C. & Co., merchants of Boston, owners of a ship proceeding
on freight from Havana to the consignment of B. & Co. at
Leghorn and to return to Havana, instructed B. Co. to invest the
freight, estimated at four thousand six hundred petsos; two
thousand two hundred in marble tiles, and the residue, after paying
disbursements, in wrapping paper. B. & Co. undertook to execute
these orders. Instead, however, of investing two thousand two
hundred petsos in marble, they invested all the funds which came
into their hands in wrapping paper, which was received by the
captain of the ship, and was carried to Havana, and there sold on
account of C. & Co., and produced a loss, instead of the profit
which would have resulted had the investment been made in marble
tiles. As soon as information of the breach of orders was received,
C. & Co. addressed a letter to B. & Co. expressing in
strong terms their disapprobation of the departure from their
orders, but did not signify their determination to disavow the
transaction entirely, and consider the paper as sold on account of
B. & Co.
Held that C. & Co. were entitled to
recover damages for the breach of their orders; that their not
having giving notice to B. & Co. that the paper would be
considered as sold on their account did not injure their claim, and
that the amount of the damages may be determined by the positive
and direct loss arising plainly and immediately from the breach of
the orders.
If the principal, after a knowledge that his orders have been
violated by his agent, receives merchandise purchased for him
contrary to orders and sells the same without signifying any
intention of disavowing the acts of the agent, an inference in
favor of the ratification of the acts of the agent may fairly be
drawn by the jury. But if the merchandise was received by the
principal under a just confidence that his orders to his agent had
been faithfully executed, such an inference would be in a high
degree unreasonable.
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. Speculative damages
dependent on possible successive schemes ought not to be given in
such cases, but positive and direct loss resulting plainly and
immediately from the breach of orders may be taken into the
estimate.
The jury, in an action for damages for breach of orders, may
compensate the plaintiff for actual loss and not give vindictive
damages. The profits which would have been obtained on the sale of
the article directed to be purchased may be properly allowed as
damages.
The bill of exceptions to the opinion of the court below
Page 28 U. S. 70
sets forth the pleadings and evidence, and exhibited the
following case.
Cunningham & Loring, merchants of Boston, owners of the brig
Halcyon, Skinner master, chartered by them to proceed from
Havana to Leghorn with a cargo of sugars, directed Bell, De Yough
& Co. merchants at that place and consignees of the brig, to
purchase for them, to be shipped to Havana by the
Halcyon
on her return to that port, a quantity of marble tiles and wrapping
paper. The letter containing these instructions was dated 15
September, 1824, and stated:
"The whole amount of freight received at Leghorn will be about
for thousand six hundred petsos; please invest two thousand two
hundred in marble tiles; the balance, after paying disbursements,
please invest in wrapping paper. . . . We have further engaged
whatever may be necessary to fill the brig on half profits, on
account of which seven hundred petsos are to be paid in Leghorn;
after purchasing tiles and paying disbursements, you will invest
the balance in paper."
A duplicate of this letter was forwarded, to which the following
postscript was added.
"P.S. We have further engaged whatever may be necessary to fill
the brig, on half profits, on account of which seven hundred petsos
are to be paid in Leghorn. After purchasing the tiles and paying
disbursements, you will invest the balance in paper, as before
mentioned. In previous orders the reams have been deficient in the
proper number of sheets. We will thank you to pay particular
attention to this, as well as having all the sheets entire."
This letter was received by the plaintiffs in error on 13
November, 1824, and on 9 December following, they addressed a
letter to Cunningham & Loring in which they stated,
"The order you are pleased to give us for paper and marble
tiles, to be paid for out of the freight of the
Halcyon
from Havana to our consignment has our particular attention."
"You have done very right to send on this order, as the wrapping
paper cannot be got in readiness before the end
Page 28 U. S. 71
of January, and therefore had it been delayed longer, could not
have been in time for your brig
Halcyon."
"We have contracted for five thousand reams at as near your
limits as possible, the article being just now in great demand. The
tiles shall be collected also."
On 14 January, 1825 they wrote to Cunningham & Loring:
"The wrapping paper ordered by yours of 15 September will be in
readiness by the end of this month, and we shall have by that time,
ready to ship, ten thousand marble tiles of twelve ounces, seven
thousand six hundred of fourteen ounces, and six thousand two
hundred of sixteen ounces, which will be about the investment you
desire of the freight from the
Halcyon."
On 21 January, 1825, the plaintiffs in error informed the
defendants of the arrival of the
Halcyon, and on 21
February they addressed them another letter, stating
"The sample of wrapping paper sent us by Messrs. Murdoch, Storcy
& Co. we found much inferior to any made in this state, and
have executed your order with a much better article, although the
difference in price bears no proportion. As your account current
after purchasing the paper, which captain Skinner told us was the
better article for investment, gave only a small balance, we
increased a little one quantity of paper, and sent no tiles."
"We now hand you bill of lading and invoice amounting to P2,801
18 for 473 packages of wrapping paper, shipped for your account and
risk on board your brig
Halcyon, John Skinner master,
which if found right, please to pass accordingly."
"Captain Skinner has been made aware of the superior quality of
this parcel of paper, and that each ream is composed correctly of
twenty quires of twenty-four and not sixteen sheets, as has been
occasionally shipped, so that he will no doubt make an adequate
price for it, because in realty the prices at which it is invoiced
are reduced by this difference below those mentioned in your
order."
The account current stated the investment of petsos 2801 18 in
wrapping paper, and showed that the balance
Page 28 U. S. 72
of the freight and other assets in the hands of the plaintiffs
in error, belonging to Cunningham & Loring, had been absorbed
in the disbursements of the brig, &c.
The
Halcyon proceeded to Havana, and there the paper
shipped by the plaintiffs 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 transactions instead of the
heavy loss sustained on the sales of the paper.
Cunningham & Loring, on being advised of the noncompliance,
by the plaintiffs in error with their instructions of 15 September,
1824, addressed the following letter to them:
"Boston, April 18, 1825"
"MESSRS BELL, DE YOUGH & Co."
"Gentlemen: We have received your favor of February 21. The
following are extracts of our letter to you of 13 September,
directing the investment of the freight per
Halcyon."
" The whole amount of freight received at Leghorn will be about
4,600 petsos: please invest 2,200 in marble tiles; the balance,
after paying disbursements, please invest in wrapping paper. We
have further engaged whatever may be necessary to fill the brig, on
half profits, on account of which 700 petsos are to be paid in
Leghorn; after purchasing the tiles and paying disbursements, you
will invest the balance in paper."
"We are exceedingly disappointed that such positive directions
were not complied with; they were given for sufficient reasons, and
without authority to alter them. You omitted to invest the 700
petsos on account of the freight of 150 boxes marked T, which we
regret, as we wished the funds at Havana; with this you would have
had 4,240 petsos, which would have furnished the tiles, paid
disbursements, and left 1,393 petsos to be invested in paper."
"Very respectfully,"
"CUNNINGHAM AND LORING"
Page 28 U. S. 73
One of the partners of the firm being in Boston in 1827, an
action was instituted against the plaintiffs in error in the Court
of Common Pleas of the County of Suffolk for damages for the loss
sustained by the plaintiffs, by the conduct of the defendants, and
on their petition, the defendants in the suit being aliens, was
removed to the Circuit Court of the United States for the District
of Massachusetts.
On the trial of this cause in the circuit court, it was in
evidence that the tiles ordered by the plaintiffs in the suit could
have been procured by the defendants, and at prices which would
have produced a profit to the plaintiffs.
During the trial, exceptions were taken to the opinion of the
court by the defendants in the circuit court, which exceptions are
stated in the opinion of this Court, and a verdict and judgment
having been rendered for the plaintiffs, the defendants prosecuted
this writ of error.
Page 28 U. S. 74
MR. CHIEF JUSTICE MARSHALL delivered the opinion of the
Court.
This is a writ of error to a judgment rendered in the court of
the United States for the First Circuit and District of
Massachusetts in a suit brought by Cunningham & Co. against
Bell, De Yough & Co. on a special contract.
Cunningham & Co., merchants of Boston, had let their vessel,
the
Halcyon, to Messrs. Atkinson and Rollins, of the same
place, to carry a cargo of sugars from the Havana to Leghorn. The
cargo was consigned to Messrs. Bell, De Yough & Co., merchants
of Leghorn, and Cunningham & Co. addressed a letter to the same
house instructing them to invest the freight, which was estimated
at four thousand six hundred petsos, two thousand two hundred in
marble tiles, and the residue after paying disbursements in
wrapping
Page 28 U. S. 75
paper. Messrs. Bell, De Yough & Co. undertook to execute
these orders. Instead however of investing the sum of two thousand
two hundred petsos in marble tiles, they invested the whole amount
of freight which came to their hands, amounting to three thousand
four hundred and forty-nine petsos, and seven-thirds, instead of
four thousand six hundred, in wrapping paper, which was received by
the captain of the
Halcyon, shipped to the Havana, and
sold on account of Messrs. Cunningham & Co. One of the partners
of Messrs. Bell, De Yough & 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 & Co., as soon as
information was received that their orders had been broken,
addressed a letter to Messrs. Bell, De Yough & 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 wrapping 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 marble
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.
At the trial, the counsel for the defendants in the court below
prayed the court to instruct the jury on several points which arose
in the cause. Exceptions were taken to the rejection of these
prayers and also to instructions which were actually given by the
court, and the cause is now heard on these exceptions.
The defendants' counsel prayed the court to instruct the jury
that the letter of 9 December, 1824, from the defendants to the
plaintiffs, was notice to them of the exercise of the aforesaid
authority in contracting for five thousand reams of paper, to be
paid for out of the freight money of the
Halcyon, and was
admitted by the plaintiffs in their
Page 28 U. S. 76
letter of 7 March, 1825, to be a rightful exercise of such
authority, and that the freight money of the
Halcyon was
pledged for payment of the said quantity of paper.
But the court so refused to instruct the jury because it did not
appear on the face of the said letter at what price the said
wrapping paper was purchased, so as to put the plaintiffs in
possession of the whole facts, that there had been a purchase of
paper to an extent and at a price which would amount to a deviation
from the orders of the plaintiffs, or that defendants had deviated
from such orders, without which there could arise no presumption of
notice of any deviation from such orders or of any ratification of
any such deviation from such orders. But the court did instruct the
jury that if, from the whole evidence in the case, the jury were
satisfied that the letter of 9 December, connected with the letter
of 14 January, did sufficiently put the plaintiffs in possession of
all the facts relative to such purchase, and the price thereof, and
of such deviation, and that the letter of 7 March in answer
thereto, was written with a full knowledge and notice of all the
facts, and that the plaintiffs did thereupon express their
approbation of all the proceedings and acts of the defendants
relative to such purchase, then in point of law it amounted to a
ratification thereof even though there had been a deviation from
the orders in this behalf.
This first exception is very clearly not supported by the fact,
and was very properly overruled for the reasons assigned by the
judge. The plaintiffs in that court, when the letter of 7 March,
1825 was written, had no reason to presume that their orders had
been violated, and consequently could not be intended to mean by
that letter to sanction such violation.
The said defendants' counsel further prayed the court to
instruct the jury that, if it believed from the evidence submitted
to it 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 five thousand reams of paper could
not be had in season for said vessel without a previous contract
therefor, that inasmuch as the
Page 28 U. S. 77
plaintiffs admit in their declaration that they did not furnish
the defendants with freight money enough to purchase twenty-two
hundred petsos worth of tiles, and pay the disbursements, and pay
for the said five thousand reams of wrapping paper, but only with
three thousand four hundred and forty-nine petsos, 7.3, (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 paying for said
wrapping paper, the defendants were not holden to purchase any
tiles, but were holden to ship the said five thousand 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 two thousand two hundred 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 four thousand six
hundred 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
four thousand six hundred petsos, after deducting the two thousand
two hundred 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
two thousand two hundred petsos for tiles, and if they did not, but
chose to purchase paper without any reference thereto, it was a
deviation from the plaintiffs' orders, and unless ratified by the
plaintiffs, the defendants
Page 28 U. S. 78
were answerable therefor; that if the defendants had purchased
paper before the arrival of the vessel to the amount only of such
residue or balance as aforesaid, and the funds had afterwards
fallen short of the expected amount of four thousand six hundred
petsos, the defendants were not bound to apply any more than the
sum remaining in their hands, after deducting the amount of such
purchase of paper, and such disbursements, to the purchase of
tiles, and that after the receipt of the letters of 20 September
and the duplicate of 15 September, if the defendants undertook to
perform the orders therein contained, there was an implied
obligation on them to apply the seven hundred petsos mentioned
therein for the plaintiffs' benefit, to the purposes therein
stated; that to illustrate the case, if the jury was satisfied that
the whole funds which came into the hands of the defendants for the
plaintiffs (independent of the seven hundred petsos) were three
thousand four hundred and fifty petsos, then the said seven hundred
petsos should be added thereto as funds in the defendants' hands,
making in the whole four thousand one hundred and fifty petsos.
In the view of the facts thus assumed by the court, and to
illustrate its opinion, the practical result under such
circumstances would be thus: the defendants were authorized to act
on the presumption of funds to the amount of four thousand six
hundred petsos. Deduct two thousand two hundred petsos for tiles
and six hundred and fifty for probable disbursements, the balance
left to be invested in paper would be one thousand seven hundred
and fifty. The defendants would then be authorized, if the
circumstances of the case required it, to contract for or purchase,
to the amount of one thousand seven hundred and fifty petsos in
paper, before the arrival of the vessel, and if the funds should
afterwards fall short of the expected amount of four thousand six
hundred petsos, the sum of one thousand seven hundred and fifty
petsos, and the disbursements, say six hundred and fifty petsos,
were to be first deducted out of the funds received, and the
balance only invested in tiles. That if the
Page 28 U. S. 79
funds which actually came to the defendants' hands (without the
seven hundred petsos), and the sum of seven hundred petsos were
also received, the whole amount would be four thousand one hundred
and fifty petsos, then the defendants would be justified in
deducting therefrom, for the purchase of paper, one thousand seven
hundred and fifty petsos, and disbursements six hundred and fifty
petsos, leaving the sum of one thousand seven hundred and fifty
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 decisions, if they were found
conformable to the facts.
This prayer was properly overruled for the reasons assigned by
the court. The orders were peremptory to apply two thousand two
hundred petsos in the first instance to the purchase of tiles. The
residue only of the funds which came to the hands of Bell, De Yough
& Co. was applied to the purchase of wrapping paper, and the
instruction that Bell, De Yough & Co. were justifiable in
acting on the presumption that the whole sum mentioned in the
letter of Cunningham & Co. would be received, and in
contracting by anticipation for wrapping paper on that presumption,
was as favorable to Bell, De Yough & Co. as the law and
evidence would warrant. The only questionable part of the
instruction is that which relates to the seven hundred petsos,
mentioned in the postscript of that copy of the letter of 15
September, 1824 which went by the
Halcyon. That postscript
is in these words:
"P.S. We have further engaged whatever may be necessary to fill
the brig on half profits, on account of which seven hundred petsos
are to be paid in Leghorn. After purchasing the tiles and paying
the disbursements, you will invest the balance in paper as before
mentioned. In previous orders the reams have been deficient in the
proper number of sheets. We will thank you
Page 28 U. S. 80
to pay particular attention to this, as well as having all the
sheets entire."
The court instructed the jury that if the defendants undertook
to perform the orders, there was an implied obligation on them to
apply the seven hundred petsos mentioned therein to the purposes
therein mentioned.
No doubt can be entertained of the existence of this implied
obligation if the seven hundred 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 seven hundred
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
four thousand six hundred petsos, and also on the hypothesis that
the additional seven hundred 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 decisions, if they were found conformable to the
facts."
We think then that the question whether the seven hundred petsos
were actually received by Bell, De Yough & Co. was submitted to
the jury on the evidence, and that there is no error in this
instruction.
The defendants' counsel did further pray the court to instruct
the jury that inasmuch as the plaintiffs admit in their declaration
that the freight money received by the defendants was three
thousand four hundred and forty-nine petsos 7.3, and it appearing
that the whole of that sum had been
Page 28 U. S. 81
absorbed in the purchase of five thousand reams of wrapping
paper, disbursements, and reasonable and customary charges, and
that as the said plaintiffs did accept and sell the said five
thousand reams of paper on their own account at the Havana; that
such receipt and sale of the paper on their account is in law a
ratification of the acts of the defendants at Leghorn in the
application of the whole of said freight money.
But the court refused so to direct the jury, because the
instruction prayed for assumed the decision of matters of facts,
and because the plaintiffs did not admit that the sum of three
thousand four hundred and forty nine petsos 7.3 was the whole sum
or funds received as freight money by the defendants, but contended
that the additional sum of seven hundred petsos was so received,
and ought to be added thereto, and because, whether the receipt and
sale of the paper at Havana was a ratification of the acts of the
defendants at Leghorn or not was matter of fact for the
consideration of the jury under all the circumstances of the case,
and not matter of law to be decided by the court in the manner
prayed for.
We think this instruction was properly refused by the court for
the reasons assigned by the judge. It may be added in support of
the statement made by the court that though the first and second
new count in the declaration claim only the sum mentioned by
counsel in their prayer, the third claims a larger sum, and
consequently left the plaintiffs in the court below at liberty to
ask from the jury such sum within the amount demanded by the third
count as the evidence would in their opinion prove to have come to
the hands of the defendants. The question whether the receipt and
sale of the sugars at the Havana amounted to a ratification of the
acts of Bell, De Yough & Co. at Leghorn certainly depended on
the circumstances attending that transaction. If Cunningham &
Co., with full knowledge of all the facts, acted as owners of the
wrapping paper without signifying any intention of disavowing the
acts of their agents, an inference in favor of ratification might
be fairly
Page 28 U. S. 82
drawn by the jury. If the cargo from Leghorn was received and
sold in the Havana under directions given at a time when Cunningham
& Co. felt a just confidence that their orders would be
faithfully executed by Bell, De Yough & Co., such an inference
would be in a high degree unreasonable. This subject was therefore
very properly left to the jury.
And the defendants' counsel furthermore prayed the court to
instruct the jury, as 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 15
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 as 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 to instruct the jury, being of opinion
that the said postscript did not necessarily as a matter of law
establish 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 its opinion there was a variance, then to find its
verdict for the defendants on that count.
On 15 September, 1824, Cunningham & Co. addressed a letter
to Bell, De Yough & Co. containing the orders which have given
rise to this controversy. This letter was sent by the
Halcyon, and contained the postscript mentioned in this
prayer for instructions to the jury. It was received on 20 January,
1825.
As the
Halcyon was to make a circuitous voyage by the
Havana, and Cunningham & Co. were desirous of communicating the
contents of its letter by that vessel previous to her arrival, a
duplicate was sent by the
Envoy, which sailed a few days
afterwards direct for Leghorn.
In this letter the postscript was omitted. It was received
Page 28 U. S. 83
on 30 November, 1824, and was answered soon afterwards with an
assurance that the orders respecting the tiles and wrapping paper
would be executed.
The first new count in the declaration is on the special
contract, and sets out at large the letter sent by the
Envoy, which was first received, and to which the answer
applied, in which Bell, De Yough & Co. undertook to execute the
orders that were contained in that letter. It is undoubtedly true
that a declaration which proposes to state a special contract in
its words must set it out truly, but this contract was completed by
the answer to the letter first received, and the obligation to
apply the funds when received was then created. The plaintiffs
below might certainly count upon this letter as their contract.
Other counts in the declaration are general, and both letters may
be given in evidence on them. The defendants might have objected to
the reading of the letter by the
Halcyon on the first new
count, but the whole testimony was laid before the jury without
exception, and the counsel prayed the court to instruct the jury
that as the postscript was omitted in the letter stated in the
first count, the evidence did not support the contract as in that
count alleged.
This prayer might perhaps have been correctly made had no other
letter been given in evidence than that received by the
Halcyon. But as the very letter on which the count is
framed, and which was the foundation of the contract was given in
evidence, the court could not have said with propriety that this
count was not sustained. It was left to the jury to say whether
there was a variance between the evidence and this count, and if in
their opinion such variance did exist, they were at liberty to find
for the defendants on that count. If there was any error in this
instruction, it was not to the prejudice of the plaintiffs in
error.
The fifth, sixth and seventh exceptions appear to have been
abandoned by the counsel in argument, and were certainly very
properly abandoned. These several prayers are founded on the
assumption of contested facts, which were submitted and ought to
have been submitted to the jury.
The eighth and last prayer is in these words:
"The
Page 28 U. S. 84
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 twenty-two hundred
petsos worth of tiles, and not performed (but broken), that the
measure of damages was the value of the said sum of twenty-two
hundred petsos at Leghorn, and not at Havana, and that as the
plaintiffs have taken and accepted another article of merchandise
at Leghorn,
viz., five thousand reams of wrapping paper,
of greater value than two thousand two hundred 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 it was 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; that what the proper damages were must be decided by it
upon the whole circumstances of the case; that in its assessment of
damages, it was not bound to confine itself to the state of things
at Leghorn, and it was 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 would not lay down any rule for
its government except that it was at liberty to compensate the
plaintiffs for their actual losses sustained, as a consequence from
the default of the defendants, but it was not at liberty to give
vindictive damages.
This prayer consists of two parts. 1st. The measure of damages
if the jury should be of opinion that the contract was broken. 2.
The ratification of the acts of Bell,
Page 28 U. S. 85
De Yough & Co, by accepting at Havana another article in
lieu of the tiles.
1. The measure of damages. The plaintiffs in error contend that
the value of the money at Leghorn, which ought to have been
invested in tiles, and not its value at the Havana, ought to be the
standard by which damages should be measured. That is, if his views
are well understood, that the value of two thousand two hundred
petsos at Leghorn, with interest thereon, and not the value of the
tiles in which they ought to have been invested at the Havana,
ought to be given by the jury.
This instruction ought not to have been given unless it be true
that special damages for the breach of a contract can be awarded
under no circumstances whatever; that an action for the breach of
contract was equivalent, and only equivalent, to an action for
money had and received for the plaintiffs' use. That the breach of
contract consisted in the nonpayment of two thousand two hundred
petsos; not in the failure to invest that sum in tiles. In fact
that under all circumstances, if no money came to the hands of the
defendants, the damages in such an action must be nominal. This can
never be admitted.
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, may 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 Havana, affords a reasonable standard for the
estimate of damages. The instructions of the judge seem to
contemplate this course, and his restraining
Page 28 U. S. 86
power would have corrected, by granting a new trial, any great
excess in this particular. The rule that the jury was to compensate
the 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.
That part of this prayer which relates to the ratification of
the acts of Bell, De Yough & Co. by the receipt of the wrapping
paper at the Havana has been fully noticed in the observations on
the third exception.
This Court is of opinion that there is no error in several
instructions given by the circuit court to the jury, and that the
judgment ought to be
Affirmed with costs and six percent damages.
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the District of
Massachusetts, and was argued by counsel, on consideration whereof
it is ordered and adjudged by this Court that the judgment of the
said circuit court in this cause be and the same is hereby affirmed
with costs and damages at the rate of six percentum per annum.
