J. G. (Jabez Gridley) Sutherland.

A treatise of the law of damages, embracing an elementary exposition of the law, and also its application to particular subjects of contract and tort (Volume 2) online

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The

Lawyers ^^^

OoPERAJjyc Puir

RoCHtSTIB, N.Y.
tttwronx. cmicaoc




THE LIBRARY

OF

THE UNIVERSITY

OF CALIFORNIA

LOS ANGELES

SCHOOL OF LAW



A TREATISE



ON THE



LAW OF DAMAGES



EMBRACING



AN ELEMENTARY EXPOSITION OF TUE LAW



AND ALSO



ITS APPLICATION TO PARTICULAR SUBJECTS OF
CONTRACT AND TORT



J. G. SUTHERLAND

Author or a Treatise on "Statutes and Statutory Construction"



THIRD EDITION

BY

JOHN E. BERRYMAN

Editor of the Second Edition of this Work; Author of a
*■* 1 > i • Law <>k Insi'uance; " One of thm

Brnnu and Bditobb of thi "Wuaomni

Statutes ok 18'JH," etc., etc.



Vol. II



CHICAG
OALLAGHAN AND OOMPANY
L903



T
^3



Copyright, 1903.
CALLAGHAN AND COMPANY.



STATE JOURNAL PRINTING COMPANY,

Printers and Stereotvpers,

madison, wis.



TABLE OF CONTENTS.



VOL. 2.



PART I.— CONTINUED.



CHAPTER VIII.— INTEREST.
References are to sections.

Definitions and general view 800

Interest by the early common law 301

Interest in England legalized by statute 302

Interest at common law in America 80S

A greements for interest 304

Section 1.— General Promise to Pay Money "With Interest."

Rule of construction 805

Law or custom fixes the rate 806

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

A _ r reements for a different rate after debt due 311. 812

Section 3.— Agreements for More than Legal Rate Before Maturity.

Kffect of usury found. . .. 818

Who may take advantage of usury 314

When contracts not void for usury 816

• eries under usury statutes 316. 317

Section 4.— Agreements for More than Legal Rate After Matiim i y.

Not usury, but penalty 818

Same .subject; when debtor relieved in Illinois 819

Section BL— Interest as Comit.nsation.

» of section

• not absolute

■ to pay interest on accounts

inreasonably and vcxationsly delayed

Quantum ttu rwu claim to interest

Allowed on money loaned

Allow. -i on money paid

■mi, in. i >m claim to lnt< rest between vendor and purchaser . .

: from time when money ought to be paid

No intere I on penaltie orstal utory Liability for riots

When silo*

rti tu.-ri t



rival of judgment bj



740021



IV TABLE OF CONTENTS.

ranees are to sections.

Interest in condemnation proceedings 830

Interest on taxes and license fees 337

In im i its liable for 838

Allowed on snms due for rent 839

Interest on damages for infringing patents 840

Right to interest as affected by the marital relation 841

Inters t as between partners 84?

ikholaers' statutory liability 843

Allowed <m annuities and legacies. 344

Interest on advancements 845

1 >u money due on policy of insurance 846

Nol Allowed on unliquidated demands 347, :; i ^

interest on accounts 849,850

When demand necessary 351

When allowed on money bad and received 352

When allowed against agents, trustees and officers 353

' >n money obtains I by extortion or fraud 854

Interest in actions for torts. 855

Section 8.— The Law of What Place and Time Governs.

Importance of subject 856

General rule as to contracts 357

Rule as to notes and bills , 358

Bonds to the United states 859

Between parties in different states 360, 301

Where usury is involved 862-365

The law of what place governs the rate as damages 366

ition and proof of foreign law 367

: 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 372

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 of Interest.

M:- cllaneous cases 380

Where payments prevented by legal process ... 381

Where war prevents payment. 382

Tender stops interest 383

r not allowed for unliquidated demands 384

When tender may be made 385, 386

Section 10.— Pleading.

How interest claimea in pleading 387

Section 11. — Interest During Pr >ceedings to Collect a Debt.

Interest on verdict before judgment 388

( )n judgments pending review 389



TABLE OF CONTENTS. V

References are to sections.

CHAPTER IX.— EXEMPLARY DAMAGES*

Compensation for wrongs done with bad motive 800

Exemplary damages: difference of views; when allowed 391-3'.>:$

Malice in law and malice in fact 89 1

Restriction and denial of exemplary damages liur>

Same subject; New Hampshire rule 396

Same subject; Massachusetts rule 897

Same subject; Nebraska rule 898

Same subject; Michigan rule 899

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 408

Enhancement and mitigation of exemplary damages 404. 406

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 412

CHAPTER X.— PLEADING AND PROCEDURE

Section 1. — Pleading.

Plaintiff must state a case which entitles him to damages 4l.'<

The ad damnum 411

Demand of damages in code complaint 415

Eil~eL-t of not answering allegation of damages 4 lt>

Ad damnum limits recovery; erroneous claim of damages 417

What provable under general allegation of damage. 418

Special damages must be alleged 410

Same subject; illustrations 420. 431

Not necessary to allege matter of aggravation 432

Blatter of aggravation not traversable 428

Not necessary to itemize damages 4'J \

Matutory damages must be specially claimed 425

Pleading in actions to recover for death 436

Section 2. — Assessment of Damages.

Writ of inquiry

When assessed without a jury 488

What a default or demurrer admits

Defendant may olfer evidence in reduction of damages

Not allow i- 1 to disprove cause of action i;ii

Jury tarn quam

Dew jury may be called

ition of error in as essment 484

Hon 8. — Paying Mokby Into Coi

Admits cause of action to amount paid

Payment! to plaintiff after suit

Si.' i

If oat be adapted to damages claimed ■ ••



lnt.:n lm< • • defendant for holding 1 ....

• plaint ilf

prove pecuniary items; opinl 441

Opinions upon irnon experience and observation
aotion and u I'm. .'■ii "i opinions.



Vi TABLE OF CONTENTS.

References are to sections.

' Opinions as to amount of damages ... 444

Proof of value 445

Same subject; opinions 44(5

s ime BObieot ; actual sales 447

Same aubieot; elements of value 448

Proof of tho value of dogs 449

Witnesses to valuo 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

•dve or insufficient verdicts 459, 40()

Verdicts must be certain 461

( toners! verdicts on several counts 462

Where there are several plaintiffs 463

Double and treble damages 464

Judgment.. 465

Judgment must follow verdict 4W>

I udgmeuts 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



PART II— APPLICATION OF THE LAW OF DAM-
AGES TO YAEIOUS CONTRACTS AND WRONGS.



CHAPTER XL— BONDS AND PENAL OBLIGATION&

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

A mer ican statutes and practice 474

Statutory bonds 475

Impossible condition 47H

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 between sets of sureties 480, 481

Neglect of duty by other officers 482

Section 3. — Other Official Bonds.

Sr-ope of section L 483

Right of action against officers 484

ruction of bonds 485

of redress for official dereliction 486

What private injuries covered by official bonds 487

Measure of damages against sureties 488

Measure of damages against officers for neglect of duty 489-4'.)2



TABLE OF CONTENTS. VU

References are to sections.

Section 4. — Probate Bonds.

Bonds for ad ministration of decedents' estates 403

How such bonds made; what recoveries may be bad 4U4

Actions on bonds as to sureties; liability for executor's debt to estate 495

Guardian's bond; sureties' liabilities 498

Mitigation of damages 497

Liability as between sets of sureties 498

Section 5.— Replevin Bonds.

Their original conditions

The condition for return of property

The condition required by modern statutes 501

-ment of damages in suit on bond 503

When sureties not liable for judgment in replevin suit

Evidence of the value

Damages recoverable ' '" j

Effect of the judgment in replevin suit

What may be shown in defense

When plaintiff recovers as special owner; effect of change in statute
Bond by defendant to retain the property ">09

Section 6.— Attachment and Forthcoming Bonds.

Attachment bonds; when cause of action accrues 510

Who may sue •• |jll

I damages recoverable 512, M.{

Exemplary damages 514

What may be shown in defense j'-|

s andexpenses; attorneys' fees; loss of time 516

Forthcoming bonds 517

Same subject; measure of damages 518

I onditiona to pay the judgment 519

Section 7. — Injunction Bonds.

of obligation 588

1 'ower of a court of equity

i tion, when it arises; who may sue

Mode of assessing damages . ■

and expenses; attorneys' fees 524.5'i5

Damages from restraint of injunction •"■

What facta no d •• •■

What facts may he shown in defense

Section 8.— Appeal and Supersedeas Boms.

conditions; liability of sureties

Supei »nds in federal supreme court

Sa me subject; liability if judgraenl is in part for money or in n
Liabi arl ii ]d in pari for money or in n

I nsta i -iiit j on more specifics conditioi

[nten I on appeal

cn M'Ti i: xi!. NOTES \M> BILLS

I 'romis ory not



Want or failun

Partial want of con ideration





; ion shown by



Vlll TABLE OK CONTENTS.

References are to sections.

Liability of drawer and indorser for principal sum 555

Interest on notes and bills 556

Interest as damn ea to be paid by maker or acceptor 557

Liability of drawer <>r indorser for interest as damages 558

Nuti's and bills are by definition payable only in money , 559

[change and damages on bills dishonored 5G0 561

When re-exchange on damages not recoverable 562

By what law liabilities governed 563

Stipulations for attorney fees and costs 564

Value of note? aod lulls 0Uf>

CHAPTER XI1L— VENDOR AND PURCHASER.

Damages for breach of contracts for sale of realty 5G6

Section 1.— Vendor against Purchaser.

Seller entitled to purchase price and interest; abatement of price. . . HOT

The lepal remedy 568

Measure of damages. 509, 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

I 'urchaser cannot assail validity of contract 574

Recovery when contract does not fix price ... 575

i Jonveyance in consideration of non-pecuniary covenants 576

Interest on purchase-money 577

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 Flureau 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 in 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 593

Same subject; actual consideration may he proved 594

Same subject: when not measured by the consideration 595

Same subject; effect of recovery on a total breach 590

Sun* 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 605

Same subject; where property is the consideration 606

subject; in England and Canada 607

Same subject; ru'e in some of the older states 608

ect; in case of partial breach, and where lien is satisfied. . 60 '

Same subject; where covenantee has extinguished adverse title 610



TABLE OF CONTENTS. ix

References are to sections.

Mitigation of damages 611

Where defect is a dower right 612

By and against whom reco\ ery may be had 618

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 617-611)

Section 5. — Covenants against Incumbrances.

What are incumbrances 620

A covenant in present i; effect of incumbrance on executory contract 621

The rule of damages 602. 623

The Canadian and English rule of damages

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

Where covenant is connected with that for quiet enjoyment . . 030

Covenant to pay incumbrances 631

Section 6. — Defenses and Cross-claims against Purchase-money.

Diversity of decisions 632

The New York rule

Alabama rule 63 :

Mississippi rule.

Rule in various other states

South Carolina and Virginia rule

Texas and Kentucky rule 638

Pennsylvania rule

Defenses under the code 640

Defenses in equity 64 1



THE LAW OF DAMAGES.



PART I (CONTINUED).



AN ELEMENTARY EXPOSITION OF THE SUBJECT

(CONTINUED).



CHAPTER VIIL

INTEREST.

300. Definitions and general view.

801. Interest by the early common law.

302. Interest in England legalized by statute.

303. Interest at common law in America.

304. Agreements for interest.

Section t

GENERAL PROMISE TO PAY MONEY "WITH INTEREST. *

805. Rule of construction.

300. Law or custom fixes the rata

807. Legal or stipulated rate applies from date.

308, 309. Whether same rate will apply after debt due.

Section 2,

agreements for interest "until paiu"

810. Agreements for interest from date until debt paid
311, 312. Agreements for a different rate after debt due.

Section 3.
achkkmknts i ml: hob! than i.hiai. kate bekohe matubjtt.

81ft Effect Of usury found.

.'ill. Who may take advantage of a

lift Wln-n oonl rut

816, 817. B niurj i.it utes.



798 INTEREST.

Section 4.
agreements for more than legal rate after maturity.

§ 318. Not usury, but penalty.

819. Same subject; when debtor relieved in Illinois.

Section 5.
interest as compensation,

820. Scope of section.
881. Right not absolute.

322. Tacit agreements to pay interest on accounts.

823. Interest where payment unreasonably and vexatiously delayed.

824. Quantum meruit claim to intorest.

825. Allowed on money loaned.
820, 327. Allowed on money paid.

328. Quantum meruit claim to interest between vendor and purchaser.
829. Interest allowed from time when money ought to be paid.
330. No interest on penalties nor statutory liability for riots.
831. When allowed on penalty of bonds.

332. Interest against government.

333, 334. Judgments bear interest.

335. Not allowed on revival of judgment by scire facias.
330. Interest in condemnation proceedings.

337. Interest on taxes and license feea

338. Infants liable for.

339. Allowed on sums due for rent.

340. Interest on damages for infringing patents.

841. Right to interest as affected by the marital relation,

342. Interest as between partners.

843. Interest on stockholders' statutory liability.

344. Allowed on annuities and legacies.

345. Interest on advancements.

340. On money due on policy of insurance.
347, 348. Not allowed on unliquidated demands,
349, 350. Interest on accounts.

351. When demand necessary.

352. When allowed on money had and received.

353. When allowed against agents, trustees and officers.

354. On money obtained by extortion or fraud.

355. Interest in actions for torts.

Section 0.
the law of what place and time governs.

356. Importance of subject.

357. General rule as to contracts,

358. Rule as to notes and bills.

359. Bonds to the United States.

880, 8G1. Between parties in different states.
362-305. Where usury is involved.



§ 300.] INTEREST. 799

§ 366. The law of what place governs the rate as damages.
367. Allegation and proof of foreign law.
368-370. Effect of change in law of place of contract.

Section 7.
interest as an incident to the principal.

371. Interest due by agreement a debt.

372. Interest as damages accessory to principal

Section 8.
interest upon interest.

373. Compound interest.

374. Instances of interest on interest.
37o. Interest on instalments of interest.

376. Separate agreements for interest.

377. Periodical interest after maturity of debt

378. 379. Computation, application and effect of partial payments.

Section 9.
suspension of interest.
3^0 Miscellaneous cases.

381. Where payments prevented by legal process.

382. Where war prevents payment.
3-3. Tender stops interest.

384 Tender not allowed for unliquidated demands.
38"), 386. When tender may be made.

Section 10.
pleading.
387. How interest claimed in pleading.

Section 11.

interest during proceedings to collect a debt.

[nteresl on verdict before judgment
. On judgments pending review.

Interest as an clement of damage lias already been sev- \?>'M )
eral times mentioned, ;m<l will frequently be considered in the
chapters which treat of Bpeoial branches of the law of dam-
Bat us such and otherwise it is an elementary topic do-
ag more particular treatment, and this seems the most
appropriate place to introduce it.

:{<><>. Definitions and general rlew, [nterest is the oom<
ition fixed by agreement or allowed by law t<>v the
or detention of moneys, or for the loss thereof to the party



E



IN I EKK8T.



L§ 300.



entitled to sooh ase. It is computed at a certain rate per
oentum bv the year, unless stipulated for upon some other
period of time. In ;t strict sense, it is the compensation agreed
to 1"' paid for the use of money while the debtor has a right
to retain the principal, and during a stipulated period of credit;
in other words, before the principal is due and payable. A
creditor is not entitled to be paid for the use of money owing
to li i in before it is due unless by agreement, express or im-
plied. 1 And this should be for the prospective use of money;
otherwise it has been held not to be strictly interest. 2 But
use may be a valid consideration for a promise to pay
money by way of compensation. a When expressly stipulated
[532] for to accrue during the period of forbearance it becomes,
as it accrues, a positive addition to the principal, and is thence
a distinct and integral part of the debt, 4 payable, unless other-
wise agreed, when the principal is due, 5 and in the same funds. 8



1 Minard v. Beans. 64 Pa. 411;
Thorndike v. United States, 2 Mason,
1: Beardslee v. Horton, 3 Mich. 560;
Robinson v. Bland, 2 Burr. 1077;
Rensselaer Glass Factory v. Reid, 5
Cow. 587; Robinson's Adm'r v. Brock,
1 Hen. & M. 211; Wiiite v. Walker,
31 111. 422; Pollard v. Yoder, 2 A. K.
Marsh. 264; Brainerd v. Champlain
Transportation Co., 29 Vt. 154; Evans
v. Beck with, 37 Vt. 285; Tanner v.
Dundee Land Investment Co., 8
Saxwer. 187. 12 Fed. Rep. 648.

2 Daniels v. Wilson. 21 Minn. 530.
Tii'' action was on a note given fora
sum agreed upon for interest after
the time for which it was computed
bad 'lapsed, ami at a rate in excess
of that antecedently specified in the
conl raot for the principal. The court
say: " A contr ict to pay interest is a
contract to pay a consideration for
the future use of money. The con-
tract in this case was a contract to
pay a consideration for the past use
of money, and, therefore, not a con-
tract to pay interest in any proper or
legal sense." Adams v. Ilastings, 6
Cal. 126. 65 Am. Dec. 496.



3 Wilcox v. Howland, 23 Pick. 167.

4 Southern Central R. Co. v. Mora-
via, 61 Barb. 181; West Branch Bank
v.Chester, 11 Pa 282, 51 Am. Dec.
547; Foster v. Harris, 10 Pa. 457.

Interest is also an incident of the
principal, in analogy to the doctrine
of accession, in cases of breach of
trust. Stickney v. Parmenter, 74 Vt.
5S, 52 Atl. Rep. 73 (sub nom. John-
son's Adm'r v. Parmenter).

8 Tanner v. Dundee Land Invest-
ment Co., 8 Sawyer, 187, 12 Fed. Rep.
648; Koehringer v. Muemminghoff,
60 Mo. 406; Ramsdell v. Hulett, 50
Kan. 440, 31 Pac. Rep. 1092; Motsin-
ger v. Miller, 59 Kan. 573, 53 Pac.
Rep. 869: Saunders v. McCarthy, 8
Allen, 42; Cooper's Adm'r v. Wright,
23 N. J. L 200.

« McCalla v. Ely. 64 Pa. 254.

It was expressed in a note, payable
subject to collateral agreements,
that interest was payable semi-an-
nually. Such agreements gave the
creditor, if the note was not paid
when due, the right to look to cer-
tain securities for its payment, and
waived his right to any other rem-



§ 300.]



INTEREST.



801



As such it has a substantive character. The creditor is not
obliged to forego what is unearned of the interest for an
agreed period on a tender of the principal. The borrower
or debtor cannot, by tendering the money to pay the debt be-
fore it is due, stop the interest; for the time of payment is
part of the contract, and is fixed for the mutual benefit and
convenience of the parties. 1 After it accrues and is due it



edy. By failing to collect the semi-
annual interest it became a part of
the principal, and subject to the con-
ditions in such agreements. Reed v.
Cassatt, 153 Pa. 156, 25 Atl. Rep. 1074.

1 1 >.ivis v. Yuba County, 75 Cal. 452.
13 Pac, Rep. 874, 17 id. 533; Ellis v.
Craig, 7 Johns. Ch. 7.

In the last case interest was pay-
able at stated periods before the
principal was due. This circum-
stance appears, in some measure, to
have influenced the decision, but the
general course of reasoning, as well
as the force of the authorities cited,
are in favor of the broader doctrine
stated in the text. The chancellor
said: "There can be no doubt that
the parties may, by express stipula-
tion, agree that a debt shall not be
paid before a given time, and until
that time arrives the debtor cannot
tender the debt and stop interest.
The quest if m then occurs, what was
the intention of the parties in this
ease, upon a fair and sound interpre-
tation of the terms ot the condition
of this bond ? The time of payment
was made an essential part of the
contract for the loan of the money.
The terms of this bond were equally
: i eement of both part ies, and in

whicb tii<-ir mutual Interest and con-
venience are presumed to have b< en
; b i. a prolonged t ime of
payment, when money Is loane I
upon Intere I p riodically,

Is not always given for the acoommo
«lii i> >n of i be lebtor; I be I me is In-
tended to meet the will and wl bes
■ , parti . nndef I be os •■ of

\'..i_ j| ,1



persons who are unable to earn
money by their own exertions, or to
employ themselves profitably in busi-
ness, such as aged and infirm persons,
women and infants, and als i in the
case of literary and charitable insti-
tutions, a safe investment of money
with a prolonged time of payment
of the principal and short times of
payment of the interest is most
likely to meet their wants and pro-
mote their welfare. The intei
money is liable to fluctuation, and
money itself is a marketable com-



Online LibraryJ. G. (Jabez Gridley) SutherlandA treatise of the law of damages, embracing an elementary exposition of the law, and also its application to particular subjects of contract and tort (Volume 2) → online text (page 1 of 116)