J. G. (Jabez Gridley) Sutherland.

A treatise on the law of damages : embracing an elementary exposition of the law, and also its application to particular subjects of contract and tort (Volume 3) online

. (page 89 of 132)
Online LibraryJ. G. (Jabez Gridley) SutherlandA treatise on the law of damages : embracing an elementary exposition of the law, and also its application to particular subjects of contract and tort (Volume 3) → online text (page 89 of 132)
Font size
QR-code for this ebook

that for that reason they had con-
tracted with other parties to do the
work from July 1, prox., and that
he must discontinue operations un-
der the contract at that time. His
contract for carrying the mail ex-
pired at the same date. Another
party secured it for the next four
years; and he lost the express busi-
ness because by the rule of the ex-
press company tliat was always
given to those who had the mail con-
tract, to whom also the defendants,
under the contract bearing a general
similarity to the one previously
made with the plaintiff, gave the

exclusive right of ticketing between
Dexter and Greenville. * * ♦ The
defendants claimed that the measure
of damages was the difference be-
tween what plaintiff was to receive,
wliich was $2.50 each for carrying
the through passengers, and what it
would actually or probably cost to
carry each passenger, and this with-
out reference to any other contracts
or any other business. The judge
ruled pro forma that the contract
did cover the distance between
Greenville and Kineo, and instructed
the jury to find specially what
amount of damage, if any, the plain-
tiff had sustained between Green-
ville and Kineo, if the defendants
had wrongfully and without suffi-
cient cause terminated the contract,
and include it with the other dam-
ages in their general verdict." The
trial court instructed the jury as to
the second position : "What was the
plaintiff to do? Of what was the
plaintiff deprived? The plaintiff is
deprived of the exclusive right of
ticketing between Dexter and Green-
ville for the term of four years from
July 1, 1873. The plaintiff had the
exclusive right to transport passen-
gers from Dexter to Greenville at a
specified rate of compensation. Now
the loss the plaintiff has sustained
is the profits upon the carriage of
passengers between the points indi-
cated." Referring to the situation
of the plaintiff in regard to his
preparation and equipment for the
transaction of this business, the
jury were instructed that "the plain-
tiff had obviously the right and the
expectation of passengers from other
sources, such as way-passengers, ex-



[§ 878

amount of freiglit which would have been earned if the charter-
party or other agreement to furnish loading had been performed,
deducting the expenses of earning it, and also any profit which
the ship or vehicle earned or might have earned during the

press profits, etc. Now, bearing this
in mind, what are the elements of
damage? The number of passen-
gers; the price of carriage; the cost
of carriage; if profits, the gains
which would have been made are the
losses which have been sustained. If
Frye was so situated that he, in
connection with other business, at
little relative cost could carry
passengers cheaply, — ^more cheaply
than anybody else, — it is his good
fortune, of which he is entitled to
reap the benefits. The measure of
damages, then, is the loss of profits
which would have been made by
carrying the passengers under the
contract, as stipulated in the con-
tract." The jury were informed
that "while the bargain itself
might not be valuable to him,
yet it might be of value to him in
connection with his other business,
situated as he was;" that upon the
evidence produced, "loss upon the
coaches and horses, if sold, would
not be an element of damage;" nor
would the loss of the plaintiff in at-
tempting to carry on tlie contract
after notice from the defendants
that they had terminated it; nor the
loss of the way-travel by means of
the competing line to which the de-
fendants transferred their contract.
"The only loss is his being deprived
of the carriage of passengers from
Dexter to Greenville and back. That
is all the company agreed to give
him; it is all he has lost. ♦ » *
The measure of damages is just
wliat he has lost by not being per-
mitted to perform the contract
which he mado; that is, what the

gains would have been after deduct-
ing tlie expenses. Whatever the
cost was, that should be deducted
from the receipts, whatever they
were, and the balance is the gain;
and the gain only is that to which
he is entitled. He is likewise en-
titled to interest, not as interest,
but by way of damages, from the
date of the writ." In reviewing
exceptions to the instructions, Bar-
rows, J., said: "We think the de-
fendants have no just cause to com-
plain of the substantial overruling
of the second position whicli tlicy
took. If by reason of its connection
with other business in which he was
engaged, the plaintiff could trans-
port passengers to and from the de-
fendants' cars without largely in-
creasing his outlay, the legitimate
profits of the contract to him were
proportionately increased, and the
wrongful termination of it by the
defendants, which the jury have
found, necessarily occasioned to him
a greater loss; and the matters to
which reference was made by the
presiding judge were so obvious in
their nature that it cannot but be
supposed that both parties entered
into the contract with an eyo to
them as existing facts. The con-
tract did not contemplate the exclu-
sive devotion of the plaintill's time
and property to the transportation
of the defendant's passengers, nor
would there be any propriety in
measuring the plaintill's profits in
the performance of the contract,
and his consequent loss in being de-
prived of it, by the standard that
the defendants claimed to set up.

§ 87&] CAREIEKS. 3269

period over whieli tlie charter extends.^ A charge to the jury in
such a case, which was affirmed, limited the deduction for the
freight earned by the ship to the time "between the expiration
of the lay-days and the time when the employment of the ship
under the charter would have ended." ^ In a similar case in
New York the approved instruction was that "the defendant
should Le charged with the full amount of the freight which he
had agreed to pay under the charter, and for the purpose of de-
termining it the jury must find how much cargo the vessel could
safely have carried. The defendant should then be credited with
the amount of the schooner's earnings during the time that an
average passage * * * with the lay-days would have occu-
pied." * If necessary preparations have been made to receive
the cargo the charterer agreed to furnish, the expense thereof
may be recovered ; ^ as may the sum necessarily paid for trim-
ming a cargo after loading, its improper condition being due to
the fact that the loading was done at an improper place, con-
trary to the terms of the charter. ^

Where the ship is described in the charter-party to be of a
certain tonnage the description is not a warranty, and an agree-
ment to furnish a cargo will be construed to require the freighter

The nature of the contract was such N. 554; Leblond v. McNear, 104 Fed.

that its terms would inevitably be 826, citing the text; McNear v. Le-

affected by the other contracts and blond, 61 C. C. A. 564, 123 Fed.

business to be carried on in eonnec- 384; Dalbeattie S. Co. v. Card, 59

tion with it; and the claim that Fed. 159.

damages for its breach should be 3 Cornwall v. Moore, 132 Fed.

estimated 'without reference to any ggg. g^^j^j^ ^ McGuire, 3 H. & N.

other contracts or any other busi- ^^^^ recognized in Aitken v. Erns-

ness' cannot be sustained." Frye v. ^^^^^^^^^ ^ q g ^„ ^^ ^^.
Maine Cent. R. Co., 67 Me. 414. See

Glaring the correct rule.

4 Ashburner v. Balchen, 7 N. Y.

Richmond v. Dubuque, etc. R. Co.,

40 Iowa 264.

„m 1-, n ■ -I-T-. -E- J 2G2; Dean v. Ritter, 18 Mo. 182;

2 Thebideau v. Cairns, 171 Fed. ' '

233; Venus S. Co. v. Wilson, 152 Bradley v. Denton, 3 Wis. 557 ; Heil-

Fed. 170, 81 C. C. A. 368; Stone v. ^'''O"*^'' ^- Hancock, 33 Tex. 714;

Woodruff, 28 Hun 534; Watts v. Lou^ v. Campbell, 26 Mich. 239.

Camors, 10 Fed. 145, affirmed, 115 5 Watts v. Camors, supra; Bulk-

U. S. 353, 29 L. ed. 406; Jordan v. ley v. United States, 19 Wall. 37,

Eaton, 2 Hask. 236 ; The Gazelle and 22 L. ed. 62.

Cargo, 128 U. S. 471, 487, 32 L. ed. 6 Carbon S. Co. v. Ennis, 114 Fed.

496, 499; Smith v. McGuire, 3 H. & 2G0, 52 C. C. A. 146.


to put on board the quantity of goods the ship was capable of
carrying with safety.''^ The stipulation is not that the owner
should receive and the freighter put on board a cargo equivalent
to the tonnage described in the charter-party, but that the one
should receive a full and complete cargo, not exceeding what the
ship was capable of receiving with safety, and that the other
should put such a cargo on board.* Abbott, C. J., said : "It is,
indeed, quite impossible that the burden of a ship — as described
in the charter-party — should, in every case, be the measure of the
precise number of tons which the ship is capable of carrying.
That must depend upon the specific gravity of the particular
goods ; for a ship of given dimensions would be able to carry a
larger number of tons of a given species of goods that were^of a
great specific gravity than she would of another of less specific
gravity, and the freighter would therefore pay freight in propor-
tion to the specific gravity of the goods." '

§ 879. Recovery for partial breach. The same rule applies as
to the measure of damages where there is only a partial breach
of the contract to furnish cargo. The controlling principle,
whether the breach is total or partial, is full indemnity for all
the carrier has lost through the shipper's default.^" The mode of
ascertaining the amount of damag-es for the breach of an ex-
ecutory agreement must, of course, vary in different classes of
cases. If it were a contract to employ the plaintiff to build a
house and pay him an agreed price for the entire work and the
defendant prevented performance the proper rule is the dif-
ference between the sum agreed to be paid and the sum it would
have cost to perform. That rule does not meet the cases of con-
tracts for freight as they are generally made. It does not meet
the case of a vessel engaged in carrying merchandise generally

7 St. Louis, etc. R. Co. v. Stell, Where the contract was to furnish

87 Ark. 308; Hunter v. Fry, 2 B. a cargo of "about one hundred and

6 Aid. 421 ; Ashburner v. Balehen, fjf^ ^^^g „ ^^^ ^,„j ^^^ hundred

7 N. Y. 262; Watts v. Camors, 115 , • . r i „ii ,„

' and SIX tons were supplied an allow-

U. S. .3.53, 2!) L. ed. 400.
8 Hunter v. Fry, supra

ance of five tons was made on ac-
count of the indefinitenesfl of tlie

"Bailey v. Damon, 3 Gray 92; language. Parker v. Tiers, 29 Fed.
Bangor F. Co. v. Magill, 108 HI. 656. 800.



for alJ who may apply and making up her cargo from various
owners of goods. Such a ship must usually sail on or about a
given (lay to fulfill her other contracts, thus having no time or
opportunity to fill up a deficient cargo, and also necessarily in-
curring all the expenses that would have been incident to the
voyage had the shipper fulfilled his particular contract to fur-
nish a certain amount of goods. On the other hand, if the ship-
per s_ contract were to fill the entire ship with his goods at a
certain freight upon his refusal or neglect to fulfill it the carrier
might abandon the whole voyage and engage in some new adven-
ture equally or more profitable, and thus all future expenses in-
cident to the first voyage be saved. Here it is quite obvious the
damages would be much less than in the case of a voyage that
must be performed notwithstanding the failure of a single in-
dividual customer to ship goods according to his contract. So
too, if under no obligation to other shippers to sail at a given
day, or if that day is remote and the demand for transportation
of goods such as to afford full opportunity to fill np the ship be-
fore that day, these circumstances would materially affect the
amount required to be paid by the shipper to the carrier to in-
demnify him for the non-performance of the contract. It seems
therefore proper that all the attendant circumstances b^
brought before the jury in each particular case to enable them
to estimate the proper sum to be awarded as damages for the
breach of a contract of this nature. The carrier is to receive
full indemmty. lie is to be made as good, in a pecuniary point
of view, as if the shipper had furnished the goods according to
his contract, if the carrier has not been guilty of laches as to
substituting other freight, or adopting other available arrange-
ments to mitigate the loss, or to avoid the expenditure incident
to tno proposed voyaf^e.

§ 880. Carrier must^mitigate his loss. If b^. proper and rea-
sonable efforts the carrier can substitute other goods in lieu of
those the charterer was to furnish he is bound to do so, and to
the extent of the freight thus received this should go in reduc-
tion of the damages. Nor is the reduction necessarily
confined to his receipts from g^ds actually substi-
tuted. The carrier may have been remiss in his attempts to


fill up his ship, or have neglected to avail himself of opportuni-
ties presented by other offers of goods, and, if giiilty of negli-
gence in these respects, this may be a ground for a deduction
from the entire sum stipulated to be paid by a shipper for freight
of certain articles which are not furnished to the carrier. It
may be also that the carrier was under no obligation to others to
prosecute the proposed voyage and might have abandoned it for
another and more profitable employment of his ship; and in
that case he ought not to pursue such voyage for the mere pur-
pose of charging the defaulting shipper with the gross sum he
stipulated to pay for transporting his goods to a distant port.^^
Upon a contract to furnish three cargoes at a foreign port, if
the master pursues his voyage, but the freighter has no freight
there, the master is not bound to go to another port in search of
freight, but is bound to seek freight at the port designated and
obtain it if possible, and if after such endeavor he is compelled
to return empty the rule of damages is the contract price.^'^ So
when a party contracts to load a ship to a given number of tons
at a stipulated price per ton and falls short -in shipping the
whole number, the oM-ner or master is entitled to recover in the
nature of damages freight for deficiency ; but where in such case
goods are offered by a third person to be shipped to an amount
sufficient to make up the deficiency, though at a reduced rate of
compensation, but still at current prices, the owner or master is
bound to receive such goods and place to the credit of the origi-
nal charterer the net earnings in respect to such substituted car-
go, after making all reasonable deductions resulting from the cir-
cumstances of the case.^' The carrier is not bound to anticipate

11 Bailey v. Damon, 3 Gray 92; 13 Greenwcll v. Ross, 34 Fed. 656;
Bradley v. Denton, 3 Wis. r).!? ; Ut- Ileeksolier v. McCrea, supra.

ter V. Chapman, 38 Cal. 659, 43 id. In Utter v. Chapman, 43 Cal. 279,
279, 99 Am. Dec. 441; Heckscher v. tlie freigliter made a total breach of
McCrea, 24 Wend. 304; Harries v. tlic contract on his part and the
Edmonds, 1 C. & K. 686; MurrcU carrier earned during the time a
V. Whiting, 32 Ala. 54. See Gil- performance of the contract would
clirist V. Lumbermen's M. Co., 65 liave occupied $341.24, but in cam-
Fed. 100"), 13 C. C. A. 272. ing this, and in a reasonable effort

12 Hradley v. Denton, supra; to earn other sums, which efforts
DufTie V. Hayes, 15 Johns. 827; the court had decided it was the
Stone V. Woodrufif, 28 Hun 534. carrier's duty to make, he incurred




a failure on the part of the shipper to furnish full cargo and
accept in advance an offer of other goods; but after a breach of
his contract it is the duty of the carrier to accept the offer of the
goods the shipper had contracted to furnish, though at a re-
duced freight, to save the latter from damages to that extent. ^*
A recent case decided in the English court of appeal covers
a question under this head previously untouched by authority.
The defendants chartered the plaintiff's ship for the carriage

an expense of $777. This net loss
of $435.16 he claimed as part of his
damages to be added to the net
profit he would have made by per-
forming the contract. The court
said: "The correct interpretation
of our decision on the former appeal
is that the plaintiffs are entitled to
recover only the actual loss whicli
they suffered from the breach of the
contract; and if it appeared that
during the space of time which
would have been requisite for the
performance of the contract by them
they had, or by the use of reasonable
diligence might have, realized a
profit from the use of the boat or
barge equal to or exceeding the
profit which tlicy would have made
by performing the contract, in that
event they would have suffered no
loss, and would have been entitled
to nominal damages only. The bur-
den of proof was on the defendant
to show that the boat and barge had
or might have realized a profit. And
if the net earnings did not equal or
exceed the profit which the plaintiff
would have made by performing the
contract, then such net earnings
would reduce, pro tanto, the amount
of the plaintiff's loss. But we did
not decide nor intend to intimate
that the defendant stood in the re-
lation of a guarantor, incurring the
hazard of whatever loss the plaintiff
might sustain by reason of a fruit-
less effort to obtain a profitable
Suth. Dam. Vol. 111.-52.

employment for the boat and barge.
It was incumbent on the defendant
to show, if he could, that a profit
had been or might have been realized
by the boat and barge; and, failing
in this, the only result would have
been that the plaintiffs would have
recovered the diff'erence between the
contract price and the cost of per-
forming the contract. But if a per-
son should charter a ship for a num-
ber of months, or for a long voyage,
and should immediately thereafter
repudiate the contract and refuse to
perform it, no one, I apprehend,
would seriously contend that the
owner could send the vessel on a
long and expensive voyage in a
fruitless effort to obtain profitable
employment for her during the term
of the charter-party without the
consent of the charterer, and there-
by fasten upon the latter the whole
expense of the voyage. In such case
the proper measure of damages
would be the difference between the
contract price and the cost which
the owner would have incurred if
the contract had been performed,
subject only to such reduction as
the charterer would have been en-
titled to on his proving aflfirmatively
that the ship had, or might by a
reasonable efi'ort have, earned a
profit during the term of the char-

HGrecnwell v. Ross, 34 Fed. (556;
Harries v. Edmonds, 1 C. & K. 686.


of a full cargo at 11. 17 s. 6d. per ton. The charter-party con-
tained the usual exception of "fire," and stipulated for the sign-
ing of bills of lading without prejudice to it or to the owners'
lien, provided that the bill of lading freight in the aggregate
should fully cover the freight due (5,600L). The defendants
shipped one thousand five hundred and nineteen tons under bills
of lading making freight payable at 11. 5s. per ton. A fire de-
stroyed one thousand tons of the goods put on board and
delayed the sailing of the ship. The defendants refused to load
any more goods and the plaintiffs filled up the ship with goods —
some at 11. 5s. per ton, and some at a lower rate. The plaintiffs
brought an action for breach of the charter-party in not loading
a full cargo. The position of the respective parties after the fire
was as follows: the plaintiffs could not insist that the defend-
ants should load carjjo to take the place of that which was
burnt, and the defendants could not insist on so doing. Each
party, as to that, had pro twnto fulfilled their obligations — the
defendants by loading, and the plaintiffs being exempted from
carrying such portion of the cargo. The defendants were under
no liability to pay freight for the bales burnt, and the plaintiffs
had lost that freight. The space theretofore occupied by the
burnt bales became vacant space in the plaintiffs' ship, and the
only obligation then attaching to the defendants was to fill up
the residue of the space in the plaintiffs' ship, and when this
was done they would have loaded a full and complete cargo pur-
suant to the charter. The obligation of the plaintiffs to mitigate
the damages was admitted, and the defendants claimed that
they were bound to fill up, if they could, with other cargo for
the defendants' benefit the space left vacant by the burnt cargo,
and that, as other cargo was found to fill up such space, the
freight received for it should also be credited against the dam-
ages the plaintiffs would otherwise recover from the defendants,
and should not go to mitigate the loss the plaintiffs had incurred
by losing their freight upon the burnt cargo. This position was
pronounced untenable. The provision in the charter-party as to
fire having modified the application of the general rule as to the
measure of damages — the difference between the charter-party
freight and the net freight actually earned — by in effect reduo-

§ 881] CAREIEES. 3275

ing as between the parties the capacity of the ship by the space
previously occupied by the burnt cargo. It was said by A. L.
Smith, L. J., whose opinion Lindley, L. J., said was to be taken
as being also his: Under the charter-party the obligation of
the ship-owner was only, if he reasonably could, to find cargo to
take the place of that cargo which the goods owner has made de-
fault in shipping, and for which default damages are, and can
alone be, sought for in this action. As regards the jute burnt,
the defendants have made no default, and for such no damages
are or could be asked herein. For that jute the ship-owner was
under no obligation to try and find other cargo, for, as regards
this, there were no damages to be mitigated. With the space
left vacant in the ship by reason of the burnt jute the defendants
had nothing whatever to do. All they had to do after the fire
was to fill up the residue of the ship. If the defendants after the
fire had had to fill up again the space left vacant by the burnt
jute and they wrongfully omitted to do so, I agi*ee then the
ship-owner should, if he could, have obtained other cargo for that
space ; but that is not the case. The ship-owners might do with
that vacant space what they liked so long as they did not delay
the voyage upon which they had contracted to caiTy the defend-
ants' goods. As to the cargo which the plaintiffs procured to
fill up the space which the defendants should have filled up
after the fire, the latter were entitled to be credited with the
freight which was in fact earned at the rate paid for it, and not
at the average rate of all the freight carried. It was also de-
cided that the fire only absolved the defendants from the pay-
ment of the freight which would have been payable on the burnt
goods according to the bills of lading, and that after the fire the
total amount of freight for which they were liable was 5,600^,
less 11. 5s. per ton on the one thousand tons burnt, not 5,600Z.,
less the charter freight of 11. 17s. Gd. per ton, on such one thou-
sand tons.^^

§ 881. Shipper's rights in profits made by carrier. It was
covenanted in a charter-party providing for an outward and re-
turn cargo at a given freight per ton on a voyage from London

W Aitken v. Ernsthauaen, [1894] 1 Q. B. 773.



to St. Petersburg that if political or other circumstances should
prevent the shipping of a return cargo or discharging the out-
ward cargo after waiting a specified time, the master should be
at liberty to return and the freighters should at once pay him
2,500^. The freighters procured a policy of insurance by which
the underwriters agreed to pay a total loss in case the ship was
not allowed to load a cargo at St. Petersburg on the chartered
voyage. The contingency of not being permitted to unload, and
consequently of reloading, happened ; thereupon, the master,
judging for the best, instead of returning innnediately to Lon-
don, proceeded to Stockholm, where, after disposing of the out-
ward cargo to disadvantage, he brought home a Swedish cargo

Online LibraryJ. G. (Jabez Gridley) SutherlandA treatise on the law of damages : embracing an elementary exposition of the law, and also its application to particular subjects of contract and tort (Volume 3) → online text (page 89 of 132)