Bell v. Cunningham, 28 U.S. (3 Pet.) 69 (1830)

The Halcyon proceeded to Havana, and there the paper shipped by the p. 45plaintiffs in error was sold, and the proceeds accounted for to Cunningham & Loring by their agents at that port. Had the marble tiles been shipped as ordered, there would have been a considerable profit in the transaction, instead of the heavy loss sustained on the sales of the paper.

For the plaintiffs, it was contended, that the circuit court had erred in leaving to the jury the construction of the correspondence between the plaintiffs in the court below and the defendants, of the 15th September 1824. The evidence feeing written, the construction of it was exclusively with the court. The course adopted by the defendants was in full accordance with the objects of the latter, as the paper could not be procured, without previous orders, and they having been given, and the defendants bound to take the paper so ordered, they were necessarily without the funds required to p. 46purchase the tiles. The plaintiffs below were bound to give the defendants notice of their intention to claim damages from them for non-compliance with instructions, and their neglect to do this, as well as their having received the proceeds of the paper, was a waiver to all their claims. The letter of the 18th of April 1825, was not such a notice.

Cunningham & Co., merchants, of Boston, had let their vessel, the Halcyon, to Messrs. Atkinson & Rollins, of the same place, to carry a cargo of sugars from Havana to Leghorn. The cargo was consigned to Messrs. Bell, De Yongh & Co., merchants, of Leghorn ; and Cunningham & Co. addressed a letter to the same house, instructing them to invest the freight, which was estimated at 4600 petsos, 2200 in marble tiles, and the residue, after , paying disbursements, in wrapping *paper. Messrs. Bell, De Yongh J & Co. undertook to execute these orders. Instead, however, of investing to the sum of 2200 petsos in marble tiles, they invested the whole amount of freight which came to their hands, amounting to 3449 petsos, and seven-thirds, instead of 4600, in wrapping paper, which was received by the master of the Halcyon, shipped to the Havana, and sold on account of Messrs. Cunningham & Co. One of the partners of Messrs. Bell, De Yongh & Co. having visited Boston on business, this suit was instituted against the company. At the trial, all the correspondence between the parties was exhibited, from which it appeared, that Cunningham & Go., as soon as information was received that their orders had been broken, addressed a letter to Messrs. Bell, De Yongh & Co., expressing in strong terms their disapprobation of this departure from orders, but did not signify their determination to disavow the transaction entirely, and consider the p. 47wrapping paper as sold on account of the house in Leghorn. In addition to the correspondence, several depositions were read to the jury, which proved that the orders respecting the jnarble tiles might have been executed without difficulty, but that the house in Leghorn, expecting to receive more money on account of freight than actually came to their hands, had contracted for so much wrapping paper as to leave so inconsiderable a sum for the tiles, that they determined to invest that small sum also in wrapping paper.

The said defendants’ counsel further prayed the court to instruct the jury, that, if they believed, from the evidence submitted to them, that the required quantity of tiles could be had in season for the return-cargo of the Halcyon, without any previous contract therefor, and that the 5000 reams of paper could not be had in season for said vessel, without a previous contract therefor, that, inasmuch as the *plaintiffs admit, in their declaration, that they did not furnish the defendants with freight money enough L to purchase 2200 petsos’ worth of tiles, and pay the disbursements, and pay p. 48Tl SUPREME COURT [Jan’y

for the said 5000 reams of wrapping paper, but only 3449 petsos, and seven-thirds (as in their declaration is expressed), and which latter sum was only sufficient for the payment of said disbursements, and for the performance of the defendants’ own contract in payment for said wrapping paper, the defendants were not holden to purchase any tiles, but were holden to ship the said 5000 reams of paper on board the Halcyon, as the property of the plaintiffs. But the court refused so to instruct the jury ; and the court did instruct the jury, that if the defendants undertook to comply with the original written orders of the plaintiffs, and no deviation therefrom was authorized by the plaintiffs, the defendants were bound, if funds to the amount came into their hands, in the first instance, to apply 2200 petsos of the funds which should come into their hands and be applied to this purpose, to the purchase of tiles, and in the next place, to deduct and apply as much as was necessary to pay the disbursements, and then to apply the residue to the purchase of paper : that if it were necessary or proper, under the circumstances, to make a purchase of the paper, before the arrival of the vessel, the defendants were authorized to act upon the presumption that 4600 petsos would come into their hands, and therefore, the plaintiffs would have been bound by any purchase of paper made by the defendants, to the amount of the balance remaining of the said 4600 petsos, after deducting the 2200 petsos for tiles, and the probable amount of such disbursements. But that it was the duty of the defendants, if they had funds, to deduct in the first instance, from the whole amount, 2200 petsos for tiles ; and if they did not, but chose to purchase paper, without any reference thereto, it was a deviation from the plaintiffs’ p. 49which actually came to the defendants’ hands (without the 700 petsos) and the sum of 700 petsos were also received, the whole amount would be 4150 petsos, then the defendants would be justified in deducting therefrom, for the purchase of paper, 1750 petsos, and disbursements 650 petsos ; leaving the sum of 1750 petsos to be invested in tiles ; and to this extent, if there was ratification, the defendants would be bound to invest for the plaintiffs in tiles, and were guilty of a breach of orders, if they did not so invest, and the plaintiffs entitled to damages accordingly. But the court left the whole facts for the consideration of the jury, and stated the preceding sums only as illustrations of the principles of decision, if they were found conformable to thé facts.

No doubt can be entertained of the existence of this implied obligation, if the 700 petsos were in fact received. This fact, however, could not be decided by the court, and was proper for the consideration of the jury. If the court took it from them, the instruction would be erroneous. Some doubt was at first entertained on this part of the case ; but on a more attentive consideration of the charge, that doubt is removed. The declaration that there was an implied obligation to apply the 700 petsos, as directed in the letter and postscript, is not made in answer to any prayer for an instruction respecting the reception of this money, but respecting its application. The answer, therefore, which relates solely to the application, ought not to be construed as deciding that it was received. The judge, afterwards, by way of illustration, shows the sum which might have been invested in wrapping paper, consistently with the orders given by Cunningham & Co., on the hypothesis that the freight money would amount to 4600 petsos, and also on the hypothesis that the additional 700 petsos were received ; and adds, “but the court left the whole facts for the consideration of the jury, and stated the preceding sums only as illustrations of the principles of decision, if they were found conformable to the facts.” We think, then, p. 50that the question, whether the 700 petsos were actually received by Bell, De Yongh & Co., was submitted to the jury on the evidence, and that there is no error in this instruction.

And the defendants’ counsel furthermore prayed the court to instruct the jury, as to the plaintiffs’ first new count, filed at this term, by leave of court, that inasmuch as the plaintiffs have set forth the letter of the plaintiffs to the defendants, of the 15th of September 1824, as containing the special contract between the plaintiffs and defendants ; and as the postscript to that letter contains a material part of the contract; and as the said postscript is not set forth in said count, as part of said letter, but is wholly omitted ; that the evidence offered by the plaintiffs, in this behalf, does not support and prove the contract as in that count is alleged. But the court refused so p. 51to instruct the jury, being of opinion, that the said postscript did not necessarily, as a matter of law, established any variance between the first new count and the evidence in the case ; and the court left it to the jury to consider, upon the whole evidence in the case, whether that count was established in proof, and if, in their opinion, there was a variance, then to find their verdict for the defendants on that count.

The eighth and last prayer is in these words : “ The *defendants’ counsel prayed the court to instruct the jury, that if they should find *- that any contract or promise was made by the defendants as to the purchase and shipment of 2200 petsos’ worth of tiles, and not performed (but broken), that the measure of damages was the value of the said sum of 2200 petsos p. 52at Leghorn, and not at Havana ; and that as the plaintiffs have taken and accepted another article of merchandise at Leghorn, viz., 5000 reams of wrapping paper, of greater value than 2200 petsos, and which was purchased with the same moneys which plaintiffs aver should have been invested in marble tiles as aforesaid, the plaintiffs are not entitled to recover any damages in this action. But the court refused so to instruct the jury, because the instruction prayed for called upon the court to decide on matters of fact in controversy before the jury. And the court did instruct the jury, that if, upon the whole evidence, they were satisfied, that the orders of the plaintiffs had been broken by the defendants, in not purchasing the tiles, in the manner stated in the declaration, and that there had been no subsequent ratification by the plaintiffs of the acts and proceedings of the defendants ; then, that the plaintiffs were entitled to recover their damages for the breach thereof; and what the proper damages were, must be decided by them, upon the whole circumstances of the case ; that in their assessment of damages they were not bound to confine themselves to the state of things at Leghorn, and they were not precluded from taking into consideration the voyage to the Havana, and the fact of the arrival of the vessel there, the state of the markets, and the profits which might have been made by the plaintiffs, if their orders as to the tiles had been complied with ; that the court could not lay down any rule for their government,' except that they were at liberty to compensate the plaintiffs for their actual losses sustained, as a consequence from the default of the defendants, but they were not at liberty to give vindictive damages.

The faithful execution of orders which an agent or correspondent has contracted to execute, is of vital importance in commercial transactions, and may often affect the injured party far beyond the actual sum misapplied. A failure in this respect may entirely break up a voyage, and defeat the whole enterprise. We do not mean, that speculative damages, dependent on possible successive schemes, ought ever to be given ; but positive and direct loss, resulting plainly and immediately from the breach of orders, p. 53may be taken into the estimate. Thus, in this case—an estimate of possible profit to be derived from investments at the Havana, of the money arising from the sale of the tiles, taking into view a distinct operation, would have been to transcend the proper limits which a jury ought to respect; but the actual value of the tiles themselves, at the Havana, affords a reasonable standard for the estimate of damages. The instructions of the judge seem to contemplate this course, and his restraining ♦power would have corrected, by granting a new trial, any great excess in this particular. The rule that the jury was to compensate the L plaintiffs for actual loss, and not to give vindictive damages, is thought by this court to have been correct. The declaration expressly claims the loss of the profits which would have accrued from the sale of the tiles.