belknap v. Godfrey, 23 Vt. 28a lams, 2 M, & W. 758. See McKyring ^ Thame v. Boast, supra; Dana v. V. Bull, 16 N. Y. 297. Sessions, 46 N. R 509; Bank v. In Plevin v. Henshall, 10 Bing. 24, Brackett, 4 id. 558. II § 1G8.] KKCOUPMKNT AND COUNTER-CLAIM. 425 part of the plaintiff's claim in satisfaction, by set-off, of cross- demands of the defendant growing out of the same contract or transaction on which the claim is founded. The same thing is meant by defalcation and discount. Literally under- stood, recoupment would include mere mitigation of damages, and the instances of this defense in the old books are mostly •of that nature.^ In the endeavor to reduce the controversy to a single point or issue very little scope was given by the early common law to defenses which rested on the principle of allowing cross-claims in favor of the defendant. At one time it was doubted that in an action on a quantum meruit for services the defendant was entitled to reduce the damages by showing that the work had not been well done.^ The allowance of such defenses was the result of a con- [262] sultation of the judges in England. In an action of that char- acter Lord Ellenborough said: " This is an action founded on a claim for meritorious services. The. plaintiff is to receive what he deserves. It is therefore to be considered how much he deserves, or if he deserves anything. If the defendant has derived no benefit from his services he deserves nothin":, and there must be a verdict against him. There was formerly con- siderable doubt on this point. Mr. Justice BuUer thought (and I, in deference to so great an authority, have at times ruled the same way) that in cases of this kind a cross-action for the negligence was necessary; but that if the work be done the plaintiff must recover for it. I have since had a con- ference with the judges on the subject, and now I consider this as the correct rule: that if there has been no beneficial service there shall be no pay; but if some benefit has been derived, though not to the extent expected, this shall go to the extent of the plaintiff's demand, leaving the defendant to 1 Dyer, 2; 8 Vin. Abr. 556-7; proof under the general issue of mit- Croke's Eliz. 631; Taylor v. Beal, igating circumstances connected Croke's Eliz. 222; Shetelworth v. with or growing out of the transac- Neville, 1 T. R. 454. tion upon which the plaintiff's claim The Illinois court must have had is based, showing that it would be in mind the older meaning of the contrary to equity and good con- word when it said that " recoup- science to suffer the plaintiff to re- nieut, in its strict common-law cover the full amount of his claim." sense, is a mere reduction of the Wadhams v. Swan, 109 111. 46. 62. -damages claimed by the plaintiff by ^farnsworth v.Garrard.l Camp.38. 42G LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 108.. his action for the negligence.'" He also remarked that where a specific sum has been agreed to be paid by the defendant " the phxintiff may have some ground to complain of surprise if evidence be admitted to show that the work and materials provided were not worth so much as was contracted to be paid because he may only come prepared to prove the agree- ment for the specified sum and the work done, unless notice be given to him that the payment be disputed on the ground of the inadequacy of the work done. But where the plaintiff comes into court upon a quantum raeridt he must come pre- pared to show that the work done was worth so much, and therefore there can be no injustice in sufi'ering the defense to be entered into even \vithout notice." ^ The right to make such defenses is no longer in question; the plaintiff must show his performance of a condition precedent as a basis of the re- covery either of an agreed sum or on a quantum Tneruit, and there is included in the mere right to make a defense the right to rebut the evidence of performance, and where the value is not fixed by agreement the amount reasonably due for such performance. In such cases, to the extent that the plaintiff's [263] recovery proceeds on proof of performance or its rea- sonable value, the defendant, if he dispute either as shown by the plaintiff, must defend, or lose all right to contest the con- clusions so arrived at or to redress for the deficiencies of the performance.^ The direct defense by negativing the facts which the plaintiff assumes to prove to measure his compensa- tion, or those which, on the theory of his action, enter into the price and fix the amount of damages, is not recoupment,* nor is a defense which consists of a denial of facts which the plaintiff must prove to maintain his action, as the perform- ance of a condition precedent.^ The defense which is al- 1 Basten v. Butter, 7 East, 479. Ass'n, 68 N. H. 437, 36 Atl. Rep. 13, "The doctrine of recoupment is in 73 Am. St. 610. general applicable whenever in the ^ Basten v. Butter, supra. trial of the plaintiff's action an in- 3 Xellogg v. Denslow, 14 Conn. 411; vestigation of the facts on which the Davis v. Tallcot, 12 N. Y. 184 claim of the defendant depends is * Steamboat Wellsville v. Geisse, 8 necessary. The law does not com- Ohio St. 333. pel parties to bring two actions ^ Thompson v. Richards, 14 Mich, when, with equal convenience, their 178; Stoddard v. Tread well, 26 Cal. rights can be settled in one." John- 294 son V. White Mountain Creamery § 161).] RECOUPMENT AND COUNTEE-CLAIM. 427 lowed under the name of recoupment is not a keeping back a part of the \>lamt\ff's2J?'i}nufacie damage on the case he seeks to establish by evidence of the character explained under the title " mitigation of damages," but a reduction of the plaint- iff's recovery by the allowance against him in his action of damages due the defendant on a substantive cause of action in his favor, growing out of the same transaction on which the plaintiff's claim or demand arises. § IGl). Same subject. Until near the close of the eight- eenth century the strict rules of the common law as to the in- dependency of covenants and the entiret}' of conditions were rigidly enforced. A defendant sustaining damages from the breach of any counter or reciprocal obligation in the contract sued upon was put to his cross-action, unless he had made the performance of such obligation strictly a condition precedent to iiis undertaking to the plaintiff.^ These rules were often at- tended with hardship, as where the plaintiff was insolvent and unable to respond afterwards or in a separate action. Thus, in an action for breach of a covenant to recover unliquidated damages the defendant pleaded set-off of like damages for the plaintiff's breach of his covenants in the same instrument. This defense was urged on grounds which now support recoup- ment. It, however, was rejected without any allusion to the right of recoupment because the statute of set-offs only applied to mutual debts, which did not include demands for un- [264] liquidated damages.^ Until this species of defense had become firmly established the severe adherence to the old practice was in no cases more marked than in actions between landlord and tenant; — the former was allowed to collect his rent, notwith- standing his covenant to repair remained unperformed, even if he was himself insolvent.' The doctrine of recoupment has attained its growth since the revolution; but the courts of this country and of England have not given it the same expansion ; nor has it made the same progress in all the states of the Union.* In New York the defense was at first admitted in mitiga- 17 Am. L. Review, 392. *See Johnson v. White Mountain 2 Howlet V. Strickland, 1 Cowp. 56. Creamery Ass'n, 68 N. H. 437, 36 AtL s Taylor's Landlord & T., g 373; 7 Rep. 13, 73 Am. st 610. Am. L. Review, 393. 428 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 170. tion of damages where there was fraud in respect to the con- sideration ; ^ next where there was breach of warranty with- out fraud.2 At this time it elicited increased discussion and received more emphatic judicial recognition. Marcy, J., said: " From an examination of the cases I am satisfied that in those where the damages arising from a breach of warranty in the sale of chattels have been allowed to be given in evidence by the defendant to reduce the amount of recovery below the stipulated price, the decisions of the court have not proceeded upon the ground that the express contracts were void by rea- son of fraud, and a recovery had upon a quantum meruit or quantum valehat upon implied contract; but upon a principle somewhat different from those adverted to in this case in the court below; upon a principle which has of late years been gaining favor with courts and extending the range of its opera- tions. Such a defense is admitted to avoid circuity of ac- tion." Hence he insisted, and the court decided, that dam- ages arising from breach of warranty should be allowed to reduce the recovery as well where there was no fraud as where there was. So true was it that this new principle of avoiding circuity of action " was gaining favor with the courts and ex- tending the range of its operations," that the discrepancies at any given time to be noticed between the decisions of courts ['i65] of different states have indicated a relative progress rather than a permanent disagreement.' § 170. Nature of defense. This defense is founded on the natural equity that mutual demands growing out of the same transaction should compensate each other by deducting the less from the greater and treating the difference as the sum justly due.* It is also founded on the policy and convenience of settling an entire controversy in one action where it can be justly done, thus saving needless delay and litigation. By proper pleading, in the application of the doctrine of recoup- 1 Becker v. Vrooman, 13 Johns, is now universally in force either 303. by statute or otherwise: though in 2 Spalding v. Vanclercook, 2 Wend, some states, in controversies at law 431; McAllister v. Reab, 4 Wend. 483. where title to real estate is involved, 3 The principle of recoupment, un- the doctrine is not applied. der various names, has been adopted * Green v. Farmer, 4 Burr. 2214, in the general jurisprudence of this 2320; Reab v. McAlister, 8 Wend. 109, country. And it is believed that it 115; Myers v. Estell, 47 Miss. 4, 17-21. A § ITO.] RECOUPMENT AND COUNTER-CLAIM. 429 mcnt, the court may look through the whole contract, treating it as an entirety, and the things done and stipulated to be done on each side as the consideration for the thinirs done and stipulated to be done on the other. "When either party seeks redress for the breach of stipulations in his favor the grievances on each side are summed up, instead of those only on the plaintid's side; a balance is struck, and the plaintiff can recover only when that balance is in his favor.' Some confusion has arisen from treatinir this defense as one of failure of consideration.' In an Ala- bama case^ the plaintiff sued on a note which had been given for a clock sold by him to the defendant with warranty that it would keep good time. The clock was shown to be worth- less as a time-piece; but the case alone was worth more than a nominal sum, and it was held that the plaintiff might claim an abatement on the note to the amount of damage that he had sustained. Having kept the clock, however, judgment must go against him for what it was actually worth. [200] By this decision the breach of warranty avoided the special contract and recovery proceeded on a quantum meruit.^ This 1 Lixf burrow v. Henderson, 30 Ga. the consideration for the defendant's 482; Myers v. Estell, 47 Miss. 4. promise." Keegan v. Kinnare, 123 2 The courts of Illinois indorse the 111. 280. 14 N. E. Rep. 14; Lyon v. view of Mr. Freeman as expressed in Bryant, 54 111. App. 331. See Wat- his note to Van Epps v. Harrison, 40 kins v. Hopkins, 13Gratt. 743. Corn- Am. Dec. 323: "In its modern appli- pare Perley v. Balch, 23 Pick. 283, 34 cation the foundation of recoupment Am. Dec. 56; Comparet v. Johnson, is failure of consideration. The de- 6 Blackf. 59; Herbert v. Ford, 29 Me. fendant in effect admits his failure 546; Drew v. Towle, 27 N. H. 412, 59 to perform the contract upon which Am, Dec. 380; V^heat v. Dotson, 12 he issued, and seeks to extenuate Ark. 699; Van Buren v. Dig<^es, 11 his default by showing that the How. 461; Van Epps v. Harrison, 5 plaintiff iias failed in some particu- Hill, 63; Withers v. Greene. 9 How. lar to do that which was the consid- 213; Wynn v. Hiday, 2 Blackf. 123: eration of the defendant's promise, Elminger v. Drew, 4 McLean, 388; and to tliat extent, therefore, the Washburn v. Picot, 3 Dev. 390; Pul- plaintiff has no right to hold the de- sifer v. Hotchkiss, 12 Conn. 234; fendant liable; hence it is essential Avery v. Brown, 31 Conn. 398; Peden that the wrong of which the defend- v. Moore, 1 Stew. & Port. 71. ant complains should in some way 3 Davis v. Dickey, 23 Ala. 848; impair the consideration of his con- Grisham v. Bodman, 111 Ala. 104, 20 tract — in other words, it must ap- So. Rep. 514. pear that the express or implied ^ Harman v. Sanderson, 6 Sm. & M. promise broken by the plaintiff was 41, 45 Am. Dec. 272, 430 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 170. is in accordance with the English rule; the damages are re- duced b}' showing how much less the article is worth by rea- son of the breach of warranty; in other words, the plaintiff having failed to perform the agreement which was the con- sideration of the defendant's promise, the judicial inquiry is what is the property or service which the defendant has re- ceived worth. Thus, A. sold 13., for 95^., two pictures, repre- senting them to be "a couple of ponsins; " they were in fact not originals, but very excellent copies. B. did not offer to return them, and it was held that if the jury thought that he believed from the representation of A. that they were origi- nals, he was not bound to pay the price agreed; but that, as he kept them, he was liable to pay such sum as the jury might consider to be their value.^ In an English case ^ Parke, B., said : " Formerly it was the practice where an action was brought for an agreed price of a specific chattel sold with a warranty, or of work which was to be performed according to contract, to allow the plaintiff to recover the stipulated sura, leaving the defendant to a cross-action for breach of the war- ranty or contract; in which action, as well the difference be- tween the price contracted for and the real value of the arti- cle or of the work done, as any consequential damage, might have been recovered; and this course was simple and consist- ent. In the one case, the performance of the warranty not being a condition precedent to the payment of the price, the defendant who received the chattel warranted has thereby the property vested in him indefeasibly, and is incapable of re- turning it back; he has all he stipulated for as the condition of pajnng the price, and therefore it was held that he ought to pay it and seek his remedy on the plaintifif's contract of war- ranty. In the other case the law appears to have construed the contract as not importing that the performance of every portion of the work should be a condition precedent to the [267] payment of the stipulated price, otherwise, the least de- viation would have deprived the plaintiff of the whole price; and therefore the defendant is obliged to pay it, and recover for any breach of contract on the other side. But after the iLomi V. Tucker, 4 C. & P. 15; De 259; Street v. Blay, 3 B. & Ad. 456; Sewhanbery v. Buchanan, 5 C. & P. Mondel v. Steel, 8 M. & W. 858. 343; Poulton v. Lattimore, 9 B. & C. ^ Mondel v. Steel, supra. § 170.] KECOUPMEXT AND COUNTER-CLAIM. 431 ■case of Basten v. Butter,' a different practice, which had been partially adopted before in the case of King v. Boston,- began to prevail, and being attended with much practical conven- ience has been since generally followed; and the defendant is now permitted to show that the chattel, by reason of the non- compliance with the warranty in the one case, and the work in consequence of the non-performance of the contract in the •other, were diminished in value.' The same practice has not, however, extended to all cases of work and labor, as for in- stance that of an attorney,^ unless no benefit whatever has been derived from it; nor in an action for freight.* It is not so easy to reconcile these deviations from the ancient practice with principle in those particular cases above mentioned as it is in those where an executory contract, such as this, is made for a chattel to be manufactured in a particular manner or goods to be delivered according to a sample;® where the party may refuse to receive or may return in a reasonable time if the article is not such as bargained for; for in these cases the ac- ceptance or non-return affords evidence of a new contract on a quantum valebat; whereas, in a case of delivery with a warranty of a specific chattel there is no power of returning and consequently no ground to imply a new contract; and in some cases of work performed there is difficulty in finding a reason for such presumption. It must, however, be consid- ered that in all these cases of goods sold and delivered with a warranty, and work and labor, as well as the case of goods agreed to be supplied according to a contract, the rule which has been found so convenient is established; and that it is com- petent for the defendant in all of these not to set off, by a proceeding in the nature of a cross-action, the amount of dam- ages which he has sustained by breach of the contract, but simply to defend himself by showing how much less the sub- ject-matter of the action was worth by reason of the breach of contract; and to the extent that he obtains or is ca- [268] pable of obtaining an abatement of price on that account he must be considered as having received satisfaction for the 1 7 East, 479. * Templer v. McLachlan, 2 N. IL 136. 27 East. 481, nota sSheels v. Davies. 4 Camp. 119. 3 Kist V. Atkinson, 3 Camp. 63; 6 Germaine v. Burton, 3 Stark. 32. Tliornton v. Place, 2 M. & Rob. 218. 432 LEGAL LIQTJIDATIONS AND REDUCTIONS. [§ 170. contract and is precluded from recovering in another action to that extent, but no more." The defendant was not entitled to show damages resulting from such breach nor the breach of any other stipulation.^ 1 Francis v. Baker, 10 Ad. & E. 642; Bartlett v. Holmes, 13 C. B. 630; Da- vis V. Hedges, I^ R. 6 Q. B. 687. In McAllister v. Eeab, i Wend. 490, the theory of recoupment is thus dis- cussed by Marcy, J.: "Upon what principle are the damages for the breach of warranty allowed in a case where there is fraud to be given in evidence to reduce the recovery be- low the stipulated price? Not on the ground of (statutory) set off, because these damages are unliquidated. Is it upon the ground that the contract is destroyed by the fraud ? If it is rendered void, upon what principle can the vendor recover at all? I know it has been said he recovers upon a quantum ineruit or qiiantutn valebat; but if there was no contract by reason of his fraud, there was no sale: no passing of title. Can an im- plied sale be set up in lieu of the ex- press one ? This, I think, may well be doubted, although the express contract may be void. Tlie case of Beecker v. Vrooman (13 Johns. 302) seems to have been put on the ground that the sale is valid. The language of the court does not countenance the idea that the question in that case was the mere value of the horse. It is there intimated that a different rule now prevails from what for- merly governed, which ^commends itself to the court, because it is cal- culated to do final and complete jus- tice between the parties, most expe- ditiously and least expensively: but if the parties were proceeding with- out regard to the express contract upon an implied one, and were only establishing the true value of the horse, there was no new rule, and the language of the court was not very appropriate to the question be- fore them. In the case of Leggett V. Cooper (2 Starkie N. P. 103), where the counsel for the defendant re- sisted the recovery on the contract for the sale of hops on account of fraud, Lord Ellenborough said, 'if there is no contract for the sale of the goods at the stipulated price, there is no contract upon the quan- tum meruit for goods sold and de- livered.' The action in the case of Frisbee v. Hoffnagle (11 Johns. 50) was on a note for the consideration of a deed with warranty for land. The defense was that the vendor had no title, and it was allowed to prevail, not upon the ground that the con- tract of sale was invalid by reason of fraud, but for the purpose of avoiding circuity of action. The decision in the case of Spalding v. Vandercook (2 Wend. 431) does not, I apprehend, proceed on the ground of fraud alone. The consideration of the note was the fulfillment of the contract to deliver barrels. If the whole contract was cut up by the fraudulent conduct of the plaintiff, the note was entirely without con- sideration; but it was not so con- sidered. So in the case of Burton v. Stewart (3 Wend. 236, 20 Am. Dec. 692), there was fraud in the sale of the horse, yet the note given on the sale was not adjudged to be without consideration. The contract was broken, but it had a valid existence; and the court entertained no doubt in that case that if there had been a proper notice the amount of recov- ery would have been greatly abated by the proof of what was offered; it was, however, rejected for the want of such notice." He concludes that d ?§ 171, 172.] RECOUPMENT AND COUNTER-CLAIM. 433 § 171. Same subject. It is true that the plaintiff's [2G0] breach of stipulations in favor of the defendant impairs the consideration of his agreement in favor of the plaintiff; but the defense of recoupment is not based on the principle of treating the defendant as relieved from his obligation to perform [270] his undertaking because the consideration is impaired. On the contrary, it is based on the opposite principle, namely, the en- forcement of the contract on both sides, and that the damages which the plaintiff has sustained from the breach of the en- gagements in his favor shall, in whole or in part, be [271] compensation, by allowance in favor of the defendant, and application thereto of such damages as he has suffered from the infraction of the correlative duties and stipulations of the plaintiff which were the consideration. The law will [272] cut off so much of the plaintiff's claim as the cross-damages may come to.^ Wherever recoupment, strictly such, is allowed, distinct causes of action are set off against each other.^ It is not a bar to the plaintiff's action like the technical plea in avoidance of circuity of action, but in pursuance of the same policy of the law it seeks to satisfy and discharge the whole or a part of the plaintiff's claim with damages for which he is liable in respect of the same transaction.^ § 172. Constituent features of recoupment. For the pur- pose of discussing the principal constituent features of recoup- ment the following propositions are sufficiently comprehensive: 1. The claim or demand for which the defendant seeks to re- coup must be a valid cause of action upon which a separate suit might be maintained against the party beneficially inter- ested in the plaintiff's action, or his assignor. 2. It must arise from the same subject-matter or spring out of the same contract or transaction on which the plaintiff relies to maintain his action. 3. It is immaterial whether it be in itself or is set up the recovery of the plaintiff is based 483; Reab v. McAlister, 8 Wend. 109; on the express contract, and the Batterman v. Pierce, 3 Hill, 171. amount of it reduced by the allow- 2 Minnaugh v. Partlin, 67 Mich, ance of damages on the defendant's 391, 34 N. W. Rep. 717; Grant v. cross-claim to save a multiplicity of Button, 14 Johns. 377; Gilleypie v. actions, and as a substitute for a Torrance, 25 N. Y. 306, 309, 82 Am. cross-action by the defendant. Dec. 355; Price's Ex'rs v. Reynolds, 1 Ives V. Van Epps, 22 Wend. 155, 39 N. J. L. 171. 15t>; McAllister v. Reab, 4 Wend. » McCullough v. Cox, 6 Barb. 387. Vol. 1 — 28 434 LEGAL LIQUIDATIONS AND KEDUCTIONS. [§§ 173, 174. as a defense against a claim for liquidated or unliquidated damages. Nor is it necessary that the claims on both sides be of the same nature. 4. Generally it is available onh^ as defense, for, except by statute, it can have no further effect than to answer the plaintiff's damages in whole or in part; the defend- ant cannot recover any balance or excess.' 5. A defendant has an election to use such a cross-demand as a defense or bring a separate action upon it; but he will not have the election to set up his claim by way of recoupment unless it would be just and practicable to adjust it in the plaintiff's action. 6. When made the subject of recoupment the defendant assumes the burden of proof in respect to it, and the same rule or measure of damages applies, subject 'to the limitation just stated, as would be applicable if the defendant had brought a separate action. 7. When submitted as a subject of recoupment the judgment will be a bar to any other suit or recoupment upon it. [273] § 173. Remedy by counter-claim. The counter-claim of the code includes recoupment and is more comprehensive; and the remedy by both has been made more useful and com- plete by statutory provision against voluntary discontinuance of the action by the plaintiff without the defendant's consent after this defense has been interposed, and for judgment on the adverse claim, if any amount is established after satisfying the plaintiff's claim, or where no claim in favor of the plaintiff is adjudged. § 174. Talidity of claim essential. The claim or demand to be recouped must be a valid cause of action for which a separate suit could be maintained.^ Hence it is essential that 1 An exceptional view is held in Fuller, 80 N. Y. 312; Lennon v. New Hampshire, the defendant being Smith, 124 N. Y. 578,27 N. E. Rep. permitted to recover an affirmative 243; Peck v. McCormick Harvesting judgment against the plaintiff if he Machine Co., 94 111. App. 586. 196 liL sliowsthat he is entitled to it. John- 295, 63 N. E. Rep. 731; Osgood v. son V. White Mountain Creamery Bauder, 82 Iowa, 171, 47 N. W. Rep. Ass'n, 68N. H. 437, 36 AtL Rep. 13, 1001: Howell v. Dimock, 15 App. 73 Am. St. 610. This is perfectly Div. 102, 44 N. Y. Supp. 271; Cincin- logical on the theory of avoiding nati Daily Tribune Co. v. Brack, 61 circuity of action. Ohio St. 489, 76 Am. St. 433, 56 N. K 2Reilly v. Lee, 85 Hun, 315, 32 Rep. 198; Harper v. Moffat Cycle Co.. N. Y. Supp. 967, affirmed without 151 111. 84, 100, 37 N. E. Rep. 656; opinion, 155 N. Y. 691; Walker v. George H. Hess Co. v. Dawson, 149 III. Millard, 29 N. Y. 375; Woodward v. 138, 36 N. E. Rep. 557; Davidson v. d § 174.] EECOCPMENT AND COUNTER-CLAni, 4:35 the subject of it be such as the court in whicli it is pleaded has jurisdictioQ of;^ that the damages set up were not incurred through the defendant's fault or negligence;- that the contract sued upon and out of which the claim arises is valid;' that the plaintiff is a party subject to suit;^ that the allowance of the counter-claim will not deprive the plaintiff of the exemptions given him by statute.^ Keduction of damages may often be claimed upon facts which do not constitute a cause of action in favor of the de- fendant. Of this class and nature are those provable in mit- igation of damages. The distinction is important; for it is necessary to use the latter in defense; the benefit of such facts will be lost if they are not then introduced. But if the defense consists of a substantive cause of action it will not be lost or barred by the defendant failing to put it forward when there is an opportunity to make it available. The fact that the defendant has the option to avail himself of matter of re- coupment or bring a cross-suit upon it necessarily implies that such matter constitutes a cause of action.^ In an action to recover for labor, if the benefit of the labor is lost by causes for which the plaintiff would be answerable in a cross- action, the same matter which would support a cross-action may be given in evidence in defense of the suit to recover Rountree, 69 Wis. 655, 34 N. W. A defendant cannot plead a Rep. 906; Sj'lte v. Nelson, 26 Minn, counter-claim against the state 105, 1 N. W. Rep. 811; Rhymney R. without its consent. State v. Brad- Co. V. Rhymney Iron Co., 25 Q. B. ley, 87 La. Ann. 623; People v. Den- Div. 146; Barnes v. McMullins, 78 nison, 84 N. Y. 272; Battle v. Tliomp- Mo. 260; Widrig v. Taggart, 51 Mich, son, 65 N. C. 406. 103, 16 N. W. Rep. 251, and cases A set-off cannot be maintained or cited to this section. a debt contracted by the plaintiff 1 Cragin v. Lovell, 88 N. Y. 258. during infancy and not ratified by 2 Provenzano v. Tlaayer Manuf. him after becoming of full age. Co., 9 Daly, 90. Rawley v. Ravvley. 1 Q. B. Div. 460; 3 Ryan v. Dumphy, 4 Mont. 342, Widrig v. Taggart, 51 Midi. 103, 16 354. N. W. Rep. 251. * A tax is not a debt or obligation * Bauer v. Teasdale, 25 Mo. App. 25; to pay money founded upon con- Curlee v. Thomas, 74 N. C. 51; Wil- tractand cannot be counter-claimed son v. McElroy. 32 Pa. 82. against. Gatling v. Commissioners, ^ Brown v. Gallaudet, 80 N. Y. 413; 92 N. C. 536, 53 Am. Rep. 432; Cobb Gillespie v. Torrance, 25 id. 309. See V. Elizabeth City, 75 N. C. 1; Finne- Houston v. Young, 7 Ind. 200; Clark gan V. Fernandina, 15 Fla. 379. v. Wiidridge, 5 id. 176. 436 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 175. payment.^ " That doctrine (of recoupment) does not rest on the nature of the right which the plaintiff has in the contract which he seeks to enforce, nor on the fact that his interest in it is the same at the time of suit brought as when it was origi- nally entered into. The essential elements on which its appli- cation depends are two only. The first is that the damages wiiich the defendant seeks to set off shall have arisen from the same subject-matter or sprung out of the same contract or transaction as that on which the plaintiff relies to maintain [274] his action. The other is that the claim for damages shall be against the plaintiff, so that their allowance by way of set-off, or defense to the contract declared on, shall operate to avoid circuity of action, and as a substitute for a distinct action against the plaintiff to recover the same damages as those relied on to defeat the action." ^ § 175, Parties. The cause of action set up for recoupment must be one against the party beneficially interested in the plaintiff's action; a claim against the nominal plaintiff person- ally, when he sues in a fiduciary capacity or for the benefit of another, is not available. Thus, where property attached by an officer upon 'mesne process was replevied from him, and on the failure of the plaintiff in that suit to comply with the judgment for return of the property suit was brought on the bond by the officer, the other party could not recoup the dam- ages adjudged in his favor against such officer for false return on the process upon which he originally attached the property because the damages recovered by the officer on the bond would be held in trust for the benefit of the attaching creditor and his debtor, and the damages sought to be recouped were assessed against him personallj'' for a wrong committed by him.^ So in action by executors, as such, for the recovery of purchase-money of land sold by them, the purchaser, making no offer or attempt to rescind the contract, cannot avail him- self of false and fraudulent representations made by them at the time of the sale in respect to the subject-matter either as a defense or by way of recoupment or counter-claim. His rem- edy, if he has any, is against the executors personally.* » Austin V. Foster, 9 Pick. 341. * Westfall v. Dungan, 14 Ohio St ^ Sau-yer v. Wiswell, 9 Allen, 39, 276; Cumberland Island Co. v. Bunk- sWriglit V. Quirk, 105 Mass, 44, ley, 108 Ga. 756, 83 S, E. Rep. 183. See Beokraan V. Maulove, 18 Cal, 388. A plaintiff who sues an assignee § 175.] KECOUPMENT AND COUNTER-CLAIM. 437 It is not essential to the exercise of the right of recoupment that the suit in which the right is asserted should be brought in the name of the part}'- who is lial)le for the cross-claim, nor need it be against the party who is entitled to the benefit of such claim. It is enough that the suit is substantially be- tween them; that the claim sued on is subject to this defense, or that the proceeding be of such a nature that the mutual claims can be adjusted in it; that whatever is recovered is en- forcible against the property of the party seeking to re- [275] coup, and whatever is deducted upon the cross-claim properly inures to his benefit.^ By the water-craft law of some states demands of certain descriptions are liens upon and enforcible against the water-craft, which may be discharged by bond or some form of undertaking in behalf of the owners conditioned for the payment of amounts found to be liens. In actions upon such security, or against the water-craft not bonded, any matter of recoupment in respect to the demand alleged to be a lien may be set up.- The surety of a principal entitled to re- coupment may, as a general rule, avail himself of that defense because of the natural equity that mutual debts and liabilities growing out of the same transaction shall compensate each for the benefit of creditors to recover recoupment was allowed. Baltimore the price of goods is not subject to a United Oil Co. v. Barber, 2 Mackey counter-claim for damages resulting (D. C), 4 from the malicious prosecution by If, contemporaneously with the ex- him of a former suit for the same ecution of notes for the purchase- cause of action unless it is shown money of land, the parties agree in tliat his cestuis que trust participated writing that the vendor sliall furnish in or approved his wrongful act. the vendee a complete chain of title Gelshenen v. Harris, 26 Fed. Rep. 680. to the land purcliased, for the per- If the beneficial interest in a claim formance of which it is stipulated or demand remains in the assignor that the notes shall be bound, the the assignee cannot set it off against damages resulting from the non-per- the debtor. Olmstead v. Scutt, 55 formance of such agreement may Conn. 125, 10 Atl. Rep. 519. be recouped against the notes al- Un an action by A. against B. and though the latter were, at the ven- C. they sought to recoup his de- dor's request, made payable to a mand. It appeared that D., who third party, no consideration moving was not a party to the record, was from him. Hooper v. Armstrong, 69 a partner of the defendants in the Ala. 'M3. See last note, original contract, was interested in 2 steamboat Wellsville v. Geisse, 3 the reduction of A.'s claim and Ohio St. 333: Ward v. Wilison, 3 suffered in common with them the Mich. 1. damages sought to be recouped. A 438 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 175. other.^ In Xevv York, however, this application of recoup- ment is refused ; ^ and so under a Tennessee statute unless the principal gives consent.' The prevailing view is that a coun- ter-claim or cross-claim must be against all the plaintiffs and them only and in favor of all the defendants and no others.* In an action upon a contract a balance due the defendant upon an unsettled partnership account between the parties, the firm having been dissolved prior to the commencement of the ac- tion, is a proper counter-claim.^ If some of the defendants set up that the contract sued upon was made with them they may plead a counter-claim though the other defendants have no in- terest in it.^ Where the plaintiff's conduct indicates that he considered the defendants as the parties with whom he was dealing and he has sued them both he cannot controvert their right to establish a counter-claim.'' In an action brought by an executor or administrator upon a contract made by him after the death of his testator or intestate or to recover assets be- longing to the estate in the hands of a third person a claim due from the deceased to the defendant cannot be counter- claimed. "The reason of the rule is that in all such cases the allowance of such set-off or counter-claim would neces- sarily destroy the equal and just distribution of the assets be- 1 Reeves v. Chambers, 67 Iowa, 81, Crow, 13 Colo. 397, 22 Pac. Rep. 779; 24 N. W. Rep. 602; McHardy v. Roberts v. Donovan, 70 CaL 108, 9 Wadsworth, 8 Mich. 349; Waterman Pac. Rep. 180, 11 id. 599; City Coun- V. Clark, 76 111. 428. See Hobbs v. oil of Montgomery v. Montgomery Duff, 23 Cal. 596. Water-works, 79 Ala. 233; Copeland 2 Lasher v. Williamson, 55 N. Y. v. Young, 21 S. C. 275; Casey v. Han - 619; Gillespie v. Torrance, 25 id. 306. rick, 69 Tex. 44, 6 S. W. Rep. 405; 3 Phoenix Iron Works Co. v. Rhea, King v. Wise, 43 Cal. 628. 98 Tenn. 461, 40 S. W. Rep. 482. An individual demand cannot be * Brown v. Morris. 83 N. C. 221; used as a counter-claim to a joint in- Sloteman v. Thomas & W. Manuf. debtedness unless the insolvency of Co., 69 Wis. 499, 34 N. W. Rep. 225; the plaintiff is shown. Collier v. Er Chase v. Evoy, 58 Cal. 348; Jenkins win, 3 Mont. 142; Kemp v. McCor V. Barrows, 73 Iowa, 438, 35 N. W. mick. 1 id. 420. Rep. 510; Hopkins v. Lane, 81 N. Y. 5 Waddell v. Darling. 51 N. Y. 327 501; McCulloch V. Vibbard, 51 Hun, See Pen dergast v. Greenfield, 40 Hu a 227, 4 N. Y. Supp. 202; Tomlinson v. 494. Nelson, 49 Wis. 679, 6 N. W. Rep. « Clegg v. Cramer. 32 Hun, 162. 366; Kirby V. Spiller, 83 Ala- 481, 3 So. 'Drew v. Edmunds, 60 Vt. 401, 6 Rep. 700: Wood v. Brush, 72 Cal. Am. St, 122, 15 AtL Rep. 100. 224, 13 Pac. Rep. 627; Thalheimer v. § 170.] EECOUPMENT AND COUNTEK-OLAIM. 439 longing to the estate among the creditors in every case where the assets were insufficient to pay all the debts of the de- ceased." ^ x\n administrator who is sued upon a personal claim cannot counter-claim a debt which is due from the plaintiff to him in his representative capacity.- Under a statute which provides that in an action brought by an executor or adminis- trator in his representative capacity a demand against the de- cedent belonging at the time of his death to the defendant may be set up as a counter-claim, the wrongful acts of an executor cannot give the defendant a right to counter-claim against a demand owing to the testator in his life-time.' § 176. Same subject. The question arose in Newfoundland V. Newfoundland R. Co.* whether a rio-ht of set-off existing: in favor of the government was available against such of the plaintiffs as were assignees of the original corporation. The facts were that the plaintiff was incorporated for the pur- pose of constructing and working a railway in pursuance of a contract with the government, for which the latter was to pay a subsidy and grant lands. The assignees took what- ever right the company had to the subsidy and the grants of land in respect to a particular portion of the road. The con- tention of the plaintiff was that the government was bound to pay a certain amount of subsidy and to make grants of land for a completed portion of the road, though it was not finished as a whole. This was disputed, but if such liability existed it was asserted that the government could set up counter-claims against the company for its breach of contract in not completing the road. It was held by the privy council that the counter-claim was good as against the assignees of the company, it and the claim having their origin in the same 1 Per Taylor, J., in McLaughlin v. 543: Wrout v. Dawes, 25 id. 369; Winner. 03 Wis. 120, 124, 53 Am. Rep. Root v. Taylor. 20 Johns. 137; Steel 273, 23 N. W. Rep. 402, citing Al- v. Steel, 12 Pa. 64; Shipman v. drich V. Campbell, 4 Gray, 284; Smith Thompson, Willes, 103. Thompson v. V. Boyer, 2 Watts, 173; Aiken v. Whitmarsh, 100 N. Y. 36, 2N. E. Rep. Bridgman, 37 Vt. 249; Woodward v. 173, is to the same effect. McGaugh, 8Mo. 161; Newhall v. Tur- ^ Qouriey v. Walker, 69 Iowa, 80, ney. 14 111. 338; Patterson v. Patter- 28 N. W. Rep. 444. son, 59 N. Y. 574, 17 Am. Rep. 384; sWakeman v. Everett, 41 Hun, Lawrence v. Vilas, 20 Wis. 381, 389- 278. 391; Lombarde v. Older, 17 Beav. < 12 App. Cas. 199. 440 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 177. portion of the contract and the obligations which gave rise to them being closely intertwined. "The claim of the govern- ment does not arise from any fresh transaction freely entered into by it after notice of assignment by the company. It was utterl}'' powerless to prevent the company from inflicting in- jury on it by breaking the contract. It would be a lamentable thing if it were found to be the law that a party to a contract may assign a portion of it, perhaps a beneficial portion, so that the assignee shall take the benefit, wholly discharged of an}'' counter-claim by the other party in respect of the rest of the contract, which may be burdensome. There is no universal rule that claims arising out of the same contract may be set against one another in all circumstances. But their lordships have no hesitation in saying that in this contract the claims for subsidy and for non-construction ought to be set against one another." ^ "Where the plaintiff sues an assignee and is not entitled to protection as a hona fide holder of negotiable paper, his action is subject to any defense by way of recoupment which would be good against the party to whom the plaintiff's demand accrued.^ AVhere a note for the price of property sold was made payable to the vendor's wife, and no portion of the consideration moved from her, the note was subject to the same defense by way of recoupment for the vendor's fraud in the sale as if it had been made payable to himself.^ § 177. Maturity of claim or demaiid ; statute of limita- tions. Must the matter of recoupment be a mature cause of action at the time of the commencement of the plaintiff's action, or Avill it be sufficient that it is such at the time of pleading? Campbell, J.,'' said : "The purpose of recoupment [276] would be defeated if the party cannot be allowed to plead what he might, at the time of pleading, have declared upon. The object of this practice is to diminish litigation by consolidating controversies into one action. The whole doctrine ilf the party who agrees to per- 2 Wood v. Brush, 72 Cal. 224, 13 form makes an assignment of tlie Pac. Rep. 627; McKnightv. Devlin, entire contract before anj' money is 52 N. Y. 399, 11 Am. Rep. 715; Hins- due under it the other party may re- dell v. Weed, 5 Denio, 172; Rockwell coup his damages for a breach there- v. Daniels, 4 Wis. 432. of by the assignors. Smith v. Wall, ^ Kelly v. Pember, 35 Vt. 183. 12 Colo. 363, 21 Pac. Rep. 42. * In Piatt v. Brand, 26 Mich. lib. ^ 177.] EECOUPMENT AND COUNTER-CLAIM:. 44:1 is one of the equitable outgrowths of the improvement of legal practice, and no obstacle should be thrown in the wa}-- of its encouragement. Our legislation has indicated this design by enlarging the defense and permitting defendants to recover damages be^^ond the plaintiff's claim. We do not feel disposed to accept any technical doctrines which would prevent its full efficacy unless compelled by a weight of authority which we do not find here." But it was said by Jarvis, C. J.,* "It seems to me we should carry the doctrine respecting the avoidino- of circuity of action very much further than any case has yet carried it if we were to hold that the damages may be reduced by showing a breach of the contract on the plaintiff's part subsequently to the commencement of the plaintiff's action. There are many cases where circumstances existing before action brought have been allowed to be given in evidence to mitigate or reduce the damages; but none that I am aware of where matters arising after action brought have been so re- ceived." Under the English judicature act of 1873 ^ relief can be given on a counter-claim in respect of a cause of action accrued to the defendant subsequently to the issue of the writ in the original suit.^ It had previously been ruled otherwise.* The later case is rested on the generality of the language of the statute, the orders made pursuant thereto and the nature of a counter-claim which had been before spoken of as being an wholly independent suit from the claim.^ It is now settled in England that a counter-claim must be treated as if it were a proceeding in an action, though it is not the latter because it is not commenced by a writ or summons, and that the plaintiff cannot after a counter-claim has been delivered discontinue his 1 In Bartlett v. Holmes, 13 C. B. ing, and as the said courts I'espect- G30. ively, or any judge thereof, might 2 Sec. 24, subsec. 3: "The said have granted in any suit instituted courts respectively, and every judge for that purpose by the same de- thereof, shall also have the power to fendant against the same plaintiff or grant to anj' defendant in respect of petitioner." any equitable estate or right, or * Beddall v. Maitland, 17 Ch. Div. otiier matter of equity, and also in 174. respect of any legal estate, right or * Original Hartlepool Collieries Co. title claimed or asserted by him, all v. Gibb, 5 Ch. Div. 713. such relief against any plaintiff or ■'' Winterfield v. Bradnum, 3 Q. B. petitioner as such defendant shall Div. 324; Stooke v. Taylor, 5 id. j09. ■have properly claimed by his plead- 442 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 177- action so as to prevent the defendant from enforcing his cause of action.^ The weight of authority in America is that a de- mand which is not due at the time the action was brought cannot be counter-claimed or set off.- The codes of some states express that the right to counter-claim must exist at the com- mencement of the action.' This means that it must then exist in the hands of those who plead it.^ In New York in an action for rent the tenant cannot recoup his damages for a breach of covenant on the part of the plaintiff after the commencement of the suit.* But in a later case the court of appeals affirmed a judgment on a counter-claim for conversion of property after the commencement of the action." The court say: "Strictly speaking, the act of the plaintiff in procuring and serving the injunction would, ordinarily, be an act at or after the com- mencement of the action, and therefore one the damages for which could not be set up as a counter-claim in a pleading which is presumed to state the claims of the parties as existing at the time of bringing the suit; but as the act of the plaintiff' related to the very property which was the subject of the action and materially affected the defendant's rights and de- fense therein, I do not see why it could not have been set up in a subsequent or supplemental answer and have thus been ren- dered effectual to the defendant." The connection betw^een a plaintiff's cause of action and a defendant's cross-claim is so close that until the former is barred by the statute of limitations the latter is available.^ " Not only does the bringing of an action stop the operation of the statute as to a proper matter of set-off, but it also seems that it revives a claim which is actually barred out, which is the proper subject of recoupment in the action, as damage 1 McGowan v. Middleton, 11 Q. B. s Davis v. Frederick, 6 Mont. 300, Div. 464. overruling Vavasseur v. 12 Pac. Rep. 664 Krupp, 15 Ch. Div. 474. * Mayo v. Davidge, 44 Hun, 342. 2 Ellis V. Cothran, 117 III 458, 3 N. 5 Harger v. Edmonds, 4 Barb. 256. E, Rep, 411; Orton v. Noonan, 29 ^ Ashley v. Marshall, 29 N. Y. 494. Wis. 541; Simpson v, Jennings, 15 ^ Beecher v. Baldwin, 55 Conn^ Neb. 671, 19 N. W. Rep. 473; Tessier 419, 12 Atl. Rep. 401, 3 Am. St. 57; V. Bnglehart, 18 Neb. 167, 24 N. W. Brumble v. Brown, 71 N. C. 513; Rep. 734; Hogan v. Kirkland, 64 N. Stillwell v. Bertrand, 22 Ark. 375;. C. 250; Lee v. Eure, 93 id. 5, 9. Eve v. Louis, 91 Ind. 457; Walker v.. Clements, 15 Q. B. 1046. § 178.] RECOUPMENT AND COUNTEE-CLAIII, 443. growing out of the same transaction. Thus, in an action to recover the price of goods sold, unsoundness may be set up b}' way of defense although an action to recover damages is barred."' In an action on a note a total failure of consider- ation and a parol warranty of the property for which the ob- ligation was given were pleaded in defense, and the latter was sustained, although the period for bringing an action upon the parol agreement had passed.- If a contract is not satisfacto- rily performed, the right to recover under it is qualified. To the extent that the contractee has been injured by the method of the contractor's performance or by his neglect to perform he may defeat the latters demand. If the statute of limita" tions does not bar the contractor the other part}'' may plead a counter-claim. The statute is tolled by the coraraenceraent of an action, and though the counter-claim is not pleaded until more than the statutory period fixed for bringing an action on the contract has gone by, it is in time if it is pleaded within the period fixed for answering the complaint.^ In Pennsylva- nia the running of the statute is not stopped until the defend- ant pleads his set-olf or gives the plaintiff notice of it.* § 178. Cross-claim must rest on contract or subject-mat- ter of action. It must arise from the same subject- [-77] matter, or spring out of the same contract or transaction on which the plaintiff relies to maintain his action.'* The same thing is substantially necessary to constitute one branch of the counter-claim of the modern codes in which it is required that it arise out of the same transaction set forth in the com- plaint as the foundation of the plaintiff's claim or be con- nected with the subject of the action.'' 1 Wood's Lim., § 282; Riddle v. 73 Me. 214; Washington v. Timber- Kreimbricht, 12 La. Ann. 297; La- lake, 74 Ala. 259; Keegan v. Kinnare, strapes v. Rocquet, 23 id. 68. 123 111. 280, 14 N. E. Rep. 14; Forrest morrow V. Hanson, 9 Ga. 398, 54 v. Johnson, 100 Mich. 321, 58 N. W. Am. Dec. 34G. Rep. 1005. 3 Herbert v. Dey, 15 Abb. N. C. ^Xenia Branch Bank v. Lee, 7 (N. Y.) 172. Abb. Pr. 372; Epperly v. Bailey, 3 * Gilmore v. Reed, 76 Pa. 462. Ind. 72; Slayback v. Jones, 9 Ind. s Sawyer v. Wiswell, 9 Allen, 39; 472; Barhyte v. Hughes, 33 Barb. Logie V. Black, 24 W. Va. 1, 20; Bo- 320; Bazemore v. Bridgers, 105 N. C. zartb V. Dudley, 44 N. J. L. 304, 43 191, 10 S. E. Rep. 888; Demartin v. Am. Rep. 373; Gilchrist v. Partridge, Albert. 68 Cal. 277, 9 Pac. Rep. 157; 444: LEGAL LIQUIDATIONS AND REDUCTIONS. [§ no. § 179. Recoupment for fraud, breach of warranty, neg- ligence, etc. If a party in negotiating a contract commits an actionable fraud upon the other contracting party touching the subject of their negotiation the latter, though he has not exercised his privilege to repudiate the contract on the dis- covery of the fraud, may recoup his damages therefor in any action brought by the guilty part}-- upon the contract. Such a cross-claim docs not grow out of the contract, but it is part of the same transaction and is connected vrith the subject of the action.^ A. executed in February a memorandum under Allen V. Coates, 29 Minn. 46. 11 N. W. Rep. 132; Schmidt v. Bickeubacli, 29 Mian. 122, 12 N. W. Rep. 349; Standley v. Northwestern Mut. L. Ins. Co., 95 Ind. 254; Lee v. Eure, 93 N. C. 5; Wilkerson v. Farnham, 82 Mo. 673; Clark's Cove Guano Co. V. Appling, 33 W. Va. 470, 10 S. K Rep. 809; Logie v. Black, 24 W. Va. 1; Wigmore v. Buell, 116 Cal. 24, 47 Pac. Rep. 927. If the plaintiff fails to prove the contract upon which he sues the defendant cannot prove another and different contract and recoup dam- ages for the breach thereof. Hal de- man V. Berry, 74 Mich. 424, 42 N. W. Rep. 57; Morehouse v. Baker, 48 Mich. 335, 12 N. W. Rep. 170; Holland V. Rea, 48 Mich. 218, 12 N. W. Rep. 1(57; Brighton Bank v. Sawyer, 132 Mass. 185; Bozarth v. Dudley, 44 N. J. L. 304. 43 Am. Rep. 373; The Zou- ave. 29 Fed. Rep. 296; Tlie C. B. San- ford, 22 id. 863. 1 Barbour v. Flick, 126 Cal. 628, 59 Pac. Rep. 122; Bell v. Sheridan, 21 D. C. 370; Johnson v. St. Louis Butchers' Supply Co., 60 Ark. 387, 30 S. W. Rep. 429; Walker v. France, 112 Pa. 203, 5 Atl. Rep. 208; Dow- agiac Manuf. Co. v. Gibson, 73 Iowa, 525, 6 Am. St. 697,35 N. W. Rep. 603; Birdsey v. Butterfield, 34 Wis. 52; Van Epps v. Harrison, 5 Hill, 63; Myers v. Estell, 47 IMiss. 4, 17, 21; Estell V. Myers, 54 id. 174, 56 id. 800; Kelly V. Pember, 35 Vt. 183; Ken- nedy V. Crandall, 3 Lans. 1; Rotan V. Nichols, 22 Ark. 244; Perley v. Balch, 23 Pick. 283, 34 Am. Dec. 56; Timmons v. Dunn, 4 Ohio St. 680; Avery v. Brown, 31 Conn. 398; Cald- well V. Sawyer, 30 Ala. 283; Cage v. Phelps, 38 Ala. 383; Moberly v. Alex- ander, 19 Iowa, 162; Johnson v. Miln, 14 Wend. 195; President, etc. V. Wadleigh, 7 Blackf. 102, 41 Am. Dec. 214; Light v. Stoever, 12 S. & R 431; Haynes v. Harper, 25 Ark. 541; Warden v. Fosdick, 13 Johns. 325. 78 Am. Dec. 383; Brown v. Tuttle, 66 Barb. 169; Hogg v. Card well, 4 Sneed, 151; Nelson v. Johnson, 25 Mo. 430; Withers v. Greene, 9 How. 213; Estep v. Fenton, 66 111. 467; Saw3'er v. Wiswell, 9 Allen, 39; Bradley v. Rea, 14 id. 20; Mixer v. Coburn, 11 Met. 561, 45 Am. Dec. 230; Westcott v. Nims, 4 Cush. 215; Cook V. Castner, 9 Cush. 266; Har- rington v. Stratton, 22 Pick. 510; Hall V. Clark, 21 Mo. 415; Rawley v. Woodruff, 2 Lans. 419; More v. Rand, 60 N. Y. 208; Price v. Lewis, 17 Pa. 51, 55 Am. Dec. 536; Graham v. Wil- son, 6 Kan. 489; Allen v. Shackelton, 15 Ohio St. 145; Sumpter v. Welsh, 2 Bay. 558: Wheat v. Dotson. 12 Ark. 699; Tunno v. Fludd, 1 McCord, 121 Abercrombie v. O wings, 2 Rich. 127 Adams v. Wylie, 1 Nott & McC. 78 McFarland v. Carver, 34 Mo. 195 Christy v. Ogle, 33 III 295; Reynolds § 179.] KECOUPMENT ANT) COUNTER-CLAIM, 445 seal stating- that he had hired of W. a certain lot for one [278] year from the 1st of May following, at a rent of $1,000. He was induced to make the contract by the fraudulent represen- tations of W. that the lot embraced a certain other parcel of land which belonged to the corporation. A. discovered the fraud before the 1st of May, and on that day, having obtained a lease of the parcel owned by the corporation, took posses- sion of the whole and occupied it during the year. It was held in an action by "W. for the rent that A. was entitled to a de- duction by reason of the fraud of at least what he wasobli^-ed in good faith to pay for the corporation Icase.^ And in action for fraudulent representations made on the exchange of prop- erty the defendant was allowed to recoup his damages result- ing therefrom.^ Where an action was brought to recover a balance due on a contract of sale of two separate patented processes, described and contracted for in a single written agreement for an entire sum payable in instalments, tlie ven- dee was entitled to set off damages arising out of the vendor's fraudulent representations as to one of the processes, althouo-h the other proved to be more valuable than the amount paid for both.'' If several distinct purchases are made at the same time, though by different instruments, they will be regarded for the purposes of recoupment as being connected.* So, in actions for the price of property sold, damages for breach of any warranty made b}^ the vendor of the property, whether it be express or implied, may be recouped,^ so far as he is not V. Cox, 11 Ind. 262; Cox v. Reynolds, Holton v. Noble, 83 Cal. 7, 23 Pac, 7 id. 257; House v. Marshall, 18 Mo. Rep. 58. 369; Shute v. Taylor, 5 Met 61; 2 Carey v. Guillow, 105 Mass. 18, 7 Owens V. Rector, 44 Mo. 389; James Am. Rep. 494; Chandler v. Childs, 42 V. Lawrenceburgh Ins. Co., 6 Blackf. Mich. 128, 3 N. W. Rep. 297. 525; Burton v. Stewart, 3 Wend. 236; 3 Rawley v. Woodruff, 2 Lans. 419. 20 Am. Dec. 692; Hammatt v. Emer- * Benjamin v. Richards, 51 Mich. son, 27 Me. 308, 46 Am. Dec. 598 White V. Sutherland. 64 111. 181 Gibson v. Marquis, 29 Ala. 668 Isham V. Davidson, 52 N. Y. 237 110, 16 N. W. Rep. 255. 5 Wilson V. Hughes, 94 N. C. 182; Bitting V. Thaxton, 72 id. 541; Walsh V. Hall, 66 id. 233: Hurst v. Everett, Simmons v. Cutreer, 12 Sm. & M. 91 id. 399; Dushane v. Benedict. 120 584; Holton v. Noble, 83 Cal. 7, 23 U. S. 630. 7 Sup. Ct. Rep. 690; Si)ald- Pac. Rep. 58. ing v. Vandercook. 2 Wend. 431; 'Allaire v. Whitney, 1 Hill, 484; Hoover v. Peters, 18 Mich. 51; Mc- Whitney v. Allaire, 1 N. Y. 305; AUister v, Reab, 4 Wend. 483; Reab 446 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 1T9. otherwise reimbursed for bis loss, as by insurance paid in con- sequence of the destruction of the property.^ If there is a sale and delivery of property in presenti which is expressly warranted and the warranty is not true, the ven- dee does not lose his right to recoup the damages by receiving and using the property." In JSTew York, where the contract V. McAlister, 8 Wend. 109; Herbert V, Ford, 29 Me. 546; Kellof?g v. Dens- low, 14 Conn. 411; Hitchcock v. Hunt, 28 Conn. 343; Mercer v. Hall, 2 Tex. 284: Hears v. Nichols, 41 111. 207, 89 Am. Dec. 381; Miller v. Smith, 1 Mason, 437; Love v. Oldham, 22 Ind. 51; Getty v. Rountree, 2 Pin. 379; McAlpin v. Lee, 12 Conn. 129, 30 Am. Dec. 609; Withers v. Greene, 9 How. 214; Van Buren v. Digges, 11 id. 461; Fisk v. Tank, 12 Wis. 276, 78 Am. Dec. 737; Deen v. Herrold. 37 Pa. 150; Ketchum v. Wells, 19 Wis. 25; Steigleman v. Jeffries, 1 S. & R. 477, 7 Am. Dec. 626; Murphy v. Gay, 37 Mo. 535; Barth v. Burt, 43 Barb. 628; Brown v. Tuttle. 66 Barb. 169; Westcott V. Nims, 4 Cush. 215; Miller V. Gaither, 3 Bush, 152; Culver v. Blake, 6 B. Mon. 528; McMillion v. Pigg, 3 Stew, 165; Lemon v. Trull, 13 How. Pr. 248; Plant v. Condit, 22 Ark. 454: Jemison v. Woodruff, 34 Ala. 143; Hoe v. Sanborn, 3 Abb. Pr. (N. S.) 189; Harman v. Sanderson, 6 Sm. & M. 41, 45 Am. Dec. 272; Rum- sey v. Sargent, 21 N. H. .397; Will- iams T. Miller, 21 Ark. 469; Goodwin V. Morse, 9 Met. 278; Harrington v. Stratton, 22 Pick. 510: Flint v, Lyon, 4 Cal. 17; Dennis v. Belt, 30 Cal. 247; Hodgkins v. Moulton, 100 Mass. 309; Burnett v. Smith, 4 Gray, 50; Allen V. Furbish, id. 504. 64 Am. Dec. 87; Stacy V. Kemp, 97 Mas-s. 166; Darnell V. Williams, 2 Stark. 166; Parish v. Stone, 14 Pick. 198; Judd v. Denni- son, 10 Wend. 513; Murray v. Carlin, 07 111. 286: Owens v. Sturge.s, id. 366; Nixon V. Carson, 38 Iowa, 338: Walker V. Hoisington, 43 Vt. 608; Parker v. Pringle, 2 Strobli, 242; Babcock v. Trice, 18 III. 420. If several suits are brought in an inferior court on notes given for property which is not of the quality bargained for, the defendant may set up the breach of warranty in each suit until the damages are neutral- ized, and on appeal and consoli- dation of the actions the whole dam- age suffered may bei'ecouped. Hurst V. Everett, 91 N. C. 399. 1 Eureka Fertilizer Co. v. Balti- more Copper Smelting & Rolling Co., 78 Md. 179, 27 Atl. Rep. 1035. 2 Getty v. Rountree, 2 Pin. 379; Fisk V. Tank, 12 Wis. 276, 78 Am. Dec. 737: Dailey v. Green, 10 Pa. 118; Pol- hemus v. Heiman, 45 Cal. 573; War- der v. Fisher, 48 Wis. 334, 4 N. W. Rep. 470; Vincent v. Lelaud, 100 Mass. 432; Lewis v. Rountree, 78 N. C. 323; Gurney v. Atlantic, etc. R. Co., 58 N. y. 358: Day v. Pool, 52 id. 416, 11 Am. Rep. 719. In Locke v. Williamson, 40 Wis. 377, the property was accepted with knowledge that it was not such as the contract called for. The buyer set up the defect in the quality and the court said: "We have concluded to hold this rule in respect to an ex- ecutory contract, that when the de- fects in the goods are patent and obvious to the senses, when the pur- chaser has a full opportunity for examination and knows of such de- fects, he must, either when he re- ceives the goods or within a reason- able time thereafter, notify the seller that the goods are not accepted as fulfilling the warrantv, otherwise § 180.] KEOOUPMENT AND COUNTER-CLAni. 4-i7 of sale is oxecutoiy and a time is agreed upon for making a test of the property which is the subject of the contract, the acceptance and use of it after the test has been made waives the right to claim a breach of the warranty.' This is not the rule in Illinois.'^ If goods are warranted the purchaser may, after he has admitted that they correspond with the contract and promised to pay the purchase price, recoup any damages resulting from a breach of the warranty, or he may, after paying the price, recover such damages in a separate suit.' Giving a renewal note after knowledge of the breach of a war- ranty is presumptive, but not conclusive, evidence of a waiver of the claim for damages.* In suits for labor or goods the warranty of either is not a matter altogether collateral; [279] it forms an essential portion of the consideration for the de- fendant's undertaking, and therefore the breach of it is proper to be shown in reduction of the stipulated price.* When dam- ages for the breach of a warranty as to the quality of a chat- tel are established they are to be applied in reduction of plaintiff's recovery as of the date of the contract.^ §180. Same subject. Whatever the nature of the contract, however numerous or varied its stipulations, and whether they are all written and embodied in one or several instruments, or only partly written or partly implied, if they are connected, so that what is undertaken to be done on one side altogether is the consideration, or part of the consideration, either in prora- tlie defects will be deemed waived." Ruff v. Jarrett, 94 111. 474; Shackel- See Nye v. Iowa City Alcohol Works, ton v. Lawrence, 65 id. 175; Reed v. 51 Iowa, 129. 3;J Am. Rep. 121, 50 N. Hastings, 61 id. 266. W. Rep. 988; Reed V. Randall, 29 N. * Aultman v. Wheeler, 49 Iowa, Y. 358; McCormick v. Sarson. 45 id. 647; Can trait v. Fawcett, 2 111. App. 256; Gaylord Manuf. Co. v. Allen, 53 571. id. 515. Compare these New York » Allen v. Hooker, 25 Vt. 137; Cole cases with the two cited above. v. Colburn, 61 N. H. 499; Hoeruer iMcParlin v. Boynton, 8 Hun, 449; v. Giles, 53 111. App. 540; McCormick aflSrmed by a majority of one and Harvesting Machine Co. v. Robin- without opinion, 71 N. Y. 604. son, 60 111. App. 253; Zimmerman v. -! Underwood v. Wolf, 131 III. 425, Druecker, 15 Ind. App. 512, 44 N. E. 19 Am. St. 40, 23 N. E. Rep. 598, cit- Rep. 557; National Oak Leather Co. ing and discussing previous decis- v. Armour-Cudahy Packing Co., 99 ions m that state. Ky. 667, 37 S. W. Rep. 81. 3 Bretz v. Fawcett, 29 111. App. 319; « Wilson v. Reedy, 33 Minn. 503, 24 Harrington v. Stratton, 22 Pick. 510; N. W. Rep. 191. Hodgkins v. Moultou, 100 Mass. 30'J; 448 LEGAL LIQUIDATIONS AND KEDCCTIONS. [§ ISO, ise or performance, for what is engaged to be done on the other, the range of the right of recoupment is co-extensive with tho duties and obligations of the parties, respectively, both to da and to forbear, — as well those imposed at first by the language of the contract as those which subsequently arise out of it in the course of its performance.^ It extends to damages result- [280] ing from negligence where care, activity and diligence are required;^ where damages accrue from excess of action, as 1 Green v. Batson, 71 Wis. 54, 36 N. W. Rep. 849; Bross v. Cairo & V. R. Co., 9 111. App. 363; Wilson v. Greens- boro, 54 Vt. 533; Babbitt v. Moore, 51 N. J. L. 229, 17 Atl. Rep. 99; Deitz v. Leete, 28 5Io. App. 540; Logie v. Blaok. 24 W. Va. 1, 19; Brigham v. Hawley, 17 111. 38; Lee v, Clements, 48 Ga. 128; Satchwell v. Williams, 40 Conn. 371; Fowler v. Payne, 49 Miss. 32; Branch v. Wilson, 12 Fla, 543; Mell v. Moony, 30 Ga. 413; Rogers v. Humphrey, 39 Me. 382; Winder v. Caldwell, 14 How. 434; Cherry v. Sutton, 30 Ga, 875; Bowker V. Hoyt, 18 Pick. 555; Fabbricotti v. Launitz, 3 Sandf. 743; Van Buren v. Digges, 11 How. 461; Dennis v. Belt, 30 Cal. 247; Logan v. Tibbott, 4 Greene, 389; Heaston v. Colgrove, 3 Ind. 265; Keyesv. Western Vermont Slate Co. 34 Vt. 81; Wildey v. Frac- tional School Dist., 25 Mich. 419; Elliot V. Heath, 14 N. H. 131; Blood- good v. Ingoldsby, 1 Hilt. 388; Walker V. Millard, 29 N. Y. 375; Guthman v. Castleberry, 49 Ga. 272; Mack v. Patchin, 42 N. Y. 167, 1 Am. Rep. 506; Eldred v. Leahy, 31 Wis. 546; Whitney v. Meyers. 1 Duer, 267; Peden v. Moore. 1 Stew, & Port. 71, 21 Ard. Dec. 649: Wilder v. Boynton, 63 Barb. 547; Cook v. Soule, 56 N. Y". 420, 45 How. Pr. 340; Holzworth v. Koch, 26 Ohio St. 33; Myers v. Burns, 33 Barb. 401, 35 N. Y. 269; Ives V. Van Epps, 22 Wend. 155; Warfield v. Booth, 33 Md. 63; Mayor V. Mabie, 13 N. Y. 151, 64 Am. Deo. 538; Rogers v. Ostrom, 35 Barb. 523; Westlake v. De Graw, 25 Wend. 669: Goodwin v. Morse, 9 Met. 278; Sanger V. Fincher, 27 111. 346: Bee Printing Co. V. Hichborn, 4 Allen, 63; Turner V. Gibbs, 50 Mo. 556; Dermott v. Jones, 2 Wall. 1; Overton v. Phelan, •2 Head, 445; Bloom v. Lehman, 27 Ark. 489; Berry v. Diamond, 19 Ark. 262; Desha's Ex'r v. Robinson's Adm'r, 17 Ark. 228; Springdale Ass'n V. Smith, 32 111. 252; Porter v. Woods, 3 Humph, 56, 39 Am. Dec. 153; Crouch v. Miller. 5 Humph. 586: Fisk V. Tank, 12 Wis. 276, 78 Am. Dec. 737: Luf burrow v. Henderson. 30 Ga. 482; Molby v. Johnson, 17 Mich, 382; Stow v. Yarwood. 14 111. 424; Stewart v. Bock, 3 Abb Pr. 118; Hoopes v. Meyer, 1 Nev. 433; Cald- well v. Pennington, 3 Gratt. 91; Bur- roughs V. Clancey, 53 111. 30; Lunn v. Gage, 37 111. 19; Evans v. Hughey, 76 111. 115; Hubbard v. Rogers, 64 III. 434: Eckles v. Carter. 26 Ala. 563; Ewart V. Kerr, 2 McMull. 141; Moore v. Carutiiers, 17 B. Mon. 669; Whit- beck V. Skinner, 7 Hill, 53; Ciiatter- ton V. Fox, 5 Duer, 64; Hill v. South- wick, 9 R. L 299, 11 Am. Rep. 250; Fitchburg, etc. R. Co. v. Hanna, 6 Gray. 539, 66 Am. Dec. 427; Allen v. McKibbin, 5 Mich. 449; Key v. Hen- son, 17 Ark. 254: Hutt v. Bruckman, 55 111.441; McDowell v. Milroy, 69 111. 498; Latham v. Sumner, 89 111. 233; Cooke v. Preble, 80 111. 381; Bishop v. Price, 24 Wis. 4S0. 2 Sinker v. Diggins, 76 Mich. 557, § ISO.] KECOUrMENT AND COUNTER-CLAIM. 449 where it injuriously transcends the limits of duty or authority ; ^ from ignorance, where knowledge and skill are due; ^ and hon- esty and good faith, being always obligations upon contract- ing parties, all damages which result from any covinous prac- tice or tort within the scope of the transaction which the plaintilFs action involves may be the subject of recoupment. Thus money paid to contractors by government officers with- out authority, or in violation, of law may be recovered on a counter-claim in a suit on the contract under which such pay- ment was made.' An employer may recoup against a serv- ant's wages not only the damages arising from his negligence and want of skill and knowledge, but for any fraudulent or tortious waste, conversion or destruction of property intrusted to him or placed in his care in the course of his employment.* If a servant lives in the family of his employer and while there seduces the latter's daughter, the damages resulting may 43 N. W. Rep. 674; Macgowan v. Whiting, 9 Daly, 86: Whitellegge v, De Witt, 13 Daly, 319; Lee v. Clem- ents, 48 Ga. 128; Fowler v. Payne, 49 Miss. 32: Phelps v. Paris, 39 Vt. 511; Still V. Hall, 20 Wend. 51; Briggs v. Montgomery, 3 Heisk. 673; Denevv v. Daverell, 3 Camp. 451; Grant v. But- ton, 14 Johns. 377; Shipman v. State, 43 Wis. 381; Garfield v. Huls, 54 111. 427; Forman v. Miller, 5 McLean, 218; Doan v. Warren, 11 Up. Can. C. P. 423; McCracken v. Hair, 2 Speer, 256; Marshall v. Hann, 17 N. J. L. 425: Eaton v. Woolly, 28 Wis. 628; Cloyd V. Steiger, 139 111. 41, 28 N. E. Rep 987; Hattin v. Chase, 88 Me. 237, 33 Atl. Rep. 989, quoting the text. 1 JIcEwen v. Kerfoot, 37 111. 530. '-'De Witt V. CuUings, 33 Wis. 298; Stoddard v. Tread well, 26 Cal, 294; Goslin V. Hodson, 24 Vt. 140; Hunt V. Pierpont, 27 Conn. 301; Shipman V. State, 43 Wis. 381; Robinson v. Mace, 16 Ark. 97; Hopping v. Quin, 13 Wend. 517; Gleason v. Clark, 9 Cow. 57; Hill v. Featherstonehaugh, T.Bing. 569; Cardell v. Bridge, 9 Vol. 1 — 29 Allen, 355; Eaton v. Woolly, 28 Wis. 628; Whitesell v. Hill, 101 Iowa. 629, 70 N. W. Rep 750, 37 L. R A. 830. 3 Barnes v. District of Columbia, 22 Ct. of Cls. 366; McElrath v. United States, 102 U. S. 426, 440. 4 Johnson v. White Mountain Creamery Ass'n, 68 N. H. 437, 36 Atl. Rep. 13, 73 Am. St. 610; Bar- retts, etc. Dyeing Establishment v. Wharton, 101 N. Y. 631, 4 N. E. Rep. 344; Gibson v. Carlin, 13 Lea, 440; Heck V. Shener, 4 S. & R. 249, 8 Am. Dec. 700; Allaire Works v. Guion, 10 Barb. 55; Coit v. Ste%vart, 50 N. Y. 17; Hatchett v. Gibson, 13 Ala. 587; Pierce v. Hoffman, 4 Wis. 277: Brig- ham V. Hawley, 17 III. 38; Brady v. Price, 19 Tex. 285, See Ward v. Willson, 3 Mich. 1, where it was held that proof that the plaintiff, while employed as a cook on board a boat, wilfully destroyed the hose belong- ing to the boat should be excluded in an action to enforce the payment of his wages, the tort not appearing to have any connection with his duties as cook. Nashville R Ca v. Chumlej', 6 Heisk. 325. 450 LEGAL LIQUIDATIONS AND EEDCCTIONS. [§ 180. be recouped in an action to recover wages.^ The same remedy is available where the employee quits the service without giv- ing the notice required by his contract; - and against a pledgee suing for the debt secured by the pledge where he has con- verted it. ' So in an action by the pledgor against the pledgee for conversion of the pledge the latter may recoup the amount of the debt secured thereby.* Where a carrier injures or loses goods, or any of them, or incurs a liability for negligent delay in transportation and delivery, the damage therefor may be recouped in an action for freight;^ damages for the culpable negligence of a physician who carries infection from patients having small-pox to the defendant's family, when called to prescribe for other diseases, may be recouped against his charges for services.^ The remedy extends to the vendor of 1 Bixby V. Parsons, 49 Conn. 483. 2Stockwell V. Williams, 40 Conn. 371. SBulkeley v. Welch, 31 Conn. 339; Ainsworth v. Bo wen, 9 Wis. 348; Harrell v. Citizens' Banking Co., Ill Ga. 846, 36 S. E. Rep. 460; Waring v. Gaskill, 95 Ga. 731, 22 S. E. Rep. 659. Where the defendant deposited a bond as collateral security for the payment of his note, and the bond was stolen after the note became due and before it was paid, the value of the bond could not be recouped in a suit on the note. To make the de- fense of recoupment available some stipulation in the contract sued upon mu-t have been violated by the plaint- iff. The deposit of the bond was per- haps a part of the transaction of giv- ing the note, but it was not the same transaction. The note was a contract independently of the pledging of the bond in itself. Winthrop Bank v. Jackson, 67 Me. 570, 24 Am. Rep. 56. The same rule was applied where the pledgee sold notes given him to secure the payment of the note in suit, which made no reference to the collateral. Fletclier v. Harmon, 78 Me. 465, 7 Atl. Rep. 271. * Belden v. Perkins, 78 IIL 449; Jar- vis v. Rogers, 15 Mass. 389; Stearns v. Marsh, 4 Denio, 227, 47 Am. Dec. ^248; Fowler v. Gilman, 13 Met. 267; Work v. Bennett, 70 Pa. 484; Brown V. Phillips, 3 Bush, 656. The right to recoup does not rest upon the principle of lien; it exists after the lien has been destroyed by a tortious act of the party in whose favor it was originally obtained. Ludden v. Buffalo Batting Co., 22 IIL App. 415. 5 Empire Transportation Co. v. Bog- giano, 52 Mo. 294; Ewart v. Kerr, 2 McMull. 141; Sears v. Wingate, 3 Allen, 103; Boggs v. Martin, 13 B. Mon. 239; The Nathaniel Hooper, 3 Sumn. 542; Jordan v. Warren Ins. Co., 1 Story, 352; Bradstreet v. Heron, 1 Abb. Adm. 209: Fitchburg, etc. Co. V. Hanna, 6 Gray, 539, 66 Am. Dec. 427; Davis v. Pattison, 24 N. Y. 317; Edwards v. Todd, 2 111. 463; Leech v. Baldwin. 5 Watts. 446; Humphrey v. Reed, 6 Whart. 435; Hinsdell v. Weed, 5 Denio, 172. But see Bornman v. Tooke, 1 Camp. 377, and Sheels v. Davies, 4 Camp. 119; Mayneon Dam. 70. 6 Piper v. Menifee, 12 B. Mon. 465, 54 Am. Dec. 547. § iSl.] RKOOUPMENT AND COUNTICR-CLAIM- 451 rags sold as clean and free from infection and fit to be manu- factured into paper if in fact they are infected with small-pox and cause that disease to break out in the paper mill of the vendee, whereby some of his workmen lose their lives and others are disabled, causing a loss of business and increase of expense to the purchaser of the rags.^ A borrower sued by the lender for conspiracy in failing to satisfy certain prior mortgages with the borrow^ed funds may set up that the lender had sohl his note before due and that his agent converted the borrowed money before its delivery to the borrower, and that the lender is indebted to the borrower to the extent of the value of the note converted.^ § 181. What acts may be the basis of recoupment. If the contract has been executed on the part of the plaintiff and, therefore, the defendant's contract sued on is based upon an executed consideration, then any tortious act of the former subsequently impairing, in fact, that consideration has been deemed an independent tort, and not a part of the transaction, or not connected with the subject of the action for breach of the defendant's undertaking.^ Thus, it has been held to be no defense to an action on a bill of exchange given for the price of goods sold that two months after their delivery to the vendee the vendor forcibly retook possession.^ But where a note was given for a judgment assigned, proof that [282] the assignor afterwards collected part of the judgment was held a defense jpro tanto to the note.' In an action for the price of specific articles bargained and sold, but not delivered, the defendant may set up by way of recoupment any injury to such articles occasioned by the fault or negligence of the vendor subsequent to the sale and j)rior to the time of de- 1 Dushane v. Benedict, 120 U. S. consideration of the contract sued 630, 7 Sup. Ct. Rep. 693. on. Nolle v. Thompson, 3 Met. (Ky.) ^ Bowman v. Lickey, 86 Mo. App. 47. 1'31. Nor for slander in an action by * In an action for wages the em- the indorsee before maturity of a plover cannot recoup damages for an note. Lyon v. Bryant, 54 111. App. 331. injury done by the plaintiff beyond * Stephens v. Wilkinson, 2B. & Ad. the .scope of his employment. Nash- 320, Huelet v. Reyns, 1 Abb. Pr. ville R. Co. V. Chumley, 6 Heisk. 327. (N. S.) 27; Slayback v. Jones, 9 Ind. Damages for maliciously suing out 472. See Martin v. Brown. 75 Ala. an attachment are not to be recouped 442; Gerding v. Adams, 65 Ga. 79. in the same suit because the wrong & Harper v. Columbus Factory, 35 was in no way connected with the Ala. 127. 452 LEGAL LIQUIDATIONS AND KEDUCTI0N8. [§ 181. liverj;^ for the vendor's duty was to keep the articles sold with ordinary care, and he is responsible for the want of such care or of good faith.^ So a vendee, when sued for the price of land sold, may recoup for the vendor's tort which dimin- ishes the value of the property purchased,^ or which consists of carrying away crops or fixtures before the sale is consum- mated by deed and delivery of possession.* Where suit was brought on a note given for wood the maker recouped against the note the amount of his loss because the plaintiff refused to permit him to convert the wood into charcoal on the land on which it was when it was sold, it was not necessary that the wood should be returned, it having been removed and coaled elsewhere.'' A tenant in common, in control of the premises held in common for the purpose of renting them, when sued by his co-tenant for his share of the rents may counter-claim the damages sustained by the plaintiff's wrongful acts in in- ducing lessees to leave the premises before their leases ex- pired,^ "Where a contract for particular works has been entered into, or for service, or for the sale and delivery of property, and there has been a part performance for which an action in general assujnjjsit is maintainable, the special contract is a part of the transaction in question. Although the plaintiff does not bring his action upon it, it is connected with the sub- ject thereof.^ Though the performance of the plaintiff's part of the contract may at first have been a condition, yet the de- fendant may waive the right to forfeit the contract for non- performance, and retain his right to damages. These he may recoup in an action on a quantum meruit or a quantum valebat, or in an action upon the contract.^ In such cases if the de- 1 Barrow v. Window. 71 111. 214. « Dale v. Hall, 64 Ark. 221, 41 S. W. 2McCandlish ^' Newman, 25 Pa. Rep. 761. 460; Chinery v. Viall, 5 H. & N. 288. i Twitty v. McGuire, 3 Murphy, 501; ^Streeter v, Streeter, 43 111. 155. Grannis v. Linton. 30 Ga. 330; Steam- •« Gordon V Bruner, 49 Mo. 570; boat Wellsville v. Geisse, 3 Ohio St. Grand Lodge v Knox, 20 Mo. 433; 333; Bishop v Price, 24 Wis. 480: Patterson v. Hulings, 10 Pa. 506; Hay ward v. Leonard, 7 Pick. 181, Owens V. Rector, 44 Mo. 389. But Bowker v. Hoy t, 18 Pick. 555; Barber see Slayback v. Jones, 9 Ind. 472. v. Rose, 5 Hill, 76. 5 Harraan v. Bannon, 71 Md. 429, 8 Woodrow v. Hawving, 105 Ala. 18 Atl. Rep. 862. 240, 16 So. Rep. 720; Madison v. Dan- § 1«1-] RECOUPMENT AND COUNTER-CLAIM. 453 fendant thinks proper to present his cross-claim by way of re- coupment the court will consider the whole contract [283] under which the plaintiff's demand arose, and direct a deduc- tion, from what he would otherwise be entitled to recover, of all damages sustained by the defendant in consequence of the plaintiff's failure to fulfill any or all of the stipulations on his side.^ On the sale of a quantity of standing wood the vendor agreed to indemnify the vendees against any damage that might happen to the wood in consequence of the burning of an adjoining fallow. The latter gave their notes for the price; and, afterwards, the fallow being burned over, the wood in question was destro3^ed by the fire; and it was held, in an action by the vendor upon the note, that the vendees might recoup their damages arising from the loss of the wood.' ville Mining Co., 64 Mo. App. 564; Wiley V Athol, 150 Mass. 426, 23 N. E. Hep. 311, 6 L. R. A. 342; Reynolds v. Bell, 34 Ala. 496, 4 So. Rep. 703; Bell V. Reynolds, 78 Ala. 511, 56 Am. Rep. 52; Sciiweickhart v. Stuewe, 71 Wis. 1. 5 Am. St. 190, 36 N. W. Rep. 605; Fabbricotti v. Launitz, 3 Sandf. 743; Vanderbilt v. Eagle Iron "Works, 25 Wend. 665; Van Buren v. Digges, 11 How. 461; Polhemus v. Heiman, 45 Cal. 573; Wbeelock v Pacific, Pneumatic Gas Co., 51 Cal. 223; Upton V. Julian, 7 Ohio St. 95; Har- ris V. Rathbun, 2 Keyes, 312; Hay- ward v. Leonard, 7 Pick. 181; Allen V. McKibben, 5 Mich. 449; McKinney V. Springer, 3 Ind. 59. ' Id. Loinax v. Bailey, 7 Blackf. 599; HoUinsead v. Mactier, 13 Wend. 275; Adams v. Hill, 16 Me. 215; Koon V. Greenman, 7 Wend. 121; Ladue v. Seymour, 24 id. 60; Brewer v. Tyring- ham, 13 Pick. 547: Coe v. Smith, 4 Ind. 79; Major v. McLester, id. 591, Milnes v Vanhorn, 8 Blackf. 198; Fenton v. Clark, 11 Vt. 557; Britton V. Turner, 6 N. H. 481, 26 Am. Dec. 713; Seaver v. Morse, 20 Vt. 620; Epperly v. Bailey, 3 Ind. 72; Good- win V Morse, 9 Met. 278; Wilkinson V. Ferree, 24 Pa. 190: Higgins v. Lee, 16 111. 495; Van Deusen v. Blum, 18 Pick. 329, 29 Am. Dec. 582; Lee v. Ashbrook, 14 Mo. 378, 55 Am. Dec. 110; White v. Oliver, 36 Me. 92; Merrow v. Huntoon, 25 Vt. 9; Blood V. Enos, 13 Vt. 625, 36 Am. Dec. 36:5; Preston v. Finney, 2 W. & S. 53; Ligget V. Smith, 3 Watts, 331, 27 Am. Deo. 358; Danville Bridge Co. v. Pomroy, 15 Pa 151: Allen v. Robin- son, 3 Barb. 341, Rogers v. Hum- phreys, 39 Me. 383. 2 Batterman v Pierce, 3 Hill, 171. This was an early and leading case on the subject of recoupment, and Bronson, J., comprehensively stated the doctrine underlying and govern- ing it. He said: "When the de- mands of both parties spring out of the same contract or transaction, the defendant may recoup, although the damages on both sides are un- liquidated. . . It was formerly supposed that there could only be a recoupment where some fraud was imputable to the plaintiff in relation to the contract on which the action is founded; but it is now well settled 4o4: LEGAL LIQUIDATIONS AND KEDUCTIONS. 181. [284] The plaintiff in one agreement stipulated to deliver forth- with a quantity of dressed pork to the defendant for a certain price, and also to sell him, upon their arrival, at a different price, a number of live hogs then on the way and expected m that the doctrine is also applicable when the defendant imputes no fraud and only complains that there has been a breacli of the contract on the part of the plaintiff. For the purpose of avoiding a circuity or the multiplication of actions, and doing complete justice to botii par- ties, they are allowed and compelled, if the defendant so elect, to adjust all their claims growing out of the same contract in one action. It was well remarked by Chancellor Wal- worth, in Reab v. McAlister,8 Wend. 109, that ' there is a natural equity, especially as to claims arising out of the same transaction, that one claim should compensate the other, and that the balance only should be re- covered.' The defendant has the election whether he will set up his claim in answer to the plaintiff's de- mand, or resort to a cross-action; and whatever may be the anaount of his damages, he can only set them up by way of abatement, either in whole or in part of the plaintiff's demand. He cannot, as in case of set-off, go beyond that, and have a balance certified in his favor. It is no objection to the defense that the plaintiff is not suing upon the origi- nal contract of sale, but upon a note given for the purchase-money. The promise of the defendants to pay the purchase-money has undergone the slight modification of being put into the form of a written obliga- tion, and on that the action is founded; but still the plaintiff is in effect seeking to enforce the original contract of sale, and the question must be settled in the same manner as though the action was, in form, upon that contract. But the objec- tion still remains, and it has been strenuously urged against the de- fense, that the damages claimed by the defendants do not spring out of the contract of sale, but arise under the collateral agreement of the plaintiff to indemnify against fire. It is undoubtedly true that there can be no recoupment by setting up the breach of an independent contract on the part of the plaintiff. But that is not this case. Here there were mutual stipulations between the parties, all made at the same time, and relating to the same sub- ject-matter; and there can be no difference, in principle, whether the whole transaction is embodied in one written instrument setting forth the cross-obligations of both parties, or whether it takes the form of a separate and distinct undertaking by each party. The plaintiff proposed to sell his wood at auction, and as an inducement to obtain a better price he stipulated with the bidders that they should have two winters and one summer to get away the wood, and that in the meantime he would insure them against the consequence of setting fire to his adjoining fallow grounds. Upon these terms the pur- chase was made by the defendant. , . . The nature of the transaction cannot be changed by putting the several stipulations of the parties into distinct written contracts; nor can it make any substantial differ- ence that the undertaking of one party has been reduced to writing, while the engagement of the other party remains in parol. In substance it is still the case of mutual stipula- § 181.] KECOUPMENT AND COUNTEE-CLAIM. 455 a few clays, no stipulation being made as to the time of [285] payment for either. It was held that the plaintilf was entitled to recover the sum stipulated for the dressed pork, notwith- standing that, after it became due, a breach of the stipulation in respect to the live hogs had accrued, but subject to recoup- ment of the defendant's damages for such breach.' In an action to recover damages for the conversion of a note made by the plaintiff and also of certain collaterals, the de- fendant may plead a counter-claim setting up the note and its non-payment at maturity and asking to recover the sum due with interest, although, after the note became due, the plaintiff had tendered to the defendant the sum due on it, and demanded the note with the collaterals, which the defendant refused to surrender. The court agreed that it is not enouirh that the claims set forth in the complaint and alleged in the counter-claim had a common origin and were coincident in the time of their creation. They must be so related that the counter-claim properly tends to diminish or defeat the plaint- iff's recovery. But the case was such. The plaintiff at- tempted to meet this by saying that upon his tender of the amount due upon the note, the defendant's lien upon the col- laterals was discharged and his right to the latter became ab- solute. This, however, did not solve the question. We must still go back to the transaction set forth in the complaint. "What is that transaction ? The plaintiff limits it to the tech- nical conversion ; that is, to the legal formula of his action. But that is not the entire transaction set forth in the complaint as the foundation of the plaintiff's claim. It is what that trans- action comes to when reduced to the concrete charge. But the transaction itself — that is the entire transaction — consists of all the facts averred in the complaint; the making and de- tions between the same parties, several, or whether some have been made at the same time and relating put upon paper wliile others rest in to the same subject-matter. The parol, the reason still remains for al- forms which the parties may have lowing the claims of both parties adopted for the purpose of manifest- growing out of the same transaction ing their agreement cannot affect to be adjusted in one action." their rights so far as this question i Tipton v. Feitner, 20 N. Y. 423; is concerned. Whether all the mut- Prairie Farmer Co. v. Taylor, 69 III ual undertakings have been embod- 440, 18 Am. Dec. G21; Cherry v. Sut- ied in one written instrument, or in ton, 30 Ga. 875. 456 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 181. liverj of the note; the giving of the collaterals, the tender of the amount due and the refusal thereupon to surrender the se- curities. The note is a part of the transaction thus set forth. It is interwoven with it. The facts with regard to it are in part the foundation of the plaintiff's claim. If the plaintiff is entitled to the value of his securities, the defendant is equally entitled to the amount of his note. It is entirely just that the plaintiff's claim should be diminished by the amount of the latter debt.' On the other hand, the defendant in an action for the value of goods sold and for services rendered cannot recoup damages resulting from an abuse of the writ of attach- ment issued by the plaintiff, there being no connection be- tween these and the subject of the action.- The same is true of a claim for storage asserted in an action brought for the conversion of property stored.^ Where accounts containing usurious interest have been closed and settled by note, and an action is brought on the note, the defendant cannot counter- claim for double the usury.* These are instances of cross-claims arising from the same contract or transaction. Stipulations are parts of the same contract for the purpose of this defense though they relate to distinct subjects, and a different time of performance, and a distinct and severable compensation is provided for each; so any implied or express warranty or guaranty which forms part of the consideration of the defendant's undertaking, which is the foundation of the plaintiff's action, is part of the same contract; and all damages to which the defendant is en- titled thereon may be recouped in such action. Many exam- ples have been given.^ In England the damages which may 1 Empire Dairy Feed Co. v. Chat- ham Nat. Bank, 30 App. Div. 476, 52 N. Y. Supp. 387. 2 Jones V. Swank, 54 Minn. 259, 55 N. W. Rep. 1126. 3 Schaeffer v. Empire Lithograph- ing Co., 28 App. Div. 469, 51 N. Y. Supp. 104, See Bernheimer v. Hart- mayer, 50 App. Div. 816, 63 N. Y. Supp. 978. i Witte V. Weinberg. 37 S. C. 579, 17 S. E. Rep. 681. 5 In an action upon one of several notes given for a chattel, a breach of warranty being alleged, the defend- ant may interpose a counter-claim for his entire damage. GeiserThresh- ing Machine Co. v. Farmer, 27 Minn. 428.8 N. W. Rep. 141; Minneapolis, Harvester Works v. Bonnallie, 29 Minn. 373, 13 N. W. Rep. 149. Contra, Aultman & T. Co. v. Hetherington 42 Wis, 622; Same v. Jett, ii 48a § 182.] EEOOUPMENT AND COUNTER-CLAIM, 457 be recouped are limited to those which directly result from the character of the property or the work done; consequential damages must bo recovered in a separate action.' "But in this country the courts, in order to avoid circuity of action, have gone further and have allowed the defendant to recoup damages suffered by him from any fraud, breach of warranty or negligence of the plaintiff growing out of or relating to the transaction in question." ^ § 182. Cross-claims between landlord and tenant. In ac- tions between landlord and tenant they have each the right to recoup damages in the other's action brought on the covenants in the lease, or those which are implied from the relation. Although there be a written lease or even an indenture con- taining express stipulations and covenants, if others are im- plied, the latter belong to and are parts of the same contract.' 1 Mondel V. Steel, 8 M. & W. 858; Davis V. Hedges, L. R. 6 Q. B. 637. liDushane v. Benedict, 120 U. S. 030, 7 Sup. Ct. Rep. 696; Harrington V. Stratton, 23 Pick. 510: Withers v. Greene, 9 How. 218; Van Buren v. Digges, 11 id. 661; Winder v. Cald- well, 14 id. 434; Lyon v. Bertram, 20 id. 149; Railroad Co. v. Smith, 21 Wall. 255; Marsh v. McPherson, 105 U. S. 709. » Harmony Co. v. Ranch, 62 111. App. 97; Culver v. Hill. 68 Ala. 68, 44 Am. Rep. 134; Vandegrift v. Abbott, 7o Ala, 487; Jones v. Horn, 51 Ark. 19, 14 Am. St. 17, 9 S. W. Rep. 309; Gocio v. Day, 51 Ark. 46; Lewis v. Chisholm, 68 Ga. 46; Stewart v. Lanier House Co., 75 Ga. 582, 598; Howdyshell v. Gary, 21 III App. 288; Burroughs v. Clancey, 53 111. 30; Dodds V. Toner, 3 Ind. 427; Blair v. Claxton, 18 N. Y. 529; Caldwell v. Pennington, 3 Gratt. 91; Vining v. Leeman, 45 111. 248; Hobein v. Drew- ell, 20 Mo. 450; Lynch v. Baldwin, 69 III. 210: Whitbeck v. Skinner, 7 Hill, 53; Mack v. Patchin, 42 N. Y. 167, 1 Am. Rep. 505; Mayor v. Mabie, 13 V Y. 151, 64 Am. Dec. 538; Lmdley v. Miller, 67 111. 244; Westlake v. De Graw, 25 Wend. 669; Lunn v. Gage, 37 111. 19; Guthman v. Castleberry, 49 Ga. 272; Tone v. Brace, 8 Paige, 597; Graves v. Berdan, 26 N. Y. 498; Vernam v. Smith, 15 N. Y. 328; Myers v. Burns, 35 N. Y. 269; Hexter v. Knox, 63 N. Y. 561; Eldred v. Leahy, 31 Wis. 546; Morgan v. Smith, 5 Hun, 220; Commonwealth v. Todd, 9 Bush, 708; Holbrook v. Young, 108 Mass. 83. If the landlord does not furnish the quantity of land or the number of animals he agrees to, the tenant may recoup his damages in an action brought to recover advances mada Horton v. Miller, 84 Ala. 537, 4 Sa Rep. 370. If the tenant makes special inquiry as to the condition of water on the premises he leases, and it is in fact unfit for use, and the landlord, knowing it, fails to remove the cause, the tenant is justified in regardi:ig the condition of the water as an eviction from the premises, and in an action to recover rent may recoup the expenses of sickne.s.->, including physician's fees, resulting from lii« 458 LEGAL LIQUIDATIONS AND EEDUCTIONS. [§ 182. The landlord, impliedly, in the absence of an express agree- ment defining his obligation in that regard, undertakes for the quiet enjoyinent of the premises by his tenant as against any hostile assertion of a paramount title, and that, so far as [286] he is concerned, he will do no act to interrupt the ten- ant's free and peaceable possession during the term granted.^ For any violation or breach of this obligation the tenant may recoup his damages in any action by the landlord against him based on his liabilities as a tenant.^ But for mere tortious acts of interference by the landlord with the demised prem- ises, not done in the assertion of a right nor amounting to an eviction, damages by wa}'' of recoupment have been denied.^ They have been denied for the malicious prosecution of suits- for unlawful detainer because they do not arise out of the con- tract and are not connected with the subject-matter of the suit> Where a cross-claim exists in favor of the tenant he may avail himself of it not only in an action against him by the land- lord on the contract, but also in replevin of property dis- trained for rent;* but not in a summary proceeding for pos- use of such water. Maywood v. Logan, 78 Mich. 185, 18 Am. St. 431, 43 N. W. Rep. 1052. In a statutory contest between landlord and tenant as to the amount of rent due, the former may meet violation of the lease with vio- lation, damages with damages, have a full reckoning, and uphold his warrant to the extent of the sum due him for rent after a settlement of the damage account. Johnston V. Patterson, 91 Ga. 531, 18 S. E. Rep. 350. 1 Keating v. Springer, 146 111. 481, 34 N. E. Rep. 805, 37 Am. St. 175, 22 L. R. A. 544; Mayor v. Mabie, 13 N. Y. 151, 64 Am. Dec. 538; Dexter v. Man- ley, 4 Cush. 14; Bradley v. Cart- wright, 36 L. J. (C. P.) 218; Maule v. Ashmead, 20 Pa. 482; Hart v. Smith, 2 A. K Marsh. 301; Young v. Har- grave, 7 Ohio, 394. 2McAlester v. Landers, 70 Cal. 79, 11 Pac. Rep. 505; Kelsey v. Ward, 38 N. Y. 83; Mayor v. Mabie, supra; Wade V. Halligan, 16 111. 507; Lynch v. Baldwin, 69 111. 210; Rogers v. Ostram, 35 Barb. 523; Chatterton v. Fox, 5 Duer, 64. The fact that the lessee has paid the rent for the greater part of the term will not deprive him of the right to counter-claim his damages for the entire term. McAlester v. Landers, supra. ^Edgerton v. Page, 20 N. Y. 281; Hulme V. Biown, 3 Heisk. 679; Bart- lett V. Farrington, 120 Mass. 284; Campbell v. Shields, 11 How. Pr. 565; Drake v. Cockroft, 10 id. 377; Walker v. Shoemaker, 4 Hun, 579; Lounsbery v. Snyder, 31 N. Y. 514; Ogilvie V. Hull, 5 Hill, 52; Vatel v. Herner, 1 Hilt. 149; Cram v. Dres- ser, 2 Sandf. 120; Crowe v. Kell, 7 Ind. App. 683, 35 N. K Rep. 186. But see Kamerick v. Castleman, 23 Mo. App. 481. 4 Dietrich v. Ely, 11 C. C. A. 266, 63 Fed. Rep. 413. 5 Nichols V. Dusenbury, 2 N. Y. § 183.] EECOUPMENT AND COUNTEK-CLAIM, 450 session based on the determination of the lease by forfeiture.* In an action for rent the defendant may show that the plaint- iff agreed to build a fence, or make certain repairs or other improvements, and has neglected to perform the agreement.^ § 183. Cause of action, connection between and cross- claim. Where the basis of the transaction between the [2.S7] parties is a contract and its breach amounts to a trespass or entitles the injured party to an action for negligence or fraud or to any action ex delicto^ he is not deprived of his right to set off such a claim, nor the other party to set off a claim aris- ing upon the contract against such a cause of action. In all such cases, there being a contract in fact, the party in default is not allowed to deprive the injured party of the right to take advantage of such default by way of recoupment or counter- claim by alleging that the contract was tortiously violated.' 288; Fowler v. Payne, 49 Miss. 32; Breese v. McCann, 52 Vt. 498; Fair- man V. Fluck, 5 Watts, 516; Giith- man v. Castleberry, 49 Ga. 272; Phil- lips V. Mouges, 4 Whart. 225; Hat- field V. Fullerton, 24 111. 278; Lind- ley V. Miller, 67 111. 244. Where the board of supervisors allowed a claim for repairing a bridge, and issued a warrant there- for, and afterwards the claimant committed a breach of his contract by failing to keep it in repair pur- suant to his bond, and he and his sureties became insolvent, held, that the board, in an action of mandamus to compel payment of the warrant, could recoup the breach, occurring before notice of assignment, against the assignee of the warrant. Jeffer- son County V. Arrghi, 51 Miss. 668. iMcSloy V. Ryan, 27 Mich. 110; D'Armond v. Pullen, 13 La. Ann. 137: Johnson v. Hoffman, 53 Mo. 504. ■''Miller v. Gaither, 8 Bush, 152; Myers v. Burns, 35 N. Y. 269; Hexter V. Knox, 63 N. Y. 561; Guthman v. Castleberry, 49 Ga. 272; Fairman v. Fluck, 5 Watts, 516; Lunn v. Gage, 87 111. 19; Kimball v. Doggett, 62 111. A pp. 528; Baker v. Fawcett, 69 id. 300. The tenant may rely upon his landlord to repair according to his agreement, and is not barred of the right to recoup because he might have made the repairs at small cost. Culver v. Hill, 68 Ala. 66, 44 Am. Rep. 134. 3 Davidson v. Wheeler, 17 R I. 433, 22 Atl. Rep. 1022; Cole v. Colburn, 01 N. H. 499; Morrison v. Love joy, 6 Minn. 319; Hatchett v. Gibson, 13 Ala. 587; Williams v. Schmidt, 54 111. 205; Chamboret v. Cagney, 2 Sweeny, 378, 41 How. Pr. 125; Starbird v. Bar- rens, 43 N. Y. 200; Wadley v. Davis, 63 Barb. 500; Griffin v. Moore, 52 Ind. 295; Mc Arthur v. Green Bay, etc. Co , 34 Wis. 139; Bitting v. Thaxton, 72 N. C. 541 ; Price v. Lewis, 17 Pa. St. 51, 55 Am. Dec. 536; Scott v. Kenton, 81 111. 96. See Scheuuert v. Kaebler, 23 Wis. 523. In all cases in which the parties have entered into an express con- tract and in which a tort has been suffered, which the sufferer may waive and sue in assumpsit, a coun- ter-claim may be made under the 460 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 183. Where there was an exchange of chattels the court said : Here are mutual and adverse claims for damages growing out of one transaction. Each party sold to the other a chattel and took another chattel in payment. For misrepresentations of the contract. Bai'nes v. McMullins, 78 Mo. i?60. And where tlie actor elects to sue in tort lor a wrong originating in or growing out of a contract wliicli he pleads as an inducement, the defendant may counter-claim for damage sustained by the breach of the contract. Kamerick v. Castle- man, 23 Mo. App. 481. The I'uie in Pennsylvania is that, independently of statute, any matter eitiier of contract or of tort, imme- diately connected with the plaintiff's cause of action, may be set up by way of defense to the action and in abatement of the plaintiff's damages only; any matter of contract may be set up by way of counter-claim under the statute, not only to defeat the action but for the purpose of estab- lisliing a liability of the plaintiff to the defendant in excess of the latter's demand. No mere matter of tort can be availed of by the defendant under the statute. Dushane v. Bene- dict, 120 U. a 630, 644, 7 Sup. Ct. Rep. 696, citing many Pennsylvania cases. In Conner v. Winton, 7 Ind. 523, the court defined a counter-claim to be that which might have arisen out of, or could have had some connection with, the original transaction in the view of the parties, and which at the time the contract was made they could have intended might in some event give one a claim against the other for compliance or non-compli- ance with its provisions. In Slay back v. Jones, 9 Ind. 472, the court, referring to recoupment and counter-claim, said: "They re- late more especially to damages for breach of contract which may be recouped in a suit for what may have been done or rendered in part per- formance of a contract. In such cases the cause of action and defense are part of the same transaction." In Love joy v. Robinson, 8 Ind. 399; Terre Haute & I. R. Co. v. Pierce, 95 Ind. 496, the court say that trespasses cannot be made to compensate each other. In Minnesota independent torts cannot be counter-claimed. Allen v. Coates, 29 Minn. 46, 11 N. W. Rep. 132. In Barhyte v. Hughes, 33 Barb. 320, and Loewenberg v. Rosenthal, 18 Ora 178. 23Pac. Rep. 601, the word "transaction" was construed to re- fer to business dealings, and did not include torts. Macdougall v. Ma- guire, 35 Cal. 274, 95 Am. Dec. 98. A counter-claim founded on con- tract cannot be interposed in an ac- tion based on fraud. People v. Den- nison, 84 N. Y. 272; Davis v. Frederick, 6 Mont. 300; Humbert v. Brisbane, 25 S. C. 506; Copeland v. Young, 21 id. 275. Where there is no contract rela- tion between the parties touching the subject in question, mutual torts committed at the same tiiue or in such succession or sequence as would make them parts of the res gestce cannot be made the basis of recoup- ment or counter-claim. In an action for assault and battery the defend- ant cannot counter-claim or recoup for a battery committed at the same affray by the plaintiff on the defend- ant (Schnaderbeck v. Worth, 8 Abb. Pr. 37); nor can the defendant in an action for slander counter-claim for slanderous words uttered by the plaintiff. Kemp v. Amacker, 13 La. 65. § 183.] KECOUPMENT AND COUNTER-CLAIM. 4G1 character alleged each party may generally sue in contract or tort. If the plaintiff had declared in contract, alleging that the defendant agreed that his horse was sound as far as he knew, knowing him to be unsound, it cannot be doubted that In Askins v, Hearns, 3 Abb. Pr. 1S4, Justice Emott thought a counter- claim could not be sustained upon the following facts: The plaintiff sued for damages for convei'sion of a ring. The defendant alleged an ex- change of rings, each to be kept until the other should be returned, and averred a tender of the one and demand of the other, and asked judgment for his ring. Such a coun- ter-claim would now be allowed with- out hesitation. Hoffman, J., said of this case, that "a distinction may be suggested, that where the ground of each claim is really a contract, al- though the form of action under the old system would be for a wrong, then, when the transaction that gives rise to each is the same, the code is broad enough to include a counter-claim. The exchange alleged of the rings was in fact a mutual agreement." Xenia Branch Bank v. Lee. 7 Abb. Pr. 377. In this case Wood- ruff, J., said: "The great question in controversy is, in an action in the nature of trover by a plaintiff who has indorsed notes or bills of ex- change, brought to recover the value thereof from a defendant in whose possession they are, and who claims title thereto through the plaintiff's indorsement, can the defendant set up title in himself, demand of pay- ment, protest and notice, and ask by way of counter-claim a judgment against the plaintiff as indorser?" It was decided in the affirmative. After quoting subdivisions 1 and 2 of section 150 of the New York code, the judge said: "This division of the section shows that there may be a counter-claim when the action itself does not arise on contract; for the second clause is expressly con- fined to actions upon contract ami allows counter-claims in such casek of any other cause of action alst arising on contract; and thig maj embrace probably all cases hereto fore denominated 'set-off,' legal or equitable, and any other legal or equitable demand, liquidated or un- liquidated, whether within the proper definition of set-oflf or not if it arise on contract. Gleason v, Moen, 2 Duer, 639. The first subdivision would therefore be unmeaning as a separate definition if it neither con- templated cases in which the action was not brought on the contract it- self in the sense in which these words are ordinarily used, nor counter- claims which did not themselves arise on contract. The first subdi- vision by its terms assumes that the plaintiff's complaint may set forth, as the foundation of the action, a contract or a transaction. The legis- lature in using both words must be assumed to have designed that each should have a meaning; and in our judgment this construction should be according to the natural and ordi- nary signification of the terms. In this sense every contract may be said to be a transaction, but every trans- action is not a contract. Again, the second subdivision having provided for all counter-claims arising on con- tract — in all actions arising on con- tract — no cases can be supposed to which the first subdivision can be applied unless it be one of three classe.s, viz. : 1st. In actions in which a contract is stated as the plaintiff's claim — counter-claims which arise 462 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 183. the defendant may recoup his damages. The fact that the de- fendant sues in tort does not complicate the matter. It is not more difficult, or less desirable, in such an action to have the whole litigation adjusted in a single suit.* out of the same contract; or, 2d. In actions in which some transaction, not being a contract, is set forth as the foundation of the plaintiff's claim —counter-claims which arise out of the same transaction; or, 3d. In actions in which either a contract, or a transat'tion which is not a con- tract, is set forth as the foundation of the plaintiff's claim — counter- claims which neither arise out of the same contract, nor out of the same transaction, but which are connected with the subject of the action." In Glen & Hall M. Co. v. Hall. 61 N. Y. 226, 19 Am. Rep. 278. an ac- tion was brought to restrain the de- fendant from using the plaintiff's trade-mark; the defendant claimed it was his, and asked damages for plaintiff's use of it by way of coun- ter-claim, and it was held to be proper. A claim on the part of the defend- ant for the price and value of the Identical goods which are the sub- ject of the action is a cause of action arising out of the same transaction alleged as the foundation of the plaintiff's claim, or is at least con- nected with the subject of the ac- tion. Thompson v. Kessel, 30 N. Y. 383; Brown v. Buckingham, 11 Abb. Pr. 387. The words "subject of the action " refer to the origin and ground of the plaintiff's right to recover rather than to the thing itself in contro- versy. Collier v. Erwin, 3 Mont. 142. In an action for assault and bat- tery the injury which provoked the defendant to commit the wrong is not connected with the subject of the action. "Ward v. Blackwood, 48 Ark. 396, 3 S. W. Rep. 624. The debaucheryof the defendant's daughter is not ground for a counter- claim in an action brought by him guilty thereof to recover money ob- tained by duress. Heckman v. Swartz, 55 Wis. 173, 12 N. W. Rep. 439. In an action against a judgment creditor for the unlawful seizure of exempt property the defendant can- not set up the judgment under which the seizure was made as a counter- claim. Elder v. Frevert, 18 Nev. 446, 3 Pac. Rep. 237. The "subject of the action " is the facts constituting the plaintiff's cause of action. The mere fact that the defendant sets up acts on the part of the plaintiff which are pre- judicial to his rights, and alleges that these acts on his part give the reason the defendant conducted himself as complained of by the plaintiff, does not show such a con- nection as is necessary to constitute such acts a counter-claim. IMulber- ger V. Koenig, 63 Wis. 558, 22 N. W. Rep. 745. The word " connected " may have a narrow or broad sig- nification, according to the facts of the case. "The counter-claim must have such relation to and connection with the subject of the action that it will be just and equitable that the con- troversy between the parties as to the matters alleged in the complaint and the counter-claim should be set- tled in one action by one litigation : and that the claim of the one should be offset against or applied upon the 1 Carey v. Guillow, 105 Mass. 18, 7 Am. Rep. 494. 183.] KECOUPMENT AND COUNTER-CLAIM. 403 If the buyer of goods brings an action against the seller for not completing the contract the latter may counter- [288, 280] claim or recoup for the goods already delivered. • And so in an action by the vendor to recover the price of goods sold and only delivered in part the purchaser may recoup any damao-es sustained by him by reason of the failure or refusal to deliver the residue;^ and in replevin for goods sold with reservation of title until payment, for failure to deliver at the time fixed ; ' and generally for failure to deliver as agreed although the contract is severable and part delivery has been accepted;* and in an action by the seller for the price the buyer may recoup for any deficiency in quantity, delay in delivery or breach of warranty.^ So in an action on a note given for the good will of a business the defendant may recoup his dama«"es resulting from the plaintiff's resumption of that business;^ and claim of the other." This rule in- cludes a ease where a second mort- gagee in possession of land commit- ted waste for the alleged purpose of depriving the defendant, the first mortgagee, of his security. In an action for the conversion of wood cut by the second mortgagee the damage sustained by the prior in- cumbrancer was connected with the subject of the action. Carpenter v. Manhattan L. Ins. Co., 93 N. Y. 552. See Thomson v. Sanders, 118 id. 252, 23 N. E. Rep. 874. In an equitable action to cancel an insurance policy a counter-claim alleging a cause of action on the pol- icy for the loss of property insui-ed is connected with the subject of the action. Revere F. Ins. Co. v. Cham- berlin. 56 Iowa, 508, 8 N. W. Rep. 338. 9 id. 386. The penalty imposed upon a na- tional bank for taking an unlawful rate of interest cannot be counter- claimed in an action upon the instru- ment discounted by it. Barnet v. Nat. Bank, 98 U. S. 555. See, gener- ally, Keegan v. Kinnare, 123 111. 280, 14 N. E. Rep. 14; Evans v. Hughey, 76 111. 115; Nolle v. Thompson, 3 Met. (Ky.) 121; Kingman v. Draper, 14 111. App. 577; Cow Run Co. v. Lehmer, 41 Ohio St. 384; Tarwater V. Hannibal, etc. R. Co., 42 Mo. 193; McArthur v. Green Bay, etc. Co., 34 Wis. 139; Walsh v. Hall, 66 N. C. 233; Walker v. Johnson, 28 Minn. 147, 9 N, W. Rep. 632; Poston v. Rose, 87 N. C. 279; Whitlock v. Ledford, 82 Ky. 390; Cornelius v. Kessel, 58 Wis. 237, 16 N. W. Rep. 550. 1 Leavenworth v. Packer, 52 Barb. 132. 2Harrolson v. Stein, 50 Ala. 347: Piatt V. Brand. 26 Mich. 178; Bowker V. Hoyt, 18 Pick. 555. 3 Ames Iron Works v. Rea, 56 Ark. 450, 19 S. W. Rep. 1063, ^Gomer v. McPhee, 2 Colo. App. 287, 31 Pac. Rep. 119; Booth v. Ty- son, 15 Vt. 515; Evans v. Chicago, etc. R. Co., 20 111. 189. 5 Cooke V. Preble, 80 111. 318; Hitch- cock V. Hunt, 28 Conn. 843; Stiegle- man v. Jeffries, 1 S. & R. 477, 7 Am. Dec. 626. eWarfield v. Booth, 33 Md. 63; Herbert v. Ford, 29 Me. 546; Burk- hardt v. Burkhardt. 36 Oiiio St. 261. 464 LEGAL LIQUIDATIONS AND EEDUOTIONS. [§ 184. in an action on an agreement not to set up business in a cer- tain place the defendant may recoup the amount agreed to be paid for the good will.' A contract which gives the sole right to sell an article in a specified place is not so disconnected with a note executed at the same time for the purchase-money of the article to be sold as that the damages resultmg from the breach of the former cannot be recouped in a suit on the latter.- § 184, Recoupment between vendor and purchaser. On the same principles recoupment is reciprocally available be- tween vendor and purchaser of real estate as well as of per- sonal property. Eecoupment may be had against the vendor for false representations affecting the identity and value of the land.* The purchaser's right to do so is not affected by the fact that the sale included both personal and real property, and that the misrepresentation related to only one class, if the transaction and the consideration were an entirety.* If tenants in common make partition to each other by quitclaim deeds the law implies a warranty that each will make good to the other any loss resulting from a superior title ; ^ hence a counter- claim may be maintained by the tenant who is evicted, on that account, against his co-tenant.^ In debt on a bond given for real estate or other action for the price the defendant may re- coup his damages for the plaintiff's breach of an agreement to give possession, as well as for injury to the premises,'^ or for the violation of an agreement to dig a well on the premises sold.* So a vendee's action to recover the purchase-money is subject to recoupment for his negligent destruction of the subject of the purchase.^ Recoupment has been allowed, in a suit for 1 Baker v. Connell, 1 Daly, 469. « Huntley v. Cline, 93 N. C. 458. 2Andre v. Morrow, 65 Miss. 315, 7 7 Patterson v. Hulings, 10 Pa. 506; Am. St. 658, 3 So. Rep. 659. Owens v. Rector, 44 Mo. 389; Gordon 3 James v. Elliot, 44 Ga. 237; Estell v. Bruner, 49 Mo. 570; Grand Lodge V. Myers, 56 Miss. 800; Warvelle on v. Knox, 20 Mo. 433; Streeter v. Vendors (2d ed.), § 962; Mulvey v. Streeter, 43 111. 155; Fetternecht v. King, 39 Ohio St. 491. McKay, 47 N. Y. 426; Abrahamson * Baughman v. Gould, 45 Mich. 481, v. Lamberson, 72 Minn. 308, 75 N. W. 8 N. W. Rep. 73. Rep. 226. 5 Nixon V. Lindsay, 2 Jones' Eq. « Maguire v. Howard, 40 Pa. 391. 230; Rogers v. Turley, 4 Bibb, 355; 9 Hatchett v. Gibson, 13 Ala. 587. Morris v. Harris, 9 Gill, 26. § 184.] KECOUPMENT AND COUNTER-CLAIM. 405 purchase-money, for damages done to the premises by an [290] adverse claimant, pending a litigation with the vendor, in which the latter's title was maintained; because, as plaintiff, he could have indemnified himself against the spoliator by the recovery of rnestie profits.^ It is well settled that when a deed has been made and ac- cepted, and possession taken under it, defects in the title will not enable the purchaser to resist the payment of the purchase- money, or recover more than nominal damages on his cove- nants for title, except in some states on the covenant of seizin, while he retains the deed and possession, and has been sub- jected to no inconvenience or expense on account of the de- fect.^ Though if no title or possession passed by the deed it would seem that any undertaking for payment of the purchase- money would be void for want of consideration notwithstand- ino- the covenants in the deed.' A vendee is authorized to extinguish an incumbrance or to remedy a defect of title after a breach of thp covenant of war- ranty, without a special request from or the consent of the vendor, and may recoup the amount reasonably paid for that purpose in an action for purchase-money, where there are cove- nants for title and against incumbrances.* So the vendee may iWeakland V. HofEman, 50 Pa. 513, 17 Ark. 254; Tillotson v. Grapes, 4 88 Am. Dec. 560. N. H. 444. 2Whislerv. Hicks, 5 Blackf. 100, ^ Delavergne v. Norris, 7 Johns. 33 Am. Dec. 454; Delavergne v. 358, 5 Am. Dec. 281; Stanard v. Eld- Norris, 7 Johns. 358, 5 Am. Dec. 281; ridge, 16 Johns. 254; Johnson v. Stanard v. Eldridge, 16 Johns. 254; Collins, 116 Mass. 393; Leffingwell v. Stephens v. Evans, 30 Ind. 39; Brandt Elliott, 10 Pick. 204; Brooks v. Moody, V. Foster, 5 Iowa, 287; McCaslin v. 20 Pi'-^k. 474; Norton v. Babcock, 2 State, 44 Ind. 151; Edwards v. Bo- Met. 510; Doremus v. Bond, 8 Blackf. dine, 26 Wend. 109; Abbott v. Allen, 368; Baker v. Railsback, 4 Ind. 533; 2 Johns. Ch. 519; Bumpus v. Platner, Brandt v. Foster, 5 Iowa, 287; Mc- 1 id. 213; Farnham v. Hotchkiss, 2 Daniel v. Grace, 15 Ark. 465; Lamer- Keyes, 9; Warvelle on Vendors (2d son v. Marvin, 8 Barb. 11; Detroit & ed.), t; 862. But see Walker v. Wil- M. R. Co. v. Griggs, 12 Mich. 45; Still- son, 13 Wis. 522; Hall v. Gale, 14 well v. Chappell, 30 Ind. 72; Brown Wis. 54; Akerly v. Vilas, 21 Wis. 88; v. Crowley. 39 Ga. 376, 99 Am. Dec. Lowry v. Hurd, 7 Minn. 356; Scant- 462; Deen v, Herrold, 37 Pa. 150; Key lin V. Allison, 12 Kan. 85; Tarpley v. v. Henson, 17 Ark. 254; Brown v. Poage, 2 Tex. 139. Starke, 3 Dana, 316; Burk v. Clem- 3 Dickinson v. Hall, 14 Pick. 217; ents, 16 Ind. 132; Schuchmann v. Rice v. Goddard, id. 293; Trask v. Knoebei, 27111. 175; Christy v. Ogle, Vinson, 20 id. 105; Key v. Henson, 33 111. 295; Kent v. Cantrall, 44 Ind. Vol. I — 30 4:Q6 LEGAL LIQUIDATIONS AND KEDUCTIONS. [§ 184. [291] recoup his damages on the covenant of warranty after the title has failed and there has been an eviction, or what is equal thereto.^ In some states, however, the defense for par- tial failure of title to real estate is not allowed at law in actions for the price.^ Generally no difference is made as to the exer- cise of the right of recoupment whether the plaintiff's action is brought on the original contract, or on a note or other security given for the price, and the latter under seal.' Such a distinction, however, seems to be recognized in New Jersey * and in England. In an action on a bill of exchange for goods supplied, which were " to be of good quality and moderate price," and to be estimated at about 400^., bills having been given for that amount, it was no defense that the goods turned out to be worth much less than the estimated price. Lord Tenterden said: "The cases cited by the plaintiffs have com- pletely established the distinction between an action for the price of the goods and an action on the security given for them. In the forriier, only the value can be recovered; in the latter, I take it to have been settled by these cases, and acted upon ever since as law, that a party holding bills given for [2\)2'] the price of goods supplied can recover upon them unless there has been a total failure of consideration. If the consid- 452; Robinius v. Lister, 30 Ind. 143, 63; Judd v. Dennison, 10 Wend. 512; 95 Am. Dec. 674; Davis v. Bean, 114 Payne v. Cutler, 13 Wend. GOo; Good- Mass. 358; Scantlin v. Allison, 13 win v. Morse, 9 Met. 278; Purkett v. Kan. 85; McKee v. Bain, 11 Kan. 569. Gregory, 3 111. 44; Christy v. Ogle, 33 iMcDaniel v. Grace, 15 Ark. 487; 111. 295; Hitchcock v. Hunt, 28 Conn. Tallmadge v. Wallis, 25 Wend. 107; 343; Mears v. Nichols. 41 111. 207, 89 Sargeant v. Kellogg. 10 III. 273: Wil- Am. Dec. 381; Kellogg v. Denslow, son V. Burgess, 34 id. 494; Coster v. 14 Conn. 411; Wilmot v. Hurd, 11 Monroe Manuf. Co., 2 N. J. Eq. 467; Wend. 585: Dailey v. Green, 15 Pa. Tone V. Wilson, 81 111. 529; McDowell 118; Ward v. Reynolds, 32 Ala. 384; V. Milroy, 69 id. 498. Key v. Henson, 17 Ark. 254. 2 CuUum V. Bank of Mobile, 4 Ala. In an action by the vendee upon 21, 37 Am. Dec. 725; Starke v. Hill, the covenants in his deed the vendor 6 Ala. 785: Tankersly v. Graham, 8 may recoup the unpaid purchase- id. 247; Helvenstein v. Higgason. 35 money or notes given to represent Ala. 259; Morrison v. Jewell, 34 Me. the same. Beecher v. Baldwin, 55 146; Thompson v. Mansfield, 43 Me. Conn. 419, 12 Atl. Rep. 401, 3 Am. 490; Wheat v. Dotson, 12 Ark. 699; St. 57. Bowley v. Holway, 124 Mass. 395. * Price v. Reynolds, 39 N. J. L. 171; 3 Harrington v. Stratton, 22 Pick. Hunter v. Reiley, 43 id. 480. 510; Van Epps v. Harrison, 5 Hill, § 1S5.] kecoupme:nt and cou>;TEii-cLAiM. 467 cration fails partially, as by the inferiority of the article fur- nished to that ordered, the buyer must seek liis remedy bv cross-action. The warranty relied on in this action makes no difference." ^ In Wisconsin it has been held that where notes are given for the contract price they are not payment unless so agreed ; and in a suit upon one of several such notes it will be pre- sumed, in the absence of evidence, that those not yet due are still in the vendor's hands, and that it is error to render jud fo- ment for the defendant on a counter-claim for the excess of his damages for breach of warranty over the note in suit.^ It was held to be unjust to allow the defendants full damages for breach of warranty, the same as though they had paid for the property, when these damages largely exceed the amount sued for. In Minnesota the decisions are to the contrary and rest upon the principle that the defendant's cause of action is one and indivisible; that a recovery of a part of the damages would bar a subsequent counter-claim to recover for the remainder.* § 185. Liquidated and unliquidated damages may be recouped. It is immaterial whether the damages which a de- fendant seeks to recoup or counter-claim are liquidated or un- liquidated; nor is it material whether the plaintiff's demand is liquidated or not.^ The theory of this defense being the set- ting off of the damages on one cause of action against those recoverable on another to avoid the necessity of other suits, 1 Obbard v. Betham, Moo. & M. 483; Lierz v. Morris, 19 id. 73; Weaver v. Morgan v. Richardson,! Canip. 40, Penny. 17111. App. 628: Batterman v. n.; Day v. Nix. 9 Moore, 159; Trickey Pierce, 3 Hill, 171; Ward v. Fellers, V. Larne, 6 M. & W. 278; Gascoynev. 3 Mich. 281; Winder v. Caldwell, 14 Smith, McC. & Y. 338; Warwich v. How. 434; Van Buren v. Digges, 11 Nairn, 10 Ex. 762. id. 461; McLure v. Rush, 9 Dana, 64; '^ Aultman & T. Co. v. Hethering- Bayne v. Fox, 18 La. 80; Stoddard v. ton, 42Wis. 022; Aultman&T. Co. V. Treadwell, 26 Cal. 294; Keyes v. Jett, id. 488. Western Vermont Slate Co., 34 Vt 3 Geiser Threshing Machine Co. v. 81: Hubbard v, Fisher, 25 Vt, 539; Farmer. 27 Minn. 428, 8 N, W. Rep. Dennis v. Belt, 30 Cal. 247; Kaskas- 141; Minneapolis Harvester Works kia Bridge Co. v. Shannon, 6 111. 15; V. Bonnallie, 29 Minn. 373, 13 N. W. Schubert v. Harteau, 34 Barb. 447; Rei>. 149. Speers v. Sterrett, 29 Pa. 192; Hayne * North German Lloyd Steamship v. Prothro, 10 Rich. 218. Co. v. Wood, 18 Pa. Super. Ct 488; 468 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 186. where both arise out of the same transaction, the defendant puts forward a substantive cause of action, becomes an actor to assert and prove it, with no other hampering conditions than would apply to him as plaintiff in a separate action upon his claim. When it appears to be so connected with the sub- ject of the plaintiff's action as to be available as a counter- [293] claim or b}'^ way of recoupment, it must be pleaded and proved according to the same rules as when it is made the basis of an action; the damages, if of such nature as to be submitted to the consideration of a jury in a suit brought for their recovery, are equally subject to determination by a jury for the purpose of redress in favor of a defendant. The policy of admitting this defense to avoid circuity of action obviously embraces all cases where the rights of the parties are of such a character as to be susceptible of adjustment in one action. Accordingly, where the defense has the necessary connection with the subject of the plaintiff's action and the rights of both parties may be finallj^ and justly settled b}'^ one adjudication, it is not essential that the damages on either side should be liquidated, nor of the same nature; — they may be liquidated on one side and unliquidated on the other ; on one side they may be claimed strictly for violation of contract, and on the other for fraud,^ or negligence,'^ or other tort/ or for tort on both sides.* § 186. Affirmative relief not obtainable. Eecoupment is generally available only as a defense; for, except by statute, it can have no further effect than to answer the plaintiff's damages in whole or in part; the defendant cannot recover any balance or excess,^ It is not necessary that it be a full de- fense;® it cuts off so much of the plaintiff's damages as the cross-claim comes to,^ and when sufficient in amount may, of course, satisfy his claim entirely,^ The verdict will then be 1 See § 179. ^ Hay v. Short, 49 Mo. 139; Ward v. 2 § 180, Fellers, 3 Mich, 281 ; Estell v. Myers, 3 §180. 54 Miss, 174; Fowler v, Payne. 52 * Carey v. Guillow. 105 Mass. 18; Miss. 210. Contra, Johnson v. White Estell V. Myers, 54 Miss. 174; Deagan Mountain Creamery Ass'n. 68 N. H, V, Weeks, 67 App. Div. 410, 73 N. Y, 437, 36 Atl. Rep. 13, 73 Am. St. 610. Supp. 641; Pelton v. Powell, 96 Wis. 6 Ross v, Longrauir, 15 Abb. Pr. 32a 473, 71 N, W. Rep. 887. Contra, Terre ^ ives v. Van Epps, 22 Wend. 155, Haute & I. R, Co. v. Pierce, 95 Ind, 8 Deagan v. Weeks, 67 App. Div. 496. 410, 73 N. Y. Supp. 641. § 186.] KECOUPMENT AND COUNTER-CLAIM. 469 for the defendant. In this respect it is different from mere mitigation, for damages can never be mitigated below a nom- inal sum. But however large the damages assessable in respect of the defendant's cross-claim set up by way of recoupment, if it exceed the plaintiff's damages only so much is taken into account as is required to annul his demand; the excess is lost.' This limitation has been obviated by the defendant brino^ino-a cross-suit as well as setting up the claim by way of re- [ii94] coupment and having the actions consolidated or tried to- gether.^ If two cross-actions are so tried, one for the price of property sold and the other for fraud in the vendor, the jury, if they find the fraud and that the damages equaled or ex- ceeded the purchase-mone}^ may render a verdict for the de- fendant in the first action and for the plaintiff in the second for the excess, if any, of such damages.' But in such case a party who defends by recoupment and brings a cross-suit, on the trial of both together is not entitled to have damages assessed in both actions for the same breach of contract, nor to divide his claim for damages as he sees fit between the two. Both actions being tried together, however, his entire damages for breaches of the contract, or in respect of his cross-demand, must be assessed and applied first, to cancel in whole or in part the damages of the plaintiff in the first action; then, if there be an excess, it should be returned in a verdict for the plaintiff in the cross-action.* Very generally in this country authority has been given to render judgment in favor of the defendant for any excess of damages after satisfying the de- mand against which his cross-claim is preferred. But when the plaintiff sues as assignee of the demand, the defendant having a cross-claim against the assignor can onl}" use it for defense; to that extent it is available the same as though tho suit were in the name of the assignor.* 1 Brunson v. Martin, 17 Ark, 270; 2 Cook v. Castner, 9 Cush.266; Star Burlingame v. Davis, 13 111. App. 602; Glass Co. v. Morey, 108 Mass. 570. Kingman v. Draper, 14 id. 577; Wa- ^Cook v. Castner, supra. terman v. Clark, 76 111. 428; Stow v. * Star Glass Co. v. Morey, supra, Yarwood, 14 id. 424; Charles City ^See § 176; Desha's Ex'r v. Robin- Plow & Manuf. Co. v. Jones, 71 Iowa, son, 17 Ark. 228. 234, 32 N. W. Rep. 280. 470 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 187, § 187. Election of defendant to file cross-claim or sue npon his demand. A defendant has an election to use such cross-demand as a defense by way of recoupment or to bring a separate action upon it; but he will not have an election to set up his claim by way of recoupment unless it would be jist and equitable, and it is practicable to adjust and allow it in the plaintiff's action. The omission to take advantage of matter of recoupment or counter-claim as a defense is no bar to a [295] cross or separate action upon it; so that, though the cross-claim be admissible by way of defense, the defendant has an option to avail himself of it in that form or to sue upon it in another action.* The reason for allowing the defendant an option is that it w^ould greatly diminish the benefit to which he is entitled and in some cases wholly neutralize it, because, while the right of action exists, the extent to which the breach of warranty or of contract may afford a defense is usually un- certain, it may require sometime for the development of all the injury which will result from the plaintiff's misconduct or default. It is unreasonable, therefore, that he should have the right to fix the time at which the money value of his wrong- doino; or neMigent omission shall be ascertained.^ But the defendant will be denied the right of recoupment w^hen it cannot be justly and equitably allowed.* It is a de- fense on principles borrowed from equity, and if a superior equity intervene it will be denied; and when any equitable barrier exists and the whole controversy cannot be settled in the plaintiff's action a separate suit must be brought. On this ground, in several states, defenses of this kind in suits for the purchase-money of land based on breaches of covenants for title will not be allowed in actions at law.* The owner of a lot entered into a contract with others for the latter to build 1 Barth v. Burt, 43 Barb. 628; Mim- so. Hitchcock v. TurnbuU, 44 Minn, naugh V. Partlin, 67 Mich. 391, 34 N. 475, 47 N. W. Rep. 153. W. Rep. 717. Where notes are given on a settle- 2 Davis V. Hedges, L. R. 6 Q. B. G87. ment for a balance found due after 3 Judgment may be ordered for the all the grounds for claiming a recoup- plaintiff on the pleadings if the ment are known to their maker he answer states a counter-claim for is estopped from urging any such merely nominal damages and the matters in defense to an action upon costs will not be affected by doing them. Hill v. Parsons, 110 111. 107. ♦See S 184. § 187.] KECOUPMENT AND COUNTEK-CLAIM. 471 a warehouse u])on it for a specified sum. The contract also contained a lease to this party for thirteen years from the date fixed for its completion at a stated yearly rent. After the building had been erected the builders and lessees entered a mechanic's lien for the work and materials, and two years afterwards the property was sold, and it had to be determined how the fund should be distributed. The lessees had occupied for two years without paying any rent, and during that time the lessor became indebted to them on account to an amount nearly equal to the rent for that period. The court below ex- cluded the lessee's account as a set-off against the rent, and set off the rent against the lien debt because these latter were part of one transaction. This decision was the subject of re- view. Thompson, J., said: "There are undoubtedly cases in which the transaction is so entirely a unit that it is most just and proper when litigation arises that matters arising directly out of it should be determined in one suit. These cases are not parallel with this. Here the same paper, it is true, con- tains the contract out of which the lien arises as well as that out of which the rent accrued; but they are as distinct and separate covenants as if written on separate sheets of paper. There is a complete contract for building, describing the kind of structure, and the time when to be completed and paid for. Then follows a complete lease of the building for a long term, to commence shortly before its completion and to con- [296] tinue for thirteen years. The former, the building contract, was to be finished in about eight months, and to be then paid for. The first year's rent would not fall due for near a year after. These things show the distinctiveness of the covenants as contracts. Now the lien might have been reduced under the principle invoked by showing defectiveness in the work and the like, and so might the rent if the landlord had been suing for it on account of interference with the tenant's pos- session, not amounting to eviction, but acts against quiet enjoyment. These would be instances of claims arising in the same transaction being allowed to be given in evidence to ex- tinguish the claim by a liberal construction of our defalcation act. ... It was impossible to settle the entire covenants in one action. They were of different and distinct natures, and to be performed at different and distinct periods. In ap- 472 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 188. plying the rent, therefore, to the extinguishment of the lien, on this principle alone, when the plaintiffs had other claims en- titled to its application on equitable principles, was of course error in the absence of appropriation by the debtor and cred- itor. They, therefore, should have been allowed to put in evidence their book account; if it was unpaid and unsecured, and no appropriation by the parties of the rent, equity would apply it to the book account in preference to the old debt secured by the lien. This is the well settled rule. " ' In an action on a note against the executor of an accom- modation indorser, it appeared that the note was made, in- dorsed and transferred to the plaintiff in payment of, or as collateral security for, an antecedent debt of a firm of which the maker was a member; that afterwards the firm made an assignment to the plaintiff for the benefit of the creditors, pre- ferring the plaintiff and the defendant's testator. The answer setting up these facts alleged also that the assets were more than sufficient to pay in full all the preferred creditors. But as these facts could not be established without an accounting, and the plaintiff was entitled, when compelled to account, to do so entirely, which could not occur in that action for the want of necessary parties, all evidence touching the counter- claim was properly rejected.^ § 188. Burden of proof; measure of damages. When a defendant sets up a cross-claim by way of recoupment he as- sumes, like a plaintiff, the burden of proof in respect to it; and the same rule or measure of damages applies as would be ap- plicable in a separate suit upon such claim; subject, however, to the limitation already mentioned, that there can be no re- covery by a defendant for any balance found in his favor be- j'ond the damages established on the part of the plaintiff, in the absence of a statute authorizing it. The burden of proof rests upon him because he asserts a claim or right, and must therefore produce the proof necessary to make good his con- tention.^ That the same rule of damages applies has been 1 McQuaide v. Stewart, 48 Pa. 198. 3 Mendel v. Fink, 8 III App. 378; 1 See Howe Machine Co. v. Hickox, Wliart. Ev., § 356. 106 111. 461. The defendant has the burden of 2 Bailey v. Bergen, 67 N. Y. 346. establishing all the elements of a See Duncan v. Stanton, 30 Barb. 533. cause of action (Heedstrom v. Baker, § ISO.] RECOUPMENT AND COUNTER-CLAIM. 473 repeatedly held;^ and it is universally assumed by actually applying it.^ But the rule is the rule of compensator}'- dam- ages — no recovery on a claim set up for recoupment can be had for malice or any aggravation in the form of exemplary damages.' The consideration that this defense is to avoid cir- cuity of action, and when resorted to is a substitute, ['298] renders it desirable and necessary to its usefulness that the defendant, to the extent of full defense, should have the bene- fit of the rule of damages to which he would be entitled if he elected to bring a separate action. § 189. A cross-claim used in defense cannot be sued upon. When a cross-claim is submitted as a defense by way of re- 13 IIL App. 104): and must plead them, Rawson v. Pratt, 91 Ind. 9. •Goodwin v. Morse, 9 Met. 278; Myers v. Estell, 47 Miss. 4; Hitch- cock V. Hunt, 28 Conn. 343; Tim- mons V. Dunn, 4 Ohio St. 680. 2 Blanchard v. Ely, 21 Wend. 342 Tinsley v. Tinsley, 15 B. Mon. 454 Rogers v. Ostram, 35 Barb. 523 Stoddard v. Treadwell, 26 Cal. 294 Satchwell v. Williams, 40 Conn. 371 Cook V. Soule. 56 N. Y. 420; War field V. Booth, 33 Md. 63; Bradley v. Rea. 14 Allen, 20; Harralson v. Stein, 50 Ala. 347; Haven v. Wakefield. 39 111. 509; Bounce v. Dow, 57 N. Y. 16; Aultman & T. Co. v. Hetherington, 42 Wis. 622; Van Epps v. Harrison, 5 Hill, 63; Overton v. Phelan, 2 Head, 445; Timmons v. Dunn, 4 Ohio St. 680; Rotan v. Nichols, 22 Ark. 244; Harris v. Rathbun, 2 Keyes, 312; Railroad Co. v. Smith, 21 Wall. 255. 3 Allaire Works v. Guion, 10 Barb. 55. This case has sometimes been cited as holding that special dam- ages are not the subject of recoup- ment (Benkard v. Babcock, 2 Robert. 175); and Dorwin v. Potter, 5 Denio, 306, has also been cited as holding the same. Neither case advances any such doctrine. In the latter case a landlord's action for rent was defended by way of recoupment for his neglect to put the barns on the demised premises in that state of re- pair required by his agreement. The court say, Whittlesey, J.: "The ma- terial question here is as to the proper rule of damages for such neglect to repair. We do not know what the referees adopted, but the questions put to the witnesses after objection would only be admissible upon the ground that the defendant was entitled to all the damages which he might have sustained by the injuries to the cows and young cattle, the increase of food required, and the decrease of produce by rea- son of the state of the barns in ques- tion. It strikes me that such dam- ages are altogether too remote and contingent, and that the true rule of damages is the sum necessary to place the barns in that state of re- pair in which they were to be put according to the agreement, with interest thereon, if the referees thought proper to allow interest." There is no hint that this rule was adopted because the plaintiff's breach of contract was set up by way of recoupment; but it is laid down as " the proper rule of dam- ages for such neglect to repair;" on that subject see Myers v. Burns, 35 N. Y. 269; Hexter v. Knox, 63 N. Y. 561. I 474 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 189. coupment the judgment will be a bar to another action or recoupment. A defendant has an election to avail himself of a cross-claim by way of recoupment, or under the code as a counter-claim, or to bring an action upon it. This choice, however, is only final when submitted for adjudication, and is so to prevent a second recovery. Neither pleading it in de- fense nor bringing an action upon it will determine the elec- tion.^ 'Where it appeared in a suit in which a cross-claim was set up by way of recoupment that the defendants had previ- ously brought an action for the same damages, which was still pending, and the trial court had rejected the defense, the appellate court said: "The court [below] seemed to have re- garded the pendency of the other action as a sort of abate- ment of the defendants' plea, or to have deemed the bringing of the suit (by the defendants) ... as a conclusive elec- tion to prosecute a cross-action, and not to recoup or use the claim as a defense under any circumstances while that action should continue. There is in this holding a misapprehension of the defendants' position. They are not prosecuting two actions, one of which abates the other. In an endeavor to re- cover their damages they find themselves prosecuted by their adversary. They may defend by setting up any matter which [299] the law recognizes as a defense, whether it be a cause of action, or whether it be a judgment actually recovered therein — the only difiference being that after judgment it must be used as a judgment and by way of set-off. The elec- tion made by the defendants was not an election not to recoup. At that time it was an election between prosecuting to estab- lish their claim, or suffering the injury without seeking any redress. And when the plaintiff forced them into court, . . . their opportunity to use their claim by way of defense first arose, and they had a right to embrace it. Until judgment in one of the suits, the right to press the claim in the other con- tinued."^ But after a judgment in a separate action upon the 1 McDonald v. Christie, 42 Barb. 36; 2 Naylor v. Schenck, 3RD. Smithy Fabbricotti v. Launitz, 3 Sandf. 743; 135; Lindsay v. Stewart, 72 Cal. 540, Eankin v. Barnes, 5 Bush, 20; Gil- 14 Pac. Rep. 516. more v. Reed, 76 Pa. 462. See Cook If the matter pleaded in recoup- V. Castner, 9 Cush. 266; Miller v. ment can be set up in defense to a Freeborn, 4 Robert. 608. suit upon the contract out of which I § ISO.] RECOUPMENT AND COUNTER-CLAIM. ii> claim it is merged in the judgment; or, if rejected, barred; if the issue embraces it, the judgment is conclusive.^ In an action for breach of warrant}'- in the sale of per- [300] sonal property these facts appeared: A note given for the it arose and which is pending it will not be proper to plead it in another suit in the same court. Jeffei'son Lumber Co. v. Williams, 68 Tex. 656, 5 S. W. Rep. 67. A plaintiff is not estopped from prosecuting a suit for work and labor by reason of the payment of a judg- ment recovered against him by the defendant pending such suit for damages for the improper perform- ance of the work and labor sued for; the claim is not res judicata because one suit sounded in tort and the other in assumpait. Mimnaugh v. Partlin, 67 Mich. 391, 34 N. W. Rep. 717. 1 Davis V. Tallcot, 13 N. Y. 184; Kane v. Fisher, 3 Watts, S4G; Grant V. Button, 14 Johns. 377; O'Connor V. Varney, 10 Gray, 331; Burnett v. Smith, 4 Gray, 50; Salem India R. Co. V. Adams, 23 Pick. 256; Stevens V. Miller, 13 Gray, 283; Huff v. Broyles, 26Gratt. 283: Beall v. Pearre, 12 Md. 550; McLane v. Mdler. 10 Ala. 856; Britton v. Turner, 6 N. H. 481, 495, 26 Am. Dec. 713. In Davis v. Tallcot, suj)ra, it was held that a recovery in a suit upon an agreement, wherein the right to recover depended by the pleadings upon the truth of the allegations made in the complaint and denied by the answer, that the plaintiff had fully performed the agreement, is a bar to an action brought subse- quently by the defendant in the tirst suit against the plaintiff therein to recover damages for the alleged non-performance of the same agree- ment. The record of the recovery estops the defendant from contro- verting that the plaintiff thertjin fully performed the contract. The rule is not otherwise, although in the first suit the defendant, in addi- tion to the allegation of perform- ance, alleged breaclies by the plaint- iff, and claimed to recoup damages, and at the trial expressly withdrew the claim for damages, gave no evi- dence touching the alleged breaches, and the second suit was to recover damages for such breaches. Gardiner. C. J., said: "The defend- ants in that (the former) action, the present plaintiffs, insisted upon the non-performance of the agreement upon the part of Tallcot and Can- field, the manufacturers of the m.i- chineiy, for two purposes entirely distinct in their nature and objects. First, as a complete defense to the action, by a denial of that which the makers of the machinery had averred and must prove before they could recover anything. Second, as a foundation for a claim in the nature of a cross action for dama;.'es to be deducted from the amount which the then plaintiff might otherwise recover. It is obvious that, by with- drawing their claim to damages, the then defendants did not waive the right to insist upon their defense. The plaintiffs, notwithstanding, must have established their title to the price stipulated, by proof that the machinery was made within the time and in the manner called for by the agreement; and the vendees were at liberty to meet and combat these proofs by counter evidence on their part. Now, this was precisely what was done, or rather the neces- sity for introducing evidence to sus- tain the action was superseded by 476 LEGAL LIQUIDATIONS AND KEDUCTIONS. [§ 189. purchase-money bad been collected by suit; to that the now plaintiff had pleaded non assum,psit^ and it was agreed that under that plea he might offer the special matter in evidence as fully as if he had specially pleaded the same or given notice thereof; the breach of warranty now sued for the then defend- ant offered to prove as a defense, but it was rejected by the court because it did not tend to show a total failure of consid- eration. On these facts the judgment in the former action the admission of the then defend- ants in open court 'that they were indebted to the manufacturers for tlie causes of action mentioned in their complaint.' As the cause of ac- tion and the indebtedness of the de- fendants were by the complaint made dependent upon a full per- formance of the contract by the parties who instituted the suit, the concession of the defendants was equivalent to an admission on the record to that effect; and the report of the referee followed by the judg- ment of the court consequently estops the parties to that suit from ever after questioning that fact in any controversy upon the same agree- ment (2 Cow. & H. N. 843; 10 Wend. 80, 3 Comst 173). In the suit now pending, however, the vendees bring their suit upon the same conti'act against the manufacturers, and aver a non-performance by the defend- ants as the sole cause of action. They have succeeded in the court below, notwithstanding the ob- jection we have considered; and there are, consequently, two records in the same court between the same parties, each importing absolute verity, one of which affirms that the manufacturers faithfully performed said agreement 'in every respect on or before the 7th of June, 1850; the other, that they did not perform it in any respect at any time.' This flat contradiction is attempted to be reconciled by the assertion that the record in the firstsuit only shows that this point might have been, not that it was, litigated. The answer is that the record in that case proves that that question of performance was directly in issue and must have been litigated; that a recovery without establishing the fact of performance was a legal impossibility. Again, the parol evidence, if admissible, only proves that the vendees did not rely upon a breach of the contract upon the part of the makers of the machinery to support their claim to recoup. This is the course they would naturally adopt if their dam- ages, in their opinion, exceeded the sum to be paid for the machinery. Their only remedy for the excess would depend upon defeating the action then pending, and subse- quently suing on the agreement. That this was really the object of their legal adviser is evidenced by the fact that while the manufact- urers recovered in their suit less than $650, the present plaintiffs have obtained judgment in the case un- der review for upwards of $900. The withdrawal of their claim to recoup was therefore not only con- sistent with the determination to in- sist upon a breach of the contract on the part of the manufacturers in or- der to defeat the suit then pending, but this was indispensable to the ulti- mate recovery of their full damages in a subsequent action." See Merriam V. Woodcock, 104 Mass. 326. § 190.] RECOUPMENT AND COUNTER-CLAIM. 477 [301] was held to be a bar.^ The defense being admissible in the former action and erroneously rejected, the judgment had the same effect as though the claim had been admitted. The error of its rejection should have been corrected by proceed- ings taken in that case; therefore the exclusion of the defense by the court had the same effect as a disallowance by a jury.- "VVhere, notwithstanding the cross-claim is pleaded, the judg- ment is afterwards taken by default by the plaintiff, and so appears by the record, such claim is not barred.' The fact that the judgment was upon default makes it as certain that the counter-claim was not passed upon by an actual adjudica- tion as though the plea had been formally withdrawn. If sev- eral notes have been given for a chattel and they become due at different times, and the defendant in an action upon the one which matures first counter-claims for damaires arisino- from the breach of the warranty, judgment in his favor estops him from pleading such defense in an action subsequently brought upon the other notes.'* § 190. Notice of cross-claim. This defense being a substi- tute for an action and to avoid the necessity of another suit, some pleading must be adopted by which the defendant evinces his election to insist on his cross-claim as a defense. It must make the necessary allegations and inform the plaintiff so that he may not be taken by surprise. And it must be set up in the answer under the code.^ The defendant is as much con- cluded b}'" the amount of damages he claims in his counter- claim as the plaintiff is by his complaint.^ Kecoupment can- 1 Beall V. Pearre, 13 Md. 550. Hardman, 4 E. D. Smith, 448: Lam- 2 Grant v. Button, 14 Johns. 377; son & Goodnow M. Co. v. Russell. 112 Smith V. Whiting, 11 Mass. 445. Mass. 387; Lansing v. Van Alstyne, 2 3 Bascom v. Manning. 52 N. H. 132; Wend. 561 ; Steamboat Welisville v. Bodurtha V. Phelon, 13 Gray, 413. Geisse, 8 Ohio St. 333; Young v. * Geiser Threshing Machine Co. v. Plumeau, Harp. 543; Maverick v. Farmer, 27 Minn. 428, 8 N. W. Rep. Gibbs,3McCord,315;McLure v.Hart, 141; Minneapolis Harvester Works 19 Ark. 119; Hill v. Austin, id. 230; V. Bonnallie, 29 Minn. 373, 13 N. W. Spink v. Mueller, 77 Mo. App. 85; Rep. 149. Compare Aultman & T. Rawson v. Pratt, 91 Ind. 9. Co. V. Hetherington, 42 Wis. 622; « Annis v. Upton, 66 Barb. 370; Aultman & T. Co. v. Jett, id. 488. Taylor v. Butters & Peters Salt & s Trowbridge v. Mayor, 7 Hill, 429; Lumber Co., 103 Mich. 1, 61 N. W. Burton v. Stewart, 3 Wend. 236; Rep. 5. Barber v. Rose, 5 Hill, 76; Crane v. 478 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 191. not extend beyond the specific matters sued upon unless the notice or pleading informs the plaintiff that the defendant will go into others.^ The notice must be sufficiently certain to ap- prise the plaintiff of the nature of the defendant's claim, and in case of a suit upon contract it must specify the breach com- plained of.- An averment in a cross-bill claiming a recoup- ment of special damages for the breach of a contract, the gen- eral damages for which appear to be only nominal, should be special; if it only alleges tliat the defendant has been damnified to a specified amount it is insufficient.^ A reduction of dam- ages by way of recoupment cannot be shown under a special plea in bar, but may be obtained under the general issue.* Statutes concerning notice will be liberally construed; the rules in relation to a variance between the pleadings and the proof will not be applied to the notice, which is good if it states the ground and substance of the defense, though it is defective in matters of form.-^ The only way to make the objection that a cause of action pleaded as a counter-claim is not such in the particular case because it is in no way connected with the sub- ject of plaintiff's action is by demurrer. If there is no demurrer on that ground and issue is taken on the facts alleged, the right to object is waived.^ Section 5. marshaling and distribution. § 101. Definition. Marshaling is the setting of debts [302] or assets in a certain order; distribution is the applica- tion of funds to the paj^ment of debts marshaled. There are therefore two kinds of marshaling, one of assets, the other of debts. Marshaling is resorted to whenever it becomes neces- sary practically to answer either the question in what order certain distinct funds or properties shall bear the burden of paying or contributing to pay a debt which is directly or indi- 1 McKevitte v. Feige, 57 Mich. 374, McCormick Harvesting Machine Co. 24 N. W. Rep. 109. v. Robinson, 60 id. 253. a Sinker v. Diggins, 76 Mich. 557, 43 & Merrill v. Everett, 38 Conn. 40. N. W. Rep. 674. ^Ayres v. O'Farrell, 10 Bosw. 143; 3 Hooper V. Armstrong, 69 Ala. 343. Hammond v. Terry, 3 Lans. 186; nVadhams v. Swan, 109 III. 46; Walker v. Johnson, 28 Minn. 147,9 Hoerner v. Giles, 53 III App. 540; N. W. Rep. 632. § 192.] MAKSHALING AND DISTRIBUTION. 479 rcctly a charge upon all ; or, secondly, when there are several debts directly or indirectly charged upon one fund or prop- erty which is insufficient to pay them in full, to determine in what order such fund shall be applied as far as it will go. In answering the first, the court settles the order of liability among the funds that must pay; the second, the priorities of the claims to be paid. Under the first inquiry two classes of persons are liable to be afi'ected: those having proprietary interests in the fund or property marshaled, and creditors having liens thereon. § 192. Sales of incumbered property iii parcels to differ- ent purchasers. For the protection of purchasers this rule obtains: if the creditor's lien be upon several parcels of land for the payment of the same debt, and some of those parcels belong to the person who in equity and justice owes, or ought to pay, the debt, and other parcels have been transferred by him to third persons, his part, as between himself and them, shall be primarily chargeable with the debt.^ And if [303] there have been successive alienations by him of parts of the incumbered property, and the portion retained is insufficient to discharge the entire incumbrance, the parcels transferred will be subject to sale in the inverse order of alienation.^ The ' 2 Story's Eq., § 1233; Clowes v. have satisfied the judgment; or, if Dickenson, 5 Johns. Ch. 285, 9 Cow. not.torestoreoraccount for the value 403; Cowden's Estate, 1 Pa. 267, 274; beyond what would, with the other, Mason v. Payne, Walk. Ch. 459; have satisfied the judgment. That Cooper V. Biglj% 13 Mich. 463; such alienee, having stood by and Barnes' Appeal, 46 Pa. 350; Ammer- allowed the legal estate to pass from man v. Jennings, 12 B. Mon. 135. liim, shall not be allowed the land In Clowes v. Dickenson, 9 Cow. itself, with improvements made sub- 403, it was held that if the creditor sequent to the execution sale and or any other person having control before he asserted his claim. The of his judgment cause a sale of the true value of the aliened estate iu aliened part before resorting to that market at the time of the execution •retained by the judgment debtor, the sale, not the price bid for it, is the latter part being sufficient to pay measure of compensation. his debt, though no order or decree ^ Id.; Wieting v. Bellinger, 50 Hun, be obtained directing the remaining 324, 3 N. Y. Supp. 361; Gage v. Mc- portion to be first sold, such creditor Gregor, 61 N. H. 47; Vogle v. Brown, will be required to restore the real 120 111. 338, 11 N. E. Rep. 327, 12 id. estate so sold; or, if sold to a bona 252; Gill v. Lyon, 1 Johns. Ch. 447; fide purchaser, to account to the Stevens v. Cooper, id. 425; James v. alienee for the value of the real as- Hubbard, 1 Paige, 228; Gouverneur tate so sold, if the other part would v. Lynch, 2 id. 300; Guiou v. Knapp, 480 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 193. operation of this rule may be waived, limited or modified bj'' the instrument executed to the earlier grantee, which will bind all who claim under him.' [304] § 193. Sale subject to incumbrance. If a portion of the land covered by a mortgage is conveyed subject to the payment of the entire mortgage by the grantee the subse- quent purchaser of another parcel,^ or the mortgagor,' has a right to insist that the parcel so conveyed shall be first sold to satisfy the mortgage. The lot so sold becomes, as to the par- ties to the conveyance, the primary fund for the payment of the mortgage,* and the grantee thereby becomes the party who in justice ought to pay the debt. The mortgagor becomes then a quasi-surety, and has the right to insist upon the col- lection of the debt first out of the land.* 6 id. 35; Skeel v. Spraker, 8 id. 182; Patty V. Pease, id. 277, 35 Am. Dec. 683; Schryver v. Teller, 9 Paige, 173; New York Life, etc. Co. v. Cutler, 3 Saudf. Ch. 176; Commercial Bank v. Western Reserve Bank, 11 Ohio, 444, 38 Am. Dec. 739; Green v. Ramage, 18 Ohio, 428. 51 Am. Dec. 458; Stuy- vesant v. Hone, 1 Sandf. Ch. 419; Stuyvesant v. Hall, 2 Barb. Ch. 151; Averall v. Wade, Lloyd & Gould, 252; Lyman v. Lyman, 33 Vt. 79, 76 Am. Dec. 151; Hurd v. Eaton, 28 111. 122; Carter v. Neal, 24 Ga. 346, 71 Am. Dec. 136; Root v. Collins, 34 Vt. 173; Brown v. Simons, 44 N. H. 475; Jenkins v. Freyer, 4 Paige, 53; Howard Ins. Co. v. Halsey, 4 Sandf. 565; La Farge Ins. Co. v. Bell, 22 Barb. 54: Gates v. Adams, 24 Vt. 71 Chase v. Woodbury, 6 Cush. 143 Black V. Morse, 7 N. J. Eq. 509 Shannon v. Marselis, 1 id. 412; Henkle V. AUstadt, 4 Gratt. 284; Jones v. Myrick, 8 Gratt. 179: Britton v. Up- dike, 3 N. J. Eq. 125: Wikoff v. Davis, 4 id. 224. Judge Story (2 Story's Eq., § 12336) doubts whether this last position is maintainable upon principle; for as between the subsequent purchasers or incumbrancers, each trusting to his own security upon the separate estates mortgaged to him, it is diffi- cult to perceive that either has, in consequence thereof, any superiority of right or equity over the other. On the contrary, there seems strong ground to contend that the original incumbrance or lien ought to be borne ratably between them, accord- ing to the relative value of the es- tates. And so the doctrine has been asserted in the ancient as well as modern English cases on the subject (Harbert's Case, 3 Co. 12; Barnes v. Racster, 1 Y. & C. New Caa 401; Lanoy v. Duchess of Athol, 2 Atk. 448; Aldrich v. Cooper, 8 Ves. 391; Averall v. Wade, Lloyd & Gould, 252; Bugden v. Bignold, 2 Y. & C. New Caa 377; Green v. Ramage, 18 Ohio, 428, 51 Am. Dec. 458); and the law is so settled in Kentucky. Dickey V. Thompson, 8 B. Mon. 312; Morrison V. Beck with, 4 T. B. Mon. 76: Hughes V. Graves, 1 Litt. 319; Burk v. Chrisman, 3 B. Mon. 50. 1 Vogel V. Shurtliflf, 28 111. App. 516; Briscoe v. Powers, 47 111. 447. 2 Caruthers v. Hall. 10 Mich. 40. 3 Mason v. Payne, Walker's Ch. 461. 4 Cox V. Wheeler, 7 Paige, 248; Jumei V. Jumel, id. 591. 5 Harris v. Jex, 66 Barb. 233. § 103.] MARSHALING AND DISTRIBUTION. 481 The rule being intended for the benefit of parties having separate interests in the property or fund on which the debt is a lien, their relation between themselves is considered in determining whether the burden rests upon them equally, or if unequally, in what order their several i)roperties may bo resorted to for payment. Where there are several heirs, or where several persons join in a recognizance, one heir, or one conusor, should not be charged exclusively, for their relations and duties are equal. ^ And the same principle would apply between several purchasers of the same date. But the prop- erty of the party who is in equity bound to pay the debt, as between him and the owner of other property bound for the same debt, is the primary fund; and the court will establish the order, between any number of persons whose property is subject to the debt, in which resort may be had to properties so separated in ownership. Thus, in an action of foreclosure against G. and L. as mortgagors, where it appears that G. is possessed of a portion of the premises in his own right, and L. of another portion, and that a third portion is held jointly, and it also appears that L. personally owes the mortgage debt, or is equitably bound to pay it, the judgment should be so entered that the interest of L. be first sold; secondly, the joint interest; and lastly, the interest of G.- But these equities between co-debtors, by which one [305] part of incumbered premises becomes the primary fund for the payment of the mortgage, may be defeated by the honajide purchase of that part by one without notice of the facts which raise these equities. Where A. and B., owning lands in sev- eralty, joined in mortgaging them to secure the payment of a joint debt, and A. afterwards executed a bond of indemnity to B. agreeing to pay the whole mortgage debt, but subse- quently executed on his lands other mortgages for a valuable consideration, to parties who had no notice of the bond or agree- ment between him and B., it was held on the foreclosure of the mortgage that B. could not, as against the subsequent mort- gagees, compel the collection of the whole of the original 1 Harvey v. Woodhouse, Select 2 0gden v. Glidden, 9 Wis. 46; Cas. in Ch. 80. See Clowes v. Dick- Warren v. Boynton, 5 Barb. 13; Cor- enson, 5 Johns. Ch. 235, 241. nell v. Prescott, id. 16. Vol. 1 — 31 482 LEGAL LIQUIDATION'S AND EEDUCTIONS. [§§ 194, 195. mortgage debt from the land of A. to their prejudice, and that half of it was collectible from B.'s land.^ § 194. Effect of creditor releasing part. A creditor, hav- ing notice of such equities between several parties owning property subject to his debt, cannot defeat them by releasing the property first liable. A release by the mortgagee of a portion of the land mortgaged, with knowledge of a prior sale of another portion, will operate as to such prior purchaser as a discharge yro tanto of the mortgage debt.* But a release with- out such knowledge will not be a discharge.' § 195. Rights where one creditor may resort to two funds and another to only one. A rule for the protection of cred- itors having junior liens exists. If one creditor can resort to two funds and another to but one of those funds, the former will be compelled to seek satisfaction out of the fund which the other cannot reach, if adequate,* and it can be done [306] without prejudice to such double fund creditor.' The rule is founded in social duty and is never enforced to the prejudice of such creditor;^ nor where it will work injustice 1 Hoyt V, Dougherty, 4 Sandf. 462; Root V. Collins. 34 Vt. 173. 2 Brown v. Simons. 44 N. H. 475; Guion V. Knapp, 6 Paige, 43; Patty V. Pease, 8 id. 277; La Farge Ins. Co. V. Bell, 22 Barb. 54; Taylor v. Maris, 5 Rawle, 51. See Cooper v. Bigly, 13 Mich. 463; James v. Brown, 11 Mich. 35; Howard Ins. Co. v. Halsey, 4 Sandf. 565; Union Nat. Bank v. Moiine, eta Co., 7 N. D. 201, 73 N. W. Rep. 527. 3 Id. 4 Ball V. Setzer, 33 W. Va. 444, 10 S. R Rep. 798; Hall v. Stevenson, 19 Ore. 153, 23 Pac. Rep. 887; Glass v. Fallen, 6 Bush, 346; Wise v. Shep- herd. 13 111. 41; Marshall v. Moore, 36 IlL 321: Hurd v. Eaton, 28 111. 122; Evertson v. Booth, 19 Johns. 492; Hayes v. Ward, 4 Johns. Ch. 132; Dodds V. Snyder, 44 IlL 53; Goss v. Lester, 1 Wis. 43; Worth v. Hill, 14 Wis. 559; Ogden v. Glidden, 9 Wis. 46; Lloyd v. Galbraith, 32 Pa. 103; Nailer v. Stanley, 10 S. & R. 450; Cowden's Estate, 1 Pa. 267; Bank of Kentucky v. Vance's Adm'r, 5 Litt. 168. See Union Nat. Bank v. Moiine, etc. Co., 7 N. D. 201, 73 N. W. Rep. 527. s Logan v. Anderson, 18 B. Mon. 114; Jervis v. Smith. 7 Abb. Pr. (N. S.) 217; Wise v. Shepherd, 13 111. 41; Cannon v. Hudson, 5 Del. Ch. 112; Hudkins v. Ward, 30 W. Va. 204, 8 Am. St. 22, 5 S. E. Rep. 600; Leib v. Stribling, 51 Md. 285; Marr v. Lewis, 81 Ark. 203, 25 Am. Rep. 553; Mc- Arthur v. Martin, 23 Minn. 75; Gil- liman v. McCormack, 85 Tenn. 597, 4 S. W. Rep. 521. «Id. In Worth v. Hill, 14 Wis. 559, the mortgage being foreclosed covered two distmct tracts in differ- ent towns. The defendant Buck, who was the appellant, held a mortgage next to this in point of time, cover- ing one of the tracts contained in this mortgage, and other land not ■.^ ul § 105.] MAESHALING AND DISTKIBUTION. 483 to other parties. Thus where a firm creditor has security [307] on the separate property of one of its members, such creditor is not for that reason to be excluded from sliaring in the pro- ceeds of the company assets until he has exliausted his security, covered by this, in the same town. Defendant Mowry held a mortgage next to Buck's in point of time, but upon tlie land in the other town cov- ered by the mortgage, and also upon another tract. Hence the Mowry mortgage did not cover any of the land mortgaged to Bunk, but their interests conflicted by reason of the mortgage which was being fore- closed, and which was prior to both, covering a part of the land contained in each of them. It further ap- jieared that there was a mortgage prior to all of these, covering tlie tract m the Buck mortgage, and the parcel in the Mowry mortgage which was not contained in the mortgage being foreclosed; that that mortgage had been foreclosed, and that part which was covered by the Mowry mortgage adjudged to be sold before the part covered by Buck's. It was further proved that the other tract covered by Buck's mortgage was ample security for the amount of the debt secured by that mortgage. Upon this state of facts it had been decreed below that the portion covered by Buck's mort- gage should be sold in this fore- closure before that covered by Mowry's, and from that part of the decree Buck appealed. Referring to the equitable rule that in foreclosure cases where the land has been subsequently conveyed by the mortgagor it shall be sold in the inverse order of alienation. Paine, J., says: "The justice of this rule has been sometimes questioned, but we regard it as not only well settled, but correct upon principle, and have re- peatedly enforced it. But at the same time we think it may be controlled by other established equitable prin- ciples, where the facts render them applicable; and such we think was the case here. It is a familiar prin- ciple that where one creditor has security upon two funds, and another has security upon one of them only, the latter may compel the former to resort first to that fund which he cannot reach. And although this is nota direct proceeding to accomplish that object,yet it is substantially that, inasmuch as Mowry sets up these facts to rebut the equity Buck would otherwise have as against him. For the result, if the judgment had been otherwise, would have deprived Mowry of his security entirely. The one tract covered by his mortgage having already been adjudged to be sold first for Bucks benefit, now if the other should be adjudged to be sold first, he would have nothing left. Whereas it appears by the tes- timony that upon the decree as ren- dered Mowry is protected and Buck left with amplesecurity for his debt. Suppose A. mortgages a tract to B., then gives a second mortgage on a part of it to C, which mortgage also covers other tracts, and then gives a mortgage on another part to D. On a foreclosure of B.'s mort- gage, the ordinary rule, based merely on the order of alienation, would be to sell D.'s part first. But suppose D. could show that the other tracts covered by C.'s mortgage were an ample security for his debt; would not that raise an equity suflficient to overcome the ordinary rule, and re- quire as between C. and D. that C.'s part should be first sold? I think so; 484 LEGAL LIQUIDATIONS AND EEDrCTIONS. [§ 196. for that would be a detriment to such creditor where it involved delay, and unjust to the creditors of the separate estate which furnished the security,' Where the rule would [308] bo applied in favor of a creditor having a right to resort to but one fund or property, it will be equally available to one claiming through a sale under his lien.^ § 196. Same when the funds belong to two debtors. The rule, however, does not apply when one of the creditors has a lien for his debt upon two funds belonging to two separate debtors, and the other has a lien upon a fund belonging to one of them, so as to compel the first creditor to make his claim wholly out of that debtor whom the other cannot reach, un- and that is substantially the relation which these defendants hold to each other in the present case. I can see no reason why the principle requir- ing the creditor having two funds to resort first to the one which the other cannot reach is not applicable to such a case. It is true that ordi- narily the adequacy of the first fund might be tested by an actual sale, and the creditor who was compelled first to resort to that might still be in a position to resort to the other to sup- ply any deficiency; and here B. may not be left in such a position. I think that is good reason why such a decree as the one made in this case should be made only upon clear proof of the entire adequacy of the remaining se- curity. But I am not prepared to say that courts should not act upon such proof, or that a party so situated has any absolute right to have the adequacy of his remaining security tested in all cases by an actual sale. It is obvious that such a test could not be had in a case like this, and con- sequently, if that rule was adopted, it would lead to the injustice of cut- ting off the last mortgagee entirely, though it might not be necessary lor the protection of the second. Courts are constantly adjudicating upon the most important rights of parties upon the theory that human testi- mony can establish facts with suffi- cient certainty to justify such adju- dication, and I think the question of the adequacy or inadequacy of a se- curity should form no exception." In Miller v. Jacobs, 3 Watts, 477, it was held that one lien creditor can invoke no security taken by another which had not become a lien when he procured his own; hence, a subse- quent mortgagee, having taken bonds but without a warrant to confess judgment, has no equity to call on a prior mortgagee to enter up a judg- ment on a bond which accompanied his mortgage in order to throw him on another fund; nor can the subse- quent mortgagee object to the vaca- tion of judgments subsequently con- fessed on those bonds, though pur- posely withdrawn to make way for other judgment creditors whose lien funds are consequently posterior in date to his lien on the mortgaged premises. 1 Bell V. Hepworth, 51 Hun, 616. 4 N. Y. Supp. 823; Morrison v. Kurtz, 15 III. 193. See Berry v. Powell, 18 111. 98; White v. Dougherty, Mart.& Yerg. 309, 17 Am. Dec. 802; Breed- love v. Stump, 3 Yerg. 257. 2 Marshall v. Moore, 36 III 821. See Dodds v. Synder, 44 111. 53; McCor- mick's Appeal, 55 Pa. 252. § IDG.] MARSHALING AND DISTRIBUTION. 485 less there be some peculiar relations between these debtors which would make it equitable that the debtor having but one creditor should pay the whole demand against him and his co-debtor.^ A creditor who has a double security, or a right to go upon more than one fund for payment, may go on all or either one of them for his whole debt. His interest under each is several and independent of the other, and cannot bo diminished by reference to the value of the other.- A cred- itor who has several securities, neither one of which is sufficient for the payment of his debt, has a right to look to each one of them for its payment in the same manner and to the same extent that he could do if he had no other. It is only when it may happen that a creditor who has no more securities than one may not require for the payment of his debt the entire proceeds of all his securities that any marshaling of them can take place for the benefit of other creditors who are only sub- sequently entitled to a lien on a part of the same fund or property.' If, for example, property sufficient for the pay- ment of fifty cents on the dollar be mortgaged to two or more creditors, and the mortgagor afterwards mortgages other property to the same and other creditors to secure the pay- ment of the same debts, and also the debts due to the other creditors, and the fund arising from the last mortgage is [309] also sufficient to pay fifty cents on the dollar of all the debts therein named, the creditors in the first mortgage have a right to their full proportion thereof on the whole amount of their debts without regard to what has been or may be received by them on the first mortgage. The two securities are sufficient for the payment of those creditors who are entitled to the benefit of both ; and yet, if the other creditors in the second mortgage have a right to reduce their debts by applying as a credit thereon the amount of their dividend under the first mortgage, and to restrict them to a jpro rata of the proceeds of the last mortgage on the balance of their debt, when thus reduced, one-fourth part of it would still remain unpaid, al- 1 Wise V. Shepherd, 13 111. 41; Dorr 2 Gwynne v. Edwards, 2 Russ. 289. V. Shaw, 4 Johns. Ch. 17, 20; 1 Story's See Kendall v. New England Carpet Eq., § 642; Ebenhardt's Appeal, 8 W. Co., 18 Conn. 38a & S. 327. See Ex parte Kendall, 17 ' Logan v. Anderson, 18 B. Mon. Ves. 520. 114. 4S6 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ lOT. though either security taken separately was sulEcient for the payment of one-half of the clebt.^ Whenever, then, a mort- gage or assignment is executed to secure the payment of cer- tain specified debts and it contains nothing to show that it was intended only to secure the payment of a part of the debt of some of the creditors, and not the whole amount thereof, the mortgagees or beneficiaries under the assignment have each a right to a full ratable share of the fund on the whole amount of their respective debts. This share cannot be diminished by the existence of another security, where both securities are necessary for the payment of the debt. Equity refuses to interfere or to marshal the securities to the prejudice of the creditor entitled to a double fund. And it makes no difference in such a case whether the benefit of one of the funds has been realized or still remains as a mere security for the payment of the debt.^ [310] § 197. Principle on wliich priority determined. The principle is believed to be universal that a prior lien gives a prior claim which is entitled to prior satisfaction out of the subject which it binds unless the lien be intrinsically 1 Logan V. Anderson, supra. 2 Id,; Morris v, Olwine, 22 Pa. 441; Kittera's Estate, 17 id, 416; Miller's Appeal, 35 id. 481; Jervis v. Smith, 7 Abb. Pr. (N. S.) 217; GraeflE's Appeal, 79 Pa. 146: Patten's Appeal, 45 Pa. 152, 84 Am. Dec. 479: Hess' Estate, 69 Pa. 272; Brough's Estate, 71 Pa. 460. In Patten's Appeal, supra, it was held that the detention by vendors of goods sold, on the insolvency and assignment for the benefit of cred- itors by the vendees, does not rescind the conti'actof sale; and the vendors are entitled to a pro rata distribu- tion out of the assigned estate; and that where a part of the goods had been delivered and tlie balance which had been detained was sold by the vendors, who applied the proceeds to the payment of the notes given upon the sale, leaving a balance still due, they were entitled to a dividend upon tlie whole amount of their claim at the date of the assignment. See Midgeley v. Slocomb, 2 Abb. Pr. (N. S.) 275. In Bridendecker v. Lowell, 32 Barb. 9, it was held that where an ar- rangement was made between debt- or and creditor, by which the former gives a new security upon property exceeding in value the amount of the debt, and receives back the evi- dence of his indebtedness, there being at the time a general fund or security by mortgage ufon real estate embracing all the debts of the debtor, but insufficient to pay the whole, the effect of such an ar- rangement was to make the specified security the primary fund for the payment of the debt specifically secured by it, and to postpone the right of that creditor to participate in the general fund until the specific fund had been exhausted. § 198.] SET-OFF OF JUDGMENTS. 487 defective or be displaced by some act of the party holdino- it which should postpone him in a court of hiw or equity to a subsequent claimant.' Where surplus moneys arose upon the foreclosure of several mortgages and were thus claimed : by judgment creditors having the first lien upon two such funds; by a mortgage creditor having a later lien on only one such fund, and by other judgment creditors having still later liens upon all, the prior judgment was ordered paid out of the fund not subject to the mortgage, but if it were not sufficient, any deficiency was to be paid prior to the mortgage out of the fund on which the mortgage was a lien; then the mortgage was to be paid out of the surplus on which it was a lien, and the subsequent creditors were entitled to payment only after satisfaction in this manner of the prior judgment and mortgage creditors.^ Section 6. set-off of judgments. § 198. Power to direct set-olF inherent. Courts of [311] law or equity have power to order mutual judgments to be set off against each other on motion made for that purpose. 1 Rankin v. Scott, 13 Wheat. 177; ment and defeat by subsequently Broom's Max. 236; 9 Paige, 61, note; acquired liens upon the funds. The Weaver v. Toogood, 1 Barb. 238; Em- facts were that the owner of three bree v. Hanna, 5 Johns. 101, 9 Am. lots gave six mortgages tliereon to Dec. 274; Muir v. Schenck, 3 Hill, different persons at various dates; 228, 38 Am. Dec. 633: Watson v. Le the first mortgage covered the en- Eow, 6 Barb. 481; Lynch v. Utica tire property, and the subsequent Ins. Co., 18 Wend. 236; Poillon v. ones parcels thereof less than the Martin, 1 Sandf. Ch. 569; Berry v. whole. All the lots were sold, and Mutual Ins. Co.. 2 Johns. Ch. 603. their proceeds were insufficient to It is iield in Gilliam v. McCormack, ■ pay all the mortgage debts. A con- 85 Tenn. 597, 4 S. W. Rep. 521, that troversy arose among the junior marshaling is a pure equity and does mortgagees as to the application of not rest at all upon contract. The the proceeds of the sale after the equity to marshal assets is not one senior mortgages were discharged, which fastens itself upon the situa- It was held that the several mort- tion at tlie time the successive secu- gages should be paid pro rata in the rities are taken, but is to be deter- order of their priority out of the mined at the time the marshaling is amount realized from the parcel or invoked. The equity does not be- parcels covered by each, cornea fixed right until the proper ^jsjew York L. Ins. & F. Co. v. steps are taken to have it enforced; Vanderbilt, 12 Abb. Pr. 458. until then it is subject to displace- 488 LEGAL LIQUIDATIONS AND KEDUCTIONS. [§ 199. Such power is not derived from or exercised in pursuance of tile statutes wLiicli allow parties to set off mutual debts. It follows the general jurisdiction of a court over its suitors: it is an equitable part of such jurisdiction and has been frequently exercised.^ Courts proceed upon the equity of the statute of set-offs ; but as their power consists in the authority they have over their suitors, rather than any express or delegated author- ity, their action in such cases has been termed the exertion of the law of the court. Suitors may ask their interference in effecting such set-off, not ex dehito JustiticB, but only ex gratia curicB.^ § 199. When it will or will not be granted. One judg- ment will not be ordered to be set off against another, on mo- tion, unless it is a judgment which is conclusive on the party against whom it is rendered, and which the party recovering and claiming the right to offset has a clear right to enforce; it must have been rendered by a court which had jurisdiction' and must be final; this right of set-off cannot be asserted pending an appeal from the judgment* An appeal, however, [31*2] only suspends the right to set-off, and the court may stay proceedings on the other judgment for the protection of that 1 Chase v. Woodward, 61 N. H. 79; 444, 54 N. E. Eep. 11, 70 Am. St. 570; Hovey v. Morrill, id. 9, 60 Am. Rep. Brown v. Hendrickson, 39 N. J. L. 315; Brown v. Hendrickson, 39 N. J. 239; Davidson v. Geoghagan, 3 Bibb, L. 239;Matson V. Oberne, 25 IlL App. 233; Makepeace v. Coates, 8 Mass. 213; Alexander V. Durkee, 112 N. Y. 451; Simson v. Hart, 14 Johns. 63, 655, 19 N. R Rep. 514; Mitchell v. 757. Oldfield, 4 T. R. 123; Williams v. 3 Harris v. Palmer, 5 Barb. 105. Evans, 2 McCord, 203; Tolbert v. < pjerce v, Tuttle, 51 How. Pr. 193; Harrison, 1 Bailey, 599; Herrick v. Hardt v. Schulting, 24 Hun, 345; De Bean, 20 Me. 51; Temple v. Scott, 3 Figaniere v. Young, 2 Robert. 670; Minn. 419; Makepeace v. Coates, 8 Zerbe v. Missouri, etc. R. Co.. 80 Mo. Mass. 451; Greene v. Hatch, 12 id. App. 414; Spencer v. Johnston, 58 195; Ames v. Bates, 119 id. 397; Neb. 44, 78 N. W. Rep. 482; De Camp Mason v. Knowlson, 1 Hill, 218; Har- v. Thomson, 159 N. Y. 444, 54 N. E. ris V. Palmer, 5 Barb. 105; Noble v. Rep. 11, 70 Am. St. 570. Howard's Ex'r, 2 Hayw. 14; Holmes If a writ of error does not operate V. Robinson, 4 Ohio, 90; Meadow v. an a. supersedeas an intention to ob- Rhyne, 11 Rich. 631; Benjamin v. tain a review of a judgment will Benjamin, 17 Conn. 110; Cooper v. not interfere with the allowance of Bigalow. 1 Cow. 296. See Zogbaum a set-off. Sowles v. Witters, 40 Fed. V. Parker. 55 N. Y. 120. Rep. 413. See Haskins v. Jordan, 123 2De Camp v. Thomson, 159 N. Y. Cal. 157, 55 Pac. Rep. 786. § 10'.'.] SET-OFF OF JUDGMENTS. 4S9 right until the appeal is determined. ^ In the exercise of this jurisdiction courts will act upon the equitable as well as le^-al interests and relations of the parties. Applications for such set-off, not being founded on any statute or governed by any fixed or arbitrary rule, are addressed to the discretion of the court, and its discretion will be so exercised as to do equity and not to sanction fraud - or oppression.' The fact that a piaintilT 1 Pierce v. Tuttle, supra; Terry v. Roberts, 15 How. Pr. 65. In Irvine v. Myers, 6 Minn. 562, it was held that where the right of set- off was suspended by appeal after a motion made, it might remain unde- cided until the final determination of the appeal. In Blackburn v. Reilly, 48 N. J. L. 82,2 Atl. Rep. 817, it is held that after the affirmance of a judgment by tiie appellate court and the return of the record to the trial court, the latter may stay the execution of such judgment for the purpose of setting it olf against a counter judgment. ^Tolbert v. Harrison, 1 Bailey, 599; Meador v. Rhyne, 11 Rich. 631. 3 Williams v. Evans, 2 McCord, 203. W. had obtained judgment against E. for $188; subsequently E. obtained a judgment in trover against W. for $240. W.. instead of moving to have his judgment set off against the larger one which had been recov- ered against him, issued a ca, sa. against E. and then assigned his judgment to a third person for value. E. was imprisoned on the ca. sa., and so remained until he died. At the next term, W., who seems to have repossessed himself of the judgment recovered by him, moved to have it set off against that obtained by E. On a motion to rescind an order allowing such set-off, Nott, J., said: "There is no doubt but that the court has the power to order mutual judgments to be set off against each other. This is a common-law power, and is not derived from the act authoriz- ing parties to set off mutual debts. . . . If it constitute a part of the equitable jurisdiction of the court, it ought to be so exercised as to do equity and not to sanction fraud; and a person who wishes to have the benefit of it ought to avail him- self of the earliest opportunity to make his application, and not to delay until the interests of third persons have become involved. If the party in this case had made his application at the court when his judgment was obtained, it ought to have been granted. He had three methods of proceeding: one. that which he is now endeavoring to pursue: another by fi. fa. against the goods of the defendant; and the third by taking his body in execu- tion. He chose the latter, and after having made his election (and par- ticularly under the circumstances of this case), he ought to be bound by it; at least he can have no high claim to the assistance of the court to relieve him from the difficulty of his own voluntary creation. It is true a judgment is not a negotiable instrument; nevertheless, an assign- ment conveys an equitable interest to the assignee, such as a court of law will notice and respect in all cases of appeal to its discretion. Newman v. Crocker, 1 Bay, 246. A bond is not negotiable, and yet tiiis court would so far respect the as- signee of one as not to permit a judgment recovered upon it to be set off against one recovered by tlie 490 LEGAL LIQUIDATIONS AND EEDLCTIONS. [§ l'^9 against whom a judgment for costs has been rendered has begun another action against the defendant for a larger amount will not prevent said judgment being offset against a judgment in favor of the defendant, since the latter judgment would be a proper set-off or counter claim against such demand us the plaintiff holds against the defendant.^ The discretion of a court in acting upon a motion to set off judgments will not be reviewed if the motion is denied.^ In exercising their power courts will consider the rights of persons who are not parties to the action.^ If a party who is entitled to a set-off has a special fund which is primarily applicable to the satis- faction of his judgment or decree he will not be permitted to avail himself of his right against the holder of an opposing judgment or decree until such fund is exhausted, and then only for any balance of his demand which is unsatisfied.* A set-off of judgments will not be allowed if it will result in depriving a debtor of property which is exempt from execu- tion.^ Were it otherwise A. might get judgment against B., obligee. The plaintiff, by taking the body of the defendant, had volun- tarily relinquished every other claim upon him; and the claim which he now has upon his property is revived only by the accidental circum- stance of his death. Suppose the assignee of this judgment had en- forced an execution against W. in the life-time of E. and during the time he had his body in execution, could W. have required that money, while in the hands of the sheriff, to be paid over to him? Certainly not; because, having taken the body in execution, he must have been con- tented with it; he could not have double satisfaction. A release of E. from custody would have been a re- lease of the debt. He had a mild and easy method of enforcing the payment of his debt, if he had chosen to make use of it. Instead of which he resorted to the most rigorous and unfeeling known to the law; like an- other Shylock, he would have noth- ing short of his flesh; and having no longer the means of gratifying his vengeance, he now comes and asks this court to take from a humane and merciful creditor a vested right, to satisfy a debt which he had it in his power to receive, and which he voluntarily relinquished to gratify a vindictive passion. The motion must be granted." See Cooper v. Bigalow, 1 Cow. 206. 1 Welsher v. Libby, 107 Wis. 47, 82 N. W. Eep. 693. '^ Chipman v. Fowle, 130 Mass. 352. sMeador v. Rhyne, 11 Rich. 631: Simmons v. Reid, 31 S. C. 389, 17 Am. St. 36, 9 S. E. Rep. 1058. 4 Nuzum V. Morris, 25 W. Va. 559. See Payne v. Webb, 29 id. 627, 2 S. E. Rep. 330. 5 Butner v. Bowser, 104 Ind. 255, 3 N. E. Rep. 889; Puett v. Beard, 86 Ind, 172, 44 Am. Rep. 280; Junker v. Hustes, 113 Ind. 524; Beckman v. Manlove, 18 Cal. 388; Duff v. Wells, 7 Heisk. 17; Collett v. Jones, 7 B. Men. 586; Johnson v. Hall, 84 Mo. 210. Contra, Temple v. Scott. :?• § 200.] SET-OFF OF JUDGMENTS. 491 seize and sell his exempt horse and obtain partial satisfaction of the judgment from the proceeds of such sale. If B. should then recover a judgment for damages against A. the latter might set off the unsatisfied portion of his judgment a^-ainst it. Thus B. would lose his horse, and A., by a violation of tho law, would collect a portion of his judgment against an insolv- ent debtor. B.'s judgment ought to take the place of his horse. But this exemption from liability to set-off is not to be extended to judgments in favor of the owner of exempt property for damages for its wrongful taking in attachment proceedings, the property being in bis possession.' A court of equity may set off judgments when courts of law cannot because they are not between the same parties. But this will not bo done unless the moving party shows equitable ground for it; he must make it appear that his rights are superior to any- equitable right in favor of the other party.^ g 200. Interest of the real parties considered. The [313] parties beneficially interested may assert their right, and a set-off between the nominal parties will be refused where it would be prejudicial to those having equitable interests.' Thus, a court will not order a judgment against an executor in his own right to be set off against a judgment in his favor on a promissory note taken for goods of his testator, sold by him, if it appear that the creditors or legatees of the testator will be thereby prejudiced.* A debtor to the estate of a decedent, Minn. 419, ruled by a divided court, ^ Daniel v. Bush, 80 Ga. 218,4 S. E. and on the theory that exemption Rep. 271. statutes are to be strictly construed; * Tolbert v. Harrison, 1 Bailey, 599. a rule opposed to the great weight In this case the court say: "The of authority. Sutherland's Stat, note given to the executor for a con- Const., §§ 420-422. See Mallory v. tract made with him must be treated Morton, 21 Barb. 424. and considered as his own. In a le- 1 Johnson v. Hall, 84 Mo. 210. gal pomt of view it was the note of 2 Howe Maclune Co. v. Hickox, Sterling Harrison to Jos. S. Tolbert. lOfi 111. 461. It is, however, unquestionable that The Rhode Island statute govern- in fact it was a part of the assets of ing the right to setoff judgments the estate of his testator; and the ex- and executions applies only to cases ecutor might and ought to have in which the parties are reversed treated it as such. He. on the pres- and sue and are sued in the same ent occasion, claims that it sliould be ri!;ht; the suits must also be pend- considered as the assets of the estate, ing at the same time. Hopkins v. This is the equity of the case: and the Drowne, 21 R. L 80, 51 AtL Rep. 1010. court of equity, in the exercise of the 492 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 200. against whom a judgment has been obtained by the adminis- trator in favor of such estate, is entitled to set off against such judgment claims proved against the estate, and which existed in the debtor's favor prior to the death of the de- jurisdiction which legitimately be- longs to it over trustees, will follow a note of hand as the property of an estate if really taken for assets of the estate sold by the administrator, though the note be taken in the pri- vate name of the administrator. Glass V. Baxter, 4 Desaus. 153. The question is whether this court is bound by legal rules to set off judg- ments in all cases where they are in the same right. It is clear that it is not." In Ames v. Bates, 119 Mass. 397, W. purchased of A. a claim against K pending an action by A. upon the claim. B. had previously purchased a claim against A. and had given no- tice thereof to A. Suit was brought thereon by B. in which W. appeared as adverse claimant of funds in the hands of R summoned as trustee. At the time of his purchase of the first claim W. had no knowledge of the claim against A. Held, that judgment for the plaintiff in the sec- ond action could not be set off against judgment for the plaintiff in the first action. The court say: "While there is no express statute authority for setting off judgments where the creditor in one action is the debtor in another, except in a limited num- ber of cases (Gen. Stats., ch. 126. g.^ 2, 3, 5), yet this power has been fre- quently exercised by courts of law, and rests upon their jurisdiction over suitors in them and their general su- perintendence of proceedings before them. Makepeace v. Coates, 8 Mass, 4'31; Greene v. Hatch, 13 Mass. 195. Such a power is only to be exercised upon careful consideration of all the circumstances of the transactions out of which the judgments arise, and in order to protect the just rights of parties. In the present case the nominal parties to the judgments are not the same, nor is the equita- ble owner of the judgment recov- ered in the name of Ames the de- fendant in the suit of which Bates is the equitable owner. But even if Ames had continued to be the owner of the judgment recovered in his name, it might well be questioned whether Bates should be permitted to set off against it the judgment re- covered by him in the name of Free- man and another, when he could not have set off the claim upon which the judgment was founded. The rea- son why a party is not permitted by the statute to set off such claims may fairly be presumed to be, that it is not just that one should be encour- aged, instead of paying his own debt, to seek out claims against his cred- itor in order thus to change the posi- tion of parties pendente lite; and this reason is equally applicable to judg- ments which may afterwards be ob- tained upon such claims. However this might be as to Ames himself, it is clear that as to the assignee of Ames. Bates should not be allowed to effect this change. When the equitable rights of third parties would be affected by an offset of this character it is not to be made to the injury of intervening rights honestly acquired. Greene v. Hatch, iibi supra; Zogbaum v. Parker, 55 N. Y. 120; Gay v. Gay, 10 Paige, 369; Ramsey's Appeal, 2 Watts, 22a'' In Carter v. Compton, 79 Ind. 37, T. obtained judgment against the es- tate of S. on a note. The executors of S. held a note of a later date against T., which was executed to § 20U.] SET-OFF OF JUDGMENTS. 493 cedent, but not claims assigned to him after his death. As to these last it was said the rights of the administrators and the creditors had become fixed by the decedent's death; the claim against the assignee had become assets of the es- tate, in which its creditors and the administrators had an in- terest.^ Set-off will not be allowed in favor of the [.'{14] nominal judgment creditor where it appears that before the judgment was obtained the cause of action had been as- [315] signed to a third person.^ But if the right exists at the time of the assignment of a judgment, the assignee will stand only in the shoes of the assignor.^ The assignee of a judgment is not affected by equities which arise between the parties to it subsequent to the assignment.* Xor is the assignee of all them in their representative capac- ity. Judgment upon it was set off against the first mentioned judg- ment. 1 Wikel V. Garrison, 82 Iowa, 453, 48 N. W. Rep. 803. 2 Swift V. Prouty, 64 N. Y. 545; Perry v. Chester, 53 N. Y. 240; Mackey v. Mackey, 43 Barb, 58; Turner v. Satterlee, 7 Cow. 480; Nash V. Hamilton, 3 Abb. Pr. 35. It is held in Williams v. Taylor, 69 Ind. 48, that if at the time a judg- ment is pleaded in set-off the equita- ble title to it is in one person and the legal title in another, the latter will prevail. 3 Skinker v. Smith, 48 Mo. App. 91 ; Irvine v, Myers, 6 Minn. 502; Jaeger V. Koenig, 32 N. Y. Misc. 244, 65 N, Y. Supp. 795; Lammers v. Goode- man, 09 Ind. 76; McBride v. Fallon, 63 CaL 301, 4 Pac. Rep. 17; Peirce v. Bent, 69 Ma 381; Wells v. Clarkson, 5 Mont. 336, 5 Pac Rep. 894; Brown V. Hendnckson, 39 N. J. L. 239; Chamberlin v. Day, 3 Cow. 353; Ferguson r. Bassett, 4 How. Pr. 168; Noxon V. Gregory, 5 id. 339; Cooper V. Bigalow, 1 Cow. 56, 206; Turner v. Crawford, 14 Kan. 499. See Duncan V. Bl(X)mstock, 2 McCord. 318; Ram- sey's Appeal, 2 Watts, 228. "Cases often occur in which the set-off of one judgment against an- other is allowed regardless of a prior assignment of one to a tliird person. Such cases are, where the assignee has taken the judgment charged with notice of the right of set-off as an existing defense (Rowe v. Lang- ley, 49 N. H. 395); where, through in- solvency of the assignor at the time of the assignment, the party claim- ing the right of set-off bad no other means of collecting his debt (Gay v. Gay, 10 Paige, 369, 375); and where, in anticipation of an application to make the set-off, the assignment wa.s made for the purpose of defeating the right. Duncan v. Bloomstot^k, 2 McCord, 318. In all cases where the assignment is without consideration, not in good faith, or fraudulently made to defeat the application, the court will direct the set-off to be mada Cross v. Brown, 51 N. H. 486; Hurst V. Sheets, 14 Iowa, 322; Rus- sell V. Conway, 11 Cal. 93; Morris v. Hollis, 2 Harr. 4: Duncan v. Bloom stock, supra." Hovey v. Morrill. 61 N. H. 9, 60 Am. Rep. 315. * Wyvell V. Barwise, 43 Minn. 171, 45 N. W. Rep. IL I 494 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 201. ri2:hts and demands under a contract charr!:ed with notice of such of its stipulations as are wholl}'- distinct from that portion of it which he is concerned with; as where an instrument pro- vides for closing up an existing, and also for carrying on a new, business. The subject-matters are so disassociated that they are several contracts. Hence the assignee of rights un- der the clause relating to prosecuting a new business is not charged with knowlege of the existence of a judgment against his assignor on account of a breach of the other provision, and such judgment cannot be set off against one subsequently ren- dered in his favor.^ As between two persons who hold judg- ments by assignments, the one prior in time has the right to be paid first by the judgment he holds, and such judgment is not subject to set-off by the assignor of it who subsequently pur- chased an assignment of a judgment against the holder.^ The assignee of a judgment which was bought without notice of any offsets thereto cannot be denied the right to enforce it by injunction proceedings because the defendant seeks to offset against it a judgment recently rendered against the plaintiff upon demands bought by him before the transfer of the judg- ment for the purpose of being used in offset, notwithstanding the plaintiff is insolvent.' The valid assignment of a judg- ment does not affect the judgment debtor's right to thereafter have a judgment in his favor against the assignor rendered in another action, before the assignment was made, setoff against the judgment assigned.* § 201. Set-off not granted before judgment. The right does not attach on the recovery of a verdict merely, and if that be assigned before judgment thereon is rendered it is not sub- ject to a set-off of a judgment against the assignor.^ But this 1 Howe Machine Co. v. Hickox, 106 * Benson v. Haywood, 86 Iowa, 107, 111, 461. 53 N. W. Rep. 85, 23 L. R. A, 335. ^McAdamsv. Randolph, 42 N. J. * Graves v, Woodbury, 4 Hill. 559. L. 332; Gauche v. Milbrath, 105 Wis. 40 Am. Dec. 298; Bagg v. Jefferson 355, 81 N. W. Rep. 487; Wright v. C. P., 10 Wend. 615; People v. Judges, AVright, 70 N. Y. 96; Terney v, Wil- etc., 6 Cow. 598; Garrick v. Jones, 3 son, 45 N. J. L. 282. Dowl. P. C. 157; Wood v, Merritt, 45 3 Button V. Mason, 21 Tex. Civ. How. Pr. 471; Spencer v. Johnston, App. 389, 52 S. W. Rep. 651. See 2 58 Neb. 44, 78 N. W. Rep. 4Sa See Freeman on Judgments, §427; Lund- Mc Adams v. Randolph, 42 N. J. L. green v. Stratton, 79 Wis. 227, 48 N. 332; Patterson v. Ward, 8 N. D. 87, W. Rep. 426. 76 N. W. Rep. 1046. § 2.I2.J 8ET-0FF OF JUDGMENTS. 495 rule is not to be applied with technical strictness. In a late -case it was said: The defendant in tliis action has recovered a verdict against this plaintiff in a suit growing out of the same transaction. The case came to the law court upon a motion for a new trial, which has been overruled, and judgment will be ordered upon the verdict — the announcement of the de- cision being made simultaneously with this. The counsel for the plaintiff in these cases has moved that the judgments, when recovered, both amounting to a less sum than the judgment that will be recovered by this defendant, be set off against the judgment in favor of this defendant, jpro tanto. This sliould bo done, but not so as to affect the attorney's lien upon the tax- able costs in each casc.^ § 202. Assignee must malie an absolute purchase. The assignee of a judgment, to be entitled to assert this right of set-off, must acquire the judgment absolutely.- If the purchase is made on the condition that the motion for set-off is success- ful, and otherwise to be Toid, the ownership is not acquired with sufficient absoluteness to enable the assignee to use it as a set-off.' An assignment upon condition of a rescission of the transfer in case the assignee cannot avoid a set-off is not suflS- ciently absolute.'' iScr will an assignment of a judgment to be collected for the assignor, less compensation for collecting, confer the requisite ownership.^ A party seeking to set oif a judgment in his favor against one recovered against him should be the owner of the judgment in his own right,^ The [316] mutual judgments should be in the same right.^ It is imma- iHowe V. Klein, 89 Me. 376, 36 AtL out of proceedings instituted before Hep. 620. the assignment, if properly com- 2 Jones V. Chalfant, 55 Cal. 505. menced. Such proceedings may have s Butler V. Niles, 26 How. Pr. 61, 35 been legitimate and necessary cou- ld. 329. sequences of the judgment when < Oilman v. Van Slyck, 7 Cow. 469. taken; and he has no right to take 8 Porter ^. Davis, 2 How. Pr. 30. away the foundation of such pro- It was held in Butler v. Niles, supra, oeeding, if still pending, by satisfying that even if a plaintiff, in an action the judgment with those held by to procure a set-off of a judgment, be him. It is not equivalent to pay- entitled to set off the judgment as- ment and acceptance in satisfaction signed to him against one recovered pendente lite, against- himself, he cannot make use ''Mason v. Knowlson, 1 Hill, 218. of such assigned judgment to defeat " Holmes v. Robinson, 4 Ohio, 90. the incident claims for costs growing Although where one of the parties 400 LEGAL LIQUIDATIONS AND KEDUCTIONS. [§ 203. terial in whose names they were respectively recovered; the right of set-off exists between the several beneficial owners and is confined to them. It is no objection that the mutual judgments are not norainallj' due to and from the same num- ber of persons; ^ if the equitable claims of many become vested in one, the}^ may be set off against separate demands, and vice versa} § 203. Nature of action immaterial. Nor is it material what was the original cause of action, whether in tort or con- tract; when a final judgment is obtained the original cause is merged, the judgment becomes technically a contract of rec- ord, and on motion it may be made to mutually compensate and satisfy another.' Nor is it necessary that both judgments should be recovered in the same court.^ The motion should in two cross-actions has assigned his interest to a third party there may- be no right to set off the judgments, yet, where the assignee, being the real plaintiff in one action, is also the real defendant in the other, there is such right of set-off. Standeven v. Murgatroyd, 27 L. J. (Ex.) 425. 1 Id. : Simson v. Hart. 14 Johns. 63, 75; Peirce v. Bent, 69 Me. 381, holding that a judgment in favor of a prin- cipal alone may be applied in satis- faction of one against him and his sureties. In Brown v. Hendrickson, 39 N. J. L. 239, it is said that in testing the right to a set-off it is not necessary that the judgments should be in the same right; it is enough if the judg- ment prayed to be set off may be enforced at law against the party re- covering the judgment to be satisfied by the set-off, provided it is not in a representative capacity. To the same effect, Skinker v. Smith, 48 Mo. App. 91. Under the Missouri statute a judg- ment in favor of the attachment plaintiff on the cause of action counted on in the attachment suit may be set off against the damages recovered by the attachment defend- ant for the improper attachment, al- though such judgment is against the relator and another who was not a party in the attachment proceeding, since the judgment plaintiff has a right to receive satisfaction of his judgment from one of his two judg- ment debtors. State v. Hudson, 86 Mo. App. 501. 2 Id.: Buller's Nisi Prius, 336. 3 Puett V. Beard, 86 Ind. 172, 44 Am. Rep. 280; Langston v. Roby, 68 Ga. 406; Sowlesv. Witters, 40 Fed. Rep. 413, holding that a decree in equity may be set off against a judgment at law; Howell v. Shands, 35 Ga. 66; King V. Hoare, 13 M. & W. 494, 504. 4 How V. Klein, 89 Me. 376, 36 Atl. Rep. 620: Skinker v. Smith. 48 Mo. App. 91; Aldrich v. Blatchford, 175 Mass. 396. 56 N. E. Rep. 700, 78 Am. St. 503; Robinson V. Kunkleman,117 Mich. 193, 75 N. W. Rep. 451 ; Taylor V. Williams, 14 Wis. 155; Kimball v. Munger, 2 Hill, 304; Barker v. Bra- ham, 2 W. Black. 869; Hall v. Ody, 2 B. & P. 29; Bridges v. Smyth, 8 Bing. 29; Bristowe v. Needham, 7 M. & G. 648; Coxe v. State Bank, 8 N, J. L. 472; Noble v. Howard's Ex'r, 2 Hayw. 14; Ewen v. Terry, 8 Cow. 126; Ross v. Hicks, 11 Barb. 481; Ir- § 204.] BET-OFF OF JUDGMENTS. 497 be made in the court where the judgment against the moving party was obtained.^ And the moving papers should be enti- tled in all the causes, whether in the same court or not.^ In some states the motion may be made in the court in which one or both of the actions are pending.' If the judgments are in different courts all difficulty in accomplishing the practical re- sult is obviated, if the party desiring the set-off makes his ap- plication in the court where the judgment exists against him, for the court can then make its action in satisfying, either in whole or in part, its own judgment conditioned upon such ap- plicant making reciprocal satisfaction of the judgment in his favor standing in another court/ § 204. Liens of attorneys. In England for a long time there were two conflicting rules as to the right of a judgment debtor to set off a judgment in disregard of the lien of his at- torney. Such right was denied by the court of king's bench if the exercise of it affected the attorney's lien for costs.' The common pleas courts held that the equitable rights of the par- ties were superior to the attorney's lien.^ In 1853 the rules adopted made the practice in the king's bench applicable to all the courts, while the judicature act of 1873 adopted the other rule. The rule of the common pleas has been adopted in many jurisdictions in this country;'^ while others follow vine V. Myers, 6 Minn. 563, Contra, » Mitchell v. Oldfield, 4 T. R. 133. Tenant V. Marmaduke, 5 B. Mon. 76. "Schoole v. Noble, 1 H. Black. 23. In Schautz v. Kearney. 47 N. J. L. "Benjamin v. Benjamin, 17 Conn. 56, a decree in admiralty rendered 110; Turner v. Crawford, 14 Kan. by a federal court was set off against 499; Sanders v. Giliett, 8 Daly, 183; ajudgmentrecoveredinastatecourt. NicoU v. NicoU, 16 Wend. 446; Rob- 1 Brookfield V. Hnghson, 44 N. J. L. erts v. Carter, 24 How. Pr. 44; 285; Taylor v. Williams, 14 Wis. 155; Brooks v. Hanford, 15 Abb. Pr. 342; Dunkin v. Vandenbergh, 1 Paige, Hayden v. McDermott, 9 id. 14; Peo- 622; Cooke v. Smith, 7 Hill, 186; pie v. New York C. P. C, 13 Wend. Ross V. Hicks, 11 Barb. 481; Russell 649; Hovey v. Rubber Tip Pencil V. Conway, 11 Cal. 93. Co., 14 Abb. Pr. (N. S.) 66; Watson v. 2Aleott V. Davison, 2 How. Pr. 44. Smith, 63 Iowa, 228, 18 N. W. Rep. In North Carolina the practice has 916; Mosely v. Norman, 74 Ala. 422; been to set oflF judgment by sdre Wright v. Tread well, 43 Md. 212; facias. Noble v. Howard's Ex'r, 3 Fairbanks v. Devereux. 58 Vt. 359, 3 Hayw. 14. Atl. Rep. 500; Bosworth v. Tallman, » Peirce v. Bent, 69 Me. 381. 66 Wis. 533, 29 N. W. Rep. 542. * Welsher v. Libby, 107 Wis. 47, 82 In New York, since the enactment N. W. Rep. 693. of 1879, no set-off is allowed as Vol. 1 — 33 498 LEGAL LIQUIDATIONS AND REDUCTIONS. [§ 204. that of the king's bench. ^ But where the equitable power of a court is invoked by motion the statute of set-off is not the [317] obligatory guide, and the court, proceeding upon its own discretion, will sustain the attorney's lien and give it prefer- ence.'^ An attorney has a lien for his costs upon money re- covered by his client or awarded him in a cause in which the attorney was employed, in case the money has come into his hands; or he may stop it in transitu by giving notice to the opposite party not to pay it until his claim for costs is satisfied, and then moving the court to have the amount thereof paid to him in the first instance. And if, notwithstanding such notice, the other party pay the money to the client, he is still liable to the attorney for the amount of his lien; and the latter in such case will not be prejudiced by any collusive release given by his client. But unless such notice is given the client may compromise with the opposite party, and give him a release without the intervention of his attorney; and he in that event can afterwards look to his client only for payment.^ This lien has sometimes been supposed to be confined to some fixed and certain amount allowed to an attorney by statute, and that it does not extend to a quantum meruit claim for his services.* against the lien of an attorney. En- Kanouse, 17 id. 146; De Figaniere v. nis V. Curry, 22 Hun, 584; Naylor v. Young, 2 Robert. 670; Hovey v. Rub- Lane, 66 How. Pr. 400, 18 J. & S. 97. ber Tip Pencil Co., 14 Abb. Pr. (N. S.) 1 Howe V. Klein, 89 Me. 376, 36 Atl. 66; Bishop v. Garcia, id. 69. Rep. 620; Currier v. Boston & M. R. 3 Graham Pr. 61; Ex parte Kyle, 1 Co., 37 N. H. 223; Stratton v. Hussey, CaL 332; Mansfield v. Borland, 2 Cal. 63 Ma 286; Puett v. Beard, 86 Ind. 507: Russell v, Conway, 11 Cal. 93; 172, 44 Am. Rep. 280; Dunklee v. Wilkins v. Batterman, 4 Barb. 47; Locke, 13 Mass. 525; Boyer v. Clark, Ten Broeck v. De Witt, 10 Wend. 3 Neb. 161; Robertson v, Shutt, 9 617; Bradt v. Koon, 4 Cow. 416; Mar- Bush, 659: Carter v. Davis, 8 Fla. tin v. Hawks, 15 Johns. 405; Chap- 183; Caudle v. Rice, 78 Ga. 81. See man v. Haw, 1 Taunt. 341; Omerod Langston v. Roby, 68 id. 406. v. Tate. 1 East, 464: Turwin v. Gib- 2 Simmons v. Reid, 31 S. C. 389, 17 son, 3 Atk. 720; Read v. Dupper, 6 Am. St 36, 9 S. K Rep. 1058; Diehl T. R. 361; Wilkins v. Carmichael, 1 V. Friester, 37 OhioSt. 473; Ward v. Doug. 101; Schoole v. Noble, 1 H. Wordsworth, 1 E. D. Smith, 598; Black. 23; Ackerman v. Ackerman, Haight V. Holcomb, 16 How. Pr. 163; 14 Abb. Pr. 229; Bishop v. Garcia, 14 Peckham v. Barcalow, Lalor's Supp. Abb. Pr. (N. S.).69. 112; Smith v. Lowden, 1 Sandf. 696; < Ex parte Kyle, 1 Cal. 332; Daven- Gihon V. Fryatt, 2 id. 638; Sweet v. port v. Ludlow, 4 How. Pr. 337; Ben- Bartlett, 4 id. 661: Roberts V. Carter, edict v. Harlow, 5 id. 347. But a 17 How. Pr. 341, 24 id. 44; Martin v. more reasonable view, in the writer's § 204.] SET-OFF OF JUDGMENTS. 499 A distinction has been made as to the right of set-off when the judgments are in the same action, or in actions growing out of the same subject-matter, and where the judgments are in actions having no connection with each other. In the former class of cases the right is generally deemed superior to the claim of the attorney in either action for his services and dis- bursements;^ in the latter the equitable right of the attorney Avho has rendered services and incurred expenses in obtaining one of such judgments, to be paid out of it, is deemed superior to the right of the judgment debtor to have that judgment paid by applying upon it the judgment owned b}^ him against his judgment creditor, the assignment being made lona jide before the right of set-off attaches.^ judgment, is to be found in the able fected the right of the attorney to opinion of Daly, J., in Ward v. his lien. Wordsworth, 1 E. D. Smith, 598, i Yorton v. Milwaukee, etc R. Co., where it is held that the abolition by 62 Wis. 367, 21 N. W. Rep. 516, 23 id. the code of all statutes regulating 401. the fees of attorneys, and of all rules 2 Gauche v. Milbrath, 105 Wis. 355, or provisions of law preventing an 81 N. W. Rep. 487; Benjamin v. Ben- attorney from agreeing with his jamin, 17 Conn. 110; Diehl v. Fries- client for his compensation, and ter, 37 Ohio St. 473; Wells v. Elsani. leaving the measure thereof to the 40 Mich. 218; Kinney v. Robison, 52 contract of the parties, has not af- Mich. 389, 18 N. W. Rep. 120. 500 PEOUNIAEY EEPJSESENTATIVE OF VALUE. [§ 205. CHAPTEK YL PECUNIARY REPRESENTATIVE OF VALUK Section L MONEY. § 205. Characteristics of money. 206. Payment to be made in money of country of performance 207. Payment in currency. 208. Effect of changes in the value of money. 209. Value of money at time of contracting. 210. The legal tender act. 81 L Effect of fluctuations in currency. Section 2L par and rate of exchange. 212, Par of exchanga 213. Rate of exchange. Section 1. MONEY. [318] § 205. Characteristics of money. All civilized na- tions have some method or system of pecuniary remuneration, based upon an arbitrary unit of value sanctioned by law. By it accounts are kept, the amounts of debts and judgments ex- pressed, and wealth computed. They have, also, gold and silver coins, either representing that unit or some multiple of it, or other value estimated with reference to it. These are of intrinsic value, and being made and issued by the sovereign power are acceptable to everybody and therefore have uni- versal currency as a convenient and necessary medium of ex- change and payment. They are money in the strict sense. [319] All pecuniary obligations are measured by and expressed in the value they represent, and are solvable by them. Nor can such obligations be otherwise liquidated or paid, except by agreement, unless the state which has the power to coin money prescribes some other form of legal money. The precious metals, being valued according to a uniform and fixed § 206.] MONET. 501 standard, are the only proper measure of value. Their value is determined by weight and purity, and the impress on the coins is a certificate so generally relied upon that the pieces readily pass for their nominal value by count. Money is cosmopolitan. A contract which is a money con- tract where it is entered into and to be performed is a money contract everywhere. To this extent the money of one na- tion is treated as money by another, as distinguished from a mere chattel or a commodity. Thus, money lent in India in 2?agodas, and sued for in England as money lent, was held re- coverable in that form. It w^as contended that the averment that the defendant was indebted for " lawful money of Great Britain" was not supported; but Gibbs, J., said, "the doc- trine contended for has been exploded these thirty [320] vears."^ The real meaning of such a count was afterwards explained to be that the defendant is indebted for money of such a value or amount in English money.^ So a contract made and to be performed in the same country, for the pay- ment of what is money at the time of contracting, will be held a money contract after that currency has been abolished and another entirely different has been substituted. § 206. Payment to be made in money of country of per- formance. Contracts for the payment of money are deemed payable in the legal money of the country where payment is to be made, unless a contrary intention appears; that [321] is, a contract for the payment within the United States of dollars is presumptively payable in dollars of our decimal cur- rency. If a contract be made here, and even not within the law merchant, and between citizens of the United States, and to be performed here, for the payment of a sum stated in the denominations of a foreign currency, it is undoubtedly to be treated as a money contract, the same as if made and to be performed in the country where such currency is the legal money.' Debts have no situs; they are payable everywhere; 1 Harrington v.Macmorris, 5 Taunt. Sneed, 2; Sheehan v. Dalrymple, 19 228. Mich. 239. 2 Ehrensperger v. Anderson, 3 Ex. » See Mervine v. Sailor, 52 Pa. 18; 148. But see McLaohlan v, Evans, Christ Church Hospital v. Fuechsel, 1 Y. & J. 3S0; Pollock v. Colglazure, 54 id. 71; Mather v. Kinike, 51 id. 4^5; Sears V. Dewing, 14 Allen, 413. 502 rECUNIAKY KEPBESENTATIVE OF VALUE. [§ 207. and in every country where payment may be either tendered or demanded, they are strictly payable in the legal currency or money of that country, and in no other currency unless strictly at maturity. A sterling debt contracted or incurred in England, a debt payable in francs incurred in France, or a contract payable in pistoles entered into in Spain, when sought to be enforced or paid in the United States, is a contract for an equivalent amount payable only in the lawful money of the United States. The very currency in which the contract by its terms was payable, if tendered in this country after matu- rity, would be no legal offer of payment; it would not be a tender which would stop interest. Contracts made abroad, or payable in foreign currency, are treated as money con- tracts; but the money specified therein, if not tendered when due, is no longer the money in which the damages due would be computed, except within the jurisdiction where such money is the lawful currency. § 207. Payment in currency. Bank bills and other paper currency circulate as money. It is not strictly such, for no debtor has a legal right to discharge a money obligation with such currency unless it is made legal tender by law; the cred- itor may refuse to receive it; but when it is paid and received, it is paid and received as money. The receipt of bank bills, dollar for dollar, upon a debt, is not conditional payment, de- pending on diligence of the payee in presenting the bills to [322] the bank and obtaining legal-tender funds, nor is it ac- cord and satisfaction.^ A contract payable in currency or in 1 Solomon v. Bank of England, 13 InMaynard v, Newman, 1 Nev. 271, East, 135; Pickard v. Bankes, id. 20; Beatty, J., said: "Money means any- Corbitv. Bank of Smyrna, 2 Harr. 235, thing which passes current as the 30 Am. Dec. 635; Ware v. Street, 2 common medium of exchange and Head, 609; Magee v. Carmack, 13 measure of value for other articles, 111. 289: Lightbody v. Ontario Bank, whether it be the bills of private or 11 Wend. 1; Ontario Bank v. Light- incorporated banks, government bills body, 13 id. 101; Wainwright v. Web- of credit, treasury notes or pieces of star, 11 Vt. 576, 34 Am. Dec. 707; Fogg coined metal. Money is anything V. Sawyer, 9 N. H. 865; Frontier Bank which by law, usage or common con- V. Morse, 22 Me. 88, 38 Am. Dec. 284; sent becomes a general medium by Westfall V, Braley, 10 Ohio St. 188, 75 whichthevalueofothercommodities Am. Dec. 509; Harley v. Thornton, 2 is measured and denominated. Paper Hill (S. C), 509, n. See Keating v. money is distinguishable from other People, 160 111. 480, 486, 43 N. E. Rep. negotiable paper, such as notes, bills 724. of exchange, etc., because it is always, § 207.J MONEY. 503 funds, qualified by any term which imports money, is a money contract. A check for "current funds" calls for current money — par funds, money circulating without discount.^ This term, as after once put in circulation, payable to bearer, not to order: because it is made to represent convenient amounts for the ordinary transaction of business, is printed and written on paper not easily worn out, and there- fore capable of being passed from hand to hand for a long time without destruction. By general consent it is used and treated as money and not as negotiable paper. If one indorses his name on such a note he does not thereby become responsible for the insolvency of the bank, but merely guarantees that the note is not a counterfeit. Neither the courts of law, nor the community, treat such paper as negotiable securities, but as money, something which is used as a general representative and measure of values." Woodruff v. Mississippi, 06 Miss. 298, 6 So. Rep. 335. A genuine silver coin worn smooth by use, notappreciably diminished in weight and identifiable, is a legal tender. Jersey City & B. P. Co. v. Morgan, 52 N. J. L. 60, 21 Atl. Rep. 783. See United States v. Lissner, 12 Fed. Rep. 840. A genuine sil ver coin of the United States, distinguishable as such, tliough somewhat rare and diflfei'ing in appearance from other coins of that government of like denomina- tion and of later dates, is a legal ten- der. Atlanta Con. Street R. Co. v. Keeny, 99 Ga. 266, 25 S. E. Rep. 629, 33 K R. A. 824. A statute requiring an officer to pay out the same moneys received and held by him by virtue of his office does not include only coin and currency in circulation as money. Money, it was said, is a generic term, and may mean not only legal tender coin and currency, but also any other circulating medium or any in- strument or token in general use in the commercial world as the repre- sentatives of value. It includes whatever is lawfully and actually current in commercial transactions as the equivalent of legal tender coin and currency. Certificates of deposit or other vouchers for money deposited in solvent banks payable on demand are a most convenient medium of exchange and are exten- sively used in commercial and finan- cial transactions to represent the money thus deposited. State v. Mc- Fetridge, 84 Wis. 473, 54 N. W. Rep. 1, 998, 20 L. R. A. 223; State v. Hill, 47 Neb. 456, 537, 66 N. W. Rep. 541. 1 Klauber V. Biggerstaff,47 Wis. 551, 3 N. W. Rep. 357, 32 Am. Rep. 773; Marc V. Kupfer, 34 IlL 286. Contra, Huse V. Hamblin, 29 Iowa, 501, 4 Am. Rep. 244. That term was held to have a spe- cific, legal and well known meaning which cannot be contradicted or ex- plained by parol. See Moore v. Mor- ris, 20 111. 255. In Phoenix Ins. Co. v. Allen, 11 Mich. 501, 83 Am. Dec. 756, it was held that a note payable in " cur- rent funds," in the absence of all evidence showing that anything else is current at the place of payment, must be regarded as payable only in such funds as are current by law. "Current money" means "cur- rency of the country," vphatever is intended to and does actually circu- late as money; every species of coin or currency; the specification of dol- lars in connection with those words serves only to measure the quantity of the notes or currency, not their value, which may be ascertained by proof. There is no distinction be- 504 PECUNIAKY KEPKESENTATIVE OF VALUE. [§ 208. well as " currency," excludes depreciated paper money.^ A note payable in " current Florida money " is payable in good funds.^ " Canada currency " is equivalent to lawful money of Can- ada.^ § 208. Effect of changes iu the value of money. The amount due by contract is sometimes subject to question by [323] reason of fluctuations in the value of the money in which the contract was made payable. These fluctuations may be caused by the state debasing the coins which repre- sented that mone}'', or by arbitrary changes in the value of existing denominations of the legal currency ; and so the value of paper money will rise and fall with the fluctuations in the credit of its maker. Suppose a contract for the payment of $100 made while the present decimal system is in force; and while that contract is pending congress revises that system and retains a dollar as a unit of value representing only fift}'" cents. Uninfluenced by any provision that the new dollar shall be a legal tender for all debts at their nominal value, would a hundred of these dollars discharge the principal of the debt under the supposed contract? The injustice of hold- ing the affirmative is apparent. The new dollars would not be those of the contract; by paying a hundred of them the promisor does not pay the value which he undertook to pay, and which was expressed by the contract. He, of course, would be entitled to pay in the money which was lawful and current when the contract required payment to be made; but as the word " dollar " is but a representative of value, that value should be ascertained by the legal sense of the term when the contract was made. Though the parties contracted with a knowledge of the power of congress to make the subsequent changes, it does not follow that they impliedly agreed that the value stipulated to be paid, as -fitly expressed in the con- tract, should be modified by an arbitrary change in the mean- ing of the terras which had been employed to express their in- tween a note for so many dollars in i Springfield M. & F. Ins. Co. v. currency and one for so many dol- Tincher, 30111. 399; Webster v. Pierce, lars" payable in currency." Miller v. 35 111.158. McKinney, 5 Lea, 93; Commissioners ^ Williams v. Moseley, 2 Fla. 304. V. McCorinick, 4 Mont. 115, 133, 5 Pac. » Black v. Ward, 27 Mich. 191. Rep. 287. I § 209.] MONEY. 505 tention. This view is so obviously just that it is a matter of surprise it should ever have been questioned.' §209. Talueof money at time of contracting. When [324] a bill is drawn in one country payable in and in the coin of 1 See 2 Daniel on Neg. Inst., § 1214; Stoiy's Contl. Laws, §?; 813, 313a. The case of Mixed Moneys, Davis, 28, rests on a contrary view. A bond was given for "£100 sterling current and lawful money of England," to be paid in Dublin, Ireland. Between the time of making the bond and its becoming due, Queen Elizabeth re- called the existing currency in Ire- land and issued a new debased coin- age called mixed money, declaring it to be lawful currency in Ireland. Of this debased coin a tender was made in Dublin, and it was held good. In a note to g 313a of Story's Confl. Laws, it is said: "The court do not seem to have considered that the true value of the English current money might, if that was required by the bond, have been paid in Irish currency, though debased, by adding so much more as would bring it to the par. And it is extremely diffi- cult to conceive how a payment of ■current lawful money of England could be interpreted to mean current or lawful money of Ireland, when the currency of each kingdom was dif- ferent, and tKe royal proclamation made a distinction between them, the mixed money being declared the lawful currency of Ireland only. Perhaps the desire to yield to the royal prerogative of the queen a sub- missive obedience as to all payments in Ireland may account for a de- cision so little consonant with the principles of law in modern times. Sir William Grant, quoting Vinnius, in Pilkington v. Commissioner for Claims, 2 Knapp, 18 to 21, affirms the better doctrine. 'He (Vinnius) takes the distinction, that if, between the time of conti-acting the debt and the time of its payment, the cur- rency of the country is depreciated by the state, that is to say, lowered in its intrinsic goodness, as if there wei'e a greater proportion of alloy put into a guinea or a shilling, the debtor should not liberate himself by paying the nominal amount of his debt in the debased money; that is, he may pay in the debased money, being the current coin, but he must pay so much more as will make it equal to the sum he borrowed.' But he says (and this seems contradictory of the foregoing), if the nominal value of the currency, leaving it un- adulterated, were to be increased, as if they were to make the guinea pass for 30s., the debtor may liberate himself from a debt of £1 10s. by paying a guinea, although he bor- rowed the guinea when it was but 21s." And the case of Reynolds v. Lyne's Ex'r, 3 Bibb, 340, is in accord with that principle. A contract was made when a dollar was 5s. 9d for the payment of a sum at a future day on the performance of a con- current act of the payee. Before the money became payable, the state where the contract was made en- hanced the value of the dollar to 6s. Subsequently payments were made and a dispute arose whether the money paid should be estimated at the rate of currency when the money was paid, or when the contract vvas made. Finally, the obligation in question was given for a balance of the original debt remaining by esti- mating the payment according to the value of a dollar at the date of the contract, viz., 5s. dd., for which judgment at law had been rendered. The question arose on a bill in equity 506 PECCNIAliY REPKESENTATIVE OF VALUE, [§ 209. [335] another, the value of which, intermediate the drawing and payment, is reduced by the government, it has been held that payment should be made according to the value of the- money at the time the bill was drawn. ^ The common law cannot be deemed settled on this point; nor are the writers on the civil law in accord upon it. The opposite view is apparently based on the assumption that in money we do not regard the coins which constitute it, but only the value which the sov- ereignty has been pleased that they shall signify.'^ But coins have, in the world's exchanges, an intrinsic value which no sovereignty can affect by arbitrary regulation. And if by a regulation concurrently adopted by all nations, the coins of each were uniformly either debased or enhanced in value without a corresponding change of their intrinsic value, the change would be immediately followed by an equal advance or decline in the price of property. If the change were made in the value of the coins of one country only, it would be at once succeeded .by a fluctuation in prices of property measured by it, showing that their purchasing power had undergone no essential modification; and the same conclusion would result from a comparison of the value of such coins with the coined for relief on the ground of mistake on Bills, *399. See Anonymous, 1 against that obligation and the judg- Hayw. (by Batt.) 354. ment founded upon it. Judge Ows- A will speaks from the time of the ley said: "When the original obli- testator's death, and a legacy of a gation . . . was made the legis- certain number of dollars is payable lature of Virginia had the power to in such dollars as were then standard, regulate the currency of their coin Graveley v. Graveley, 25 S. C 1, 60, within the limits of that state; and Am. Rep. 478. as the contract . . . was made If at the time a contract which within the limits of that state, the provides for its discharge in lawful promise ... to pay in current silver money is made silver coins of money of Virginia must have been all denominations are legal tender, agreed on with a knowledge of the the fact that subsequently such coins state sovereignty, and subject to its are a legal tender for only a small control in regulating the currency, proportion of the amount due does We are of the opinion, therefoi-e, not prevent the payment of the obli- that the original obligation . . . gation in the manner stipulated, might have been satisfied by pay- Parisli v. Kohler, 11 Phila. 346. ment in current money at its value Damages are assessable in the when Lyne became entitled to de- same kind of money as the contract mand paj'ment;" and that relief calls for. Martin v. Evans, 14 PhiUu was granted against the judgment. 122. 1 Du Costa v. Cole, Skin. 272; Chitty 2 See Story Conf. Laws, g 313^. § 210.J MONEY. 507 money of other nations. When a contract is made for the payment at a future day of a given amount of money in speci- fied legal denominations, having at the date of the contract a fixed legal value, are not the intention and legal obligation of the parties to be ascertained by the import at that time of the terms used? Undoubtedly a debt created by contract which can be paid with money can be satisfied by whatever medium of payment is legal tender at the time it is due and payable/ if paid then ; and it may be added, that at all times afterwards it will be solvable in any money wdiich for the time being is legal tender at the place where payment may be demanded or tendered, whether it be the place of contract or elsewhere.^ The legal currency which may be applicable at the place of contract when the debt becomes due and is actually demanded, or sought by tender to be paid, may be as unlike that [326] mentioned in the contract as though the demand of payment or tender were made in another country. Upon general prin- ciples and legal analogies the value should be ascertained by the legal reading of the contract at the time it was made, and this is payable in any currency which is legal tender when payment is actually made.^ If w^hen and where payment is made the currency consists of coins of the same or a different name, and represent different values from those named in the contract, or the same values, but have been either debased or the contrary, the par should be ascertained of the money of the contract, and that par should be the measure of the amount due. This question may be precluded by the new currency, or that which is offered in payment being made a lawful tender for the particular debt at the nominal value of such currency. Under such legislation, these general views have but a subordinate influence; the practical question then being what is the effect of the statute. § 210. The legal tender act. Under the legal tender law of 1862 the value of the dollar was not changed, but a new legal representative of it was introduced as a medium of payment. Paper money in the form of the government's promise to pay was issued and declared to be legal tender for all debts, pub- 1 Higgins V. Bear River & A. Water 2 Downman v. Downman, 1 "Wash. & M. Co., 27 Cal. 153; Wilson v. (Va.) 26. Morgan, 4 Robert. 58. 3 Bronson v. Rodes, 7 Wall. 229. 508 PECUNIARY EEPKESENTATIVE OF VALUE. [§ 210. lie and private, with certain exceptions of the former. The coinage, which had previously been the exclusive legal tender, was, however, still retained as money. During the first years after the issue of this paper currency, owing to the situation of the country, and doubtless to the circumstance that no time was fixed for its redemption in specie, it became depreciated; that is, gold and silver money was largely at a premium. As greenbacks were a legal tender for all debts payable in money generally they became, of course, the ordinary currency, and were thereby made the legal, as they were the nominal, equiv- alent, dollar for dollar, for the payment not only of all subse- [327] quent but also all antecedent debts.^ The difference in market value could not be recognized when the paper dollar was offered in payment of any debts to which it was applica- ble by law. The court said: "A court cannot say judicially that one kind of money made a legal tender is of greater or less value than another; nor can evidence be received to prove a difference." - The legal equivalence in value of coined money and greenbacks is more absolutely asserted by the early than by the later decisions.^ In an action for specific performance 1 Legal Tender Cases, 12 Wall. 457; parties waiving its provisions, and Dooley v. Smith, 13 id. 604; Bigler v. requiring a debt to be paid in gold, Waller, 14 id. 297; Bowen v. Clark, is illegal, and cannot be sustained. 46 Ind. 405; Reynolds v. Bank, etc., See Linn v. Minor, 4 Nev. 462 (1868). 18 id. 467; Thayer v. Hedges, 23 id. In Kimpton v. Bronson, 45 Barb. 141: Brown v. Welch, 26 id. 116; 618, Daniels, J., said: "The law has Bank v. Burton, 27 id. 426; Mclnhill impressed them (treasury notes) with V. Odell, 62 111. 169; Black v. Lusk, a legal value precisely equal to that 69 id. 70; Morrow v. Rainey, 58 id. of gold and silver of the same de- 357: Chamblin v. Blair, id. 385; Long- nominations for the purpose of pay- vi'orth v. Mitchell, 26 Ohio St. 334; ing individual debts with them, and Belloc V. Davis, 38 Cal. 243. it cannot permit a discrimination ^Carpentier v. Atherton, 25 Cal. against them in favor of gold and 564; Reese v. Stearns. 29 id. 273; silver, without allowing its authority Spencer v. Prindle, 28 id. 276; Poett to be substantially annulled. How- V. Stearnes, 31 id. 78. ever the fact may be as to their 3 In Buchegger v. Shultz. 13 Mich, value as a mere commodity, for the 420 (1865), it was held that the act purpose of paying individual debts of congress making treasury notes a treasury note is as completely a a legal tender in payment of private legal dollar as a piece of metal of a debts was not designed to confer a certain weight and quality, im- personal privilege upon debtors, but pressed as the law directs, is a legal was based upon principles of state dollar. The one is no more so than liolicy; and an agreement between the other for those purposes that the § 210.] MONEY. 509 the plaintiff had a verdict; and in September, 18G0, deposited the purchase-money in court in gold to be taken out by the defendant on filing his deed. The prothonotary deposited the money with reliable bankers to his own credit. They em- ployed the money as they did other deposits, without profit as coin; it was always subject to the prothonotary's draft. The defendant filed his deed after the passage of the legal- tender law, and the prothonotary offered to pay him the money in court in legal tenders, which he refused and brought [328] trover for the gold; held, that he could not recover.' The earlier cases proceeded on the construction that "«7^ debts'''' in the legal tender law of 1862 included all pecuniary liabilities, whether originating in contracts expressly to pay in gold and silver, or in "dollars" generally. But the subject re- ceived a different treatment when it came to be considered in the national supreme court. That court said congress must have had in contemplation debts originating in contract, or de- mands carried into judgment, and only debts of this character. And the term did not include taxes levied under state laws;^ nor obligations payable expressly in coined money. Referring to a tender of United States notes in 1865 on a debt contracted in 1851, payable by the language of the contract in gold and silver coin. Chase, C. J., said there were two descriptions of money in use at the time the tender was made, both authorized by law, and both made legal tender in payments. The statute denomination of both descriptions was dollars; but they were laws have declared them to be of generalcurrent of decisions; namely, equal value. Where these laws are that all debts, whether payable in supreme, that value must be ob- terms in gold and silver as money, served and secured by courts of jus- or in dollars generally, were solvable tice. If the obligation in this case in greenbacks. Shollenberger v. had been such as required the de- Brinton, 53 Pa. 1; Appel v. Wolt- livery of one thousand eight hundred mann, 38 Mo. 194; Riddlesbarger v. gold dollars, and not as it was, one McDaniel, id. 138; Wilson v. Morgan, thousand eight hundred dollars in 4 Robert. 58, 1 Abb. Pr. (N. S.) 174, 30 gold or silver coin, its construction How. Pr. 3S6; Murray v. Gale, 5 Abb, must have been different. Further, Pr. (N. S.) 236, 52 Barb. 427; Whet- it would have been in no sense a debt stone V. CoUey, 36 111. 328: Hum- within the contemplation of these phrey v. Clement, 44111. 299; Galliano statutes, and could not be affected v. Pierre, 18 La. Ann. 10,89 Am. Dec. by their provisions declaring treas- 643; Munter v. Rogers, 50 Ala. 283. ury notes a lawful tender for the ^ Aurentz v. Porter, 50 Pa. 115. payment of debts." Such was the '- Lane County v. Oregon, 7 Wall. 71. 510 PECUNIARY KEPKESENTATIVE OF VALUE. [§ 210. essentially unlike in nature. The coined dollar was a piece of gold or silver of a prescribetl degree of purity, weighing a pre- scribed number of grains. The note dollar was a promise to pay a coined dollar; but it was not a promise to pay on demand, nor at any fixed time, nor was it in fact convertible into a coined dollar. It was impossible, in the nature of things, that these two dollars should be actual equivalents of each other, nor was there anything in the currency acts purporting to make them such.^ iBronson v. Rodes, 7 Wall 229; Legal Tender Cases, 12 Wall 457. In The Vaughan and Telegraph, 14 Wall. 258, which was a collision case, there was a right to recover for the loss of property according to its value at the time and place of shipment. The place of shipment being in Can- ada, the value in dollars was stated in the currency of Canada, which was equivalent to the gold currency of the United states, but being stated in dollars, the district court refused to recognize any difference between the value of a dollar of that currency and the dollar of the currency in which the judgment of the court would be payable; in other words, would allow nothing to be added to the amount stated in the dollars of Canada currency, to give the equiv- alent when paid in legal tender notes — holding that the loss in this way was an incident of the suit in the forum where it was brought, and was unavoidable. In the circuit court the same rule of damages was applied, but the decree gave the value of the Canada currency in legal tender notes. "These notes," said Swayne, J., " have since largely appreciated, so that while the libel- ants would, under the decree of the district court, if it had been paid when rendered, have received much less than the estimated value of the barley, they will now, if the circuit court be afiSrmed, receive much more. . . . Upon the rule of dam- ages applied by both courts as re- spects the kind of currency in which the value of the barley was esti- mated, the libelants were entitled, on the plainest principles of justice, to be paid in specie or its equivalent. The hardship arising fi-om the decree before us is due entirely to the delay in its payment which has since oc- curred, and the change which time and circumstances have wrought in the value of the legal tender cur- rency. The decree was right when rendered, and being so, cannot now be disturbed," A minority of the court dissented, on the ground that the original decree should have been rendered for the Canada value in gold to avoid the loss incident to the fluctuations in the value of green- backs. See Edmondson v. Hyde, 2 Sawyer, 205; Kellogg v. Sweeney, 46 N. Y. 291, 7 Am. Rep. 333. In Simpkins v. Low, 54 N. Y. 179, it was held that the legal tender acts of congress relate to the effect of the notes issued thereunder as a tender in the payment of debts arising on contract; they do not forbid the rec- ognition in other relations of the dif- ference between coin and currency. The action was brought for the con- version of certain bonds issued by a California company, and though not in terms payable in gold, still as they were by the custom of business treated as such, recovery was permit- ted on a gold basis. In Lulingv. Atlantic Mut. Ins. Co., 30 How. Pr. 69. it was held that where there is a specific agreement made ■§ 210.] MONEY. ill Except for the payment of debts, in the sense of [329-333] the legal tender law, there was no conclusive presumption that the two currencies were of equal value. Parties may by their contracts recognize not only the actual, but any estimated, dif- between any policy-holders of a mut- ual insurance company and thecojM- pany that the premiums of the for- mer shall be paid in gold and the losses shall be paid by the latter in gold, the company on declaring its dividends are bound to allow such policy-holders a certificate of their share of the profits in accordance with a gold standard as compared with currency. A notice issued by the company to the effect that the dealers making insurances payable in gold wei'e to participate with others in the earnings, and that these would be computed and made pay- able in currency, and the delivery by the company and acceptance of the certificates of such earnings by such policy-holders under said notice does not affect the legal bearing of the contract, nor make the certificates a bar to an action by the policy-holders against the company to correct the account upon which these were based and for a proper readjustment. The certificates were good to the ex- tent which the}'' provided for only. Baltimore & O. R Co. v. State, 36 Md. 519; Bank of Prince Edward Island V. TurnbuU, 35 How. Pr. 8; Lanev. Gluckauf, 28Cal. 288; Vilhac V. Biven, id. 410; Rankin v. Demott, €1 Pa. 263. A debt payable "in gold or its equivalent in lawful money of the U. S.'* requires payment to be made at the commercial value of gold when due. Baker's Appeal, 59 Pa. 313. The defendants in 1866 bought goods from plam tiffs, "Liverpool tests. monthly shipments from Liverpool to Philadelphia, ... at three and one-fourth cents per pound, cash, gold coin, on vessel at Philadel- phia;" held to be payable in gold or its equivalent. Parties could take themselves out of the operation of the legal tender law after its passage by contracting for payment in coin alone. Frank v. CoHioun, 59 Pa. 381. See Governor, Opinion in Response to. 49 Mo. 216; The Emily B. Souder, 8 Blatchf. 337. In Glass v. Abbott. 6 Bush. 622, it was held that the difference in value between gold and greenbacks is sufficient to make usury, where there would be none if no such differ- ence existed. But see Reinback v. Crabtree, 77 III 182. Money had and received main- tainable for proceeds of a gold bond sold, and recovery may be had of such proceeds at its value in paper money. Hancock v. Franklin Ins. Co., 114 Mass. 155. In Carpenter v. Atherton, 28 How. Pr. 303, a California contract pay- able in gold was in question; being such as under the statutes of that state, called the specific contract act, would be there enforced by requir- ing payment in gold, it was held proper to decree in New York that it be specifically performed, and a tender of greenbacks was held no defense. This remedy was afforded while the courts of the latter state held that legal tender notes were applicable to debts payable ex- pressly in coined money. But in Massachusetts the courts held that the benefits of the California specific contract act could not be allowed. Tufts V. Plymouth Gold Mining Ca, 14 Allen, 407. In Cooke v. Davis, 53 N. Y. 318, it was held that a contract to deliver or receive either of the two recog- 512 PECUNIAKY EEPKESENTATIVE OF VALUE. [§ 211. ference, incur obligations on the basis of it as a consideration; ^ obtain damages for torts in respect to it, or recover for the loss of it as an element of damage;^ and by that standard where there have been dealings on a gold basis resulting in an in- debtedness,* or an indebtedness payable in a foreign coin cur- rency.* And to insure the full benefit of the gold value of the debt or liability, judgment in coined money is authorized and required to be rendered.® § 211. Effect of fluctuations in currency. Where there are fluctuations in the value of the money of account, or of the currency in which the commercial business of a country is nized kinds of currency at a price expressed in dollars and fractions of a dollar, or at a specified percentage, is to be construed as meaning that the price is payable in the other cur- rency. The defendant contracted to deliver to the plaintiff's assignor " $10,000 current funds of the United States " at fifteen cents on the dollar ten months after date. It was held that the contract was to deliver $10,000 legal tender notes for $1,500 in coin; that it was valid, and for a breach thereof the defendant was liable. The contract was so con- strued, because otherwise it would be meaningless. The court below construed the promise of fifteen per cent, as payable also in legal tenders, and nonsuited the plaintiff on the ground that the contract was void for want of consideration. See Smith V. McKinney, 22 Ohio St. 200; also, Caldwell V. Craig, 22 Gratt. 340; Tur- pin V. Sledd's Ex'r, 23 id. 238. The subject of the comparative value of treasury notes and coin is discussed in a practical way by Beatty, C. J., in State v. Knitt- schnett, 4 Nev. 178 (1868). See Fabbri V. Kalbfleisch, 52 N. Y. 28; Kupfer V. Bank of Galena. 34 111. 328, 85 Am. Dec. 309; Trebilcock v. Wilson, 12 Wall. 687; People v. Cook, 44 Cal. 638. 1 Cooke v. Davis, 53 N. Y. 318: Smith v. McKinney, 22 Ohio St. 200; Luling V. Atlantic Mut. Ins. Co., 30 How. Pr. 69. 2Simpkins v. Low, 54 N. Y. 179: Kellogg V. Sweeney, 46 id. 291, 7 Am. Rep. 333; The Vaughan and Telegraph, 14 Wall. 258; Fabbri v. Kalbfleisch, 52 N. Y. 28. 3 Hancock v. Franklin Ins. Co., 114 Mass. 155. But see Wright v. Jacobs, 61 Mo. 19. * Christ Church Hospital v. Fuech- sel, 54 Pa. 71; Mather v. Kinike, 51 id. 425; The Emily B. Souder, 8 Blatchf. 337, 17 Wall. 666; Sheehan V. Dalrymple, 19 Mich. 239; Colton V. Dunham, 2 Paige, 267; Black v. Ward, 27 Mich. 191; Oliver v. Shoe- maker, 35 Mich. 464. 5Bronson v. Rodes, 7 Wall. 229 The Emily B. Souder, 17 id. 666 Trebilcock v. Wilson, 12 id. 687 Dewing v. Sears, 11 id. 379: Quinn V. Lloyd, 1 Sweeny, 253; Currier v. Davis, 111 Mass. 480; Independent Ins. Co. V. Thomas, 104 id, 192; Chisholm v. Arrington, 43 Ala. 610; Kellogg V. Sweeney, 46 N. Y. 291, 7 Am. Rep. 333; Phillips v. Dugan, 21 Ohio St. 466, 8 Am. Rep. 66: Chesa- peake Bank v. Swain, 29 Md. 483; Atkinson v. Clark, 69 Ga. 460. See Gist V. Alexander. 15 Rich. 50; Townsend v. Jennison, 44 Vt. 815; Grund v. Pendergast, 58 Barb. 216. § 211.] MONEY. 513 transacted, allowances have sometimes been made. These fluctuations have been very great, and are always liable to occur when the currency is paper. A promisor has a right to pay in the currency of the contract at par, although [334] depreciated, if he pays when it is due; but if he does not, and that currency is mone}', is the subsequent depreciation an item of legal damages to the creditor; or if it subsequently appreci- ates, is the increase of value an item for which allowance can be made against him? In an early case in North Carolina the court say: "Where the currency in which the judgment is to be given is equal, sum for sum to the money mentioned in the bond, the jury assess damages usually for the detention to the amount of the interest accrued, but they are not obliged to assess damages to that amount only. If upon inquiry, for in- stance, they find that one pound of the present currency of this country is not equal to one pound of the money payable by the obligation, whether this inequality be occasioned by depreciation or any other cause, and though the money men- tioned in the obligation be not foreign money, they may, in the assessment of damages, increase them beyond the amount of the interest so as to make the damages and principal equal in value to the principal and interest mentioned in the bond." ^ But whatever may be the rule in respect to a mere conven- tional money, a debt or liability payable in a legal tender currency may always be discharged in that currency at par, and no allowance is made for fluctuations in its value.'^ More than once in the history of this country there has been a conventional and fluctuating paper currency in general use as a substitute for and purporting to represent the denominations 1 Anonymous, 1 Hay w. (by Batt.) the contract was made, and one dol- 354. In a note to this case it is lar now being equal to ten shillings, stated that there were at the same See Taliaferro v. Minor, 1 Call, 456: term several cases of assumpsit for Massachusetts Hospital v. Provincial currency more depreciated at the Ins. Co., 2.o Up. Can. Q. B. 613. time of the contract than it is now, 2 gee Faw v. Marsteller, 2 Cranch, and according to the direction of the 10, 29; Downman v. Downman, 1 court the plaintiff recovered only Wash. (Va.) 26; Higgins v. Bear the real value in the present cur- River & A. Water & M. Co., 27 CaL rency, the sum demanded being 153; Metropolitan Bank v. Van Dyck, reduced one-sixth, — twelve shillings 27 N. Y. 400. having been equal to one dollar when Vol. I — 33 51J: PECUNIARY REPRESENTATIVE OF VALUE. [§ 211. of an otherwise ideal legal money. During the prevalence of such currency values have been estimated and dealt with as though this depreciated money were their legal standard and measure. Questions of amount have arisen out of such trans- [335] actions after this vicious currency had passed away, and sums agreed to be paid while it w^as the general medium of ex- change, and magnified in consequence of its depreciation, have been demanded when payment could be exacted in the pure, legal currency. Scaling laws have then been enacted as the only relief against the injustice and inequality of interpreting the inflated language of value which a depreciated currency had popularized by the actual legal standard subsequently brought into practical use. This mode of relief was resorted to in the late insurgent states after the rebellion where the notes of the confederacy had necessarily been the only circulat- ing medium; and until the subject was considered in the su- preme court of the United States scaling acts were, by the decisions of several of the state courts, regarded as essential to protect debtors from the enforcement of contracts made with reference to the depreciated currency from liability to pay an equal sum in the lawful currency of the United States.' 1 In Omohundro v. Crump, 18 say the least, whether parol evidence Gratt. 703, Jaynes, J., said, in respect of the actual understanding and to notes made in Virginia in Novem- agreement of the parties as to the ber, 1861, payable in one, two and kind of currency in which a con- three years: "The act of March 3, tract is to be fulfilled, which is ex- 1866, provides that in any action pressed to be payable in ' dollars * founded on any contract, express or generally, would be admissible, in- implied, made and entered into be- dependently of the provisions of that tween the 1st day of January, 1862, act. The word ' dollars ' has a and the 10th day of April, 1865, it definite signification fixed bj- law, shall be lawful for either party to and it is laid down that 'when the show by parol or other relevant evi- words have a known legal meaning, dence what was the true understand- such for example as measures of ing and agreement of the parties, quantity fixed by statute, parol either expressed or to be implied, as evidence that the parties intended to the kind of currency in which it to use them in a sense different from was to be fulfilled or performed, or their meaning, though it was still in reference to which as a standard the customary and popular meaning, of value it was made and entered is not admissible.' 1 Greenleaf Ev., into. This case does not come with- § 280. See also Smith v. Walker. 1 in the provisions of that act, because Call, 24; Comraonwealtli v. Beau- the note was made before the 1st day marchais, 8 Call, 107. We need not of January, 1862. It is doubtful, to decide whether such evidence could § 211.] MONEY. 515 In 1868 a case from Alabama brought this subject [33G] before the federal court of last resort. The question was, " Whether evidence can be received to prove that a promise, made in one of the insurgent states, and expressed to be for the payment of dollars, without qualifying words, was in fact made for the payment of an}'- other than lawful dollars of the United States?" "It is quite clear," said Chase, C. J., deliv- ering the opinion of the court, " that a contract to pay dollars, made between citizens of any state of the Union, while main- taining its constitutional relations with the national govern- ment, is a contract to pay lawful money of the United States, and cannot be modified or explained by parol evidence. But it is equally clear, if in any other country, coins or notes de- nominated dollars should be authorized of different value from the coins or notes which are current here under that name, that, in a suit upon a contract to pay dollars, made in that have been received in this case, because it is expressly stated in the facts agreed that there was no actual agreement. "It is contended, however, that the law will imply an agreement under the circumstances of this case to accept confederate money in pay- ment of the note on which the ac- tion is founded. The argument is that the note, having been made after the establishment of the con- fedei'ate states, must be considered as made with reference to the actual currency of those states; and that as confederate notes were the actual currency in those states at the time the note became jaayable it was pay- able in that currency. It must be remembered, however, that confed- erate notes were never made a legal tender. They were never the lawful money of the country, but only a substitute for money like bank notes. Gold and silver were the lawful money of the confederate states at the time this note was made, and also at the time it became payable, according to the provisions of the act of the congress of the United States, expressly adopted by the congress of the confederate states. The prin- ciple of public law relied on by the counsel for the appellant, and quoted from Story, Confl., § 242. pre- sumes, in the absence of evidence to the contrary, that every contract is made with refei-enceto the lawful currency of the country in which ifc is entered into. It does not presume it to be made with reference to any substitute for any currency which may happen to circulate. A con- tract made in Eichmond before the war for the payment of so many dollars would not have been deemed payable in bank notes, though bank notes were then the common and practically the exclusive currency. And so in this case, if we apply to the confederate states the principle relied on, the note must be deemed payable in specie, which was the lawful money of the confederate states at the time it became pay- able." Boulware V. Newton, 18 Gratt. 70S; Hansbrough v. Utz, 75 Va. 959. 516 PECUNIAKY KEPRESENTATITE OF VALUE, [§ 211. country, evidence would be admitted to prove wliat kind of dollars were intended; and, if it should turn out that foreign dollars were meant, to prove their equivalent value in lawful [337] money of the United States. Such evidence does not alter or modify the contract. It simply explains an ambiguity, which, under the general rules of evidence, may be removed by parol evidence. We have already seen that the people in the insurgent states, under the confederate government, were, in legal contemplation, substantially in the same condition as inhabitants of districts of a country occupied and controlled bv an invading belligerent. The rules which would apply in the former case would apply in the latter; and as, in the former case, the people would be regarded as subjects of a foreign power, and contracts among them be interpreted and enforced with reference to the conditions imposed by the conqueror, so in the latter case, the inhabitants must be regarded as under the authority of the insurgent belligerent power actually es- tablished as the government of the country, and contracts made with them must be interpreted and enforced with refer- ence to the condition of things created by the acts of the gov- erning power. It is said, indeed, that under the insurgent government the word 'dollar' had the same meaning as under the government of the United States; that the confederate notes were never made a legal tender; and, therefore, that no evidence can be received to show an}^ other meaning of the word when used in a contract. But, it must be remembered that the whole condition of things in the insurgent states was matter of fact rather than matter of law, and as matter of fact, these notes, payable at a future and contingent day, which has not arrived and can never arrive, were forced into circulation as dollars, if not directly by the legislation, yet in- directly and quite as effectually by the acts of the insurgent government. Considered in themselves, and in the light of subsequent events, these notes had no real value, but they were made current as dollars by irresistible force. They were the only measure of value which the people had, and their use was a matter of almost absolute necessity. And this gave them a sort of value, insignificant and precarious enough, it is true, but always having a sufficiently definite relation to gold and silver, the universal measures of value, so that it was ^211.] MONEY. 517 always easy to ascertain how much gold and silver was the real equivalent of a sum expressed in this currency. In the light of these facts, it seems hardly less than absurd to say that these dollars must be regarded as identical in kind [338] and value with the dollars which constitute the money of the United States. "We cannot shut our eyes to the fact that they were essentially different in both respects; and it seems to us that no rule of evidence properly understood requires us to refuse, under the circumstances, to admit proof of the sense in which the word ' dollar ' is used in the contract before us." ' The presumption from the promise to pay dollars was [330] that dollars of lawful money were meant.^ But this presump- tion was reversed by the provisions of the scaling laws enacted in some states. Payments actually received by the creditor in confederate notes were held valid.* But it was held in some of the southern states that payments received by an agent or trustee in such currency would not have effect as such.'* In Tennessee, North Carolina and Georgia, however, it was held that a sheriff is authorized to receive, in the absence of instruc- tions to the contrary, whatever kind of money is passing cur- rently in the payment of debts of the same character as that 1 Thorington v. Smith, 8 Wall. 1. Whitley v. Moseley, 46 Ala. 480. See See Hanauer V. Woodruff. 15 id. 448; Williams v. Campbell, 46 Miss. 57; Confederate Note Case, 10 id. 548; Powell v. Knighton, 43 Ala. 626; Gavinzel v. Crump, 33 id. 308; Ef- Fretz v. Stover, 23 Wall. 198; also finger v. Kenney, 115 U. S. 566, 9 Robinson v. International L. Assur. Sup. Ct. Rep. 179, and cases cited; Society, etc., 42 N. Y. 54, 1 Am. Rep. Bailey v. Stroud, 26 W. Va. 614; 490; Bank of Old Dominion v. Mc- Chalmers v. Jones, 23 S. C. 463. Veigh, 30 Gratt. 457; Alley v. Rog- If payment is made in a depreci- ers, 19 id. 366. ated currency which is not legal Executors or administrators and tender a promise to make good the other trustees who were clothed with depreciatiou is founded on a valua- the legal title to claims due the es- ble consideration; but it is otherwise tates they represented discharged where payment is made in what the debtors thereto by receiving payment law designates as money. McElderry in confederate currency in the ab- V. Jones. 67 Ala. 303. sence of fraud or collusion. Trustees 2 Id. ; Wilcoxen v. Reynolds. 46 Ala. of Howard College v. Turner, 71 Ala. 539; Taunton v. Mclnnish, id. 619; 439, and -cases cited; Hyatt v. Mc- Neeley v. McFadden, 2 S. G 169; Burney, 18 S. C. 199. But it was not Williamson v. Smith, 1 Cold. 1,78 so in the case of one whose authority Am. Dec. 478. was special, as an agent or attorney. 3 Ponder v. Scott, 44 Ala. 241. Ferguson v. Morris, 67 Ala, 389. See * Scruggs V. Luster, 1 Heisk. 150; next note. 51 S PECUNIARY KEPRESENTATIVE OF VALUE. [§ 212., which he has to collect, subject to the limitation that he would not be warranted in receiving any currency so depreciated as to amount to notice that the creditor would not accept it.' Section 2. par and rate of exchange. § 212. Par of exchange. There is no common or interna- tional unit of value; hence the business and commerce of the world are conducted in many kinds of money. It often becomes necessary, therefore, to enforce the collection of debts incurred or 1 Atkin V. Mooney, Phil. (N. C. L.) 32; Emerson v. Mallett, Phil. Eq. 236; Turner v. Collier, 4 Heisk. 89; Boyd V. Sales, 39 Ga. 74; King v. King, 37 id. 205; Campbell v. Miller, 38 id. 304, 95 Am. Dec, 389; Hutchins v. Hull- man. 34 Ga. 346; Neely v. Wood- ward, 7 Heisk. 495. See Van Vacter V. Brewster, 1 Sm. & M. 490. " No court since the war has held, so far as we know, that confederate treasury notes were issued by lawful authority; but money has been rec- ognized generally by the courts as a generic term, covering anything that by common consent is made to rep- resent property and pass as such in current business transactions, and that when a judgment or debt has been paid in confederate money and accepted, the transaction cannot be opened. Several decisions go to the extent that if at the time and place of payment confederate money was generally received in business trans- actions and was in fact the current money of the country, the agent's authority to receive such money, in the absence of directions to the con- trary, may be presumed. This rule has been applied not only when the creditor and debtor were within the same state, but when the creditor resided in a state not a member of the confederacy, and the debtor was witliin the confederate lines. King v. King, 37 Ga. 205; Westbrook v. Davis, 48 Ga. 471; Rodgers v. Bass, 46 Tex. 505; Burford v. Memphis Bulletin Co., 9 Heisk. 691; Pidgeon v. Williams, 21 Gratt. 251; Hale v. Wall, 22 Gratt. 224; Robinson v. Interna- tional L. Assui-. Society, 42 N. Y. 54,, 1 Am. Rep. 490; Glasgow v. Lipse, 117 U. S. 327, 6 Sup. Ct. Rep. 757;. Martin's Adm'r v. United States, 2 T. B. Mon. 89, 15 Am. Dec. 129. Other decisions hold that the rule should not be applied where the creditor was within the fedei'al lines, with communication between him and his agent in the confederacy de- stroyed. In such a case it has been held that no implied authority to receive confederate money existed, and that payment to the agent or attorney did not discharge the debt. Harper v. Harvey, 4 W. Va. 539; Alley V.Rogers, 19 Gratt. 366; Water- house V. Citizens' Bank, 25 La. Ann. 77; Fretz v. Stover, 22 Wall. 198." Hendry v. Benlisa, 37 Fla. 609, 20 So. Rep. 800, 34 L. R. A. 283. The last case holds that if at the time and place of payment in confederate money it was generally received in business transactions, and was the current money of the country, an agent's authority to receive it, in the absence of directions to the contrary from a resident principal, will be presumed. i § 212.] PAR AND RATE OF EXCHANGE. 519 contracted in one currency by resort to courts whose judgments are rendered in another; and the gold and silver coins of one country often circulate as money in other countries and are current at their value, which is capable of equivalent ex- [340] pression in the local currency. Whatever the coinage, a like amount of these precious metals will, in all forms of coined money, be of like intrinsic value, depending for its equality on weight and fineness. An amount stated in one currency which is an equivalent for the same value expressed in another is the par of exchange; it is a literal translation of the lan- o-uao-e of value in one country or currency into that of equal value in another. The true par of exchange between two countries is the equivalent of a certain amount of the currency of one in the currency of the other, supposing the currency of both to be at the precise weight and purity fixed by their re- spective mints ;^ or in other words, it is the amount which the standard coin of either country would produce when coined at the mint of the other.^ 1 McCuUoch's Com. Die, tit. Par of Exchange. 2 Commonwealth v, Haupt, 10 Al- len, 38. In Daniel on Negotiable In- struments the par of exchange is thus explained, vol. 2, §§ 1443, 1443: " By the par of exchange is meant the precise equality of any given sum of money in the coin or currency of one country and the like sum in the coin or currency of another country into vphich it is to be exchanged, re- gard being had to the fineness and weight of the coins as fixed by the mint standard of the respective countries. Cunningham on Bills, 417; Story on Bills, § 30. Marius says: *Pair,' as the French call it, 'is to equalize, match or make even the money of exchange from one place with that of another place; when I take up so much money for exchange in one place to pay the just value thereof in another kind of money in another place, without having respect to the current of exchange for the same, but only to what the monej-s are worth.' Marius on Bills, 4. It is necessary to this purpose to ascer- tain the intrinsic values of the dif- ferent coins; and then it is a matter of arithmetical computation to ar- rive at the amount of one which will be the exact equivalent of a certain amount of the other, into which it is to be exchanged. When this has been accomplished, and the exact equivalent of a certain amount in one currency has been ascertained in another, should it be desired to transmit such amount from one country to another, the rate of ex- change between the countries will be added to or subtracted from such amount, accordingly as the course of exchange is in favor of the one country or the other. So the par of exchange is the equivalency of amounts in different currencies, while the rate of exchange is the difference between the amounts at different places. Gilbert remarks on this subject, in his Treatise on Banking: 'The real par of exchange 520 PECUNIAKY EEPRESENTATIVE OF VALUE. [§21$ [341] The par of exchange is the measure of damages only when the sum for which it is substituted as an equivalent would be such if judgment could be taken in the same cur- rency as that in which the debt exists. It is the measure where there is no question of the rate of exchange, and the only inquiry is what is the equivalent amount in our currency to that found due in a foreign currency. The nominal par based on the equality in value of gold or silver, whether in foreign or domestic coins, by the universal standard, may not be the real par if the money of the former be not gold and silver of the standard value, or if it be some depreciated substitute. Then it may be a question whether the creditor is entitled to judgment for an equivalent accord- ing to the real par, or whether he must accept as an equiva- lent the nominal par. Judge Story says, " if a note were made in England for £100 sterling, payable in Boston, if a suit between two countries is that by which an ounce of gold in one coun- try can be replaced by an ounce of gold of equal fineness in the other country. In England gold is the legal tender, and its price is fixed at £3 17s. lOid. per ounce. In France, silver is the currency, and gold, like other commodities, fluctuates in price according to supply and demand. Usually it bears a premium or agio.' In the above quotation the premium is stated to be 7 per viille; that is, it would require 1,007 francs in silver to purchase 1,000 francs in gold. At this price the natural exchange, or that at which an ounce of gold in England would purchase an ounce of gold in France, is 25.3U. But the commercial exchange — that is, the price at which bills on London would sell on the Paris exchange — is 25 francs, 25 cents, showing that gold is 0.30 per cent, dearer in Paris than in London. Tables have been con- structed to show the results of each fluctuation in the premium of gold in Paris and Amsterdam (Gilbert on Banking, 424). And in Cunningham on Bills it is said: By the par of exchange is meant the precise equal- ity between any sum or quantity of English money, and the money of a foreign country into which it is to be exchanged, regard being had to the fineness as well as to the weight of each. When Sir Isaac Newton had the inspection of the English mint he made, by order of council, assays of a great number of foreign coins to know their intrinsic values and to calculate thereby the par of exchange between England and other countries, of which a table is given by Dr. Arbuthnot. And he says you may thereby judge the balance of trade, as well as the dis- temper of a patient by the pulse. And this, it seems, induced Mons. Dutot, in a late book, entitled. Re- flections Politique sur les Finances, to follow the same path in calculat- ing the par of exchange, and to say that the balance of trade may be thereby as well judged of as the weather by a barometer." Gilbert on Banking, 417. § 213.] PAR AND RATE OF EXCHANGE. 521 were brought in Massachusetts, the party would be entitled to recover . . . the established jiar of exchange by [342] our laws. But if our currency had become depreciated by a debasement of our coinage, then the depreciation ought to be allowed for, so as to bring the sura to the real par, instead of the nominal par." ^ And for the same reason, if the money in which the debt was incurred were depreciated, an allowance by way of deduction should be made in ascertaining the equivalent in a currency of gold and silver of standard value. There being no statute fixing for general purposes a legal par of exchange, the rule which is established by the best author- > ities is that in rendering judgment in a different currency it should be given for such sum as approximates most nearly to the value of the amount contracted for.-' § 213. Kate of exchange. Where the debt is not only pay- able in the currency of a foreign country, but is expressl}'' or by implication also payable there, and not having been paid is sued in this country, the creditor is entitled to the money of the forum to a sum equal to the value of the debt at the place where it should have been paid. Where the creditor sues the law ought to give him just as much as he would have had if the contract had been performed, just what he must pay to remit the amount of the debt to the countrj' where it was payable. Hence he is entitled to recover according to the rate of exchange between the two countries at the time of the trial.* 1 Story's Conf, Laws, § 310. Am. Dec. 84: Watson v. Brewster, 2 Benners v. Clemens, 58 Pa. 24; 1 Pa. 381 ; Hawes v. Woolcock, 26 Robinson v. Hall, 28 How. Pr. 342; Wis. 629; AUshouse v. Ramsay, 6 Pollock V. Colglazure, Sneed, 2; Whart. 331, 87 Am. Dec. 417; Jelison €omstock V. Smith, 20 Mich. 338; v. Lee, 3 Woodb. & M. 368; Nicker- Reiser v. Parker, 1 Lowell, 262; son v. Soesman, 98 Mass. 364; Capron Hawes v. Woolcock, 26 Wis. 629; v. Adams, 28 Md. 529; Cushing v. Jelison v. Lee, 3 Woodb. & IL 368; Wells, 98 Mass. 550; Smith v. Shaw, ■Gary v. Courtenay, 103 Mass. 316, 2Wash. CO. 167; Stringer v. Coombs, 4 Am. Rep. 559; Swanson v. Cooke, 62 Me. 160, 16 Am. Rep. 414; Grant 30 How. Pr. 385. 45 Barb. 574: 3 v. Healey, 3 Suran. 523; Benners v. Kent's Com. 116, note: TheVaughan Clemens, 58 Pa. 24; WoodhuU v. and Telegraph, 14 Wall. 258; Story's W^agner, 1 Bald. 296; Wood v. Wat- ConfL Laws, §§ 310, 311; Scott v. son, 53 Me. 300; Delegal v. Nay lor. 7 Bevan, 2 B. & Ad. 78. Bing. 460; Cash v. Kennion, 11 Ves. 3 Marburg v. Marburg. 26 Md. 8, 90 314; Lee v. Wilcocks, 5 S. & R 48; 522 rjiCUNIARY REPRESENTATIVE OF VALUE. [§ 213. Scott V. Bevan, 3 B. & Ad. 78, and note; Ekins v. East India Co., 1 P. Wm& 395; Lanusse v. Barker, 3 Wheat. 101. [345J] The opinion in Grant v. Healey, supra, places the law on this subject in a clear light, and answers with great force the contrary decisions in Massachusetts and New York which are cited in the discussion. "I take the general doctrine to be clear,'' said the learned judge, "that when- ever a debt is made payable in one country, and is afterwards sued for in another country, the creditor is entitled to receive the full sum nec- essary to replace the money in the country where it ought to have been paid, with interest for the delay; for then and then only is he fully in- demnified for the violation of the contract. In every such case the plaintiff is therefore entitled to have the debt due to him first ascertained at the par of exchange between the two countries, and then to have the rate of exchange between these countries added to or subtracted from the amount, as the case may re- quire, in order to replace the money in the country where it ought to be paid. It seems to me that this doc- trine is founded on the true princi- ples of reciprocal justice. The ques- tion, therefore, in all cases of this sort, where there is not a known and settled commei'cial usage to govern them, seems to me to be rather a question of fact than of law. In cases of accounts and of advances, the ob- ject is to ascertain where, according to the intention of the parties, the balance is to be repaid — in the coun- try of the creditor or of the debtor. In Lanusse v. Baker, 3 Wheat. 101, 147, the supreme court of the United States seem to have thought that where money is advanced for a per- son in another state, the implied undertaking is to replace it in the country where it is advanced, unless that conclusion is repelled by the agreement of the parties or by other controlling circumstances. . . In relation to mere balances of ac- count between a foreign factor and a home merchant, there may be nioredifficulty in ascertaining where the balance is reimbursable, whether where the creditor resides or where the debtor resides. Perhaps it will be found, in the absence of all con- trolling circumstances, the truest rule and the easiest in its applica- tion is that advances ought to be deemed reimbursable at the place where they are made, and sales of goods accounted for at the place where they are made or authorized to be made. . . . (Consequa v. Fanning, 3 Johns. Ch. 587, 610, 17 Johns. 511, 8 Am. Dec. 442.) . . . I am aware that a different rule, in respect to balances of account and debts due and payable in a foreign country, was laid down in Martin v. Franklin, 4 Johns. 125, and Scofield V. Day, 20 Johns. 102, and that it has been followed by the supreme court of Massachusetts in Adams v. Cordis, 8 Pick. 260. It is with unaffected diffidence that I venture to express a doubt as to the correctness of the decisions of these learned courts upon this point. It appears to me that the reasoning in the 4 Johns. 125, which constitutes the basis of the other de- cisions, is far from being satisfac- tory. It states very properly that the court have nothing to do with in- quiries into the disposition which the creditor may make of his debt after the money has reached his hands; and the court are not to award dam- ages upon such uncertain calcula- tions as to the future disposition of it. But that is not, it is respectfully submitted, the point in controversy. The question is whether, if a man has undertaken to pay a debt in one country, and the creditor is com- pelled to sue him for it in another § 213.] PAR AND KATE OF EXCHANGE. 523 [344] country, where the money is of less value, the loss is to be borne by the creditor, who is in no fault, or by the debtor, who by the breach of his contract has occasioned the loss. The loss of which we here speak is not a future contingent loss. It is posi- tive, direct, immediate. The very rate of exchange shows that the very sum of money paid in one country is not an indemnity or equivalent for it when paid in another country, to which by tlie default of the debtor the creditor is bound to resort. Sup- pose a man undertakes to pay an- other $10,000 in China, and violates his contract, and then he is sued therefor in Boston, when the money if duly paid in China would be worth at the very moment twenty per cent, more than it is in Boston; what com- pensation is it to the creditor to pay him the $10,000 at par in Boston ? Indeed I do not perceive any just foundation for the rule that interest is payable according to the law of the place where the contract is to be performed, except it be the very same on which a like claim may be made as to the principal, viz., that the debtor undertakes to pay there, and therefore is bound to put the cred- itor in the same situation as if he had punctually complied with his con- tract there. It is suggested that the case of bills of exchange stands upon a distinct ground, that of usage, and is an exception from the general doctrine. I think otherwise. The usage has done nothing more than ascertain what should be the rate of damages for a violation of the con- tract generally, a matter of conven- ience and daily occurrence in busi- ness, rather than to have a fl uct uating standard dependent upon the daily rates of exchange; exactly for the same reason that the rule of deduct- ing one-third new for old is applied to cases of repairs of ships, and the deduction of one-third from the gross freight is applied in cases of gen- eral averaga It cuts off all minute calculations and inquiries into evi- dence. But in cases of bills of ex- change drawn between countries where no such fixed rate of dam- ages exists, the doctrine of damages applied to the contract is precisely that which is sought to be applied to the case of a common debt due and paj-able in another country; that is to say, to pay the creditor the exact sum which he ought to have received in that country. That is sufficiently clear from the case of Mellish v. Simeon, 2 H. Black. 378, and the whole theory of re-exchange." See Lodge V. Spooner, 8 Gray, 166; Hus- sey V. Farlow, 9 Allen, 263; Bush v. Baldrey, 11 id. 367; Weed v. Miller, 1 McLean, 423; Grutacup v. Woul- luise, 2 id. 581. 524: CONVENTIONAL LIQUIDATIONS AND DISCHAKGES. CHAPTER yil. CONVENTIONAL LIQUIDATIONS AND DISCHARGEa Section L PAYMENT. § 214-216. What is; modes of making, 217. What is not payment. 218. Eflfect of payment. 219. Payment before debt due. 220. Payment by devise or legacy. 221. Payment by gift inter vwos. 222. Payment by retainer. 223. 224. Payment in counterfeit money, bills of broken banks or forged notes. 225-227. Payment by note, bill or check. 228, 229. Collaterals collected or lost by negligence of creditor are pay- ments. 230. Who may make payment. 231. To whom payment may be mada 233. Pleading payment. 233. Evidence of payment Section 2. application of payments, 234. General rule. 235. 236. By debtor. 237. Same subject; evidence. 238-240. By creditor. 241. Appropriation by the court. 242. When payments applied pro rafa. 243. General payment applied to oldest debt. 244. General payment applied to a debt bearing interest, and first to in- terest. 245. General payment applied to the debt least secured; comments on conflicting views of the general subject. Section 3. accord and satisfaction. 246. Definition. 247. Consideration. 248. Payment of part of a debt will not support an agreement to discharge the whole. 248a. Same subject. 249. Any other act or promise which is a new consideration will suffice. CONVENTIONAL LIQUIDATIONS AND DISCHAEGES, 525 § 250. Composition witli creditors. 251. Compromise of disputed claim. 253. Agreement must be executed. Section 4 RELEASE. § 253. Definition. 254. Differs from accord and satisfaction. 255. Extrinsic evidence and construction. 256. Who may execute. 257. Effect when executed by or to one of several olaiming or liable. 258. What will operate as a releasa 259. Covenant not to sue. Section 5. TENDER. 260. Right to make. 261. On what demands it may be made. 363. When it may be mada 263. In what money. 264 By whom. 265. To whom. 266, 267. It must be sufficient in amount, 268. How made. 269. Where to be made. 270. Must be unconditional 271. Effect of accepting. 272. Must be kept good. 273. Waiver and omission of tender on sufficient excuse 274. Tender must be pleaded and money paid into court 275. Effect of plea of tender. 276. Effect of tender when money paid into court. 277. Effect of tender on collateral securities. 278. Paying money into court Section 6. stipulated damages. 279. Contracts to liquidate damages valid- 280. Damages can be liquidated only by a valid contract. 281. Modes of liquidating damages; computation of time, 282. Alternative contracts. 283. Liquidated damages contradistinguished from penalty. 284 The evidence and effect of intention to liquidate. 285. Stipulated sum when damages otherwise certain or unc^taii? 386, 287. Contracts for the payment of money. 288. Large sum to secure payment of a smaller. 289. Stipulation where damages certain and easily proved. 290. 292. Stipulation when damages uncertain. 52G CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 214. § 293. Same subject; illustrations. 294, 295. Stipulation for payment of a fixed sum for partial or total breach. 296. Effect of part performance accepted where damages liquidated. 297. Liquidated damages are in lieu of performance. 298. Eifect of stipulation upon right of action, 299. Waiver of right to stipulated damages. Section 1. PAYMENT. [345] §214. What is; modes of making. Payment is the actual performance of an agreement or duty to pay money.^ It is distinguishable from accord and satisfaction, and from release ; it is strict performance in respect to a debt, accord- ing to the literal and substantial import of the contract by virtue of which it was incurred; accord and satisfaction is the adoption, by mutual consent and the doing, of some other act as a substitute; release is a renunciation of the contract or lia- bility, whereby performance is waived. But accord and sat- isfaction is a payment suh modo; and a release, as it must be founded on an actual consideration, shown or implied, is to the extent of such consideration a payment or satisfaction.^ Payment includes the transfer by the debtor to the creditor and the receipt by the latter of money or something else of value accepted by him as representing money. Ordinarily 1 City Savings Bank v. Stevens, 59 N. Y. Super. Ct. 549, 15 N. Y. Supp. 139. A payment on Sunday discharges the debt. Jameson v. Carpenter, 68 N. H. 62, 36 Atl. Rep. 554. Under an agreement to pay bills daily for goods delivered the pur- chaser has the whole of the day in which bills are presented to pay them. Anglo-American Provision Co. V. Prentiss, 157 111. 506, 42 N. E. Rep. 157. Punctual payment means pay- ment on the day fixed; nine days thereafter is too late. Leeds & Han- ley Theater v. Broadbent, [1898] 1 Ch. 343. "Originally payment was the per- formance of a promise to pay money at the time and in the manner re- quired by the term? of the contract; but it has been extended to include the delivery of money in satisfac- tion of a debt after a default has been made in pajnnent according to the terms of the contract." Ulsch v. Muller, 143 Mass. 379, 9 N. E. Rep. 736. A cross-demand is not payment and cannot be treated as such unless by agreement of the parties. Mc- Curdy v. Middleton, 82 Ala. 131, 2 So. Rep. 721; Wharton v. King, 69 Ala. 365. 2 See Bottomley v. Nuttall, 5 C. K (N. S.) 122, 134, 135. § 214.] PAYMENT. 527 the debtor must seek the creditor to pay him.' Eut if a lease is silent as to the place where rent is to be paid the landlord must make a demand of payment on the land before he can declare a forfeiture, notwithstanding the tenant has thereto- fore sought him for the purpose of making payment.^ If there is no agreement on the subject the purchase price of property is payable at the office of the vendors, to their agents or to them in person.' But if the place of payment is designated and the presence of the payee is necessary, he must attend ; and it -either of two places is agreed upon he must select, and there is no default until he has done so.* If the creditor refuses to receive payment at the place appointed by him and does not inform his debtor of a purpose to require it to be made else- where, he waives the right to payment at another than the designated place and cannot reap any benefit from his act.' The duty of the debtor to seek his creditor does not require that he should do so beyond the limits of the state or country in which the debt was contracted, and by implication or ex- press agreement was to be paid.^ But as nothing but actual payment w^ill discharge the debt, this dutv of seeking the cred- itor will more properly be considered in connection with the subject of tender.'^ It may, however, be added here that if the debtor is a municipality, county, state or government the obligation is not dischargeable at any other place than its treasur}^,^ unless some other place be designated. A county iCranley v. Hillary, 2 M. & S. 120; tell v. Nichols' Adm'r, Hardin, 66; Soward v. Palmer, 2 Moore, 276; Galloway v. Standard F. Ins. Co., 45 Galloway v. Standard F. Ins. Co., W. Va. 237, 31 S. E. Rep. 969. 45 W. Va. 237, 31 S. K Rep. 969. •? g§ 260-270. 2Rea V. Eagle Transfer Co., 201 Pa. 8 Pekin v. Reynold*, 31 111. 529, 83 273, 50 Atl. Rep. 764. Am. Dec. 244; Boyle s Lunacy, 20 Pa, 3 Greenawalt V. Este, 40 Kan. 418, Super. Ct. 1; People v. Tazewell 19 Pac. Rep. 803; Baker v. Holt, 56 County. 22 111. 147; Johnson v. Stark Wis. 100, 14 N. W. Rep. 8; North- County, 24 id. 75; South Park Convrs western Iron Co. v. Meade, 21 Wis. v. Dunlevy, 91 id. 49; Friend v. Pitts- 480. burgh, 131 Pa. 305. 6 L. R. A. 636, 17 * Thorn v. City Rice Mills, 40 Ch, Am. St. 811, 18 Atl. Rep. 1060; Sibley Div. 357. V. Pine County, 31 Mmn. 201, 17 N. 5 Union Mut. L. Ins. Co. v. Union W. Rep. 337; Monteith v. Parker. 36 Mills Plaster Co., 37 Fed. Rep. 286, Ore. 170. 59 Pac. Rep. 192: William- 4-{ L. R A. 90. son County v. Farson, 101 III. App. 6 King V. Finch, 60 Ind. 423; Lit- 328, 199 111. 71, 64 N. K Rep. 1086. 528 CONVENTIO:S^AL LIQUIDATIOXS AND DISCHARGES. [§ 214. which issued bonds containinfi: a reservation of the ri^ht to pay them after a certain date, prior to their maturity, was not bound to seek the holders of them and give notice of its elec- tion to pay them after a date duly fixed by the authorities. Its duty was discharged by giving ample notice through news- papers of the exercise of its option that the bonds would be paid at the place named therein. By placing the funds there the debtor discharged its duty to the bondholders and was not liable to them for interest thereafter.^ If a debtor is directed by his creditor to remit money by mail, or if that be the usual mode of remitting it, and the re- [346] mittance be lost, the creditor must sustain the loss.'^ In such case compliance with the direction in respect to the mode of remittance fulfills all the requisites of payment — tender and acceptance, — both of which are essential. To constitute a payment, money or some other valuable thing must be deliv- ered by the debtor to the creditor for the purpose of extinguish- ing the debt, and the creditor must receive it for that purpose.^ 1 Stewart v. Henry County, 66 Fed. Rep. 127; Ward v. Smith, 7 Wall 450. See Williamson County v. Far- son, supra. 2 Colvin V. United States Mut. Ac- cident Ass'n, 66 Hun, 543, 21 N. Y. Supp. 734; Primeau v. National L. Ass'n, 77 Hun, 418, 28 N. Y. Supp. 794; McCluskey v. Same, 77 Hun, 566. 28 N. Y. Supp. 931, affirmed without opinion, 149 N. Y. 616; Guil- foyle V. National L. Ass'n, 36 App. Div. 343, 55 N. Y. Supp. 236; Jung v. Second Ward Savings Bank. 55 Wis. 364. 42 Am. Rep. 719, 13 N. W. Rep. 235; Warwicke v. Noakes. Peake, 67. See Parker v, Gordon, 7 East, 385. Compare State v. Insurance Co., 106 Tenn. 2S2, 61 S. W. Rep. 75. If no mode of remitting is indi- cated by the creditor a remittance made in the way a prudent man would do if he was paying his own debt relieves an agent from responsi- bility. Underwriters' Wrecking Co. V. Board of Underwriters, 35 La. Ann. 803. In the absence of an express direc- tion to remit by mail or a usage or course of dealing from which au- thority to so remit may be inferred, a remittance of money so made is at the risk of the party mailing it. Burr V. Sickles, 17 Ark. 428, 65 Am. Dec. 437. There is no evidence of payment when the instrument remitted de- scribes the payee by a wrong chris- tian name, though he keeps it and might have obtained the money by signing it in the name used. Gordon V. Strange, 1 Ex. 477. 3 Slaughter v. Slaughter, 7 Houst 482, 32 Atl. Rep. 857; Lofland v. Mc- Daniel, 1 Pennewill, 416, 41 Atl. Rep. 882; Holdsworth v. De Belaunzaran, 106 N. Y. 119, 12 N. E. Rep. 615; Robinson v. Robinson, 20 S. C. 567; Steiner v. Erie Dime Savings & L. Co., 98 Pa. 591; Ryan v. O'Neil, 49 Mich. 281, 13 N. W. Rep. 591; Kings- ton Bank v. Gay, 19 Barb. 459. See Collins V. Adams, 53 Vt. 433. A promise by a creditor to cover a § 214.] PAYMENT, 529 It is, however, competent for parties to agree that payments shall be made in something else of value than money, ^ If an employer and employee stipulate that advances made to the latter should be repaid by services, the former is bound to ac- cept payment in that mode, and if he permits the employee to be involuntarily driven from the service by a co-employee the debt is extinguished.^ A note payable in property may bo satisfied by the payment of money; ^ b^'' failing to pay in prop- check signed by a third person in favor of the debtor does not prevent the check, on its transfer to the cred- itor and appropriation by him, from operating as payment. Tiddy v. Har- ris, 101 N. C. 589, 8 S. E. Rep. 227. Payment implies a voluntary act of the debtor looking to tlie satisfac- tion, in whole or in part, of the de- mand against him. A creditor can- not lawiully pay himself with the debtor's money without the latter's consent, express or implied; and when the debtor delivers him money for a purpose which negatives the idea of payment the creditor's con- trol of it is limited to the purpose declared. Detroit, etc. R. Co. v. Smith, 50 Mich. 112, 15 N, W. Rep. 39. Monthly payments made on a chat- tel mortgage in consideration, as stated in receipts therefor, of the ex- tension of the time for payment of the mortgage debt from month to month will be applied in extinguish- ment of such debt. Bateman v. Blake, 81 Mich. 227, 45 N. W. Rep. 831. If money paid unconditionally is retained its acceptance cannot be made conditional unless notice to that effect is in fact given the payor. Shea V. Massachusetts Ben. Ass'n, 160 Mass. 289, 85 N. E. Rep. 855, 39 Am. St. 475. 1 United Water Works Co. v. Farmers' Loan & Trust Co., 11 Colo. App. 225, 240, 53 Pac. Rep. 511; Webb V. Vermillion, 13 Ky. L. Rep. 367 (Ky. Super. Ct); Rider v. Culp, Vol. 1 — 34 68 Mo. App. 527; Pinson v. Puckett, 35 S. C. 178, 14 S. E. Rep. 393; Van Werden v. Equitable L. Assur. So- ciety, 99 Iowa, 621, 68 N. W. Rep. 892; Bixby v. Grand Lodge Ancient Order United Workmen, 105 Iowa, 505, 70 N. W. Rep. 737; Stirna v. Beebe, 11 App. Div. 206, 42 N. Y. Supp. 614; Weir v. Hudnut, 115 Ind. 525, 18 N. E. Rep. 24; Sharp v. Car- roll, 66 Wis. 62, 27 N. ^^•. Rep. 832; Phillips V. Ocmulgee Mills, 55 Ga. 633. See § 215. Payment is made "at the time," within the meaning of the statute of frauds, w^here the vendor accepts as payment a check which is then good and which is subsequently paid, though the time of payment is not shown. Hunter v. Wetsell, 84 N. Y. 549, 38 Am. Rep. 544; Elwell v. Jack- son, 1 Cab. & Ellis, 362. The "good will " of a business has a market value so that it may be ac- cepted in payment of a subscription for stock. Beebe v. Hatfield, 67 Mo. App. 609. 2 Hanlin v. Walters, 3 Colo. App. 519, 34 Pac. Rep. 686. ' Leapald v. McCartney, 14 Colo. App. 442, 60 Pac. Rep. 640, citing Pinney v. Gleason, 5 Wend. 394, 21 Am. Dec. 223; Brooks v. Hubbard, 3 Conn. 58, 8 Am. Dec. 154; Hise v. Foster, 17 Iowa, 23; Ferguson v. Hogan, 25 Minn. 135: Heywood v. Hey wood, 42 Mp. 229, 66 Am. Dec. 277: White v. Tompkins, 52 Pa. 30:!; Trowbridge v. Holcomb, 4 Ohio St. 38. 530 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 214:. erty on the stipulated day the debtor forfeits his election to pay either in that mode or in inonej^ and the creditor may demand money. ^ If a contract may be satisfied by delivery of a com- modity as ordered by the payee, the failure to fill an order ren- ders the balance due payable in money, and the acceptance of another order in the course of business does not reinstate the clause of the contract as to the mode of payment.^ The defendants forwarded to the plaintiffs sufficient funds to pay a note held by the latter against the former, but they re- fused to receive it, and informed the defendants that the money was subject to their order. There was no payment; if the de- fendants would protect themselves against costs they should have withdrawn the deposit and made a tender.^ The weight of authority is, as will be seen in the section on accord and sat- isfaction, that the payment of a less sum than is due does not discharge a liquidated demand unless a sealed acquittal is given as evidence of the fact.* But this principle does not apply if something else of value than money is received, though the security accepted is of inferior rank to that which it is re- ceived in lieu of,^ or is less in amount," if the parties agree that ^ Growl V. Goodenberger, 112 Mich. G83, 71 N. W. Rep. 485; Wy- man v. Winsiow, 11 Me. 898, 26 Am. Dec. 542; Robbins v. Luce, 4 Mass. 474; Caldwell v. Button, 20 Tex. Civ. App. 369, 49 S. W. Rep. 723; Brashear V. Davidson, 31 Tex. 191; Haskins v. Dern, 19 Utah, 89, 56 Pac. Rep. 953; Texas & P. R, Co. v. Marlor, 123 U. S. 687, 8 Sup. Ct. Rep. oil; Pearson v. Williams, 24 Wend. 244; Roberts v. Beatty, 2 P. & W. 63, 21 Am. Dec, 410: Ren wick v. Goldstone, 48 Cal. 554; Smith v. Coolidge, 68 Vt. 516, 35 Atl. Rep. 432, 54 Am. St. 902. 2 Smith v. Coolidge, supra. s Kingston Bank v. Gay, 19 Barb. 459; Greenough v. Walker, 5 Mass. 214; Clark v. Wells, 5 Gray. 69. After the commencement of an action upon a note by the indorsee against the maker its payment by the payee and indorser does not consti- tute a defense so as to affect the costs. Concord Granite Co. v. French 12 Daly, 228. An answer by a surety alleged that the plaintiff had been fully paid by money received from the princi- pal debtor's estate and with the ad- ministrator's consent; held to show- that the latter agreed that the money so received should be payment. John- son V. Breedlove, 104 Ind. 521, 6 N. K Rep. 906. ^Grinnell v. Spink, 128 Mass. 25; Tuttle V. Tuttle, 12 Met. 551, 46 Am. Dec. 701; Harriman v. Harriman, 12 Gray, 341; Baldwin v. United States, 15 Ct. of Cls. 297; Bostwick v. Same, 94 U. S. 53. 5 Peters v. Barnhill, 1 Hill (S. C), 237; Dogan v. Ashbey, 1 Rich. 36. 6Fensler v. Prather, 43 Ind. 119; Wells v. Morrison, 91 id. 51; Sibree v. Tripp, 14 M. & W. 23; Thomas v. Heathorn, 2 B. & C. 477; Bush v. Abraham, 25 Ore. 336, 35 Pac. Rep. § 215.] PAYMENT. 531 it sliall be payment. There are well considered cases by courts of good standing to the effect that "if one owing a sum of money, the amount of which is not ascertained and fixed, offers his creditor a certain sum, declaring that it is in full for all that is owing him, which sum is accepted by the creditor, such ac- ceptance is in full discharge of the demand." ^ If a debtor mails to his creditor a statement of the account between them and sends the balance which he admits to be due, requesting a receipt in full, the claim will be satisfied if the creditor retains the money.^ " When one gets his due ignorantly, if he is not hurt by his ignorance, it is the same as if he acted with knowl- edge. Thus, where a negotiable note was transferred before maturity as collateral, and was afterwards paid off in property, not to the holder but to the payee, who collected without au- thority, and who, after converting the property into money, transmitted the proceeds to the holder as his own money, and the holder applied the same to the secured debt only, not applying it also to the collateral, and not knowing that he was dealing with a fund derived from the collateral, this was a discharge of the collateral debt, notwithstanding such igno- rance on the part of the holder." * § 215. Same subject. The creditor may assent in advance to a mode of payment which reserves no subsequent election by excluding an}^ concurrent act on his part in accomplishing it, or by making any such act obligatory. Thus, an award made against a party in pursuance of a submission in which he agreed to indorse it on a note is a payment jpro tanto.^ So money paid by a debtor to a third person on the prior request of the creditor is a payment,^ and so is the transfer of a credit if all the parties are agreed.^ The acceptance by a debtor of 1066; Bolt V. Dawkins, 16 S. C. 198, ^ Coleman v. Jenkins, 78 Ga, 607, 214. 3 S. E. Rep. 444; Butts v. Whitney, 1 American Manganese Co. v. Vir- 96 Ga. 445. 23 S. E. Rep. 397. ginia Manganese Co., 91 Va. 272, 284, * Flint v. Clark, 12 Johns. 374. 21 S. E. Rep. 466, citing Donohue v. » Brady v, Durbrow, 2E. D. Smith, Woodbury, 6 Gush. 148; McDaniels 78; Storey v. Menzies, 3 Pin. 329. V. Lapham, 21 Vt. 232; McDaniels v. « Eyles v. Ellis, 4 Bing. 112: Sliryer Bank of Rutland. 29 Vt. 230, 70 Am. v. Morgan, 77 Ind. 479; Beach v. Dec. 406. Wakefield, 107 Iowa, 567, 76 N. W, niunisey V. Barber, 78 III. App. 88, Rep. 688, 78 id. 197; Daniel v. St. citing Ostrander v. Scott, 161 111, Louis Nat. Bank, 67 Ark. 223, 54 S. 339, 43 N. E. Rep. 1089. W. Rep. 214. 532 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 215 a written order of his creditor to pay money to a third person entitles the former to a credit to the extent of the sum called for by the order, although payment was not then made, if the debtor was solvent and his liabilit}'' fixed,^ and it is immaterial that the debtor thought he had not accepted the order, and paid it only after judgment was rendered against him.^ The tender of bonds, etc., of a banking association to them in pay- ment of a debt, in pursuance of their agreement to receive them in payment,^ or work done for the payee of a note by the maker under an agreement that the proceeds are to be applied to discharge the note, is a payment.* Where it is agreed between debtor and creditor that the former shall do some col- lateral act for a stipulated price or a price which may be made certain, and that such act shall be deemed a payment or part payment of the debt, the amount so stipulated becomes at [34:7] once a payment when the act has been performed. In case of mutual connected debts it is not necessary that the formality should be gone through of each party handing the amount he owes over to the other, whether the sums they are mutually entitled to be equal or not. If they are equal they wholly cancel each other; if not equal the lesser is to be deducted from the greater. These compensations, when they fairly and properly occur, are reciprocal payments.^ An agree- If an insurance agent gives credit liet, 8 W. & S. 311, 42 Am. Dec. 297; for the premium due on a policy and Woodruflf v, Trapnall, 12 Ark. 811, 10 insurer charges hiin with the How. 190; Exchange Bank v. Knox, amount, the transaction is equiva- 19 Gratt. 739; Mann v. Curtis, 6 lent to payment. Wythevillelns. & Robert. 128. Banking Co. v. Teiger, 90 Va. 277, -« Moore v. Stadden, Wright. 88; 18 S. E. Rep. 195; Miller v. Life Ins. Hall v. Holmes, 4 Pa. 251. Co., 12 Wall. 285; White v. Con- 5 Rutherford v. Schattman, 119 N. necticut Ins. Co., 120 Mass. 330; Y. 604, 23 N. E. Rep. 440; Iron Cliffs Train v. Holland Purchase Ins. Co., Co. v. Gingrass, 42 Mich. 30, 3 N. W. 62 N. Y. 598; Bang v. Farmville Ins. Rep. 238; Roberts v. Wilkinson, 34 Co., 1 Hughes, 290; Griffith v. New Mich. 129; Connecticut Mut. Ins. Co. York L. Ins. Co., 101 Cal. 627, 36 Pac. v. State Treasurer, 31 Mich. 6; Rep. 613, 40 Am. St. 96. Phoenix Ins. Co. v. Meier, 28 Neb. 124, iMerwin v. Austin, 58 Conn. 22, 18 44 N. W. Rep. 97; McKeon v. Bying- Atl. Rep. 1029, 7 L. R A. 84. ton, 70 Conn. 429, 39 Atl. Rep. 853. 2CarrolIv. Weaver, 05 Conn. 76,31 See Sword v. Keith, 31 Mich. 247; Atl. Rep. 489. Jewett v. Winship, 42 Vt. 205; S!as- ^Leavitt v. Beers, Hill & Denio, son v. Davis, 1 Aik. 73; Strong v. 221. See Northampton Bank V. Bal- McConnell, 10 Vt. 231; Chellis v. § 215.] PAYMENT, 533 ment between parties having mutual demands to set off one against the other would seem on principle and the weight of authorit^'^ to take effect also as reciprocal payments, and the same result follows in all cases of connected accounts.^ Thus, Woods, 11 Vt. 4GG; Robinson v. Hurl- burt, 34 Vt. 115; Bronson v. Rugg, 89 Vt. 241; Downer v. Sinclair, 15 Vt. 495; Huff mans v. Walker, 26 Gratt. 314; Eaves v. Henderson, 17 Wend. 190. 1 In Davis v. Spencer, 24 N. Y. 386, it was held that an agreement be- tween the payee of a note and the maker, made with the assent of the Jatter's partner, to apply the indebt- edness of the payee to such maker and his partner in payment of the note, operates in presenti as a satis- faction of the note pro tanto. Allen, J., said: " Formerly there appears to have been a doubt whether an agree- ment to set off precedent debts op- erated as payment, satisfaction or extinguishment. An accord that each of the parties should be quit of actions against the other was said not to be good because it was not any satisfaction. Bac. Abr., Accord, A. But there is no difference in principle between an agreement con- cerning debts, one of which is to be contracted in the future, as in Eaves V. Henderson, 17 Wend. 190, and an agreement concerning debts already existing; and it has been decided that an agreement to discontinue and a discontinuance of ci-oss-ac- tions for false imprisonment consti- tute an accord and satisfaction, and bar another action by either. Foster V. Trull, 12 Johns. 456. Whenever a valid new contract is substituted in the place of the old, ... an ac- tion will not lie on the old contract, but the remedy of the parties is on the new or substituted agreement although the transaction may not amount to a technical accord and .satisfaction. Good v. Cheesman, 2 B. & Ad. 328. Where t%vo brothers, A. and B., principal and surety in an annuity, had, in an agreement be- tween them and a third brother for the settlement of their affairs, de- clared that the bond was the debt of B., the surety, it was held that this agreement, whether subsequently acted upon or not, was a binding ac- cord between A. and B. Cartwright V. Cooke, 3 B. & Ad. 701. Hills v. Mesnard, 10 Q. B. 266, is in principle not unlike Eaves v. Henderson, supra. The action was by payees against acceptors of a bill. The de- fendants became acceptors for the accommodation of one Hundle, and the plaintiffs, the payees, agreed to appropriate certain moneys which they expected to receive in discharge of the bill. They subsequently re- ceived the money, and the court held it a payment of the bill pro tanto. Lord Denman, C. J., says: It was competent for the parties to agree beforehand that the money should be specifically applied to the dis- charge of the liability on the bill pro tanto. ' And it seems to be the good sense of the transaction to treat it as so much money paid to the plaintiffs by Hundle on their account and as their agent.' Gardiner v. Callender, 12 Pick. 374, is in point, and decides that when E. H. R., one of the exec- utors of A. S., gave to the executors of W. P. a memorandum as follows: ' It is agreed that the sum $3,235, due from E. H. R. to the estate of W. P., shall be applied on a certain note of $6,000 now held by the representa- tives of A. S.,' the memorandum amounted to a payment on the note and was not merely an executor's agreement. The fact that a memo- 534 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. 215. [348] if A. has a valid and subsisting demand against B. for goods, services or cash, constituting proper items of an ac- count upon which he has a present right of action, and before commencing suit thereon credits on such account a demand B. has against him for services at their fair and full value, such credit by A. so far operates as payment that B. cannot main" tain an action for his demand brought while such other suit [fM9] is pending.' But where A. owes B. by promissory note payable in instalments, and at the same time holds a note against B. for a larger amount, on which he indorses as part payment the amount of the instalments of his own note as they fall due, but without B.'s consent, this is not a payment of the instalments.^ A payment by credit occurs where a bank receives a check drawn on itself and credits the holder the amount,' or where the bank is the creditor and receives randum in writing was made of the agreement does not vary its legal ef- fect It was not required by law to be m writing. The court, as in Hills V. Mesnard. sought the good sense of the transaction, and to give effect to the sensible arrangement of the par- ties, holding that it could not be necessary, in order to connect the one debt with the other by an agree- ment in 'presenti, that there should be the vain formality of passing the mone}^ from one party to the other and returning it again to the party from whom it just came, or that a formal release or receipt should be executed. This case is not cited by counsel or alluded to by the court in the subsequent case of Gary v. Ban- croft, 14 Pick. 315, but the latter was decided upon a ground which dis- tinguished it from the former case; the court holding that in the case last cited the agreement was execu- tory and not executed, requiring some further act to be done before the one note would operate as pay- ment or extinguishment p?'o tantoot the other. Dehon v. Stetson, 9 Met. 341, followed Gary v. Bancroft, and was decided ujjon the same ground. Another point was in the case, to wit: tliat one of the parties inter- ested in the debt which it was sought to apply in payment as the individ- ual debt of one of his partners had not been consulted, and had no knowl- edge of the contemplated arrange- ment." See Peabody v. Peters. 5 Pick. 1; Dudley V. Stiles, 33 Wis. 371; Ely V. McNight, 30 How. Pr. 97; Hawkes v. Dodge Gounty Mut. Ins. Go., 11 Wis. 183; Shinklev. First Nat. Bank, 22 Ohio St. 516; Heaton v. Angier, 7 N. H. 897, 28 Am. Dec. 353; Fatlock v. Harris, 4 D. & E. 180; Wil- son V. Coupland, 5 B. & Aid. 228; Wharton v. Walker, 4 B. & G. 163; Cuxon V. Chadley, 3 B. & C. 591. 1 Briggs V. Richmond, 10 Pick. 391, 20 Am. Dec. 526; Allen v. Garman, 1 E. D. Smith, 693; Means v. Smith, Tappan, 60. - Greenough v. Walker, 5 Mass. 214. See Glark v. Wells, 5 Gray, 69. A payment to a vendor on his own obligations is a payment in cash. Hand v. Gas Engine & Power Go., 167 N. y. 142, 60 N. E. Rep. 425; Foley v. Mason, 6 Md. 37. ■■*Addie V. National Gity Bank, 45 N. Y. 735, 6 Am. Rep. 160; Bank v. § 215.] PAYMENT. boJ the debtor's check drawn on itself.^ There is a distinction between the acceptance by a creditor from his debtor of a new security for an old debt, and the acceptance by a bank ot a check drawn upon itself in payment of a note. The former is a mere substitution of one executory agreement to pay for another, or a commutation of securities; there is no extin- guishment of the precedent debt unless there is an agreement to accept the new obligation or security as a satisfaction of the old. But when a bank receives upon a debt a check drawn upon itself by one of its customers and charges it in account, it thereby admits that it has funds of the drawer sufficient to meet the check, and the acceptance is per se an appropriation of the funds to pay it. The transaction operates directly as a payment of the debt.'^ If the dividends on a policy of life insurance equal the premiums and have, in the immediately preceding years, at the request of the insured or his benefi- ciary, been applied to the payment of the premiums as they became due, the latter are paid as fast as they become due so» long as the conditions stated exist.' So long as money ille- gally exacted from a member of a benefit society remains in its treasury and is sufficient to meet assessments made upon him he is not in default.* By a valid new agreement the debtor may obtain the right to pay otherwise than in money ; and the acceptance by the Burkhardt, 100 U. S. 688; American App, 41. See Shipp v. Stacker, 8 Mo. Excliange Nat. Bank v. Gregg, 138 145. 111. 596, 33 Am. St. 171, 28 N. E. Rep. ^U.; Commercial Bank v. Union 839 (although the bank may fail to Bank, 11 N. Y. 203. charge the drawer with the amount); If a sight draft is indorsed for col- Watkins v. Parsons, 13 Kan. 426; lection to the debtor's bankers and Weedsport Bank v. Park Bank, 2 by his direction the amount it calls Keyes, 561. for is charged against him, the 'Pratt V. Foote, 9 N. Y. 463; Rozet banker drawing his check for the V. McClellan, 48 111. 345, 95 Am. Dec. amount to the order of the creditor 551. and transmitting it to him, the debt If the guarantor of a note owned is paid, although the bank which so and held by a bank has on deposit draws fails and its check is made in it a sum nearly equal to the valueless. Welge v. Batty, 11 III. amount called for by the note, a App. 461. tender of his check for such sum and 3 Matlock v. Mutual L. Ins. Co., 180 the necessary amount of cash to the Pa. 360, 36 Atl. Rep. 1082. assignee of the bank satisfies the ■• Knight v. Supreme Court Order note. Lionberger v. Kinealy, 13 Mo. of Chosen Friends, 2 Silvernail, 453, 6 N. Y. Supp. 427. 636 CONVENTIONAL LIQUIDATIONS AND DISCHAKGES. [§ 216. creditor of any chose in action or property will operate as payment,^ The receipt b}"^ the creditor of bank bills or treas- ury notes in payment of a gold debt, although under protest and with an express reservation of a claim for the difference, will be payment dollar for dollar.^ So gold dollars, if applied [350] towards the payment of a debt without any special con- tract as to the value at which they are to be taken, cannot be treated as having any greater value than any other currency which is a legal tender for the payment of debts.' The com- mon-law rule that marriage has the legal effect of paying or extinguishing a debt the husband might owe the wife, or the wife the husband at the time of marriage, is in force in Ken- tucky.* § 216. Same subject. On the foreclosure of a mortgage on real estate by entry the land inures as payment to the extent of its value.^ So taking possession of chattels mortgaged or forfeited is also payment to the amount of their value;® and the proceeds of sale realized by foreclosure are pro tanto pay- ment.'' Taking the debtor's body is a satisfaction unless he escape.^ It has this effect though the creditor consented to his being set at liberty under an agreement which the debtor has failed to perform;* or on his giving a warrant of attorney which turned out to be void for informality.^" It is not, how- ever, an absolute satisfaction like payment, for it will not dis- charge a guarantor," nor prevent the creditor from pursuing his remedy against other parties.^'^ 1 Inman v. Griswold, 1 Cow. 199; Sword V. Keith, 31 Mich. 247; Block V. Dorman, 51 Mo. 31; Casey v. Har- ris, 2 Litt. 173; Allegheny R. Co. v. Case^', 79 Pa. 84; Eaves v. Hender- son, 17 Wend. 190; Perkins v. Cady, 111 Mass. 318; Locke v. Andres, 7 Ired. 159; Perit v. Pittfield, 5 Rawle, 166; Cramer v. Willetts, 61 111. 481; Brown v. Feeter, 7 Wend. 801 ; Bur- chard V. Frazer, 23 Mich. 224. 2 Gilman v. Douglas County, 3 Nev. 27, 3 Am. Rep. 237. 3 Bush V. Baldrey, 11 Allen, 367. 4 Farley v. Farley, 91 Ky. 497, 16 S. W. Rep. 129. & Hedge V. Holmes, 10 Pick. 381; Briggs V. Richmond, id. 391, 20 Am. Dec. 526. «Case V. Boughton, 11 Wend. 106; Charter v. Stevens, 3 Denio, 33. ' Lansing v. Goelet, 9 Cow. 346; Globe Ins. Co. v. Lansing, 5 id. 380, 15 Am. Dec. 474. sjaques v. Witby, 1 T. R. 557; Williams v. Evans, 2 McCord, 203. "Vigers v. Aldrich, 4 Burr. 2482; Blackburn v. Stupart, 2 East, 243; Tanner v. Hague, 7 T. R. 420. 10 Jaques v. Witby, supra; Loomis V. Storrs, 4 Conn. 440. S.ee Sheldon V. Kibbe, 3 Conn. 214, 8 Am. Dec. 176. 11 Terrell v. Smith, 8 Conn. 426. 1- Porter v. Ingraham, 10 Mass. 88. f 216.] PAYMENT. 537 A levy on sufficient personal property by execution is pre- sumably a satisfaction of the debt; it is a means of payment, and requires only the performance of a ministerial duty by an officer to accomplish it. The levy is not of itself satisfaction, and anything which subsequently, without the fault of the ■officer or creditor, prevents actual satisfaction, as if the debtor has not been deprived of property levied upon, will destroy its effect as evidence of that result.^ So long as the [351] property remains in legal custody the other remedies of the creditor will be suspended, lie cannot have a new exe- <;ution against the person or property of the debtor, nor main- tain an action on the judgment, nor use it for the purpose of becoming a redeeming creditor.- The levy does not divest title; it only creates a lien on the property. It often happens that the levy is overreached by some other lien, is aban- doned for the benefit of the debtor or defeated by his mis- conduct. In such cases there is no color for saying that the judgment is gone. The judgment is satisfied when the execu- tion has been so used as to change the title or in some other way to deprive the debtor of his property. This includes the case of a levy and sale, and also of a loss or destruction of the goods after they have been taken out of the debtor's pos- session by virtue of the process.' In admiralty, where a res is seized by a judicial process for a debt which carries with it •A jus in re, as between debtor and creditor, the maxim domino perrit res means that the destruction of the seized property, without fault of the debtor, works a payment of the debt to the extent of its value. Where third parties voluntarily join the seizing creditor in his proceeding and unite, so to speak, 'Starr v. Moore, 3 McLean, 354; ams, 3 Ohio, 323; Webb v. Bumpass, •Clerk V. Withers, 2 Lcl. Raym. 1073, 9 Port. 201, 23 Am. Dec. 310; Green 1 Salk. 323, 6 Mod. 290; Mountney v. v. Burke, 23 Wend. 490; Browning v. Andrews, Cro. Eliz. 237; Atkinson v. Hanford, 5 Hill, 588; Duncan v. Har- Atkinson, id. 391; Ladd v. Blunt, 4 ris. 17 S. & R. 436; Farmers' & M. East, 402; Bay ley v. French, 2 Pick. Bank v. Kingley, 2 Doug. (Mich.) 379; 590; Denton v. Livingston, 9 Johns. Churchill v. Warren, 2 N. H. 298; 98; Hoyt v. Hudson, 12 id. 207; Ordinary v. Spann, 1 Rich. 429; Por- Troup V. Wood, 4 Johns. Ch. 228; Ex ter v. Boone, 1 W. & S. 25J; Ex parte parte Lawrence, 4 Cow. 417, 15 Am. King. 2 Dev. 341, 21 Am. Dec. 335; Dec. 386; Jackson v. Bowen, 7 Cow. Binford v. Alston, 4 Dev. 354. 13, 21, Cornell v. Cook, id. 312; Wood 2 People v. Hopson, 1 Denio, 577. V. Torrey, 6 Wend. 562; Cass v. Ad- 3 Id. 538 CONVENTIONAL LIQUIDATIONS AND DISCUAKGES, [§217. in the seizure, also asserting claims which carry with them' liens, the destruction of the property, without fault of the debtor, works a payment of their respective claims, to the ex- tent of the value of the propert}'' destroyed, in the order of the priority of their claims, and operates as a payment up to its value precisely as would its sale and the application of its proceeds.^ A sufficient tender, made and kept good by bringing the money into court, is equivalent to a payment, and is such of the date of the tender to prevent costs and interest. The debtor pleading it cannot withdraw the money whatever may be the verdict; the money must be paid to the plaintiff.^ § 217. What is not payment. The deposit of money in a bank where a note is payable is not of itself a payment, but simply a tender,'' unless in some way appropriated to the note; ■* nor is the surrender of a check at the clearing-house.* A note held by an administrator and payable to him is not paid be- cause he charges himself with the amount it represents in settling his accounts with the estate.^ So charging a note supposing the maker had funds in bank, when in fact he had not, the charge being canceled the next day on discovery of the mistake, will not amount to payments And where the president of a bank, having his notes lying therein under pro- test, indorsed for his accommodation, procured the cashier to make a new note, which the president indorsed and exchanged for those protested, delivering the latter to the cashier for his security, the original notes were not thereby paid, although the president entered them as paid and all new notes as dis- [352] counted.^ A clerk of a bank stole from the drawer o^ another clerk bills belonging to the bank, which he delivered to the cashier, and which the latter, not knowing them to have been thus stolen, accepted in discharge of the balance due from such clerk to the bank ; the transaction did not work a 1 Per Billings, D. J., in Gill v. Pack- 5 Merchants' Nat. Bank v. Procter, ard, 4 Woods, 270. 1 Cin. Super. Ct. 1. 2 Reed v. Armstrong, 18 Ind. 446; « Robinson v. Robinson, 20 S. C. 567. Taylor v. Brooklyn E. R. Co., 119 N. ' Troy City Bank v. Grant, Hill & Y. 561. 23 N. a Rep. 1106. Denio, 119. 3 Hill V. Place, 36 How. Pr. 26. 8 Highland Bank v. Dubois, 5- * See Sutherland v. First Nat. Bank, Denio, 558. 31 Mich. 230. § 2 17. J PAYMENT. 53^ payment.' The mutilation of a note by a stranger to it, with intent to cancel and extinguish it, raises no presumption of its payment.- The receipt of part of the amount clue is not a waiver of the right to recover the balance, nor doos it work an estoppel.' A note is not paid because its maker placed in the hands of the payee's attorney, who had the note for collection, notes and accounts to be collected, on which certain sums were paid the attorney, but not credited or applied on such note, the payee of which had not concurred in such arrange- ment. The attorney was agent for the debtor in making col- lections, and money paid him was the pro{)erty of the latter. Until applied or appropriated it could not become a payment on the note* Surrendering a city warrant calling for the pay- ment of a large sum for others amounting in all to the same sum, these being dated and indorsed as was the original, is a mere exchange.'^ An insurance assessment is not paid by depositing the necessary sum in the mail in the absence of anything in the dealings between the parties giving such deposit that effect.^ If money which reaches insurer after it is due is tendered in- sured within a reasonable time it is not payment.'' An insurer owing an insured employee money is not bound to apply any part of its indebtedness on the payment of an assessment due from him." An insurance premium is not paid by a confession of judgment for the amount of premium notes held by insurer." Thus it appears that unless there is an actual payment and receipt of money, or something else accepted in its place as 1 State Bank v. Wells, 3 Pick. 394. * Hatch v. Hutchinson, 64 Ark. 119, 2 Whitlock V. Manciet, 10 Ore. 166. 40 S. W. Rep. 578; Moore v. Norman, The destruction of a note held by 53 Minn. 83, 53 N. W. Kep. 809, 38 a wife against her husband, under Am. St. 526, 18 L. R. A. 359. the influence of feelings caused by ^ Monteith v. Parker, 36 Ora 170, his cruel treatment of her, is not a 59 Pac. Rep. 192. satisfaction of the debt. Schlemmer •• Rice v. Grand Lodge Ancient Or- V. Schendorf, 20 Ind. App. 447, 49 N. der United Workmen, 103 Iowa, 643, E. Rep. 968. 72 N. W. Rep. 770. » Hodges V, Tennessee Implement "> S. C, 92 Iowa, 417, 60 N. W. Rep. Co., 123 Ala. 573, 26 So. Rep. 490; 726. Greer v. Laws, 56 Ark. 37, 18 S. W. » Pister v. Keystone Mut. Ben. Rep. 1038; Clark v. Equitable L. Ass'n, 3 Pa. Super. Ct. 50. Assur. Society, 76 Miss. 23, 23 So. Rep. " Proebstel v. State Ins. Co., 14 453; Whiting v. Plumas County, 64 Wash. 669, 45 Pac. Rep. 308. Cal. 65, 28 Pac. Rep. 445. 540 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 218. payment, a debt is not satisfied; any ceremony by which pay- ment is nominall}'^ made or acknowledged may be avoided for mistake or fraud, and so where the actual or authorized assent of the creditor is wanting.^ § 218. Effect of payment, "Whether a payment made by a guarantor or surety or a volunteer will operate as a purchase or as an extinguishment depends on the intention with which it is made.^ But a debtor cannot himself become the owner,' nor pay his debt without discharging it, though he may wish and intend to keep it on foot;'' and any assignment to a third person with a view to keeping it alive will be void.* A pay- 1 Hay den v. Lauffen burger, 157 Mo. 88, 57 S. W. Rep. 721. 2 Fogartj V. Wilson, 30 Minn. 289, 15 N. W. Rep. 175; Swope v. Leffing- well, 72 Mo. 848; Lucas v. Wilkinson, 1 Hurl. & N. 423; Morris v. Oakford, 9 Pa. 498; Kinley v. Hill, 4 W. & S. 426; Elkinton v. Newman, 20 Pa. 281; Carter v. Jones, 5 Ired. Eq. 196, 49 Am. Dec. 425; Matliews v. Aiken, 1 N. Y. 595; 1 Lead. Cas. in Eq. 88; id. pt. 1, 167 (2d Am. ed.); Low v. Blodgett, 21 N. H. 121; Ex parte Balch, 2 Low. 440; Harbeck v. Van- derbilt, 20 N. Y. 395; Mechanics' Bank v. Hazard, 13 Johns. 353. See Gillett V. Gillett, 9 Wis. 194. In Louisiana the payment of a note secured by a mortgage by one not bound for it, and who had no interest in discharging it, will not subrogate him to the rights of the party to whom he paid, but will extinguish the debt and the mortgage securing it, and the claim for reimbursement will constitute the party who paid an ordinary creditor of him for whose benefit the payment was made. NichoUs v. His Creditors, 9 Rob. 476; Weil v. Enterprise Ginnery & Manuf. Co., 42 La. Ann. 492, 7 So. Rep. 622. 3 Kingsley v. Purdom, 53 Kan. 56, 35 Pac. Rep. 811; Gordon v. Wansey, 21 Cal. 77. * Livermore v. Truesdell, 9 Colo. App. 332, 48 Pac. Rep. 276; Champney V. Coope, 34 Barb. 539; Collins v. Adams, 53 Vt. 433; Hammatt v. Wy- man, 9 Mass. 138; Brackett v. Wins- low, 17 id. 153; Adams v. Drake, 11 Cush. 504; Tuckerman v. Newhall, 17 Mass. 581; Chapman v. Collins, 12 C' sh. 163; Pray v. Maine, 7 id. 253; Harbeck v. Vanderbilt. 20 N. Y. 395, 398. See Shaw v. Clark, 6 Vt 507, 27 Am. Dec. 578. If payment is made at the request of the maker the obligation is extin- guished and an indorsement of it subsequently made by the payee is ineffectual. Moran v. Abbey, 63 Cal. 56; Pearce v. Bryant Coal Co., 121 III 590, 13 N. E. Rep. 561. 5 Id. ; Moran v. Abbey, 58 Cal. 167; Gordon v. Wansey, 21 id. 78; Citi- zens' Bank v. Lay, 80 Va. 436; Rolf V. Wooster, 58 N. H. 526. It makes no difference that an at- tempt to transfer was made at the time of payment, and as a part of that transaction. Wright v. Mix, 76 Cal. 465, 18 Pac. Rep. 645. If a note is deposited in a bank for collection a payment made by a guarantor, surety or the maker will discharge it. Citizens' Bank v. Lay, 80 Va. 436; Lancey v. Clark, 64 N. Y. 209, 21 Am. Rep. 604; Eastman v. Palmer, 32 N. Y. 238; Dooley v. Virginia F. & M. Ins. Co., 3 Hughes, 221. § 218.] PAYMENT. 54; ment actually made upon a debt, whether of the whole or a part, is a total or partial discharge, and cannot afterwards be changed except by mutual consent, and if other parties are interested, by their consent also.' Where marriage extin- guishes a debt due from the wife to the husband it also dis- charges any lien by which the debt was secured, and the debt is not revived by a divorce.^ As will more fully appear in another connection,^ the payment of a debt due after suit brought will prevent the recovery of interest as damages,* though it would be otherwise if there had been a contract to pay interest.^ After a judgment recovered upon a paid debt, or without deducting payments, the sura paid cannot be recovered; pay- ment in a strict sense is a defense, and if not used as such is lost.^ The payments must be strictly such or definitely ap- propriated to the debt to have that efifect.'' Where a sum of money was delivered by the obligor to the obligee to be [353] credited by the latter upon the bond as part payment, and the obligee neglected to indorse or apply it and obtained judgment for the whole amount of the bond, the obligor was allowed to recover the money paid.^ There was a special trust re- [354] posed in the defendant to credit the money on the bond and he had violated it. Where, however, there is a direct pay- ment on a debt which is not evidenced by note, bond or writ- ing of any kind; where no act beyond payment and receipt of it is necessary or contemplated to give effect to the payment, and the money is passed from the debtor to the creditor as payment at once, and not simply to become such on the doing of some act to evidence it, it is strict payment and cannot be 1 Mead v. York, 6 N. Y. 449, 57 Am. 6 Loring v. Mansfield, 17 Mass. 394; Dec. 467; Marvin v. Vedder, 5 Cow, Maniot v. Hampton, 7 T. R, 269; De 671; Hawkins V. Stark, 19 Jolins. 305; Sylva v. Henry, 3 Port. 182; Eggles- Frost V. Martin, 26 N. H. 423, 59 Am. ton v, Knickerbacker, 6 Barb. 458; Dec. 353; Miller v. Montgomery, 31 Adams v. Barnes, 17 Mass. 365; 111. 350. Job V, Collier. 11 Ohio, 422; Seymour 2 Farley v. Farley, 91 Ky. 497, 16 v. Lewis, 19 Wend. 512. S. W. Rep. 129. •^See Hazen v. Reed, 30 Mich. 331; 3 Ch. 8. Judd V. Littlejohn, 11 Wis. 176. ^ Davis V. Harrington, 160 Mass. 8 Woodward v. Hill, 6 Wis. 147; 278, 35 N. E. Rep. 771. Fowler v. Shearer, 7 Mass. 14. See 5 Andover Savings Bank v. Adams, Wheeler v. Harrison, 28 Mich. 265. 1 Allen, 28. -542 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§§ 219, 220. recovered, though the debt is afterwards sued upon and judg- ment rendered for it without deducting the sum paid.^ If payment has been made for a consideration which is subse- quently withdrawn or withheld, the money maybe recovered.^ " It is undoubtedly the rule that one partner may not appro- priate the property or money of the firm to the payment of his own debt without the consent of his copartners, and that if he does so the property misapplied may be followed and re- covered until it reaches the hands of a honafide purchaser for value. But I think it is equally well settled that the payment of money to a creditor, who receives it in discharge of an ex- isting debt innocently and without knowledge or means of knowledge that the debtor paying had no rightful ownership of the fund, is good and effectual, and does not subject the re- cipient to a recovery by the true owner."* §219. Payment before debt due. The creditor is not obliged to receive a part payment,* but if he does it has the effect of partial satisfaction. Payment before the money is due is a payment at maturity.^ If a creditor, however, receives money before it is due on a demand drawing interest such payment, in the absence of an agreement to the contrary, should be ap- plied to the extinguishment of the principal.^ And even when received upon the understanding that it was not to draw interest until the balance of the debt should be paid because the cred- itor used the money as his own it was held that it should be applied at the date of payment.^ The holder of a note enti- tled to grace cannot be compelled to accept payment until the last day, to which interest should be computed.* § 220. Payment by devise or legacy. A devise or legacy will operate as payment when it is intended by the testator and accepted by the creditor as such.^ A legacy to a creditor iDriscoU V. Damp, 17 Wis. 419; 5 Patten v. Fullerton, 27 Me. 58; Bronson v. Rugg, 39 Vt. 241. Holmes v. Broket, Cro. Jac. 434. - Mechanics & Traders' Ins. Co. v. See Roberts v. Wilkinson, 34 Mich. McLain, 48 La. Ann. 1091, 20 So. Rep. 129. 278. ** Starr v. Richmond 30 111. 276. 3 Newhall v. Wyatt, 139 N. Y. 452, 7 Toll v. Hiller, 11 Paige, 228. 36 Am. St. 712, 34 N. E. Rep. 1045; 8 Smith v. Merchants' & Farmers' Stepliens v. Board of Education, 79 Bank, 14 Ohio Ct. Ct. 199. N. Y. 187, 35 Am. Rep. 511. 9Scheerer v. Scheerer, 109 111. 11; * Jennings v. Shriver, 5 Blackf. 37. Rose v. Rose, 7 Barb. 174; Clarke v. % 220.] PAYMENT. 543 which is equal to or greater than his debt, and which is not contingent or uncertain, is presumed to be a satisfaction of the debt.^ Courts, however, have given effect to slight circum- stances, appearing on the face of the will or otherwise, by way of repelling the presumption of satisfaction.- And the rule is not allowed to prevail where the legacy is of less amount [355] than the debt; even as a satisfaction j!?;'o tanto; nor where there is a difference in the time of payment of the debt and the legacy; nor where they are of different natures as to subject- matter; nor where there is an express direction in the will for the payment of debts.^ When a legacy is made by a creditor to a debtor and the debt is less in amount than the legacy, the legatee is considered as having so much of the assets in his hands as the debt amounts to and consequently to be satisfied pro tanto; and Avhen the debt exceeds the legacy, the execu- tors of the testator are entitled to retain the legacy in part discharge of the debt.* There is no presumption that a legacy given a creditor is in satisfaction of the debt if the testator is Bogardus, 13 Wend. 67; Mulheran's Ex'r V. Gillespie, id. 349; Courtenay V. Williams, 3 Hare, 539; Voorhees V. Voorhees, 18 N. J. Eq. 227; Brokaw V. Hudson. 27 id. 135; Blair v. White, 61 Vt. 110, 17 Atl. Rep. 49; Brunn v. Schuett, 59 Wis. 260, 18 N. W. Rep. 260. 1 Wescoe's Appeal, 52 Pa. 195; Eaton V. Benton, 2 Hill. 576; Cloud V. Clinkinbeard, 8 B. Mon. 398, 48 Am. Dec. 397: Strong v. Williams, 12 Mass. 392, 7 Am. Dec. 81 ; Williams V. Crary, 5 Cow. 368; 2 Story's Eq., g 1100; Fetrow v. Krause, 61 111. App. 238. 2 Id. See Story's Eq., ^§ 1100, 1101; Strong v. Williams, 13 Mass. 392; Willis v. Dun, Wright. 133; Byrne v. Byrne, 3 S. & R. 54, 8 Am. Dec. 641; 1 Pom. Eq., ^ 527. "There is no doubt the rule still nominally exists; but the tendency of the more recent decisions is to consider the bequest a bounty and not the dis- charge of an obligation. And the courts now lay hold of any circum- stances, however trifling, for the purpose of repelling the presumption that the legacy was intended as a satisfaction of the debt." Crouch V. Davis, 23 Gratt. 62, 93. In another case it was observed: Inasmuch as the presumption is arbitrary and often in conflict with the real mo- tives and wishes of the testator, and seemingly harsh, courts have been prompt to seize upon every circum- stance to counteract and overcome it. Gilliam v. Brown, 43 Miss. 641. Both these cases are approved in Patten v. Glover, 1 D. C. App. Cas 406, 480. ^Fetrow v. Krause, 61 111. App. 238; Van Riper v. Van Riper, 2 N. J. Eq. 1; Lisle v. Tribble. 92 Ky. 304, 12 S. W. Rep. 742; Gibbons v. Wood- ward, 3 Walker (Pa. Sup. Ct.), 303: Cloud V. Clinkinbeard, 8 B. Mon. 398,48 Am. Dec 397; Fort v. Good- ing, 9 Barb. 371. ♦Tinkham v. Smith, 56 Vt 187; Clarke v. Bogardus, 12 Wend. 67. See Close v. Van Husen, 19 Barb. 505. 54:4 CONVENTIONAL LIQUIDATIONS AND DISCHAKGES. [§ 221 a joint debtor, or if the legacy is contingent.^ Though no general rule was laid down a legacy has been declared not to be a satisfaction of a debt incurred after the will was made.^ A bequest by a mother, indebted to her children as adminis- tratrix of the estate of their father and as their guardian, of a portion of her own estate, which is more than the amount of the indebtedness, is not to be regarded as a satisfaction of her indebtedness to them. But this rule does not apply to an ad- vancement made by a father or other person in loco jparentis to a child to whom he is indebted.* § 221. Payment by gift inter vivos. A creditor may ex- tinguish a debt gratuitously by such acts as are equivalent to a gift consummated. Thus, indorsements made in consider- ation of kindness, by direction and in the presence of a mort- gagee, of part payments upon a mortgage against his grand- daughter and her husband, with whom he was living at the time, and which were to accord with his deliberate and ex- pressed intention to make a gift or donation of his property to her, have been sustained as an extinguishment or forgiving of the mortgage debt to that extent. It was objected that, this being a gift inter vivos, delivery and acceptance were es- sential to its validity, and as there was in such a case no de- livery it could not take effect. Christiancy, J., said : " Doubt- less such is the rule where the gift consists of tangible per- sonal property which admits of actual delivery; and the same rale would probably apply where the note or bond of a third person is the subject of the gift. Whether if the whole of the mortgage debt in the present case had been the subject, de- livery of the note and mortgage, or one of them, would not have been essential we need not inquire. In the present case it was but a part of the sum secured by the note and mort- gage; and the attempted donation was to the debtors them- [356] selves. And it is difficult to conceive how any delivery could have been made. But it is said that there must have been a delivery of the papers or of a release or receipt for the portion of the debt intended to be given; because without 1 Gibbons v. Woodward, supra. ^ Patten v. Glover, 1 D. C. App. 2 Sullivan v. Latimer, 38 S. C. 158, Gas. 4G6; Plunkett v. Lewis, 3 Hare, 17 S. E. Rep. 701. 316; 1 Pom. Eq., § 540. § '2-21.] PAYMENT. 545 something of this kind it would have been in the power of the donor to retract, and this he might doubtless have done if this had been an executory agreement or undertaking to make this gift. But here the purpose and intention of making the gift was fully executed, and by one of the donees actually accepted at the time; and the acceptance by the other of the extino-uish- ment of a part of the debt against himself may be very safely presumed. And if it remained in the power of the donor to retract, it would have been equally so, if purely a gift, had a receipt been given, and equally so, for aught we can discover, had a release been given, there being no consideration and untler our statute ^ which makes the seal no more than prima facie evidence of a consideration. The want of consideration could, therefore, in either case, have been shown. As the debt which was the subject of the gift, when considered with ref- erence to the fact that the donee was the debtor, and that only part of the debt was attempted to be given, did not admit of actual delivery, and as all was done that could well be done under the circumstances to make the gift effectual, we do not think the act and intention of the donor should be defeated merely because the subject did not admit of an actual or tech- nical delivery." ^ A delivery is so essential to the validity of a gift that its place cannot be supplied by a formal declaration of the donor's executory intention, although in writing.^ The intention to discharge b}'' gift a debt in the form of a note, bond or the like should be executed by an actual surrender of the instrument or by a release delivered to the donee.* The delivery of a note bv the holder to the maker, with the intention of transferrintr iComp. L. of Mich. 1871, § 5947. R. 312; Whitehill v. Wilson, 3 P. & 2 Green v. Langdon, 28 Mich. 221 ' Plumstead's Appeal, 4 S. & R 545; Wheat ley v. Abbott, 32 Miss. 343; Hunter v. Hunter, 19 Barb. 631 Noble V. Smith, 2 Johns. 52, 3 Am, Dec. 399; Cook v. Husted, 12 Johns. 188; Davis v, Boyd, 6 Jones, 249 Brunn v. Schuett, 59 Wis. 260, 18 N. W. Rep. 260. * Kidder v. Kidder, 33 Pa. 268 W. 405; Duffield v. Elwes, 1 Bligh (N. S.), 497; Duffield v. Hicks, 1 Dow & Clark, 11; Licey v. Licey, 7 Pa. 251, 47 Am. Dec. 513; 1 Smith's Lead. Cas. 1st pt. *469. In Campbell's Estate, supra, Gib- son, C. J., said that "the gift of a bond, note or other chattel cannot be made by words in /u^wro or in words in presently unaccompanied by such Campbell's Estate, 7 id. 100, 47 Am. delivery of the possession as makes Dec. 503; Wentz v. Dehaven, 1 S. & the disposal of the thing irrevocabla" Vol. 1 — 35 54G CONVENTIONAL LIQUIDATIONS AND DISCHAKGES. [§ 222. to him the title thereto, is an extinguishmentof the note and a discharge of the obligation to pay it.' [357] §222. Payment by retainer. Payment or satisfaction of a debt may result as the legal effect of the debtor having conferred on him in some character the duty or right to re- ceive payment. This conclusion rests upon the ground that when the same hand is to pay and receive the money, that which the law requires to be done shall be deemed to be done; and, therefore, that such debt, when due from an administrator, for instance, shall be assets de facto to be accounted for in the probate account.^ But the principle only applies where it is shown that the personal representative had sufficient personal assets for the payment of his debt which he could have applied for that purpose.^ When a testator makes his debtor executor it is a release at law, but the former may reserve the debt, and payment be enforced by the party to whom it is bequeathed under the fiction of a promise to him.* Such appointment does not extinguish the debt, nor a mortgage security for it,* but it becomes assets in his hands,^ especially if there is a de- ficiency, to pay debts.'' An executor or other trustee for the distribution of moneys to pay debts, legacies, etc., may retain for a debt owing him from the trust funds, and may also re- tain for the benefit of the trust any sum due from a benefi- ciary. A personal representative may retain for his debt by withholding within the period allowed by the statute of lim- Brunn v. Schuett, 59 Wis. 260, 18 N. Taylor v. Deblois, 4 Mason, 131; Bry- W. Rep. 260. aut v. Smith, 10 Cush. 169; Hunt v. 1 Slade V. Mutrie, 156 Mass. 19, 30 Nevers, 15 Pick. 500, 26 Am. Dec. 616, N. E. Rep. 168; Stewart v. Hidden, 15 Pick. 54, 1 Allen, 153. See Ilsley 13 Minn. 43; Ellsworth v. Fogg, 35 v. Jewett. 2 Met. 168; Wilson v. Wil- Vt. 355; Vanderbeck v. Vanderbeck, son, 17 Ohio St. 150, 91 Am. Dea 125. 30 N, J. Eq. 265; Jaffray v. Davis, 124 3 Jordan v. Hardie, 131 Ala. 72. 31 . N. Y. 164, 170, 26 N. E. Rep. 351, 11 So. Rep. 504; Miller v. Irby, 63 Ala. L. R. A. 710; Patten v. Glover, 1 D. 485. C. App. Gas. 466, 481. •• Fishel v. Fishel, 7 Watts, 44. 2 Ipswich Manuf. Go. v. Story, 5 ^gacon v. Fairraan. 6 Gonn. 121; Met. 310; Stevens v. Gaylord, 11 Gollard v. Donaldson, 17 Ohio, 264. Mass. 255; Kinney v. Ensign, 18 See Pratt v, Northam, 5 Mason, 95; Pick. 2;J2; Winship v. Bass, 12 Mass. Miller v. Irby, G3 Ala. 477. 199; Wankford v. Wankford, 1 Salk. « Winship v. Bass, 12 Mass. 198. 299; Gheetham v. Ward, 1 B. & P. ^ Marvin v. Stone, 2 Gow. 781. 630; Freakley v. Fox, 9 B. & G. 130; § 223.] PAYMENT. 547 itations a sufficient amount from the moneys coming to his hamls, and is entitled to due credit therefor in the settlement of his accounts,^ on such proof as would authorize a recovery upon it.2 And such retainer will be presumed from sufficient assets coming into his hands which were susceptible of con- version into money.'' His debt, however, will not be deemed extinguished by the receipt of assets sufficient to dis- [358] charge it, but which he fails to reduce to money and turn over to his successor.* The right of retainer, and the legal inci- dents thereof, applies to debts due the personal representative as trustee, or as executor or administrator of another person." An executor de son tort cannot retain for his own debt.® Sureties in a bond who pay it off after the death of the principal are entitled to rank as his specialty creditors, and if they be administrators of his estate may retain whatever they pay on account of such suretyship out of assets that come to their hands as administrators against other specialty creditors.'^ A retainer may either be pleaded or given in evidence under the plea oi plene administravit? § 223. Payment in counterfeit money, bills of brolien banks or forged notes. It accords with principles governing in like cases, and certainly with the decided weight of author- ity, to hold that the party paying by legal implication war- rants the genuineness of what he pays as money,^ unless the character of the transaction or the accompanying circum- stances show a different intention.^ This rule is now recoo-- O 1 Batson v. Murrell, 10 Humph. 301, & Russ. 224; Jones v. Davids, 4 Russ. 51 Am. Dec. 707; Hamner v. Ham- 277. ner, 3 Head, 398; Harrison v. Hen- « Evans v. Norris, Hayw. (by Batt.) derson, 7 Heisk. 315. 473. 2 Kirksey v. Kirksey, 41 Ala. 636. 9 Watson v. Cresap, 1 B. Mon. 195, 3 Glenn v. Glenn. 41 Ala. 571. 36 Am. Dec. 572; Edmunds v. Digges, * Harrison v. Henderson, 7 Heisk. 1 Gratt. 359, 42 Am. Dec. 561; Har- 315; Ross v. Wharton, 10 Yerg. 190. grave v. Dusenbury, 2 Hawks, 326; ^Miller V. Irby.63 Ala. 477;Thomp- Fogg v. Sawyer, 9 N. H. 305; Buck son V. Cooper, 1 Call, 861, 1 Am. Dec. v. Doyle. 4 Gill. 478, 45 Am. Dec. 176; 509; Thomas v. Thompson, 2 Johns. Goodrich v. Tracy, 43 Vt. 314, 5 Am. 471; Hosack v. Rogers, 6 Paige, 415; Rep. 281. Morrow v. Payton, 8 Leigh, 54. i See Dakin v. Anderson, 18 Ind. 52. « Turner v. Child, 1 Dev. 331. In Orchard v. Hughes, 1 Wall. 73, ''Powell's Ex'r v. White, 11 Leigh, it was held to be no defense to a suit 309. See Copis v. Middleton, 1 Turn, for ilebt tliatthe debt arose from the 54:8 CONVENTIONAL LIQUIDATIONS AND DISCHAKGES. [§ 223. nized as an exception to that of caveat emptor^ but it is evident it was not always so.^ This warranty of genuineness, how- [359] ever, is not absolute; but the general current of author- ity is that the payer warrants the quality to such an extent that he is bound to made it good, if found bad, and is returned within a proper time.^ It is a special warranty, requiring the return of the thing warranted and involving an obligation of the debtor to pay the amount again in good money; but leav- ing the creditor, of course, the option, on returning the spuri- ous money, to proceed on the statu q\io as upon a rescission. The payment in either case, to the extent of the counterfeit money, is treated as a nullity when it has been restored.' The same principle applies to the notes of individuals. If receipt of the bills of a bank char- tered illegally, and lor fraudulent purposes, and that the bills were void in law, and finally proved worthless in fact; they themselves having been actually current at the time the de- fendant received them, and not hav- ing proved worthless in his hands, and he not being bound to take them back from the person to whom he paid them, 1 In Wade's Case, 5 Coke, 114a, it was said: "It was adjudged between Vare and Studley that when the les- sor demanded rent of the lessee, ac- cording to the condition of re-entry, and the lessee payeth the rent to his lessor, and he received it and put it in his purse, and afterwards in look- ing it over again at the same time he found amongst the money that he had received some counterfeit pieces and thereupon refused to carry away the money, but re-entered for the condition broken, it was ad- judged the entry was not lawful; for when the lessor had accepted the money it was at his peril, and upon that allowance he shall not take ex- ception to any part of it." And it is Baid in Shepherd's Touchstone, 140, in respect to mortgages: " If the pay- ment be made, part of it with coun- terfeit coin, and tlie part}^ accept and put it up, this is a good payment, anil consequently a good performance of the condition." 2 Atwood v. Cornwall, 28 Mich. 336, 15 Am. Rep. 219; Wingate v. Neid- linger, 50 Ind. 520; Samuels v. King, id. 527; Stebbins v. Stebbins, 51 Ind. 595. See Alexander v. Byers, 19 Ind. 801. 3 Id.; Markle v. Hatfield, 2 Johns. 453; Gilman v. Peck, 14 Vt. 516; Thomas v. Todd, 6 Hill, 340; Torrey V. Baxter. 13 Vt. 452; Pindall's Ex'r v. Northwestern Bank, 7 Leigh, 617; Raymond v. Baar, 13 S. & R. 318, 15 Am. Dec. 603; Bank of St. Albans v. Farmers' & M. Bank, 10 Vt. 141, 33 Am. Dec. 188. In Watson v. Cresap, 1 B. Mon. 195, 36 Am. Dec. 572, Judge Ewing said: *"It must be presumed that he who passes a bill as money passes it as genuine, and the law implies an as- sumpsit or warranty that it is so (2 Johns. 458, 15 Johns. 241); and if the bill should be counterfeit and worth- less, this implied promise is immedi- ately, upon passing the bill, broken, and an action lies for its breach; nor does it matter whether he who passes it knows that it is counter- feit or not. 2 Johns., s? ris V. Eufaula Nat. Bank, 106 Ala. 383, 18 So. Rep. 11; McCormick Har- vesting Machine Co. v. Breen, 61 111. App. 528; National Bank v. Grimm, 109 N. C. 93, 13 S. E. Rep. 867: Bank of Commerce v. Hart, 37 Neb. 197, 40 Am. St. 479, 20 L. R. A. 780, 55 N. ■ W. Rep. 631; Sandy River Bank v. Merchants & Mechanics' Bank, 1 Biss. 146; Western Brass Manuf. Co. V. Maverick, 4 Tex. Civ. App. 535, 23 S. W. Rep. 728: Everts v. Lavvther, 165 111. 487, 46 N. E. Rep. 233; Law- ther v. Everts, 63 111. App. 432; Scully V. Dodge, 40 Kan. 395, 19 Pac. Rep. 807; McCormick v. Peters, 24 Neb. 70. 37 N. W. Rep. 927; Nichol- son v. Pease, 61 Vt. 534, 17 Atl. Rep. 720; Lochenmeyer v. Fogart3', 112 111. 572; Wilcox & W. Organ Co. v. Lasley, 40 Kan. 521, 20 Pac. Rep. 228; Deatherage v. Henderson, 43 Kan. 684, 23 Pac. Rep. 1052; Mitchell v. Printup, 68 Ga. 675. If the agent of a mortgagee ac- cepts a certificate of deposit in pay- ment of a mortgage and deposits it in the bank which issued it to the credit of his own account, the pay- ment is of cash. Harrison v. Legore, 109 Iowa, 618, 80 N. W. Rep. 670; Hare v. Bailey, 73 Minn. 409, 76 N. W. Rep. 213. It seems that an attorney, acting in good faith, has broader powers than other agents. It has been ruled where an attorney, under his em- ployment, obtained judgment and presented a certified transcript of it to the defendant, demanding pay- ment, which was made in confeder- ate funds in 1862, that such payment was binding, and that payment in such funds, they being current, to clerks, sheriflfs and other officers authorized to collect money, was binding on the creditor, while it was otherwise as to payments so made to private agents. East Tennessee, etc. R. Co. V. Williams, 8 Tenn. Cas. 8. See § 211. 1 Farmers' Bank & Trust Co. v. Newland, 97 Ky. 464.31 S. W. Rep. 38; Morse on Banks & Banking, sec. 221. 2 National Bank of Commerce v. American Exchange Bank, 151 Mo. 320, 52 S. W. Rep. 26.5, 74 Am. St. 527. S.American Brewing Co. v. United States, 33 Ct of Cls. 349; Miltenber- ger V. Cooke, 18 Wall. 421. 4 Cole V. Sackett, 1 Hill, 5ia In 560 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 225, [372] III England, and generally in this country, it is be- lieved that the debtor's negotiable note or bill of a third per- son, when received by mutual agreement of the parties as satisfaction, has that effect; and the rule applies equally whether the debt be antecedent or contemporaneous.^ Where this case Cowen, J., said: "It may be considered at present as entirely settled that to operate as a satisfac- tion the promise must be of some tiiird person; in other words, some- thing over and above the original debt. A promise by note is a secu- rity of no higlier degree than an im- plied promise; and tlie logic of these pleas is no more than saying: 'Your precedent debt is discharged because I promised to pay it in another form, and you accepted tlie latter promise as a satisfaction.' What considera- tion is tliere for such an acceptance ? The new promise to do a thing which the debtor was bound to do before — a thing which he now refuses to do, because he had promised again and again to do it! In these promising times, there are, I apprehend, few debts which on such a theory are not in danger of being barred much short of the statutes of limitations; for creditors, however unwilling, are many times obliged to accept promises as the only satisfaction they can obtain for the present. It is entirely settled that a promissory note in no way affects or impairs the original debt unless it be paid." Notwithstanding the argument, from want of consideration, in the foregoing opinion. Judge Cowen conceded to negotiable notes taken for an account some additional value to the creditor in Myers v. Welles, 5 Hill, 463: "Being negotiable, they might be used more beneficially than the account. Besides, they operate to liquidate the plaintiff's claim. These advantages constituted suffl,- dent consideration for the suspen- sion." See Frisbie v. Larned, 21 Wend. 450; Putnam v. Lewis, 8 Johns. 389; Hawley v. Foote, 19 Wend. 516. On principle, it might well be claimed that where the new note is supported by sufficient consideration for forbearance, that consideration is sufficient for a discharge of the original debt. 1 Kirkpatrick v. Puryear, 93 Tenn. 409, 24 S. W. Rep. 1130, 22 L. R. A. 785; Thum v. Wolstenholme, 21 Utah, 446, 61 Pac. Rep. 537; Holmes V. Laraway, 64 Vt. 175, 23 Atl. Rep. 763; Mulligan v. Hollingsworth, 99 Fed. Rep. 216; Kell v. Larkin,72 Ala. 493;Dryden v. Stephens, 19 W. Va. 1: Mayer v. Mordecai, 1 S. C. 398; Smith V. Hobleman, 12 Neb. 502, 11 N. W. Rep. 753; Sard v. Rhodes, 1 M. & W. 153; Sibree v. Tripp, 15 id. 23; 2 Am. Lead. Cas. (5th ed.) 273; 1 Smith Lead. Cas. pt. 1 (7th Am. ed.) *456; Yates V. Valentine, 71 Hi. 643; Chitty on Bills, 289 et seq. and p. 119; Story on Prom. Notes, § 389, note 3, g 405; Seltzer v. Coleman, 32 Pa. 493; Smith's Merc. L. 542; Cornwall v. Gould, 4 Pick. 444; Huse v. Alexan- der, 2 Met. 157; Sheehy v. Mandeville, 6 Cranch, 253; Mailiard v. Duke of Argyle, 6 M. & G, 40; Hart v. Boiler, 15 S. & R. 162, 16 Am. Dec. 536; Jones V. Shawan, 4 W. & S. 257; Sutton v. The Albatross, 2 Wall. C. C. 327; Keough V. McNitt, 6 Minn. 513. See Goenen v. Schroeder, 18 id. 66; Bank V. Bobo, 11 Rich. 597; Haven v. Foley, 19 Mo. 636; Dougal v. Cowles, 5 Day, 511: Bonnell v. Chaniberlin, 26 Conn. 487; McMurray V. Taylor, 30 Mo. 263, 77 Am. Dec. 611; Foster v. Hill, 36 N. H. 526; Moody v. Leavitt, 2 N. H. 171; Costelo v. Cave, 2 Hill (S. C), § 225.] PAYMENT. 561 any person is obligated to pay money, a payment made in any mode, eitlier property, his negotiable paper, or other securi- ties, if such payment is received as a full satisfaction of the demand, it is equivalent for the purpose of payment to cash.' Though the general rule is otherwise, in Massachusetts,- Maine,^ 528, 27 Am. Dec. 404; Drake v. Mitch- ell, 3 East. 251; Foster v. Allanson, 3 D. & E. 479; Moravia v. Levy, id. 483, n.: Watsou v. Owens, 1 Rich. Ill; The Kimball, 3 Wall. 37; Brown v. Olmsted, 50 Cal. 162; Alley v. Rogers, 19 Gratt. 366; Burrows v. Bangs, 34 Mich. 304. 1 O'Bryan v. Jones, 38 Mo. App. 90; Rice V. Dudley, 34 id. 383; Dryden v. Stephens. 19 W. Va. 1; Ralston v. Wood, 15 111. 159, 58 Am. Dec. 604; Gillilan v. Nixon, 26 111. 52; Cox v. Reed, 27 id. 434; Wilkinson v. Stew- art, 30 id. 48; Leake v. Brown. 43 id. 376; Tinsley V. Ryon,9Tex. 405; Rob- son V. Watts. 11 Tex. 764; Van Mid- dlesworth v. Van Middlesworth, 32 Mich. 183; Wright v. Lawton, 37 Conn. 107: Gage v. Lewis. 68 111. 004; Doolittle V. Dwight. 2 Met. 561 ; With- erby v. Mann, 11 Johns. 518; McLel- lan V. Crofton, 6 Me. 304; Randall v. Rich, 11 Mass. 494; Pearson v. Par- ker, 3 N. H. 366; Atkinson v. Stew- art, 2 B. Mon. 348; Howe v. BufTalo, etc. R. Co., 37 N. Y. 297; Keller v. Boatman. 49 Ind. 104. In Pitzer v. Harmon, 8 Blackf. 112, 44 Am. Dec. 738, a negotiable note was given by the surety and was taken in discharge and satisfaction; held not such a payment as would warrant a recovery against the prin- cipal for money paid. See Bennett V. Buchanan, 3 Ind. 47. If a check given for a pre-existing debt is ultimately paid there is no "debt owing or accruing" to the creditor between the times of the delivery of the check and its pay- ment so as to make the debtor who drew it subject to garnishment. El- Vou 1 — 36 well v. Jackson. 1 Cab. & Ellis, 302; Thompson v. Peck, 115 Ind. 512, 18 N. E. Rep. 16. 1 L. R. A. 201: Hunter V. Wetsell, 84 N. Y. 549. 38 Am. Rei). 544. As to the payment of costs by check in order to be entitled to ap- peal, see Burns v. Smith, 180 Pa. 006. 37 Atl. Rep. 105. -Melledge v. Boston Iron Co., 5 Cush. 158, 51 Am. Dec. 59; Thatcher V. Dinsmore. 5 Mass. 299, 4 Am. Dec. 61; Goodenow v. Tyler, 7 Mass. 30, 5 Am. Dec. 22; Maneely v. McGee, 6 Mass. 143, 4 Am. Dec. 105; Chapman V. Durant, 10 Mass. 47; .lohnson v. Johnson, 11 id. 361; Whitcomb v. Williams, 4 Pick. 288; Fowler v. Bush. 21 id. 230; Wood v. Bodwell, 12 id. 268; Scott v. Ray, 18 id. 268; French v. Price, 24 id. 13; Brewer Lumber Co. v. Boston & A. R. Co., 179 Mass. 228. 60 N. E. Rep. 548. 3 Dole V. Hayden, 1 Me. 152; Wise v. Hilton, 4 id. 435; Homes v. Smith, 16 id. 181: Gilmore v. Bussey, 12 id. 418; Trustees, etc. v. Kendrick, id. 381; Comstock v. Smith, 23 id. 20,'; Bunker v. Barron, 79 id. 62, 1 Am. St. 282. 8 Atl. Rep. 253;.Varner v. Nobleborough, 2 Me. 121, 11 Am. Dec. 48. In Dole v. Hayden, supra, upon a settlement of mutual accounts a promissory note was given for the balance supposed to be due, but by a mistake in computation the note was made for $20 more than in truth was due; it was held that the debtor might recover this sum from the creditor although the note still remained unpaid. The court treated the mistake as substantially an 562 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 225. Indiana,^ Louisiana^ and Vermont,' it is thoroughly settled that when a creditor receives a negotiable note of the debtor, either for an antecedent or a contemporaneous simple contract debt, it [373] is presumed to be received as absolute and not conditional pa3''raent. This is a presumption of fact onl}^ liable to be controlled by evidence that such was not the intention of the parties/ In Wisconsin the taking of a bill of exchange on a previous indebtedness of the drawer to the payee is prima facie payment of the debt;^ This presumption rests upon the theory that when a note is given for goods it is equally convenient for the creditor, and generally more so, to sue on it than on the original promise; and so there is no reason for considering the original simple contract as still subsisting and in force; therefore, it is pre- omission to allow $20 of the plaint- iff's account, and the action as brought for it. 1 " It is settled by the decisions of this court that the giving of a prom- issory note, governed by the law merchant, for a pre-existing indebt- edness of the maker to the payee will discharge such debt unless it is shown that the parties did not intend it to have that effect. And the giv- ing of a promissory note not gov- erned by the law merchant does not operate as a payment thereof unless it is so agreed between the parties. " Sutton v. Baldwin, 146 Ind. 361, 45 N. E. Rep. 518. Where a debtor gave his creditor notes payable to his wife the court refused to hold that they were given and accepted as payment, although they were payable in bank, because the creditor could not use them as commercial paper unless the wife indorsed them. Bradway v. Groen- endyke, 153 Ind. 508, 55 N. E. Rep. 434. The presumption of payment aris- ing from the acceptance of bills of exchange is not difficult to overcome, and parol evidence may be received for that purpose. Keck v. State, 12 Ind. App. 119, 39 N. E. Rep. 899. ^Hunt V. Boyd, 2 La. 109. 3 Hodges V. Fox, 3G Vt 74; Street V. Hall, 29 id. 165. But if the creditor takes a note under a misapprehension as to the facts, he supposing that parties are bound by it who are not, the pre- sumed intention to treat the note as payment is rebutted, and there may be a recovery upon the original debt. Wait V. Brewster, 31 Vt. 516, 527. « Butman v. Howell, 144 Mass. 66, 10 N. E. Rep. 504; Green v. Russell, 132 Mass. 536; Fowler v. Ludwig. 34 Me. 460; Dodge v. Emerson, 131 Mass. 467; Melledge v. Boston Iron Co., 5 Gush. 158, 51 Am. Dec. 59; Maneely V. McGee, 6 Mass. 143, 4 Am. Dec. 105; Watkins v. Hill. 8 Pick. 522; Howland v. Coffin, 9 id. 54; Reed v. Upton, 10 id. 525; Butts v. Dean, 2 Met. 76, 35 Am. Dec. 389; Brewer Lumber Co. v. Boston & A. R. Co., 179 Mass. 228. 60 N. E. Rep. 548, and cases cited in notes to the next par- agraph. SMehlbergv. Tisher, 24 Wis. 607; Schierl v. Baumel, 75 id. 69, 43 N. W. Rep. 724. ■§ 225.] PAYMENT. suraed that it was intended by the parties that the note should be deemed a satisfaction.' The presumption, however, is founded on the negotiable character of the note, and does not apply to other instruments.'- The same presumption arises in Massachusetts when payment is made by the note of a thinl person, unless there is an agreement to the contrary, or equivalent circumstances;' but it is otherwise in Indiana,* unless the creditor surrenders the debtor's notes and sues upon the note of the third person.* The presumption that a note is taken as satisfaction is affected by circumstances. Thus, where the note given is not the obligation of all the parties who are liable for the simple contract debt, and, a fortiori^ when [37-4] the note given is that of a third person, and if held to be in satisfaction would wholly discharge the liability of other par- ties previously liable, the presumption, if it exists at all, is of much less weight.^ The fact that such presumption would de- prive the party who takes the note of a substantial benefit has a strong tendency to show that it was not so intended; as where it would imply the discharge of a mortgage,^ or the 1 Curtis V. Hubbard, 9 Met. 328. See Brewer Lumber Co. v. Boston & A. R. Co., 179 Mass. 228, 234, 60 N. E. Rep. 548, for other reasons. 2Alford V. Baker, 53 Ind. 279; Trustees v. Kendrick, 13 Me. 381; Chapman v. Coffin, 14 Gray, 454; Greenwood v. Curtis, 6 Mass. 358, 4 Am. Dec. 145; Wade v. Curtis, 96 Me. 309, 52 Atl. Rep. 762. 3 Wiseman v. Lyman, 7 Mass. 286. Taking the negotiable note of a third person and entering it on the books as payment is not conclusive that it is such. Brighara v. Lally, 130 Mass. 485. * Godfrey v. Crisler, 121 Ind. 203. 23 N. E. Rep. 999; Bristol Manuf. Co. v. Probasco, 64 Ind. 406. 5 Dick V. Flanagan, 123 Ind. 277, 23 N. E. Rep. 765. See Hooker v. Hub- bard, 97 Mass. 175; Dewey v. Bell, 5 Allen, 165. « Paine v. Dwinel, 53 Me. 52, 87 Am. Dec. 533; Kidder v. Knox, 48 Me. 555; Strang v. Hir.st, 61 id. 15; Melledge v. Boston Iron Co., 5 Cush. 158, 51 Am. Dec. 59; Maneely v. Mc- Gee, 6 Mass. 143, 4 Am. Dec. 105; Emerson v. Providence Hat Manuf. Co., 12 Mass. 237, 7 Am. Dec. 60; French v. Price, 24 Pick. 13; Bar- nard V. Graves, 16 id. 41; Curtis v. Hubbard, 9 Met. 328. 'Taft V. Boyd, 13 Allen, 86; Bun- ker V. Barron, 79 ]\Ie. 62, 1 Am. St 282, 8 Atl. Rep. 253; Watkins v. Hill. 8 Pick. 522; Pornroy v. Rice, 16 id. 22; Zerrano v. Wilson, 8 Cush. 424. See Fowler v. Bush, 21 Pick. 230. In Weddigen v. Boston, etc. Co., 100 Mas& 422, a buyer sent the seller a third person's check to pay for a bill of goods; the seller sent a re- ceipt for the amount as received in settlement of the bill. At the time of sending the check the buyer sup- posed it to be good, but it was sea- sonably presented and dishonored; held not a payment or accord and satisfaction. Where a debtor gave his negoti- 564 CONVENTIONAL LIQUIDATIONS AND DISCHAKGES. [§ 226. lien of a vendor, including the right of stoppage in transitu} The taking of a note is to be regarded as payment only when the security of the creditor is not thereby impaired.^ In some states, and upon very good reasons, a distinction is made as to the eilect to be given to security executed by the debtor. If it is not of higher rank than the evidence of indebtedness held by tiie creditor it is not presumed to be accepted in payment, but if he takes a higher security or a better assurance of pay- ment than he was before possessed of the presumption is to the contrary.' Where the debtor executes a note in which he waives his right to claim exemptions and gives it to his cred- itor, it is presumed to be taken by him in payment of a book account.* The general distinction was made by Judge Story; he thought, however, that it ought not to be extended to se- curity given by a third person.-^ Whether a note is to have the effect of payment or to be considered as collateral only is to be determined by the law of the state in which it was made and is payable, though the creditor resides in another state and the indebtedness which was the consideration for the note was incurred there.® § 226. Same subject. The rule in the states above named is exceptional. It is held generally in this country, as well as able note for the amount of his debt, ceived in full for the goods. Van- and included more than lawful in- cleef v. Therasson, '6 Pick. 12. terest in consideration of further de- i Brewer Lumber Co. v. Boston & lay of payment, the note being void A. R. Co., 179 Mass. 228, 60 N. E. Rep. for usury, held the original debt was 548. not discharged and might still be ^Paine v. Dwinel, 53 Me. 52, 87 recovered, though a receipt was Am. Dec. 533; Lovell v. Williams, given at the time the note was taken. 125 Mass. 442; Walker v. Mayo, 143 Johnson v. Johnson, 11 Mass. 359; id. 42, 8 N. E. Rep. 873; Vallier v. Stebbins V. Smith, 4 Pick. 97: Rams- Ditson, 74 Me. 553; Hercules Iron dell V. Soule, 12 Pick. 126; Meshke v. Works v. Hummer, 4 111. App. 598. Van Doren, 16 Wis. 319; Lee v. Peck- 3 Chalmers v. Turnipseed, 21 S. C. ham, 17 id. 383. See Webster v. Stad- 126; Pelzer v. Steadman, 22 id. 279; den, 14 id. 277. Gardner v. Hust, 2 Rich. 608. A negotiable note given in New ^Lee v. Green, 83 Ala. 491, 3 So. York for goods sold there by a citi- Rep. 785. zen of that state is no satisfaction of * United States v. Lyman, 1 Mason, the original debt, so as to bar an ac- 482, 505. tion in Massachusetts for the same, ^Gilman v. Stevens, 63 N. H. 342; although the note was lost and the Thomson-Houston Electric Co. v. vendor had given the vendee a re- Palmer, 52 Minn. 174, 53 N. W. Rep. ceipt stating that the note was re- 1137, 38 Am. St. 536. § 220.] PAYMENT. 565 in England, that a note, bill or check of the debtor or of a third person, given and received on account of a previous debt or one contemporaneously contracted,^ is not absolute, but con- ditional, payment, unless it is accepted as such, or unless it pro- duces payment.'- The principle is applicable to a check which 1 Wisconsin is apparently another exception so far as contemporaneous debts are concerned. Challoner v. Boyington, 83 Wis. 399, 53 N. W. Rep. G9i; but not as to antecedent debts. Willow River Lumber Co. v. Luger Furniture Co., 102 Wis. 636, 78 N. W. Rep. 763. -The cases which expressly hold the doctrine stated in the text are very numerous: a few only are cited here; those which will be cited in the subsequent discussion of the va- rious branches of the subject under consideration are in harmony with those here collected, except the de- cisions in Massachusetts, Maine, Indiana, Louisiana and Vermont, and in Wisconsin as to bills of ex- change and some cases there and elsewhere which make a distinction between the obligations of the debtor and third persons where they are given for a contempora- neous debt. See first paragraph of last section. Hunter v. Moul, 98 Pa. 13, 42 Am. Rep. 610; White v. Boone, 71 Tex. 712, 12 S. W. Rep. 51 ; Caldwell V. Hall, 49 Ark. 508. 1 S. W. Rep. 62; Comptoir D'Escompte v. Dresbach, 78 Cal. 15, 20 Pac. Rep. 28: Thomas V. Westchester County, 115 N. Y. 47, 4 L. R. A. 477. 21 N. E. Rep. 634; Fry V. Patterson, 49 N. J. L. 612, 10 Atl. Rep. 390; Brabazon v. Seymour, 42 Conn. 554; Bank of Monroe v. Gif- ford, 79 Iowa, 300. 44 N. W. Rep. 558; Bradley v. Harwi, 43 Kan. 314, 23 Pac. Rep. 566; Levan v. Wilten, 135 Pa. 61, 19 Atl. Rep. 145; Whitcherv. Dexter, 61 N. H. 91; Holmes v. Briggs, 131 Pa. 233, 18 Atl. Rep. 928 (these last two cases qualify the proposition by the condition that the creditor must not so improperly con- duct himself with respect to the note as to injure the debtor); Selby v. McCuI lough, 26 Mo. A pp. 66; Knox V. Gerhauser, 3 Mont. 267; Salomon V. Pioneer Co-operative Co., 21 Fla. 374, 58 Am. Rep. 667; Fleig v. Sleet, 43 Ohio St. 53, 54 Am. Rep. 800, 1 N. E. Rep. 24; First Nat. Bank v. Case, 63 Wis. 504. 22 N. W. Rep. 833 (the rule is otherwise where a bill of ex- change is accepted; see last para- graph); Wood burn v. Woodburn, 115 111. 427. 5 N. E. Rep. 82: Heath v. White, 3 Utah, 474, 24 Pac. Rep. 762; Wiles v. Robinson, 80 Mo. 47; Hunt V. Higman, 70 Iowa, 406, 30 N. W. Rep. 769; Hess v, Dille, 23 W. Va. 90: Keel v. Larkin, 72 Ala, 493; Ciieltenham Stone & G. Co. v. Gates Iron Works, 23 111. App. 635, 134 111. 623, 16 N. E. Rep. 923; Walsh v. Lennon, 98 III. 27, 38 Am. Rep. 75; Wilhelm v. Schmidt, 84 111. 183; Pritchard v. Smith, 77 Ga. 463; Cos- telo V. Cave, 2 Hill (S. C), 207; Slo- comb V. Lurty, Hempst. C. C. 431; People V. Howell, 4 Johns. 296; Bates V. Rosekrans, 37 N. Y. 409; Webster V. Stadden, 14 Wi.s. 277; Burrows v. Bangs, 34 Mich. 304; Peter v. Beverly, 10 Pet. 532; Owensou v. Morse, 7 T. R, 64; Chastain v. Johnson, 3 Bailey, 574: Alley v. Rogers, 19 Gratt. 368; The Kimball, 3 Wall. 37; Newell v. Nixon, 4 id. 573; Lee v. Tinges, 7 Md. 215; Harris v. Jolmston, 9 Cranch, 311; Good v. Cheesman, 2 B. & Ad. 328; Winslow v. Hardin's Ex'r, 3 Dana, 543; Adger v. Pringle, 11 S. C. 527; Johnson V. Clarke, laid. 72; Scott V. Gilkey, 153 111. 168, 39 N. 5G6 CONVENTIONAL LIQUIDATIONS AND DISCUAKGES. [§ 22G.. is certified before its delivery to the creditor. Tlie only effect of the certificate is to increase the currency of the check by addin Merchants' Nat. Bank v. Camp, 110 Ga. 780, 36 S. E. Rep. 201; Cheney v. Libby, 134 U. S. 68, 10 Sup. Ct. Rep. 498. § 231.] PAYMENT. 5S5 raaj impeach a payment made to one having possession of the evidence of the debt. Thus, payment by the maker of a note before maturity to the son of the holder, who had been for- bidden to take payment, with the knowledge of the party pay- ing, is not a good payment, although the note is delivered up by the son; the father may maintain a suit for the note, not having ratified the payment.^ The circumstances, however, must show payment in bad faith; it is not enough that there is gross negligence in not ascertaining the party entitled to the money." Pajniientof a lost negotiable instrument, after notice of its loss, will not operate as a discharge against the loser un- less the person presenting it establishes his title thereto. A notice previously given of the loss of a coupon, distinguishable by its number or other ear-mark, is sufficient to fix uj)on the maker the duty of inquiry and of refusal to pay a holder who cannot prove his right; especially is this the rule where an in- strument is presented after it has matured.' Pa3nnent to one not in possession of the evidence of debt, and without a sur- render of it, is at the risk of the payer; and if the party receiv- ing the money had no right to receive it the note is not dis- charged.^ But if the person who receives the money, though 1 Kingman v. Pierce, 17 Mass. 247. 59 Pac. Rep. 117; Wheeler v. Guild, 2 Cothran v. Collins, 29 How. Pr. 20 Pick. 543, 32 Am. Dec. 231; Rush 113; Haescig v. Browu, 34 Mich. 503. v, Fister, 23 111. App. 348; Viskoeii v. 3 Hinckley v. Union Pacific R. Co., Doktor, 27 id. 232; Stiger v. Bent, 111 129 Mas.s. 52, 37 Am. Rep. 297. See 111. 328. Hinckley v. Merchants' Nat. Bank, Payment of a pledged note to the 131 Mass. 147. pledgor will not discharge it. Gris- * Fortune v. Stockton, 182 111. 454, wold v. Davis, 31 Vt. 390. 55 N. E. Rep. 367, 82 111. App. 272 The authorities recognize the rule (suhnom, Stockton v. Fortune): Leon that "where a principal has, by his V. Mclntyre, 88 id. 349; Englert v. voluntary act, placed an agent in a White, 92 Iowa, 97, 60 N. W. Rep. situation that a person of ordinary 224; Bank of Montreal v. Ingerson, prudence, conversant with business 105 Iowa, 349, 75 N. W. Rep. 351; usages and the nature of the partic- Hall V. Smith, 3 Kan. App. 685, 44 ular business, is justified in presum- Pac. Rep. 908; Cummings v. Hurd, ing that such agent has authority to 49 Mo. App. 139; Dodge v. Birken- perform, on behalf of his principal, feld, 20 Mont. 115, 49 Pac. Rep. 590; a particular act, such particular act Hitchcock V. Kelley, 18 Ohio Ct. Ct. having been performed, the princi- 808; Hollinshead v. Stuart, 8 N. D. pal is estopped, as against such inno- 35, 77 N. W. Rep. 89; Stalzman v. cent third person, from denying the Wyman, 8 N. D. 108, 77 N. W. Rep. agent's authority to perform it." 285; Rhodes v. Belchee, 36 Ore. 141, Johnston v. Milwaukee & Wyoming 586 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 231. he had not possession of the evidence of the indebtedness or authority to receive payment, pays it to the person entitled and such person receives it, the debt is discharged.^ The rule that payment to one who is without the evidence of indebtedness is at the risk of the debtor applies though the note is paid at the place designated in it for payment.^ It was heUl in Iowa that if a note is made payable at a bank payment made there on the date of the maturity of the note is satisfaction though the note was not in possession of the bank.^ But this position has been receded from, in deference to the almost unvarying current of authority, to the extent of holding that the fact that a note is so payable does not au- thorize the bank, in the absence of the note, to collect any- thing on it before maturity.* The authorities are reviewed by the New Jersey court, and the conclusion arrived at (which is concurred in by the Iowa court), that the contract of the maker, acceptor or obligor is to pay the holder of the paper, and the place for payment is designated simply for the con- venience of both parties. Making a bill or note payable at a Investment Co., 46 Neb. 480, 64 N. W. Rep. 1100; Reid v. Kellogg, 8 S. D. 596, 67 N. W. Rep. 687. This doctrine has been applied where an agent who was not possessed of the mort- gage or notes, or a satisfaction of them, received payment of them be- fore it was due. Harrison v. Legore, 109 Iowa, 618, 80 N. W. Rep. 670. Doyle V. Corey, 170 Mass. 337, 49 N. E. Rep. 651, is in harmony with the cases referred to. 1 Second Nat. Bank v. Spottswood, 10 N. D. 114. 86 N. W. Rep. 359; Cole- man V. Jenkins, 78 Ga. 605, 3 S. E. Rep. 444. - McNamara v. Clark, 85 111. App. 439; Englert v. White, 92 Iowa, 97, 60 N, W. Rep. 224; Klindt v. Hig- gins, 95 Iowa. 529, 64 N. W. Rep. 414; Cummings v. Hurd, 49 Mo. App. 139. 3 Lazier v. Horan, 55 Iowa, 75, 7 N. W. Rep. 457. * Bank of Montreal v. Inger.son, 105 Iowa, 349, 75 N. W. Rep. 351, distin- guishing Bank of Charleston Nat. Banking Ass'n v. Zorn, 14 S. C. 444, and citing Caldwell v. Evans, 5 Bush, 380, 96 Am. Dec. 358; Adams v. Hackensack Improvement Com- mission, 44 N. J. L. 638, 43 Am. Rep. 406; St. Paul Nat. Bank v. Can- non, 46 Minn. 95, 48 N. W. Rep. 526, 24 Am. St. 189; Hills v. Place, 48 N. Y. 520. 8 Am. Rep. 568; Cheney v. Libby, 134 U. S. 68, 10 Sup. Ct. Rep. 498; Ward v. Smith, 7 Wall. 447; Williamsport Gas Co. v. Pinkerton, 95 Pa. 62; Wood v. Merchants' Sav- ing. Loan & Trust Co., 41 111. 267; Grissom v. Bank, 87Tenn. 350, 3 L. R. A. 273. 10 S. W. Rep. 744, 10 Am. St. 669; Turner v. Hay den. 4 B. & C. 1; Walton V. Henderson, Smith (N. H.), 168, as sustaining tlie doctrine that the bank, in such a case, is not the agent of the payee of the note, though the latter be due, so as to be authorized to accept payment of it, unless the note is in its possession. § 231.] PAYMENT. 587 banker's is authority to the banker to apply the funds of tlio acceptor or maker on deposit to the payment of the paper. If maturing paper be left with the banker for collection he be- comes the agent of the holder to receive payment; but unless the banker is made the holder's agent by a deposit of the paper with him for collection, he has no authority to act for the holder. The naming of a bank in a note as the place of payment does not make the banker an agent for the collection of the note or the receipt of the money. Ko power, authority or duty is thereby conferred upon the banker in reference to the note; and. the debtor cannot make the banker the agent of the holder simply by depositing with him the funds to pay it. Unless the banker has been made the agent of the holder by the indorsement of the paper or the deposit of it for col- lection, any money which the banker receives to apply in payment of it will be deemed to have been taken by him as the agent of the payer.^ The fact that an attorney is authorized to collect interest does not empower him to receive the principal.- Such author- ity, in the absence of direct proof, may in some cases be in- ferred from the possession of the bond and mortgage; but it is incumbent upon the debtor who pays to the attorney to show that the securities were in his possession on each occasion when payments were made, for their withdrawal would be a revocation of the authority.^ If an attorney employed to col- 1 Adams V. Hackensack Imp. Cora- Eq. 13; Eaton v. Knowles, 61 Mich, mission, supra; First Nat. Bank v. 625, 38 N. W. Rep. 740; Brewster v. Chilson. 45 Neb. 257, 63 N. W. Rep. Carnes. 103 N. Y. 556. 9 N. E. Rep. 31)2; Baitel v. Brown, 104 Wis. 493, 323; Lane v. Duchac, 73 Wis. 646. 41 80 N. W. Rep. 801; Hollinsliead v. N. W. Rep. 962. Contra, Shane v. rStuart, 8 N. D. 35. 77 N. W. Rep. 89. Palmer, 43 Kan. 481, 23 Pac. Rep. 594; 2 Campbell v. O'Connor, 55 Neb. 638, Quinn v. Dresbach, 75 Cal. 159. 7 Am. 76 N. W. Rep. 167. St. 138, 16 Pac. Rep. 762. Compare 3 Williams v. Walker, 2 Sandf. Ch. Wilcox v. Carr, 37 Fed. Rep. 130. 325; Doubleday v. Kress, 50 N. Y. A mortgagor who makes the agent 410, 10 Am. Rep. 502; Smith v. Kidd, of his mortgagee for the collection 68 N. Y. 130, 23 Am. Rep. 157; Crane of the principal and mterest due the V. Gruenewald, 120 N. Y. 274. 17 Am. latter his own agent for the purpo.se St. 643, 24 N. E. Rep. 456; Henn v. of securing a loan to be used in dis- Conisby, 1 Ch. Cas. 93; Gerard v. charging a mortgage must stand a Baker, id. 94; Garrels v. Morton, 26 loss caused by the agent's embezzle- IIL App. 433; Cox v. Cutter, 28 N. J. ment of the money so obtained, tba 588 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 231. lect a note receives part of the sum due in cash and takes se- curity in his own favor for the balance, the payment is good pro tanto; but the creditor may refuse to accept such securit}'' and recover on the note from the maker.' If payment of a loan is made to the attorney who negotiated it while he has the custody of the bond and mortgage, with the consent of the mortgagee, and the mortgagor knows the fact, he is discharged although the attorney was not in fact authorized to receive it.'- If the attorney of a plaintiff comes into possession of money belonging to the defendant and the latter and the attorney agree that it should be paid on the plaintiff's claim, such agree- ment is payment.' The court of errors and appeals of Is"ew Jersey has ruled, by a vote of eleven to one, reversing the vice-chancellor, that the mere possession of a bond and mortgage by one not the obligee will not warrant the payment thereof to such posses- sor. Many years before payment these papers were drawn by the person to whom payment was made, but of that fact it did not appear that the debtor had any knowledge. The papers were in the possession of the mortgagee from the time of their execution until they were delivered to the scrivener for safe keeping in his vault, and were put up by the mortgagee in a bundle, tied with strings and sealed with wax. Interest had been paid to the scrivener under special authority from the mortgagee.* A late case in New York is hard to harmon- ize with the case just stated, and holds a rule more consonant with the authorities and the analogies of the law. The attor- ney to whom payment was made had not made the original loan, but had negotiated the purchase of an outstanding bond and mortgage. Of the latter fact it does not appear that the mortgagor not having directed the ^ Davis v. Severance, 49 Minn. 528, agent to apply it to the mortgage in 53 N. W. Rep. 140. his possession. Boardman v. Bliz- 2 Crane v. Gruenewald, swpra; IMc- iard, 36 Fed. Rep. 26. Connell v. Mackin, 22 App. Div. 587, The apparent authority of an at- 48 N. Y. Supp. 18. torney to receive payment of inter- 3 Millhiser v. Marr, 130 N. C. 510, est does not depend upon his pro- 41 S. E. Rep. 1038. duction to the debtor of the securi- *Lawson v. Nicholson, 52 N. J. Eq. ties, but on his possession of them. 821, SI Atl. Rep. 386, reversing Law- Crane V. Gruenewald. 120 N. Y. 274, son v. Carson, 50 N. J. Eq. 370, 25 17 Am. St 643. 24 N. K Rep. 456. AtL Rep. 191. § 231.] PAYMENT. 589 mortgagor had any knowledge; indeed, he did not know of the assignment of the bond and mortgage until informed of it by the receipt of the attorney for interest paid a short time be- fore payment of the principal. The same attorney had been authorized to receive the interest from the assi"-nor of the O mortgage, and was so authorized by the assignee, the papers being left in the attorney's possession. It is said: The fact that the agent or attorney has made the loan does not give him authorit}' to collect the debt,^ nor, it seems, does the mere pos- session of the security bj'' such attorney give such authority .- Both conditions must concur. Jt is said in the case last cited : " The reason of the rule that one who has made a loan as a<'ent and taken the security is authorized to receive payment wlien he retains possession of the security is founded upon human experience that the payer knows that the agent has been trusted by the payee about the same business, and he is thus given a credit with the payer."' The same rule was applied to the case before the court,' In case of a mortgage or other non-negotiable evidence of debt, probably a payment in good faith to the original holder, in the absence of the paper evidence, would be treated as valid, although there had been an actual assignment of the debt.* Payment, however, may not be made to an assignor after 1 To that effect is Heflin v. Camp- signed it is incumbent upon the bell, 5 Tex. Civ. App. 106, 23 S. W. assignee to show that the debtor was Rep. 595. notified in order to protect himself 2Doubleday v. Kress, 50 N. Y. 410, against any payment made to the 10 Am, Rep. 502. original creditor. Heermans v. Ells- 3 Central Trust Co. v. Folsom, 167 worth, 64 N. Y. 115; Quinn v. Dres- N. Y. 285, 60 N. E. Rep. 599, approv- bach, 75 Cal. 159, 7 Am, St. 138, 16 ing Williams v. Walker, 2Sandf. Ch. Pac. Rep. 762; Bank v. Jones, 65 Cal 325. 437, 4 Pac. Rep. 418. * Trustees of Union College v. Under the recording acts the rec Wheeler. 61 N. Y. 88; Foster v. Beals, ord of the assignment of a mortgage 21 id. 247. See Richardson v. Ains- is constructive notice to the world worth, 20 How. Pr. 521; Robinson v. of the rights of the assignee; a pur- Weeks, 6 id. 161; Muir v. Schenck, chaser of the equity of redemption 3 Hill, 228, 38 Am. Dec. 633; Gamble cannot claim any benefit from pay- V. Cummings, 2 Blackf. 235. ments made to the mortgagee after It is a fair legal presumption that his assignment has been recorded, the creditor who holds a non-negoti- Brewster v. Carnes, 103 N. Y. 556, 9 able chose in action is entitled to re- N. E. Rep. 323; Viele v. Judson, 83 ceive payment thereof. If it is as- N. Y. 32. 590 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 231. notice of such assignment;^ and will not be recognized even if the assignor still has possession of the securities;^ not even under garnishment proceedings and an order of the court, if that defense is not made.' Where the demand has been as. signed, payment as garnishee of the original creditor is not good unless it is compulsory, though there has been no notice of the assignment, for assignment passes the title without notice.* The hona fide payment of a debt due a person who died intestate made to his sole heir and the sole distributee of the funds of the estate, before administration is granted, will, if equity requires it, relieve the debtor from liability to an ad- ministrator subsequently appointed.'^ If the executor of a de- ceased postmaster has made application for the readjustment of the latter's salarj'', requesting that payment be made tohira, a payment to the widow of the deceased is not binding on the executor, though she also applied for readjustment.^ One who pays a note to a person who had sued upon it at law does so at his peril if, at the time of payment, he has notice of the pend- ency of an appeal in a chancery suit brought against him by another person to establish his right to the note.'^ A husband is not authorized to accept payment for the personal labor of his wife rendered outside his family; but if the debtor sold property to the husband and wife jointly and she agreed that the money due her might be applied on the purchase price, her demand is satisfied.^ A compulsory payment under a foreign attachment from a court of competent jurisdiction is good, and will be recognized [389] even in a foreign jurisdiction, though in the latter an earlier attachment had been levied for the same debt.^ A pay- 1 Lyman v. Cartwright, 3 E. D. 5 Vail v. Anderson, 61 Minn. 552, Smith, 117; Meriam v. Bacon, 5 Met. 64 N. W. Rep. 47; Hannah v. Lank- 95; Guthrie v. Bashline, 25 Pa. 80; ford, 43 Ala. 163; Lewis v, Lyons, 13 Field V. Mayor, 6 N. Y. 179; Ten Eick 111. 117. V. Simpson, 1 Sandf. Ch. 244. ^ Holt v. United States, 29 Ct. of 2 Chase v. Brown, 32 Mich. 225. Cls. 56. 3 Roy V. Baucus. 43 Barb. 310. ^ McClintock v. Helberg, 168 111. 4 Richardson v. Ainsworth, 20 How. 384, 48 N. E. Rep. 145, 64 111. App. 190. Pr. 521: Robinson v. Weeks, 6 id. 161; « Strickland v. Hamlin, 87 Me. 81, Muir V. Schenck, 3 Hill, 228, 38 Am. 32 Atl. Rep. 732. Dec. 633. ^ Minor v. Rogers Coal Co. 25 Ma § 231.] PAYMENT. 59i ment as trustee or garnishee is good though the trustee might have disputed the jurisdiction of the court ordering such pa}''- raent.' But it is otherwise if the garnishee, knowing that the cLaim has been assigned, fails to set up that fact, notwithstand- ing the assignee did not intervene, thoui-h havinir knowled"-e of the garnishment proceedings.^ Money paid by the govern- ment to a receiver of the property of a citizen by the court of a state in which he is domiciled discharges the claim of the government's creditor.* Where a debt is owing to two persons jointly it may be paid to either. Thus, where two persons joined in an agreement to sell and convey land, it was held that a payment to one of them was good though he had no title to the land.* If the survivor of two joint payees of a note is the sole devisee of the deceased payee payment may be made to him.'^ But payment made to a third person is not valid unless such person was authorized by all the obligees to receive it.^ Payment of money to a part of the heirs of a person insured for their benefit does 'Dot discharge the insurer's liability; the indebtedness was not joint.^ Payment of a debt due to a deceased person, made before letters granted, to a person who afterward takes them out, is made good by the subsequent letters.^ The secondary liability of the owner of a building for the services of workmen employed by the contractor and for materials supplied does not arise until the steps prescribed by statute to acquire a lien therefor have been taken; hence payment made to other persons than the contractor does not bind him.® The right to the emoluments of an office follows App. 78; Allen v. Watt. 79 111. 284; 33 Me. 67; Moore v. Bevier, 60 Minn. Lieber v. St. Louis Agricultural & 240, 63 N. W. Rep. 281; Heury v. Mt. M. Ass'n, 36 Mo. 382; Holmes v. Pleasant, 70 Mo. 500. Remsen, 4 Jolins. Ch. 460, 20 Johns. ^ Perry v. Perry's Ex'r, 98 Ky. 242, 229, 11 Am. Deo. 269; McDaniel v. 33 S. W. Rep. 755. Huglies, 3 East, 367. « Moore v. Bevier, 60 Minn. 240, 63 iReed v. Parsons, 11 Cush. 255; N. W. Rep. 281. Sauntry v. Dunlap, 13 Wis. 364. ^ Brown v. Iowa Legion of Honor, 2 Greenwich Ins. Co. v. Columbia 107 Iowa, 439, 78 N. W. Rep. 73. Manuf. Co., 73 111. App. 560. » Priest v. Watkins. 2 Hill. 235, 38 ' Boi-cherling v. United States, 35 Am. Dec. 584; In re Faulkner, 7 Hill, Ct. of Cls. 311, 329. 18L '♦Waters v. Travis, 9 Johns. 450; ^ Walker v. Newton, 53 Wis. 336, Flanigan v. Seelye, 53 Minn. 23, 55 10 N. W. Rep. 436. N. W. Rep. 115: Oatman v. Walker, 592 CONVENTIONAL LIQUIDATIONS AND DISCHAEGES. [g 23U the true title to it.^ As between the person entitled to an office and the public, there is no obligation upon the latter until the duties of the office have been assumed. The salary fixed therefor is the reward for express or implied services, and therefore cannot belong to one who has not performed services although he is wrongfully hindered from occupying the posi- tion in which he might have rendered them.^ AVhere disburs- ing officers pay compensation for official services, pursuant to law, they are justified, by the weight of authority, on grounds of public policy in paying to a de facto officer, and such pay- ment is a good defense to an action against the public by the de jure officer to recover the salary, after he has been placed in possession of the office.' The public is liable for the salary due and unpaid a de jure officer before judgment in his favor.* This is the rule whether the compensation arises 1 Conner v. New York. 2 Sandf. 370; Nichols V. MacLean, 101 N. Y. 526, 54 Am. Rep. 730, 5 N. E. Rep. 347; People V. Tieman, 30 Barb. 193; Dolan V. Mayor. 68 N. Y. 274. 23 Am. Rep. 168; McVeany v. Mayor, 80 N. Y. 185, 36 Am. Rep. 600; People v. Miller. 24 Mich. 458, 9 Am. Rep. 131; Dorsey V. Smith, 28 Cal. 21; Hunter V. Chandler, 45 Mo. 452; Glascock v. Lyons, 20 Ind. 1, 83 Am. Dec. 299; Douglass V. State, 31 Ind. 429; War- den V. Bayfield County, 87 Wis. 181, 58 N. W. Rep. 248. 2 Smith V. Mayor. 37 N. Y. 518; Connor v. Mayor, 5 id- 285; Auditors V. Benoit, 20 Mich. 176, 4 Am. Rep. 382. s Dolan v. Mayor, 68 N. Y. 274, 23 Am. Rep. 168; McVeany v. Mayor, 80 N. Y. 185. 36 Am. Rep. 600; Auditors V. Benoit, supra; Coughlin v. Mc- Elroy, 74 Conn. 397, 409, 50 Atl. Rep. 1025; State v. Clark, 52 Mo. 508; W^estberg v. Kansas, 64 Mo. 493; Steubenviile v. Culp, 38 Ohio St. 18, 23, 43 Am. Rep. 417: Commissioners of Saline County v. Anderson, 20 Kan. 298, 27 Am. Rep. 171; State v. Milne, 36 Neb. 301, 19 L. R. A. 689. 54 N. W. Rep. 521, 38 Am. St. 724; Shannon v. Portsmouth, 54 N. H. 183; Shaw v. Prina County, — Ari- zona, — , 18 Pac. Rep. 273. Contra, Dorsey v. Smyth, 28 Cal. 21; Car- roll V. Siebenthaler, 37 Cal. 193: An- drews v. Portland, 79 Me. 484, 10 Atl. Rep. 458; Rasmussen v. Carbon County, 8 Wyo. 277, 45 L. R. A. 295, 56 Pac. Rep. 1098; Philadelphia v. Rink, 2 Atl. Rep. 505 (Pa.). In Tennessee the test applied is, could the person wrongfully in office compel the payment of the salary to him? The case ruled was this: A. was elected to succeed L. ; the latter obtained an injunction restraining A. and the authorities who were about to induct him into office from interfering with his enjoyment of it. The injunction was made perpetual and L. remained in possession and drew the salary. After the injunc- tion was dissolved and A."s title established by the appellate court, he recovered from the public the salary provided for the office and paid L. during his incumbency. The injunction did not require the offi- cers to make payment thereof to L. Memphis V. Woodward, 12Heisk. 499. 4 Dolan V. Mayor, supra; Comstock V. Grand Rapids. 40 Mich. 397; Peo- ple V. Brenan, 30 How. Pr. 417. § 232.] PAYMENT. 593 from fees payable from the public treasury or an annual salary payable at intervals, and whether the officer was appointed or elected.^ If payment is made after notice of an adjudication against the right of the person in office the public is liable to the de jure officer for the amount.^ i!^otice to the government from a corporation that it has changed its treasurer is not effective to prevent payment to the former treasurer in pur- suance of a contract in his name.^ Payment of a private debt due to a member of a firm to the firm of which the creditor is a member will not support a plea of payment in the absence of evidence, express or implied, that the creditor has authorized the receipt of the money by the firm as his agents.* § 233. Pleading payment. By the theory of common-law pleading in the action of aasximpsit^ as well as by the provis- ions of the modern code, payment, either full or partial, being in confession and avoidance, must be pleaded. It cannot be proved under the general issue or general denial. The issue in debt was upon the existence of present indebtedness; and therefore in that action the rule was different. The general issue in asmmpsit^ however, by a later practice, came to be so expanded as to materially infringe this logical rule; and it was held to embrace many defenses which admitted all the essential facts stated in the declaration, and avoided their effects by matter subsequent, including payment.' If the plaintiff al- 1 McVeany v. Mayor, 80 N. Y. 185, Morton. 3 Call, 234. SeeEcIson v. Del- 36 Am. Rep. 600. lage, 8 How. Pr. 273. But see Hirsch 2 Id. V. Caler, 21 Cal. 71; Davaney v. Eg- ' Chapter of Calvary Cathedral v. genhoff, 43 id. 397. United States, 29 Ct. of Cls. 269. In Kentucky it is considered to be * Powell V. Brodhurst, [1901] 2 Ch. settled that a partial payment on or 160. before the day on which the debt is sMcKyring v. Bull, 16 N, Y. 297. due may be pleaded; and full pay- In this case the opinion of Selden, J., ment after the day is pleadable by interestingly and instructively dis- statute; but the courts there have cusses the subject and reviews many not gone so far as to sanction a plea English cases ; the conclusion reached of partial payment after the day, but being that the code requires the de- have decided that it cannot be fendant to plead any new matter pleaded. Gearhart v. Olmstead, 7 constituting either an entire or par- Dana. 445; Mc Waters v. Draper, 5 tial defense, and prohibits him from T. B. Mon. 494; Young v. Park, 6 J. J. giving such matter in evidence upon Marsh. 540: Craigs v. Whips, 1 Dana, the assessment of damages when not 375. Nor is either partial or full pay- set up in the answer. Skipwith v. ment after the day provable under Vol. I — 38 594 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 232. leges non-payment and must establish it to show a cause of action, payment may be proven under a general denial.^ Under [31)0-31)0] a general allegation of payment the defendant may, , in some jurisdictions, give in evidence any facts which in law amount to payment;^ while in others only such facts can be shown as tend to establish a common-law or actual payment.* A plea of payment need not allege tlie amount paid, the date of payment nor the person who received it; * under such plea partial payment may be proven.'^ But if payment in property'' is relied on the answer must be specific as to its value.^ And this is necessary in some cases where partial payment is ad- mitted and the suit is on a contract for the payment of money. The defendant may plead a payment in excess of the admis- sion, but should allege the amount paid and . not merely that the plaintiff has been fully paid as to some or all of the items of the demand, especially where the amount payable is de- pendent upon another amount, also traversable.'^ An allega- tion of the place of payment is surplusage and will not preju- the general issua Hamilton v. Coons, 5 Dana, 317. When the petition states facts con- stituting the plaintiff's claim a gen- eral denial does not present an issue authorizing the defendant to prove payment. St. Louis, etc. R. Co. v. Grove, 39 Kan. 731, 18 Pac. Rep. 958. iKnapp V. Roche, 94 N. Y. 329; Quin V. Lloyd. 41 id. 349; McElwee V. Hutchinson, 10 S. C. 436; State v. Roche, 94 Ind. 373; Robertson v. Rob- ertson, 37 Oreg. 339, 62 Pac. Rep. 377; Marley v. Smith, 4 Kan. 155; State V. Peterson, 143 Mo. 536, 39 S. W. Rep. 453. 2 Edmunds v. Black, 13 Wasli. 490, 43 Pac. Rep. 330; Bush v. Sprout, 43 Ark. 416; Morehouse v. Northrop, 33 Conn. 380, 89 Am. Dec. 311; Hart v. Crawford, 41 Ind. 197; Farmers' & Citizens' Bank v. Sherman, 33 N. Y. 69; Whittington v. Roberts, 4 T. B. Mon. 173. See Day v. Clarke, 1 A. K. Marsh. 521. 3 Lovegrove v. Christman, 164 Pa. 390, 30 Atl. Rep. 385. This doctrine is said to have no application to suits in justices' courts. Rider v. Gulp, 68 Mo. App. 527. An equitable defense cannot be proven without leave and upon no- tice. Steiner v. Erie Dime Savings & L. Co., 98 Pa, 491; Hawk v. Geddis, 16 S. & R. 28. In Massachusetts the discharge of a note payable in money by the de- livery and acceptance of property must be the result of a subsequent and independent agreement resting upon substantial facts which the answer must set forth. Ulsch v. Mul- ler, 143 Mass. 379. 9 N. E. Rep. 736. * Johnson v. Breedlove, 104 Ind. .521, 6 N. E. Rep. 906; Stacy v. Coleman, 10 Ky. L. Rep. 78 (Ky. Super. Ct.). SKeyes v. Fuller, 9 III App. .528; State V. Roche, 94 Ind. 372. 6 Choate v. Hoogstraat, 46 C. C. A. 174. 105 Fed. Rep. 713. ^Shipman v. State, 43 Wis. 381. § 233.] PAYMENT. 595 dice.' It has been held in Kentucky not necessary for a jury when sworn on an inquiry of damages, or, indeed, on the trial of an issue, to notice credits indorsed on a note, unless under the issue of payment; but under the practice in that state whenever a note on which an action is brought is filed the courts of original jurisdiction notice it so far as to cause the clerk to note on the record all credits indorse:! thereon as credits on ihe judgment, and this after a writ of inquiry or verdict [.'J07J In United States v. Eckford's 17 Fed. Rep. 494; Monson v. Meyer, Ex'r, 1 How. 250, McLean, J., said: 190 111. 105, 60 N. E. Rep. 63, 93 IIL "The treasury officers are the agents App. 127. of the law. It regulates their '■i Dennis V. McLaurin. 31 Miss. 606; duties, as it does the duties and Pearl v. Clark, 3 Pa. 350. rights of the collector and his .sure- 3 Reed v. Board man, 20 Pick. 441. ties. The officers of the treasury See Lansdale v. Graves. Sneed, 215. cannot, by any exercise of their dis- ^ Mathews v. Switzler, 46 Mo. 301; cretion, enlarge or restrict the obli- Gaston v. Barney, 11 Ohio St. 506; gation of tlie collector's bond. Much Field V. Holland, 6 Cranch, 8; Allen less can they, by the mere fact of V. Jones, 8 Minn. 202. keeping an account current, in 602 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 235... will an intentioQ of the principal debtor to apply a payment m favor of a surety be presumed, and thus exclude the right of the creditor to make the application.^ The right of a debtor to apply money regardless of his surety exists only where the payment is made by his own funds free from any equity in favor of the surety to have the application made in payment of the debt for which he is liable. Where the specific money paid to the creditor and applied on a debt of the principal, for which the surety is not held, is the money for the collection and payment of which the surety is bound, the latter is entitled to have the money applied to the payment of the debt for which he is surety unless the creditor shows a superior equity to sustain the application made. The surety has the burden of showing that the application made is inequitable to him.'-' The absolute right of directing the application of payments which a debtor has does not pass to his personal representa- [402] tives; nor does it pertain to any one making payments in a fiduciary capacity.^ If the terms of an express trust do which debits and credits are entered as they occur, and without any ex- press appropriation of payments, af- fect the right of sureties. The col- lector is a mere agent or trustee of the government. He holds the money he receives in trust, and is bound to pay it over to the govern- ment as the law requires. And in the faithful performance of this trust the parties have a direct inter- est, and their rights cannot be disre- garded. It is true, as argued, if the collector shall misapply the public funds, his sureties are responsible. But that is not the question under consideration. The collector does not misapply the funds in his hands, but pays them over to the govern- ment without any special direction as to their application. Can the treas- ury officers say, under such circum- stances, that the funds currently re- ceived and paid over shall be appro- priated in discharge of a defalcation which occurred long before the sureties were bound for tlie collector. and by such appropriation hold the sureties bound for the amount? The statement of the case is the best refutation of the argument. It is so unjust to the sureties, and so directly in conflict with the law and its pol- icy, that it requires but little consid- eration." Jones v. United States, 7 How. 681; Boody v. United States, 1 Woodb. & M. 150; Postmaster-Gen- eral v. Nor veil, Gilpin, 106; United States V. January, 7 Cranch, 572; Seymour V. Van Slyck, 8 Wend. 403; Stone V. Seymour. 15 id. 19: United States V. Linn, 2 McLean, 501. 1 Smith's Merc. L. 672; Plomer v. Long, 1 Stark. 153; Hargroves v. Cooke, 15 Ga. 321; Clark v. Burdett, 2 Hall, 197; James v. Malone, 1 Bailey. 334. See Lansdale v. Graves, Sneed, 215: Gard v. Stevens, 12 Mich. 292, 86 Am. Dec. 52. 2 Merchants' Ins. Co. v. Herber, 08 Minn. 420. 71 N. W. Rep. 624. 3 Putnam V. Russell, 17 Vt. 54, 42 Am. Dec. 478; Barrett v. Lewis, 2: Pick. 123; Cole v. Trull, 9 Pick. 325. § 230.J APPLICATION OF PAYMENTS. G03 not determine the order of payments, their order, it is believed, must be fixed by law. A series of cases in Pennsylvania have dealt with the right of members of building and loan associations to direct the ap- plication of payments made to the latter. Originally it was determined that all payments were to l)e credited to the debt created by the loan made to the member.^ But tliis doctrine was qualified, and was not to be regarded as laying down the rule that payment of dues on the stock, ipno facto ^ works an extinguishment of so much of the mortgage. "The debtor may so apply it, but the payment itself is not an application of the money to the reduction of the mortgage."^ The right of the debtor to direct the application of the payments on the stock to the extinguishment of the debt is now recognized if the rights of creditors, based on the assignment. of the stock, are not alBfected,' or legal process has not been resorted to op insolvency has not intervened.* An application made at the inception of the contract for the loan cannot be subsequently interfered with.^ Where a borrowing member of such an as- sociation gives it his obligation for the payment of the princi- pal debt in equal monthly instalments until the whole is paid, according to the statute and the rules of the association, such instalments cannot be appropriated to a direct payment on account of the loan with the effect of leaving dues on the stock unpaid." g 236. Same subject. An agreement between debtor and creditor for a particular application of moneys expected from But in Marshall v. Nagel, 1 Bailey, 2 Building Ass'n v. Sutton, 35 Piu 308, it was held that if a debtor pays 463. 78 Am. Dec. 349. a sum of money on account of dis- ^Wadlinger v. Washington Ger- tinct debts due to different creditors man B. & L. Ass'n, 153 Pa. 622, 26 to a common agent of all the credit- Atl. R'^p. 647. ors, and gives no directions as to ''strohen v. Franklin Savings & the order in which the money is Loan Ass'n, 115 Pa. 273, 8 Ati. Rep. to be applied to the debts, the agent 843; York Trust, Real Estate & De- may make the application according posit Co. v. Gallatin, 186 Pa. 150, 40 to his discretion and the debtor will Atl. Rep. 317. be bound by it. Carpenter v. Goin, » York, etc. Co. v. Gallatin, suipra. 19 N. H. 479. 6 preemansburg Building & L. iKupfert V. Guttenberg Building Ass'n v. Watts, 109 Pa. 221, 48 AtL Ass'n, 30 Pa. 465; Hughes's Appeal, Rep. 1075. id. 471. 60i CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 236. a specific source will preclude any diversion by either, without the consent of the other, when the money is received.' Thus, where money is realized by a creditor from a collateral se- curity for a debt, such money is deemed appropriated to that debt.- The plaintiff, an equitable mortgagee for 600Z., lent the title deeds of the property to the defendant E., the mort- gagor, to enable him to negotiate a sale of it, the deeds to be returned. E. paid plaintiff oOOl. received by him as part of the purchase-money ; afterwards E. became bankrupt. Before such payment was made E. was indebted to the plaintiff on a trade account for a larger amount. E. made no application of the 300Z. he paid, and the plaintiff contended that he might apply it to the trade account, thus leaving the mortgage un- discharged. This contention was disapproved of, it being infer- able from the nature of the transaction that E. made the pay- ment only in respect to the plaintiff's right to the mortgage, and that it must, from the circumstances, be understood that the payer meant the money to be applied toward the satisfac- tion of the mortgage.^ If money is advanced by a factor to 1 Thompson v. Hudson, L. R. 6 Ch. .320; Lansdale v. Mitchell, 14B. Mon, 348; Hughes v. McDougle, 17 Ind. 399; King of Spain v. Oliver, Pet. C. C. 276; Sproule v. Samuel, 5 111. 135; Stackpole v. Keay, 45 Me. 297; Gwathney v. McLane, 3 McLean, 371: White v. Toles. 7 Ala. 569; Smith V. Wood, 1 N. J. Eq. 74; Hahn V. Geiger, 96 III. App. 104; Hansen v. Rounsavell, 74 111. 238. See § 235, last paragraph. In Ross V. Crane, 74 Iowa, 375, 37 N. W. Rep. 959, the purchaser of a note and mortgage agreed with their maker in writing to employ him and apply his wages in payment of the mortgage debt. After money enough had been earned to pay the mortgage the holder applied the amount to an- other account and assigned the se- curity and the note to a third person. The agreement was held binding and the debt to have been satisfied be- fore the assignment was mad& 2 Howard v. Schwartz, 22 Tex. Civ. App. 400. 55 S. W. Rep. 348; Cald- well V. Hall. 49 Ark. 508, 1 S. W. Rep. 62; Strickland v. Hardie, 82 Ala. 412, 3 So. Rep. 40; Greer v. Turner, 47 Ark. 17, 14 S. W, Rep. 383; Pritchard V. Comer, 71 Ga. 18; Hatcher v. Comer, 73 id. 418; Taylor v. Cock- rell, 80 Ala, 236; Marziou v. Pioche, 8 Cal. 522; Buckley v. Garrett, 47 Pa. 280; San ford v. Clark, 29 Conn. 457; Masten v. Cummings, 24 Wis. 623; Cross V. Johnson, 30 Ark. 398; Mo Cune V. Belt. 45 Mo. 174; Paine v. Bonney, 6 Abb. Pr. 99; Donally v. Wil- son, 5 Leigh, 329; Windsor v. Ken- nedy, 52 Miss. 164; Hicks v. Bing- ham, 11 Mass. 300; Hall v, Marston, 17 Mass. 575. See Green v. Ford, 79 Ga, 130; Baum v. Frantham, 24 S. C 104. 3 Young V. English, 7 Beav. 10; Buster v. Holland, 27 W. Va. 510, 53a See Stoveld v. Eade, 4 Bing. 154; Waters v. Tompkins, 2 Cr., M. & R 273; Pearl v. Deacon, 24 Beav. 18a § 236.] APrLICATION OF PAYMENTS. C05 purchase property, upon the security of its being shipped to him, it will be implied that the advances were made upon tho condition that they should be paid out of the proceeds of the property; after the factor has obtained possession of it the debtor cannot direct the application of the amount realized from it to another debt.' But the agreement to control the debtor's choice must be such as to give the creditor a ri"-ht in the nature of a lien which can be specitically enforced.^ Where the debtor has directed the application of his pay- ment to a particular debt, he has a right to treat it as actually so applied. The debt will be deemed extinguished to the ex- tent of such payment.' The creditor has no option to disre- gard the direction,^ and no different application by him will avail unless afterwards ratified or acquiesced in by the [403] debtor;^ nor will the direction of the latter be overruled or changed in equity.^ After a debtor has made application of a 1 Frost V. Weathersbee, 23 S. C. 354. 2 Whitney v, Traynor, 74 Wis. 289, 43 N. W. Rep. 267; Stewart v. Hop- kins, 30 Ohio St. 502, See Mellendy V. Austin, 69 111. 15; Clarke v. Scott, 45 Cal. 86. 3Libby v. Hopkins, 104 U. S. 303; Washington N. Gas Co. v. Johnson, 123 Pa. 576, 16 Atl. Rep. 799; Lauteu V. Rowan, 59 N. H. 215; Irwin v. Paulett, 1 Kan. 418. 4 Runyon v. Latham, 5 Ired. 551; Wetherell v. Joy, 40 Me. 325; Scott V. Fislier, 4 T. B. Mon. 387; Blanton V. Rice, 5 id. 253; Rugeley v. Smalley, 12 Tex. 238; Farmers', etc. Bank v. Franklin, 1 La. Ann. 393; Stewart v. Hopkins, 30 Ohio St 502; Bank of Muskingum V. Carpenter, 7 Ohio, 21, 28 Am. Dec. 616. 5 Sherwood v. Haight, 26 Conn. 432; Jackson v. Bailey, 12 111. 159; Fore- lander V. Hicks, 6 Ind. 448; Semmes V, Boy kin, 27 Ga. 47; Hall v. Marston, 17 Mass. 575; Solomon v. Dreschler, 4 Minn. 278; Tayloe v. Sandiford, 7 Wheat. 13: Bonaffe v. Woodberry, 12 Pick. 463; Hussey v. Manufact- urers', etc. Bank, 10 Pick. 415; Blood- worth V. Jacobs, 2 La. Ann. 24; Adams V. Bank. 3 id. 351; Robson v. McKoin, 18 id. 544; Treadwell v. Moore, 34 Me. 112; Black v. Shooler, 1 McCord, 293; Martin v. Draher, 5 Watts 544; Mitchell v. Dall, 2 Har. & G. 159; McDonald v. Pickett. 2 Bailey, 617: Reed v. Boardinan, 20 Pick. 441; McKee v. Stroup, 1 Rice, 291; Moorehead v. West Branch Bank, 3 W. & S. 550; Jones v. Per- kins, 29 Miss. 139; Smith v. Wood, 1 N. J. Eq. 74; Cardinell v. ODowd. 43 Cal. 586. ^Selfridge V.Northampton Bank, 8 W. & S. 320. It has been held that the debtor cannot impute a payment to princi- pal when interest is due thereon without first paying the interest. Johnson v. Robbins, 20 La. Ann. 569. This may be doubted if the creditor receives the money. Unless the in- terest was due as damages, it might, notwithstanding, be recovered. See Williams v. Houghtaling, 3 Cow. 86; Pindall v. Bank of Marietta, 10 Leigh, 484. GOG CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 236. payment he cannot himself revoke it, and apply it otherwise, without the creditor's consent.^ lie will be held to the applica- tion made, though it was made for interest on a debt not bear- ing interest; ^ to a debt on which the statute of frauds does not allow an action to be brought; ' or to an illegal claim/ But where usurious interest has been paid, it is deemed an extortion and the payment may be recovered or applied to the principal debt.^ A different rule prevails in Ohio,® and in the District of [404] Columbia." By mutual consent of the debtor and creditor, where no other parties are interested, the application of a pay- ment may be changed; and in that case the indebtedness first discharged will be revived by implication, without any express promise.^ If there are other parties interested as a surety,'' 1 Long V. Miller, 93 N. C. 233; York Trust, Real Estate & Deposit Co. v. Gallatin, 186 Pa. 150, 40 Atl. Rep. 317, 2 Beard v. Brooi^lyn, 31 Barb. 142. a Haynes v. Nice, 100 Mas& 327, 1 Am. Rep. 109. ^Tomlinson Carriage Co. v. Kin- sella, 31 Conn. 268; Hubbell v. Flint. 15 Gray, 550: Dorsey v. Way man, 6 Gill, 59; Richardson v. Woodbury, 13 Cush. 279; Feldman v. Gamble, 26 N. J. Eq. 494; Caldwell v. Went- worth, 14 N. H. 431. See Plummer V. Erskine, 58 Me. 59; Mueller v. Wie- bracht. 47 Mo. 468. A debtor may direct the applica- tion of a payment upon an illegal item of tiie account against iiim, neither party believing it to be illegal, and the transaction involving it not being malum, in se, but vialum prohibitum. Johnston v. Dahlgren, 48 App. Div. 537, 62 N. Y. Supp. 1115, 166 N. Y. 354, 59 N. E. Rep. 987. 5 Wood V. Lake. 13 Wis. 84, and cases cited; Gill v. Rice, id. 549; Lee V. Peckham. 17 id. 383; Fay v. Love- joy, 20 id. 403; State Bank v. Ens- minger, 7 Blackf. 105: Smead v. Green, 5 Ind. 308; Browning v. Mor- ris, 2 Cowp. 790; Smith v. Bromley, 2 Doug. 695, note; Williams v. Hed- ley, 8 East, 378; Wheaton v. Hib- bard, 20 Johns. 290, 11 Am. Dec. 284; Burrows v. Cook, 17 Iowa, 436; Stanley v. Westrop, 16 Tex. 200; Parchman v. McKinney, 12 Sm. & M. 631. See Second Nat. Bank v. Fitzpatrick, 23 Ky. L. Rep. 610, 63 S. W. Rep. 459; Citizens" Nat. Bank V. Forman's Assignee, 33 Ky. L. Rep. 613, 63 S. W. Rep. 454. In an action to recover payments made on account of usury the appli- cation to the principal debt will be made as of the date of the writ, if the party who made them so re- quests. Peterborough Savings Bank V. Hodgdon, 62 N. H. 300. ••See Conant v. Seneca County Bank, 1 Ohio St. 298; Shelton v. Gill, 11 Ohio, 417; Graham v. Cooper, 17 id. 605; Williamson v. Cole, 26 Ohio St. 207. ■^ Kendall v. Vanderlip, 2 Mackey, 105. 8 Rundlett v. Small, 25 Me. 29. ^Brockschmidt v. Hagebusch, 73 111. 562; Ruble v. Norman, 7 Bush, 533; Ware v. Otis, 8 Me. 387. § 237.] APPLICATION OF PAYMENTS. GL'7 co-debtor,' or a subsequent incumbrancer,^ their consent is essential; ' but a debtor's general creditor cannot be heard to complain.* §237. Same subject; evidence. Parol evidence is admis- sible to show that at the time a note was given for money lent an agreement was made to pay a certain sum as extra inter- est and that all the payments made were for such interest and not upon the note.*^ A copy of a letter addressed by a cred- itor to his debtor, contained in the letter book of the former, advising the debtor that he had drawn on him for the amount of a particular purchase, is not evidence for such creditor in an action against a guarantor to establish that a payment made shortly afterwards by the debtor, who was indebted on several accounts, was made in discharge of such purchase, though the draft itself or evidence of its contents, if lost, accompanied by a letter from the debtor to the creditor regretting his inabil- ity to meet the draft, and promising speed}' payment of that demand, followed by a payment a few days after the date of such letter, is evidence to show that it was a payment made in discharge of that particular claim." The letter of a debtor, or of his acknowledged general agent, to his creditor, direct- ing him to which of two debts a payment he is about to [405] make shall be applied, is the best evidence to show on what account such payment was received by the creditor.'' Such an act of the debtor in an action against his guarantor for one of the debts, where several were due, is not considered as merely the declaration of a third person, but it is the act of the party who had the legal right to make the application.^ ' Thayer v. Denton, 4 Mich. 192 ; appropriation was made after ne Miller v, Montgomery, 31 111. 350; had applied for the benefit of the Brown v. Brabham, 3 Ohio, 275. insolvent laws, and was therefore 2 Chancellor v. Sohott, 23 Pa. 68; invalid. Richmond Iron Works v. Tooke V. Bonds. 39 Tex. 419. Woodruff, 8 Gray, 447. See Cremer v. 3 In a suit to foreclose a mortgage Higginson, 1 Mason, 323; Bank of which the defendant alleged had North America v. Meredith. 2 Wash, been paid, the plaintiff proved an C. C. 47. agreement to change the appropria- •• Whitney v. Traynor, 74 Wis. 289, tion of the payments, previously 42 N. W. Rep. 2G7. stipulated to be applied to the mort- ^Rolian v. Hanson, 11 Cush. 44. page debt, to another debt. Held, 6 Mitchell v. Dall, 2 H. & G. 159. that the defendant might then prove ' Id. 'that the agreement to chanc-e the ^Id. 008 CONVENTIONAL LIQUIDATIONS AND DISCHAKGES. [§ 238, § 238. By creditor. "Where the debtor omits to make any appropriation at the time of payment the right to make the application devolves on the creditor. But its exercise is sub- ject to limitations. In one respect, however, it is less restricted than that of the debtor. The creditor is not required to decide at once on receiving the money. Within what time he must exercise the choice has been much discussed. The weight of opinion seems to be that he must make the application within a reasonable time, in view of the circumstances of the particu- lar case, at the latest, before any controversy arises or any material change occurs in the relations of the parties.^ The bringing of a suit may determine the creditor's election, as 1 Applegate v. Koons, 74 Ind. 347; Robinson v, Doolittle, 13 Vt. 246; Mills V. Fowkes, 5 Bing. N. C. 455; Philpott V. Jones, 2 Ad. & El. 41; Smith's Merc. L. 650; Peters v. An- derson, 5 Taunt, 596; Norris v. Beaty, 6 W. Va. 477; Bridenbecker v. Low- ell, 33 Barb. 9; Haynes v. W'aite, 14 Cal. 446; Allen v. Culver, 3 Denio, 284; Parker v. Green, 8 Met. 144: Whetmore v. Murdock, 3 Woodb. & M. 390; United States v. Kirk pat- rick, 9 Wheat. 720; Backhouse v. Pat- ton, 5 Pet. 160; Hill V. Southerland, 1 Wash. (Va.) 128; Van Rensselaer v. Roberts, 5 Denio, 470; McCartney v. Buck, 8 Houst 34, 12 Atl. Rep. 717. In Marsh v. Oneida Central Bank, 34 Barb. 298, it was held that a bank which holds a note against one of its depositors is not bound to apply his deposits immediately when it be- comes due. If not made then, and a judgment is recovered on the note, the right to make such application is not thereby waived or lost, and the bank may afterwards avail itself of the right against an assignee of the deposit. See Long Island Bank v. Townsend, Hill & Denio, 204; Mayor V. Patten, 4 Cranch, 317. In some cases it is held that an ap- plication made after an action 'has been begun is too late. Taylor v. Coleman, 20 Tex. 773; Sanford v. Van Arsdall, 53 Hun, 70, 6 N. Y. Supp. 494; Huff stater v. Hayes, 64 Barb. 573. But it has been sustained when made after suit brought where it harmonized with the intention of the parties. Bank of California v. Webb, 48 N. Y. Super. Ct. 175. It is said in the same case (94 N. Y. 467) that the application may be made any time before the court makes it unless the debtor previously requests the creditor to exercise his right of election. In South Carolina the creditor has until verdict or judgment to apply the payments. Heilbron v. Bissell, Bailey's Eq. *430; Price v. Hamilton, 12 S. C. 32; Thatcher v. Massey, 20id. 543; Baum v. Trantham, 43 S. C. 104, 19 So. Rep. 973, 46 Am. St. 697. These cases are rested upon the prin- ciple that until the debtor pays the money it is his: and he has the right to control its disposition. After the creditor receives it he may exercise such right, and it continues until the court has exerted its power over the payment. Whenever the application is made effect must be given to it as of the time the money was received. Poul- son V. Collier, 18 Mo. App. 583; Bray v. Crain, 59 Tex. 649. § 23S.] APrLIOATION OF PAYMENTS. 609 where he holds two notes and an unappropriated payment large enough to pay one of them is made, his suit on one of the notes is an election to apply the money to the payment of the other.i But if he brings separate suits on them he will not bo allowed on the trial of one to elect to apply to the [iOG] satisfaction of the other a payment previously made, and not before specially applied by either party .^ If there is no pro- vision given in securities, the payment of which is enforced by law, as to the application of their proceeds the creditor has no right to make an appropriation thereof.^ A stipulation in a note that if the maker became otherwise indebted to the payee before its payment the latter might apply the first payment to such claims as he chose does not include property taken by virtue of a mortgage securing such note, especially as against sureties on the latter."* A creditor cannot appropriate pay- ments after third persons have acquired rights against the debtor, so as to affect their rights if an application can bo made which will protect them.-^ In Arkansas the rule is that where there is a single running account in which third persons are not interested, and a general payment is made without ap- plication by the debtor, the creditor has no election to make the application; the law applies the payment to the several items of the account in the order of their priority.^ A banker is not required to apply a balance due by him on an account current to his depositor upon the liability of such customer on a note or bill. And in a suit by a banker against the acceptor of a bill the fact that the drawer had an account with the banker, and that after protest of the bill there were balances in favor of the drawer, would not be evidence in favor ' AUeu V. Kimball, 23 Pick. 473; that payments made by a third per- Starrett v. Barber, 20 Me. 457; Bobe son, who is not the debtor's agent. V. Stickney, 36 Ala. 492; Dent v. State are not voluntary, though they were Bank, 12 Ala. 275. made pursuant to arrangement or -Stone V. Talbot, 4 Wis. 442. understanding between the parties. 3 Orleans County Nat. Bank v. < Barrett v. Bass, 105 Ga. 421, 31 S. Moore, 112 N. Y. 543, 8 Am. St. 775, R Rep. 435. 20 N. E. Rep. 357, 3 L. R. A. 302; » Willis v.McIntyre, 70Tex. 34, 7 S. Snider v. Stone, 78 111. App, 17; Mat- W. Rep 594, 8 Am. St. 574 ter of Georgi, 21 N. Y. Misc. 419, 47 ^ Hughes v. Johnson, 38 Ark. 295; N. Y. Supp. 1061. Dunnington v. Kirk, 57 Ark. 595, 23 It is said in Sanford v. Van Ars- S. W. Rep. 430. dall, 53 Hun, 70, 77, 6 N. Y. Supp. 494, Vol. 1 — 39 610 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 238. of the acceptor to show a pajnnent or satisfaction by the drawer.^ If a debtor owes to his creditor several debts it is generally said that the creditor may apply a payment which the debtor does not appropriate to either at his pleasure.- This is not true in an absolute and unqualified sense. He is not at liberty to apply a payment to a disputed,' contingent,* or un- liquidated demand in preference to one admitted, absolute or certain, nor to one not due in lieu of another past due.^ Money collected on an execution should be credited on the writ; the plaintiff cannot take a part of it and apply it to an unsecured debt, though it may be that it could have been applied to an execution of older date than that which was levied.^ This 1 Citizens' Bank v, Carson, 32 Mo. 191; Long Island Bank v. Townsend, Hill & Denio, 204 But see State Bank v. Arnastrong, 4 Dev. 519, and State Bank v. Locke, id. 529. 2 Giles V. Vandiver, 91 Ga. 192, 17 S. E. Rep. 115; Skinner v. Walker, 98 Ky. 729, 34 S. W. Rep. 233; Coney v. Laird, 153 Mo. 408, 55 S. W. Rep. 96; On- V. Nagle. 87 Hun, 12, 33 N. Y. Supp. 879; Burt v. Butterworth, 19 R. L 127, 32 Atl. Rep. 167; Perry v. Bozeman, 67 Ga. 643; Greer v. Bur- nam, 71 id. 31; Trotter v. Grant, 2 Wend. 413; Robbins v. Lincoln, 12 Wis. 1; Peters v. Anderson, 5 Taunt. 596; Arnold v. Johnson, 2 111. 196 Brady's Adm'r v. Hill, 1 Mo. 225 Brewer v. Knapp, 1 Pick. 332 Holmes v. Pratt, 34 Ga. 558; Wash- ington Bank v. Prescott, 20 Pick. 339; Goddard v. Cox, 2 Str. 1194; Allen V. Kimball, 23 Pick. 473; Brooke v. Enderby, 2 B. & B. 70; Bodenham v. Purchas, 2 B. & Aid. 39; Bosaiiquet v. Wray. 6 Taunt. 597. 3 Stone V. Talbot. 4 Wis. 442. See Ayer v. Hawkins, 19 Vt. 26; Lee v. Early, 44 Md. 80; McLendon v. Frost, 57 Ga. 448. * Baker v. Stackpoole, 9 Cow. 420, 18 Am. Dec. 508; Cremer v. Higgin- fion, 1 Mason, 338; Whetmore v. Mur- dock, 3 Woodb. & M. 390. See Kid- der V. Norris, 18 N. H. 532; Wright V. Laing, 3 B. & C. 165. 6 Richardson v. Coddiugton, 49 Mich. 1. 12 N. W. Rep. 886; Lam- prell V. Bellericay Union, 3 Ex. 283; Baker v. Stackpoole, 9 Cow. 420, 18 Am. Dec. 508; Early v. Flannery, 47 Vt. 253; Niagara Bank v. Rosevelt, 9 Cow. 409; Bobe v. Stickney. 36 Ala. 482; Burks v. Albert. 4 J. J. Marsh. 97. 20 Am. Dec. 209; Heintz v. Cahn, 29 111. 308; Bacon v. Brown, 1 Bibb, 334, 4 Am. Dec. 640; Parks v. In- gram, 22 N. H. 283, 55 Am. Dec. 153; Cloney v. Richardson, 34 Mo. 370: Smith V. Applegate, 1 Daly, 390. See Dedham Bank v. Chickering, 4 Pick. 314; Gass v. Stinson, 3 Sumn. 99; Hunter v. Osterhoudt, 11 Barb. 33; Effinger v. Henderson, 33 Miss. 449. In Arnold v. Johnson, 2 111. 196, it is held the creditor may apply the payment to any debt he sees proper, unless there are circumstances which would render the exercise of such discretion on the part of the creditor unreasonable, and enable him to work injustice to his debtor. See Bridenbecker v. Lowell, 33 Barb. 9; Lindsey v. Stevens, 5 Dana, 107. 6 Smith V. Smith, 105 Ga. 717,31 S. E. Rep. 754. § 238.] Al'l'LICATION OF PAYMENTS. Gil principle does not seem to be recognized in ]\rissouri. In a case where a deed of trust secured two nott^s, with different sureties, the proceeds of the foreclosure sale being sufficient to pay either note, but not both, the creditor was sustained in ap- plying- the money so as to retain the benefit of both securities, without regard to the dates when the notes matured.^ The test as to whether the application made is valid or not, as ap- plied to payments for goods sold, is whether the debtor couhl recover the money paid, which, as a rule, can only be done where payment has been made in consequence of fraud, or under duress, or under a mistake of fact. This principle does not extend to a case where liquors are sold for the purpose of being resold in violation of law. Hence the application of money paid to the items of an account covering such liquors is v^alid, though no action would lie to recover their price.- Where part of a debt is barred by the statute and a [407] pirt is collectible, and the debtor makes a payment, requiring and receiving a receipt in full of all demands, the law will imply an application of the payment to the collectible portion.' But where a debtor pays money, without any specific direc- tions, on account of several debts, all of which are barred, the creditor may apply it to either at his option; he may apply it to the largest and thus revive it as to a balance. But he is not at liberty to apply a part of the payment to each of the several demands and thereby revive them all.'' And it has been held that where a payment made is less than either of several distinct demands, the creditor having a right to apply it is not allowed to divide it and apply a part to each de- mand,^ but in a later case, the indebtedness in question consist- ing of two notes and an account of different dates, the creditor was sustained in applying a general payment in such manner as to keep all the debts alive.'* This is in accordance with the prevailing doctrine, none of the debts being barred by statute.'' ' Sturgeon Savings Bank v. Riggs, 5 Wheeler v. House, 27 Vt 735. 72 Mo. App. 239. « Rowell v. Estate of Lewis. 72 Vt ^IMiiyberry v. Hunt. 34 N. B. 628. 16:3, 47 At). Rep. 783; Beck v. Haas, 3 Berrian v. Mayor, 4 Robert. 538. Ill Mo. 264, 20 S. W. Rep. 19. 33 Am. See Hill v. Robbins. 22 Mich. 475. St. 516. ■* Ayer v. Hawkins, 19 Vt. 26. See "^ Where money is paid by a debtor contra, Jackson v. Burke, 1 Dill, to a creditor wlio has several de- 311. See Armistead v. Brooke, 18 mands against him, and no tUrec- Ark. 521. tions are given how he shall apply 612 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 238. The rule of Clayton's Case,' which is that, where an account current is kept between parties, as a banking account, there is no room for any other appropriation than that which arises from the order in which the receipts and payments take place and are carried into the account, is not an invariable rule; the circumstances of a case may afford ground for inferring that the transactions of the parties were not intended to come under that rule, as where there is no account current, and no setting off of one item against another, but credit is given for the entire sum paid at the end of all the items. In such a case the creditor may make the application up to the last mo- ment, by action or, otherwise, by intention expressed, implied or presumed.^ it, the creditor may apply it as he pleases; therefore, when he holds two bonds of his debtor, both due, and payable with interest, and money is so paid to him, he may apply it to the part extinguishment of both bonds; and he is not bound to apply it on one bond until it be satisfied, and the residue to the other. Smith v. Screven, 1 McCord, 368. See James v. Malone, 1 Bailey, 334. In Washington Bank v. Prescott, 20 Pick. 339, four notes were made by the same person, and indorsed by the defendant; they were in the hands of the same holder; and the defendant, before any of them be- came due, gave the holder an order for the payment of the notes with- out expressing any priority out of property conveyed by the maker to assignees by an indenture to which the indorser was a party, for the payment of the notes in full or pro- portionably, which property proved to be insufficient. The assignees, in pursuance of the order, made a pay- ment after all the notes had fallen due, and the holder applied the money to all the notes pro rata, in- stead of applying it wholly to those which had first fallen due, and it was held that he had a right to make such application. In an ac- tion on two of the notes, it was held that the other two, with the indorse- ments thereon, were admissible in evidence in order to explain the ap propriation of the money paid on the order. And it vvas also held that the jury in assessing the dam- ages were not to regard any div- idend which might in the future be paid on such order. See Blackstone Bank v. Hill, 10 Pick. 129; Black- man V. Leonard, 14 La. Ann. 59; White V. Trumbull, 15 N. J. L. 314, 29 Am. Dec. 687. In order that the partial pay- ment of a debt part of which is barred shall take it all out of the statute of limitations "there must be reasonable evidence that the debtor recognized and admitted the whole of the indebtedness to be due; but if he did so admit, and made a general payment on account of it, there is no reason for applying the admission and payment to either of 1 1 Merivale, 585. 2 Cory V. Owners of Turkish Steam- ship Mecca, [1897] App. Cas. 286. § 2;J9.] APPLICATION OF PAYMENTS. 613 § 2V.). Same subject. It has been held that a cred- [408'' itor may apply money paid by the debtor without directions to a debt on which the statute of frauds does not allow an ac- tion to be maintained/ or on a bill void for want of a stamp,* or to one of two bills, or one of two debts barred by the statute of limitations.'' The general rule, however, is that the creditor cannot make an application of moneys to any demand for which he could not sustain an action.^ lie is not permitted to apply them to an illegal demand, although a debtor may do so.' A more precise and accurate statement of the rule in re- spect to a creditor's right to apply a payment not appropriated by the debtor is that the creditor may apply it on either of several demands at his pleasure where they are all equally valid, payable absolutely, liquidated, due, antl not in fact con- tested.^ A creditor will not be allowed to make such an ap- the notes rather than to the others, hut it would carry out the inten- tions of the parties to apply the acknowledgment and payment to each of the notes, that is. to the whole indebtedness." Taylor v. Fos- ter, 132 Mass. 30. In Mills V. Fowkes, 5 Bing. N. C. 455, it is ruled that a creditor may apply a general payment to a barred debt, though he holds claims which are not barred. But see Reed v. Hurd, 7 Wend. 408; Heath v, Gren- ell, 61 Barb. 190; Harrison v. Day- nes, 23 La. Ann. 216. 1 Haynes v. Nice, 100 Mass. 327; Philpott V. Jones, 4 Nev. & Man. 14, 3 A. & R 41; Rohan v. Hanson. 11 Cush. 44; Ramsay v. Warner, 97 Mass. 13. 2 Biggs V. Dwight, 1 M & Ry. 308. 3 Mills V. Fowkes, 7 Scott, 444, 5 Bing. N. C. 458; Hopper v. Hopper, 61 S. C. 124, 137, 39 S. E. Rep. 366. See last note to § 238. 4 Kidder v. Norris, 18 N. H. 532; Wright V. Laing, 3 B. & C. 165; Ban- croft V. Dumas, 21 Vt. 456; Nash v. Hodgson, 6 De G., M. & G. 474; Ku- ker V. Mclntyre, 43 S. C. 117, 20 S. E. Rep. 976 (void bond executed by a married woman): Mullooly v. Hua- tau, 1 N. Z. L. R. (Sup. Ct.) 151. * Rohan v. Hanson, 11 Cush. 44; Greene v. Tyler, 39 Pa. 361; Robinson V. Allison, 36 Ala. 525; Gill v. Rice, 13 Wis. 549. See McCarty v. Gor- don. 16 Kan. 35; Fay v. Lovejoy, 20 Wis. 407; Phillips v. Moses, 65 Me, 70. In Clark v. Mershon, 2 N. J. L. 70, it was held where a tavern-keeper was indebted to his customer, the items of liquor were to be considered as payment pro tanto, and not & trust or credit, within the tavern act of New Jersey. In Adams v. Mahnken, 41 N. J. Eq. 332, 3 Atl. Rep. 520, it is held that creditors who hold a bond contain- ing a void usurious agreement and other indebtedness unaffected by such agreement can only appropri- ate payments so far as they might have been recovered. Edwards v. Rumph, 48 Ark. 479, 3 S. W. Rep. 635: Dunbar v. Garrity, 58 N. R 75. 6 Wellman v. Miner, 179 III. 326, 53 N. E. Rep. 609. See Stone v. Talbot, 4 Wis. 442. 614 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 239, plication of a pay merit as the debtor might reasonably object to, or as would work injustice to him.^ He may not, by applying it to a contested claim, throw the burden upon the debtor of disproving the demand.^ An application by the creditor, con- [409] trary to the debtor's directions, but acquiesced in by hira,^ will be binding.' It is not necessary that the demands be all of the same grade or dignity; part may be specialties, and part simple contract debts, and the creditor has the choice on which he will apply a general payment.* As between a legal and equitable demand, it would seem that preference must be given to the legal; the creditor is not at liberty to pay a later equi- table claim instead of an older legal debt; " and it is not certain that he has the option to apply the money to a prior equitable demand in preference to a later legal one.^ He may apply a payment to a demand not secured in lieu of one secured, or to one the securitj^ for which is more precarious.^ Such right is not affected by a clause in a chattel mortgage to the effect that, upon the mortgagor's default, the mortgagee might sell the property and apply the net proceeds to the payment of the debt, returning the overplus to the mortgagor.^ Payments 1 Bonnell v. Wilder, 67 111. 327; Bridenbecker v. Lowell, 32 Bai*b. 9; Taylor v. Coleman, 20 Tex. 772; Lindsey v. Stevens, 5 Dana, 107; Ar- nold V. Johnson, 2 111. 196; Ayer v. Hawkins, 19 Vt. 26. See Bean v. Brown, 54 N. H. 395; Gass v. Stinson, 3 Sumn. 99. 2 Stone V. Talbot, supra. 3 Pennsylvania Coal Co. v. Blake, 85 N. Y. 226; Flarsheim v. Brestrup, 43 Minn. 298, 45 N. W. Rep. 438. * Meggot V. Wild, 1 Ld. Rayra. 287; Mayor v. Patten, 4 Cranch, 317; Peters v. Anderson, 5 Taunt. 596; Hargroves v. Cooke, 15 Ga. 321; Pierce v. Knight, 31 Vt. 701; Penny- packer V. Umberger, 23 Pa. 492; Heintz v. Cahn, 29 111. 308; Brazier V. Bryant, 2 DowL P. C. 477; Chitty V. Naish, id. 511. 5 Goddard v. Hodges, 1 Cr. & M. 33. * See Bosanquet v. Wray, 6 Taunt. 597; Birch v. Tebbutt, 2 Starkie, 74; 2 Pars, on Cont. 631. ■^Hargroves v. Cooke, 15 Ga. 321; Waterman v. Younger, 49 Mo. 413; Jenkins v. Beal, 70 N. C. 440; Sim- mons V. Gates, 56 Ga. 609: Driver v. Fortner. 5 Porter, 9; Burks v. Albert, 4 J. J. Marsh. 97, 20 Am. Dec. 209; Wood V. Callaghan, 61 Mich. 402, 1 Am. St. 597, 28 N. W. Rep. 162; White V. Beem, 80 Ind. 239; M. A. Sweeney Co. v. Fry, 151 Ind. 178, 51 N. E. Rep. 234; Northern Nat. Bank v. Lewis, 78 Wis. 475. 47 N. W. Rep 834; Haynes v. Nice, 100 Mass. 327, 1 Am. Rep. 109; Henry Bill Pub. Co. v. Utley, 155 Mass. 366, 29 N. E. Rep. 635; Risher v. Risher, 194 Pa. 164. 45 Atl. Rep. 71; Montague v. Stelts, 37 S. C. 200. 34 Am. St. 736, 15 S. E. Rep. 968; Hall v. Johnston, 6 Tex. Civ. App. 110, 24 S. W. Rep. 861. 8 Baum v. Trantham, 42 S. C. 104, 19 S. E. Rep. 973, 46 Am. St. 697. § 239.] APPLICATION OF PAYMENTS. 015 made on a continuous account of several items, the whole con- stituting but one debt, will be applied to the items in the order of their date. The rule is not affected because some of Lii<; items are subject to a mechanic's licn.^ The particular circumstances may give the creditor a right to infer the consent of the debtor to an application not otliLT- wise admissible. He may apply an unappropriated payment, to a contingent liability, to a debt not due, to one barred by the statute of limitations, or even to an illegal demand if ho has no other. The payment of money under such circum- stances necessarily implies a consent to apply it to the demands actually existing.- If the debtor agrees that his creditor may apply payments to any indebtedness due when they are made, they may be applied to the satisfaction of an account due in- stead of a matured note.' Some distinctions have been made in respect to the creditor's right of application between debts which the debtor paying owes separately and alone, and those which he owes jointly with others; and also between debts owing to the person re- ceiving the payment alone, and those to which he and others are jointly entitled. It has been held that if one member of a firm makes a payment to a person who has an account against him, and also against the firm of which he is a member, [4l0j the creditor must apply the money to the individual account unless he can show a consent to have it otherwise applied.^ The law will appropriate it to the individual debt in the ab- sence of any application by the parties, if the money paid is not shown to have been derived from the fund from which the joint liability was to be raet.^ This strict rule has not been 1 Pond & Hasey Co. v. O'Connor, Gass v. Stinson, 3 Sumn. 98; Sneed 70 Minn. 2C6, 78 N. W. Rep. 248. v. Wiester, 3 A. K. Marsh. 277. 2 Hall V. Clement, 41 N. H. 166; » Baker v. Stackpoole, 9 Cow. 420, Bowe V. Gano, 9 Hun, 6; Treadwell 18 Am. Dec. 508; Camp v. Smith, 136 V. Moore, 34 Me. 112; Ayer v. Haw- N. Y. 187, 33 N. E. Rep. 640; Liver- kins, 19 Vt. 26. See Rackley v. more v. Claridge, 33 Me. 438. See Pearce, 1 Ga, 241 ; Bancroft v. Dumas, Lee v. Fountaine, 10 Ala. 755, 44 Am. 21 Vt. 456; § 338; Arnold v. Prole. 4 Dec. 505. IkL & G. 860. After the dissolution of a partner- ' Everton v. Day, 66 Ark. 73, 48 S. ship one of its members continued W. Rep. 900. the business, agreeing to pay all the < Johnson v. Boone, 2 Harr. 172; partnership debts and taking enough GIG CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 2'±tJ. uniformly recognized. The creditor has been given the choice, in the absence of directions, to apply it upon the joint debt.^ Paj^ments made by a surviving partner, while carrying on the partnership business for the joint benefit of himself and the estate of the deceased partner, pursuant to a stipulation in the partnership articles, upon an account, some items of which were contracted before and some after the death of the other partner, must be applied to the discharge of the first items.'- Where the debtor making a general payment owes a debt to a firm, and also one to the member of it to whom the payment is personally made, the receiver is precluded by his relation of agent for the firm from preferring his own claim. It is implied in the very nature of an agent's or trustee's contract that he will take the same care, at least, of the property intrusted to him that he does of his own.' Therefore, he should apply the payment /^ro rata to both debts.'* If the debtor is a firm the creditor cannot apply moneys paid by it to the individual debts of one or more of the partners.* [411] § 210. Same subject. A creditor cannot apply a pay- ment made generally on account of existing debts to a new of the firm property to do so; he the money with which payment was added other goods to the stock and made could not be presumed to have mortgaged it to secure both the accrued out of the funds of the new joint and individual debts. It was firm, and to be applied, therefore, to held that a creditor might apply pay- the benefit of the fund from which luents made to the latter debt. King it had been taken; that it could not V. Sutton, 42 Kan. 600, 23 Pac. Rep. be applied to the portion of the ac- 695; St. Louis Type Foundry Co. v. count accruing after the withdrawal, Wisdom, 4 Lea, 695. on the principle that it should be ap- 1 Van Rensselaer v. Roberts, 5 plied to the debt for which there was Denio, 470; Boyd v. Webster, 59 N. the least security, because it did not H. 89. appear but that the company was as 2Stanwood v. Owen, 14 Gray, 195; solvent after the withdrawal as be- Morgan V. Tarbell, 28 Vt. 498. fore; but that the money so paid In Fairchild v. HooUy, 10 Conn, should be applied to the oldest items 475, an account against a partnership, of the account, upon which sundry payments had ^ Colby v. Copp, 35 N. H. 434 been made, was entire and unbal- ^Id.; Favenc v. Bennett. 11 East, anced; before any payments had 36; Barrett v. Lewis, 2 Pick. 123; been made a secret partner had with- Scott v. Ray, 18 id. 360; Cole v. Trull, drawn from the concern, and the 9 id. 325. payments were made by one of the ^ Farris v. Morrison, 66 Ark. 318, partners who remained. Held, that 50 S. W. Rep. 693. § 240. J APPLICATION OF PAYMENTS. CI 7 debt subsequently contracted;' nor to an instalment of the same debt becoming due subsequent to the payment.'' It has been held that the creditor's application is not complete and absolute until the debtor has been notified of it.' When suck notice has been given the money is appropriated.^ An ob- jection to the application made by the debtor ten days after he has been informed of it is too late.* If the holder for collection of several notes airainst one debtor, which are owned by various persons, receives from iiim a sum less than the amount of all the notes, and the debtor makes no application of the payment, it is competent for the creditors owning the notes to direct the application to any of them. In an action after such payment upon one of such notes, in the absence of any application up to the time of the trial, no part will be applied to the note in suit if it appears that the plaintiff has not received part of the money .^ An attorney holding several notes for collection, belonging to dif- ferent persons, and receiving a payment on account of them not appropriated by the debtor, may himself appropriate it.'' But if an agent, having a demand himself against the debtor, and also acting for a principal who has a demand against the same debtor, receives an unappropriated payment from such debtor, he must apply it ratably to both.* 1 Miles V. Ogden, 54 Wis. 573, 12 N. Ill, 14 S. W. Rep. 474; Seymour v. W. Rep. 81; Law's Ex'r v. Suther- Sexton, 10 Watts, 255. land, 5 Gratt. 357; Baker v. Stack- 3 Ryan v. O'Neil, 49 Mich. 281.13 poole, 9 Cow. 420, 18 Am. Dec. 508. N. W. Rep. 591; Lane v. Jones, 79 A. owed a debt to B. payable on Ala. 156; Sinison v. Ingham, 2 B. &C. demand, for which C. was surety. 65; Allen v. Culver, 3 Denio. 284; Van A. assigned debts of others to B. as a Rensselaer v. Roberts, 5 id. 470. means of payment in part. After ^Id.; The Asiatic Prince, 47 C. C. such assignment, but before the as- A. 325, 108 Fed. Rep. 287; Bopp v. signed debts were collected, A. con- Wittich. 88 Mo. App. 129. tracted another debt to B. for which ^ Risher v. Risher, 194 Pa. 164, 45 there was no security. Held, that B. Atl. Rep. 71. could not, after collection of the as- In North Carolina no change of signed debts, apply the same to pay the application can be made after the debt contracted after the assign- the creditor has given the debtor ment, and recover the first debt from credit by entering it. Burnett v. C, the surety for it. Donally v. Wil- Sledge, 129 N. C. 114, 39 S. E. Rep. son, 5 Leigh, 329. 775. 2 Gates V. Burkett, 44 Ark. 90; « Taylor v. Jones, 1 Ind. 17. Heard v. Pulaski, 80 Ala. 502, 2 So. 7 Carpenter v. Goin, 19 N. H. 479. Rep. 343; Kline v. Ragland, 47 Ark. 8 Barrett v. Lewis, 2 Pick. 123; Cole V. Trull, 9 Pick. 325. 61S CONVKXTIONAL LIQUIDATIONS AND DISCHARGES. [§ 240.. The right of appropriation is confined to the parties; no third person can insist on any application which neither of them has made.^ Thus the grantee of a mortgagor cannot [412] insist that money of the mortgagor in the mortgagee's hands shall be used to pay off the mortgage unless this was clearly contemplated by the parties, and the grantee made his purchase upon that understanding.' Strangers can demand nothing in this regard which the parties have not required.^ "Where creditors claim equities through their debtors they are usually estopped by what the debtors do; but fraud never estops creditors. This doctrine relative to the application of payments applies only where the creditor has two or more honest claims against the debtor; it does not apply so as to conclude creditors where there is only one such. Therefore a subsequent mortgagee may object to the application by the holder of an earlier mortgage of partial payments to usurious interest for the purpose of keeping alive that part which is valid.* As has been already stated, a surety of a debtor who makes an indefinite payment cannot interfere with the elec- tion of the creditor; nor will an intention of the debtor be presumed to apply it in favor of the surety so as to exclude the right of the creditor to make the application.^ But where, 1 Harding v. Tifft, 75 N. Y. 461; Feldman v. Beier, 78 id. 393; Coles v. Withers, 33Gratt. 186; Mack v. Adier, 23 Fed. Rep. 570; Jefferson v. Church of St. Matthew, 41 Minn. 393, 43 N. W. Rep. 74; Thorn & Hunkins' Lime & Cement Co. v. Citizens' Bank, 158 Mo. 373, 59 S. W. Rep. 109. 2 Gordon v. Hobart, 3 Story, 243; Backhouse v. Patton, 5 Pet. 160. 3 Spring Garden Ass'n v. Trades- men's Loan Ass'n, 46 Pa. 493. See Parker v. Green, 8 Met. 137. 4 Greene v. Tyler, 39 Pa. 361. See Chester v. Wheelwright, 15 Conn. 562. 5 Hanson v. Manley, 73 Iowa, 48, 33 N. W. Rep. 857: Wilson v. Allen, 11 Ore. 154, 2 Pac. Rep. 91. Payments made genei-ally to the creditors on account of a person for whom a guaranty is given may be applied by them in liquidation of a balance existing against him before it was given, and the guarantor can- not insist on the payments being ap- plied in exoneration of his liability,. although at the time of his assum- ing it the creditors did not give him notice that any such balance was then existing. Kirby v. Marlbor- ough, 2 M. & S. 18. See Merrimack Co. V. Brown, 13 N. H. 330. It is held in Gore v. Townsend, 105 N. C. 328, 11 S. E. Rep. 160, 8 L. R. A. 443, that a mortgagee who holds two mortgages, the older of which was executed by a husband and his wife to secure the former's debt, and the latter of which was executed by him alone on the same property to secure a subsequent note, cannot appropriate the proceeds of personal property to the payment o£ § 241.] APPLICATION OF PAYMENTS. Gl'J at the inception of the contract of suretyship, a mode of pay- ment was agreed upon and a particular fund identified fot that purpose, the surety may insist on the application of that fund when it is realized. Thus, a factor who has accepted a bill drawn by his principal, as against an accominodation drawer who becomes such on the faith of a consifnment of cotton made to meet it at maturity, cannot a|)ply the proceeds of the consignment to another debt, and no factor's lien for such other debt will be permitted to intervene.' When the party having a right to appropriate a payment has done so, [-IIUJ the appropriation is final, and he cannot change it.- § '^4^1. Appropriation by the court. Where the parties have not made a specific appropriation of moneys paid, and there are several debts or demands for which the party paying the money is liable to the party receiving it, the fundamental rule or principle is that the law will appropriate it according to the justice and equity of the case.' It has been said that in the second mortgage; it must e;o to the payment of the first in exonera- tion of the wife's dower right, she being a surety for her husband. 1 Brander v. Phillips, 16 Pet. 131. See Marryatts v. White, 3 Stark. 101, in which security having been given by a surety for goods to be supplied and in respect of a pre-existing debt, tlie goods were supplied, and pay- ments made from time to time by the principal, in respect of some of which discount was allowed for prompt payment; held, that it must be inferred in favor of the surety that all these payments were in- tended to be in liquidation of the lat- ter account; also Shaw v. Picton, 7 D. & R. 201, 4 B. & C. 715, where the same agent had a bill of account with the grantor of several annu- ities, for the payment of which A. became surety, and in consequence of a letter written by an attorney in the names of the grantees, at the in- stance of the agents, demanding pay- ment of the arrears of the annuities from the grantor and his surety, a sum of money was paid under cir- cumstances from which it was to be collected that the money was in- tended to be specifically appropriated to the annuity account, and the agents applied it to the bill account; held, that this was a misapplication, and that the money ought to be ap- propriated pro rata among the an- nuitants in relief of the surety. ^ Wright V. Wright, 73 N. Y. 149. 3 Martin v. Ede, 103 Cal. 157,37 Pac. Rep. 199; McCartney v. Buck, 8 Houst. 34, 13 Atl. Rep. 717: Field v. Holland, 6 Cranch, 8; Souler v. Schechterly, 91 Pa. 83; Spiller v. Creditors, 16 La. Ann. 293; Stone v. Seymour, 15 Wend. 19; Parker v. Green, 8 Met. 144; Norris v. Beaty, 6 W. Va. 477; Robinson v. Doolittle. 13 Vt. 346: Randall v. Parramore, IFla. 409; Chester v. Wheelwright, 15 Conn. 563; Calvert v. Carter, 18 Md. 73; Neidig v. Whiteford, 29 McL 178; Haden v. Phillips, 21 La. Ann. 517; Upham V. Lefavour, 11 Met. 174; Seymour v. Van Slyck, 8 Wend. 403; Hargroves v. Cooke, 15 Ga. 331; Leef 620 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 241. law that application is made which is most favorable to the creditor; in equity, the payment is applied first to the debt for \vhich the security is most precarious.^ In applying the cardinal principle various subsidiary rules have been recognized, in respect to which and in the reasons assigned therefor the de- cisions are not entirely in accord. Many cases proceed upon the assumption that the intention of one or both of the parties is to be effectuated, or that the interest of one party in prefer- [414] ence to that of the other is entitled to be subserved.- V. Goodwin, Taney, 460; Callahan v. Boazman. 21 Ala. 246; Bayley v. Wynkoop, 10 111. 449; Benny v. Rhodes, 18 Mo. 147, 59 Am. Dec. 293; Proctor V. Marshall, 18 Tex. G3; Oliver V. Phelps, 20 N. J. L. 180; McFarlani V. Lewis, 3 III 344; Wiiite v. Trum- bull, 15 N. J. L. 314, 29 Am. Dec. 687; Carson v. Hill, 1 McMuU. (S. C.) 76; Selleck v. Sugar Hollow Turnpike Co.. 13 Conn. 453; Rosseau v. Cull. 14 Vt. 83; Starrett v. Barber, 20 Me. 457. 1 Chicago Title & Trust Co. v. Mc- Glew, 90 111. App. 58. ^ Conduitt V. Ryan, 3 Ind. App. 1, 29 N. E. Rep. 160; McDaniel v. Barnes, 5 Bush, 183; Allen v. Culver, 3 Denio, 284; Byrne v. Grayson. 15 La. Ann. 457; Spiller v. Creditors, 16 id. 292; Calvert v. Carter, 18 Md. 73; Pierce V. Sweet, 33 Pa. 151; Poindexter v. La Roche, 7 Sou & M. 699; Bussey v. Gant's Adm'r, 10 Humph. 238; Patti- son V. Hull. 9 Cow. 747; Dows v. Morewood, 10 Barb. 183; Johnson's Appeal, 37 Pa. 268; Seymour v. Sex- ton, 10 Watts, 255. In Johnson's Appeal, supra. Strong, J., said: "The fact of actual appro- priation to the earliest items of the account not being established, the next question is whether the law re- quires that the credits should be thus applied. In the absence of direction by the debtor, and of actual appli- cation by the creditor, the law will make an equitable application, and in making it will regard the circum- stances of the case. In the present case it should make no difference to Duncan whether his credits were ap- plied to the earlier or to the later items of the account. He was equally a debtor for both and both carried interest. It is true that when pay- ments are made upon a running ac count it is one of the principles of legal application that they shall be treated as extinguishing the earliest charges in the account. But this is not a paramount principle. Another of equal force is that the payments are to be applied to that debt which is least secured. Both these rules look to the interest of the creditor, it being presumed that the debtor by neglecting to give any direction con- sented to such an application as would be most beneficial to the cred- itor. But to apply Duncan's credits to the first items of the account . . against him and thus extinguish the mortgage in the first instance would be an application not beneficial to the debtor, and most hurtful to the creditor. It would be paying first the debt which was best secured, and leaving the later advances without the protection of a factor's lien and without any security at all as against judgments entered before they were made. It would be reversing the fundamental rule of appropria- tions." The equitable circumstan- ces stated abundantly justify the application which was made with- § 2il.] AI'l'LICATION OF PAYMENTS. 021 But it is believed that there is no presumption of inten- [415] tion which controls where the law makes the application.' If there is evidence of intention, it governs, of course,- but the application then is not made by the law, but by the party whose intention controls. And when the interest of one party is subserved it is not upon any invidious preference, but upon some special ground of equity which appeals to the conscience of the court in his behalf.^ Such considerations sometimes re- out the presumption that " the debtor by neglecting to give any di- rection consented to such an appli- cation as would be most beneficial to the creditor." There would seem to be no more ground lor such a pre- sumption than that the creditor by neglecting to make an actual appli- cation of the credits consented to such an application as would be most beneficial to the debtor. That there is no such presumption that the debtor consents to an appli- cation most beneficial to the creditor is evident from the cases that con- sult the interest of the debtor where there are no countervailing equities. Thus, in accordance with the gen- eral course of authority, the law ap- plies a payment to a debt bearing in- terest in preference to one not bear- ing interest. Seymour v. Sexton, sujjra. Crompton v. Prall, 105 Mass. 255, proceeds on the same principle. Dows V. Morehead, 10 Barb. 183, holds that the law will apply pay- ments to that debt, a relief from which will be most beneficial to the debtor; as, for example, acceptances for which an instrument in the shape of a mortgage or pledge of personal property is given. Poiu- dexter v. La Roche, 7 Sm. & M. 699, and Pattison v. Hull, 9 Cow. 747, are to the same effect. But a more satis- factory statement of the principle is to be found in Field v. Holland, 6 Cranch, 8, where Marshall, C. J., says: "'When a debtor fails to avail himself of the power he possesses. in consequence of which that power devolves on the creditor, it does not appear unreasonable to suppose that he is content with the manner in which the creditor will exercise it. If neither party avails liimself of his power, in consequence of which it devolves on the court, it would seem reasonable that an equi- table application should be made. It being equitable tiiat the whole debt should be paid, it cannot be inequi- table to extinguish first those debts for which the security is most pre- carious." See Langdon v. Bowen, 40 Vu 512; Truscott v. King, 6 N. Y. 147; Worthley v. Emerson, 116 Mass. 374: The A. R, Dunlap, 1 Low. 350; Robie v. Briggs, 59 Vt. 443, 59 Am. Rep. 737. In the last case the debtor owed an individual and joint account; his payments amounted to more than the former; in ignorance of the ex- act state of the account the creditor entered the whole sum paid to the credit of the individual account. The court applied the surplus to the other. 1 Moore v. Gray, 22 La. Ann. 289. 2 McMillan v. Grayston, 83 Mo. App. 425. If the debtor pays with one intent and the creditor receives with an- other the former's intent will be given effect. Roakes v. Bailey, 55 Vt. 542. 3 Pierce v. Knight, 31 Vt. 701; Smith v. Loyd, 11 Leigh, 512. 37 Am. Dec. 621; 2 Greenlf. Ev., § 533. ■G22 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 2i2, quire a jpro rata distribution of the payment to all of several debts; sometimes its appropriation to one for being the oldest, or least secured, to relieve the debtor from some special hazard or hardship, or to absolve a surety. Where a bank is protected against loss on future overdrafts by a principal his sureties are entitled to have payments made applied to the account which they have guaranteed. • If the money paid arises from some property or fund it will be ap- plied to the discharge or reduction of the demand against the same.- If several chattels are bought at the same time under a single contract, the promise to pay being single, the court will not apply payments made on the contract to the different articles in the order in which they are specified therein ; but will apply them to the contract generally.' Partial payments made on a note infected with usury will be applied to the ex- tinguishment of lawful interest, and then to the principal/ If an incumbrance is void in part only, payments will be applied first to the discharge of so much as is valid.^ § 242. When payments applied pro rata. If an indefinite payment is made where there are several debts of the same nature and all things equal, it is applied proportionally.^ Moneys collected by judicial proceedings founded on several claims cannot be applied by either party; the law will apply them jpro rata. Thus, where a creditor having several de- mands against his debtor recovers a portion of the entire amount in a judicial proceeding founded on them all, the law [416] will apply such a recovery as a payment ratably upon them all; neither the debtor nor the creditor has the right to apply it to the satisfaction of some of them in exclusion of others.^ 1 Drake v. Sherman, 179 IlL 362, 53 292; Jones v. Kilgore, 2 Rich. Eq. 63; N. E. Rep. 638. Baine v. Williams, 10 Sm. & M. 113; 2 Brinckerhoff v. Greenan, 85 111. Pointer v. Smith, 7 Heisk. 137. App. 253. Matured notes given for the same 3 Hill V. McLaughlin, 158 Mass. 307, consideration and in the hands of a 53 N. E. Rep. 514. single person constitute butone debt; * Haskins v. Bank, 100 Ga. 216, 27 and payments made after their ma- S. E. Rep. 985. See §§ 378, 379. turity are applicable to them all. 5 Wingate v. Peoples' Building & Egle v. Roman Catholic Church, 36 Loan Savings Ass'n, 15 Tex. Civ. App. La. Ann. 310. 416. 39 S. W. Rep. 999. '^ Olds Wagon Works v. Bank of •> Spiller V. Creditors, 16 La. Ann. Louisville, 10 Ky. L. Rep, 253; Orleans fi 2i2.] APPLICATION OF PAYMENTS. 623 If an insolvent debtor assigns for the benefit of those creditors who become parties to the ussignincnt and thereby release their claims, and a dividend is received by one of them, it must be appropriated ratably to all his claims against the debtor, as well to those upon which other parties are liable, or which are otherwise secured, as to those which are not secured.* A general payment made by the principal debtor, pursuant to a compromise of several debts in one lump, will be applied pro rata to all the claims against him, in an action against an indorser for part.^ And doubtless the same rule of application would be applied between the debtor and creditor where there has been a general judgment pursuant to a compromise founded upon and embracing several demands.' A pro rata distribution of a payment is made on the equita- ble maxim that equality is equity. Other considerations may concur and lead to the same result. If a debtor creates a trust or security for the payment of several demands, without preference, money realized from that source is deemed appro- priated by him to the demands so provided for, and to be pro- portionately distributed thereto; and either party may insist on such application.'* If a general payment is made to a per- son having two accounts against the party paying, one due to himself and the other to a third party, for whom he was act- ing as agent, and no appropriation is made by either, it will bo applied ratably to both accounts.^ So where a debt is [417] payable by instalments, or a mortgage is made to secure a County Nat. Bank v. Moore, 113 N. Tucker v. Brackett, 25 Tex. (Supp.) Y. 543," 8 Am. St. 775, 20 N. E. Rep. 199; Ordinary v. McCoUura, SStrobh. 357, 3 L. R. A. 302; Bostick v. 494; Van Aken v. Gleason, 34 Mich. Jacobs. 133 Ala. 344, 32 So. Rep. 136; 477; Stamps v. Brown, Walker (Miss.), Standifer v. Codington, 35 La. Ann. 526. See Mahone v. Williams, 39 896; Cowperthwaite v. Sheffield, 1 Ala. 202; Jones v. Kilgore, 2 Rich. Sandf. 416, 3N. Y. 243; Bridenbecker Eq. 63; Baine v. Williams. 10 Sm. V. Lowell, 32 Barb. 9. See Thompson & M. 113. V. Hudson, L. R. 6 Ch. 320; Merri- i Commercial Bank v. Cunning- mack County Bank v. Brown, 12 N, ham. 24 Pick. 270, 35 Am. Dec. 322. H. 320. 2 Butchers' and Drovers' Bank v. Where a fund is insufficient to Brown, 1 N. Y. Leg. Obs. 149. satisfy several judgments entered ' Thompson v. Hudson, L. R 6 Ch. the same day, they should be paid 320. Tpro rata, though one was entered a * Id. -few hours later than the others. ^ Wendt v. Ross, 33 Cal. 6.50. 624: CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 242. series of notes payable at different times, and a payment is made after all the instalments or notes have become due, and neither party makes any special appropriation of it, according^ to the weight of authority it will be applied by the court jt?n> rata to all the instalments or notes — and this whether they are held by the original creditor or a part have been trans- ferred, unless the assignee has specially acquired a preference by the agreement of transfer.^ When a debt is payable in instalments, and there are sep- arate notes or other distinct evidences of debt payable at differ- ent times, all equally payable with or without interest, and a general payment made is not appropriated by either party, if it exceeds the interest and principal due at the time it was made it will be applied, of course, first to pay what is due of interest and principal, and the residue ratably on all and each of the instalments subsequently payable, with accrued interest on the part thus extinguished.^ 1 Cage V. Her. 5 Sm. & M. 410, 43 Am. Dec. 531; Wooten v. Buchanan, 49 Miss. 3S6; Donley v. Hays, 17 S. & R. 400; Cooper v. Ulmann, Walk. Ch. 251; Mohlen's Appeal, 5 Pa. 418, 47 Am. Dec. 413; Henderson v. Her- rod, 10 Sm, & M. 631; English v. Carney, 25 Mich. 178; McCurdy v. Clark, 27 id. 445; Youmans v. Heartt, 34 id. 397; Betz v. Heebner, 1 P. & W. 280; Smith v. Nettles, 9 La. Ann. 455; Bailey v. Bergen, 2 Hun, 520; Parker v. Mercer, 6 How. (Miss.) 323; Cremer v. Higginson, 1 Mason, 323; Perrie v. Roberts, 2 Ch. Cas. 84 But see State Bank v. Tweedy, 8 Blackt. 447, 46 Am. Dec. 486: Murdock v. Ford, 17 Ind. 52; Stanley V. Beatty, 4 Ind. 134; CuUum V. Erwin, 4 Ala. 452; Bank of United States V. Covert, 13 Ohio, 240; Turner V. Pierce, 31 Wis. 342. 2 In Righter v. Stall, 3 Sandf. Ch. 608, a debtor owed a mortgage debt, payable in ten annual instalments. About two-thirds of the debt was paid at a time when a small amount was due for interest, and before any part of the principal had fallen due. There was no direction given by the debtor, nor actual application of the payment made by the creditor; and it was held that the law must make the application, and that after dis- charging the interest due the balance must be applied ratably in exonera- tion of each and all of the instal- ments. In Jencks v. Alexander, 11 Paige, 619, the following rules are laid down: 1. Where the principal is not due, but the interest is due, the pay- ment must first be applied to pay the interest then due; and the resi- due towards that part of the princi- pal which will first become due and payable, so as to stop the interest, pro tanto, from the time of such payment. 2. When neither princi- pal nor interest has become due at the time of the payment, the amount paid should be applied to the extin- guishment of principal and interest ratably; so as to extinguish a part of the principal and the interest which has accrued on the part of § 243.] APPLICATION OF PAYMENTS. G25 § 243. General payment applied to oldest debt. If [418] no other paramount rule of appropriation governs, an indefi- nite payment made to a person to whom a debtor paying the money owes several debts will be applied to that which [419] the principal thus extinguished. The facts of the case were that Au- gust 24, 1883, a mortgap;e was given for $650, payable in five equal yearly payments, the first to become due on the first of January following, with interest annually. Five hundred dol- lars were paid and indorsed on the day the mortgage was given. On the 14th of the following September a further sum of $3 was paid. On the 4th of November, 1835, proceed- ings to foreclose were commenced on a claim of $20.98 of delinquent interest, and it was held that $20.58 was then due. The chancellor said: "I think the counsel for the com- plainants is wrong in supposing that nothing had become due and pay- able upon the mortgage at the time the proceedings to foreclose were instituted. It is true a sum much larger than the two instalments of $130 each, and all interest upon the residue, had been paid. But the proper application of the payments was to apply them towards the sat- isfaction of the principal of the debt at the time of such payments re- spectively, after deducting from such payments the interest which had then accrued. The payment of the $500 on the day of the date of tlie mortgage, being applied in sat- isfaction of the three first instal- ments of principal and $110 of the fourth instalment, left $20 of the fourth and the whole of the fifth in- stalments still due. And as by the terms of the bond and mortgage the interest on the whole $650 was pay- able annually, the mortgagee would have been entitled to the annual in- terest on the $150 which still re- VOL. 1 — 40 mained due on the last two instal- ments, if there had been no subse- quent payment. The payment of $3 on the 14th of September, 1833, must be applied towards the fourth instal- ment of principal, after deducting therefrom the interest on the $3 from the 24th of the preceding Au- gust. In other words, when the principal is not due, but interest is due (a different case), the payment must first be applied to the extin- guishment of the mteirest then due and payable, and the residue to the extinguishment of that part of the principal which will first become due, so as to stop interest, pro ta.ito, from the time of such payment. But when neither principal nor in- terest has become due (the case in hand) at the time of the payment, such payment, in the absence of any agreement as to the application, is to be applied to the extinguishment of principal and interest ratably, ac- cording to the decision of the su- preme court in the case of Williams V. Houghtaling, 3 Cow. 86." In Williams v. Houghtaling the court say: " When, according to the terms of the bond payable by instal- ments, interest cannot be demanded until the principal is payable (as in this case), payments made on an in- stalment not due and payable should be applied to the extinguishment of principal and such proportion of in- terest as has accrued on the principal so extinguished. For instance, an instalment on a bond of $500 is due on the 1st of January, 1825, with in- terest from 1st of January, 18<4; on the first of July, 1824, the obligor pays $207; the $7 should be applied to pay 626 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 243. first accrued.' This rule is especially applicable to items of [420] debit and credit in a general account current.^ When both parties concur in the entry of the payments upon general account, without specific application, the law infers an inten- the six months' interest accrued on $200. and the $200 extinguishes so much principal." There is dictum in Jencks v. Alex- ander apparently in conflict with the text and in conflict with Righter v. Stall. The conclusion arrived at is not in conflict. If the payment of §500 had been ratably applied to the five instalments, they would have been severally reduced to $80, and interest on each annually payable would be the same, and due at the same time, as upon a like amount on the two past instalments. When the payment of $3 was made no interest or principal was dua It being paid on the mortgage generally was ap- plicable ratably towards paying the entire principal and interest. In Turner v. Pierce. 31 Wis. 342, there was a land contract made Oc- tober 22, 1863, upon which the pur- chase-money was $5,600, due in six annual instalments, payable August 1, 1865, to 1870, with interest on the whole sum unpaid, payable at the time each instalment became due — the purchaser having the option to make the payments on or before the times mentioned, and then to pay interest only to the time of such payment. Before any of the princi- pal became due the purchaser made a large payment, receipted to apply on the land contract. On the 5th of March, 1866, an action for strict foreclosure of the contract was be- gun on the ground that the pur- chaser was in default. The title had failed to a part of the lands, and the court held that each instalment should be reduced in the proportion that the value of that part ($1,832) bore to tlie whole value, and that the defendant was entitled to have the payment applied to the Instalments first becoming due at such decreased rates, and that therefore nothing was due when the suit was com- menced. See Starr v. Richmond, 80 111. 276. 1 Pond V, Harwood, 139 N. Y. Ill, 34 N. E. Rep. 768; Atkins v. Atkins, 71 Vt. 422, 41 Atl. Rep. 503; Thomp- son V. St Nicholas Nat. Bank, 113 N. Y. 325, 21 N. K Rep. 57; North- western Lumber Co. v. American Exp. Co., 73 Wis. 656, 41 N. W. Rep. 1059; The Mary K. Campbell, 40 Fed. Rep. 906; Sanford v. Van Arsdall, 53 Hun, 70, 6 N. Y. Supp. 494; Duncan V. Thomas, 81 CaL 56, 22 Pac. Rep. 297; Jefferson v. Church of St Mat- thew, 41 Minn. 392, 43 N. W, Rep. 74; Moses V. Noble, 86 Ala. 407, 5 So. Rep. 181; Ashby v. Washburn, 23 Neb. 571, 37 N. W. Rep. 267; Marks v. Robinson, 82 Ala. 69, 2 So. Rep. 293; State V. Chad wick, 10 Ore. 423; Mackey v. Fullerton, 7 Colo. 556, 4 Pac. Rep. 1198; Bennett v. McGillan, 28 Fed. Rep. 411; McGillin v. Ben- nett, 133 U. S. 445, 10 Sup. Ct Rep. 122: Pardee v. Markle, 111 Pa, 548, 56 Am. Rep. 299; Kline v. Ragland, 47 Ark. Ill, 14 S. W. Rep. 474; Brown v. Shirk, 75 Ind. 266; Mc- Curdy v. Middleton, 82 Ala. 131, 3 So. Rep. 721 ; Hammett v. Dudley, 63 2 Carey-Lombard Lumber Co. v. Hunt, 54 IlL App. 314; Winnebago Paper Mills v. Travis, 56 Minn. 480, 58 N. W. Rep. 36; Goetz v. Piel, 26 Mo. App. 634; Swett v. Boyce, 134 Mass. 381; Crompton v. Pratt, 105 id. 255. § 243.] APPLICATION OF PAYMENTS. C27 tion on the part of both that they shall satisfy the charges therein in the order of their entry; and they will be so ap- plied unless some controlling equity requires a different dispo- sition.^ It has been held that this rule should apply without refer- ence to the fact that one item may be better secured than another, since the particular parts, .being blended together in one common account, have no separate existence; the balance only is considered as due;^ and a payment made on such ac- Md. 154; Hersey v. Bennett, 28 Minn. 86, 41 Am. Rep. 281, 9 N. W. Rep. 590; Helm v. Commonwealtli, 79 Ky. 67; Bancroft v. Holton, 59 N. H. 141; Frost V. Mixsell, 38 N. J. Eq. 586; Wagner's Appeal, 103 Pa. 185; Wies- enfeld v. Byrd, 17 S. C. 106; Miliken V. Tufts, 31 Me. 497; Faircliild v. Holly, 10 Conn. 475; Smith v. Loyd, 11 Leigh, 512, 37 Am. Dec. 6'31; Rol> inson's Adm'r v. Allison, 36 Ala. 526; Howard v. McCall, 21 Gratt. 205; Wendt V. Ross, 33 Cal. 650; Seymour V. Sexton, 10 Watts, 255: Sliedd v. Wilson, 27 Vt. 478; St. Albans v. Failey, 46 Vt. 448; Langdon v. Bowen, 46 Vt. 512; Upham v. Le- favour, 11 Met. 174; Dovvs v. More- wood, 10 Barb. 183; Allen v. Culver, 3 Denio, 284; Webb v. Dickinson, 11 Wend. 62; Hollister v. Davis, 54 Pa. 508; Allen v. Brown, 39 Iowa, 330; Livermore v. Rand, 26 N. H. 85; Parks V. Ingram, 33 N. H. 383; Thompson v. Phelan, 23 N. H. 339; Bacon v. Brown, 1 Bibb. 334, 4 Am. Dec. 640; Sprague v. Hazenwinkle, 53 111. 419; Clayton's Case, 1 Meriv. 585; United States v. Kirkpatrick, 9 Wheat. 720; Berrian v. Mayor, 4 Robert. 538; Home v. Planters' Bank, 32 Ga. 1; Mills v. Fowkes, 5 Bing. N. C. 455; Pennell v. Deffell, 4 De G., McN. & G. 373; Harrison v. Johnston, 27 Ala. 445; Postmaster-General v. Furber, 4 Mason, 333: Hansen v. Rounsavell, 74 III. 238: Souder v. Schechterly, 91 Pa. 83; Perry v. Booth, 67 A pp. Div. 235, 73 N. Y. Supp. 216; National Park Bank v. Seaboard Bank, 114 N. Y. 38, 35, 20 N. E. Rep. 033. See Killorin v. Ba- con. 57 Ga. 497. In the case of mutual accounts the credits on one side are applied to the extinguishment of the debts on the other as payments intention- ally made thereon, and not as the set-off of one independent debt against another. Sanford v. Clark, 29 Conn. 457. As to the application of this rule between cestuis que trust, see Wood V. Stenning, [1895J 3 Ch. 433; Mutton v. Peat, [1899] 3 Ch. 556. 1 Id. ; Jones v. United States, 7 How. 681; Sanford v. Clark, 20 Conn. 457; Souder v. Schechterly, 91 Pa. 83; Lodge v. Ainscow, 1 Pennewill, 327, 41 Atl. Rep. 187; Conduitt v. Ryan, 3 Ind. App. 1, 29 N. E. Rep. 160; Grasser & Brand Brewing Co. V. Rogers, 112 Mich. 113, 70 N. W. Rep. 443. If a trustee pays trust money on his account athis banker'sand mixes it with his own funds and draws checks against it in the usual man- ner for his personal use he will be presumed to have drawn his own and not the trust money. Knatchbull v. Hallett, 13 Ch. Div. 696, overruling earlier cases. 2 Harrison v. Johnston, 27 Ala. 445. 628 CONVENTIONAL LIQUIDATIONS AND DISCHAKGES. [§ 243. count, without a more specific appropriation, is treated by a majority of the cases as applied to the earliest items, although for some of these the creditor has a lien or other security and has none for the others.^ Where there is a single open account and a general payment is made by the debtor at full age, it is presumed to be in satisfaction of the earliest items although they accrued during his minority .^ Such a payment will not be judicially disturbed.^ The rule concerning the application of payments to the oldest item of the account applies to an open running account with a firm continued unchanged witli a member of it who buys the interest of his copartner and con- tinues the business.* As between a debt due and a contingent liability a payment will be applied to the former.* The rule under consideration for applying an indefinite pa}^- ment to the debts which first accrued applies not only to the first items of an account but to distinct debts contracted at dif- ferent times.^ The rule is not unjust or prejudicial to a debtor; it operates, however, more beneficially to the creditor; for it ' Conduitt V. Eyan, 3 Ind. App. 1, 29 N. E. Rep. 160; Dunnington v. Kirk, 57 Ark. 595, 22 S. W. Rep. 430; Worthley v. Emerson, 116 Mass. 374; Truscott v. King, 6 N. Y. 147; The A. R. Dunlap, 1 Low. 350; Moore V. Gray, 22 La. Ann. 289; Gushing v. Wyman, 44 Me. 121; Hersey v. Ben- nett, 28 Minn. 86, 41 Am. Rep. 271, 9 N. W. Rep. 590; Miller v. Miller, 23 Me. 22, 39 Am. Dec. 597. But see Pierce v. Sweet, 33 Pa. 151; Thomp- son V. Davenport, 1 Wash. (Va.) 125; Schuelenberg v. Martin, 2 Fed. Rep. 747. The last case is distinguishable because tlie payment was not a voluntary one; a fact which the court failed to observa 2Thurlow V. Gilmore,40 Me. 378. 3 Pond & Hasey Go. v. O'Gonnor, 70 Minn. 266, 73 N. W. Rep. 248. 4 Schoonover v. Osborne, 108 Iowa, 453. 79 N. W. Rep. 2G3; Morgan v. Tarbell, 28 Vt. 498. 5 Missouri Central Lumber Go. v. Stewart, 78 Mo. App. 456; Niagara Bank v. Rosevelt, 9 Cow. 409. 6 Parks v. Ingram, 22 N. H. 283, 55 Am. Dec. 153; Thompson v. Phelan, 22 N. H. 339; McDaniel v. Barnes, 5 Bush, 183; Robinson's Adm'r v. Al- lison, 36 Ala. 526; Byrne v. Grayson, 15 La. Ann. 457; Upham v. Lefavour, 11 Met. 174; Langdon v. Bowen, 46 Vt. 512: Smith v. Loyd, 11 Leigh, 512, 37 Am. Dec. 621 ; Jones v. United States, 7 How. 681; McKinzie v. Nevius, 22 Me. 138, 38 Am. Dec. 291 ; AUstan v. Gontee, 4 Har. & J. 351; Draflfen v. Boon vi He, 8 Mo. 395; Cop- land v. Toulmin, 7 CI. & F. 349; Sim- son v. Ingham, 2 B. & C. 72; Hooker V. Keay, 1 Q. B. Div. 178. This rule will not be applied to payments made by a reorganized partnership without the consent of its new members. St. Louis Type Foundry Co. v. Wisdom, 4 Lea. 695; Burland v. Nash, 2 F. & F. 687; Thompson v. Brown, 1 Mood. & M. 406; Roakes v. Bailey, 55 Vt. 542. § 244.] APPLICATION OF PAYMENTS. 629 often saves a debt from the bar of the statute of limitations, and closes the door to the older transactions which it may bo presumed are more ditRcult of proof. But the rule ap- [421] plies the payments in the natural and logical order of the transactions. It is not supported, however, by reasons so co- gent but that it will yield when there is evidence of a contrary intention,^ or where some superior equity requires a different application.'^ " "Whenever the relation of the parties or the nat- ure of the account or transaction between them shows that an appropriation of payments to the earliest items of the ac- count would do injustice between them or fail to conform to their understanding or agreement, another application is made." ' If property is exempt from execution the rule that partial payments shall be so appropriated as to protect the creditor does not apply so as to affect such property any more than such payments would revive a debt barred by time,* § 214. General payment applied to a debt bearins; inter- est, and first to interest. As between debts bearing and those not bearing interest, the law directs an indefinite pay- ment to be applied to the former.^ The reason generally as- signed is that of relieving the debtor in respect to the debt which is most burdensome, or the presumed choice of the debtor. •* This may be conceded to be sufficient for this appli- cation, and some others, where a particular one is specially beneficial to a debtor without being attended with a corre- sponding loss to the creditor which the law is equally solicit- ous to prevent. Interest due is first to be satisfied when a general payment is made, and if there be a surplus it is to be applied to the principal. If the payment falls short of the in- terest, the balance of the interest is not to be added to the principal, but remains to be extinguished by the next payment, if it is sufficient.'^ This rule yields to that which requires that 1 City Discount Co. v. McLean, L. Scott v. Fisher, 4 T. B. Men. 387; R 9 C. P. 693; Langdon v. Bowen, 46 Blanton v. Rice, 5 id. 253; Bacon v. Vt. 512. Brown, 1 Bibb, 334, 4 Am. Dec. 640; 2 Upham V. Lefavour, 11 Met. 174. Scott v. Cleveland, 33 Miss. 447; ^Faisst V. Waldo, 57 Ark. 270, 21 Bussey v. Gant's Adm'r, 10 Humph. S. W. Rep. 436. 238. * Sternberger v. Gowdy, 93 Ky. « Id. See Neal v. Allison, 50 Miss. 146, 19 S. W. Rep. 186. 175. 5 Heyward v. Lomax, 1 Vern. 24; ^ Weide v. St. Paul, 03 Minn. 07.64 630 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 24:4:. the debt least secured shall first be paid ; hence if the claim for mterest is better secured than the principal the application will be in favor of the latter;' and is not to be applied where the defendant in foreclosure appeals and gives a bond for the pay- ment, if the judgment be aflBrmed, of such interest as might accrue and remain otherwise unpaid upon the decree from the date thereof. On affirmance of such judgment the proceeds of the sale will be applied to meet the fees, costs and principal before satisfying the interest on the decree; the deficiency, if any, will thereby be secured by the appeal bond. " It would not be in accordance with natural justice or with the rules which govern courts of equity to allow appellant to delay a sale by his appeal and render the security inadequate to pay the accruing interest, and then, upon a sale, discharge the in- terest from the proceeds of such security and free him from his obligation." 2 Where a debt bearing interest remains unpaid until interest is due on the interest, where that is permitted, general pay- [4-22] ments are to be applied, first, to such interest on in- terest; second, to interest on the principal; and third, to the principal.^ And in applying payments on a sum secured by a N. W. Rep. 65; Monroe v. Fohl, 73 State v. Jackson, 1 Johns. Cb. 13, 7 Cal. 568, 14 Pac. Rep. 514; Morgan v. Am. Deo. 471; People v. New York Michigan Air Line R Co., 57 Mich. County, 5 Cow. 331; Jencks v. 430, 25 N. W. Rep. 161, 26 id. 865; Alexander, 11 Paige, 619; Starr v. Bradford Academy V. Grover, 55Vt. Richmond, 30 111. 276, 83 Am. Dec. 463; Case V. Fish. 58 Wis. 56,15 N. 189; Johnson v. Johnson, 5 Jones' Eq. W. Rep. 808; Hurst v. Hite, 20 W. 167; De Bruhl v. Neuflfer, 1 Strobh. Va. 183; Frazier v. Hyland, 1 Har. & 426. See Mercer's Adm'r v. Beale, 4 J. 98; Gwinn v. Whitaker, id. 754; Leigh, 189. Bond V. Jones. 8 Sm. & M. 368; Spires If part of the interest is barred by V. Hamot, 8 W. & S. 17; Peebles v. the statute of limitations an unap- Gee, 1 Dev. 341; Hampton v. Dean, 4 propriated payment will not be ap- Tex. 455; Hearn v. Cutberth, 10 id. plied to its discharge because it is 216; McFadden v. Fortier, 20 111. 509; not wholly due. In re Fitzmaurice's Hart V. Dorman, 3 Fla, 445: Lash v. Minors, 15 Irish Ch. 445. Edgerton, 13 Minn. 210; Hammer v. 'Smythe v. New England Loan & Nevill, Wright, 169; Estebeue v. Es- Trust Co., 12 Wash. 424, 41 Pac. Rep. tebene, 5 La. Ann. 738; Union Bank 184. V. Lobdell, 10 id. 130; Bird v. Lobdell, 2 Monson v. Meyer, 190 III 105, 60 id. 159; Johnson v. Robbins, 20 id. N. K Rep. 63, 92 IlL App. 127. 569; Moore v. Kiflf, 78 Pa. 96; Will- 3 Anketel v. Converse, 17 Ohio St. iaras V. Houghtaling, 3 Cow. 86; IL Righter v. Stall, 3 Sandf. Ch. 60S; § 245.] APPLICATION OF PAYMENTS. 631 penal bond, they will be applied to the interest in the first in- stance, although their sum exceeds the penalty.^ A payment of usury will be applied in law to discharge the amount legally due.^ Payments received on a debt bearing interest before either is due should be applied to pay the principal and the in- terest accrued on that part of the principal so extinguished.' The rule which applies a general payment first to interest due, rather than principal, is directly opposite to that which ap- plies a payment on an interest-bearing debt in preference to one not bearing interest; it does not favor the debtor, but the creditor; for the law in some states allowing interest due to bear interest is exceptional. § 245. General payments applied to the debt least se- cured; comments on conflicting views of the general sub- ject. If one debt be secured and another not, and a general payment is made, the prevailing rule is that the court will ap- ply it to the debt which is not secured, or that for which the 1 Smith V, Macon, 1 Hill Ch. (S. C.) 339. 2 Atlanta Savings Bank v. Spencer, 107 Ga. 629, 33 S. E. Rep. 878; Bur- rows V. Cook, 17 Iowa, 436; Parch- man v. McKinney, 12 Sm. & M. 681; Stanley v. Westrop, 16 Tex. 200; Bartholomew v. Yaw, 9 Paige, 165. See g 236. In a suit under the national bank act to recover usurious interest and the forfeiture provided for, if occa- sional settlements have been made by the parties, payments deducted from the principal and interest then due and new notes given for the balances, the payments will be ap- plied pro rata to the principal and interest due at the time. Kinser v. Farmers' Nat. Bank, 58 Iowa, 728, 13 N. W. Rep. 59. 3Righter v. Stall, 3 Sandf. Ch. 608; Jencks v. Alexander, 11 Paige, 619; Williams v. Houghtaling, 3 Cow. 86; Miami Exporting Co. v. United States Bank, 5 Ohio, 260. In Starr v. Richmond, 30 IlL 276, 83 Am. Dec. 189, Walker, J., said: "It appears to be more equitable and just that when the holder re- ceives money before it is due, on a demand drawing interest, it should be applied, in the absence of an agreement to the contrary, to the principal. Otherwise, by loaning the sum thus received, he w^ould, in effect, compound the interest, or have placed at interest before its maturity a larger sum than his original claim. In other words, he would receive interest on the maker's money as well as his own. After the principal and interest both become due it would be otlier- wise. The court below, we think, erred in applying any portion of the payment made before the maturity of the note to the extinguishment of interest, but should have appro- priated the whole of the payment to the principal." McElrath v. Dupuy, 2 La. Ann. 520; Fay v. Lovejoy, 20 Wis. 407. 632 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 245, security is most precarious.^ The rule has been applied to money recovered from a defaulting officer by his sureties and paid over by them to the government, his defalcation being in [4:23] excess of their liability.^ If, however, the security of one of the debts is by a surety, a general payment will be ap- plied to the debt for which he is liable that he may be relieved.* ' Sternberger v. Gowdy, 93 Ky. 146, 19 S. W. Rep. 186; Chicago Title & Trust Co. V. McGlew, 90 111. App. 58; Mouson V. Meyer, 98 IlL App. 94, 190 111. 105, 60 N. E. Rep. 63: Gardner v. Leek, 53 Minn. 522, 54 N. W. Rep. 746; Price V. Merritt, 55 Mo. App. 640; McMillan v. Grayston, 83 Mo. App. 425; Smith v. Lewiston Steam Mill, 66 N. H. 613, 34 Atl. Rep. 153; Pond V. Harvvood, 139 N. Y. Ill, 34 N. E. Rep. 768; Pope v. Transparent Ice Co., 91 Va. 79, 20 S. E. Rep. 940; Poling V. Flanagan, 41 W. Va. 191, 23 S. E. Rep. 685; The Katie O'Neil 65 Fed. Rep. Ill; Garrett's Appeal, 100 Pa. 597; Goetz v. Piel, 26 Mo. App. 634, 643; Nichols v. Knowles, 3 Mc- Crary, 477, 17 Fed. Rep. 494; Sanborn V. Stark, 31 id. 18; McOurdy v. Mid- dleton, 82 Ala. 131, 2 So. Rep. 721; Poulson V. Collier, 18 Mo. App. 583; The D. B. Steel man, 5 Hughes, 210; Hare v. Stegali, 60 111. 380; Wilhelm V. Schmidt, 84 id. 183; Plain v. Roth, 107 id. 588; Frazier v. Lanahan, 71 Md. 131, 17 At). Rep. 940, 17 Am. St. 516; Lester v. Houston, 101 N. C. 605, 8 S. E. Rep. 366; North v. La Flesh, 73 Wis. 520, 41 N. W. Rep. 633; Mc- Daniel V. Barnes, 5 Bush, 183; Thomas V. Kelsey, 30 Barb. 268; Blanton v. Rice, 5 T. B. Mon. 253; Field v. Hoi- land, 6 Cranch, 8; Burks v. Albert, 4 J. J. Marsh. 97, 20 Am. Dec. 209; Foster v. McGraw, 64 Pa. 464; Patti- Bon V. Hull, 9 Cow. 747; Dows v. More wood, 10 Barb. 183; Johnson's Appeal, 37 Pa. 268; Langdon v. Bo wen, 46 Vt. 512; Wilcox v. Fair- haven Bank, 7 Allen, 270; Hempfield R. Co. V. Thornburg, 1 W. Va. 261; Gaston v. Barney, 11 Ohio St. 510*. Moss V. Adams, 4 Ired. Eq. 42; Ran- sour V. Thomas, 10 Ired. 104; State v. Thomas, 11 id. 251; Jenkins v. Beal, 70 N. C. 440; Sprinkle v. Martin, 72 id. 92; Chester v. Wheelwright, 15 Conn. 562; Bosley v. Porter, 4 J. J. Marsh. 621; Gordon v. Hobart, 2 Story, 243; Taylor v. Talbot, 2 J. J. Marsli. 49; Sager v. Warley, Rice Ch. (S. C.) 26; Heilbron v. Bissell, 1 Bailey Eq. 430; Gregory v. Forrester, 1 Mc- Cord Ch. 318; Smith v. Wood, 1 N. J. Eq. 74; Jones v. Kilgore, 2 Rich. Eq. 63; Baine v. Williams, 10 Sm. & M. 113; McQuaide v. Stewart, 48 Pa. 198; Smith V. Brooke, 49 id. 147; Plant- ers' Bank v. Stockman, 1 Freeman's Ch. 502. 2 Alexander v. United States, 6 C. C. A. 602, 57 Fed. Rep. 828. sPritchard v. Comer, 71 Ga. 18; Pearl v. Deacon, 1 De G. & J. 461; Kinnaird v. Webster. 10 Ch. Div. 139; Berghaus v. Alter, 9 Watts, 386; Ross V. McLauchlan. 7 Gratt. 86; Marry- atts V. White, 2 Stark. 101; Gard v. Stevens, 12 Mich. 292, 86 Am. Dec. 52; Bridenbeckerv. Lowell, 32 Barb. 9. Where one of several accommoda- tion makers of a note has notified the payee and holder of his desire to terminate his liability, he cannot claim in diminution thereof on ac- count of outstanding advances money paid to the holder by the accommo- dation payee after such revocation, such monej' being the proceeds of the business of the payee conducted on money advanced on the credit of the other accommodation makers. Patterson v. Bank of British Colum- bia. 26 Ore. 509, 38 Pac. Rep. SI'S- § 245.] APPLICATION OF PAYMENTS. 633 No one except a surety will be heard to contend for a different application. The court cannot go outside the case to see whether or not equity requires that other than the parties to the record shall be protected ; and, it seems, that in the absence of fraud or imposition on the surety he has no equity to control the application of a payment for which he is bound.' One liable as guarantor for the prompt payment of interest on a mortgage cannot, in an action upon the guaranty, after a fore- closure sale which failed to bring the amount due on principal and interest, assert the right to have the money applied to the interest." In some states the courts, carrying the rule first stated in this section to greater length, hold that the applica- tion will be made to the debt which bears heaviest upon the debtor, and apply a general payment so as to discharge a debt for which he has given security in preference to an unsecured demand in order to release the collateral.' There is a marked conflict of decision upon this point relat- ing to the application by the court of indefinite payments aris- ing, as before intimated, from the diverse judicial assumptions on the one hand, that such payments are as a general rule to be applied in the manner most beneficial to the debtor, and -on the other, that they are to be applied most beneficially to the creditor.* No court, however, has so far relied upon [424:] 1 Richards' Estate, 185 Pa. 155, 39 Payments will be so applied as to Atl. Rep. 1117; Stamford Bank v. save a debtor's homestead. First Benedict, 15 Conn. 444. Nat. Bank v. Hollinsworth, 78 Iowa, 2 Smythe v. New England Loan & 575, 43 N. W. Rep. 536. Trust Co., 13 Wash. 434, 41 Pac. Rep. * So much has this assumption of 184. favoring one party or the other as a 3 Compound Lumber Co. v. Murphy, rule entered into the judgment of the 169 111. 343, 48 N. E. Rep. 472; Frazier courts, that it has been a convenient V. Lanahan, 71 Md. 131, 17 Atl. Rep. resort for determining incidental 940, 17 Am. St. 516; Griswold v. questions. Thus where it was proved Onondaga County Savings Bank, 93 that a payment was made in a certain N. Y. 301; Pattison v. Hull, 9 Cow. year, but the day and montli could 747; Dows v. Morewood, 10 Barb. 183; not be shown, the court directed tlie Poindexter v. La Roche, 7 Sm. & M. credit to be given as of tlie last day 699; Dorsey v. Gassaway, 3 Har. & J. of the year, a day most favorable to 402, 3 Am. Dec. 557; McTavish v. the creditor. Byers v. Fowler, 14 Carroll, 1 Md. Ch. 160 (but see Gwinn Ark. 80. See Anderson v. Mason, 6 V Whitaker, 1 Har. & J. 754); The Dana, 217; Bank of Portland v. Antarctic, 1 Sprague, 206; Neal v. Brown, 22 Me 295. Allison, 50 Miss. 175. See Thatcher If the course of dealing between ^v. Massey, 20 S. C. 543. the parties indicates an understand- 634: CONVENTIONAL LIQUIDATIONS AND DISCHAEGEa. [§ 245.. either assumption as to resolve all questions by it. As before stated, neither assumption, apart from some special ground, is founded in reason or principle. Xeither party, by reason merely of being debtor or creditor, has any claim to be pre- ferred; each as a general rule has had an election to appropri- ate the payment, and each having waived it has an equal claim to a just application by the court. The rule that the debt which is least secured should be first paid, where there are no- special circumstances, stands on very slight preponderance of equity. The most that can be said for it was said by Marsh- all, C. J. : " It being equitable that the whole debt should be paid it cannot be inequitable to extinguish first those debts for which the security is most precarious; " ^ and it is not surpris- ing that the humane consideration of relieving the debtor of the more burdensome debt should determine the application the other way. But the rule to pay first the debt least se- cured seems to be supported by a decided weight of authority. There is also considerable contrariety of decision upon other points relative to the application of payments by the court. The cases agree that an indefinite payment is to be applied to the oldest debt, where no other rule of appropriation conflicts; but it often occurs that another and sometimes several rules do conflict. Then the relative force of the conflicting rules and the particular circumstances must control the application. That rule is often met by the rule that the least secured debt shall be first paid. Both may be said to operate in favor of the creditor, but they do not always conduce to the same ap- plication. The latter is paramount when no circumstances exist to increase the force of the other. Where the secured and unsecured debts are by mutual consent items in a general account current, and especially if, by like consent, the pay- ment is also credited in the account, the rule for applying the credit to the oldest items prevails, notwithstanding the partial security;^ but not without dissent. Where the creditor's se- curity consisted in retaining title to the property sold, and the purchase price of the articles so conditionally sold constituted ing that payments are to be applied ^ Field v. Holland, 6 Cranch, 8. in the way most beneficial to the 2§243. creditor the court will give effect to it. Gwin V. McLean, 63 Jliss. 12L § 2^6.] ACCOKD AND SATISFACTION. 635 the earliest items in the account, and the payments were, by mutual consent, entered as credits therein, the interest [l-^.j] of the purchaser to perfect his title to the property was deemed to preponderate against the interest of the creditor to obtain payment of his unsecured, rather than his secured, claims; and the concurrence of the parties in making the transaction a matter of account evinced their intention that the payments should satisfy the charges in the order of their entry.' Section 3. ACCORD AND SATISFACTION. § 246. Definition. A claim or demand may be satisfied by the party liable delivering, paying or doing, and the claimant accepting, something different from that which was owing or claimed, if they so agree.^ It is a substituted payment. When 1 Crompton v. Pratt, 105 Mass. 255. In Pointer v. Smith, 7 Heisk. 137, A., a Tennessean, as agent, hired out in Alabama the slaves of several Tennesseans, and afterwards re- ceived in Alabamaapart of thehire, without any appropriation at the time by either agent receiving or the debtor paying. Held, that the law of Alabama would govern as to the subsequent appropriation of the pay- ment; but in the absence of any proof as to the law thereof, ap- plicable to the circumstances, the debtor could not make a subsequent appropriation, and it should be dis- tributed pro rata. In Smith v. Union Bank of George- town, 5 Pet. 518, it was held that the right of priority of payment among creditors of an intestate depends on the law of the place where the assets are administered, and not on the law of the place of the contract, or of the domicile of the deceased; and, there- fore, where administration was taken under the laws of Maryland of assets there, where all debts are of equal dignity, and the intestate was dom- iciled and owed a bond debt in Vir- ginia, where bond debts have a pref- erence, the latter debt had no prior right of payment out of the assets in Maryland. 2 If the amount due is unliquidated and the party owing it makes an offer of a less sum in settlement and attaches thereto the condition that if the sum is taken at all it must be received in full or in satisfaction, and the other party receives it with knowledge of the condition, he takes it subject thereto, and it operates as a full accord and satisfaction not- withstanding the payee, at the time of receivmg it, declares that he takes it in satisfaction pro tanto only. Mc- Daniels v. Bank, 29 Vt. 230, 70 Am. Dec. 406; Preston v. Grant, 34 Vt. 201; Berdell v. Bissell, 6 Colo. 162; Vermont State Baptist Convention V. Ladd, 58 Vt. 95, 4 Atl. Rep. 634; Bull V. Bull, 34 Conn. 455; Patten v. Douglass, 44 id. 541. If a party injured, with knowledge of all the facts, demands and receives from the wrong-doer a sum of money on account of the injury, either in whole or in part, it is presumed that it was intended as a full recompense, 63G CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 24T. such agreement is executed — carried fully into effect' — the original demand is canceled, satisfied, extinguished. It is thus discharged by what the law denominates accord and satisfac- tion. It is a discharge of the former obligation or liability by the receipt of a new consideration mutually agreed upon.^ The rule requiring that an accord be executed is satisfied if the creditor accepts the promise of the debtor to perform some act in future in satisfaction of the debt, and where that is the case the debt is extinguished without performance.' But there is an obvious distinction between an engagement to ac- cept a promise in satisfaction and an agreement requiring per- formance of the promise. In the latter case a tender of performance, although made promptlv and in good faith, is not satisfaction.* [426] § 247. Consideration. For the purpose of support- ing such an agreement and giving it effect, the law treats all considerations which have value, without regard to the extent of that value, as sufficient, as it does in all other cases of con- tract; — inadequacy is not a valid objection; a court will not consider the disparity, if there is any, between the value of the liability discharged and the thing done or promised, which forms the consideration, if the latter is of some value.* The and it is an accord and satisfaction. 64 N.W. Rep. 1120; Rogers v. Spokane, Hinkle v. Minneapolis, etc. R Co., 31 9 Wash. 168, 37 Pac. Rep. 300. Minn. 434, 18 N.W. Rtp. 275. But it 2Vanbebber v. Plunkett, 26 Ore. is otherwise if the party in fault 562, 569, 38 Pac. Rep. 707, 27 L. R A. pays money voluntarily, and not in 811, quoting the text; Bush v. Abra- response to a claim made by the ham, 25 Ore. 336, 345, 35 Pac. Rep. other, or if any fact gives the pay- 1066, quoting the text, ment the character of a gratuity. 3 Smith v. Elrod, 123 Ala. 269, 24 Sobieski V. St. Paul& D. R Co., 41 So. Rep. 994; Knowles v. Knowles, Minn. 169, 42 N. W. Rep. 863. 128 111. 110, 29 N. E. Rep. 196; 1 Swoff or d Brothers Dry Goods Co. Potts v. Polk County, 80 Iowa, y. Goss, 65 Mo. App. 55; Wenz v. 401, 45 N. W. Rep. 775; Averill v. Meyersohn. 59 App. Div, 130, 68 N. Wood, 78 Mich. 342, 44 N. W. Rep. Y. Supp. 1091; First Nat. Bank v. 381; Oregon Pacific R. Co. v. Forrest, Leech, 36 C. C. A. 263, 94 Fed. Rep. 128 N. Y. 83, 28 N. E. Rep. 137; Bab- 310; Crow v. Kimball Lumber Co., 16 cock v. Hawkins, 33 Vt. 561; Sharp C. C. A. 127, 69 Fed. Rep. 127; Hosier v. Mauston, 93 Wis. 629, 66 N. W. V. Hursh, 151 Pa. 415, 25 AtL Rep. 53; Rep. 803. See § 252. Omaha F. Ins. Co. v. Thompson, 50 * Hosier v. Hursh, 151 Pa, 415, 25 Neb. 580, 70 N. W. Rep. 30; Carpenter Atl. Rep. 52. V. Cliicago, etc. R. Co., 7 S. D. 584, 5 Savage v. Everman, 70 Pa. 315, § 248.] ACCOKD AND SATISFACTION. 037 receipt of money paid into court by the defendant does not deprive the plaintiff of his right to collect the balance due unless the payment was accompanied by a condition that the sum must be accepted in full satisfaction.^ § 248. Payment of part of a debt will not support agree- ment to discharge the whole. Where there is an overdue money demand, liquidated and not disputed, and a part only of it is paid, though this is accepted as full satisfaction, there is only a part performance of the obligation in kind; the agreement to discharge the residue is void for want of con- sideration. All claims for damages, for torts committed, or for contracts broken, are payable in money. When a demand therefor is certain, or rendered certain by agreement or ad- judication, and is no longer disputed, it cannot be satisfied with any less amount than the precise sum owing. If a part is paid there is a partial performance of the obligation of the party liable, and no more. His payment is only a discharge 'pro tanto. This part payment may have been induced solely by the assurance that it would be accepted as full satisfaction, and it may have been impossible to compel payment; still, the party paying has done in kind only what he was under a legal obligation to do in respect to the amount paid, and the corresponding amount of the obligation is thereby satis- fied, but no more; therefore the agreement of the creditor to discharge the residue is, in a legal sense, gratuitous and not binding.^ 10 Am. Rep. 676; Hartman v. Dan- iCooley v. Kinney, 119 Mich. 377, ner, 74 Pa. 33; Very v. Levy, 13 How. 78 N. W. Rep. 333. 345; Hardman v. Bellhouse, 9 M. & 2 Swofford Brothers Dry Goods Ca W. 596; Sibree v. Tripp. 15 id. 23; v. Goss, 05 Mo. App. 55; Morrill v. Booth V. Smith. 3 Wend. 66; Kellogg Baggott. 157 111. 240, 41 N. R Rep. V. Richards, 14 id. 116; Stein man v. 639; Hart v. Strong, 183 IIL 349, 55 Magnus, 11 East, 390; Lewis v. Jones, N. E. Rep. 629; Pottlitzer v. Wesson, 4 B. & C. 506; Blinn v. Chester, 5 8 Ind. App. 472, 35 N. E. Rep. 1030; Day, 360; Webster v. Wyser, 1 Stew. Jennings v. Durflinger, 23 Ind. App. 181; Davis v. Noaks, 3 J. J. Marsli 673, 55 N. E. Rep. 979; Stengel v. 497; Wood v. Roberts, 2 Stark. 417; Preston, 11 Ky. L. Rep. 976, 13 S. W. Boothby v. Sowden, 3 Camp. 175; Rep. 839; Leeson v. Anderson, 99 Bradley v. Gregory, 2 id. 383; Bush Mich. 247, 58 N. W. Rep. 72; Wet- V. Abraham, 25 Ore. 336, 35 Pac. Rep. more v. Crouch, 150 Mo. 671, 51 S. 1066; Griffith v. Creighton, 61 Mo. W. Rep. 738; Griffith v. Creighton, App. 1; Howard v. Morton, 65 Barb. 61 Mo. App. 1; Howe v. Robinson, 13 161. See § 249. N. Y. Misc. 256, 34 N. Y. Supp. 85; 638 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 248. [427] The actual value of a debt or demand depends on the probability of voluntary payment, or the possibility of collec- tion by legal process. Where a debt is doubtful, a creditor may obtain a part of the nominal amount by discharging the residue, and thus realize all that it is actually worth, and per- Jones V. Rice, 19 N. Y. Misc. 357, 43 N. Y. Supp. 491; Toledo v. Sanwald, 13 Ohio Ct. Ct. 496 (applying the rule to a judgment); Mt. Holly Water Co. v. Mt. Holly Springs, 10 Pa. Super. Ct. 162; Commonwealth V. Cummins, 155 Pa. 30, 25 Atl. Rep. 996; Chicago, etc. K Co. v. Clark, 35 C. C. A. 120, 92 Fed. Rep. 968 (the opinion of Lacombe, C. J., reviews many cases); Hodges v. Truas, 19 Ind. App. 651, 49 N. E. Rep. 1079; Rued V. Cooper, 119 Cal. 463, 51 Pac. Rep. 704; Gurley v. Hiteshue, 5 Gill, 217; Markel v. Spitler, 28 Ind. 488; Dederick v. Leman. 9 Johns. 333; Harris v. Close, 2 Johns. 448, 3 Am. Dec. 244; Seymour v. Minturn, 17 Johns. 169, 8 Am. Dec. 380; White v. Jordan, 27 Me. 370; Latapee v. Pecho- lier, 2 Wash. C. C. 180; Warren v. Skinner, 20 Conn. 559: Campbell v. Booth, 8 Md. 107; Curtiss v. Martin, 20 111. 575; Donohue v. Woodbury. 6 Cush. 150; Bryant v. Proctor, 14 B. Mon. 451; Williams v. Langford, 15 id. 560; Conkling v. King, 10 Barb. 372, 10 N. Y. 440; Keeler v. Salisbury, 33 N. Y. 648: Fellows v. Stevens, 24 Wend. 299; Harper v. Graham, 20 Ohio, 105; Fell v. McHenry, 42 Pa. 41; Pierson v. McCahill, 21 Cal. 122; Irvine v. Millbank, 56 N. Y. 635; Hinckley v. Arey, 27 Me. 362; Riley V. Kershan, 52 Mo. 224; Peterson v. Whe-ler, 45 id. 369; Rose v. Hall, 26 Conn. 392, 68 Am. Dec. 402; Bailey v. Day, 26 Me. 88; Redfield v. Holland Purchase Ins. Co., 56 N. Y. 354, 15 Am. Rep. 424; Lewis v. Jones, 6 D. & R. 567. 4 B. & C. 513; Ogborn v. Hoff- man, 52 Ind. 439; Keen v. Vaughan, 48 Pa, 477; Carrington v. Crocker, 37 N. Y. 336; Cumber v. Wane, 1 Str. 426; Sibree v. Tripp, 15 M. & W. 23; Fitch V, Sutton, 5 East, 230; Pin nell's Case, 5 Rep. 117: Lynn v. Bruce, 3 H. Bl. 317; Thomas v. Heathorn, 2 B. & C. 477; Mitchell V. Cragg, 10 M. & W. 367; Skaife v. Jackson, 3 B. & C. 421; Graves v. Key, 3 B. & Ad. 313; Straton v. Ras- tall, 2 T. R. 366; Churchill v. Bow- man, 39 Vt. 518; Hardey v. Coe, 5 Gill, 189; Smith v. Bartholomew, 1 Met. 276, 35 Am. Dec. 365; Arnold v. Park, 8 Bush, 3; Tyler v. Odd Fel- lows' Mut. Relief Ass'n, 145 Mass. 134, 13 N. E. Rep. 360; Smith v. Chil- ton, 84 Va. 840, 6 S. E. Rep. 142; Mar- tin V. Frantz, 127 Pa. 389, 14 Am. St. 859, 18 Atl. Rep. 20; Hayes v. Massa- chusetts Mut. L. Ins. Co., 125 III 626. 18 N. E. Rep. 322; Sheibley v. Dixon Count}', 61 Neb. 409, 85 N. W. Rep. 399; Helling v. United Order of Honor, 29 Mo. App. 309; Emmitts- burg R. Co. V. Donoghue, 67 Md. 383, 1 Am. St. 396, 10 Atl. Rep. 233; St. Louis, etc. R. Ca v. Davis, 35 Kan. 464, 11 Pac. Rep. 421; Foakes v. Beer, 9 App. Cas. 605, 11 Q. B. Div. 221; Eldred v. Peterson, 80 Iowa, 264, 20 Am. St. 416, 45 N. W. Rep. 755. In Gordon v. Moore, 44 Ark. 349, 355, 51 Am. Rep. 606, it is held "that an agreement by a creditor to ac- cept a smaller sum in satisfaction of a debt, carried into effect by the receipt of the money, and the exe- cution of a formal and positive re- lease, with all other acts essential to an absolute relinquishment of his right, is a valid and iri'evocable act." •§ 24:8(2.] ACCORD AND SATISFACTION. 639 ^aps more. For this reason the rule stated has been ref^arded by the courts as only a technical one; and they have satisfied it on nice distinctions;^ or, as has been judicially said, "they have seemed to seize with avidity upon any consideration to support the agreement to accept the lesser sum in satisfaction of the larger, or, in other words, to extract if possible from the ■circumstances of each case a consideration for the new aoree- ment in place of the old, and thus to form a defense to the action brought upon the old agreement."^ § 24-8a. Same subject. In a recent case the Mississippi court refused to recognize the rule stated in the last section, notwithstanding it had been applied there. In a strong opin- ion Woods, C. J., argues that the case in Coke' which is relied upon as the foundation of the rule decided no such question. "An examination of that mischievous and misleading reported case will make it appear at once that the question before us was not in any way involved. PinneFs plea was that, before the maturity of his bond for the larger sum, plaintiff had ac- cepted a lesser sum agreed upon between the parties, in full satisfaction of the original debt. Kow, all the authorities, American and English, including Coke himself, agree that this was a good defense, and that the plaintiff was bound by it, if defendant should properly plead it to a suit for the entire original debt. But the hapless Pinnel, in that remote period when courts were almost as zealous for the observance of tech- nical rules of special pleading as for the execution of justice ac- 1 Kellogg V. Richards, 14 "Wend, less because the debtor was unable 116; Smith v. Ballou. 1 R I. 496; Har- to pay it. Judge Marshall said: " We per V. Graham. 20 Ohio, 105; Brooks think his acceptance is sufficient to V. White, 2 Met. 283, 37 Am. Dec. establish the adequacy of the satis- 95; McDaniels v. Lapham, 21 Vt. 222. faction. It cannot be said that there See Weymouth v. Babcock, 42 Me. was no consideration for giving up 44; Milliken v. Brown, 1 Rawle, 391; any part of the debt of the defend- Lamb v. Goodwin, 10 Ired. 320; Mc- ant, because although the value of Daniels v. Bank, 29 Vt. 230; Mathis the entire consideration given can V, Bryson, 4 Jones, 509; Brink v. be measured, there is no measure of Garland, 58 Mo. A pp. 356. the value of the debt which the de- In Woolfolk V, McDowell, 9 Dana, fendant could not pay." 268, a creditor accepted his own note -^ Jaffray v. Davis, 124 N. Y. 164, 26 outstanding in the hands of a third N. E. Rep. 351, 11 L. R A. 7ia person, in satisfaction of a larger ^ Pinnel's Case, 5 Rep. 117. amount against his debtor, but worth GiO CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 24S«. cording to right, was adjudged to pay the whole debt, the plaint- iff having judgment against him because of his ' insufficient pleading, for,' sa^^s Coke, ' he did not plead that he had paid the ol. 2s. 2d. in full satisfaction (as by law he ought), but pleaded the payment of part generally, and that the plaintiff accepted it in full satisfaction.'" After showing that the courts of this country generally adopted the rule supposed to be so laid down, the writer comes to the question of consider- ation, the absence of which is usually given as the reason for the rule: "The absurdity and unreasonableness of the rule seem to be generally conceded, but there also seems to remain a wavering, shadowy belief in the fact, falsely so called, that the agreement to accept, and the actual acceptance of, a lesser sum in the full satisfaction of a larger sum, is without any consideration to support it — that is, that the new agreement confers no benefit upon the creditor. However it may have seemed three hundred years ago in England, when trade and commerce had not yet burst their swaddling bands, at this day and in this country, where almost e\ery man is in some way or other engao:ed in trade or commerce, it is as ridiculous as it is untrue to say that the payment of a lesser part of an origi- nally greater debt, cash in hand, without vexation, cost, and delay, or the hazards of litigation m an effort to collect all, is not often — nay, generally — greatly to the benefit of the creditor. Why shall not money — the thing sought to be se- cured by new notes of third parties, notes whose payment in money is designed to be secured by mortgage, and even nego- tiable notes of the debtor himself — why shall not the actual payment of money, cash in hand, he held to be as good con- sideration for a new agreement, as beneficial to the creditor, as any mere promises to pay the same amount, by whomsoever made and howsoever secured ? And why may not men make and substitute a new contract and agreement for an old one, even if the old contract calls for a money payment ? And why may one accept a horse worth one hundred dollars in full satisfaction of a promissory note for one thousand dollars, and be bound thereby, and yet not be legally bound by his agree- ment to accept nine hundred and ninety-nine dollars, and his actual acceptance of it, in full satisfaction of the one thousand dollar note ? No reason can bs assigned, except that just ad- § 249.] ACCOED AND SATISFACTION. 641 verted to, and this rests upon a mistake in fact. And a rule of law which declares that under no circumstances, however favorable and beneficial to the creditor, or however hard and full of sacrifice to the debtor, can the payment of a less sum of money at the time and place stipulated in the original obli- gation, or afterwards, for a greater sum, though accepted by the creditor in full satisfaction of the whole debt, ever amount in law to satisfaction of the original debt, is absurd, irrational, unsupported by reason and not founded in authority, as has been declared by courts of the highest respectability, and of last resort, even when yielding reluctant assent to it."^ § 249. Any other act or promise which is a new consider- ation will suffice. If there be any benefit or even legal [428] possibility of benefit ^ to the creditor thrown in, the additional weight will turn the scale and render the consideration suffi- cient to support the agree ment.' Payment at a different place,* or before the original debt is due,* is sufficient. 8o if, instead of offering payment of a less sum, the debtor procures a third person to become security, either by engaging his personal I Clayton v. Clark, 74 Miss. 499, 60 Am. St. 521, 37 L. R. A. 771, 21 So. Rt-p. 565, 23 id. 189, modifying or overruling Jones v. Perkins, 29 Miss. 139; Pulliam v. Taylor. 50 Miss. 251, and Burrus v. Gordon, 57 Miss. 93. To much the same effect as the princi- pal case is Harper v. Graham, 20 Ohio, 105. See Shelton v. Jackson, 20 Tex, Civ. App. 443, 49 S. W. Rep. 414 2 '-What is called 'any benefit, or even any legal possibility of benefit,' is not that sort of benefit which a creditor may derive from getting payment of part of the money due to him from a debtor who might other- wise keep him at arm's length, or possibly become insolvent, but is some independent benefit, actual or contingent, of a kind which might in law be a good and valuable consider- ation for any other sort of agreement not under seal." Foakes v. Beer, 9 App. Cas. 605 (1884). Compare the preceding section. Vou 1 — 41 3 Grayson's Appeal, 108 Pa. 581; Hendrick v. Thomas, 106 Pa. 327; Ty- son V. Woodruff, 108 Ga. 308, 33 S. E. Rep. 981; 1 Smith Lead. Cas. 600; Steinman v. Magnus, 2 Camp, 124; Bradley v. Gregory, id. 383; Wood v. Roberts, 2 Stark. 417; Boothby v. Snowden, 3 Camp. 175; Sibree v. Tripp, 15 M. & W. 23; Bidder v. Bridges, 37 Ch. Div. 406. 4 Smith V. Brown, 3 Hawks, 580; Harper v. Graham, 20 Ohio, 105; Aus- tin V. Dor win, 21 Vt 39; Spann v. Baltzell, 1 Fla. 302, 46 Am. Dec. 340: Arnold v. Park, 8 Bush, 3; Milliken V. Brown, 1 Rawle, 391. 5 Sonnenberg v. Riedel, 16 ]\Iinn. 83; Goodnow V. Smith, 18 Pick. 414, 29 Am. Dec. 200; Brooks v. White, 2 Met. 283, 37 Am. Dec. 95; Levy v. Very, 12 Ark. 148; Boyd v. Moats, 75 Iowa, 151, 39 N. W. Rep. 237; Schwei- der v. Lang, 29 Minn. 254, 13 N. W. Rep. 33; Ricketts v. Hall, 2 Bush, 249, 43 Am. Rep. 302; Smith v. Brown, 3 Hawks, 580. 642 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 249. credit or pledging his property for the payment of a smaller sum;^ or the payment of such sum by a third person ;2 or if the debtor alone gives negotiable paper for a smaller sum to satisfy a larger debt not in negotiable form; " or if one of sev- eral joint debtors, whether in partnership or not, does so, and the note or bill, and not the payment of it, is accepted as satis- faction, it is valid; giving such security is a new considera- tion, for it may be more advantageous than the debt in its previous form.* Giving notes for smaller sums than the amount of the indebtedness which was represented by a single note, so that the creditor may sue on them in justice's court, is a suf- 1 Lincoln Savings Bank & Safe De- posit Co. V. Allen, 27 C. C. A. 87, 82 Fed. Rep. 148; Keeler v. Salisbury, 33 N. Y. 648; Brooks v. White, 2 ]\Iet. 283, 37 Am. Dec. 95; Babcock v. Dill, 43 Barb. 577; Le Page v. McCrea, 1 Wend. 164, 19 Am. Dec. 469; Harri- son V. Close, 2 Johns. 448, 3 Am. Dec. 444; Seymour v. Minturn, 17 Johns. 169, 8 Am. Dec. 380; Conkling v. King, 10 N. Y. 440; Welby v. Drake, 1 C. & P. 557; Belshaw v. Bush, 11 C. B. 191; James v. Isaacs, 12 id. 791; Steinman v. Magnus, 11 East, 390; Henderson v. Stobart, 5 Ex. 99; Dias V. Wanmaker, 1 Sandf. 469; Seymour V. Goodrich, 80 Va. 303; Bidder v. Bridges, 37 Ch. Div. 406; Roberts v. Brandies, 44 Hun, 468; Varney v. Conery, 77 Me. 527, 1 Atl. Rep. 683; Laboyteaux v. Swigart, 103 Ind. 596, 3 N. R Rep. 373. See Warburg v. Wilcox, 7 Abb. Pr. 336. 2 Fowler v. Smith, 153 Pa, 639, 25 AtL Rep. 744; Clark v. Abbott, 53 Minn. 88, 55 N. W. Rep. 542, 39 Am. St. 577; Laboyteaux v. Swigart, 103 Ind. 596, 3 N. E. Rep. 373; Varney v. Conery, 77 Me. 527, 1 Atl. Rep. 683; Welby V. Drake, 1 C. & P. 557; Gordon V. Moore, 44 Ark. 349, 51 Am. Rep. 606; Pettigrew Machine Co, v. Har- mon, 45 Ark. 290. 3 Jaflfray v. Davis, 124 N. Y. 164, 26 N. E. Rep. 351, 11 L. R. A. 710, dis- tinguishing or disapproving Keeler V. Salisbury, 73 N. Y. 653, and Platts V. Walrath, Lalor's Supp. 59; Me- chanics' Bank v. Houston, 11 W. N. C. 388 (Pa. Sup. Ct.) ; Curlewis v. Clark, 3 Ex. 375; Cooper v. Parker, 15 C. B. 825; Sibree v. Tripp, 15 M. & W. 23; Goddard v. O'Brien, 9 Q. B. Div. 37. * Thompson v. Percival, 5 B. & Ad. 925; Sheehy v. Mandeville, 6 Cranch, 253; Mason v. Wickersham, 4 W. & S. 100; Cole v. Sackett, 1 Hill, 516; Waydell v. Luer, 5 id. 448, 3 Denio, 410; Arnold v. Camp, 12 Johns. 409, 7 Am. Dec. 328; Lodge v. Dicas, 3 B. & Aid. 611; Pearson v. Thomason, 15 Ala. 700, 50 Am. Dec. 159; Russell v. Lytle, 6 Wend. 390, 22 Am. Dec. 537; Barron v. Vandvert, 13 Ala. 232; Webb V. Goldsmith, 2 Duer, 413; Cartwright v. Cooke, 3 B. & Ad. 701; Evans v. Powis, 1 Ex. 601; Kinsler V. Pope, 5 Strobh. 126; Evans v. Drummond, 4 Esp. 89; Reed v. White, 5 id. 122; Lyth v, Ault, 7 Ex. 669; Bedford v. Deakin, 2 Stark, 178. See Ricketts v. Hall, 2 Bush, 249; Keeler v. Salisbury, 27 Barb. 485, 33 N. Y. 648; Conkling v. King. 10 Barb, 372. In Bowker v. Harris, 30 Vt 425, a wife's note was held sufficient con- sideration, she having paid it, though it was void when made. See, also, Kirwan v. Kirwan, 4 Tyrwh. 491; Hart v. Alexander, 2 M. & W. 484; Powles v. Page, 3 C. B. 16. § 249.] ACCOKD AKD SATISFACTION. 64J ficient consideration.' An accord and satisfaction mov- [420] ing from a stranger, or a person having no i)ecuniary interest in the subject-matter, if accepted in discharge of the debt, con- stitutes a good defense to an action to enforce the liability against the debtor.^ He sufficiently adopts it by taking ad- vantage of it by plea.' There must be something received to which the creditor was not before entitled.* And it must pos- sess some value or by legal possibility be of benefit to him.' The extent of the value is not material.^ Part of a claim may be satisfied by withdrawal of the defense of infancy to the residue.^ Suspension or abandonment of a suit is a sufficient consideration.^ If there is a new consideration of some value, it is enough, though it is of much less value than the debt dis- charged.^ The voluntary acceptance by an injured railroad employee of the benefits provided for in his contract of mem- bership in the relief department maintained by his employer, knowing the effect of such acceptance, bars a suit to recover for the injury sustained.'" Where a debtor pays part of a debt 1 In re Dixon, S McCrary, 556. 2 Jones V. Broadhurst, 9 C. B. 173; Leavitt v. Morrow, 6 Ohio St. 71, 67 Am. Dec. o34; Harrison v. Hicks, 1 Port. 433, 27 Am. Dec. 638; Daniel v. Hallenbeck, 19 Wend. 408; Clow v. Borst, 6 Johns. 37; Stark v. Thomp- son, 3 Mon. 296; Wool folk v. Mc- Dowell, 9 Dana, 268; Belshaw v. Bush, 11 C. B. 191; Jackson v. Penn- sylvania R. Co.. 66 N. J. L. 319, 49 Atl. Rep. 730; Armstrong v. School District, 28 Mo. App. 169. 3 Belshaw v. Bush, supra; Snyder V. Pharo, 25 Fed. Rep. 398; Bennett V. Hill, 14 R. L 322. * Thurber v. Sprague, 17 R. L 634, 24 Atl. Rep. 48; Bryant v. Proctor, 14 B. Mon. 451; Hethcoate v. Crook- shanks. 3 T. R. 24; Harper v. Gra- ham, 20 Ohio, 105; Good v. Chees- man, 2 B. & Ad. 328; Fitch v. Sutton, 5 East, 230; Acker v. Phoenix, 4 Paige, 305; Commonwealth v. Mil- ler, 5 Mon. 205; Riley v. Kershan, 52 Mo. 224; Rose v. Hall, 26 Conn. 392, 68 Am. Dea 402; Bartlett v. Rogers, 3 Sawyer, 62. SBIinn v. Chester, 5 Day, 360: Booth V. Smith, 3 Wend. 66; Web- ster V. Wyser, 1 Stew. 184; Keeler v. Neal, 2 Watts, 424; Davis v. Noaks, 3 J. J. Marsh. 494. See § 247 ; Foster V. Dawber, 6 Ex. 839. «Id.; Pinnel's Case, 5 Rep. 117; Andrew v. Boughey, 1 Dyer, 75a. ^ Cooper V. Parker, 15 C. B. 823. 8 Smith V. Monteith, 13 M. & W. 427; Lewis v. Donohue, 27 N. Y. Misc. 514, 58 N. Y. Supp, 319. 9 1 Smith's Lead. Cas. pt. 1, *445; Kellogg V. Richards, 14 Wend. 116: Jones v. Bullitt, 2 Litt. 49; Brooks v. White, 8 Met. 283; Harper v. Gra- ham, 20 Ohio, 105; Boyd v. Hitch- cock, 20 Johns. 76, 11 Am. Dec. 347; Le Page v. McCrea, 1 Wend. 164, 19 Am. Dec. 469; Sanders v. Branch Bank, 13 Ala. 353. i^Eckman v. Chicago, etc. R Co., 169 111. 312. 48 N. E. Rep. 496, 38 L. R. A. 750, 04 IlL App. 444 See § & 6J-4 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 249. for which the creditor holds a note, upon an agreement that such part payment shall be full satisfaction, and, in pursuance of such agreement, the note is surrendered or canceled, the transaction will amount to full accord and satisfaction.^ The surrender is equivalent to a release." If the principal and surety in a bond given to secure the performance of a contract which involves matters uncertain in their nature are insolvent, pay- ment of less than the face of the bond is a good consideration for its discharge.^ An agreement between grantor and grantee, subsequent to a conveyance, in pursuance of which the former places a sum of money in the hands of a third person to be for- feited to the grantee in full satisfaction of all damage he may sustain by reason of the breach of the former's covenant, is a good accord and satisfaction.^ An accord and satisfaction by one of several jointly liable is a discharge of all.^ At common law an accord and satisfac- tion to one of two obligees of a common money bond was good because they were considered as having a joint interest in the debt, with its incident of survivorship, and the satisfaction to one of them of the full amount due to all put an end to the bond.^ But in equity the general rule with regard to money lent by two persons to a third was that they v^qtq prima facie regarded as tenants in common, and not as joint tenants, both of the debt and of any security held for it. " Though they take a joint security, each means to lend his own money and to take back his own." '^ This is, however, but a presumption, and may be rebutted. The accord is good as to the obligee who re- ceived his share.* 1 Ellsworth V. Fogg, 35 Vt. 355; 57 id. 497, 10 N. W. Rep. 875; Go.=?s v. Draper V. Hitt, 43 Vt 439, 5 Am. Rep. Ellison, 136 Mass. 503; Coonley v. 293; Beach v. Endress, 51 Barb. 570; Wood, 36 Hun, 559. Kent V. Reynolds, 8 Hun, 559. The discharge of a party not - Id. shown to be a wrong-doer will not sShelton v. Jackson, 20 Tex. Civ. affect the right of action against the App. 443, 49 S. W. Rep. 414. other defendants. Wardell v. Mc- 4 Reichel v. Jeffrey, 9 Wash. 250, 37 Connell, 25 Neb. 558, 41 N. W. Rep. Pac. Rep. 296. 548. 5 Chicago V. Babcock. 143 III 358, 6 Wallace v. Kelsall, 7 M. «fe W. 264, 82 N. E. Rep. 271; Atwood v. Brown, 'Morley v. Bird, 3 Ves. 631; Mat- 72 Iowa, 723, 32 N. W. Rep. 108; Tur- son v. Dennis, 10 Jur. (N. S.) 461, 12 ner v. Hitchcock, 20 Iowa, 310: Metz Week. Rep. 926. V. Soule, 40 id. 236; Long v. Long, 8 steeds v. Steeds, 22 Q. B. Div. 537. §§ 250, 251.] ACCORD AND SATISFACTION. G45 § 2.)0. Composition with creditors. There is no want [430] of consideration in agreements for composition between a debtor and two or more of his creditors; for the enirajrement of one is a sufficient consideration for that of the others.^ The fact that a creditor whose claim was disputed was not a party to the agreement does not invalidate it, no such contingency being provided for.^ When an unliquidated or disputed de- mand is the subject of accord, and a certain sum is paid and accepted as full satisfaction, the consideration is manifest. § 251. Compromise of disputed claim. The settlement or compromise of a disputed or doubtful claim is a good consid- eration for a promise.'' The claim must be a real one and the parties must regard their rights concerning it as in fact or in law doubtful, and the compromise must be made lonafide} A iPierson v. McCahill, 21 Cal. 132 Fellows V. Stevens, 24 Wend. 292 Steinman v. Magnus, 11 East, 390 Keeler v. Salisbury, 33 N. Y. 648 Way V. Langley, 15 Ohio St. 392 Ricketts v. Hall, 2 Bush. 249; Tuck erman v. Newhall, 17 Mass. 581; Dier raeyer v. Hackman, 52 Mo. 282; Keay V. Whyte, 3 Tyrvvh. 596; Boyd v. Hin.l, 1 H. & N. 938; Cutter v. Reyn- olds, 8 B. Mon. 596; Boothby v. Sow- den, 3 Camp. 174; Bradley v. Gregory, 2 id. 383; Wood v. Roberts, 2 Stark. 417; Cockshott v. Bennett, 2 T. R. 765; Hale v. Holmes, 8 Mich. 37; Hartle v. Stahl, 27 Md. 157. See Case V. Gerrish, 15 Pick. 49. 2 Crawford v. Krueger, 201 Pa. 348, 50 Atl. Rep. 931. 3 Brockley v. Brockley. 122 Pa. 1, 15 Atl. Rep. 646; Schaben v. Brunning, 74 Iowa, 102, 36 N. W. Rep. 910; Zim- mer v. Becker, 66 Wis. 527, 29 N. W. Rep. 228; Stewart v. Ahrenfeldt, 4 Denio, 189; Wehrura v. Kuhn, 61 N. Y. 623; Hammond v. Christie, 5 Robert. 160; United States v. Clyde, 13 Wall. 35; United States v. Child, 12 Wall. 232; United States v. Justice, 14 Wall. 535; Brett v. Universalist Society, 63 Barb. 610. < Wahl V. Barnum, 116 N. Y. 87. 22 N. K Rep. 280, 5 L. R A. 623: Zoe- bisch V. Von Minden, 120 N. Y. 406, 24 N. E. Rep. 795; Moon v. Martin, 122 Ind. 211, 23 N. E. Rep. 608; Gilliam V. Alford. 69 Tex. 267, 6 S. W. Rep. 757; Grandin v, Grandin. 49 N. J. L. 508, 60 Am. Rep. 642. 9 Atl. Rep. 756; Cook V. W^right, 1 B. & S. 559: Cal- lisher v. Bischoffscheim, L. R. 5 Q. B. 449; Ockford v. Barrelli. 20 Week. Rep. 116; Miles v. New Zealand Al- ford Estate Co., 32 Ch. Div. 266; Demars v. Musser-Sauntry Land Co., 37 Minn. 418, 35 N. W. Rep. 1; An- thony V. Boyd, 15 R. I. 495, 8 AtU Rep. 701, 10 id.657;Headley v. Hack- ley, 50 Mich. 43, 14 N. W. Rep. 693. In Miles v. New Zealand Alford Estate Co., supra, the court dissents from some observations made by Lord Esher, M. R., in Ex parte Ban- ner, 17 Ch. Div. 480, 490, to the effect that it was not only necessary to the validity of a settlement that the plaintiff believed he had a good cause of action, but that the circumstances must in fact raise some doubt whether there was or was not a good cause of action. t46 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 251. mere statement that the amount of a claim was in dispute is not enough to show that there was a consideration for ac- cepting less than was due*/ but it is suflHcient if the contro- versy be real and the issue respecting it be considered by the parties as doubtful.^ "Whether the compromise amount be re- ceived or a promise to pay it, the original claim is extin- guished if the parties so agree and there is a sufficient consid- eration.^ Inequality of consideration will not, of itself, avoid a settlement.* The adjustment of any unliquidated demand, whether in dispute or not, stands on a similar principle.^ Stated 1 EmmittsburgR Co. v. Donoghue, 67 Md. 383, 1 Am. St. 396, 10 AtL Rep. 233. It was observed in Edwards v. Baugh, 11 M. & W. 641: "The dec- laration alleges that certain disputes and controversies were pending be- tween the plaintiff and the defend- ant whether the defendant was in- debted to the plaintiff in a certain sum of money. There is nothing in the use of the word ' controversy' to render this a good allegation of con- sideration. The controversy merely is that the plaintiff claims the debt and the other denies it." ^ Galusha v. Sherman, 105 Wis. 263, 81 N. W. Rep. 495, 47 L. R. A. 417. As applied to the subject of accord and satisfaction a demand is not liquidated, even if it appears that something is due, unless it appears how much is due, and when it is ad- mitted that one of two specific sums is due, but there is a real difference as to which is the proper amount, the demand is unliquidated. Nassoiy v. Tomlinson, 148 N. Y. 326, 42 K K Rep. 715, 51 Am. St. 695. An account cannot be considered as liquidated so as to prevent the receipt of a less amount than is claimed from being a satisfaction if there is a controversy over a set-off and the amount of the balance. Os- trander v. Scott, 161 111. 339, 43 N. E. Rep. 1089. See Bingham v. Brown- ing, 197 III 122, 64 N. R Rep. 317, 97 111. App. 443. 3 Wilder v. St Johnsbury, etc. R. Co., 65 Vt. 43, 25 AtL Rep. 896; Gran- din V. Grandin. 49 N. J. L. 508, 9 Atl. Rep. 756, 60 Am. Rep. 642; Korne v. Korne, 30 W. Va. 1; Tuttle v. Tuttle, 12 Met. 551, 46 Am. Dec 701; Peace v. Stennet, 4 J. J. Marsh. 449; Jones V. Bullitt, 2 Litt. 49; Reid v. Hibbard, 6 Wis. 175; Pulling v. Supervisors, 3 Wis. 337; Calkins v. State, 13 Wis. 389; Metz v. Soule, 40 Iowa, 236; Og- born V. Hoffman, 52 Ind. 439; Riley V. Kershan, 52 Mo. 224; Merry v. Al- len, 39 Iowa, 235; Gates v. Shutts, 7 Mich. 127; Converse v. Blumrich, 14 id. 109, 90 Am. Dec. 230; May hew v. Phoenix Ins. Co., 23 Mich. 105; Hooper v. Hooper, 26 id. 435; Bo wen v. Lockwood, id. 441; Hull v. Swarth- out, 29 id. 249; Campbell v. Skinner, 30 id. 32;Reithmaier v. Beckwith, 35 id. 100; Neary v. Bostwick, 2 Hilt* 514. 4 Galusha v. Sherman, 105 Wis. 263, 81 N. W. Rep. 495, 47 L. R A. 417. 6 Sanford v. Abrams, 24 Fla. 181, 2 So. Rep. 373; Donohue v. Woodbury, 6 Cush. 148, 52 Am. Dec. 777; Eate- man v. Daniels, 5 Blackf. 71; Harris V. Story, 2 E. D. Smith, 363; Long- ridge V. Dorville, 5 B. & Aid. 117; Watters v. Smith, 2 B. & Ad. 889; Haigh V, Brooks, 10 A. & K 309; Wilkinson v. Byers, 1 id. 106; Wright v. Acres, 6 id. 726; Atlee v. Back- § 251.] ACCORD AND SATISFACTION. 647 accounts and settlements are treated with favor, and are con- clusive unless there is proof of mistake or fraud.^ A def- [431] inite sum paid or agreed to be paid, and adopted by the par- ties as an adjustment and compensation for either a doubtful and disputed demand, or one which is uncertain and unliquid- ated, constitutes a sufficient consideration for the discharge of such original demand. And upon such adjustment, by which a definite sum, paid or to be paid, is substituted for the claim as it formerly existed, the latter is extinguished on the princi- ple of accord and satisfaction.- An infant's action for dam- ages is barred by the acceptance, in full satisfaction from the party liable therefor, of a sum of money which is undisposed of and not returned, notwithstanding an offer to credit it on any judgment that might be obtained.^ If a receipt for money paid contains anything in the nature of an agreement upon the compromise or settlement of a disputed claim that the payee accepts and receives the sum designated in it in satisfaction and discharge of his claim, it is a contract and cannot be var- ied or contradicted by parol.* Where money is due and there is an agreement to accept something else in lieu of it, and that something else is deliv- ered and accepted, the agreement cannot be said to be without consideration, though the thing so delivered and accepted is of less value than the nominal amount of the debt. Anything house, 3 M.&W. 633; Sibree V.Tripp, ing, 197 111. 123, 64 N, E. Rep. 317; 15 id. 23; Llewellyn v. Llewellyn, 3 Housatonic Nat. Bank v. Foster, 85 Dowl. & L. 318; Allis v. Billing, 2 Hun, 376, 32 N. Y. Supp. 1031. Cush. 19; Durham v. Wadlington, 2 The satisfaction of a cause of ac- Strobb. Eq. 258; Abbott v. Wilmot, tion for personal injury made by the 22 Vt. 437; Ellis v. Bitzer, 2 Ohio, 295. person injured bars his representa- 1 Id. ; Wilde v. Jenkins, 4 Paige, tives after his death from asserting 481; Lockwood v. Thorne, 11 N. Y. any claim because of theactofneg- 170; Pulliam v. Booth, 21 Ark. 420. ligence for which satisfaction was See Purtel v. Morehead, 2 Dev. & made. Read v. Great Eastern R. Co., Bat. 239; Galusha v. Sherman, 105 L. R. 8 Q. B. 355; Dibble v. New Wis. 263. 81 N. W. Rep. 495, 47 L. R. York & E. R. Co., 25 Barb. 183. A. 417. 2 Lane v. Dayton, etc. Co., 101 Tenn. 2Storch V. Dewey, 57 Kan. 370, 46 581. 48 S. W.Rep. 1094 Pac. Rep. 698; Maack v. Schneider, * Komp v. Raymond, 42 App. Div. 51 Mo. App. 92; Lapp v. Smith, 183 33, 58 N. Y. Supp. 909; Coon v. Knapp, 111. 179, 55 N. E. Rep. 717; Home F. 8 N. Y. 402. 59 Am. Dec. 502; Ryan Ins. Co. V. Bredehoft, 49 Neb. 152, 68 v. Ward, 48 N. Y. 204. N. W. Rep. 400; Bingham v. Brown- G48 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 251. of legal value, whether a chose in possession or in action, act- ually received in full satisfaction of a debt is good for that effect.' Nor is the adequac}'' of the consideration affected be- cause the value of the collateral thing received in satisfaction was fixed by agreement of the parties at a less sum than the amount of the debt. Thus, where a larger sum than S750 was owing and actually due in money, an agreement to receive $750 worth of salt and the actual reception of it in discharge of the whole debt was held to have that effect.'^ The right to compromise a suit may be exercised by the person who is au- thorized to bring it in the first instance,' and a compromise made by one plaintiff will bind his co-plaintiffs if it appears that the amount paid was received as full satisfaction for the whole injury.* Where a statute gives the widow the prior right to sue for the death of her husband, she has the right to compromise her suit over the objections of her children, and without let or hindrance from any one.^ She may also com- promise the whole right of action before suit is brought, and a payment to her of the sum agreed upon will discharge the wrong-doer.^ But if the suit is brought by an administrator on behalf of the widow and children she cannot compromise without the plaintiff's consent or the concurrence of the other beneficiaries.^ 1 1 Smith's Lead. Cases, pt. 1, 445; In Platts v. Walrath, Hill& Denio, Jones V. Bullitt, 2 Litt. 49; Brooks 59, it was held that giving a mort- V. White, 2 Met. 283, 37 Am. Dec. 95; gage for a debt, less a certain deduc- New York State Bank v. Fletcher, 5 tion agreed to be made in considera- Wend. 85; Frisbie v. Larned, 21 id. tion of the security, is not payment 451; Bullen V. McGillicuddy, 2 Dana, of the debt so that a note subse- 90; Pope v. Tunstall, 2 Ark. 209; quently given for the sum deducted Booth V. Smith, 3 Wend. 66; Boyd v. will be deemed without considera- Hitchcock, 20 Johns. 76, 11 Am. Dec. tion. 247; Le Page v. McCrea, 1 Wend. s Stephens v. Nashville, etc. R, 10 164; Sanders v. Branch Bank, 13 Lea. 448. Ala. 353; Blinn v. Chester, 5 Day, People's Furniture & Carpet Co. Poole V. Tumbridge, 3 M. & W. 223; v. Crosby, 57 Neb. 283, 77 N. W. Rep. Dobie V. Larkan, 10 Ex. 776; City 658, 73 Am. St. 504, citing O'Rourke Bank v. Cutter, 3 Pick. 414; Suffolk v. Hadcock, 114 N. Y. 541, 22 N. E. Bank v. Worcester Bank. 5 id. 106; Rep. 33; Taylor v, Einley, 48 Vt. 78; Dewey V. Humphrey, id. 187; Frazier New Home Sewing Machine Co. v. V. Cushman, 13 Mass. 277; Rose v. Bothane, 70 Mich. 443, 38 N. W. Rep. Brown. Kirby, 293, 1 Am. Dec. 23; 326. Tracy v. Strong, 2 Conn. 659; Ash- ^Ferrea v. Tubbs, 125 Cal. 687, 53 burn V. Poulter, 35 id. 553. Pac. Rep. 308. »2 Par. on Cont. 642. ssands v. Lyon, 18 Conn. 18. 668 CONVENTIONAL LIQUIDATIONS AND DISCHAKGES. [§ 2G2. turity.^ Some doubt has been expressed whether a tender is good of a debt not bearing interest before it is due.^ A vendor cannot be placed in default by a tender of the purchase-money before the stipulated time for payment;* nor can a premature tender affect the security for a debt;^ nor any other right of the creditor.'^ A tender on a past-due obligation is good though preliminar}' notice of it is not given.^ The necessity of such notice in England when 2ipost diem tender of the money due upon a mortgage is made rests entirely on custom.'' In computing the time, after entry for condition of a mort- gage broken, within which a mortgagor ma}'^ redeem the day of entry is to be excluded.^ And where payment must be made, as in such a case within a certain period, it has been made a question at what time of the last day the right of ^nj- ment or tender expires. In the old cases it is held that pay- ment should be made at a convenient time in which the money may be counted before sunset.^ It is probable that 1 Eaton V. Emerson, 14 Me. 335; Tillou V. Britton, 9 N. J. L. 120; Saunders v. Frost, 5 Pick. 259; Bacon V. Hooker, 153 Mass, 554, 54 N. E. Rep. 253. A tender of the amount due on a promissory note is good if made at the time fixed for payment, though before the expiration of the days of grace, interest for such days being included. Wyckoff v. Anthony, 9 Daly, 417. On appeal this question was not passed upon, it being held that the r.ght to object to the ten- der at the time it was made was waived. Wyckoff v. Anthony, 90 N. Y. 443. 2 2 Par. on Cont 642. See McHard V. Whetcroft, 3 Har. & McH. 85. 3 Rhorer v. Bila, 83 Cal. 51, 23 Pac. Rep. 274; Reed v. Rudman, 5 Ind. 409; Cogan v. Cook, 23 Minn. 137. 4Noyes v. Wyckoff, 114 N. Y. 204, 21 N. E. Rep. 158. 5 Moore v. Kime, 43 Neb. 517, 61 N. W. Rep. 736; Burns v. True, 5 Tex. Civ. App. 74, 24 S. W. Rep. 388; Ab- shire v. Corey, 113 Ind. 484, 15 N. E. Rep. 685. 6 Sharp V. Wyckoff, 39 N. J. Eq. 376. '> Browne v. Lockhart, 10 Sim. 420, 424. 8 Wing V. Davis, 7 Me. 31. The necessity of a tender for such purpose is denied. Quin v. Brittain, Hoff. Ch. 353; Beach v. Cooke. 14 N. Y. 508; Casserly v. Witherbee, 119 N. Y. 523, 23 N. E. Rep. 1000; especially if the person seeking to redeem does not know, because of the mortgagee's fault, the sum due. Aust v. Rosen- baum, 14 Miss. 893, 21 So. Rep. 555. 9 In Wade's Case, 5 Coke, 114a, it was said: " Although the last time of payment of the money by force of the condition is a convenient time in which the money may be counted before sunset, yet. if the tender be made to him who ought to receive it at the place specified in the condition, at any time of the day, and he refuse it, the condition is forever saved, and the mortgagor 262.] TENDEE. GG9 the courts would not now recognize the rule as a fixed [l-to] and arbitrary requirement, without regard to circumstances necessitating a tender while the daylight lasts. There [l-iG] is some reason for holding a tender unseasonable which is or obligor needs not make a tender of it again before the last instant." See Coke Litt. 203. In Wing V. Davis, 7 Me. 31, the validity of a tender made late in the evening of the last day to redeem after entry for condition broken was in question. Mellen, C. J., said: " In Hill v. Grange, 1 Plowd. 178, the con- dition was to pay rent within ten days after certain feasts, in which case the justices unanimously held that the lessee had liberty within the ten days; and, therefore, they ob- serve ' the lessee is in no danger as long as he has time to come and pay it; and he has time to come and pay it as long as the tenth day continues, and the tenth day continues until the night comes; and when the night is come, then his time elapses. So that his time to pay continues until the separation of day and night. And in arguing this point, Robert Brook, chief justice, and Saunders, said that if the rent reserved was a great sum, as £500 or £1.000, the les- see ought to be ready to pay it in such convenient time before sunset in which the money might be counted; for the lessor is not bound to count it in the night, after sunset, for if so he might be deceived; for Brook said: ' Qui anibulat in tene- bris nescit qua vadiV The language of the court in the case of Greeley V, Thurston does not advance a dif- ferent principle. The question is, what is the whole day in relation to a tender in contracts of this charac- ter. We are not aware that modern decisions have changed the law as established by the old cases; or the facts necessary to be proved to sup- port a plea of tender, except so far as the conduct of the creditor may in certain cases amount to a waiver of objections against the formality of the tender, or in case of his art- ful avoidance or evasion. In the case before us there is nothing like a waiver as to the unseasonableness of the hour; in fact, this was the objection made by the defendants at the time of the alleged tender, which was attempted to be made not long before midnight, when tlie de- fendants and their families were asleep, and all the lights extin- guished. No reason has been as- signed why a payment or a tender was delayed to so unusual an hour; and if a loss to the plaintiff is the consequence of this strange delay, he must thank his own imprudence. We do not decide that a tender may not, in any circumstances, be good, though made after the departure of daylight; it is not necessary to inti- mate any opinion on the point. Our decision is founded on the facts of this case; and the tender not having been made in due season, we need not inquire as to the sufficiency of the sum which was offered.'' In Greeley v. Thurston, 4 Me. 479, 16 Am. Dec. 285, the question was when the default of the maker of a promissory note occurred, he claim- ing that he had the whole of the last day in which to pay it, and that until that day is passed he cannot be said to have broken his contract. Weston, J., said: "There is no ques- tion that with regard to bonds, mort- gages and instruments in writing, other than notes of hand or bills of ex- change, the party who engaged to pay money, or to perform any other duty, fulfills his contract, if he does 670 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 2G2. made late at night if the creditor has gone to bed, and de- [447] clines to consider it on that ground, where no cause for «o delaying it exists.^ A late judicial exposition of the ques- tion is to the effect that, where no place is named in the so on any part of the day appointed. Unless the case of negotiable paper forms an exception to the general rule which attaches to other written contracts, the maker of a negotiable note of hand and the acceptor of a bill of exchange are not liable to be sued until the day after these instru- ments become due and payable. In the case of Leftey v. Mills, 4 T. R 170, we have the opinion of Mr. Jus- tice BuUer, given in strong terms, although the decision was finally placed upon another ground, that the general rule before intimated does not apply to bills of exchange. In that case a clerk called with the bill, upon which the question arose, at the house of the defendant, the acceptor, on the day it became due, and, not finding him at home, left word where the bill might be found, that the defendant might send and take it up; this not being done at six o'clock in the evening it was noted for non-payment. Between seven and eight o'clock the same clerk called again on the defendant with the bill, who then offered to pay the amount of it, but refused to pay an additional half-crown for the notary. Lord Kenyon was of opin- ion, at the trial, that the tender was sufficient, and directed a verdict for the defendant. A rule was obtained to show cause why the verdict should not be set aside and a new trial granted. The court said, in granting the rule, that the main question was whether the acceptor had the whole day to pay the bill in, or whether it became due on demand at any time on the last day. After argument, Lord Kenyon stated in this, as in other contracts, the ac- ceptor had the whole day; but said, if there were any difl'erence between bills of exchange and other contracts in this respect, the claim of the no- tary could not be supported, this being an inland bill pa5'able fourteen days after sight, and the statute of William, which first authorized a protest upon inland bills, givmg it only upon such bills as were payable a certain number of days after date. Upon this last ground Duller, J., concurred; andheadded: *I cannot refrain from expressing my dissent to what has fallen from my lord re- specting the time when the payment of bills of exchange may be enforced. One of the plaintiff's counsel has cor- rectly stated the nature of the ac- ceptor's undeitaking, which is to pay the bill on demand on any part of the third day of grace; and that rule is now so well established that it will be extremely dangerous to depart from it. With regard to foreign bills of exchange, all the books agree that the protest must be made on the last day of grace; now that supposes a default in payment, for a protest cannot exist unless de- fault be made. But if the party has until the last moment of the day to pay the bill, the protest cannot be made on that day. Therefore the usage on bills of exchange is estab- lished; they are payable any time on the last day of grace, on demand, provided that demand be made within reasonable hours. A demand at a very early hour of the day, at two or three o'clock in the morning. 1 Wing V. Davis, 7 Me. 31. § 263.] TENDER. 671 -agreement for the making of payment, or no established usage prevails to the contrary, as in the case of notes and bills, the payer has the whole of the day, at any place where ho may meet the payee, and both may have the proper means and opportunity of making and receiving the tender. The party bound must do all that, without the concurrence of the other, he can do to make the payment or perform the act, and that at a convenient time before midnight, such time varying ac- cording to the quantum of payment or the nature of the act to be done. If he is to pay money it must be tendered at a sufficient time before midnight for the tenderee to receive and count it.^ This rule may well be qualified by adding a con- dition that the tender shall be made at such time as will give the creditor an opportunity to ascertain the state of the account between him and his debtor; because he is not bound to know at his peril at all times the exact sum due hira;^ and besides the law will doubtless take account of the fact that business men are not at all times prepared to surrender the evidences of their claims against their debtors. Commercial paper being payable on the day of maturity at any reasonable hour when demanded, a breach of the contract to pay may occur whenever such demand is made. In the absence, how- ever, of any demand the debtor upon such paper undoubtedly has the same time on the last day to fulfill his promise as when he is indebted in any other form.' § 263. In what money. The offer must be made in legal tender money of the country, if it is demanded.* But where would be an unreasonable hour; but, or duly forwarded." Shed v. Brett, on the other hand, to say that the de- 1 Pick. 401; City Bank v. Cutter, 3 mand should be postponed until mid- Pick. 414. night would be to establish a rule i Smith v. Walton, 5 Houst, 141, attended with mischievous conse- following Startup v. Macdonald, 6 M. quences.' Upon consideration we «fc G. 598, 624, 46 Eng. C. L. 623. adopt the views of Mr. Justice Bui- 2 Root v. Bradley, 49 Mich. 27, 13 ler; and it is our opinion that bills N. W. Rep. 896; Waldron v. Murphy, of exchange and negotiable notes 40 Mich. 668; Chase v. Welsh, 45 should be paid on demand, if made Mich. 345, 7 N. W. Rep. 8'.)5. at a reasonable hour, on the day ^ Sweet t. Harding, 19 Vt. 587. they fall due; and if not then paid, < Wilson v. McVey, 83 Ind. 108; that the acceptor or maker may be Collier v. White, 67 Miss. 133, 6 So. sued on that day. and the indorser Rep. 618; Wharton v. Morris, 1 Ball. and drawer also, after notice given 124; Moody v. Mahurin, 4 N. H. 296; 672 CONVEKTIOXAL LIQUIDATIONS AND DISCHARGES. [§ 263, bank or treasury notes which circulate as money, though not made a legal tender, are offered, the objection that they are not legal tender is deemed one of form, and waived if not specially made, or if objection is rested on some other ground; * [44S] for to invalidate a tender or to divest an offer to pay of the legal effect of a tender, if the objection is to the medium or currency and not to the sum offered, the ground of it must be stated, or the right to object in that respect will be waived, and it cannot afterw^ards be taken advantage of in court oa the score of the tender not being legal; in other words, an objection on a point of fact works a waiver of an objection on points of law.- It is a general rule that if a tender is refused on a specified ground of objection no other can afterwards be relied upon.* This applies, however, only to such objections as could be obviated, and not to a tender made before a debt is due.* An offer of depreciated bank notes, without any ex- planation, is in legal effect but an offer of compromise or of Lee V. Biddis, 1 Dall. 175: Long v. Waters, 47 Ala. 624; Hallowell & A. Bank v. Howard. I'd Mass. 235; Lange V. Kohne, 1 McCord, 115; Smith v. Keels, 15 Rich. 818; Magraw v. Mc- Glynn, 26 Cal. 420: Martin v. Bott. 17 Ind. App. 444, 46 N. K Rep. 151 (a finding that a tender was made of the " lawful .sum in money " is not a finding that it was made in legal tender). See Tate v. Smith, 70 N. C. 685; Graves v. Hardesty, 19 La. Ann. 186; Parker v. Broas. 20 id. 167; Har- ris V. Jex, 55 N. Y. 421, 14 Am. Rep. 285. 1 Koehler v. Buhl, 94 Mich. 496, 54 N. W. Rep. 157; Cooley v. Weeks, 10 Yerg. 141; Ball v. Stanley, 5 id. 199, 26 Am. Dec. 263; Fosdick v. Van Husan, 21 Mich. 567; Curtiss v. Green- banks, 24 Vt. 536; Warren v. Mains, 7 Johns. 476; Holmes v. Holmes, 13 Barb. 137; Wheeler v. Knaggs, 8 Ohio, 172: Lockyer v. Jones, Peake, 180, n.; Wright v. Reed, 3 T. R 554; Brown v. Saul, 4 Esp. 267; Polglass V, Oliver, 2 Cr. & J. 15; Tiley v. Court- ier, id. 16, n.; Saunders v. Graham, Gow, 121; Brown v. Dysinger, 1 Rawle, 408; Snow v. Perry, 9 Pick. 539; Towson v. Havre de Grace Bank, 6 H & J, 53; Williams v. Rorer, T Mo. 555; Sea well v. Henry, 6 Ala. 226; Noe v. Hodges, 3 Humph. 162; Cummings v. Putnam, 19 N. H 569; Brown v. Simons, 44 id. 475; Snow V. Perry, 9 Pick. 539. 2 Polglass V. Oliver, 2 Cr. & J. 15; Gradle v. Warner, 140 III 123, 29 N. K Rep. 1118. See Waldron v. Murphy, 40 Mich. 668, and § 270. SMcGrath v. Gegner, 77 Md. 331, 26 Atl. Rep. 502, 39 Am. St. 415. In Moynahan v. Moore, 9 Mich. 9, it was said to be "a well established principle, that an objection made at the time of tender precludes all others, and if that be not well grounded the tender will be held good." See Perkins v. Dunlap, 5 Me. 268, 271; Hull v. Peters, 7 Barb. 331; Carman v. Pultz, 21 N. Y. 547; Keller V. Fisher, 7 Ind. 718: Stokes v. Reck- nagle, 38 N. Y. Super. Ct. 368; § 27a * Mitchell V. Cook, 29 Barb. 243. § 204.] TENDER. C73 accord and satisfaction, and not a legal tender,' unless thoy are tendered to the bank which issued them.^ Even a ciieck for money handed the payee or sent by a letter is a good tender, where no objection is made on that ground, but only to the amount.^ But when the party entitled to payment is not pres- ent and has no opportunity to urge the objection, he cannot be presumed to have waived it by his silence.* A note for dol- lars payable in gold and silver is payable in money, and neither bullion, nor gold and silver in any other form than money, is a legal tender.^ In an action for the breach of a covenant of seizin a tender of the amount paid by the grantee and of the unpaid notes and mortgage executed by him to secure the bal- ance of the purchase price is good." § 264. By wlioiii. Of course it may be made by an author- ized agent.'^ Where the tender is made in behalf of the debtor, strict authority at the time does not seem to be requisite; it being for his benefit and in his name, it may be effectual with- out such agency as would enable the person making it [WO] to do any act which would bind the debtor. Thus, a tender made for an infant by his uncle has been held good, though he was not at that time his guardian.^ So when an agent was sent to tender a sum less than that demanded, and he added of his own funds to the sum furnished by his principal and tendered the full amount required, it was held good.® A tender made by an inhabitant of a school district to one hav- ing a claim against it was held good, though such inhabitant 1 Newberry V. Trowbridge, 13 Mich. 'Jennings v. Mendenhall, 7 Ohio 263. St. 258; Jones v. Arthur, 8 Dowl. P. A certified check was tendered and G 442; Shipp v. Stacker. 8 Mo. 145; returned for insufficiency in amount; Petrie v. Smith, 1 Bay, 115; Wyckoff but the court found that it was suf- v. Anthony, 9 Daly, 417; Harriman ficient; the check was then deposited v. Meyer, 45 Ark. 37. in court.aud while there deposited the ^ Sloan v. Petrie, 16 111.262; Hub- bank on which it was drawn failed, bard v. Chenango Bank, 8 Cow. 88; It washeldthatthecheck,if accepted, Ward v. Smith, 7 Wall. 447. wouM have been only conditional ^Hart v. Flynn's Ex'r, 8 Dana. 190. payment, and the loss resulting from 6 Conrad v. Trustees of Grand its non-payment must be borne by Grove, 64 Wis. 258, 25 N. W. Kep. 24. the drawer. Larsen v. Breene, 12 '^ Eslow v. Mitchell, 26 Mich. 500. Colo. 480, 21 Pac. Rep. 498. 8 Brown v. Dysinger, 1 Rawle, 408. - Northampton Bank v. Balliet, 8 See Coke Litt. 2066. W. & S. 311, 43 Am. Dec. 297. 9 Read v. Goldring, 3 M. & S. 86. Vol. I — 43 674: CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 264. was not regularly authorized to do so.^ A corporation ap- pointed three agents to tender a sum to B, and obtain from him a reconveyance of a certain estate conveyed to him by the corporation as security for a debt; one of the three made the tender and it was held good.^ A person having no inter- est in the tender has no right to make it in his own behalf.' He should make it in behalf of the debtor and so inform the creditor.'* The creditor must object on the ground of a want of authority or the right to do so is waived.^ If a tender is made by the debtor's prior authority, or is subsequently rati- fied, it is good.® Any person may make a tender for an idiot.' A tender of the amount due one who has purchased land at a tax sale is not good if it is made by several persons, one of whom has no right to redeem.^ A mortgagee may refuse a tender of the amount due him made by one who is a stranger to him and to the mortgagor, and who is not acting in the interest or at the request of the latter, though he had tax titles on the mortgaged property, they not being subject to the mortgage.^ One who has purchased mortgaged premises and mortgaged chattels thereon from the mortgagor, the for- mer subject to existing liens, has no authority to make a tender of the amount due on the latter, the debt accrued thereby being payable on demand and none being made.^" But it is otherwise where a tender is made by the mortgagor's grantee after the debt is due, the creditor having knowledge of the transfer.^^ A tender of the amount of a mortgage lien by the assignee in insolvency of the mortgagor has the same effect as if made by the latter ; '^ and so of a tender by the vendee of chattels.^^ A tender by a subsequent grantee of the iKincaidv. School District, 11 Me. ^Coke Litt. 2066; Brown v. Dy- 188. singer, 1 Rawle, 468. 2 St Paul Division No. 1, Sons of 8 Bender v. Bean, 52 Ark. 132, 12 Temperance v. Brown, 11 Minn, 356. S. W. Rep. 180, 241. 3 Mahler v. Newbaur, 32 CaL 168, 9 Sinclair v. Learned, 51 Mich. 335, 91 Am. Dec. 571. 16 N. W. Rep. 672. * Id.; McDougald v. Dougherty, 11 lONoyes v. Wyckoff, 114 N. Y. 204^ Ga. 570. 21 N. E. Rep. 158, 30 Hun, 466. 5 Lampley v. Weed, 27 Ala. 631. n Yeager v. Groves, 78 Ky. 278. e Harding v. Davies, 2 C. & F. 77; 12 Davies v. Dow, 80 Minn. 223, 83 McIniflEe v. Wheelock, 1 Gray, 600; N. W. Rep. 50. Eslow V. Mitchell, 26 Mich. 500. is Flanigan v. Seelye, 53 Minn. 23, 65 N. W. Rep. 115. § 205.] TENDEE. 675 equity of redemption is good.* An executor lias no authority to make a tender to a legatee in a jurisdiction in which his foreign letters have not been recognized although the funds tendered were realized from the personal property of the tes- tator situated in the jurisdiction in which the tender was made. A tender so made is not validated by the subsequent issuance of letters from a court in the jurisdiction in which the legatee was at the time it was made.- § 265. To whom. A tender should, in general, be made direct to the creditor.' But it may be made to his attorney* or authorized agent,'^ although such attorney falsely denies his authority,^ or such agent has been instructed not to receive it.^ A tender to an agent is good though it was made on the sup- position that he continued to be the party in interest.^ An attorney, having a demand for collection, wrote the debtor re- questing him to pay it at the attornej^'s office; the debtor sub- sequently made a tender in the absence of the attorney [450] to his clerk in his office, and it was held good.^ Such a request of payment gives the debtor a right to treat any person havino- charge of such office in the absence of the attorney as author- ized to receive the money.^" But a letter from the attorney, demanding payment to him instead of at his office, will not warrant a tender to a writing clerk there who disclaims and has not authority to receive it." 1 Kortright v. Cady, 21 N. Y. 343. « Mclniffe v. Wheelock, 1 Gray, 600. 2 "Welch V. Adams, 152 Mass. 74, 25 'Muffatt v. Parsons, 1 Marsh. 55, 5 N. E. Rep. 34, 9 L. R. A. 244. Taunt. 307. 3 Hornby v. Cramer, 12 How. Pr. ^ Conrad v. Trustees of Grand 490: Smith v. Smith, 2 Hill, 351. Grove, 64 Wis. 258, 25 N. W. Rep. 24. A tender pending an appeal need ^ Wilmot v. Smith, 3 C. & P. 453; not be made to the attorney; it is Kirton v. Braithwaite, 1 M. & \V. 310. good if made to the opposite party '"Watson v. Hetherington, 1 C. & in person. Ferrea v. Tubbs, 125 Cal. K. 30; Kirton v. Braithwaite, 1 M. & 687, 58 Pac. Rep. 308. W. 310. ^ Salter v. Shove, 60 Minn. 483, 63 "Id.; Bingham v. Allport, 1 N. & N. W. Rep. 1126; Brown v. Mead, 68 M. 398. Vt. 215, 34 AtL Rep. 950; Billiot v. A tender to an attorney with whom Robinson, 13 La. Ann. 529; Wilmot V. a demand is lodged for collection, Smith, 3 C. & P. 453. before suit is brought, is unavailing; ^Hargous v. Lahens, 3 Sandf. 213; if made after suit is commenced the Goodland v. Blewith, 1 Camp. 477; costs must be tendered. Thurston v. Anonymous, 1 Esp. 349; Continental Blaisdall, 8 N. H. 367. Ins. Co. V. Miller, 4 Ind. App. 553, 30 In Finch v. Boning, 4 C. P. Div. N. E. Rep, 718. 143, the judges disagreed as to the 676 CONVENTIONAL LIQUIDATIONS AND DISCHAEGE8. [§ 265. "When an instrument is pa^^able at a bank, and is lodged there for collection, the bank becomes the agent of the payee to receive payment. The agency extends no further, and with- out special authority such agent can only receive payment of the debt due his principal in the legal currency of the country, or in bills which pass as money at their par value by the con- sent of the community.^ A tender may be made to a clerk in a store for goods there purchased, and it will be equivalent to a tender made to the principal, even though prior thereto the claim has been lodged with an attorney for suit. Such clerk can also waive, either by implication or expressly, any objec- tion to the validity of the tender on the ground of its being in bank bills and not in specie.^ Where there is no general agency to collect, but power simply to receive the sum demanded, a tender of a less sum to such special agent is invalid ; as where the plaintiff sent his son to demand a specific amount for an unliquidated claim, it was held that an offer to him of a less sum could not be considered as a tender to the plaintiff.^ Where an agent of the defendants had been notified not to receive a tender, but to refer the plaintiff to a third person named, of which the plaintiff had notice, the latter was at liberty to seek the person to whom he had been so referred or the defendants, at his election, and could make the tender to either.* A tender made to the holder of a note is good though he subsequently assigns it;^ but it is otherwise as to a tender to the original payee if he has transferred the obligation.^ A mortgagor or his assignee must make tender to the mortgagee or person claiming under him; it cannot be made to the assignee of the [451] contract secured by the mortgage.^ Money due to a cestui que trust should be tendered to the trustee.® But a tender to an executor while in another state, before he had acted or effect of a disclaimer by a solicitor's * Abshire v. Corey, 113 Ind. 484, 15 clerk who said that the solicitor was N. E. Rep. 685. out of the office, and he, the clerk, ^ Burns v. True, 5 Tex. Civ. App. 74, had no instructions, 24 S. W. Rep. 338. 1 Ward V. Smith, 7 Wall. 447. See ^ Smith v. Kelley, 27 Ma 237, 46 § 231. Am. Dec. 595. 2Hoyt V. Byrnes. 11 Me. 475. sChahoon v. Hollenback, 16 S. & » Chipman V. Bates, 5 Vt. 14a R. 425, 16 Am. Dec. 587; Cook v. * Hoyt V. Hall, 3 Bosw. 42. Kelley, 9 Bosw. 358; Hay ward v. Munger, 14 Iowa, 516. \ § 2G6.] TENDER. G77 qualified, will not stop interest.* If a tender is made to a clerk, agent, or other representative of the creditor, it must be shown that he had authority to receive the money.'^ A debt duo jointly to several persons may be tendered to either, but should be pleaded as tendered to all.=» If no place has been appointed for payment, a tender to the creditor wherever he may be found is good; * but if it is made without notice at an unusual or un- fit place it may be declined if it is necessary for the creditor to examine the account between him and his debtor.' § 266. It must be sufiicieiit in amount. The tender must include the full amount due. A tender of part of a debt is in- operative.^ The creditor is not obliged to receive it. The debtor must, at his peril, tender enough; if his tender is less it will be of no avail, though the deficiency is small and oc- iTodd V. Parker, 1 N. J. L. 45. 2Hargous v. Lahens, 3 Sandf. 213; Goodland v. Blewith, 1 Camp, 477; Anonymous, 1 Esp. 349; Jevvett v. Earle. 53 N. Y. Super. Ct. 349. 3 Wyckoflf V. Anthony, 9 Daly, 417; Douglas V. Patrick, 3 T. R. 683; Southard v. Pope, 9 B. Mon. 264; Beebe v, Knapp, 28 Mich, 53; Flanigan V. Seelye, 53 Minn, 23, 55 N. W. Rep. 115. See Dawson v. Ewing, 16 S. & R. 371. *Slingerland v. Morse, 8 Johns. 474; Hunter v. Le Conte, 6 Cow. 728. See ^214. 5 Waldron v. Murphy, 40 Mich. 668; Chase v. Welsh, 45 id. 345, 7 N. W. Rep, 895; Root v. Bradley, 49 Mich. 27, 12 N. W. Rep. 896. 6 San Pedro Lumber Co, v. Rey- nolds, 111 Cal, 588, 44 Pac. Rep. 309; Helphrey v. Chicago, etc. R, Co., 29 Iowa, 480; Louisiana Molasses Co. v. Le Sassier, 52 La. Ann. 2070, 28 So. Rep. 217; Hoppe & Strub Bottling Co. V. Sacks, 11 Ohio Ct. Ct. 3; Elderkin V. Fellows, 60 Wis. 339, 19 N. W. Rep, 101; Dixon v. Clark, 5 C. B. 365; Baker v. Gasque, 3 Strobh. 25: Pat- note V. Sanders, 41 Vt. 66, 98 Am. Dec. 664; Boyden v. Moore, 5 Mass. 365. In the last case Parsons, C, J., said: " It is a well-known rule that the de- fendant must take care at his peril to tender enough; and if he does not, and if the plaintiff replies that there is more due than is tendered, which is traversed, the issue will be against the defendant, and it will be the duty of the jury to assess for the plaintiff the amount due on the promise; and if not covered by the money tendered, he will have judg- ment for the balance. ... In calculating, there may be, and prob- ably must arise, fractions not to be expressed in the legal money of ac- count; these fractions are trilles, and may be rejected, . . . If any sum large enough to be discharged in the current coin of the country is a trifle which, although due, the jury are not obliged to award to the plaintiff, the creditor, it will be difficult to draw a line and say how large a sum must be not to be a trifle. The law fixes no such rule," Under the code of California a tender is not ineffectual because it is insufficient in amount unless it is ob- jected to for that reason at the time it is made. Oakland Bank v. Apple- garth, 67 Cal. 80, 7 Pac, Rep. 139, 476. 6T8 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ '206. curred by mistake.^ If a tender is made after suit it must cover the costs,^ including the fees of witnesses. " The fact that the plaintiff did not inform the defendant that he had summoned these witnesses was of no importance. If the de- fendant desired any information astotheamountof the plaint- iff's costs from him, he should have inquired, for he knew a suit had been brought and some costs had accrued, and if he chose to make a tender without inquiry, the plaintiff certainl}'- was not in fault.' Tender of the amount due on a note must include attorney's fees when the note stipulates for their pay- ment and is in the hands of an attorney for collection, and there is a dispute as to the amount due. But if the payee re- fuses to give information concerning the fees, or the maker be ignorant of the employment of an attorney, or the tender be refused upon other grounds, and the maker be thereby misled, the court would protect him in making the tender.* The ne- cessity of tendering the whole sum due does not require the [452] debtor to tender a sum to cover all demands his creditor may have against him. He may tender for the payment of any one of several debts which is distinct and separable.* A tender of a gross sum upon several demands, without des- 1 Id. 2 Smith V. Wilbur, 35 Vt. 133. In Harris v. Jex. 55 N. Y. 421, 14 Am. 3 Rouyer v. Miller, 16 Ind. App. 519, Rep. 285, a tender was made upon a 44 N. K Rep. 51, 45 id. 674. See debt contracted prior to the passage Haskell v. Brewer, 11 Me. 258; Nelson of the legal tender law of 1862; and v. Robson, 17 Minn. 284 this tender was made in legal tender < Emerson v. White, 10 Gray, 351; notes after the decision in Hepburn People v. Banker, 8 How. Pr. 258; V. Griswold, 8 Wall. 603, and before Collier v. White, 67 Miss. 133, 6 So. the reversal of that case in Knox Rep. 618. V. Lee, 12 Wall. 457; it was refused But in Connecticut a tender made because it was not the currency pay- before the defendant has been served able. And it was held that the plaint- with process is good though costs are iff was justified in refusing the not included. Ashburn v. Poulter, tender; he had a right to refuse on 25 Conn, 553. the decision of the highest judicial ^ Wright v. Robinson, 84 Hun, 172, tribunal in the land; that decision, 82 N. Y. Supp. 463; North Chicago for the time being, was the law, and Street R. Co. v. Le Grand Co., 95 111. not merely the evidence of it; App. 435; Hurt v. Cook, 151 Mo. 417, but it was intimated that if the 52 S. W. Rep. 396; East Tennessee, tender had been kept good it would etc. R. Co. v. Wright, 76 Ga. 532; 2 have been a defense to interest and Par. on Cont. 641. costs, after the decision of Knox v. Lee. § 266.] TENDER. 079 ignating the amount tendered upon each, is sudicient.' Where, however, there are several separate demands sued for, and there has been a tender made of a less sum than the amount demanded for the whole, but not specifically applied to any separable portion of it, it has been held that it cannot be ap- plied in pleading to either.^ A tender of the amount justly due by the condition of a bond is good although less than the penalty.^ The penalty is only nominally the debt, and the tender of that sum which if paid would satisfy the bond will be effectual.* A tender is not invalidated by being of a larger sum than the amount it is offered to pay or is demanded, even though change is requested, unless objection is made to it on that account.* 1 Johnson v. Cranage, 45 Mich. 14, 7 N. W. Rep. 188; Thetford v. Hub- bard, 23 Vt. 440. 2 Hardingliam v. Allen, 5 C. B. 793. If A.. B. and C. have a joint demand, and C. has a separate demand against D., and D. offers A. to pay him both the debts, which A. re- fuses, without objecting to the form of the tender, on account of being entitled only to the joint demand, D. may plead this tender in bar of an action on the joint demand, and should state it as a tender to A., B. and C. Douglas v. Patrick, 3 T. R. 688. But see Strong v. Harvey, 3 Biug. 304, where it is held that if a party has separate demands for un- equal sums against several persons, an offer of one sum for the debts of all will not support a plea stating that a certain portion of this sum was tendered for the debt of one. It was held in Hampshire Manuf. Bank v. Billings, 17 Pick. 89, that a tender of the amount due on a joint and several promissory note by a surety, while an action brought by a holder against the principal was pending, will not discharge the surety from his liability unless he offers to indemnify the holder against the costs of such action. 8 Tracy v. Strong. 2 Conn. 659. 4 See Fraser v. Little, 13 Mich. 195; Spencer v. Perry, 18 Mich. 394. 5 North Chicago Street R. Co. v. Le Grand Co., 95 III. App. 435. In Dean v. James, 4 B. & Ad. 546, it was held that a tender of 201. 9s. GcL in bank notes is sufficient to sup- port a plea of tender of 20Z. Taun- ton, J., referring to Watkins v. Robb, 2 Esp. 710, said: "There the defend- ant tendered a 57. note and demand- ed 6c?. change, which the defendant was not bound to give." Betterbee v. Davis, 3 Camp. 71. Littledale, J., said: "This case falls within the third res- olution in Wade's Case, 5 Co. 115, that if a man tender more than he ought to pay it is good, for omne majus continet in se minus, and the other is bound to accept so much of it as is due to him." The argument against the tender was that a sub- sequent demand must be of the specific sum tendered, and if that sum is more than the plaintiff's de- mand, it would be inapplicable. Re- ferring to this Littledale, J., con- tinues: " As to replying a demand it is not the plaintiff's business to de- mand more than is actually due; it is enough if in his replication he admits that the sum due was tendered, but 680 CONVENTIONAL LIQUIDATIONS AND DISCHAEGES. [§ 267. [453] § 267. Same subject. The creditor is entitled to payment in money made legal tender by law, and the debtor has a right to make payment in that currency. Debts made payable in the denominations of the legal tender currency are solvable in that currency at par, without regard to when or where they were contracted, or the relative value of [454] the denominations in that currency at and after the alleges that he afterwards demanded that and it was refused." Lord Abinger said in Bevans v. Rees, 5 M. & W. 306: " I am prepared to say that if the creditor knows the amount due to him, and is offered a larger sum, and without any objec- tion of a want of change makes quite a collateral objection, that will be a good tender." Black v. Smith, Peake. 88; Cadman v. Lubbuck, 5 D. & Ry. 289; Hubbard v. Chenango Bank, 8 Cow. 89; Patterson v. Cox, 25 Ind. 261; Douglas v. Patrick, 3 T. R. 6«3; Dean v. James. 4 B. & Ad. 546; Astley v. Reynolds, 2 Str. 916; Strong V. Harvey, 3 Bing. 304; Rob- inson V. Cook, 6 Taunt. 336; Blow v. Russell, 1 C. & P. 365. Cadman v. Lubbuck, 5 D. & Ry. 289. Where the defendant, who owed the plaintiff 108Z. for principal and interest on two promissory notes, in consequence of an applica- tion from the plaintiff's attorney for the amount sent a person to the at- torney, who told such attorney that he came to settle the amount due on the notes, and desired to be in- formed what was due, and laid down 150 sovereigns on a desk, out of which he desired the attorney to take what was due for such princi- pal and interest, but the attorney re- fused to do so, unless a shop account due from the plaintiff to the defend- ant was fixed at a certain amount, held to be a good tender. Bevans v. Rees, 5 M. & W. 306. A tender has been held vitiated by delivering a counter-claim at the same time. Thus, where a defendant tendered seven sovereigns in payment of a de- mand of Ql. 17s. 6d., and said to the plaintiff. "There, take your de- mand," and at the same time deliv- ered a counter-claim upon the plaint- iff of 11. 5s., -who said you must go to my attorney: Held, not a good tender to an action for the 61. 17s. Qd. Brady v. Jones, 2 D. & R. 305; and see Holland v. Phillips, 6 Esp. 46. See, also, Laing v. Meader, 1 C. & P. 257. In Saunders v. Frost, 5 Pick. 259, 269, there was a tender of a mort- gage debt which was not due, and bearing interest, and of which only interest was due. Objection was made by counsel that the tender was made of a debt not due. The tender was of a sum equal to the interest and the principal. Parker, C. J., said: "But it appears to U3 that, in order to avail himself of this objection, the defendant ought to have shown a willingness to take what was due, and to have stated that he claimed to hold pos- session only for the non-payment of interest." Odom v. Carter, 86 Tex. 281. A tender of $5 by a street-car pas- senger who has no smaller money is reasonable, and his ejection from the car thereafter is unlawful. Barrett V. Market Street Cable R. Co., 81 Cal. 296, 22 Pac. Rep. 859, 15 Am. St. 61, 6 L R. A. 336. § 267.] TENDER. 081 contract was made. The legal tender currency for the time bsing, when the contract is performed or enforced, is the cur- rency applicable to it.' If money be payable in the legal cur- rency of another country, the legal rather than the market equivalent is the amount to be paid. A contract to pay in "dolkirs" may require payment in either coin or legal tender currency provided by the government, according to the inten- tion of the parties. Treasury notes, commonly called "green- backs," are the currency payable, unless the contract itself indicates the intention that the debt be paid in coin.'^ A con- tract to pay in " dollars" in gold and silver is a contract for the direct payment of money; neither bullion, gold dust, gold and silver bars, old spoons and rings, are a proper tender in satisfaction.^ But current bank notes, which pass as money, offered in payment and not objected to on that ground, will constitute a good tender.* When a debtor tenders a bank check in payment of a debt, and the creditor expressly waives all objection to that mode of payment and only objects to the amount, it is good;* but not, as a rule, otherwise.® If numer- 1 Story on Prom. Notes, § 390 and Williams v. Eorer, 7 Mo. 556; Cooley note; George v. Concord, 45 N. H. v. Weeks, 10 Yerg. 141; Snow v. 434; Wood v. Bullens, 6 Allen, 516; Perry, 9 Pick. 539; Wheeler v. Pong V. De Lindsey, 1 Dyer, 82a; Knaggs, 8 Ohio, 169; Fosdick v. Van Dooley v. Smith, 13 Wall, 604; Legal Husan, 21 Mich. 567; Curtiss v. Green- Tender Cases, 13 id. 457; Trebilcock banks, 24 Vt. 536; Petrie v. Smith, 1 V. Wilson, id. 687; Vorgesv. Giboney, Bay, 115; Brown v. Dysinger, 1 38 Mo. 458; Warnibold v. Schlich- Rawle, 408. See Ward v. Smith, 7 ting, 16 Iowa, 243; Murray v. Harri- Wall, 447. son, 47 Barb. 484; Wilson V. Morgan, & Dale v. Richards, 21 D. C. 312; 4 Robert. 58; Strong v. Farmers', etc. Jennings v. Mendenhall, 7 Ohio St. Bank, 4 Mich. 350; Wills v. Allison, 258. 4 Heisk. 385; Bond v. Greenwald, id. The court say in the last case 453; Caldwell v. Craig, 22 Gratt. 340. cited: "On a somewhat extensive 2 Trebilcock v. Wilson, 12 Wall, examination of the cases, it seems 687. to us that mere silence is held to be 3 Hart V. Flynn, 8 Dana, 190. See a waiver of objection in the case of Lang V. Waters, 47 Ala. 624; McCune current bank notes, for the reason V. Erfort, 43 Mo. 134. that they constitute the common * Brown v. Simons, 44 N. H. 475; currency of the country, and are by Ball V, Stanley, 5 Yerg. 199, 26 Am. all classes paid out and received as Dec. 263; Noe v. Hodges, 3 Humph, money, which is a reason that does 162; Seawell v. Henry, 6 Ala. 226; not fully apply to bank checks. All 'Cummings v. Putnam, 19 N. H. 569; the cases, however, proceed on tlie 6Te Poel V. Shutt, 57 Neb. 592, 78 N. VV. Rep. 28& 682 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 268 ous payments have been made by the debtor to the creditor by checks, and no objection to them has been raised, a tender by check is sufficient, though it would be otherwise if the creditor informed his debtor of an objection to continue receiving them.* If a check is objected toon any other ground than that it is not money the effect of the tender can only be got rid of by a personal demand and a refusal to pay.- Where a note is [455] payable to a bank in which the debtor has a deposit, his check on such bank is a good tender;' but a note or other ob- ligation of the creditor is not a legal tender. A tender for part of an entire demand and set-off for the residue cannot be pleaded.* § 268. How made. As a general rule the money must be actually produced and placed within the power of the creditor to receive it, unless he dispense with its production by express declaration or other equivalent act.* A mere verbal offer to principle that where all objection to the proposed medium of payment is waived, the tender is good, though not made in coin; and the only dif- ference between them is on the question as to what shall be held to be conclusive of such waiver." 1 Wright V. Robinson, 84 Hun, 173, 33 N. Y. Supp. 4r33: Mitchell v. Ver- mont Copper Mining Co., 67 N. Y. 280; McGrath v. Gegner, 77 Md. 331, 26 Atl. Rep. 502, 39 Am. St. 415. 2 Daly V. Egan, 13 Vict. L. R. 81. 3Shipp V. Stacker, 8 Mo. 145. "Lawful current money" of a state is construed to mean money is- sued by congress. Wharton v. Morris, 1 Ball." 124; McChord v. Ford, 3 T. B. Mon. 166. " Current lawful money " is the same. Lee v. Biddis, 1 Dall. 175. But "currency," where bank notes are the only currency, does not mean money. McChord v. Ford, supra; Lange v. Kohne, 1 McCord, 115. A tender in confederate money was held not good, although it was at the time the circulating currency in the community. Graves v. Hard- esty, 19 La. Ann. 186. See Parker v. Broas, 20 id. 167; but see, also, Phil- lips V. Gaston, 37 Ga. 16; Tate v. Smith, 70 N. C. 685. *Carj V, Bancroft, 14 Pick. 315, 25 Am. Dec. 393; Hallowell & A. Bank V. Howard, 13 Mass. 235; Searles v. Sadgrove, 85 Eng. 0. L. 639, 5 El. & Bl. 639. 5 Pinney v. Jorgenson, 27 Minn, 26, 6 N. W. Rep. 376; Deering Harvester Co. V. Hamilton, 80 Minn. 163, 83 N. W. Rep. 44; Te Poel v. Shutt, 57 Neb. 592, 78 N. W. Rep. 288; Brown V. Gilmore, 8 Me. 107, 22 Am. Dec. 223; Ladd v. Patten, 1 Cranch C. C. 263; Thomas v. Evans, 10 East, 101; Liebrandt v. Myron Lodge, 61 111. 81; Dickinson v. Shee, 4 Esp. 68; Walker V. Brown, 12 La. Ann. 266: Sands v. Lyon, 18 Conn. 18; Strong v. Blake, 46 Barb. 227; Matheson v. Kelly, 24 Up. Can. C. P. 598; Holmes v. Holmes, 13 Barb. 137; Bakeman v. Pooler. 15 Wend. 637; Breed v. Hurd, 6 Pick. 356; Gilmore v. Holt, 4 id. 258; East- land V. Longshom, 1 N. & McC. 194 Southworth v. Smith, 7 Cush. 891 Lohman v. Crouch, 19 Gratt. 331 § 2GS.] TENDEK. 6 S3 pay a certain sum does not constitute a tender.^ The cases concur in the foregoing rule, but differ somewhat in its appli- cation. Where there is a verbal offer of a particular [450] sura, and the creditor insists on more being due in such man- ner as amounts to a declaration that the offered sum would not be received, the actual production of the money is not necessary.2 The immediate departure of the creditor on such an offer being made, or any intentional evasion of the debtor, would seem to be equivalent to an express refusal of it, and equally to excuse the production of the money.' So on a verbal Dunham v, Jackson, 6 Wend. 22; Mclntire v. Clark, 7 id; 330; Sargent V. Graham. 5 N. H. 440, 33 Am. Dec. 469. See Champion v. Joslyn, 44 N. Y. 653; Hill v. Place, 5 Abb. Pr. (N. S.) 18, 7 Robert. 389; Borden v. Bor- den, 5 Mass. 67, 4 Am. Deo. 32; Sliu- gerland v. Morse, 8 Johns. 474; Blight V. Ashley, 1 Pet. C. C. 15; Thayer v. Brackett, 13 Mass. 450; Gary v. Bancroft, 14 Pick. 315, 25 Am. Dec. 393. 1 Shank v. Groflf, 45 W. Va. 543, 33 S. E. Rep. 248; De Wolfe v. Taylor, 71 Iowa. 648, 33 N. W. Rep. 154; Eastman v. Rapids. 31 Iowa, 590; Camp V. Simon, 34 Ala. 126; Steele v. Biggs, 22 111. 643; Hornby v. Cramer, 12 How.Pr. 490; Sheredine v. Gaul, 2 Dall. 190; Bacon v. Smith, 2 La. Ann. 441; Hunter v. Wa,rner, 1 Wis. 141. See Harris v. Mulock, 9 How. Pr. 402; Hill v. Place, 7 Robert. 389. 2 Smith V. Old Dominion Building & Loan Ass'n, 119 N. C. 257, 26 S. E. Rep. 40; Bradford v. Foster, 87 Tenn. 11, 9 S. W. Rep. 195; Johnson v. Garlichs, 63 Mo. App. 578: Graham V. Frazier. 49 Neb. 90, 68 N. W. Rep. 367; Bender v. Bean, 52 Ark. 132, 13 S. W. Rep. 180, 341; Pinney v. Jor- genson, 27 Minn. 26, 6 N. W. Rep. 376; Black v. Smith, Peake, 88; Jack- son V. Jacob, 3 Bing. N. C. 869; Sands V. Lyon, 18 Conn. 18; Read v. Gold- ring, 2M. & S. 86; Finch v. Brook, 1 Scott, 70; Dauks, Ex parte, 2 De Gex, M. & G. 936; Murray v. Roosevelt, Anth. 101; Vaupell v. Woodward, 2 Sandf. Ch. 143; Stone v. Sprague, 20 Barb. 509; Dana v. Fiedler, IE. D. Smith, 463; Slingerland v. Morse, 8 Johns. 474; Everett v. Saltus, 15 Wend. 474; Warren v. Mains, 7 Johns. 476; State v. Spicer, 4 Houst. 100; Hazard v. Loring, 10 Gush. 207; Strong V. Blake, 46 Barb. 227; Apple- ton V. Donaldson, 3 Pa. 381. In Dunham v. Jackson, 6 Wend. 23, it was held that a hesitating re- fusal, based on a claim of more than is due, will not dispense with the actual production of the money. Sargent v. Graham, 5 N. H. 440, 22 Am. Dec. 469; Harding v. Davies, 2 C. & P. 77. 3 Continental Ins. Co. v. Miller, 4 Ind. App.553, 30 N. E.Rep. 718: Adams Exp. Co. V. Harris, 120 Ind. 73, 21 N. E. Rep. 340, 16 Am. St 315, 7 L. K. A. 214; West v. Averill Grocery Co., 109 Iowa, 488, 80 N. W. Rep. 555; Hurt V. Cook, 151 Mo. 417, 52 S. W. Rep. 39G; Schayer v. Commonwealth Loan Co., 163 Mass. 3J2, 39 N. E. Rep. 1110; Gilmore v. Holt, 4 Pick. 257; South worth v. Smith, 7 Gush. 391; Judd V. Ensign, 6 Barb. 258; Houbie V. Volkening. 49 How. Pr. 169; Sands V. Lyon, 18 Conn. 18; Raines v. Jones, 4 Humph. 490; Littel v. Nichols, Hard. 60; Holmes v. Homes, 12 Barb. 137. But see Leatherdale v. Sweep- stone, 3 C. & P. 342; Knight v. Ab- 684 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 268. offer of a specified sum in legal tender notes in which the debt might be paid, a declaration by the creditor that he would re- ceive nothing but gold or silver would dispense with the act- ual production of the offered money.' An absolute refusal to receive the amount, or, in case of mutual executory contracts, to do the act in consideration of which it is to be paid, is a waiver of production.- But the debtor must have the money to immediately comply with his offer; having it in a bag is [457] no objection.' In some cases it is held that such a re- fusal will not dispense with the actual production of the money; that there must be some declaration or equivalent act to the effect that the debtor need not offer it.* The sight of the money may tempt the creditor to accept it.* The question whether the production has been dispensed with is for the jury, and if they find the facts specially and do not find the fact of dispensation, the court will not infer it.^ The money must be actually at hand and ready to be produced immedi- ately if it should be accepted. It is not enough that a third person has it on the spot and is willing to loan it, unless he actually consents to do so for the purpose of the tender.^ At bott, 30 Vt. 577; Thome v. Mosher, Walk. (Miss.) 369, 12 Am. Dec. 570. 20 N. J. Eq. 267, 36 Am. Rep. 542. Compare Sharp v. Todd, 38 N. J. Eq. 1 Chinn v. Bretches, 43 Kan. 316, 22 234. Pac. Rep. 426; Hanna v, Rateldn, 43 * Thomas v. Evans, 10 East, 101; 111. 462; Hayward v. Hunger, 14 Douglas v. Patrick, 3 T. R 683; Dick- Iowa, 516; Wynkoop v. Cowing, 21 inson v. Shee, 4 Esp. 68; Finch v. III. 570. Brook, 1 Bing. N. C. 253; Leather- 2 Murray v. Roosevelt, Anth. 101; dale v. Sweepstone, 3 C. & P. 342; Hazard v. Loring, 10 Cush. 267; Firth v. Purvis, 5 T. R. 432; Kraus Vaupell v. Woodward, 2 Sandf. Ch. v. Arnold, 7 Moore, 59; Brown v. 143; Strong v. Blake. 46 Barb. 227; Gilmore, 8 Me. 107, 22 Am. Dec. 223; Stone V. Sprague, 20 id. 509; Apple- Bakeman v. Pooler, 15 Wend. 637. ton V. Donaldson, 3 Pa. 381; Dana v. 5 Finch v. Brook, supra. Fiedler, 1 E. D. Smith, 463; Slinger- 6 id.; 2 Greenlf. Ev., ^ 603. land V. Morse, 8 Johns. 474; Everett The burden of proving readiness V. Saltus, 15 Wend. 474; Warren v. andability to pay is upon the debtor. Mains, 7 Johns. 476; Thompson v. Ladd v. Mason, 10 Ore. 308; Park v. Lyon, 40 W. Va. 78, 20 S. E. Rep. 812. Wiley, 67 Ala. 310. 3 Con way V. Case, 22 111. 127; Breed ''Sargent v. Graham, 5 N. H. 440, V. Hurd, 6 Pick. 356; Davis v. Stone- 22 Am. Dec. 469; Bakeman v. Pooler, street, 4 Ind. 101; Harding v.Davies, 15 Wend. 637; Breed v. Hurd, 6 2 C. & P. 77; Borden v. Borden, 5 Pick. 356; Eastland v. Longshorn, 1 Mass. 67, 4 Am. Dec. 32; Sucklinge N. & McC. 194 V. Coney, Noy, 74; Behaly v. Hatch, § 208.] TENDEK. 685 an interview between the pLaintiff and the defendant the latter was willing to pay £10, and a third person otl'ered to go up- stairs and fetch that sum, but was prevented by the plaintiff saying " he cannot take it." Such offer was held a good tender.* A tender made by holding an unstated sum in hand, [-t.iS] peremptorily rejected without inquiry as to amount, is good.- 1 Harding v. Davies, 2 C. & P. 77. But in Kraus v. Arnold, 7 Moore, 59, the defendant ordered A. to pay the plaintiff £7 12s., and the clerk of the plaintiff demanded £8, on which A. said he was only ordered to pay £7 13s., which sum was in the hands of B., and B. put his hand to his pocket with a view to pulling out his pocket- book to pay £7 12s., but did not do so, by the desire of A. ; but B. could not say whether he had that sum about him, but swore he bad it in his house, at the door of which he was standing at the time. Held, not a legal tender, because the money was not produced. And in Glasscott v. Day, 5 Esp. 48, it was held the tender was not good because the money was not in sight; the witness supposed it was in the desk, but never saw it produced; and it did not appear that if the creditor had been willing to accept the money it could be immediately paid; the money should be at hand and capable of immediate delivery. In Breed v. Kurd, 6 Pick. 356, a witness told the plaintiff that the defendant had left money with him to pay his bill, and that if tlie plaint- iff would make it right by deducting a certain sum he would pay it, at the same time making a motion with his hand towards his desk, at which he was then standing; he swore that he believed, but did not know, that there was money enough in his desk; but if there was not, he would have obtained it in five minutes if the plaintiff would have made the de- duction; but the plaintiff replied that he would deduct nothing. Held, not a tender. 2 State v. Spicer, 4 Houst. 100. It appeared in this case that the par- ties met, and the debtor, in his wagon, which stopped on meeting the creditor, said; "I've got the money to pay you," specifying the claim, and put his hand into his pocket to take out the bag which contained the money; while he was doing this the creditor said, "I want nothing to do with such a cut-throat as you," and walked rapidly away. The jury found that the debtor was thei'eby prevented from producing the money and offering it to the creditor, and it was held a good ten- der. Sands v. Lyon, 18 Conn. 18. In Knight v, Abbott, 30 Vt. 577, the defendant, desiring to make a tender, said to the plaintiff as he was passing in a wagon, " I want to tender you this money for labor you have done for me," at the same time holding a sum in his hand equal to his indebtedness, but not mention- ing any amount; the plaintiff did not reply, nor stop his team. Held, not a good tender. In Thorne v. Mosher, 20 N. J. Eq. 257, A. offered to pay money to B., holding her purse in her hand in sight of B., who saw the purse, but not the bills. A. opened the purse, and was in the act of taking out the bills, but stopped on account of the refusal of B. to receive tlie money. Held, that the offer was neither pay- ment nor tender, but the refusal was an excuse for not making a tender. 686 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 269. To make a valid tender under a statute providing that an offer in writing to pay a particular sura of money is, if not accepted, equivalent to the actual production and tender of the money, the party must have the ability to produce the money, and must act in good faith. Such an offer does not deprive the creditor of the right to a reasonable time in which to ascertain the amount due, and to determine whether he will accept.^ § 269. Where to be made. If a debt is payable at a partic- ular place the creditor has a right to receive the money there.- When payable at a bank, the designation of place imports a stipulation that the holder will have the instrument on which the money is payable at the bank to receive payment, and that the debtor will have the funds there to pay it; and it is the general usage in such cases to lodge the instrument with the bank for collection. If the instrument is not there lodged, and the debtor is there at maturity with the necessary funds to pay it, he so far satisfies the contract that he cannot be made responsible for any future damages, either in costs of suit or interest for the delay.' Having money, howev^er, in a bank where a note is payable is not a tender unless it is in some way appropriated to the note.* A tender to the cashier [•459] of the amount of a note payable at his bank, coupled with a demand of the note, is not good, it not being there at the time, and the money not being deposited nor afterwards offered.'^ Where no place of payment is appointed the debt is payable anywhere; and it is the duty of the debtor to seek the creditor if within the state.® If the creditor is without the ^ Hyams v. Bamberger, 10 Utah, 1, Houbie v. Volkening, 49 How. Pr. 36 Paa Rep. 202. 169; Harris v. Mulock, 9 id. 402. 2 United States v. Gurney, 4 In the last case it appeared that the Cranch, 338; Adams v. Rutherford, creditor went to the debtor's office to 13 Ore. 78, 18 Pac. Rep. 896. See § 214. receive payment. While in the act 3 Ward V. Smith, 7 Wall. 447; of counting one of several packages Cheney v. Bilby, 20 C. C. A. 291, 74 of bank bills delivered to him by the Fed. Rep. 52. debtor as payment, he suddenly left * Myers v. Byington, 34 Iowa, 205. the office by reason of insulting 5 Balrae v. Wambaugh, 16 Minn, language addressed to him by the 116; Hill V. Place, 7 Robert. 389. See latter. It was held that the money Rowe V. Young, 2 Brod, & Bing. 165; not being current coin, it would not Bacon v. Dyer, 12 Me. 19; Wallace v. be a tender if the creditor objected McConnell, 13 Pet. 136. to it for that reason; therefore to 6 Littell V. Nichols. Hardin, 66; constitute that money a tender, the .§ 270.] TENDER. 687 state the tender is dispensed with, and no riglits are lost by the debtor's inability to make it.^ The publication of a notice of a change in the place designated for payment of the princi- pal of bonds does not affect their holders without actual notice of such change.^ § 270. Must be unconditional. A tender must bo uncondi- tional,' or at least cannot be clogged by any condition to which the creditor can have reasonable objection; ^ so that if he takes the money and there is more due, he may still bring an action for the residue.* An offer of a certain sum in full of a [400] demand is not a good tender.^ But a tender is not vitiated by being an offer of payment under protest. If the debtor abso- debtor was obliged to give the cred- itor time sufficient to ascertain whether the money was such as lie would be willing to receive instead of coin; and the creditor having cause to leave on account of the in- sulting language before such exam- ination was completed, the tender was not sufficient; the debtor must seek the creditor for that purpose. See Mathis v. Thomas, 101 Ind. 119; g214. 1 Buckner v. Finley, 2 Pet. 587; Smith v. Smith, 25 Wend. 405; Hale V. Patton, 60 N. Y. 233, 19 Am. Rep. 168; Allshouse v. Ramsay, 6 Whart. 331, 37 Am. Dec. 417; Gill v. Bradley, 21 Minn. 15; Gage v. McSweeney, 74 Vt. 370, 53 Atl. Rep. 960. 2Kelley v. Phenix Nat. Bank, 17 App. Div. 496, 45 N. Y. Supp. 533. See Williamson County v. Farson, 101 111. App. 328, 199 111. 71, 64 N. K Rep. 1086. 8 Rose V. Duncan, 49 Ind. 269; Jen- nings V. Major, 8 C. & P. 61; Holton V. Brown, 18 Vt. 224, 46 Am. Dec. 148; Wagenblast v. McKean, 3 Grant's Cas. 393; Cothren v. Scanlan, 34 Ga. 555; Pulsifer v. Shepard, 36 III. 513; Shaw V. Sears, 3 Kan, 242; Hunter V. Warner, 1 Wis. 141; Gibson v. Lyon, 115U. S. 439, 6 Sup. Ct. Rep. 129. * Connecticut Mut. L. Ins. Co. v. Stinson, 86 111. App. 668; Be vans v. Rees, 5 M. & W. 306; Richardson v. Jackson, 8 id. 298; Wheelock v. Tan- ner, 39 N. Y. 481; Foster v. Drew, 39 Vt. 51; Dedekam v. Vose, 3 Blatchf. 44. See Moynahan v. Moore, 9 Mich. 9; Hepburn v. Auld, 1 Cranch, 321. 5 Moore v. Norman, 52 Minn. 83, 53 N. W. Rep. 809, 38 Am. St. 526, 18 L. R. A. 359; Beckman v. Birchard, 48 Neb. 805, 67 N. W. Rep. 784; Te Poel V. Shutt, 57 Neb. 592, 78 N. W. Rep. 288; Mitchell v. King, 6 C. & P. 237; Hartings v. Thorley, 8 id. 573; Jen- nings V. Major, id. 61; Peacock v. Dickerson, 2 id. 51, n. ; Benkard v. Babcock, 27 How. Pr. 391; Hen wood V. Oliver, 1 G. & D. 25, 1 Q. B. 409; Bowen v. Owen, 11 id. 130; Wood v. Hitchcock, 20 Wend. 47; Loring v. Cooke. 3 Pick. 48; Roosevelt v. Bull's Head Bank, 45 Barb. 579. *> Shiland v. Loeb, 58 App. Div. 565, 69 N. Y. Supp. 11; L'Hommedieu v. The H. L. Dayton, 38 Fed. Rep. 926; Noyes v. Wyckoflf, 114 N. Y. 204, 21 N. K Rep. 158; Tompkins v. Batie, 11 Neb. 147, 7 N. W. Rep. 747, 38 Am. Rep. 361 ; Boulton v. Moore, 14 Fed. Rep. 922; Shuck v. Chicago, etc. R. Co., 73 Iowa, 333, 35 N. W. Rep. 429; Griffith V. Hodges, 1 C. & P. 419; Strong V. Harvey. 3 Bing. 304; Che- minant v. Thornton, 2 C. & P. 50; 688 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 270. lutely oflPers to pay he does not vitiate the offer by protesting.* There have been some intimations that even asking a receipt [461] would vitiate a tender; and it is probable the require- Thayer v. Braokett, 13 Mass. 450; Mitchell V. King. 6 C. & P. 237; Wood V, Hitchcock, 20 Wend. 47. In the last case Cowen, J., said: "It was clearly a tender to be ac- cepted as the whole amount due, which is holden to be bad by all the books. The tender was also bad be- cause the defendant would not allow that he was ever liable for the full amount of what ho tendered. His act was within the rule which says he shall not make a protest against his liability. He must also avoid all counter-claim, as of set-oflf against part of the debt due. That this de- fendant intended to impose the terms, or raise the inference that the acceptance of the money should be in full and thus conclude the plaint- iff against litigating all further or other claim, the referees were cer- tainly entitled to say. That the de- fendant intended to question his liability to part of the amount tend- ered is equally obvious, and his ob- ject was at the same time to adjust his counter-claim. It is not of the nature of a tender to make condi- tions, but simply to pay the sum tendered as for an admitted debt. Interlarding any other object will always defeat the effect of the act as a tender. Even demanding a re- ceipt or an intimation that it is ex- pected, as by asking, 'Have you got a receipt?' will vitiate. The demand of a receipt in full would of course be inadmissible." The reason of this rule is obvious where the debtor does not in fact tender all that is due; for if a debtor tenders a certain sum as all that is due, and the creditor receives it, under these circumstances it might compromise his rights in seeking to recover more; but if the same sum was tendered unconditionally, no such effect would follow. Sutton v. Hawkins, 8 C, & P. 259. The reason why a tender has so often been held invalid when a receipt in full has been demanded seems not to have been merely because a receipt was asked for, but rather because a part was offered in full payment. See Sanford v. Bulkley, 30 Conn. 344. In Holton v. Brown, 18 Vt. 224, 46 Am. Dec. 148, it was held that a tender to pay a note is vitiated by demand of it, and refusing to accept a discharge of the mortgage and a receipt for the payment, the holder not being able at the time to find the note. See Wilder v, Seelye, 8 Barb. 408; Story on Prom. Notes, § 106 et seq. ; §§ 243, 244; Balme v. Wambaugh, 16 Minn. 116. In Robinson v. Ferreday, 8 C. & P. 753, it was held that a tender was not vitiated by the person making it saying, at the time, that it was all that the debtor considered was due; but if he offers the sum " as all that is due," it is diflferent. Sutton v. Hawkins, 8 C. & P. 259; Field v. Newport, etc. R Co., 3 H. & N. 409; Thorpe v. Burgess, 8 Dowl. P. C. 603. And in Bowen v. Owen, 11 Q. B. 130, a tenant sent to his landlord 26Z., with a letter in these words: "I have sent with the bearer 26Z. to set- tle one year's rent of Nant-y-pair." The landlord refused to take it, say- ing that more was due. Held, a good tender. 1 Manning v. Lunn, 2 C. & K. 13; Scott V. Uxbridge & R. R. Co., L. R. 1 C. P. 596: Sweny V. Smith, L. R. 7 Eq. 324. But see Wood v. Hitchcock, 20 Wend. 47, quoted from in the pre- ceding nota § 270.] TENDER. G89 raent to give one stamped would have that effect;^ but it is be- lieved that the tenderer may ask a simple receipt for what is paid." At all events, if the creditor refuse the tender wholly on the ground of more being due he cannot afterwards object thereto because the debtor required a receipt.' A tender, however, which is accompanied by a demand for a receipt in full is con- ditional, and of course invalid.* A tender of money in [462] An offer to the effect that " I am willing to pay you the named sum to avoid litigation; it is not due you, but I am willing to pay," if accom- panied by the money (which is not necessary in Iowa) is not a good tender. Kulins v. Chicago, etc. R. Co., 65 Iowa, 528, 22 N. W. Rep. 661. 1 Laing v. Header, 1 C. & P. 257. See Ryder V. Townsend, 7 D. & R. 119. 2 See 2 Par. on Cont. 645, note m; Jones V. Arthur, 8 Dowl. P. G 442; Bowen v. Owen, 11 Q. B. 130. Under the code of California the debtor may demand a receipt. Fer- rea v. Tubbs, 125 Cal. 687, 58 Pac. Rep. 308. And so in Georgia; but nothing more than a receipt can be demanded. De Graffenreid v. Menard, 103 Ga. 651, 30 S. E. Rep. 560. A tender of taxes may be condi- tioned upon the giving of a receipt, the statute requiring that the officer do that. State v. Central Pacifio' R. Co., 21 Nev. 247, 22 Pac. Rep. 237. * Richardson v. Jackson, 8 M. & W. 298; Cole v. Blake, Peake, 179. ^Halpin v. Phenix Ins. Co., 118 N. Y. 105, 23 N. E. Rep. 482; Noyes v. Wyckoff, 114 N. Y. 204, 21 N. E. Rep. 158; Frost v. Yonkers Savings Bank, 70 N. Y. 558, 26 Am. Rep. 627; Bowen V. Owen, 11 Q. B. 130; Griffith v. Hodges, 1 C. & P. 419; Glasscott v. Day, 5 Esp. 48; Higham v. Baddely, Gow, 213; Foord v. Noll, 2 Dowl. (N. S.) 617; Finch v. Miller, 5 C. B. 428; Sanford v. Bulkley, 30 Conn. 344; Richardson v. Boston Chemical Lab- oratory, 9 Met. 42; Perkins v. Beck, 4 Crauch C. C. 68; Hart v. Flynn, 8 Vou 1 — 44 Dana. 190; Holton v. Brown. 18 Vt. 224, 40 Am. Dec. 148; Siter v. Robin- son, 2 Bailey, 274; Brooklyn Bank v. DeGrauw, 23 Wend. 342, 35 Am. Dec. 569: Wood v. Hitchcock, 20 Wend. 47; Eddy V. O'Hara. 14 id. 221; Clark v. Mayor. 1 Keyes, 9; Thayer v. Brack- ett, 12 Mass. 450; Wagenblast v. Mc- Kean, 2 Grant's Cas. 393; Pulsifer v. Shepard, 36 111. 513; Cothran v. Scan- Ian, 34 Ga. 555; Shaw v. Sears, 3 Kan. 242; Hunter v. Warner, 1 Wis. 141; Rose V. Duncan, 49 Ind. 269. Where a tender was made in "greenbacks," and refused ber-ause payment in coin was demanded, it was considered a valid tender, if the court should be of opinion that the debtor was entitled to pay in such money. The money was paid into court, to be drawn only on its order "or by the plaintiff, if he shall accept the same as tendered." The plaint- iff obtained an order of the court and drew the money, and the order recited that he should not be preju- diced by his acceptance and appro- priation of the amount. Lindsay. J., said: "So long as the legal tender notes remained in the hands of the court, or its agent, the Fanners' Bank, they constituted a standing and continuous offer to Robb, which he had the option at any time to ac- cept ' as tendered.' But he could not of his own volition take out and ap- propriate such notes upon any other conditions than those upon which the tender was made. Nor had the court tlie power to change or modify these conditions. If it should finally 690 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 270. payment of a debt, to be available, must be without qualifica- tion; that is, there must not be anything raising an implication that the debtor intends to cut off or bar a claim for any amount beyond the sum offered.^ A tender of money to pay negoti- able paper may be so far conditional as to be accompanied by a demand for its surrender,^ unless the creditor asserts in good be adjudged that the tender was suf- ficient in law, the appellant would be entitled to his costs, and the title to the money on deposit would be vested in Robb. Upon the other Jiand, if the court should adjudge that Robb was entitled to have his note paid in gold coin, a judgment specifically enforcing his contract would be rendered, and Wells would have the right to withdraw from the hands of the court the legal tender notes on deposit. Theruleis diflFerent ■where there is no controversy as to the character of the money tendered : but where the plaintiff claims a larger amount than the defendant concedes to be due, in such cases the tender establishes the liability of the party sued for the amount ten- dered, and the plaintiif has a right to accept that amount as a payment pro tanto, and continue the litiga- tion for the balance claimed, he being responsible for costs subsequently accruing, in case lie fails to recover judgment for such balance or some part thereof. Here it was all the time in the power of Robb to waive his objection to the character of the money tendered and accept it in satisfaction of his debt; but as it was lawful money, as held recently by the supreme court of the United States (Knox v. Lee and Parker v. Davis), it was not within the power of the circuit court to permit him to take possession of it as property, and account to appellant for its value in coin, nor to compel the latter to pay it out upon any debt for less than its face value. As the unauthorized order of the court under which Robb obtained possession of the money tendered was made at his instance, and contrary to the objections of his debtor, he occupies no better at- titude than he would have done had he withdrawn the money from the bank, as he had a right to do, under the order directing the deposit to be mada He must be held to have waived objection to the character of the money tendered, and to have ac- cepted it as a payment of his debt." Wells' Adm'r v. Robb, 9 Bush, 26. iWood V. Hitchcock, 20 Wend. 47; Roosevelt v. Bull's Head Bank, 45 Barb. 579; Wilder v. Seelye, 8 id. 408 Sanford v. Bulkley, 30 Conn. 344 Perkins v. Beck, 4 Cranch C. C. 68 Brooklyn Bank v. De Grauw, 23 Wend. 342, 35 Am. Dec. 569; Holton v. Brown, 18 Vt. 224, 46 Am. Dec. 148; Hart V. Flynn, 8 Dana, 190; Eddy V. O'Hara, 14 Wend. 221; Clark v. Mayor. 1 Keyes, 9; Cheminant v. Thornton, 2 C. & P. 50: Strong v. Harvey, 3 Bing. 304; Mitchell v. King, 6 C. & P. 237; Brady v. Jones, 2 Dow. & Ry. 305; Benkard v. Bab- cock, 27 How. Pr. 391; Rose v. Dun- can, 49 Ind. 269; Finch v. Miller, 5 C. B. 428; Sutton v. Hawkins, 8 C. «& P. 259. 2 Bailey v. Buchanan County, 115 N. Y. 297, 6 L. R A. 562, 22 N. E. Rep. 155; Strafford v. Welch, 59 N. H. 46; Cutler V. Goold, 43 Hun, 516; Wilder V. Seelye, 8 Barb. 408; Rowley v Ball, 3 Cow. 303, 15 Am. Dec. 266; Smith V. Rockwell, 2 Hill, 482; Han- sard V. Robinson, 7 B. & C. 90. See Story on Bills, §§ 448-9; Chitty oa § 270.] TENDER. 691 faith that the sutn tendered is insufficient.^ The debtor may- require that a pledge be surrendered.^ The rule as to such paper is exceptional, to withdraw it from circulation and for recourse to other parties. The general doctrine in respect to tender is that no condition can be annexed which, by acceptance, would preclude any ques- tion which would otherwise be open to the creditor. He should be at liberty to accept the tender, and to say he does not take it in full satisfaction of his demand; or that he does not [403] forego any right by its acceptance except to deny that so much was paid, and such benefits to the tenderer as are consequent by legal intendment. The party making the tender should be content to allow the creditor to take the money, and get more if the jury find him entitled to it; or to assert any other right consistent with the mere acceptance of the money, and applying it to the subject.' If, however, there is no dispute as to the Bills, 438; Story oa Prom. Notes, ?§ 106, 112, 143. 244; Storey v. Krew- son. 55 Ind. 397, 23 Am. Rep. 668; Dooley v. Smith, 13 Wall. 604. 1 Moore v. Norman, 52 Minn. 83, 53 N. W. Rep. 809, 38 Am. St. 526, 18 L. R. A. 359. 2 Cass V. Higenbotam, 100 N. Y. 253, 3 N. E. Rep. 189; Loughborough V. McNevin, 74 Cal. 250, 5 Am. St. 435, 14 Pac. Rep. 369, 15 id. 773; John- son V. Cranage, 45 Mich. 14, 7 N. W. Rep. 188; Johnson v. Garlichs, 63 Mo. App. 578. •''Beardsley v. Beardsiey, 29 C. C. A. 538, 86 Fed. Rep. 16. See Jennings V. Major, 8 C. & P. 61; Thayer v. Brackett, 12 Mass. 450. A party qualifies his tender when he demands in return what, accord- ing to his own theory of his rights, he is strictly entitled to for the money he pays, and even though such theory is legally correct, if that theory is questioned. This is illus- trated by Loring v. Cooke, 3 Pick. 48. A tender was made to redeem from an execution sale. The amount tendered was not the subject of dis- pute; but the debtor demanded a re- lease which was not necessary to cancel the sale, and the purchaser's inchoate title; and a release had been prepared by the tenderer ready for execution. The purchaser re- fused to execute it, and claimed to hold his purchase to secure other debts. This right was held not to exist, as the English doctrine of tacking was not recognized; but the tender was invalidated by the de- mand of a release, though if exe- cuted it would have extinguished no right which the purchaser could have asserted. In the subsequent case of Saunders v. Frost, 5 Pick. 259, 275, a tender was made on a mortgage debt after the mortgagee had taken possession to foreclose for interest in arrear, the principal not being due. The tender was of the whole mortgage debt, including in- terest computed to the date of the tender, and not to the maturity of the debt. The court held that as to the principal the tender was not good ; for the creditor had a right to keep his debt at interest until the 692 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 270. amount of the debt a tender may always be restricted by such conditions as by the terms of the contract are precedent to or simultaneous with the payment of the debt or proper to be performed by the tenderee; ^ as that he shall discharge amort- time appointed for payment. But it was no objection to the tender in respect to interest due that a larger sum was tendered; nor that a dis- charge of the mortgage was de- manded; for since the statute enti- tled the mortgagor to a discharge on payment of the mortgage debt the demand of such discharge was only of the performance of a duty imposed by law. So it seems that the tender, as to interest, was not rendered nugatory by being accom- panied by a condition which was only admissible when a tender could rightfully be made of the mortgage debt. It was sustained because it was the duty of the mort- gagee to inform the mortgagor that possession was held only for the in- terest due; and the mortgagee should have shown a willingness to accept payment of such interest. In Storey v. Krewson, 55 Ind. 397, 23 Am. Rep. 668. the court held that under a statute which requires a mort- gagee of lands to discharge a mort- gage of record, after having received full payment, a mortgagor is not en- titled to demand such discharge when tendering such full payment; that the mortgagee could not be re- quired to do so merely upon a ten- der of the amount as a condition to his right to receive the amount. Biddle, J., said: "When one party is to perform an act, whose right does not depend upon any act to be per- formed by the other party, the ten- der must be without condition, as where money is to be paid without condition. The current of author- ities — indeed we believe it to be quite uniform — holds that the party bound to pay the money cannot make a good tender upon the condi- tion that the party to whom the money is to be paid shall give him a written receipt therefor; and in the case of a non-commercial promissory note the authorities are in conflict whether a good tender can be made upon the condition that the note shall be surrendered; but in the case of commercial paper the authorities seem to be uniform that a tender upon condition that the paper shall be surrendered is good, because such paper might be put in circulation after payment, and innocent parties become liable; not so, however, with non-commercial paper; after pay- ment by the maker it becomes harm- less against him, wherever it may go." A tender to be good must not be upon any condition prejudicial to the party to whom it was made. See Wheelock v. Tanner, 39 N. Y. 481; Hepburn v. Auld, 1 Cranch, 831. D. purchased some oats of F., who took goods worth S^l-78 in part payment. D. tendered $170 to F., telling him that if he took $130 of the amount it closed the whole business; and if he took the $170 it settled the oat busi- ness and left the account for the goods standing; held not conditional; D. merely explained his tender. Fos- ter V. Drew, 39 Vt. 51. A tender of the amount due on a judgment, accompanied by a de- mand for the assignment of the se- curity or writ, will not entitle the person making it to be subrogated to the plaintiff's rights therein. Forest Oil Co.'s Appeals, 118 Pa. 138, 12 Atl. Rep. 442. iHalpin v. Phenix Ins. Co., 118 N. Y. 165, 23 N. E. Rep. 482; Johnson v. 270.] TENDER. C93 gao-e;^ return collateral security ;2 give a release;' or surrea- der mortgaged chattels, if a reasonable time be given.* If the holder of a note secured by mortgage claims them under an oral assignment from the payee and the latter has warned the maker not to pay the holder, the maker may require a written assignment or release from the payee as a condition of a ten- der.-^ A tender in payment of a mortgage is not conditional.' But if a tender is made upon condition its acceptance is an ac- ceptance of the condition."^ Thus a creditor who accepts money offered on condition that it be received in full satisfaction of a demand does so subject to the condition, notwithstanding he may then or subsequently protest.^ In some of these cases Cranage, 45 Mich. 14, 7 N. W. Rep. 188; Lamb v. Jeffrey, 41 Mich. 719, 3 N. W. Rep. 204; Brink v. Freoff, 40 Mich. 614. 1 Halpin v. Phenix Ins. Co., supra; Wheelockv. Tanner, 39 N. Y. 481; Salinas v. Ellis, 26 S. C. 337, 2 S. K Rep. 121. See Jewett v. Earle, 53 N. Y. Super. Ct. 349; Werner v. Tuch, 52 Hun, 269. 5 N. Y. Supp. 219. 2 Cass V. Higgenbotam, 100 N. Y. 253, 3 N. E. Rep. 189; Ocean Nat. Bank v. Fant, 50 N. Y. 474; Lough- borough V. McNevin, 74 Cal. 250, 5 Am. St. 435, 14 Pao. Rep. 369, 15 id. 773. 3 Saunders v. Frost, 5 Pick. 259. * Brink v. Freoff, 40 Mich. 610. 5 Kennedy V. Moore, 91 Iowa, 39,58 N. W. Rep. 1066. 8 Davis V. Dow, 80 Blinn. 223, 83 N. W. Rep. 50. '^ St. Joseph School Board v. Hull, 73 Mo. App. 403; Rosema v. Porter, 112 Mich. 13, 70 N. W. Rep. 316; Pot- ter V. Douglass, 44 Conn. 546; Wal- ston V. Denny, 84 111. App. 417; Adams v. Helm, 55 Mo. 468; Kronen- berger v. Binz, 56 id. 121; Lee v. Dodd. 20 Mo. App. 284; Kofoed v. Gordon, 122 CaL 315. 54 Pac. Rep. 1115. 8 Treat v. Price. 47 Neb. 875, 66 N. W. Rep. 834, citing Fuller v. Kemp, 138 N. Y. 231, 33 N. E. Rep. 1034, 20 L. R A. 785; Reynolds v. Empire Lumber Co., 85 Hun, 470, 33 N. Y. Supp. Ill; Donohue v. Woodbury, 6 Gush. 150, 52 Am. Dec. 777; Mc- Daniels v. Lipham, 21 Vt. 222, To the same effect are Nassoiy v. Tom- linson, 148 N. Y. 326, 51 Am. St. 695, 42 N. E. Rep. 715; Bull v. Bull, 43 Conn. 455; Hilliard v. Noyes, 58 N. H. 312; Brick v. Plymouth County, 63 Iowa, 462, 19 N. W. Kep. 304; Hinkle v. Minneapolis, etc. R. Co., 31 Minn. 434, 18 N. W. Rep. 275; Frei- berg V. Moffett, 91 Hun, 17. 36 N. Y. Supp. 95; Anderson v. Standard Granite Co., 92 Me. 429, 43 Atl. Rep. 21, 69 Am. St. 522; Ennis v. Pullman Palace Car Co., 165 111. 161, 46 N, E. Rep. 439; Lang v. Lane, 83 111. App. 543; Pollman Coal & Sprinkling Co. V. St. Louis, 145 Mo. 651, 47 S. W. Rep. 563; Logan v. Davidson, 18 App. Div. 353, 45 N. Y. Supp. 961, affirmed without opinion 162 N. Y. 624; Con- necticut River Lumber Co. v. Brown, 68 Vt 239, 35 Atl. Rep. 56; Murphy V. Little, 69 Vt. 261, 37 Atl. Rep. 968; Ostrander v. Scott, 161 111. 339, 43 N. E. Rep. 1089; Vorhis v. Elias, 54 App. Div. 412, 56 N. Y. Supp. 134, 67 id. 1149; Lewinson v. Montauk Theatre Co., 60 App. Div. 572, 69 N. Y. Supp. 1050; Hamilton v. Stewart, 105 Ga. 300, 31 S. E. Rep. 184. 694 COiSrVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 270. checks or drafts sent by mail to the creditor " in full satisfac- tion " or as " payment in full " were retained, and in some of them the claims were disputed. But ordinarily the reten- tion of a check inclosed in a letter which refers to the amount as the balance due on accounts between the parties will not be an accord and satisfaction so as to bar an action for the bal- ance due.^ " It is only in cases where a dispute has arisen be- tween the parties as to the amount due and a check is tendered on one side in full satisfaction of the matter in controversy that the other party will be deemed to have acquiesced in the amount offered fey an acceptance and retention of the check." ^ If the amount of the claim is in dispute and the creditor ad- vises his debtor that the amount for which his check was sriven has been credited to his account, and has not been accepted in full, the debtor will be deemed to have acquiesced in that ap- plication unless he expresses to the creditor his dissent.* To constitute the acceptance of less than is due an accord and satisfaction of a disputed and unliquidated claim the money must be tendered in satisfaction and the tender accompanied witii such acts and declarations as make its acceptance a con- dition to that end.* [464] When mutual acts are to be done by two parties at the same time and the right of each depends upon the performance of the other, either may tender his part of the performance upon the condition that the other discharges his duty; and neither is compelled to perform unless the other does so also; as when land is bargained and sold to be conveyed upon pay- ment of the purchase-money. In such a case neither can b© compelled to perform his part of the agreement except on the performance by the other of his part; that is, the vendee can- not demand the conveyance without tendering the purchase- money; and the vendor cannot demand the purchase-money 1 Eames Vacuum Brake Co. v. Pros- 3 Strock v. Brigantine Transporta- ser, 157 N, Y. 289. 51 N. E. Rep. 986; tion Co., 23 N. Y. Misc. 358, 51 N. Y. McKay v. Myers, 168 Mass. 312, 47 N. Supp. 327; McKeea v. Morse, 1 C. C. E. Rep. 98; Day v. Lea, 22 Q. B. Div. A. 237, 49 Fed. Rep. 253. 610. *Kingsville Preserving Co. v. ^ Eames Vacuum Brake Co. v. Pros- Frank, 81 III. App. 586; Lang v. Lane, ser, supra; Hodges v. Truax, 19 Ind. 83 id. 543. App. 651, 49 N. E. Rep. 1079 (review- ing many cases). 271.] TENDER. 095 without tendering the conveyance; and either may make a good tender to the other upon the condition that he will per- form his part of the agreement.^ If the performance of prece- dent or contemporaneous conditions is refused the person whose duty it is to pay has done all that is required of him when he has made a tender; he is thereby excused from keeping it good.* But where it is provided by statute that a tender shall be un- conditional except for a receipt in full or delivery of the obliga- tion, one who has completed the payment of the purchase- money of land and is entitled to evidence of the title condi- tions a tender by making it dependent upon the execution of a conveyance.^ § 271. Effect of accepting. Acceptance of a tender, when made as full payment, has the effect of entire satisfaction in case of a disputed claim.* But the acceptance of a proper tender, accompanied by no such condition, does not pre- [-lOo] elude the creditor from proceeding for more,^ An appeal is 1 Scott V. Beach, 172 111. 273, 50 N. E. Rep. 196; Comstock v. Lager, 78 Mo. App. 390; Clark v. Weis. 87 111. 438, 29 Am. Rep. 60; Englebach v. Simpson, 33 S. W. Rep. 506, 12 Tex. Civ. App. 188; Wheelock v. Tanner, 39 N. Y. 486; Mankel v. Belscamper, 84 Wis. 218, 54 N. W. Rep. 500; Hal- pin V. Phenix Ins. Co., 118 N. Y. 165, 23 N. E. Rep. 482; Englander v. Rog- ers, 41 Cal. 420; Heine v. Tread well, 72 id. 217, 13 Pac. Rep. 503; Storey v. Krevvson, 55 Ind. 397, 23 Am. Rep. 668. 2 Cannon v. Handley, 72 Cal. 133, 13 Pac. Rep. 315; Washburn v. Dewey, 17 Vt. 92; White v. Dobson, 17Gratt 262; McDaneld v. Kimbrell, 3 G. Greene, 335. 3 De Graffenreid v. Menard. 103 Ga. 651, 30 S. E. Rep. 560; Elder v. John- son, 115 Ga. 691, 42 S. E. Rep. 51. *St. Joseph School Board v. Hull, 72 Mo. App. 403: Towslee v. Healy, 89 Vt. 522; Springfield & N. R, Co. v. Allen, 46 Ark, 217; United States v. Adams, 7 WalL 463; Jenks v. Burr, 56 111. 450; Draper v. Pierce, 29 Vt. 250; Cole v. Champlain Transport;^ tion Co., 26 Vt. 87; McDaniels v. Bank of Rutland, 29 Vt. 230. 70 Am. Dec. 406; Adams v. Helm, 55 Mo. 468. It is held in some cases that an un- accepted tender is an admission that there is a sum due the tenderee equal to it, and this although it be defect- ive or be made in a case where it is not binding and cannot be pleaded. Denver, eta R Co. v. Harp, 6 Colo. 420; CiUey v. Hawkins, 48 111. 309. These cases are of doubtful authority, because the legal effect of such a tender is no more than a mere offer of compromise. No doubt is entertained that where a tender is made under a mistaken belief by tlie party who made it that the sum tendered was due evidence is admissible to rebut the inference that a debt was thereby admitted. Ashuelot R. Co. v. Chesii- ire R Co., 60 N. H. 356. sHiggins v. Halligan, 46 111. 173; Ryal v. Rich, 10 East, 47; Sleght v. Rhinelander, 1 Johns. 192. 696 CONVENTIONAL LIQUIDATIONS AND DISCHAEGES. [§ 272. not waived by the receipt of a pa3'^merit. The acceptance of a sura tendered on account of a claim only extinguishes it when it is all that the creditor is entitled to, or when it is received as being so.^ § 272. Must be kept good. Unless the conduct of the party who is entitled to payment excuses the other from so doing^ he must keep his tender good; that is, the debtor must at all times be prepared to meet a demand for money tendered ; if he fails to do so he places himself in default and loses the ben- efit of his tender.^ And the rule applies in chancery and at law.* It is not necessary to keep for the creditor the identical money tendered. The tenderer is at liberty to use it as his own; all he is under obligation to do is to be read}'^ at all times to pay the debt in current money when requested.® iBenkard v, Babcock, 2 Robert. 175. 2 See g 268. 3 Middle States Loan, Building & Construction Co. v. Hagerstown Mattress & Upholstery Co., 82 Md. 506, 33 Atl. Rep. 886; Parker v. Beas- ley, 116 N. C. 1, 21 S. E. Rep. 955. 33 L. R. A. 231; Shank v. Groff, 45 W. Va. 543, 33 a E. Rep. 248; McDaniel V. Upton, 45 111. A pp. 151; Beardsley V. Beardsley, 29 C. C. A. 538, 86 Fed. Rep. 16; Crain v. McGoon, 86 111. 431; Sanders v. Peck, 131 id. 407, 25 N. E. Rep. 508; Aulger v. Clay, 109 111. 487; Wyckoflf v. Anthony, 9 Daly, 417; Rainwater v. Hummell, 79 Iowa, 571, 44 N. W. Rep. 814; Wilson v. McVey, 83 Ind. 108; Park v. Wiley, 67 Ala. 310; Wilder v. Seelye, 8 Barb. 408; State v. Briggs. 65 N. C. 159; Bronson v. Rock Island, etc. R Co., 40 How. Pr. 48; Mohn v. Stoner, 14 Iowa, 115, 11 id. 30; Warrington v. Pollard, 24 id. 281, 95 Am. Dec. 727; Kortright v. Cady, 23 Barb. 490, 5 Abb. Pr. 358: Brooklyn Bank v. De- Grauw, 23 Wend. 342, 35 Am. Dec, 569; Pulsifer v. Shepard, 36 111. 513; Nelson v. Oren, 41 111. 18; Cullen v. Green, 5 Harr. 17; Clark v. Mullenix, 11 Ind. 532; Jarboe v. McAtee, 7 B. Mon. 279; Livingston v. Harrison, 3 E. D. Smith, 197; Call v. Scott, 4 Call, 402; Mason v. Croom, 24 Ga. 211; Brock v. Jones, 16 Tex. 461; Webster v. Pierce, 35 111. 158; Wood V. Merchants', etc. Co.. 41 III. 267; Suver V. O'Riley, 80 111. 104; Haynes V. Thorn, 28 N. H. 380; Nantz v. Lober, 1 Duv. 304; Hay ward v. Hague, 4 Esp. 93; Pierse v. Bowles, 1 Stark. 323; Spybey v. Hide, 1 Camp. 181; Rivers v. Griffiths, 1 D. & Ry. 215; Coles v. Bell, 1 Camp. 478, note; Coore v. Callaway, 1 Esp. 115. 4 De Wolf V. Long, 7 111. 679; Doyle V. Teas, 5 111. 202; Brooklyn Bank v. De Grauw, 23 Wend. 342, 35 Am, Dec. 569; Stow v. Russell, 36 111. 18; Mo- Daniel v. Upton, 45 111. App. 151, (holding that the rule applies to jus- tices' courts). A plaintiff failing in his suit in equity after tender and deposit of money in court brought error, and pending the proceedings in error withdrew the deposit; held, not a waiver of error. Vail v. McMillan, 17 Ohio St. 617. 6 Cheney v. Bilby, 20 C. C. A, 291, 74 Fed. Rep. 52; Thompson v, Lyon, 40 W, Va, 87, 20 S, E. Rep. 812; Cur- tiss V. Greenbanks, 24 Vt. 536. But § 272.] TENDER. 697 A refusal by the debtor, after a tender, to pay the money tendered on demand of the creditor deprives the offer [460] of all legal availability and effect.^ For this purpose the debtor should keep the money in his own possession. A de- posit of it with a third person for the creditor, with or with- out giving him notice thereof, will not exempt him from this necessity ; for the creditor will be under no obligation to apply to the depositary for it. If he thinks proper to accept the ten- der, he may call on the debtor himself for it. In that case, unless the debtor pays or tenders the sum, he will lose the benefit of the previous tender.^ Hence the debtor is entitled to the benefit of his tender if he is ready with the money on a demand made to himself personally, although he may have made the tender by his attorney.' The demand for the money after a tender and refusal must be of the precise sum tendered,* and must be made by some one authorized to receive it and give the debtor a discharge.* Where the tender had been made by two persons, demand on one was sufficient.^ If money is tendered with which the debtor has a right then to discharge the debt, and sufficient to satisfy it, he is not to bear the loss of its subsequent depreci- ation.'' see Quynn v. Whetcroft, 3 Harr. & ^Coles v. Bell, 1 Camp. 478, note; McH. 353; Roosevelt v. Bull's Head Coore v, Calloway, 1 Esp. 115. Bank, 45 Barb. 579. «Peirse v. Bowles, 1 Stark. 52a 1 Nantz V. Lobar, 1 Duval, 304; A letter, demanding payment of a Rose V. Brown, Kirby, 293, 1 Am. debt, sent'to the debtor's house, to Dec. 22. which an answer is returned that 2 Rainwater v. Hummell, 79 Iowa, the demand should be settled, was 571, 44 N. W. Rep. 814; Town v. held to be sufficient evidence of a Trow, 24 Pick. 168. demand on an issue of a subsequent 3 Berthold v. Reyburn, 37 Ma 586. demand and refusal to a plea of A defendant's attorney having made tender. Hay ward v. Hague, 4 Esp. 93. a tender the plaintiff's attorney sub- A tender may lose its effect by sequently agreed to take it, but it mutual waiver, as where afterward was held this assent was not such a the debtor, at the suggestion of the demand as would avoid the tender, creditor, consents to retain the The demand for such a purpose money. He cannot afterwards set must be made upon the debtor per- it up as a defense. Terrell v. Walker, sonally. 65 N. C. 91. *Spybey v. Hide, 1 Camp. 181; 'Anonymous, 1 Hayw. 183. See Rivers v. Griffiths, 1 Dow. & Ry. 215. Jeter v. Littlejohn, 3 Murph. 18G. 698 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 273. [467] §273. Waiver and omission of tender on sufficient excuse. There is probably no difference in respect to the effect of stopping interest as damages, based on default, between an actual tender or tender with some punctilio waived and a readiness to pay, and a tender altogether prevented by the conduct of the creditor; as, for example, by his absence or concealment. For this effect it is only needful to negative default.^ Where, however, the debt bears interest by agree- ment of the parties after it is payable, an actual tender is doubtless essential to stop interest unless the creditor pre- vents it by some fraudulent evasion.^ Where a tender is made to the creditor, not in currency which he is bound to receive, but in bank bills current at par as money, and not objected to on that account; or is made by a check on a bank, assented to as a mode of payment, the offer is a sufficient tender. And where there is a verbal offer to pay and the debtor is prepared to make his offer good, but omits to produce the money to the view of the creditor because the latter says it need not be produced as he will not receive it, the proffer is in sub- stance and legal effect a tender.^ The law interprets the con- duct of the parties in the ceremony of tender according to their apparent intentions, and determines its sufficiency upon the objections then stated. We have seen that certain incidents, such as demanding a receipt for what is paid, or change where there is an offer of a larger amount, or bank bills instead of money which is legal tender, must be specially objected to at the time. Silence is a tacit waiver of such objections. Other objections may also be waived by implication on the maxim of expressio unius est exclusio alterius. A general rule on this subject is that if a tender is refused on a specific ground the 1 Thompson v. Lyon, 40 W. Va. 87, 20 S. E. Rep. 813; Thorne v. Mosher, 20 N. J. Eq. 257. 2 Gil more v. Holt, 4 Pick. 258; South worth v. Smith, 7 Gush. 391; Cheney v. Bilby, 20 G. C. A. 291, 74 Fed. Rep. 52. 3 Stephenson v. Kilpatrick, 166 Mo. 262, 267, 65 S. W, Rep. 773: Holmes V. Holmes, 9 N. Y. 525; Hall v. Nor- walk F. In& Co., 57 Conn. 105, 17 Atl. Rep. 356; Roe v. State, 83 Ala. 68, 3 So. Rep. 2; McDaneld v. Kim- brell, 3 G. Greene, 335; Manhattan L. Ins. Co. V. Smith, 44 Ohio St. 156, 58 Am. Rep. 806, 5 N. E. Rep. 417; Mathisv. Thomas, 101 Ind. 119; Hoff- man V. Van Diem en, 63 Wis. 362, 21 N. W. Rep. 542; Sharp v. Todd, 38 N. J. Eq. 324; Duffy v. Patten, 74 Me. 396; Koon v. Snodgrass, 18 W. Va.. 32a See §268. § 2T4.] TENDEK. G'JO creditor will not be permitted afterwards to raise any otlier objection which, if stated at the time it was made, could have been obviated.^ § 27i. Tender must be pleaded and money paid into court. If the money tendered is not demanded by the creditor, [468] and he brings suit, the defendant must plead the tender, and his plea must be accompanied by payment of the money into court for the creditor,- unless the effect of the tender is merely the extinguishment of a lien without discharging the debt, in Avhich case payment into court is not necessary.' It is also un- necessary if it is merely desired to stop interest;* and so where there has been a breach of the vendor's contract to put the 1 Hull V. Peters, 7 Barb. 331 ; Car- man V. Pultz, 21 N. Y. 547; Keller v. Fisher. 7 Ind. 718; Mitchell v. Cook, 29 Barb. 243; Haskell v. Brewer, 11 Me. 258; Hay ward v. Munger, 14 Iowa, 516; Graves v, McFariane, 2 Cold. 167; Bradshawv. Davis, 12 Tex. 386; Nelson v. Robson, 17 Minn. 284; Rudulph V. Wagner, 36 Ala. 698; Stokes V. Recknagel, 38 N. Y. Super. Ct. 368; Rlck-er v. Blanchard, 45 N. H. 39; Abbot v. Banfield, 43 id. 152; Schroeder v. Pissis, 128 Cal. 209, 60 Pac. Rep. 758; Rickettsv. Buckstaff, _ Neb. , 90 N. W. Rep. 915. If a tender of money which the creditor refused is left with him against his wish, and he declines to give it up when called for, it will be sufficient. Rogers v. Rutter, 11 Gray, 410. 2 Colby V. Reed, 99 U. S. 560; Mat- thews v. Lindsay, 20 Fla. 962; Allen V. Cheever, 61 N. H. 32; Halpin v. Pheuix Ins. Co., 118 N. Y. 165, 23 N. E. Rep. 482; Coghlen v. South Caro- lina R. Co., 32 Fed. Rep. 316; Morri- son V. Jacoby, 114 Ind. 84, 14 N. E. Rep. 546, 15 id. 806; Roberts v. White, 146 Mass. 256, 15 N. E. Rep. 568; Park V. Wiley, 87 Ala. 310; Frank v. Pickens, 69 id. 369; Goss v. Bo wen, 104 Ind. 207, 2 N. E. Rep. 704; Fer- oald V. Young, 76 Me. 356; Jenkins V. Briggs, 65 N. C. 159; Ciaflin v. Hawes, 8 Mass. 261; Harvey v. Hack- ley, 6 Watts, 264; Nelson v, Oren, 41 111. 18; Brown v. Ferguson, 2 Denio, 196; Sheriden v. Smith, 2 Hill, 538; Livingston v. Harrison, 2 E. D. Smith, 197; Robinson v. Gaines, 3 Call, 243; Hume V. Pepioe, 8 East, 168; Giles V. Hartis, 1 Ld. Raym. 254; Becker V. Boon, 61 N. Y. 317: Karthaus v. Owings. 6 Har. & J. 134: Griffin v. Tyson. 17 Vt. 35; Cullen v. Green, 5 Harr. 17; Mason v. Croom, 24 Ga, 2l 1 ; Brock V. Jones, 16 Tex. 461: Clark v. Mullenix, 11 Ind. 532; Marine Bank V. Rushmore, 28 III. 463; Webster v. Pierce, 35 111. 158; Warrington v. Pol- lard, 24 Iowa, 281, 95 Am. Dec. 727; Jarboe v. McAtee, 7 B. Mon. 279; De Goer v. Kellar. 2 La. Ann. 496; Alex- andrie v. Saloy, 14 id. 327; Call v. Scott, 4 Call, 402; State v. Briggs, 65 N. C. 159; National Machine & Tool Co. v. Standard Shoe Machinery Co., 181 Mass. 275, 63 N. E. Rep. 900. See Terrell v. Walker, 65 N. C. 91 ; and for a construction of the code of Oregon, see Holladay v. HoUaday, 13 Ora 523, 536, U Pac. Rep. 260, 12 id. 821. 3 Cass v. Higenbotam. 100 N. Y. 248, 3 N. E. Rep. 189. See § 277. * Ferrea v. Tubbs, 125 Cal. 687, 58 Pac Rep. 308. 700 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 275. vendee of land into possession, the former having told the ven- dee that he would not comply with the contract.^ And if the vendor puts himself in a position to make it appear that a tender of the purchase price would be refused if made, the ven- dee may plead an offer to bring the money into court, and may have specific performance.^ If there is uncertainty as to the amount due the plaintiff may have specific performance by pleading readiness to bring the money into court whenever the sum is liquidated.^ The payment made before trial is final ; the debtor cannot speculate on the effect of the evidence and add to the sum paid after the trial has begun.* If the plead- ings do not object to the failure to allege payment into court the money may be paid in during the trial, and, in the absence of an objection in the record, the appellate court will assume that it was so paid.^ § 275. Effect of plea of tender. The plea of tender is a conclusive admission that the sum tendered is due;** and if the money is not paid into court the plaintiff may sign judg- ment." But the tender and plea go no further than to admit the contract or duty sued upon, and the right of the plaintiff to the sum paid in. The defendant may contest the plaintiff's right to anything beyond that sum upon any ground consist- ent with an admission of the original contract or transaction. 1 Irwin V. Askew, 74 Ga. 581. T. 561, 23 N. R Rep. 1106; Voss v. 2 Kerr v. Hammond, 97 Ga. 567, 25 McGuire, 26 Mo. App. 452; Kansas S. E. Rep. d'67. City Transfer Co. v. Neiswanger, 27 3 Id.; Irvin v, Gregory, 13 Gray, id. 356; Schnur v. Hickox, 45 Wis. 215. 200; Monroe v. Chaldeck, 78 111. 429; 4 Frank v. Pickens, 69 Ala. 369. Roosevelt v. New York & H. R. Co., A payment at the time of filing the 30 How. Pr. 226; Currier v. Jordan, answer will not affect the costs un- 117 Mass. 260; Ruble v. Murray, 4 less there is a specification of the Hayw. 27; Huntington v. American amount paid on the claim and for Bank, 6 Pick. 340; 2 Pars, on Cont. costs. The Good Hope, 40 Fed. Rep. 638, note. But see Clarke v. Lyon 60a County, 7 Nev. 75. 6 Halpin v. Phenix Ins. Co., 118 N. ' Chapman v. Hicks, 2 Dowl. P. C. Y. 165, 23 N. E. Rep. 482. 641; Monroe v. Chaldeck, 78 IlL 429. 6 McDaniel v. Upton, 45 111. App. See Knox v. Light, 12 111. 86; Sloan 151; Illinois Central Co. v. Cole, 62 v. Petrie, 16111. 262; Marine Bank v. id. 480; Noble v. Fagnant, 162 Mass. Rush more, 28 111. 463; Webster v. 275, 286. 38 N. E. Rep. 507; Giboney Pierce, 85111. 158; Stow v. Russell, 36 V. German Ina Co., 48 Mo. App. 185; IlL 35; Reed v. Woodman, 17 Me. 4a Taylor v. Brooklyn E. R. Co.. 119 N. § 275.] TENDER. 701 He may insist upon the statute of limitations, payment beyond the sum tendered or other defense.^ He cannot claim in a motion for arrest of judgment that the complaint is so defect- ive as not to authorize the recovery of any sum.- It has been held that an answer under the code must allefre that the money has been brought into court; and if it omits this alle- gation it does not state facts sufficient to constitute a defense and the plaintiff may avail himself of the objection on the trial;' it must also be alleged that the money is brought into court for the other party's use and benefit; it is not enough to say for his use.^ And if issue be joined on the plea of ten- der, where the money has not been brought into court, [469] it has been held that judgment should be given for the plaint- 'iff, notwithstanding a verdict in favor of the defendant on that issue.^ But in other cases the omission to pay the money into court has been treated as an irregularity; and if the plaintiff accept the plea and reply thereto without receiving notice that the money has been paid in he waives the irregularity.^ The 1 Cox V. Parry, 1 T. R. 464; Reid v. Dickons, 5 B. & Ad. 499; Meager v. Smith, 4 id. 673; Spalding v. Vander- cook, 2 Wend. 431; Wilson v, Doran, 110 N. Y. 101, 17 N. E. Eep. 688; Griffin v. Harriman, 74 Iowa, 436, 38 N. W. Rep. 139; Young v. Borzone, 26 Wash. 4, 20, 65 Pac. Rep. 13.5. 2 Wilson V. Chicago, etc. R, Co., 68 Iowa, 673, 27 N. W. Rep. 916. 3 Becker v. Boon, 61 N. Y. 417. See last section. The notice of payment into court after suit which is required by the New York code is not waived by fail- ing to return an answer pleading tender before suit or to otherwise raise the question before trial Wil- son V. Doran, 110 N. Y. 101, 17 N. E, Rep. 688. * Phoenix Ins. Co. v. Overman, 21 Ind, App. 516, 52 N. E. Rep. 771. *Claflin V. Hawes, 8 Mass. 261. ■ « Woodruff V. Trapnall, 12 Ark. 640; Sheriden v. Smith, 2 Hill, 5,3S-, Shep- herd V. Wysong, 3 W. Va. 46; Roose- velt V. New York & H, R Co., 30 How. Pr. 226. In the last case the defendant set up in the answer a tender without paying the money into court. This answer was accepted, and the plaint- iff afterwards applied to the court for an order requiring the defendant to pay to the plamtiff the sum ten- dered, under a provision of the code that •' when the answer of the de- fendant express!}'-, or by not deny- ing, admits part of the plaintiff's claim to be just, the court, on mo- tion, may order defendant to satisfy that part of the claim, and may en- force the order as it enforces a judg- ment or provisional remedy.'' The tender was held to be such an ad- mission. The court say: "The money tendered in this case was not paid into court, and it is to be inferred from the fact that the an- swer is treated as part of the plead- ings that it is accepted witiiout the money being paid in. On the facts 702 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 275. technical rules governing pleas of tender in actions at law do not apply in equity. Upon a bill to enforce specific perform- ance of an agreement to accept a named sum of money in sat- isfaction of a debt secured by pledged property a tender is well pleaded by alleging readiness, willingness and ability to pay the amount due or to bring it into court to be paid ujDon transfer of the collateral.* The plaintiff is entitled to the money paid into a court of law, with a plea of tender, in any event.^ He may take it out, though he replies that the tender was not made before action brought.' The fact that more is paid than is due, or that no payment was necessary for the protection of the rights of the party who paid, does not give him the right to withdraw the money or any part of it.* But the rule that the plaintiff is en- titled absolutely to the amount tendered and paid into court has been held not to apply to an action brought to recover a penalty or other fixed amount, where, unless the plaintiff re- covers the amount of the penalty or fixed sum, he is not en- titled to judgment.^ Nor is it applicable to money paid into court by the plaintiff on a bill in equity to redeem, where the defendant for whom such money is paid successfully contests the right to redeem.^ In such an action the plaintiff paid in, before me I must treat the plea of 15 Pac. Rep. 691; Sweetland v. Tut- tender as sufficient, although the hill, 54 111. 215; Munk v. Kanzler, 26 money has not been paid into court. Ind. App. 105 58 N. E. Rep. 543; But if the tender was irregular for Martin v. Bott, 17 Ind. App. 444, 46 thereasonstated, the admission of the N. E. Rep. 151; Beil v. Supreme justice of the plaintiff's claim would Council American Legion of Honor, be none the less distinct and une- 42 App. Div. 168, 58 N. Y. Supp. 1049. qui vocal." See also Merritt v. See Ruble v. Murray, 4 Hayw. 27. Thompson, 10 How. Pr. 428; Thurston If money paid into court in a suit V. Marsh, 5 Abb. Pr. 389. for unliquidated damages is taken 1 Chicora Fertilizer Co. v. Dunan, out in good faith by the plaintiff's 91 Md. 144, 46 Atl. Rep, 347, 50 L. R. solicitor and paid to his client the so- A. 401; Zebley v. Farmers' Loan & licitor cannot be compelled to repay Trust Co., 139 N. Y. 461, 34 N. E. Rep. it after his client's death. Davys v, 1067. Richardson, 21 Q. B. Div. 208. 2 Foster v. Napier, 74 Ala. 393; Tay- 3 Le Grew v. Cooke, 1 Bos. & PuL lor V. Brooklyn E. K Co., 119 N. Y. 332. 561, 23 N. E. Rep 1106; Kansas City ^Fox v. Williams, 92 Wis. 320, 66 Transfer Co. v. Neiswanger, 27 Mo. N. W. Rep. 357. App. 356; Dillenback v. The Ross- •"' Canastota & M. Plank R. Co. v. end Castle. 30 Fed. Rep. 462; Sup- Parkill, 50 Barb. 601. ply Ditch Co. v. Elliott, 10 Colo. 327, « Putnam v. Putnam, 13 Pick. 129. 275.] TENDER. ro3 under order of the court, a sum previously tendered; in the meantime he had failed to keep his tender good, and judgment was given for the defendant for that reason. The plaintiff was then entitled to withdraw the raone}' except so much as might pay the defendant's costs.^ By withdrawing money paid into court the plaintiff accepts it for the purposes for which it was paid ; he cannot claim that it was merely pay- ment on account.^ In this case Shaw, C. J., said: "There is no analogy between the payment of money into court in a common- law action of debt or assumpsit and a like payment upon a bill in equity to redeem under our statute, and hence the authorities applicable to the former case afford no rule gov- erning the present. By payment into court, in an action claiming debt or damages, the defendant ad- mits, in the most formal manner, his absolute liability to that sum, and by the form of the rule or plea oflfei's it in satisfaction and discharge of such admitted liability. If not accepted it is paid into court for the plaintiflf's use, and the defendant derives the full benefit of it as if paid to and ac- cepted by the plaintiff himself, be- cause it operates as a bar pro tanto to all claims in respect to such sum. It is therefore upon the strongest reason held that such payment shall be deemed absolute, and the party shall not be permitted to draw it in question on the ground of equity or mistake, or any ground except fraud or imposition. " But the character of a payment of money into court on a bill in «quity to redeem a mortgage is en- tirely different. It is in its nature •entirely provisional; it is an offer to pay in discharge of a debt secured by mortgage on real estate, the pur- pose of which is to release such real estate from the incumbrance. But the defendant contests the right to redeem; alleges that, by force of law and the lapse of time, the mortgage is foreclosed, that she has become the absolute owner of the estate, and of course that there is no longer any debt secured bj' mortgage, and, con- sequently, that she has no claim to the money offered in satisfaction of such debt This defense prevails, and the conclusion of law is that the defendant was right in rejecting the money tendered and not releasing the estate. She cannot now be al- lowed to claim this money against her own formal actshowing that she has no title to it. Nor ought the plaintiffs to be bound by a provis- ional offer of money to redeem an estate, where it appears that they cannot redeem, and the paj^ment cannot avail them for the only pur- pose for wliich the money was of- fered." 1 Dunn V. Hunt, 76 Minn. 196, 78 N. W. Rep. 1100. 2 Haeussler v. Duross, 14 Mo. App. 103; Turner v. Lee Gin & Machine Co., 98 Tenn. 604, 41 S. W. Rep. 57; Gardner v. Black. 98 Ala. 638, 12 So. Rep. 813; Hanson v. Todd, 95 Ala. 328, 10 So. Rep. 354; Chne v. Rude- sill, 126 N. C. 523, 36 S. E. Rep. 36. Compare Spaulding v. Vandercook, 2 Wend. 431; Sleght v. Rhinelander, 1 Johns. 192; Johnston v, Columbian Ins. Co., 7 Johns. 315. The opinion in the Tennessee case cited contains a summary of the practice under the old procedura Y04 CONVENTIONAL LIQUIDATIONS AND DISCHAKGE8. [§§ 276, 277. [470] § 276. Effect of tender when money paid into court. A mere tender of a sufBcient sura only has the effect to stop interest and protect the debtor against subsequent costs. It does not discharge the debt.^ But when the debtor has kept the tender good, and, on being sued, regularly pleads it and brings the money into court, it accomplishes such discharge [471] whether the action proceeds to judgment or not. If the action abate or be withdrawn, the defendant in a subsequent action may plead the tender and payment into court in the first action; and if these facts are established he will be en- titled to judgment.^ §277. Effect of tender on collateral securities. A suffi- cient tender, however, will discharge all liens and collateral securities; and for this effect it need not be kept good, nor be brought into court.' Thus, where a mortgage of real estate is a mere security for the debt and the legal title remains in the mortgagor precisely the same after as before the debt is due, 1 Ferrea v. Tubbs, 125 Cal. 687, 58 Pac. Rep. 308; Ruppel v. Missouri Guarantee Savings & Building Ass'n, 158 Mo. 618, 59 S. W. Rep. 1000; Wright V. Robinson, 84 Hun, 173, 32 N. Y. Supp. 463; Law v. Jackson. 9 Cow. 641 ; Carley v, Vance, 17 Mass. 389; Haynes v. Thorn, 28 N. H. 386, 400; Barnard v. Cushman, 35 IlL 451; Raymond v. Bearnard, 12 Johns. 274, 7 Am. Dea 317; Coit v. Houston, 3 Johns. Cas. 243; Jackson v. Law, 5 Cow. 248; Cornell v. Green, 10 S. & R 14. See Jeter v. Littlejohn, 3 Murph. 186: Staat v. Evans, 35 111. 455; Teass' Adm'r v. Boyd, 29 Mo. 131; Wheeler v. Woodward, 66 Pa. 158; Pennsylvania Co. v. Dovey, 64 id. 260; Dixon v. Clark, 5 C. B. 365 Waistell v. Atkinson, 3 Bing. 289 Johnson v. Triggs. 4 G. Greene, 97 Freeman v. Fleming, 5 Iowa, 460 Shant v. Southern, 10 id. 415; Mohn V. Stoner, 11 id. 30; Hayward v. Hun- ger, 14 id. 516. 2 Robinson v. Gaines, 3 Call, 24a See Warder v. Arell, 2 Wash. (Va.) 282, 1 Aiii. Dec. 48a Keys V. Roder, 1 Head, 19, was an action of debt commenced in a jus- tice's court. It was held that a mere offer by the defendant to the plaint- iff of the sum claimed before the issuance of the warrant could not be pleaded as a valid tender in bar of the action. The money should have been produced and offered also at the time of the trial before the justice; and upon appeal to the circuit court, it should have been brought into that court at the time of filing the papers, and still held ready and pro- duced as a continuous offer. A mere offer of the amount to the plaintiff by the defendant's counsel, in the progress of the argument in the cir- cuit court, was not sufficient. ^Schayer v. Commonwealth Loan Co., 163 Mass. 332, 39 N. E. Rep. 1110; Mitchell V. Roberts, 17 Fed. Rep. 776; Wright V. Robinson, 84 Hun, 172, 32 N. Y. Supp. 463; Willard v. Harvey, 5 N. H. 253; Swett v. Horn, 1 id. 332; Maynard v. Hunt, 5 Pick. 240. •] TENDER. 7U5 and until there is a foreclosure, the tender of the amount due after the law day and before foreclosure will discharge tLe mortgage; and if the mortgagee is in possession the mortgagor may recover in ejectment.^ But to establish a tender and re- fusal, such as will discharge the lien of a mortgage without the tender being kept good, the proof must be clear that the ten- der was fairly made and deliberately and intentionally refused by the owner of the mortgage, and that sufficient opportunity was afforded to ascertain the amount due; at least it should ap- pear that a sum was absolutely and unconditionally tendered sufficient to cover the whole amount due.- Though the tender be sufficient, yet if the mortgagor asks for affirmative relief, even for extinguishment of the lien, he must do equity; this obliges him to keep the tender good; he must pay the amount equitably due the mortgagee.' Where the incidents attached to a mortgage of real estate are those w^hich prevailed at the common law^, the mortgagee having an estate on condition which becomes absolute by reason of non-payment on the day named, a tender will not discharge the lien unless it is made punctually and is kept good.* A tender will discharge a 1 Kortright v. Cady, 21 N. Y. 343, 5 Abb. Pr. 358; Jackson v. Crafts. 18 Johns. 110; Edwards v. Farmers' F. Ins. & L, Co., 21 Wend. 467; Farmers' F. Ins. & L. Co. V. Edwards, 26 id. 541; Arnot V. Post,6 Hill,65; Post v. Arnot, 2 Denio, 344; Tiffany v. St. John, 5 Lans. 153, 65 N. Y. 314; Hartley v. Tatham, 1 Robert. 246, 1 Keyes, 222; Trimm v. Marsh, 54 N. Y. 599, 13 Am. Rep. 623: McDaniels v. Reed, 17 Vt. 674; Eslow v. Mitchell, 26 Mich. 500; Caruthers v. Humphrey, 12 id. 270; Van Husan v. Kanouse, 13 id. 303; Saltus V. Everett, 20 Wend. 267; Sa- linas V. Ellis, 26 S. C. 337, 2 S. E. Rep. 121; Thornton v. National Exchange Bank, 71 Mo. 221. See Harris v. Jex, 66 Barb. 232; Merritt v. Lambert, 7 Paige, 344; Ketchum v. Crippen, 37 Cal. 223; Bryan v. Maume, 28 Cal. 238; Wilson V. Keeling, 1 Wash. (Va.) 194; Werner v. Tuch, 52 Hun, 269, 5 N. Y. Supp. 219. Vol. 1 — 45 2Tuthill V. Morris, 81 N. Y. 94; Parks V. Allen. 42 Mich. 82, 4 N. W. Rep. 227; Jewett v. Earle, 53 N. Y. Super. Ct. 349; Waldron v. Murphy, 40 Mich. 668. 3Tuthill V. Morris, 81 N. Y. 94; Landis v. Saxton, 89 Mo. 375, 1 S. W. Rep. 359. See Salinas v. Ellis, 26 S. C. 337, 2 S. E. Rep. 121. 4 Grain v. McGoon. 86 111. 431; Mat- thews V. Lindsay, 20 Fla.962; Schearff V. Dodge, 33 Ark. 340; Alexander v. Caldwell, 61 Ala. 543; Greer v. Tur- ner, 36 Ark. 17; Currier v. Gale, 9 Allen, 522; Holman v. Bayley, 3 Met. 55; Phelps V. Sage, 2 Day, 151; Shields V. Lozear, 34 N. J. L. 496, 3 Am. Rep. 256; Rowell v. Mitchell. 68 Me. 21; Store}' V. Krewson, 55 Ind. 397, 23 Am. Rep. 608; Collins v. Robinson, 33 Ala. 91; Slaughter v. Swift, 67 id. 494; Frank v. Pickens. 69 id. 369; Tomp- kins V. Batie, 11 Neb. 147, 38 Am. Rep. 361, 7 N. W. Rep. 747; Hudson v. 706 CONVENTIONAL LIQUIDATIONS AND DISCHAEGES. [§ 277. mechanic's lien for the repair of personal propert}'';^ an attor- ney's lien; 2 a pledge or mortgage of personal property;' the [472] right to distrain for rent;* and will release a surety.' But a tender of the sum due on a contract for the purchase of land, the legal title being in the vendor, does not discharge his lien; he can be divested of his title only by payment of the purchase-money.® A landlord's statutory lien for rent is not discharged by a tender of the rent due.'^ Whether a judgment which is a lien on land, or under which an execution has been levied, will be discharged by a tender is not very clearly settled. It has been held that to make a ten- der effectual for this purpose the money should be brought into court and the judgment satisfied of record. Being a debt of record, and a tender not discharging it, the lien, beino- a legal consequence, must subsist while the debt continues in that form,^ But the weight of reason, if not authority, is in Glencoe Sand & Gravel Co., 140 Mo. 103, 41 S. W. Rep, 450, 63 Am. St. 722; Himmelmann v. Fitzpatrick, 50 Cal. €50: Mitchell v. Roberts, 17 Fed. Rep. 776. iMoynahan v. Moore, 9 Mich. 9; Ball V. Stanley, 5 Yerg. 199, 26 Am. Dec. 263. 2 Stokes on Lien of Att'ys, 81, 172; Jones V. Tarleton, 9 IVL & W. 675; Scarf 6 V. Morgan, 4 id. 280; Irving v. Viana, 2 Y. & Jer. 71. ^Hyams v. Bamberger, 10 Utah, 3, 36 Pac. Rep. 202, citmg the text; Norton v. Baxter, 41 Minn. 146, 42 N. W. Rep. 865, 4 L. R. A. 305; Lough- borough V. McNevin, 74 Cal. 250, 5 Am.St. 435. 14 Pac. Rep. 369, 15 id. 773; McCalla v. Clark, 55 Ga. 53: Wild- man V. Radenaker, 20 Cal. 615; Ball V. Stanley, supra; Cooley v. Weeks, 10 Yerg. 141; Coggs v. Bernard. 2 Ld. Raym. 909; Comyn's Dig., tit. Mort- gage, A. But not after the day it is due. Tompkins v. Batie, supra. Contra, Hyams v Bamberger, 10 Utah, 3, 36 Pac. Rep. 202. See Frank V. Pickens, 69 Ala. 369. * Hunter v. Le Conte, 6 Cow. 728; Davis V. Henry, 63 Miss. 110. s Smith V. Old Dominion Building & Loan Assn, 119 N. C. 257, 26 S. E. Rep. 40; Mitchell v. Roberts, 17 Fed. Rep. 776; Brandt on Suretyship, §§ 21» 22; Appleton v. Donaldson, 3 Pa. 381; Spurgeon v. Smitha, 114 Ind. 453, 17 N. E. Rep. 105; Joslyn v. Eastman, 46 Vt. 258; White v. Life Assn of America, 63 Ala. 419, 35 Am. Rep. 45; McQuesten v. Noyes, 6 N. H. 19; Sailly V. Elmore, 2 Paige, 497; Fisher V. Stockebrand, 26 Kan. 565; Hayes V. Josephi, 26 Cal. 535; Solomon v. Reese, 34 id. 28. Compare Clark v. Sickler, 64 N. Y. 231, 21 Am. Rep. 606; Second Nat. Bank v. Boucher, 56 N. Y. 348. « Schearflf v. Dodge, 33 Ark. 346. 7 Hamlett v. Tallman, 30 Ark. 505; Bloom V. McGehee, 38 Ark. 329. 8 Jackson v. Law, 5 Cow. 248; Law V. Jackson, 9 id. 641; Halsey v. Flint, 15 Abb. Pr. 367. See Shumaker v. Nichols, 6 Gratt. 592; Flower v. EI- wood, 66 111. 447, 449; Redington v. Chase, 34 Cat 666. But see also Mason v. Sudam, 2 Johns. Ch. 172; Tiffany v. St. John, 5 Lans. 153, 65 N. Y. 314, 23 Am. Rep. 55. § 277.] TENDEE. 707 favor of holdinj^ an execution lien discbarged by a tender the same as a conventional lion would be. In each case the lien exists as a collateral advantage to the creditor. It is inciden- tal to the debt. In each case, if the lien is not satisfied, there is a power to sell. Payment will extinguish one as well as the other.' But it will not discharge a lien to secure the payment 1 Tiffany v. St. John. 65 N. Y. 314, 23 Am. Rep. 55. In this case Dwight, C, said: "There is, undoubtedly, a stage in a proceeding in an action where property is in the custody of the law, that a tender will not de- stroy tlie lien, as that might inter- fere with the proper disposition of the case. After the action is over, and judgment obtained, and execu- tion levied, the case becomes clearly assimilated to that of an ordinary lien; and if tender is made and not accepted the lien will be extin- guished. This distinction was set- tled as far back as the time of Lord Coke, and is clearly stated in the Six Carpenters' Case (8 Coke, 146a). The point there discussed was the effect of a tender in the case of a distress tor rent, or of cattle doing dam- age — an instance of a lien created by the act of the law. Coke con- siders the distinction between a tender made upon the land before distress, after the distress and before impounding, after impounding and before the determination of the liti- gation, and contrasts these with a tender made after the law has deter- mined the rights of the parties. He says: 'Note, reader, this difference: that tender upon the land before the distress makes the distress tortious; tender after the distress and before the impounding makes the detainer, and not the taking, wrongful; ten- der after the impounding makes neither one nor the other wrongful, for then it comes too late, because then the cause is put to the trial of the law, to be there determined. But after the law has determined it, and the avowant has return irreplevisa- ble, yet if the plaintiff makes him a sufficient tender he may have an ac- tion of detinue for the detainer after, or he may. upon satisfaction made in court, have a writ for the redelivery of his goods.' He adds: 'And there with agree all the books, and Pelk- ington's Case, in the fifth part of my reports (fol. 76), and so all the books •which, pri)nn facie, seem to disagree, are, upon full and pregnant reason, well reconciled and agreed.' " There is here a clear statement of the principle applicable to the case at bar. Here the law has al- ready determined the right which has became final in analogy to the ' return irreplevisable ' of Lord Coke, and the tender having been made and refused, if it were sufficient in amount, an action of replevin in the detinet will lie in analogy to the ac- tion of detinue referred to by him. It should also be observed that Lord Coke's rule provides that the owner of goods has his election to make an application to the court for relief. "The defendant cites in opposition to these views the case of Jackson V. Law, 5 Cow. 248, 9 id. 641. That case, however, has no bearing upon the present controversy. The point there decided was that a tender of money due upon a judgment by a junior judgment creditor did not discharge it, nor take away the lien of the senior judgment creditor upon lands, but that the latter might still redeem upon his judgment within the terms of the statute ap- 70S CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 27S. of special assessments for street improvements, no personal liability therefor existing.^ [4:73] A plea of tender should conclude by praying judgment whether the plaintiff ought to recover any damages by reason of the non-payment of the sum alleged to have been tendered.^ If upon the trial the sum tendered and brought into court is found by the jury to be less than was due at the time of the tender the verdict and judgment should be for the whole amount of the plaintiff's demand, without any deduction on account of the money brought into court. The defendant, however, is entitled to the benefit of the payment by indorse- ment upon the judgment or execution.^ [474] § 278. Paying money into court. A practice was introduced into England in the time of Charles II. of paying money into court where no previous tender had been made.* This is supposed to have been adopted to avoid the hazard and difficulty of pleading a tender.^ The money was paid in on a rule of court, and thereafter the plaintiff proceeded for more at the hazard of paying subsequent costs. The amount paid in was stricken from the declaration, and no evidence given of that part of the claim.^ It was at first required to be paid in before plea, but was afterwards allowed by plicabletothat subject. The ground court of equity may set aside a sale of this decision briefly was that a underit as irregular and void. Mason judgment, being a debt of record, is v. Sudani, 2 Johns. Cli. 172." See not discharged by a tender, and it is, Crozer v. Pilling, 6 D. & R. 129. in no case, the effect of a tender to ^ McGuire v. Bi'ockman, 58 Mo. discharge the debt. The judgment App. 307. could only be extinguished by act- -Karthaus v. Owings, 8 Har. & J. ual satisfaction. As long as it re- 134. mained in force, it must, by its very 3 Dakin v. Dunning, 7 Hill. SO, 42 nature, as prescribed by statute, be Am. Dec. 33; Huntington v. Zeigler, a lien on the land. If its existence 2 Ohio St. 10; Bennett v. Odom, 30 continued it could not be deprived Ga. 940; Baker v. Gasque, 3 Strobh. of its ordinary and usual character- 25; Reed v. Woodman, 17 Me. 43; 1 istics. The case is very different Tldd's Pr. 569. with a pledge or mortgage, or lien of * Payment into court without a any kind collateral to the debt. To rule may be disregarded. Levan v. this class of collateral liens an exe- Sternfeld, infra. cution belongs, and on general prin- 5 Levan v. Sternfeld, 55 N. J. L. 41, ciples a tender destroys it. Even in 25 Atl. Rep. 854; Arch. Pr. 199; the case of a judgment a tender may Boyden v. Moore, 5 Mass. 365; Reed have such an effect as to make it in- v. Woodman, 17 Me. 43. equitable to enforce the lien; and a *> Id. § 279.] STIPULATED DAMAGES. 709 withdrawing the plea. The rule allowing the defendant to pay money into court was granted generally on condition of pay- ing costs, directing that sura to be stricken out of the declara- tion, if refused by the plaintiff, and concerning it no evidence to be received on the trial. This reduced the controversy to the quantum of damages; and the consequence was that, if the plaintiff did not prove a greater sum due than that paid in, a verdict passed for the defendant and he had judgment for subsequent costs. If the plaintiff proved that more was due, he had a verdict and judgment for the balance and subsequent costs.^ The payment of money into court was proved by production of the rule.^ But when the tender is found sufficient and the money has been brought into court the verdict should be for the defendant.' Section 6. stipulated damages. § 279. Contracts to liquidate damages valid. After [475] damages have been sustained an agreement to pay such sum therefor as shall be ascertained in a particular way is binding.* And parties in making contracts are at liberty to stipulate the amount which shall be paid by either to the other as compen- sation for the anticipated actual loss or injury which they fore- see or concede will result from a breach if it should occur.* Without express statutory authority officers who are author- ized by law to make contracts for a state or municipality have 11 Bac. Abr. 473c. See Ruble v. sence of proof that the plaintiff took Murray, 4 Hayw. 27. it in satisfaction of his claim, he was i Id. not thereby precluded from filing spennypacker v. Umberger, 22 new counts and recovering an addi- Pa. 492; Levan v. Sternfeld. supra. tional sum thereon. In Hill V. Smith, .34 Vt. 535. the de- * Longridge v. Dorville, 5 B. & Aid. fendant, before the new counts, 117. See Hosmer v. True, 19 Barb. upon which alone the plaintiff re- 106. covered, were filed, paid into court a ^Sun Printing & Pub, Ass'n v. sum of money sufficient to satisfy all Moore. 183 U. S. 642, 22 Sup. Ct. Rep. the damages the plaintiff could have 240; Guerin v. Stacy, 175 Mass. 595, recovered under the original decla- 56 N. E. Rep. 892; Holmes v. Holmes, ration and costs to the time of such 12 Barb. 137; Fasler v. Beard, 39 payment, and the plaintiff took the Minn. 32, 38 N. W. Rep. 755. monev; it was held that in the ab- 710 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 279. power to fix a sum as liquidated damages for their violation. i The sura designated in the contract or subsequently agreed upon becomes, on the happening of the event on which its payment depends, the precise sum to be recovered, and the jury are confined to it.^ ISTor will equity relieve from the pay- ment of it.' As will more fully appear hereafter, there are limitations on the power thus to contract. As a general rule, where the injury resulting from the breach of a contract is susceptible of definite measurement, as where the breach con- sists in the non-payment of mone}^ the parties will not be sustained in the enforcement of stipulations for a further sum, whether in the form of a penalty or liquidated damages; but where the damages sustained are uncertain and are not readily susceptible of being reduced to a certainty by a legal compu- tation they may be determined before a breach occurs."* The 1 State Trust Co. v. Duluth, 70 Minn. 257, 73 N. W. Rep. 249; Brooks v. Wichita, 114 Fed. Rep. 297, 52 C. C. A. 209; Little v. Banks, 86 N. Y. 258; Parr v. Greeubush, 42 Hun, 232; Nelson v. Jonesboro, 57 Ark. 168, 20 S. W. Rep. 1093; Salem v. Anson, 40 Ore. 339, 67 Pac. Rep. 190, 56 L. R. A. 169. 2 Smith V. Newell, 37 Fla. 147, 20 So. Rep. 249; American Copper, Brass & L Works V. Galland-Burke Brewing & M. Co., — Wash. , 70 Pac. Rep. 238; Kelso v. Reid, 145 Pa. 606, 27 Am. St. 716, 23 Ati. Rep. 323; Welch V. McDonald. 85 Va. 500, 8 S. E. Rep. 711; Stanley v. Montgomery, 102 Ind. 102, 26 N. E. Rep. 213; Lowe v. Peers, 4 Burr. 2225; Beale v. Hayes, 5 Sandf. 640; Tardeveau v. Smith's Ex'r, Hardin, 175, 18 Am. Dec. 727. See Bradshaw v. Craycraft, 8 J. J. Marsh. 79; Keeble v. Keeble, 85 Ala. 552, 5 So. Rep. 149. In Louisiana the sum agreed to be paid by way of liquidated damages is subject to reduction under certain circumstances; when the reduction is permissible, and suit is brought for the whole amount, the onus is upon the party claiming the reduction to establish the extent to which it should be made. Goldman v. Gold- man, 51 La. Ann. 761, 25 So. Rep. 555. Under the Ontario judicature act of 1895 equity will award actual damages, estimated on a liberal scale, in lieu of the damages stipulated for. Townsend v. Toronto, etc. R. Co., 28 Ont. 195. 3 Harper v. Tidholm, 155 111. 870, 40 N. E. Rep. 575; Ewing v. Litchfield, 91 Va. 575, 22 S. E. Rep. 362; Sanford V. First Nat. Bank, 94 Iowa, 680, 63 N. W. Rep. 459; Wood v. Niagara Falls Paper Co., 121 Fed. Rep. 818 (Ct. Ct. of Appeals, 2d Ct.); Wi- baux V. Grinnell Live Stock Co., 9 Mont. 154, 162, 22 Pac. Rep. 492; 3 Story's Eq. § 1318; 3 Lead. Cas. in Eq. 671 et seq.; Westerman v. Means, 12 Pa. 97; Downey v. Beach, 78 IlL 53; Brooks v. Wichita, 114 Fed. Rep. 297, 52 C. C. A. 209; Sun Printing & Pub. Ass'n V. Moore, 183 U. S. 642, 661, 22 Sup. Ct. Rep. 240; Young v. Gaut, 69 Ark. 114, 61 S. W. Rep 372. 4 Goldman v. Goldman, 51 La. Ann. 761, 25 So. Rep 555; Kunkel v. Wherry, 189 Pa. 198, 42 Atl. Rep. 112, § 280.] STIPULATED DAMAGES. 711 validity of an agreement to stipulate what the damages shall be is to be determined by the situation of the parties and their apprehension of the effect of a breach of the contract at the time of making it. The fact that it is subsequently ascertained that the damages caused by the breach were capable of ascer- tainment does not change the legal effect of their stipuhition.* There is an implied condition in every judicial sale that if the purchaser does not pay the price he offered he will pay the difference between that price and the price realized on a sub- sequent sale duly made after proper notice, and also pay the expense of such sale. This condition has the same effect as if there was a formal contract stipulating the damages for such default.2 § 280. Damages can be liquidated only on a valid contract. A valid contract must exist on which damages could be re- covered.' If void for not being in writing/ or if impeached for fraud,* the stipulation for damages will share the fate of the contract. And it has been held that an agreement to pay a sum as liquidated damages in case a court in which an action was pending should fail to make an order containing a speci- fied provision is void, for being against public policy, or in the nature of a wager.'' A contract is not void so as to bar the re- 69 Am. St. 802; Tobler v. Austin, 22 non-payment. Royal Victoria L. Tex. Civ. App. 99, 53 S. W. Rep. 706; Ins. Co, v. Richards, 31 Ont. 483. Palmer v. Toms, 96 Wis. a67, 71 N. ^ Newman v. Perrill, 73 Ind. 153; W. Rep. 654; Fasler v. Beard. 39 Minn. Scott v. Bush, 26 Mich. 418, 12 Am. 32, 38 N. W. Rep. 755; Sun Printing Rep. 311. & Pub. Ass'n V. Moore, 183 U. S. 643, ^Darrow v. Cornell, 12 App. Div. 20 Sup. Ct. Rep. 240; Brooks v. 604, 43 N. Y. Supp. 1081; Wambaugh Wichita, 114 Fed. Rep. 297, 52 C. C. v. Bimer. 25 Ind. 368. See Fruin v. A. 209; Whitfield v. Levy, 35 N. J. L. Crystal R. Co., 89 Mo. 397, 14 S. W. 149. Rep. 557. 1 Wilson V. Jonesboro. 57 Ark. 168, « Dittrich v. Gobey, 119 Cal. 599, 51 20 S. W. Rep. 1093; Dunn v. Morgen- Pac. Rep. 962; Cowdrey v. Carpenter, tliau, 73 App. Div. 147, 76 N. Y. Supp. 1 Robert. 429. A party to an action 827. for the foreclosure of a mortgage of 2 Howison V. Oakley, 118 Ala. 215, real estate on assigning a junior 238, 23 So. Rep. 810. mortgage of only a part of the prem- ' The ordinary terms of an applica- ises stipulated with its assignee that tion for life insui'ance, stipulating the order of sale should direct the that insurer should not be liable un- property not covered by the junior til it received the first premium, does mortgage to be first sold for the pay- not constitute the amount of such ment of the mortgage being fore- premium liquidated damages for its closed. It was held that, the stipu- 712 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 281. covery of the sura stipulated as damages for the violation of its con.dition as to the sale of a good-will because it includes more territor}'- than the statute allows. Though the contract is void as to the excess of such territory the defendant, by breaching it within the territory as to which it was valid, became liable for the entire sum stipulated to be paid in that event.^ A pro- vision in a contract for liquidating the damages which may re- sult from its breach will not be extended by construction to other provisions or conditions in it than are within its obvious scope and purpose.^ § 281. Modesof liquidating damages; computation of time. [476] The stipulation for the adjustment of the amount of damages is usually embraced in the contract for the violation of which they are to be paid; but not always so. A deposit may be made with a third person or with the party, of money, a note, or something else of value to be paid, delivered over or retained on the happening of the breach.* Agreements are of lation being void, the assignee could not recover the liquidated damages specified in it upon its breach by the making of an order without the designated provision. See Voorhees V. Reed, 17 111. A pp. 21. 1 Franz v. Bleler, 126 CaL 176, 56 Pac. Rep. 249, 58 id. 466; Price v. Green, 16 M. & W. 346. 2 Curnan v. Delaware & O. R. Co., 138 N. Y. 480, 34 N. E. Rep. 201. 3 Moore v. Durnam, — N. J. Eq. — , 51 Atl. Rep. 449; Wallis v. Smith. 21 Ch. Div. 243; Lea v. Whitaker, L. R 8 C. P. 70; Magee v. La veil, 9 id. 107; Swift v. Powell, 44 Ga. 128; Kellogg V. Curtis, 9 Pick. 634; Stillwell v. Temple, 28 Mo. 156; Reilly v. Jones, 1 Bing. 302; Betts v. Burch, 4 H. & N. 506; Hinton v. Sparkes, L. R. 3 G P. 160; Leslie v. Macmichal, 2 N. S. W. 250; Sanders V. Carter, 91 Ga. 450, 17 S. E. Rep. 345; Csesar v. Rubinson, 71 Ap)). Div. 180. 75 N. Y. Supp. 544. In White v. Dingley, 4 Mass. 433, the plaintiff had given the defend ant a license for two years, and cov- enanted not to sue him within that time, and that if he should sue him he should be wholly discharged from the claim. The creditor brought suit in violation of the covenant, and the debtor was Imprisoned upon the writ, whereupon he brought suit upon the covenant for damages. It was held that the action could not be maintained; the forfeiture was a liquidation of the damages. Upham V. Smith, 7 Mass. 265. In an action to recover damages for breaking up a highway the de- fendant gave the plaintiff a cognovit to confess judgment for £200, with a defeasance that no execution should issue if the defendant, within a lim- ited time, should reinstate the road according to certain specifications. The road not being completely rein- stated within the time prescribed, the plaintiff sued out execution and levied the £200 and costs. Held, that the £200 was in the nature of a penalty, and not of stipulated dam- ages; and the court referred it to a prothonotary to ascertain what dam- ages the plaintiff had actually sus- § 281.] STIPULATED DAMAGES. 713 this nature and valid which provide a particular method of proof; as that property covered by insurance, if afterwards destroyed by fire, shall be estimated by a particular [4:77] standard,' or by a designated person.^ An agreement between a broker and a farmer, the former having advanced money to the latter to raise a crop, for the repayment of such money, with interest, and to ship to the broker a certain number of bales of cotton to be sold by him, or, in default, to pay the customary broker's commission on such bales as he failed to ship, is for liquidated damages, it not being shown to be a cover for usury.' Where a part of the work required to be done under a contract which provided for stipulated damages in consequence of delay was sublet and both the contractor and the subcontractor were in default, the clause providino- for such damages was binding on the latter, and each was respon- sible for the proportion of the damages his delay caused.* A condition in a contract extending municipal ai(.l to a railroad company that if it should cease to remain independent for a tained, and what sum he was enti- tled to recover from the defendant for his failure to reinstate tiie road. Charrington v. Laing. 3 M. & P. 587. Where the intention of the parties is potential, the circumstance that the sum is deposited with a stake- holder to be paid over, or in the hands of the opposite party, with a stipulation that it is to be forfeited in the event of a breach, is pointed out as stronger evidence of an inten- tion to make it liquidated damages than the words or nature of the con- tract otherwise would. Magee v. Lavell, L. R. 9 C. P. 107: Betts v. Burch, 4 H. & N. 506; Hinton v. Sparkes, L. R. 3 C. P. 160; Wallis v. Smith, 21 Ch. Div. 243. A contract which provides that if it shall be broken by either of the parties to it the party who commits the breach shall pay such sum as the other party would have received if it had been observed, and tiiat the average yearly receipts shall be the basis on wJiich the sum to be paid shall be determined, does not pro- vide for liquidated damages, but fixes the basis on which the actual damages shall be ascertained. Tufts V. Atlantic Tel. Co., 151 Mass. 269, 23 N. E. Rep. 844. 1 ^tna Ins. Co. v. Johnson, 11 Bush, .587. 21 Am. Rep. 223; Common^ wealtli Ins. Co. v. Sennett, 37 Pa. 208, 78 Am. Dec. 418; Lycoming Ins. Co. V. Mitchell, 48 Pa. 3G7; Bodine v. Glading, 21 id. 50, 59 Am. Dec. 749; Irving V. Manning, 6 C. B. 391; C. H. Brown Banking Co. v. Baker, 74 S. W. Rep. 454, — Mo. App. — . 2 Faunce v. Burke. 16 Pa. 479; Rol> inson v. Cropsey, 2 Edw. Cb. 138; Wells V. Smith, id. 78; Barnet v. Passumpsic Turnpike Co., 15Vt. 757; City Bank v. Smith, 3 G. & J. 2G5. 3 Blackburn V. Haye.s, 59 Ark. 366, 27 S. W. Rep. 240. < Chicago Bridge & Iron Co. v. Olson, 80 Minn, 523, 83 N. W. Rep. 461. 714 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 2S' stated time the money paid should be returned, provides for liquidated damages.' Where the stipulation was to pay five dollars per day for every car delayed beyond the specified date the court refused to exclude Sunday from the computation. This general rule was laid down: In the computation of rents, interest, dam- ages, or any other amounts in which the day, the week, the month, or any other fixed period of time is the agreed standard of measurement, every intervening Sunday, as well as every secular day, must be included and counted in the reckoning.^ § 28'-2. Alternative contracts. These are such as by their terms may be executed by doing either of several acts at the- election of the party from whom performance is due. Com- pletion in one of the modes is a performance of the entire con- tract, and no question of damages arises. Such a contract, therefore, is not one for liquidated damages.' Where by the condition of a bond the obligor might, by paying $600 in twelve, or $400 in six, months, become the owner of a patent right for a specified district, or otherwise should account for a certain share of the profits, he had a choice of those alterna- tives for those periods.* Stipulating the damages and promis- ing to pay them in case of a default in the performance of an otherwise absolute undertaking do not constitute an alternative contract.^ The promisor is bound to perform his contract, though there is generally a practical option to violate it and take the consequences; but he is not entitled to an election to pay the liquidated damages and thus discharge himself. A contract stipulating that drainage works shall be completed in all respects and cleared of all implements, tackle, impediments, 1 Hamilton County v. Grand Trunk R. Co., 19 Ont. App. 252. 2 Pressed Steel Car Co. v. Eastern R. Co., 121 Fed. Rep. 609, 619 (Ct. Ct. of Appeals, 8tli Ct.). 3 Strickland v. Williams, [1899] 1 Q. B. 382; Salem v. Anson. 40 Ore. 339, 345. 67 Pac. Rep. 190, 56 L. R. A. 169; Smith V. Bergengren, 153 Mass, 236, 26 N. E. Rep. G90, 10 L. R, A. 768. nicNitt V. Clark, 7 Johns. 465; Fisher v. Shaw, 42 Me. 32; Slosson v. Beadle, 7 Johns. 72; Mercer v. Irv- ing. 1 E., B. & E. 563; Reynolds v. Bridge, 6 E. & B. 528; Choice v. Mose- ley, 1 Bailey, 136, 19 Am. Dec. 661. 5 Stewart v. Bedell, 79 Pa. 336; People V. Central Pacific R. Co., 76 Cal. 29, 34, 18 Pac. Rep. 90; Crane v. Peer, 43 N. J. Eq. 553, 4 Atl. Rep. 72, quoting the text and examming a large number of cases. Compare Hahn v. Concordia Society, 42 Md. 460. And see Indianola v. Gulf, etc R. Co., 56 Tex. 594. § 2S2.] STIPULATED DAMAGES. 715 and rubbish on or before a date fixed, and that in default of such completion the contractor shall forfeit and pay lOO/. and 5^. for every seven days during which the works shall be incom- plete after the said time as and for liquidated damages, provides for such payment only in a single event, the non-completion of the works.' A bond conditioned for the defendant's oljedience to a perpetual injunction restraining him from trespassing on the lands of the plaintiff or the walls, gates or fences thereof, or inclosing the same, and from pulling down or removino" or otherwise injuring the same, or inciting others to commit any such trespasses, depends upon one condition only — a breach of the injunction — and the sura designated in it was liquidated. 2 A party agreed to pay §350 for certain real estate, and paid down a small part. On full performance the promisee was to procure for the promisor, as purchaser, a deed from a third person; it was also agreed that if the purchaser should fail to perform the contract or any part of it, he should pay the other party $25 as liquidated damages, and immediately surrender possession. A tender of that sum and of possession was made before suit brought for the remainder of the pur- chase-money, and it was unsuccessfully contended in behalf of the purchaser that he was entitled by the terms of the [478] contract to relieve himself by those acts from its obligation.' On entering the service of a bank the defendant executed a 1 Law V. Local Board of Redditch, 3Ayres v. Pease, 12 Wend. 393; [1893] 1 Q. B. Div. 127; Townsend v. Phoenix Ins. Co. v. Continental Ins. Toronto, etc. R. Co., 28 Ont. 195. Co., 14 Abb. Pr. (N. S.) 266; Long v. A physician who goes to a special- Bowring, 33 Beav. 585; Howard v. ist in his profession for treatment Hopkyns, 2 Atk. 371; Dike v. Greene, and is told that, in the event of a 4 R. I. 285; Dooley v. Watson. 1 Gray, cure, he would require either a cer- 414; Gray v. Crosby, 18 Johns. 219; tificate of his skill and proficiency Sainter v. Ferguson. 7 C. B. 716; Hob- as a specialist or $5,000 in cash, is son v. Trevor. 2 P. Wms. 191; Chilli- liable for the latter sum, having re- ner v. Chilliner, 2 Ves. Sr. 528; In- fused to give the certificate after as- gledew v. Cripps, 2 Ld. Raym. 814; senting to the terms proposed. The Preble v. Boglmx-st, 1 Swanst. 580; court considered the question as de- Sloman v. Walter, 1 Brown Ch. 418; pending upon whether the contract Lampraan v- Cochran, 16 N. Y. 275; provided for a penalty or liquidated Ward v. Jewett. 4 Robert. 714; Robe- damages. Burgoon v. Johnson, 194 son v. Whitesides, 16 S. & R 320; Pa. 61, 45 Atl. Rep. 65. Robinson v. Bakewell, 25 Pa. 424; 2 Strickland v. Williams, [1899] 1 Cartwright v. Gardner, 5 Cush. 273. Q. B. 382. 716 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 2S3. bond in the penal sum of 1,000?., its condition being that it should be void if he discharged his duties in the manner stipu- lated, and if he should pay the plaintiffs a like sum in case he should at any time within two years after leaving their service accept employment in any other bank within a distance of two miles. This condition was violated. It was held that the obligation could not be satisfied by paying the sura mentioned ; there was an agreement implied from the bond that the defend- ant should not enter the service of a rival bank, which agree- ment would be enforced by a court of equity.^ Such courts may enforce performance, or enjoin those acts that would be a violation,- but in such cases the equitable is an elective, not a cumulative, remed3^ Before granting such relief equity will require the plaintiff to forego the legal claim to the stipulated damages.* § 283. Liquidated damages contradistinguished from pen- alty. The most important and difficult question in respect to a sura stated in connection with a breach of contract is whether it is liquidated daraages or penalt}'. If the latter, it is not an actual debt; it cannot be recovered, but only the real damages, which have to be proved; and the statement of the agreement in the contract is of ver}'' little consequence. If the former, it is the precise sum to be recovered on proof of a breach of the undertaking to which it refers, and no evidence of the manner and extent of the real injury is necessary.* 1 National Provincial Bank v. Mar- 3 Okl. 527. 41 Pac. Rep. 615; St shall, 40 Ch. Div, 112. Louis, etc. R. Co. v. Shoemaker, 27 - Cases cited in the two preceding Kan. 677: Hathaway v. Lynn, 75 Wis. notes. 186, 43 N. W. Rep. 956, 6 L. R. A. 551; ••Howard v. Hopkins, 2 Atk. 371; Spicer v. Hoop, 51 Ind. 365; Wood v. 1 Story's Eq., §§ 717a, 793/; 3 Par. on Niagara Falls Paper Co., 121 Fed. Cont. 356, note q; Gordon v. Brown, Rep. 818 (Ct. Ct of Appeals, 2d Cir- 4 Ired. Eq. 399; Dooley v. Watson, 1 cuit). See § 279 for other cases. Gray 414; French v. Macale, 2 Drury In some of the cases the qualifica- & W. 2G9; Long v. Bowring, 33Beav. tion is added that the damages must 585. See § 298. be beyond nominal. That theory * Salem V. Anson, 40 Ore. 339, 67 probably originated in Hathaway v. Pac. Rep. 190, 56 L. R. A> 169; Hen- Lynn, supra. Doubt as to its being nessy v. Metzger, 152 111. 505, 38 N. sound was expressed in the second E. Rep. 1058, 43 Am. St. 267; McCann edition of this work. Since its pub- V. Albany, 158 N. Y. 634, 53 N. E. lication that doubt has been ap- Rep. 673; O'Keefe v. Dyer, 20 Mont, proved by several courts. The con- 477, 52 Pac. Rep. 196; Kelley v. Seay, trary rule was held prior to that a § 2S3.] STIPULATED DAMAGES. 717 The decision of this question is often intrinsically difficult, for judicial opinions, in the numerous cases on the subject, are very inharmonious; they furnish no universal test or guide. But, as was said by Christiancy, J.: ''While no one can fail to discover a very great amount of apparent conflict, still it will be found on examination that most of the cases, however conflicting in appearance, have yet been decided according to tlie justice and equity of the particular case." ^ " The (juestion whether a sum named in a contract to be paid for a failure to perform," said Earl, J., "shall be regarded as stipulated dam- ages or a penalty, has been frequently before the courts, and has given them much trouble. The cases cannot all be har- monized, and they furnish conspicuous examples of judicial efforts to make for parties wiser and more prudent contracts than they have made for themselves. Courts of law have, in some cases, assumed the functions of courts of equity, and have relieved parties by forced and unnatural constructions from stipuhitions highly penal. Where an amount stipulated as liquidated damages would be grossly in excess of the actual damages, they have leaned to hold it a penalty. Where the actual damages were uncertain and difficult of ascertainment, they have leaned to hold the stipulated amount to have been intended as liquidated damages. No form of words has been regarded as controlling. But the fundamental rule, so often announced, is that the construction of these stipulations de- pends, in each case, upon the intent of the parties, as evidenced by the entire agreement construed in the light of the circum- stances under which it was made."^ time in Kelso v. Reid, 145 Pa. 606, 27 ^ Jaquith v. Hudson, 5 Mich. 123. Am. St. 716. 23 Atl. Rep. 323, and in 2 Kemp v. Knickerbocker Ice Co., Spicer v. Hoop, 51 Ind. 365. If the 69 N. Y. 145; Caesar v. Rubinson. — money deposited is to be treated as N. Y. — , 67 N. E. Rep. 58: Butler v. liquidated damages proof of damage Wallbaum Stone & Minnig Co., 47 because of the breach of contract 111. App. 153; Sanders v. Carter, 91 need not be made. "The case of Ga. 450, 17 S. E. Rep. 345; Allison v. Hathaway v. Lynn, 75 Wis. 186, 43 Dunwody, 100 Ga. 51, 28 S. E. Rep. N. W. Rep. 956, 6 L. R. A. 551, an- 651; Salem v. Anson, 40 Ore. 339. 67 nouncing a contrary rule, does not Pac. Rep. 190, 56 L. R A. 169, citing commend itself to our judgment." the text; Taylor v. Times Newspaper Sanford v. First Nat. Bank, 94 Iowa, Co., 83 Minn. 523, 86 N. W. Rep. 760; 680,63 N. W. Rep. 459; Smith v. Lennon v. Smith, 14 Daly, 520. Newell, 37 Fla. 147, 20 So. Rep. 249. The question whether the amount 718 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 283. The general tendency toward "judicial expansion," which has been a marked characteristic of recent years, has in- creased the uncertainty involved in this branch of the law of ■damages. That uncertainty was never absent; but it has be- come so great that it is practically, if not actually, impossible to formulate a rule which will be recognized in any consider- able number of cases. While the judicial tendency to pater- nalism is marked, there is abundant evidence to warrant the conclusion that business men are much more inclined than for- merly to stipulate their liability if there shall be failure to per- form their contracts. Why the courts are more than ever dis- posed to deny the same freedom of contract in this respect that is unhesitatingly recognized in other departments of law and business it is difficult to say. N^otwithstanding the de- plorable state of the decisions it may be assumed, first, that if, by the terms of the contract, a greater sum is to be paid upon default in the payment of a lesser sum at a given time, the provision for the payment of the greater sum will be held a penalty; second, where, by the terms of a contract, the dam- ages are not difficult of ascertainment according to such terms and the stipulated damages are unconscionable, the latter will be regarded as a penalty; third, within these two rules parties may agree upon any sum as compensation for the breach of a contract.' [4:79J It has been often declared judicially that a stipulation in a contract for the payment of a stated sum, in the event of a breach, should be interpreted, like all its other provisions, with a view to carrying into effect the intention of the parties. Referring to this subject Nelson, C. J., said: "A court of law stated in a conditional bond or con- be caused by the several breaches tract is to be taken as a penalty provided against, the ease or diffi- or a liquidation of damages arising culty of measuring a breach of dam- from a breach of the condition is to ages, and such other matters as are be determined by the intention of legally or necessarily inherent in the the parties, drawn from the words of transaction. The concurrent decla- the wliole contract, examined in the rations of the parties are inadmissi- light of its subject-matter and its ble, except to show mistake or fraud, surroundings; and in this examina- March v. Allabough, 103 Pa. 335. tion will be considered tiie relation i Poppers v. Meagher, 148 111. 192, which the sum stipulated bears to 35 N. E. Rep. 805: Law v. Local the extent of the injury which may Board of Redditch, [1892] 1 Q. B. 127. 283.] STIPULATED DAMAGES. 719 possesses no dispensing power; it cannot inquire whether tho parties have acted wisely or rashl}" in respect to any stipula- tion they may have thought proper to introduce into their agreements. If they are competent to contract, within the prudential rules the law has fixed as to parties, and there has been no fraud, circumvention or illegality in the case, the court is bound to enforce the agreement." ' Best, C. J., said 3ii 7iisi prius: "The law relative to liquidated damages has always been in a state of great uncertainty. Tliis has been occasioned by judges endeavoring to make better contracts for parties than they have made for themselves. 1 think that parties to contracts, from knowing exactly their own situa- tions and objects, can better appreciate the consequences of their failing to obtain those objects than either judges or juries. Whether the contract be under seal or not, if it states what shall be paid bj'' the party who breaks it to the party to Avhose prejudice it is broken, the verdict in the action for the breach of it should be for the stipulated sum. A court of jus- tice has no more authority to put a different construction on the part of the instrument ascertaining the amount of dam- ages than it has to decide contrary to any other of its clauses." ^ Equally emphatic language is to be found in other cases.^ In this connection language employed by the supreme court of the United States in a case * ruled in 1902 is pertinent as in- dicating a larger regard for the contractual rights of parties than is manifested in many of the recent decisions. The con- tention made was that where actual damages can be assessed from the testimony the court must disregard any stipulation fixing the amount and require proof of the damage sustained.* 1 Dakin V. Williams, 17 Wend. 447. positor, so long as it has in its possession funds of his sufficient to do so, and which are not incumbered by any earlier lien in its favor, is but a legal obligation to pay money. It is implied from the usual course of business, if it is not ex- press; and it usually is not.' The customer may draw out his funds in such parcels as he may see fit, both as regards num- ber and amount. The rule of law forbidding a creditor to split up his demand does not affect this principle, which is based upon a custom of the banking business.^ This duty of the bank is of such importance that if it refuses without suf- ficient justification to pay the check of the customer, lie has his action, and may recover substantial damages, though no actual loss or injury be shown, and ma}' recover for such ap- proximate loss or injury as may be proven.^ § 288. Large sum to secure payment of a smaller. Where a large sum, which is not the actual debt, is agreed to be paid and her assigns up to the defendant's Loan Ass'n, 63 Minn. 358, 65 N. W. death, but not since, upon claim by Rep. 645. the assignees to prove against the ^ First Nat. Bank v. Lynch, 6 Tex. defendant's estate for the payment Civ. App. 590, 25 S. W. Rep. 1042. due in respect of the annuity, and of 3 j)ownes v. Pha?nix Bank, 6 Hill, the monthly payments accrued due 297; Marzetti v. Williams, 1 B. & Ad. since his death: Held, that the £100 415; Watson v. Phoenix Bank, 8 ^let. per month, though called a penalty, 217, 41 Am. Dec. 500; Morse on Bank- was not to be regarded strictly as ing, 29. such, and that the assignees were en- *ld.: Munn v. Burch, 25 III. 35; titled to prove for the arrears both of Chicago, etc. Ins. Co. v. Stanford, 23 the annuity and the £100 a month." 111. 168, 81 Am. Dec. 270. 1 Maudlin v. American Savings & sjjollin v. Steward, 14 C R 595; Morse on Banking, 453; g 77. 74S CONVENTIONAL LIQUIDATIONS AND DISCHAKGES. [§ 288. [198] in case of a default in the payment of a less sum, which is the real debt, such larger sum is always a penalty.^ This rule has often been loosely stated, and its true scope and oper- ation overlooked by following too rigidly the letter. A con- tract may be framed so as apparently to secure the payment of a less sura b}^ a greater, when it is in substance but an alter- native or conditional agreement to accept a stipulated part in full satisfaction if paid at a particular time or in a specified manner.^ A demise of land was made at a yearly rent of 1 Cimarron Land Co. v. Barton, 51 Kan. 554,83 Pac. Rep. 317; Schmieder V. Kingsley, 6 N. Y. Misc. 107. 26 N. Y. Supp. 31; Goodj'ear Shoe Ma- chinery Co. V. Selz, 157 111. 186, 41 N. E. Rep. 625; Kimball v. Doggett, 63 111. App. 528; Turrell v. Archer, 1 Mart. Ch. 103; Fisk v. Gray. 11 Allen, 132; Walsh v. Curtis. 73 Minn. 254, 76 N. W. Rep. 52; Krutz v. Robbins, 12 Wash. 7, 40 Pac. Rep. 415, 50 Am. St. 871; Bradstreet v. Baker, 14 K I. 546; Bryton v. Marston, 33 111. App. 211; Clements v. Railroad Co., 132 Pa. 445, 19 Atl. Rep. 274, 276: Astley v. Wel- don, 2 B. & P. 346; Taul v. Everet, 4 J. J. Marsh. 10; Bagley v. Peddle, 5 Sandf. 192; Beale v. Hayes, id. 640; Cairnes v. Knight, 17 Ohio St. 69; Morris v. McCoy, 7 Nev. 399; Tiernan V. Hinman, 16 111. 400: Fitzpa trick v. Cottingham, 14 Wi& 219; Haldeman V. Jennings, 14 Ark. 329; Mead v. Wheeler, 13 N. H. 353; Chamberlain V. Bagley, 11 id. 234; Kerable v Farren, 6 Bing. 141; Mason v. Callen- der, 2 Minn. 350. 72 Am. Dec. 102; Niver v. Rossman, 18 Barb. 50; Kuhn V. Myers, 37 Iowa, 351; Davis v. Hendrie, 1 Mont 499; Wallis v. Car- penter. 13 Allen, 19; Gray v. Crosby, 18 Johns. 219; Brockway v. Clark, 6 Ohio, 45; Brevard v. Wimberly, 89 Mo. App. 331; Morrill v. Weeks, 70 N. H. 178, 46 Atl. Rep. 32. - In Thompson v. Hudson. L. R. 2 Eq. 612, a creditor had agreed with his debtor to remit part of his debt upon having a mortgage to secure the payment of the balance in two years, without prejudice to his right to recover the whole debt if such balance was not paid within that time. The debtor executed a mort- gage for such balance, containing a proviso that if the mortgage debt be not paid within two years, the whole of the original should be recovered; and it was held that the proviso was of the nature of a penalty from which the mortgagor was entitled to be re- lieved in equity; that the mortgagee could only recover the smaller sum. But on appeal to the house of lords (L. R. 4 Eng. & Ir. App. 1), this decis- ion was reversed; and it was held if the larger sum is actually due, and the creditor agrees to take a lesser sum, provided that sum is secured in a certain way and paid on a certain day, and that, if these stipulations be not performed, he shall be entitled to recover the whole of the original debt, such remitter to such original debt does not constitute a penalty, and a court of equity will not relieve against it. Mayne on Dam. 101. Lord Westbury said that any plain man walking the streets of London would have said that it was in ac- cordance with common sense; and if he were told that it would be requi- site to go to three tribunals before getting it accepted, would have held up his hands with astonishment at the state of the law. Carter v. Cor- ley, 23 Ala. 6ia § 2S8.] STIPULATED DAMAGES. 740 £187, with the usual clauses for distress and entry on non-puv- ment, and an agreement that so long as the lessee porlonnc'd the covenant the lessor would be content with the yearly rent of £93, payable on the same day as the first reserved [4M9] rent. It was held that tlie larger rent was not penal; that ejectment could be maintained on its non-payment.^ Such cases must be determined on the true intent of tiie transaction. If the larger sum is in truth the actual price or debt, and the smaller only agreed upon as a satisfaction if paid under stated conditions, the omission to comply with the terms of payment in the easier mode will preserve to the creditor the right to exact the larger sum.^ A case in Wisconsin was correctly decided on this principle. A bond was mad.,- in a penalty of $900, conditioned that if the obligor should pay to the obligee one year after the death of her husband, and an- nually thereafter during her natural life, the sum of the interest on $464 at the rate of seven per cent, per annum, the bond should be void, otherwise of force; and it was also provided in the condition that should any default be made in the payment of the said interest or any part thereof on any day wherein the same was made payable by the bond, and the same should remain unpaid and in arrear for thirty days, then and in tliat case the principal sura of $464, with arrearages of interest thereon, should, at the option of the obligee, become immedi- ately payable; and that if the payment of said interest were promptly made, then at the obligee's death the debt and the mortgage given to secure the bond should cease and be null. A default occurred in the payment of the annuities of interest; and the obligee gave notice of her option to consider the prin- cipal, with the arrears of interest, presently due and payable. The question was what sum was due on the bond which the mortgage in suit was given to secure. A decree had been made adopting the sum of $464, mentioned in the condition as the principal that became due on its breach, and for that sum, with the delinquent interest, judgment was rendered. The de- fendant contended that the sum the plaintiff was entitled to recover was not $464, but only the value of a life annuity of 1 Lord Ashtown v. White, 11 Irish 2 Waggoner v. Cox, 4 Ohio St 539, L. 400; McNitt v. Clark, 7 Johns. 465. 543, quoting the text. 750 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 28S. $32.48 at the time the plaintiff declared her option; at which time she was fifty-two or fifty-three years of age. Such value, computed by the Northampton tables, was then a little less than $300. Lyon, J., said : " The covenant was voluntarily [500] made by the obligor, and, so far as appears, he received therefor full value for the sum which he agreed to pay at the option of the obligee in case of default. The most that can be said against the justice of it is that the damages would be the same if default were made and the option declared at a much later period in the life of the obligee. But that is a contingency which it may be fairly presumed the obligor took into consider- ation when he made his covenant; and it was always in his power to prevent the happening of such contingency by paying the annuity which he covenanted to pay." The judge added: " It follows that the sum named in the bond is to be regarded as stipulated damages unless the gross value of the life annuity can be ascertained by some exact pecuniary standard." He discusses this question and arrives at the conclusion that the value is uncertain. It may be observed that that method of determining whether the sum mentioned in the condition was penalty or not would be very proper if it be assumed that the annuity was the primary object of the arrangement, and that no sum was originally fixed which represented the value of the defendant's undertaking, or of the consideration received; and that the gross sum was stipulated as the valuation put by the parties on the annuity; and equally so if the case was that $464 was a sum arising in the transaction which they agreed might be withheld so long as the interest on it was promptly paid, and with the further benefit that the debt should cease at the creditor's death, otherwise to be paid at once; then the case stands on the principle of Thompson v. Hudson,* and the con- ditional method of discharge not having been strictly followed, the dispensation depending on it failed, and the original debt remained unsatisfied and absolute.^ IL. R 2 Eq. 612, stated supra. brought to foreclose a mortgage made 2Berrinkott V. Traphagen, 39 Wis. to secure a payment of this note: 219. "For value received, I promise to Longworth v, Askren. 15 Ohio St. pay N. L., or order, one thousand 370, does not appear to be consistent dollars, with interest yearly till paid, -with these views. An action was and payable as follows: In two, ^§ 288.] STIPULATED DAMAGES. 751 Whore a large sum is stipulated to be paid on the non- [oOl] payment of a less amount made payable by the same instru- ment, the former is prima facie a penalty. If the question is to bo determined by construction of the instrument alone it three, four, five, six, seven, eight, nine and ten years, equal instahnents, with interest yearly, as aforesaid, being the contract price of a lot. But if each and every payment is made punctually as due. or before due, or v.'ithin ten days after each is due, as an inducement to punctuality, two hundred dollars of the amount will be released. And eight hundred dol- lars and its yearly interest accepted in full payment, but not otherwise." Before the ten years expired full $800 and annual interest on that sum had been paid; but the payments had not been made according to the terms of the contract as to time and amount. The court held that the sum of $1,000 was penalty, and $800 the actual debt according to the face of the note. White, J., said: "This case presents the single legal ques- tion: whether, upon the true con- struction of the mortgage note sued on, the one thousand dollars therein mentioned is to be regarded as a pen- alty. If that be its character, the judgment of thesuperiorcourtshould be affirmed; otherwise, it should be reversed. This is not the case of an agreement for the composition of a subsisting, independent indebtedness. The instrument in question creates the only debt on which the plaintiff relies for a recovery. Nor can the claim made by the plaintiff's counsel be supported, that the stipulation for the discharge of the obligation by the punctual payment of $800 in in- stalments is a privilege given to the payer, and inserted for his exclusive benefit. This claim is based on the assumption that the $1,000 was the sole consideration for the lot. and ■consequently is the amount of the actual debt. But it is as fair to pre- sume that the omiss. on of the stipu- lation in regard to the $-800 would have defeated the sale as that the in- sertion of the $1,000 secured it. The transaction was the sale of tiie lot: and the instrument in question con- tains the terms upon which it was made. All the stipulations on the part of the Ricords are supported by the same identical consideration. It is not to be presumed that the sale would iiave been concluded had any of the terms actuallyagreed to been omitted; and, as the terms of the sale were satisfactory to the parties, the presumption is they were ac- quiesced in. not as a special favor to either, but for the mutual benefit of both. Nor, in our view, does the order in which the sums are stated change their character, or the legal effect of the instrument; for whether the amount to be paid is to be re- duced upon compliance with the terms of payment, or to be increased as a default, is only a different mode of expressing the same thing. "All that the plaintiff, at the time of making the contract, had a right to expect was the payment of $800, with the interest, in the instalments and at the times stipulated. These payments Ricords had promised to make punctually'. A default oc- curred; and in such a contract, in our opinion, interest is to be regarded as a compensation for the injury caused by the delay. All beyond must be regarded either as penalty or liquidated damages; but under neither form can the plaintiff be al- lowed to recover more than wliat the law deems adequate compensation for the breach. 752 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 288, would be deemed a penalty. May the real transaction be in- vestigated and, upon proper facts, a different interpretation and effect be given to the agreement? No language of the contract can be adopted which will shelter a penalty so that [502] inquiry may not be made into the subject-matter and surroundings to ascertain if it be such. The principle is often declared in terras that permits inquiry to go to the intrinsic nature of the transaction; and a large sum promised as a consequence of the non-payment of a small one will be held a penalty whatever may be the language describing it.' "Wright, C. J., said in an Iowa case: "From all, however, we may de- duce one point as settled. Whether the sum mentioned shall be considered as a penalty or as liquidated damages is a ques- tion of construction, on which the court may be aided by cir- cumstances existing extraneous to the writing. The subject- matter of the contract, the intention of the parties, as well as other facts and circumstances may be inquired into, although " It is to be noted that the only evidence of the terms of the sale is what appears from the instrument itself. There is nothing to show that the contract for the purchase of the lot was originally made, in fact, at §1,000; and that the remission of the contract price to §800 was the gratu- itous act of the vendor. If the abatement stood on this footing, it would devolve on the party seeking its benefit to show that he had com- plied with the conditions upon which it was offered." This opinion bases the right of the debtor to discharge the bond by pay- ment of $800 on its being reserved in the agreement of purchase; it, how- ever, concedes that it was equally a part of the contract of sale that $1,000 should be paid if all the instal- ments should not be punctually paid. It would seem to be a reciprocal right to enforce the bond according to its terms; that there was as am pie a consideration for the agreement in either alternative as in the cases of Lord Ashtown v. White, supra, and McNitt V. Clark, 7 Johns. 465. Longworth v. Askren, supra, is ap- proved in Goodyear Shoe Machinery Co. v. Selz, 158 111. 186. 41 N. E. Rep. 625. In the latter case a contract for the monthly rental of certain pat- ented machines, to be computed on the month's manufacture of goods with the machines, stipulated that the rental should be due on the first day of the month next following, and to be paid within one month from that day, and that if the rents due on the first day of any month shall be paid on or before the fif- teenth day thereof the lessor will grant a discount of fifty per cent. It was resolved that the sum to be com- puted, less the discount, was the act- ual debt, and that the so-called discount was a penalty. 1 Bryton v. Marston, 33 111. App. 211; Bagley v. Peddle, 5 Sandf. 192; Niver v. Rossman, 18 Barb. 55; Mor- ris V. McCoy, 7 Nev. 399. § 289.] STIPULATED DAMAGES. the words are to be taken as proved exclusively by tbu uui inrr"! ins: § 289. Stipulations where damages certain and easily proved. On general principles, an agreement to pay a [50:{J fixed sura as damages for non-performance of a contract, where the loss or injury might without it be easily determin.Hl by proof of market values, or by a precise pecuniary standard, is subject to nearly the same criticism as a contract to liquidate damages for non-payment of money. There are no pt-culiar reasons why a stipulated sum should be treated as a penalty for exceeding just compensation for a default in the paym«.'nt of money, and not be so treated in case of a different agree- ment where the excess is capable of being made equally mani- fest.2 In money contracts any rate of interest not prohibited by statute may be contracted to be paid as interest proper; 1 Foley V. McKeegan, 4 Iowa, 1, 66 Am. Dec. 107; Perkins v. Lyman, 11 Mass. 76,6 Am. Dec. 158; Hodges v. King, 7 Met. 583; Dennis v. Cum- mins, 3 Johns. Cas. 297, 2 Am. Dec. 160. In Morris v. McCoy, 7 Nev. 399, Lewis, C. J., said: "Although, as a general rule, it is acknowledged that the intention of the parties as ex- pressed in the contract should be en- forced, still, it is clearly ignored in that class of cases where the parties stipulate for the payment of a large sum of money as damages for the non-payment of a smaller sum at a given day. In such cases, it is said, no matter what may be the language of the parties, the large sum will be deemed a penalty, and not liquidated damages." But upon an exception to the exclusion of parol testimony to affect the question where the agreement was apparently of this nature, and such extrinsic evidence was offered to rebut the inference that the larger sum was a penalty, the learned judge said " that was not admissible, because there was no am- biguity: and it must be supposed that the agreement was fully em- Vou 1 — 48 bodied in tlie written instrument. 1 Greenlf. Ev., g 275." 2 Fisher v. Bid well, 27 Conn. 36A Sec. 1670 of the Civil Code of Cali- fornia pi'ovides that "every contract by which the amount of damage to be paid, or other compensation to be made, for a breach of an obligation, is determined in anticipation thereof, is to that extent void, except as ex- pressly provided " in sec. 1071, wliich says: "The parties to a contract may agree therein upon an amount which shall be presumed to be the amount of damage sustained by a breach thereof, when, from the nat- ure of the case, it would be imprac- ticable or extremely diflScult to fix the actual damage." It has been ruled under these provisions that a stipulation by a building contractor to pay tlie owner a specified sum for each day's delay in completing the building is not of itself sufficient to authorize a recovery. Patent Brick Co. V. Moore, 75 Cal. 205, 16 Pac. Rep. 890; Long Beach City School Dis- trict V. Dodge, 135 Cal. 401, 67 Pac. Rep. 499. There is no difficulty in fixing the actual damage wliicli one sustains 754 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 289. that is, during the period of credit; so any sura may be con- tracted to be paid for property or services in a contract of purchase or hiring. But when parties contract for the same thinff in advance as damao-es for a considerable excess above the customary rate of interest, or the market value of prop- erty or other thing, the agreement will raise the inquiry whether such excessive sum was intended to be paid ; or whether, even if it was, it is not a penalty. It would be such, according to the preponderance of authority, if not intended to be paid in case of default, and if not fixed on the basis of compensation.^ In such cases courts generally arrive at har- monious conclusions by diverse modes of reasoning. One will say the sum fixed is so flagrantly excessive it was evidently not the intention of the parties that it should be paid or en- forced, and therefore it is a penalty. Another will say the excess, per se, makes the stated sum a penalty, and the inten- tion of the parties is simply immaterial. It generally occurs that where there is an agreement to pay a gross sum in the [504:] event of the non-performance of a contract, and the case is such that a jury can ascertain with reasonable certainty how much damages the injured party has actually sustained by the non-performance, courts are strongly inclined to regard the gross sum as a penalty, and not as liquidated damages.^ If by being deprived of the use of land Co., 16 Ohio Ct. Ct. 21, 64 Ohio St. to which he is entitled. Eva v. Mc- 361. 60 N. E. Rep. 563; Seim v. Mahon, 77 Cal. 467, 19 Pac. Rep. 873. Krause, 13 S. D. 530, 83 N. W. Rep. Nor in ascertaining the damage re- 583; Schroeder v. California Yukon suiting from the breach of a war- Trading Co., 95 Fed. Rep. 296; Wil- ranty of the fitness of a harvesting mington Transportation Co. v. O'Neil, machine. Greenleaf v. Stockton 98 Cal. 1, 32 Pac Rep. 705; Willson Combined Harvester & A. Works, 78 v. Baltimore. 83 Md. 203, 34 Atl. Rep. Cal. 606, 21 Pac. Rep. 369. 774, 55 Am. St. 339; Chaude v. Shep- iSee Sun Printing & Pub. Ass'n v. ard, 122 N. Y. 397, 25 N. E. Rep. 358; Moore, 183 U. S. 642, 22 Sup. Ct. Rep. March v. Allabough, 103 Pa. 335; 240. Brennan v. Clark, 45 N. W. Rep. 472, 2 Carson v. Arvantes. 10 Colo. App. 29 Neb. 385; Lansing v. Dodd, 45 N. 382, 50 Pac. Rep. 1080; Smith v. New- J. L. 525; Bradstreet v. Baker, 14 ell. 37 Fla. 147, 20 So. Rep. 249; Si- R. L 546; Davis v. United States, 17 mon V. Lanius, 9 Ky. L. Rep. 59; Hill Ct. of Cls. 201; Spear v. Smith, 1 V. Wertheinier-Swarts Shoe Co., 150 Denio, 464; Dennis v. Cummins, 3 Mo. 483, 51 S. W. Rep. 702; Connelly Johns. Cas. 297. 2 Am. Dec. 160; V. Priest, 72 Mo. App. 673; Knox Streeter v. Rush, 25 Cal. 67; Bright Rock Blasting Co. v. Grafton Stone v. Rowland, 3 How. (Mi.ss.) 398; Sco- § 2S9.] STIPULATED DAMAGES. the intention, however, is clear to liquidate damages, and the amount is either not greatly above or below the sum which would otherwise be recoverable; or, if above, was fixed spe- cially to cover contemplated consequential losses, not provable under legal rules, and is not an unreasonable provision there- for, the sum fixed may be sustained as liquidated damages.* But if the intention be doubtful, or the amount materially varies from a just estimate of compensation, the stated sum will be considered a penalty .^ field V. Tompkins, 95 111. 190, 35 Am. Rep. 160; In re Newman, 4 Ch. Div. 724: Mansur & T. Implement Co. v. Tissier Arms & H. Co., — Ala. — , 33 So. Rep. 818. In Spencer v. Tilden, 5 Cow. 144, the defendant had agreed in writing not under seal, for value received, to pay $360, or twelve cows and calves, "to be paid or delivered at a place mentioned, in four years. It was held that the value of the consideration, and of the cows and calves, might be inquired into to see whether the sum expressed was intended by the parties as penalty or liquidated dam- ages; and it appearing that that sum was much beyond the value of either, it was considered in the nat- ui'e of a penalty, and the plaintiff's recovery was confined to the value of the cows and calves. See note at end of the case. 1 May V. Crawford, 150 Mo. 504, 51 S. W. Rep. 693; Henderson v. Mur- phree, 109 Ala. 556, 20 So. Rep. 45; Burk V. Dunn, 55 111. App. 25; Bird V. St. John's Episcopal Church, 154 Ind. 138; Jaqua v. Headington, 114 Ind. 309, 16 N. E. Rep. 527: Nielson V. Read, 12 Fed. Rep. 441: Gallo v. McAndrews, 29 id. 715; Brooks v. Wichita, 114 id. 297, 52 C. C. A. 209; Hodges V. King, 7 Met. 583; Man ice V. Brady, 15 Abb. Pr. 173; Durst v. Swift. 11 Tex. 273; Walker v. Engler, 30 Mo. 130; Cotheal v. Talmage, 9 N, Y. 551, 61 Am. Dec. 716; Fitzpat- rick V. Cottingham, 14 Wis. 219; Easton v. Penn.sylvania & O. C. Co.. 13 Ohio, 80; Tardeveau v. Smith's Ex'r, Hardin, 175. 3 Am. Dec. 727; Bradshaw v. Craycraft, 3 J. J. Marsh. 79; Hodges, Ex parte, 24 Ark. 197; Talcott V. Marston, 3 Minn. 339; Shreve v. Brereton, 51 Piu 175; Knapp v. :\Ialtby, 13 Wend. 587; Powell v. Burrouglis, 54 Pa. 329; John.ston v. Cowan, .59 id. 275; Keeble V. Keeble, 85 Ala. 552; Salem v, An- son, 40 Ore. 339, 67 Pac. Rep. 190. 56 L. R. A. 169; Nilson v. Jonesboro, 57 Ark. 168, 20 S. W. Rep. 1093; Indi- anola v. Gulf, etc. R Co.. 59 Tex. 594. 2 Chicago House-Wrecking Co. v. United States, 45 C. C. A. 343, 106 Fed. Rep. 385 (disapproved in Sua Printing & Pub. Ass'n v. Sloore, sn- pi'a); Dennis v. Cummins, 3 Johns. Cas. 297, 2 Am. Dec. 100; Lindsay v. Anesley, 6 Ired. 188; Mills v. Fox, 4 E. D. Smith, 220; Esmond v. Van Benschoten, 12 Barb. 306: Baird v. Tolliver, 6 Humph. 186, 44 Am. Dec. 298. The Alabama court looks with more favor upon contracts to stipu- late damages than do most courts. It does not apply an exceptional rule of construction to them, nor protect one of the parties from the consequences of his error of judg- ment or improvidence at the ex- pense of the other who may be, and in the case of any other contract would be, entitled to the rights given 756 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 290. § 290. Stipulation when damages uncertain. If a contract does not afford any data from which actual damages can be calculated this circumstance has been held to afford a reason for regarding a sum designated in it as liquidated damages.^ [505] This test would include among those deemed uncertain all contracts which require any extrinsic evidence to ascertain the extent of the actual injury. Expressions may be found in some cases favoring this criterion of uncertain damages.^ But where the damages cannot be calculated by market values, nor by any precise pecuniary standard, or where, from the peculiar circumstances which the contract contemplates, there must be other uncertainty affecting the practical ascertainment of the amount of the actual loss, the law favors any fair adjustment of it by stipulation.* The damages resulting from breach of a him under it. "Wiiether the sum agreed to be paid is out of propor- tion to the actual damages, which will probably be sustained by a breach, is a fact into which the court will not enter on inquiry if the in- tent is otherwise made clear that liquidated damages, and not a pen- alty, is in contemplation." Keeble V. Keeble. 85 Ala. 552, 5 So. Rep. 149, quoted with approval in Henderson V. Murphree, 109 Ala. 556, 20 So. Rep. 45. This is in harmony with Sun Printing & Pub. Ass'n v. Moore, 183 U. S. 642, 23 Sup. Ct. Rep. 240. 1 Nilson V. Jonesboro, 57 Ark. 168, 20 S. W. Rep. 1093; Garst v. Harris, 177 Mass. 72, 58 N. E. Rep. 174; Guerin v. Stacy, 175 Mass. 595, 56 N. E. Rep. 892; Thorn & Hunkins Lime & Cement Co. v. Citizens' Bank, 158 Mo. 272, 59 S. W. Rep. 109; Coal Creek, etc. Co. v. Tennessee Coal, etc. Co., 106 Tenn. 651, 62 S. W. Rep. 162; Collier v. Betterton, 87 Tex. 440, 29 S. W. Rep. 467; Barry v. Harris, 49 Vt. 392; Everett Land Co. v. Maney, 16 Wash. 552, 48 Pac. Rep. 243; San- ders V. Carter, 91 Ga. 450, 17 S. E. Rep. 345; Fletcher v. Dyche, 2 T. R. 34; Waggoner v. Cox, 40 Ohio St. 539; Wolf V. Des Moines R Co., 64 Iowa, 380, 20 N. W. Rep. 481; Ward V. Hudson River B. Co., 125 N.Y. 230. 26 N. E. Rep. 256; Tode v. Gross, 127 N. Y. 480, 13 L. R. A. 652, 28 N. E. Rep. 469, 24 Am. St. 475; De Graff v. Wickham, 89 Iowa, 720, 52 N. W. Rep. 503; Talkin v. Anderson, 19 S. W. Rep. 852 (Texas Sup. Ct.). 2 Bagley v. Peddie, 16 N. Y. 469, 69 Am. Dec. 713; Streeter v. Rush, 25 Cal. 67; Esmond v, Van Benschoten, 12 Barb. 366; Craig v. Dillon, 6 Up. Can. A pp. 116. 3 New Britain v. New Britain Tele- phone Co., 74 Conn. 326, 333, 50 Atl. Rep. 881; Monmouth Park Ass'n v. Wallis Iron Works, 55 N. J. L. 132, 26 Atl. Rep. 140: Tennessee Manuf. Co. V. James, 91 Tenn. 154, 15 L. R A. 211, 18 S. W. Rep. 262; Common- wealth v. Ginn & Co., 23 Ky. L. Rep. 521, 63 S. W. Rep. 467; Kil- bourne v. Burt & Brabb Lumber Co., 23 Ky. L. Rep. 985, 64 S. W. Rep. 631 ; Whiting v. New Baltimore, 127 Mich. 66, 86 N. W. Rep. 403; Taylor v. Times Newspaper Co., 83 Minn. 523, 86 N. W. Rep. 760; Keeble v. Keeble, 85 Ala. 552, 5 So. Rep. 149; St. Louis, etc. R. Co. V. JeflFerson Stone Co., 90 Mo. App. 171; Emery v. Boyle, 200 Pa. 249, 49 Atl. Rep. 779; Jennings § 290.] STIPULATED DAMAGES. marriage promise; ' of an agreement not to engage in a partic- ular occupation or business; 2 from delay in completing par- ticular works, or in doing some other act on which ulterior transactions depend;'' or damages from the disclosure of the V. McCormick, 25 Wash. 427, 67 Pac. Rep. 764; Reichenbach v. Sage, liJ Wash. 364. 43 Pac. Rep. 354 52 Am. St. 51; Menges v. Milton Piano Co., — Mo. App. — , 70 S. W. Rep. 250; American Copper, Brass & Iron Works V. Galland-Burke Brewing & M. Co., — Wash. , 70 Pac. Rep. 236; Wooster v. Kisch, 26 Hun, 61; Kemp V. Knickerbocker Ice Co., 69 N. Y. 45; Indiauola v. Gulf, etc. R. Co., 56 Tex. 594; Jones v. Binford, 74 Me. 439; Lipscomb v. Seegers. 19 S. C. 425; 1 Dane's Abr. 549, § 18; Gammon v. Howe, 14 Me. 250; Ting- ley V, Cutler, 7 Conn. 291; Cotheal v. Talmage, 9 N. Y. 551; Bagley v. Ped- die, supra; Mundy v. Culver, 18 Barb. 336; Wolf Diamond Coal Co. V. Schultz, 71 Pa. 180; Bingham v. Richardson, 1 Win.ston, 217; DeGrofT V. American L. T. Co.. 24 Barb. 375; Fisk V. Fowler, 10 Cal. 512. In this case an ordinary bond with condi- tion for delivery of title to a boat within a specified time was held to liquidate the damages at the sum stated as a penalty. See § 289. 1 Lowe V. Peers, 4 Burr. 2225. See Abranis v. Kounts, 4 Ohio, 214. 2 McCurry v. Gibson, 108 Ala. 451, 18 So. Rep. 806, 54 Am. St. 177; Boyce V. Watson, 52 111. App. 361 ; Stover v. Spielman, 1 Pa. Super. Ct. 526; Tob- ler V. Austin, 22 Tex. Civ. App. 99, 53 S. W. Rep. 706; Borley v. Mc- Donald, 69 Vt. 309, 38 Atl. Rep. 60; Snider v. McKelvey, 27 Ont. App. 339; Palmer v. Toms, 96 Wis. 367, 71 N. W. Rep. 654; Newman v. Wolfson, 69 Ga. 764; Mueller v. Kline, 27 111. App. 473; Stevens v. Pillsbury, 57 Vt. 205; Tode v. Gross. 127 N. Y. 480, 24 Am. St. 475, 28 N. E. Rep. 469, 13 L. R. A. 652; Grasselli v. Lowden, 11 Ohio St. 349; Applegate v. Jacoby. 9 Dana, 2UG; Mott v. Mott, 11 Barb. 127; Rawlinson v. Clarke, 14 M. & W. 1S7; Hitchcock v. Coker, 6 Ad. & El. 438; Galesworthy v. Strutt, 1 Ex. 6.59; Green v. Price, 13 M. & \V. 695; Dakin v. Williams, 17 Wend. 447; Williams v. Dakin, 22 id. 210; Lange V. Werk, 2 Ohio St. 519; Gushing v. Drew, 97 Mass. 445; Atkyns v. Kin- nier, 4 Ex. 776; Mercer v. Irving, 1 E., B. & K 563; Reynolds v. Bridge, 6 E. & B. 528; Nobles v. Bates. 7 Cow. 307: Pierce v. Fuller, 8 Mass. 223, 5 Am, Dec. 102; California Steam Nav. Co. v. Wright, 6 Cal. 258; De- Groff V. American L. T. Co., 24 Barb. 375; Stewart v. Bedell, 79 Pa. 336; Horner v. Flintolf, 9 M. & W. 678; Lightner v. Menzel, 35 Cal. 452; Sainter v. Ferguson, 7 C. B. 716; Davis V. Penton, 6 B. & C. 216; Bigony v. Tyson, 75 Pa. 157; Hoi brook v. Tobey, 66 Me. 410, 22 Am. Rep. 581; Reilly v. Jones, 1 Bing. 302; Leighton v. Wales, 3 M. & W. 545; Crisdee v. Bolton. 8 C. & P. 240. 3 Pressed Steel Car Co. v. Eastern R. Co., 121 Fed. Rep. 609 (Ct. Ct. of Appeals, 8th Ct.); Ward v. Hudson River B. Co., 135 N. Y. 230, 26 N. K Rep. 256; O'Brien v. Anniston Pipe- works, 93 Ala, 582, 9 So. Rep. 415; Law V. Local Roard of Redditch, [1892] 1 Q. B. 127; De Graff v. Wick- ham, 89 Iowa, 720. 52 N. W. Rep. 503; Hall V. Crowley, 5 Allen, 304, 81 Am- Dec. 745; Curtis v. Brewer, 17 Pick. 513; Fletcher v. Dyche, 2 T. R 32; Hamilton v. Moore, 33 Up. Can. Q. B. 100 and 520; Gaskin v. Wales. 9 Up. Can. C. P. 314; McPhee v. Wil- son, 25 Up. Can. Q. B. 169; Bergheim V. Blaenavon Iron & S. Co , L. R. 10 Q. B. 319; Folsom v. McDonougli, 6 758 CONTENTIOXAL LIQUIDATIO^'S AND DISCHARGES. [§ 290. [506] secrets of business,' or from breach of an agreement to abate a nuisance,- are manifestly of that nature; and stipula- tions fixin3. R. A. 211, 18 S. W. Rep. 2G3; Walsh v. In Schrimpf v. Tennessee Manuf. Fisher, 102 Wis. 172, 78 N. W. Rep. Co.. 86 Tenn. 219, 8 Am. St. 832, 6 437, 76 Am. St. 865. S. W. Rep. 131, a servant agreed to I I § 293.] STIPULATED DAMAGES. TtJl theatre before the fulfillment of their engagement with him sustains a stipulation fixing the damages for its breach.' The inquiry whether a fixed sum is intended as pen- [512] alty or liquidated damages is generally answered according to the equity and justice of the particular case. If the damirgcs are uncertain in their nature, or difficult to be proved, and in applying the stipulation to the case the result is not manifestly at variance with the principle of just compensation, it is readily adopted as consistent therewith. In such cases the intention is inferred from these circumstances, and the lan- guage of the parties is very liberally construed to give effect to it. The sum may be called a penalty or forfeiture, or the form and phraseology may be vague and equivocal; but, nev- ertheless, the sum stated be held to be liquidated damages.^ § 293. Same subject; illustrations. Some differences will be noticed, resulting from a stricter adherence to the arti- ficial rules of construction by some courts than by others. On the other hand, where the actual damages may be ascertained by mere computation, or can be easily established by proof, and the sum stated is not a just measure of the actual loss or injury, these circumstances prevail against very clear and posi- tive expressions of intention to liquidate damages.' In cases of neutral circumstances the language and form of the con- tract may alone be decisive. All doubts as to the justice of the stipulated sum, or as to the actual intention of the parties, will be resolved by treating it as a penalty. Man}' stipula- tions ostensibly providing a remuneration to be paid, or in some way to inure to the party entitled to the benefit of tlie •contract in case of a breach, have been held not to have the •effect to liquidate damages because so framed as to be incon- sistent in their effect with the idea of compensation either for the reason that the intention to limit the compensation for 1 Pastor V. Solomon, 26 N. Y. Misc. Bip:ony v. Tyson, 75 id. 157; Pearson 125, 55 N. Y. Supp. 956, affirming 25 v. Williams, 26 Wend. 630; Knai)p v. N. Y. Misc. 322, 54 N. Y. Supp. 575. Maltby, 13 id. 587; Upliam v. Smith, 2 §283, n.; Mathews v. Sharp, 99 7 Mass. 265: Fisli v. Fowler. 10 Cat Pa. 560; Lennon v. Smith, 14 Daly, 512; Sparrow v. Paris, 7 H. & N. 594; 520; Miller v. Rankin, 11 Atl. Rep. Yenner v. Hammond, 36 Wis. 277: ^15 (Pa.); Eakin v. Scott. 70 Tex. 442, White v. Arleth, 1 Bond, 819; H.iy- 7 S. W. Rep. 777; Boys v. Ancell, 5 maker v. Schroers, 49 Mo. 406. Bing. N.C. 890; Streeperv. Williams, 3 Kemble v. Farren. 6 Bing. 141; 48 Pa. 450; Burr v. Todd, 41 id. 206; Horner v. Flintofif, 9 M. & W. 67a 768 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 293, [513] breach to such amount as the provision in question may specify, or the purpose to afford compensation to that extent is doubtful in view of the special facts of the case. A few cases may be profitably consulted as illustrations of tlie uncer- tain nature of such stipulations, and how much at large is the judicial discretion by which their practical effect is governed. In a case in New York two parties agreed upon an exchange of real estate; each was to deliver a deed of his property or " forfeit the sum of $500." Upon the first trial the court held this to be a provision for liquidated damages, and the plaintiff" had a verdict for that sura, which was set aside on the de- fendant's motion, upon the ground that the court erred in treating that sum as other than a penalt3^ The case was re- tried upon this theory, and resulted in a verdict for the plaint- iff of $1,000 against his request and exception that it should be regarded as stipulated damages. The defendant then sought to reverse the judgment on the ground that the sum stated in the contract was not a penalty, but liquidated damages. The ruling that it was a penalty was in harmony with the de- fendant's argument for a new trial, and he had taken no ex- ceptiou to a like construction of the contract on that trial. He was, therefore, not in a situation on appeal to allege that that construction was erroneous. Church, C. J., said: "It is, how- ever, proper to say that, if the question was before us, we should hesitate in holding it a penalty; and there are many reasons for regarding it as a provision fixing the measure of damages by the parties. The word ' forfeit ' is not conclusive. A fundamental rule upon this subject is that the words em- ployed must, in general, yield to the intention of the parties as evinced by the nature of the agreement, the amount of the sum named, and all the surrounding circumstances. The sum named is reasonable in amount; it is payable for one breach, viz.: a failure to deliver a deed; and the injury is in some de- gree uncertain in amount and extent, and might depend upon many unforeseen contingencies. These are material circum- stances favorable to an inference that the parties intended to fix the sum as the measure of damages." But that question being precluded, by the absence of any objection on the ap- pellant's part, the judgment was affirmed.^ 1 Noyes v. Pliillips, 60 N. Y. 408. I § 203,] STIPL'LATED DAMAGES. 709 In a later case in the same state an ice company agreed [5U] to deliver to K. four thousand tons of ice in 1870, for retail. Afterwards the company, by fraudulent representations, [)ro- cured from K. a written exoneration as to all the ice above live hundred and eighty-seven tons. By the original agreement K. agreed to pay the ice company $1 per ton for each and every ton that he failed to take according to the terms of the aL'ree- raent; and the ice company agreed to forfeit $1 per ton for each and every ton that they failed to deliver according to the terms of the agreement. The contract price of the ice delivered was $2.50 per ton, and the market price, when the exonerated quan- tity should have been delivered, was from $14 to $10 per ton. A suit was brought for rescission of the agreement obtained by fraud, reducing the quantity, and for damages. The rescission was granted, and the next question was between penalty and liquidated damages under the $1 per ton clause referred to. The court of common pleas held that the stipulation was a ])en- alty.^ The court of appeals were of contrary opinion. Earl, J., said: "What was here intended by the parties? The $1 was certainly intended at least to limit the extent of damages to be paid in case of breach, else there would be no purpose lor inserting it; and effect should be given to this intention if it can be consistently with the rules of law. There is nothing decisive in the language used. In case of failure b}' the plaintiffs they agreed 'to pay ' the $1, in case of failure by the defendant it agreed ' to forfeit ' the same sum. The words * to pay ' and ' to forfeit ' were evidently used in the same sen.sc-,* and might be used in case the sum was intended either as liquidated damages or as a penalty." ^ In another case, a 1 Kemp V. Knickerbocker Ice Co., and there was added the following 51 How. Pr. 31; Basye v. Ambrose, provisions: "For non-conipliante 28 Mo. 89. See Cotheal v. Talmage, with this contract by either party 9 N. Y. 551, 61 Am. Dec. 716, the penalty shall be as follows: If 2 1^ 283, n. tlie parties of the first part are not 3 Kemp V. Knickerbocker Ice Co., themselves, or agents, on the spot 69 N. Y. 45, 57; Winch v. Mutual twenty days after the stipulated no- Benefit Ice Co., 9 Daly, 117. tice be given, then the parties of the In Lowry v. Barelli, 21 Ohio St. second part shall be at liberty to sell 324, one party offered to sell and de- said marble just as if consigned to liver at a specified time and place them, and claim of said first par- two thousand five hundred cubic feet ties the difference between the net of Italian marble at $2.12^ per foot, amount that the marble sold at, and Voul — 49 770 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 293. [515] building contract, the builder was to receive for the com- pleted house $4,600; the contract contained the provision that the builder, who was the plaintiff, should " forfeit ten per cent. on the whole amount if the said house is not entirely com- what they bound themselves to pay for it, say $2.12| per cubic foot; pro- vided always, that said difference shall never exceed thirty-seven and one-half cents per cubic foot, which difference shall be paid down, in cash at once, without any difficulty; and should the parties of the second part fail to deliver within the speci- fied time the quantity of marble above mentioned, the parties of the first part shall be at liberty to buy the same quantity of marble at the market price, and charge the differ- ence, if any, to the parties of the second part; provided always, that the difference of the marble so pur- chased shall not exceed thirty seven and one-half cents per cubic foot of the price fixed by this agreement, and that the terms of payment be cash."' The vendee sued the vendor and assigned as a breach the non- delivery of the marble. The jury found, among other things, that " the defendants refused to perform the agreement on their part; that the plaintiffs did not purchase, nor at- tempt to purchase, marble corre- sponding to that described in the con- tract before bringing suit; that such a lot of marble could not have been purchased in New Orleans where the contract was made; that tiie differ- ence between the market price and the contract price on the day of breach was greater than thirty -seven and a half cents per foot; that the damages of the plaintiff amount to §1,516.62," for which sum tliey re- turned a verdict. A motion for a new trial was made on the ground, among others, that the verdict was con- trary to the law and the evidence. On this motion it was contended on behalf of the defendants " that the sum of thirty-seven and a half cents per foot is in the nature of a limita- tion of damages, and not actual or liquidated damages, and is the ut- most that the parties can recover." This point was not noticed in the opinion, which was adverse to the motion, and judgment was ordered to be rendered on the verdict. Mc- Ilvaine, J., said: "It is no doubt competent for parties to limit by express stipulation the amount of damages to be recovered in the event of a breach of their contract: or to make the right to recover at all to depend upon a particular event; or they may agree that damages shall not be recovered in any event for a violation of the contract; tlms mak- ing wliat would otherwise be a con- tract binding in law a mere option on the part of the promisor to do or not to do as he may choose. In our opinion the contract between the parties in this case was of the first and not of the second or third classes named. Taking it altogether, we believe the parties intended to secure the performance at what they sup- posed would be a rea onabie com- pensation to the injured party in case of a default by the other in not receiving or delivering the marble. "It cannot be doubted that the par- ties intended to bind each other by this contract to the purchase and sale upon the terms named therein. For the breach of every contract the law implies damages; and to es- cape the consequences of this rule of law the party in default should be able to show that damages had been waived. In this contract no waiver or exemption from damages upon ^ 293.] STIPULATED DAMAGES. pleted and fit to occupy at the time agreed upon." Daniel, J., said: "The clause . . . cannot properly be regarded as an agreement or settlement of liquidated damages. The [510] terra 'forfeiture' imports a penalty; it has no necessary con- the state of facts found in the special verdict is expressed, nor can it be inferred except upon the principle that expressio unius est exclusio al- teriufi. This maxim, however, should not be applied in a case where, by fair construction of the whole in- strument, a different intention can be ascertained. . . . Whatever might have been the law of this case, had there been such marble in the market at the time of the defend- ant's default, we are of opinion that the plaintiffs, under the state of facts found in the special verdict, were excused not only from making a purchase of alike quantity of mar- ble in the market, but also from any vain and fruitless effort to do so." In Grand Tower Co. v, Phillips, 23 Wall. 471, a company having coal mines agreed to deliver one hundred and fifty thousand tons of coal, the product of its mines, to P. at $3 a ton during the year 1870, in equal daily proportions, between the loth of February and the 15th of Decem- ber; that is to say, fifteen thousand tons each month. The contract con- tained this provision: "If through no fault of the parties of the second part (P.), the party of the first part (the company) shall fail in any one month to deliver all or any part of the quota of coal to which the par- ties of the second part may be en- titled in such month, the party of the first part shall pay to the parties of the second part as liquidated dam- ages twenty-five cents per ton for each and every ton which it may have so failed to deliver; or instead thereof, the parties of the second part may elect to receive all or any part of the coal so in default in the next succeeding month, in which case the quota which the parly of the lirht part would otherwise have been bound to deliver under this contract shall be increa.sed in such succeeding month to the extent of the quantity in default." Coal rose in value from about .?3 a ton to .^9; and without the fault of P. the company did fail to deliver the quota — fifteen thou- sand tons — due in October, and P. thereupon elected and gave notice of the election to take the said quota in November. But the com i 'any failed to deliver it then, and failed also to deliver the quota — fifteen thousand tons — due in November. P. then elected and gave notice of his election to take in December the quota due in November, as also that due in October. No coal, however, was delivered at any time, and P. brought suit for damage-s. It was held that the plaintiffs were entitled to their actual damages and were not limited to twenty-five cents per ton. Bradley, J., said: "The ques- tion whether this view is right or not depends upon the true construction of the agreement made by the par- ties. . . . It is evident from an inspection of the contract that the election given to the plaintiffs to re- ceive in the following month the coal which they were entitled to re- ceive and did not receive in a par- ticular month was a substitute for the liquidated damages of twenty- five cents per ton. With regard to that particular amount of coal, the rule of liquidated damages was at an end. The agreement did not carry it forward to the following month. It imposed upon the defendant the obligation, if the plaintiffs so elected* 772 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 293. nection with the measure or degree of injury which may re- sult from a breach of contract or from an imperfect perform- ance. It implies an absolute infliction, regardless of the nature and extent of the causes by which it is superinduced. Unless, therefore, it shall have been expressly adopted and de- [517] clared by the parties to be a measure of injury or com- pensation it is never taken as such by courts of justice." • The lessor for years of part of a steam mill covenanted with his lessee to furnish him with a certain amount of steam-power during every working day in the year, and that if at any time he should fail to do so the rent should cease during the time of such failure. The lessee had taken a lease for five years for the purpose of carrying on business, and had placed machinery on the premises on the faith of the lessor's covenant to furnish him steam-power to work it. Soon after his work commenced the lessor withheld all the power and thus broke up the busi- [518] ness. On these facts the court held that the suspension of rent was not full satisfaction of the damages; it Avas not satisfied that the lessee had agreed to accept such suspension as a full compensation for an entire breach of cne covenant.^ to furnish the coal itself instead of lation worse than useless. The plaint- paying the liquidated sum. If not ififs might continue to exercise their 60, what was the option worth ? It election to receive the coal month amounted to nothing more than the after month, without avail, and, at right of giving to the defendant an- the end, find themselves exactly at other month to furnish the coal, the point they started from — forced Surely they would have had that to accept the twenty-five cents per right without stipulating for it in ton." this solemn way. Had not this op- ^ Van Buren v. Digges, 11 How. tion been given to the plaintiffs, the 461. See § 283, n. defendant would have had the option 2 Fisher v. Barret. 4 Gush. 381; either to furnish the coal or to pay Pengra v. Wheeler, 24 Ore. 532, 34 the twenty- five cents per ton for not Pac. Rep. 354, 31 L. R. A. 726. furnishing it — a sum which they In Nowlin v. Pyne, 40 Iowa, 166, could very well afford to pay upon there was an agreement between a slight rise in the market prices. It the parties for exchange of farms, was evidently the very purpose of which contained this clause: "It is the option given to the plaintiffs to also understood that, in case the said avoid this oppressive result. They P. fails to make said conveyance, as could require the coal to be delivered aforesaid, then he agrees to pay said at all events, and if they elected to N. for all plowing done by him do this it was the duty of the de- on said land." The qiiestion was fendant to furnish it. The contrary whether N. was entitled to any other construction would make the stipu- damages. It was contended by the § ^93.] STIPULATED DAMAGES. 773 The general doctrine was well summed up in a Penn- [510' sj^vania case. Tlie owners of a hotel had agreed to sell it for $14,000, of which $3,000 was to be paid at a specific time, when a deed was to be made; part possession was to be deliv- other party that he was not. Day, J.: "This position would be correct if the parties to a contract must stipulate for the damages to be re- covered in order that they may re- cover any. But the law, of itself, attaches to the breach of every con- tract the right to recover proper damages. That the parties have expressly provided for the payment of some of the damages, which, perhaps, the law would not have awarded without such provision, cannot be construed to be a waiver of the right to recover other dam- ages which the law permits. In order to defeat the recovery of such damages it must clearly appear that the parties have stipulated for all the consequences which they intend shall follow a breach of their agreement. It is plain that this agreement more particularly refers to certain inci- dental damages which might not arise at all, whilst as to the principal damages, and which are certain to follow a breach of the contract if it was an advantageous one to the plaintiff, the contract is silent." In Potter v. McPherson, 61 Mo. 240, there was a contract between the parties for constructing a rail- road, by the terms of which pay- ments were to be made by the em- ployer in monthly instalments, ten per cent, being reserved by him until the completion of the work, "as security for the faithful performance of the contract;" and in case of cer- tain breaches on the part of the con- tractor the amounts reserved were to be absolutely forfeited to the other party. Held, that the amounts so to be retained were not liquidated dam- ages for such breaches, but the con- tractor could recover the entire sum agreed upon, less the damages which in fact might be sustained by reason of his non-compliance with the con- tract. Hough, J., said: "To hold otherwise in such a case would pro- duce the gros.sest inequality and in- justice. The amount forfeited might bear no just relation to the damage suffered. The more nearly the con- tract approaches completion, the greater would be the reserve, and the less would be the damage. As the damage diminished the sum for- feited would increase." Savannah, etc. R. Co. V. Callahan, .56 Ga, 331. See Phelan v. Albany, etc. R. Co., 1 Lans. 258; Jemmi.son v. Gray, 29 Iowa, 537; Faunce v. Burke. 16 Pa. 469. 55 Am. Dec. 519; Hennessey v. Farrell, 4 Cush. 267; Jackson v. Cleveland, 19 Wis. 400. Easton v. Pennsylvania & O. C. Co., 13 Ohio, 79, was a similar case, the contract providing for monthly payments, and a reserve of fifteen per cent, to insure the completion of the work; and also that in case of its too slow progress, and in certain other contingencies, the president of the company or the engineer should have power to determine that the contract had been abandoned, and such determination should put an end to it, and exonerate the com- pany from every obligation arising therefrom, and then the job might be disposed of as though the contract had never existed. It was declared abandoned because, in the opinion of the engineer, the work was not being prosecuted with suflScient force to insure its completion with- in the time agreed on. Suit was brought by the contractor to recover 774 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 293. ered at once, and in the contract the parties agreed to forfeit '520] |1500 in case either failed to comply with its terms. It was held that the forfeiture was intended by them as a com- pensation to either in case the other wholly abandoned the contract and was liquidated damages, not a penalty. As the general rule of damages might not embrace all the compen- sation the parties deemed would be due in view of the prob- able risk, trouble, loss and expense incident to the contem- plated change on the part of either party, they were regarded as having fixed the sum stipulated as the amount of damage the fifteen per cent, reserved in monthly payments for work done. Woods, J., said: "The contract may be supposed to be severe upon the plaintiffs. They were, however, by no means forced to execute it. It was voluntary. By its terms, exten- sive control over the work is con- ferred upon the defendant, and great confidence reposed in the honest and faithful exercise of his discretion. If the defendant has violated neither its letter nor its spirit it is difficult to see what rea- sons the'plaintitf shave for complaint. We sit here to enforce the contracts made by others, but we have no au- thority to impose upon them obliga- tions to which they have never as- sented. The plaintiffs were to be paid monthly on estimates made monthly by the engineer. It has been done. Fifteen per cent, was to be retained to insure the completion of the work. The de- fendant kept back this amount. If the contract was declared aban- doned, the determination of the president or engineer is conclusive. The contract is at an end, and the defendant exonerated from every obligation thence arising by express agreement. It is insisted that when the whole work is completed the fifteen per cent, may be recovered by the plaintiffs. Had they finished the work the position would be cor- rect, but if the contract is aban- doned, relet and others complete the work, the amount retained as secu- rity is in its nature liquidated dam- ages. If it were not so intended,, there would be no security in the re- tention of this amount. . . . The president or engineer is the umpire between the parties. His determi- nation ends the contract and ex- empts the company from its obliga- tions. The agreements of the parties are the law by which their riglits are to be determined, and I am ex- tremely doubtful, at least, whether any court can legitimately interfere and upset their arrangements when an honest discretion has been exer- cised, where neither fraud nor cir- cumvention has intervened. I am instructed by my brethren, however, to say, as the opinion of the court, that in this class of cases tiie sub- ject is open to inquiry whether the contractors had done any act, or omitted the performance of any duty which, within the terms of the con- tract between the parties, would justify the president or engineer in declaring it abandoned; and if no such act had, in fact, been done, nor duty omitted, the honest exercise of the discretion conferred to abandon the contract ought not to shield the defendant from the payment of the per centum so retained." § 293.] STIPULATED I/AMAGES. 775 each would suffer from a total failure; and the word "for- feit" was outweighed by the other elements of interpretation and meant " to pay." Agnew, J., said: " It is unnecessary to examine the numerous authorities in detail, for they are neither uniform nor consistent. No definite rule to determine the question is furnished by them, each being determined more in direct reference to its own facts than to any general rule. In the earlier cases the courts gave more weight to the lan- guage of the clause designating the sum as penalty or as liqui- dated damages. The modern authorities attach greater im- Dortance to the meaning and intention of the parties. Yet the intention is not all-controlling, for in some cases the subject- matter and surroundings of the contract will control the in- tention where equit}' absolutely demands it. A sum expressly stipulated as liquidated damages will be relieved from if it is obviously to secure payment of another sum capable of being compensated by interest. On the other hand, a sum denomi- nated a penalt}^ or forfeiture will be considered liquidated damages where it is fixed upon by the parties as the measure of the damages, because the nature of the case, the uncertainty of the proof or the difficulties of reaching the damages by proof have induced them to make the damages a subject of previous adjustment. In some cases the magnitude of the sum and its proportion to the probable consequence of a breach will cause it to be looked upon as minatory only. Upon the whole, the only general observation we can make is that in each case we must look at the language of the contract, the intention [521] of the parties as gathered from all its provisions, the subject of the contract and the surroundings, the ease or difficulty of measuring the breach in damages and the sum stipulated, and from the whole gather the view which good conscience and equity ought to take of the case." ' 1 Streeper v. Williams, 48 Pa. 450; case of the breach of the contract the Shreve v. Brereton, 51 id. 175; Emery purchaser was bound "in the penal V. Boyle, 200 id. 249. 49 Atl. Rep. 779; sum of $5,000 as liquidated damages." Robeson v. Whitesides, 16 S. & R. 320. The difficulty of establishing the It was a condition of the sale of actual loss was so great that the goods by one firm to another that the stipulated sum was recoverable, purchaser should not advertise them May v. Crawford, 142 Mo. 390, 44 S. asof the stock of the seller, except as W. Rep. 260, 150 Mo. 504, 51 S. W. to the goods actually bought, and in Rep. 693. T76 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 293. A contract for the use of a patent right for six years desig- nated the annual license fee to be paid b}'- the licensee and bound him, if he used it after the expiration of the terra with- out a new license, to pay double the stipulated rate. This was sustained as an agreement for stipulated damages. "As the parties could not know in 1888 what the value of the use of the patent might be after 1894, it was certainl}'- a proper sub- ject for agreement between them as to what should be paid as damages should the defendant continue to use the patent with- out license after the expiration of the term, and this they did by agreeing on the sum of $500. It could hardly have been the intention of the parties that the right of the plaintiff, in case use should be made of the patent after the expiration of five years, should be limited each year to the actual damages he might be able to show that he sustained from the use made. It would be difficult to lay down a principle by which such damages could be estimated by a jury.^ There is general con- currence in the view that the uncertainty concerning the amount of coal, ore or oil the lessee of a mine may take there- from and the corresponding uncertainty as to the royalties the 'essor will receive make provisions stipulating that not less *han a certain quantity of coal, ore or oil shall be taken each year binding as agreements for stipulated damages.^ In a case where the language used was not explicit as to the inten- tion of the parties, the words "stipulated damages," or any similar term not being used, their omission was regarded as of some significance as to such intention; and the uncertainty of the damages was urged as a reason for construing the contract as one for stipulated damages. That argument was thus an- Where a street railroad company i Knox Rock Blasting Co. v. Graf- and the trustees of a village con- ton Stone Co.. 64 Ohio St. 361, 60 N. tracted for the construction of a road E. Rep. 563, 16 Ohio Ct. Ct. 21. and the former deposited $10,000 as 2Coal Creek, etc. Co. v. Tennessee a guaranty of its good faith and Coal, etc. Co.. 106 Tenn. 651, 678, 63 stipulated that the same should be- S. W. Rep. 162; Lehigh Zinc & Iron come the property of the village as Co. v. Bamford, 150 U.S. 665, 14 Sup. liquidated damages in case of its de- Ct. Rep. 219; Fljmn v. White Breast fault, such stipulation v^as binding. Coal & Mining Co., 72 Iowa, 738, 32 Peekskill, etc. R, Co. V. Peekskill, 21 N. W. Rep. 471; Consolidated Coal App. Div. 94, 47 N. Y. Supp. 305, Co. v. Peers, 150 111. 344, 37 N. E. Repi affirmed without opinion, 165 N. Y 937; Powell v. Burroughs, 54 Pa. 329. 628. § 294.] STIPULATED DAMAGES. 777 swared: There is no presumption in the law that damages resulting from the breach of an obligation to convey a mining claim cannot be calculated by market value or estimated by reference to pecuniary standards; nor is tiiero a presumption that it would be impracticable or extremely dillicult to fix thu actual damage in such case. True, evidence of a character different from that adduced to show the value of lands used for purposes other than mining may be required, and its pro- curement may be attended with difficulty and expense; but, nevertheless, the law does not raise, and the courts do not in- dulge, the presumption that proof of the value of such a claim is impracticable. In the absence of exceptional circumstances, a promise to pay a certain sum of money if the promisor fail to perform his agreement to convey land is mere security and a penalty;^ and this rule is applicable to mines as well.- § 294. Stipulation for payment of a fixed sum for partial or total breach. Contracts often contain a variety of stipu- lations of unequal importance and, therefore, admitting of many breaches for which the damages would be different in -amount. In such a case a total breach would involve an in- jury greater than that which would result from the infraction of a particular stipulation. Hence it is self-evident that a sum stipulated to be paid, either for breach of one of the minor provisions or of the whole contract, could not be a liquidation of damages on the principle of compensation for actual injury. The sum would either be too great for a partial breach or wholly inadequate to one which involved the loss of the whole contract.' Hence, if the agreement cannot be approj)riated to 1 Dooley v. Watson, 1 Gray, 414. machinery may be retained without 2 O'Keefe V.Dyer, 20 Mont. 477, 483, payment for it, or that for a gross 53 Pac. Rep. 196. breach it shall be retained as stipu- 3 Hoagland V. Segur, 38 N. J. L. 230. lated damages. No sum is fixed In Pennypacker V.Jones, 106 Pa. 237, either as a penalty or as liquidated the stipulation was that machines damages. It is manifest tliat if the put into a mill should have a desig- defendants produced all tlie results nated capacity to make high grades agreed upon except a deficiency of of flour, and if the results were not one or two barrels in the daily prod- as promised the machines were to uct, tiie forfeiture of the entire con- be retained without payment being tract price of the machinery would made for them. The court observe be entirely out of i>roportion to tiie that nothing was "said to the effect, damage sustained. z\gain,the letter of ■either that for any breach the entire this provision of the contract is that 778 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 294.- a total breach, but applies by necessary construction to such as would cause trifling loss or inconvenience, as well as to those of great importance, such sum is a penalty. Parke, B., said: "The rule laid down in Kemble v. Farren^ was that w^hen an agreement contained several stipulations of various degrees of importance and value, the sum agreed to be paid ^y way of damages for breach of any of them shall be con- strued as a penalty, and not as liquidated damages, even though the parties have in express terras stated the contrary. . . . [522] When the parties say that the same ascertained sum shall be paid for the breach of any article of the agreement, however minute or unimportant, they must be considered as- not meaning exactly what they say; and a contrary intention may be collected from the other parts of the agreement." ^ But in a later case' he is reported to have said of the same case: "That decision has since been acted upon in several cases, and I do not mean to dispute its authority. Therefore, if a party agree to pay 1,000/!. on several events, all of which are capable of accurate valuation, the sum must be construed as a penalty, and not as liquidated damages. But if there be a contract consisting of one or more stipulations, the breach of the machines may be retained if the cost to which the plaintififs were sub- results are not as promised. This re- jected in repairing the mill after the lates only to the non-production of defendants ceased work is also a di- the results contracted to be pro- rect loss arising from the defective duced, that is, that the mill should machinery furnished, and it is not have a capacity of two hundred bar- provided for in the contract. We rels daily, with full modern percent- think it clear that none of these age of high grades flour equal in items come within the terms of the quality to best in market. It makes stipulation for the retention of the no provision for damages for other machines, and that it was not within breaches of contract, which may oc- the contemplation of the parties that cur consistently with the production they should. We therefore consider of the results stated. One of the that the provision for the retention items of damage sustained by the of the machines was only in the plaintiffs was that it took a greater nature of a penalty, and that the quantity of grain to produce a barrel true measure of damages is the loss with the defendants' machines than actually sustained, flowing directly with the ordinary process, and the from the defects in the defendants' referee has found especially that machines." from this source alone there was a ^ 6 Bing. 141. positive loss of $1,096.7.5. This is a ^ Horner v. Flintoff, 9 M. & W. 678.. species of direct loss for which we ^ Atkyns v. Kinnier, 4 Ex. 776. think there can be a recovery. The § 294.] STIPULATED DAMAGES. 779 which cannot be measured, then the parties must be taken to have meant that the sum agreed on was liquidated damages and not a penalty." And the same antithesis is stated by him in another case: ''Where a deed contains several stipulations of various degrees of importance, as to some of whieli the dam- ages might be considered liquidated, whilst for others they might be deemed unliquidated, and a sum of money is made payable on a breach of any of them, the courts have held it to be a penalty only, and not liquidated damages. But when the damages are altogether uncertain, and yet a definite sum of money is expressly made payable in respect to it by way of liquidated damages, those words must be read in the ordinary sense, and cannot be construed to import a penalty."' This latter distinction has been recognized and followed in other cases in Eno-land and in America.^ 1 Green v. Price, 13 M. & W. 695; affirmed, 16 id. 346. 2 Emery v. Boyle, 200 Pa. 249, 49 Atl. Rep. 779; Carpenter v. Lockliart. 1 Ind. 434. Cotheal v. Talmage, 9 N. Y. 551, 61 Am. Dea 716, was decided on this distinction. Ruggles, J., said: "It is contended that because the contract referred to in the bond bound the de- fendant to do several things of dif- ferent degrees of importance, and the sum of $500 was made payable for the non-performance of any or either, it must be a penalty, and not liquidated damages. This doctrine, in the cases in which it is asserted, is traced to the cases of Astley v. Weldon, 2 Bos. & Pul. 340. and Kem- ble V. Farren, 6 Bing. 141. But I do not understand either of these cases as establishing any such rule. The principle to be deduced from them is, that where a party agrees to do several things, one of which is to pay a sum of money, and in case of a failure to perform any or either of the sti pulations agrees to pay a larger sum as liquidated damages, the larger sum is to be regarded in the nature of a penalty; and being a penalty in regard to one of the stipu- lations to be performed is a penalty as to all. In Kembie v. Farren Tin- dal. C. J., says that if the clause fixing the sum for liquidated dam- ages 'had been limited to breaches which were of uncertain nature and amount, we should have thought it would have the effect of ascertain- ing the damages upon any such breach;' thus rejecting the doctrine contended for by the defendant's counsel in the present case. It is true that the doctrine thus contended for has been adopted in some English and in several American cases: hast- ily, I should think, and without care- ful examination of the cases from which it is supposed to be derived. But if it should be considered as hav- ing any solid foundation in principle, it should be applied only in subor- dination to the general rule, which requires the courts in these, as in all other, cases to carry into effect the true intent of the parties. It should never be applied to cases like the present, wliere the amount of dam- ages is uncertain from the nature of the subject itself; and incapable of proof, not only from that uucer- 780 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 294. In a recent English case there is a very full discussion of the earlier cases, and the conclusion reached is that a contract to pay a sum of money if there shall be a breach of the stipula- tions contained in it, they being of varied importance and none of them trivial nor conditioned for the payment of speci- fied amounts of money, provides for liquidated damages.^ In the case referred to the plaintiff agreed to sell an estate for 70,000^. to the defendant; the latter was to build upon it and complete the buildings within ten years. A deposit of 5,000?. was to be paid by the defendant. The agreement provided that " if the defendant should commit a substantial breach of the contract, either in not proceeding with due diligence to carrv out and complete the works, or in failing to perform any of the provisions therein contained, then, and in either of the said events, the deposit money of 5,000*^. was to be forfeited; and if the balance of such deposit had not then been paid the defendant should forfeit and pay a sum of money equal to such balance, the intention being that if default was made by the defendant as aforesaid he should forfeit and pay to the plaintiff by way of liquidated damages the sum of 5,000Z., and the agreement to be void and of no effect." The defendant paid no part of the deposit, expended nothing on the estate and performed none of the acts stipulated for. A suit was brought to recover 5,000?. as liquidated damages, and the court of appeal held, affirming the judgment of Fry, J., that such sum was recoverable. It was pointed out by Jessel, M. tainty, but from the circumstances some cases. I cannot think it ought ah'eady stated ; and where, for these to be applied to the present. Thein- reasons, there was a necessity for justice it professes to avoid is no ascertaining them, by estimate by greater than that which is tolerated the parties in their contract. The in many other cases for the purpose only plausible ground for withhold- of enforcing a faithful performance ing the doctrine in any case is, that of contracts." Bagley v. Peddie, 16 the party might be made responsible N. Y. 469, 69 Am. Dec. 713. for the whole amount of damages ^ Wallis v. Smith, 21 Ch. Div. 243, for the breach of an unimportant followed in Schrader v. Lillis, 10 Ont. part of his contract, and so be made 358, notwithstanding the court of to pay a sum by way of damages appeal had, previous to the decision grossly disproportionate to the in- of Wallis v. Smith, announced the jviry sustained by the other party, contrary doctrine in Craig v. Dillon, Without undertaking to deny that 6 Ont. App. 116. this rule may properly be applied to § ^'-^'-i-] STIPULATED DAMAGES. 7S1 K, that, although the dicta in the earlier cases' seemed to lay down a positive rule, the actual decisions were in cases wliere one or more of the stipuhitions was or were for the payment of a sura of money less than that named as liquidated dam- ages. He said: " Although I wisli to leave the (juestion open, where there are several stipulations, and one or more is or are of such a character that the damages must be small, I do not wish for a moment to abstain from stating my opinion that there is no such doctrine where there are several stipulations irrespective of importance, which is the doctrine laid down by Mr. Justice Ileath,'^ and apparently approved of by Lord Jus- tice James.' There is neither authority nor principle for such doctrine, and I cannot see that it is estal^lished by any case which is binding on this court." Lord Justice Cotton said: " It is not sufficient, in my opinion, to say that the covenants to the breach of which this applies are of varying importance. That may be so, but yet the parties may very reasonably come to the conclusion that they will agree between themselves that the sum mentioned shall be assessed between them as the damages in consequence of the breaches of these various cov- enants. Probably there may be an exception, that where some of the covenants are of such a character that obviously the damages which can possibly arise from a breach in any Avay of that covenant would be very insignificant compared with the sum which has been fixed by the parties, there the court will give the non-natural construction to the terms used by the parties. In my opinion that comes within the same principle as where the courts have interfered, where one of the covenants has been for payment of a sum of money where the damage is capable of being assessed accurately, and is very much below the sum named." This decision is correctly interpreted to mean " that an agreement with various cov- enants of different importance is not to bo governed by any inflexible rule peculiar to itself, but is to be dealt with as com- ing under the general rule that the intention of the parties 1 Astley V. Weldon, 2 B. & P. 34G, v. Local Board of Redditch, [1892] 1 353; In re Newman, 4 Ch. Div. 731; Q. B. 127. Reynolds V, Bridge, 6 R & B. 540; 2 Astley v. Weldon. sxiprcu Atkyns v. Kinnier, 4 Ex. 783: Gals- ^ Iq re Newman, sxiTpra. worthy v. Strutt, 1 id. 659. See Law 7S2 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 295. themselves is to be considered. If they have said that in the case of any breach a fixed sura is to be paid, then they will be kept to their agreement unless it would lead to such an ab- surdity or injustice that it must be assumed that they did not mean what they said." ' This doctrine has been adhered to in the court of appeal in a case in which the lease of a farm contained a covenant b}'" the lessees not to sell hay or straw off the premises during the last twelve months of the term, but to consume the same; it also provided that an additional rent of SI. per ton should be pay- able by way of penalty for every ton of hay or straw so sold. It appeared that there was a substantial difference between the manurial value of hay and that of straw. This difference was sufficient to make the stipulation one for a penalty, regardless of the use of that word by the parties. Lord Esher, comment- ing on the following language used by the court in Lord Elphinstone v. Monkland Iron and Coal Co.,'^ "When a single lump sum is made payable by way of compensation on the occurrence of one or more or all of several events, some of which may occasion serious, and others but trifling, damage, the presumption is that the parties intended the sum to be penal, and subject to modification," said: I think the effect is subs tan tiall}'' the same as if, instead of the words " some of which may occasion serious and others but trifling damage," he had said " some of which may occasion serious and others less serious damage." ' [523] § 295. Same subject. Whether the damages are certain or not, a fixed sum made payable on the happening of one or of several events, each of which will be the occasion of some loss, cannot be deemed a sum intended for compensa- tion unless the stipulations are all of primary importance and the damages resulting from their breach are equally uncertain, or the provisions are parts of one whole, steps in the accora- 1 Mayne on Dam., Gth London ed., disajjproved Wright v. Tracey, Irish 160. Hep. 7 C. L. 134, which held that one 2L. R. 11 App. Cas. 332, 342. sum was to be paid in the event of 3Willson V. Love, [1896] 1 Q. B. the breach of any one of several 626. Oneof the judges was in doubt stipulations of varying degrees of as to whether the conclusion arrived importance. at was correct. A majority of them § 295.] STIPULATED DAMAGES. 783 plishment of one end, and to be ref^^arded as a single contract. Otherwise, no stipulation can operate on that principle. In many courts the law is held to be that a sum is stipulated damages when it conclusively appears that the parties have intentionally adopted it for that purpose. But where the couits proceed on the theory that there can be no sucli inten- tion when the stipulation is so framed that it cannot by any possibility operate to adjust the recompense to the actual in- jury, a sum made payable indifferently for one breach or for many, for a breach attended with a small loss or a large one, can have no effect to liquidate damages. In case the damages are easily computed, the extent of the inequality of the pro- vision is seen at once; but even if they are uncertain, the in- equality is logically certain. Eyan, C. J., stated the [52-1-] point with great clearness: "Where the sura is agreed to be paid for any of several breaches of the contract, and the dam- ages resulting from the breach of all of them are uncertain, and there is no fixed rule for measuring them, but tiie breaches are apparently of various degrees of importance and injury, the cases are conflicting on the rule whether the sum should be held as a penalty or as liquidated damages. On principle, "we are very clear that in such a case the sum should be held as a penalty. For it appears to us that it would be as unjust to sanction a recovery of the sum agreed to be paid alike for one trivial breach, or for one important breach, or for breach of the whole contract, as it would be to sanction such a recover}-- equally for damages certain and uncertain in their nature. The rule holding the sura to be a penalty in the latter case goes upon the injustice of allowing such a recovery equally in case of damages, uncertain indeed, but manifestly and materially different in amount; equally for breach of part of the contract, and for breach of the entire contract. Such a rule would not •only put the same value on a small part as on a large part, but would put the same value on any part as on the whole." ' This 1 Lyman v. Babcock, 40 Wis. 503. it is agreed that the promisor shall lu 3 Parsons on Cont. 161, the author pay, by way of liquidated dama?:es, says: '' Let us suppose a contract be- a large sum, if the promisee recover tween parties, one of whom, for against him in an action for a breach good consideration, promises to the of this contract. It must be sup- other to do several things, and then posed that this sum is intended and 784 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 295. [525] is believed now to be the doctrine generally held; if a gross sum is stipulated to be paid for any failure to fulfill an agreement consisting of several parts and requiring several things to be done or omitted, it is a penalty.^ regarded as adequate compensation for the breach of the whole contract; for it is all that the promisor is to pay if he breaks the whole. It would, of course, be most unjust and oppressive to require him to pay this whole sum for violating anyone of the least important items of the» contract. But such would be the effect, if the words of the parties prevailed over the justice of the case. The sum to be paid would, therefore, be treated as penalty, and reduced accordingly, unless the agreement provided that it should be paid only when the whole con- tract was broken, or so much of it as to leave the remainder of no value; or unless the sum agreed upon was broken up into parts, and to each breach of the contract its appropriate part assigned; and the sum or sums paj'able came in other respects within the principles of liquidated damages." Astley v. Wel- don, 2 B. & P. 346, per Heath, J.; Boys V. Ancell, 5 Bing. N. C. 390; Reilly v. Jones, 1 Bing. 302; People V. Central Pacific R. Co., 76 Cal. 24, 36. 18 Pac. Rep. 90; Keeble v. Keeble, 85 Ala. 552, 5 So. Rep. 149; Mansur & T. Implement Co. v. Tissier Arms & H. Co.. — Ala. — , 33 So. Rep. 818. 1 Iroquois Furnace Co. v. Wilkin Manuf. Co., 181 111. 582, 54 N. E. Rep. 987: Wilhelm v. Eaves, 21 Ore. 194, 14 L. R. A. 297, 27 Pac. Rep. 1053, citing the text; Keck v. Bieber, 148 Pa. 645, 33 Am. St. 846, 24 Atl. Rep. 170; Wilkinson v. Colley, 164 Pa. 8.5, 30 At). Rep. 286, 26 L. R A. 114; Krutz V. Robbin.s, 12 Wash. 7, 14, 50 Am. St. 871, 40 Pac. Rep. 415; East Moline Co. v. Weir Plow Co., 37 C. x":;. A. 62, 95 Fed. Rep. 250; People v. Central Pacific R Co., 76 Cal. 24, 37, 18 Pac. Rep. 90, quoting the text; Radloff V. Haase, 96 IlL App. 74, quoting the text; El Reno v. Culli- nane, 4 Okl. 457, 46 Pac. Rep. 510; Watts v. Camors, 115 U. S. 353, 6 Sup. Ct. Rep. 91; Bignall v. Gould, 119 U. S. 495, 7 Sup. Ct. Rep. 294; St. Louis, etc. R Co. v. Shoemaker, 27 Kan. 677; Higbie v. Farr, 28 Minn. 439, 10 N. W. Rep. 592; Carter v. Strom, 41 Minn. 522, 43 N. W. Rep. 394; Dickson v. Lough, 18 L. R. Ire. 518; Charles Fruit Co. v. Bond, 26 Fed. Rep. 18; McPherson v. Robert- son, 82 Ala. 459, 2 So. Rep. 333; Moore V. Colt, 127 Pa. 289, 18 Atl. Rep. 8, 14 Am. St. 845; Farrar v. Beeman, 63 Tex. 175; Lansing v. Dodd, 45 N. J. L. 525; Whitfield v. Levy, 35 id. 149; Tayloe v. Sandiford, 7 Wheat. 13; Van Buren v. Digges, 11 How. 461; Carpenter v. Lockhart, 1 Ind. 434; Cook v. Finch, 19 Minn. 407; Lee V. Overstreet, 44 Ga, 507; Owens V. Hodges, 1 McMull. 106; Hammer V. Breidenbach, 31 Mo. 49; Goldsbor- ough V. Baker, 3 Cranch C. C. 48; Nash V. Hermosilla, 9 Cal. 581; Foley V. McKeegan, 4 Iowa, 1, 66 Am. Dec. 107; Martin v. Taylor, 1 Wash. C. C. 1; Henderson v. Cansler, 65 N. C. 542; Lord V. Gaddis, 9 Iowa, 265; Hallock v. Slater, id. 599; Brown v. Bellows, 4 Pick. 179; Moore v. Platte County, 8 Mo. 467; Jackson v. Baker, 2 Edw. Ch. 471; Thoroughgood v. Walker, 2 Jones, 15; Curry v. Larer, 7 Pa. 470. 49 Am. Dec. 486; Fitzpatrick v. Cot- tingham, 14 Wis. 219; Trower v. El- der, 77 111. 452; Hoagland v. Segur, 38 N. J. L. 230; Long v. Towl, 42 Mo. 545, 97 Am. Dec. 355: Gower v. Salt- marsh, 11 Mo. 271: Watts v. Shep- pard, 2 Ala, 425; Cheddick v. Marsh, i § 295.] STIPULATED DAMAGES. 785 A distinction is taken in England where a deposit is made and it is to be forfeited for the breach of a number of stipula- tions of varying importance. Though some of them may be trifling or require the payment of a designated sum of money on a given day, if the contract provides forstipuhited damages it will be carried out. Commenting on this rule Fry, J., said: " In that there seems to me to bo great good sense, and f(jr tliis reason, that if a fund is set apart to meet a particular contin- gency which is described, and that contingency arises, it is difficult to say tliat the stakeholder, or other person having the fund, is not to hand it over at once to the person wlio claims it under the contingency which has happened." ' There are American cases which hold that where the instrument re- fers to a sum deposited as security for performance, the for- feiture, if reasonable in amount, will be enforced as liquidated damages, the intention being evident that the monej'^ shall be paid over upon breach of the contract.'^ But this rule does 21 N. J. L. 463: Niver v. Rossman. 18 Barb. 50; Berry v. Wisdom. 8 Ohio St. 241; Clement v. Cash, 21 N. Y. 253; Chase v. Allen, 13 Gray, 42; Trustees v. Walrath. 27 Mich. 232; Elizabethtown, etc. R. Co. v. Geoghe- gan, 9 Bush, 56; Daily v. Litchfield, 10 Mich. 29; Staples v. Parker, 41 Barb. 648; Magee v. Lavell, L. R. 9 C. P. 107; Shute v. Taylor, 5 Met. 61 Beckham v. Drake, 9 M. & W. 79 Hoag V. McGinnis. 22 Wend. 163 Higginson v. Weld, 14 Gray, 165 Lea V. Whitaker, L. R 8 C. P. 70; In re Newman, 4 Ch. Div. 724; Hooper V. Savannah & M. R. Co.. 69 Ala. 529; Heatwole v. Gorrell, 35 Kan. 692; Bryton v. Marston, 33 111. App. 211. In some of the foregoing cases the rule is quoted as applicable to agree- ments for performance or omission of various acts, in respect to one or more of which the damages on a breach would be readily ascertainable, be- cause the particular case embraced such stipulations; but without any expression to indicate that the de- termination would have been dif- Vol. I — 50 ferent if all the damages had been of an uncertain nature. in Hathaway v. Lynn, 75 Wi.s. 186, 43 N. W. Rep. 956 (see Palmer V. Toms. 96 Wis. 367, 71 N. W. Rep. 654), there was a single stipulation for a series of acts of the same nat- ure from each of which the prom- isee might expect a benefit, but it ■was contingent, and $'200 was .stijiu- lated as damages for violation or disregard of the terms of the agree- ment; it was held that for a partial breach only nominal damages could be recovered in the absence of proof of substantial damages. See Mc- Cullough V. Manning, 132 Pa. 43, 18 Atl. Rep. 1080. iWallis V. Smith, 21 Ch. Div. 243, 250, 258; Hinton v. Sparkes, L. R 3 C. P. 161; Lea v. Whitaker, 8 id. 70; Magee v. Lavell, 9 id. 107. 2 San ford v. First Nat. Bank, 04 Iowa. 680, 63 N. W. Rep. 459; Max- well V. Allen. 78 Me. 33, 57 Am. Rep. 783, 2 Atl. Rep. 386; Sanders v. Carter, 91 Ga. 450, 17 S. E Rep. 345. 32. Y86 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 295. not extend to the case of a deposit made by a bidder where his bid does not refer to it as either liquidated damages or a pen- alty, the proposals providing simply that if the successful bid- ders enter into contract with bond without delay, their checks will be returned. The only implication from such language is that a failure to enter into bond shall entitle the party invit- ing the bids to so much of the deposit as will be a just com- pensation for any loss that may result from the failure of the bidder to furnish the bond. " A failure to give the bond is a breach of the contract and the damages which would result from that breach would be the difference the city paid, if any- thing, in excess of the amount of the unexecuted bid, and also the expense of a re-advertisement for new bids. These ele- ments of damage are neither uncertain nor difficult of ascer- tainment."^ This view is in accord with a New York case in which a tenant deposited with the landlord a sum of money which the lease provided should be held as security for the tenant's performance of his covenants, the same to be applied on payment of rent for the last three months of the term if the lease was not sooner terminated by the tenant's failure to perform, in which event the money was to be forfeited and become the landlord's. After default in paying one month's rent the tenant was dispossessed, and the landlord refused to pay any part of the deposit. The tenant was entitled to re- cover it except so much as was necessary to pay the one month's rent.^ Where the agreement is that the money de- 1 Willson V. Baltimore, 83 Md, 202, covenants and held as indemnity for 213, 34 Atl. Rep. 774. such loss as should arise from Vjreach. 2 Chaude v. Shepard, 122 N. Y. 397, And in that view the plaintiff was 25 N. E. Rep. 358. The opinion con- entitled to the surplus remaining tains this: In view of the intention after such claim of the defendant of the parties as derived from the was satisfied. Scott v. Montells, 109 entire provision in respect to this N. Y. 1, 15 N. E. Rep. 729. It is, deposit, there was nothing within however, urged for the defendant their contemplation in its purpose, that, as the money was actually in the event of the premature ter- placed in the possession of the do- mination of their relation given by fendant pursuant to the contract at the lease, other than such damages the time of the execution of the as should result from the default of lease, the disposition of it is governed the plaintiff. This is evident from by a different rule than that which the fact that the deposit was made would have been applicable if the as security for performance of the claim to it had been founded upon § 295.] STIPULATED DAMAGES. 787 posited may be retained by the landlord as liquidated damages if the tenant is dispossessed, witliout any rebate or allowance, the rights of the parties are llxed by it.' But the sum paid and the value of the property exercise a potent influence in the judicial mind to the same extent as where the stipulation is not accompanied by a deposit or provision is not made that the sum paid as part of the purchase price shall become the property of the vendor if the vendee fails to perform. Where a contract for the purchase of oranges upon the trees provided for the payment of a lump sum, fifteen hundred dollars of which was paid at the time it was made, and that if the vendee did not comply with its conditions such payment was to be forfeited, the court refused to treat that sum as liquidated damages.^ There is one class of contracts in which the general con- struction of stipulations liquidating damages may at first sight seem to be in conflict with the doctrine stated: contracts of a negative character, requiring a party to abstain continuously from doing certain acts, as to discontinue a nuisance^ or to secure enjoyment of the good will in a certain trade or busi- ness. A contract of the latter description contains a guaranty against competition from the promisor for a certain time and the executory agreement of the continued to the end of the term, plaintiff to pay it. That would have In that event only, it was to be ap- been so if the money had been paid plied in payment of tlie rent for the upon the contract by way of partial three months ending with its close, performance by the plaintiff. In such The provision relating to the deposit case the party so paying, and after- and expressive of forfeiture cannot, wards by reason of his default is de- therefore, be treated as indicative of prived of or denied the benefits of intention of the parties to give it his contract, cannot recover the the character of liquidated damages, money so paid by him upon it. Page but rather that it should have the V. McDonnell, 55 N. Y. 299; Law- nature of a penalty in the event rence V. Miller, 86 N. Y. 131; Havens there mentioned. Carson v, Ar- V. Patterson, 43 N. Y. 218. And vantes, 10 Colo. App. 382. 50 Pac. Rep. tliese views are not inconsistent 1080, is to the same effect, with the rule applied to the facts in • Longobardi v. Yuliano. 33 N. Y. the cases of Ockenden v. Henly, Misc. 472, 67 N. Y. Su|)p. 902. Ellis, Bl. & E. 485, and Hinton v. 2 Nichols v. Haines, 30 C. C. A. 235, Sparkes, 3 C. P. Div. 161. There is no 98 Fed. Rep. 692. provision in the lease in question 3 Grasselli v. Lowden, 11 Ohio St that the money deposited should be 849; not to poach, Roy v. Duke of treated as a payment, or to make it Beaufort, 2 Atk. 190. such, unless the plaintiffs tenancy 788 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 295. at a specified place, or in some limited district. He agrees not to engage in that business for such time within that place, and if he does, or violates the contract, or fails to fulfill it, he will pay a certain sura. In general, a single violation, though [526] it be accomplished in one day, and is confined to a small part of the district, subjects him to liability for the stated sum, and a repetition of such acts, or a failure to abstain at all, may subject him to no greater liability.' These agree- ments are in general such as to require one continuous act of abstention, and the consideration and the amount required to be paid evince the intention that such stipulated sum be paid for a minimum of violation. The agreement may be so framed that there may be repeated recoveries for successive infrac- tions, or so that only one infraction is possible.- 1 See Hathaway v. Lynn, 75 Wis. 186, 43 N. W. Rep. 956. 6 L. R. A. 551. 2 Dakin v. Williams, 17 Wend. 447; Dunlop V. Gregory, 10 N. Y. 241, 61 Am. Dec. 746; Mott v. Mott. 11 Barb. 127; Streeter v. Rush, 25 Cal. 67; Duffy v. Shockey, 11 Ind. 70, 71 Am. Dec. 348; Spicer v. Hoop, 51 Ind. 365; Jaquith v. Hudson, 5 Mich. 123; Mercer v. Irving, El., B. & E. 563; Reynolds v. Bridge, 6 El. & B. 528; Sainter v. Ferguson. 7 C. B. 716; Muse V. Swayne, 2 Lea, 251, 31 Am. Rep. 607: Galsworthy v. Strutt, 1 Ex. 659; Rawlinson v. Clarke, 14 M. & W. 187. It is held in Kansas that contracts not to engage in business must be sued upon as breaches thereof occur. Heatwole v. Gorrell, 35 Kan. 692. But this is not in accord with the weight of authority. Streeter v. Rush, 25 Cal. 67; Gushing v. Drew, 97 Mass. 445; Grasselli v. Lowden, 11 Ohio St. 349; Moore v. Colt, 127 Pa, 289, 18 Atl. Rep. 8 14 Am. St. 845. See Leary v. Laflin. 101 Mass. 334. Under a statute of New York a contract was authorized to be made with certain officers for the publica- tion of the reports of the decisions of the court of appeals. The officers were given power to impose terms beneficial to the public on the con- tracting publisher, and to make pro- vision in the contract that a party injured by the refusal of the con- tractor to sell and deliver as pre- scribed in the contract s5»ould be en- titled to recover damages- and might fix a sum as liquidated damages. A contract so entered into required the contractor to furnish, at the contract price, any volume published under it to any other law-book seller in the city of New York or Albany apply- ing therefor, "in quantities not ex- ceeding one hundred copies to each applicant," unless the contractor choose to deliver more. The con- tract also provided that for any fail- ure on the part of the contractor '• to keep on sale, furnish and deliver the volumes, or any of them, as agreed, he shall forfeit and pay . . . the sum of $100, hereby fixed and agreed upon, not as penalty, but as liqui dated damages," to be sued for and recovered by the persons aggrieved The plaintiff, a bookseller, applied on six different occasions for a nuns ber of copies required by him in bia business, of certam volumes puK lished under the contract, tehJering the contract price, which aefendant § 295.] STIPULATED DAMAGES. 7S9 Where the stated sum obviously and grossly exceeds [527] any just measure of compensation there is the same recognized discretion in such cases as in others to declare it a penalty.' refused to deliver. In an action on the contract it was held a valid stipula- tion of damages, not a penalty, and that the plaintiff was entitled to re- cover the damages for each refusal. Miller. J., delivering the opinion of the court, treats the question as one depending on the intention of the parties, ascertained from the lan- guage of the contract and from the nature of the surrounding circum- stances of the case. Referring to the case he says: "The breach provided for was a single one — a failure to keep on .sale, furnish and deliver the volumes named at a price fixed. The agreement expressly provides that the sum named is fixed and agreed upon 'not as a penalty.' The failure to sell and deliver embraced not only a single volume, but might be one hundred volumes at one time. The damages for a failure to deliver a single volume might be very small, while for a larger number it would be far greater; and, in case of a bookseller, disposing of them in the course of his trade, might be beyond the amount actually fixed. The damages for a single breach were also uncertain, and could not be determined without extrinsic evi- dence, and without some embarrass- ment. The mere loss of profits on a volume to a bookseller might also be of but trifling amount when com- pared with the injury to his trade by being unable to furnish to his customers volumes of the reports as required. Under the circumstances it is easy to see that there would be considerable difficulty in making proof of the actual damages in- curred. In view of the facts, al- though the question is bj' no means free from embarrassment, it is, per- haps, a fair inference that the parties actually intended to guard against these difficulties by fixing tlieamount named in the contract as liquidated damages. As the damages wlnCh might possibly be incurred by a fail- ure to supply a larger number of copies provided for by the contract miglit be greater, we think the amount was not unreasonable, or grossly disproportionate to the prob- able estimate of actual damagea" Little V. Banks, 83 N. Y. 25a 1 Wheatland v. Taylor, 29 Hun, 70; Burrill v. Daggett, 77 Me. 545; Smith V. Wedgwood, 74 id. 457; Stearns v. Barrett, 1 Pick. 448, 11 Am. Dec. 223; Grant V. Pratt, 52 App. Div. 540, 549, 65 N. Y. Supp. 486. In Perkins v. Lyman, 9 Mass. 522, 11 id. 76, 6 Am. Dec. 158, the defend- ant covenanted for a valuable con- sideration that he would not be di- rectly or indirectly interested in any voyage to the northwest coast of America or in any traffic with the natives of that coast for seven years, in the penal sum of $8,000. It was held a violation of such covenant to own and fit a vessel for such voyage, although before her departure the covenantor divested himself of ail in<^^erest in the vessel and cargo; but also held that the §8.000 was penalty. "The question whether a sum of money mentioned in an agreement shall be considered as a penalty and so subject to the chancery powers of this court or as damages liquidated by the parties is always a question of con- struction, on which, as in other cases where a question of the meaning of the parties in a contract, provable in a written instrument, arises, the court may take some aid to them- selves from circumstances extrane- Y90 CONVENTIONAL LIQUIDATIONS AND DISCHARGES. [§ 296. § 296. Effect of part performance accepted where dam- [528] ages liquidated. For the same reason that one sum cannot consistently be compensation alike for a total and partial breach, a stated sura made payable for the former can- not by construction be applied to any infraction after accept- ance of part performance.^ In case of such a stipulation the ous to the writing. In order to de- termine upon the words used there may be an inquiry into the subject- matter of the contract, the situation of the parties, the usages to which they may be understood to refer, as well as to other facts and circum- stances 'of their conduct; although their words are to be taken as proved by the writing exclusively." The court considered there was nothing in the transaction and subject-mat- ter to indicate whether the sum stated was penalty or liquidated dam- ages. It might be either consistently with the object of the contract. But the court say: " If the sum of $8,000, mentioned in the agreement, is to be treated as liquidated damages, then for one instance, in which the con- tract should be broken, and for a thousand in which the defendant should interfere in the trade contem- plated by the parties to be secured to the plaintiffs for seven years, ex- clusively of him and of all acting under him, the same damages, the amount of demand, would be recov- ered, and having been once paid, if demanded as a penalty, there would be an end of the contract: but if demanded as damages, then, it seems. thedemand might be repeated. Examined in this view we see noth- ing which gives this contract any other determinate meaning than that of penalty. If there is nothing to prevent the plaintiffs, in case the defendant should have injured them in the breach of his contract to a greater amount than $8,000 from re- covering upon his covenant, and in that form of action, the extent of the damage actually sustained, al- though greatly exceeding the sum mentioned, it would be a severe con- struction, indeed, which should con siderhim liable to that amount upon one breach, however slight the injury and loss may have been. . . . He binds himself in the sum of $8,000 for his faithfully and strictly adhering to this contract. It is not said, if he does so, contrary to his agreement, then he will pay that sum as a satis- faction. Nor is there anything ex- pressed which would conclude the plaintiffs, unless it be their form of action (debt), when the amount of damages should exceed $8,000, from demanding to the extent of their loss." 1 Hoagland v. Segur, 38 N. J. L. 230; Shute V. Taylor, 5 Met. 61; Taylor v. The Marcella, 1 Woods, 302; Watts v. Sheppard, 2 Ala. 425; Berry v. Wisdom, 3 Ohio St. 241; Lampman V. Cochran, 16 N. Y. 275, per Shank- land, J.; Sheill v. McNitt. 9 Paige, 101; Mundy v. Culver, 18 Barb. 336; Smith Granite Co. v. Newall. 22 R. I. 295, 47 Atl. Rep. 597. The text is approved in Wibaux v. Grmnell Live Stock Co., 9 Mont. 154, 165, 22 Pac. Rep. 493. In the last case the con- tract was for the sale and purchase of cattle, and stipulated that a sum should be paid if the vendor failed to deliver the entire number called for; no provision was made for the delivery of a less number. Less than the whole M-ere delivered and accepted. As a result the agreement for stipulated damages was con- verted into one in the nature of a penalty. § 297.] STIPULATED DAMAGES 701 Stated sum is only recoverable upon the happening of the very event mentioned in the contract. If a partial breach occurs it has sometimes been said the stated sum is as to tliat hreacli only penalty, and damages are given on proof without regard to it.^ In other instances it has been held that thf (himages for a partial breach are a constituent of the sum stipulated ior an entire failure to perform. Thus, where there were liqui- dated damages for a failure to convey land, and a part only of it was conveyed, and a failure as to the residue, the damage allowed was a sum which bore the same ratio to the stipulated sum that the value of the land not conveyed bore to that of the whole.2 If the owner of the building, with the consent of the contractor, who has bound himself to pay $10 per day as liquidated damages for delay in completing it, occupies a part of the building after the time stipulated for its completion, but before it is finished, the liability for the stipulated sum termi- nates with such occupancy; thereafter the contractor is only liable for the actual damages.' § 297. Liquidated damages are in lieu of perlonuance. It has been held that in all cases where a party relies [529] on the payment of liquidated damages it must clearly appear from the contract that they are to be paid and received in lieu of performance.* Where the sti])ulated sum covers the loss of the whole contract, and does not apply where there is merel}'- 1 Wheatland V. Taylor, 29 Hun, 70; liquidated as to that covenant it is Shute V. Taylor, 5 Met. 61. not as to the other. Lansing v, 2 Watts V. Sheppard, 2 Ala. 425. Dodd, 45 N. J. L. 525; Whitfield v. See Chase v. Allen, 13 Gray, 42. Levy. 35 id. 149, 15G; Laurea v. Ber- Tlie sum named must be regarded nauer. 33 Hun, 307. as liquidated as to all the provisions If tlie requests and acts of one in to which it shall extend, or it will whose favor damages are stipulated not be so regarded as to any. It are responsible for part of tiie delay cannot be liquidated damages in one in the execution of a building con- case and not in the other. If the tract, there cannot be an apportion- contract applies to the covenant of ment of the stipulated sum. Willia one party to convey, and to that of v. Webster, 1 App. Div. 301, 37 N. Y. the other party to pay the consider- Supp. 354. ation money on the delivery of the ' Collier v. Betterton, 87 Tex. 440, deed, the measure of damages in one 29 S. W. Rep. 467. case is the unpaid purcliase-money,