Andrews v. Pardee , 5 Day 29 ( 1811 )

Ingersoll, J.

(After stating the case.) The- question now is, whether it was competent for the comí to hear the evidence offered by the defendant ? My opinion is, that it was competent for the court to hear such eiidenee, and consequently, that there ought not to be a new trial. It is contended, that the defendant in this action, acted as an agent and attorney of the plaintiffs, and if he mismanaged with respect to the property committed to him, by deviating from his instructions, that he is liable to his principals for the value of such property.

Assuming this position to he correct, it necessarily follows, that there must be an enquiry with respect to the value of it, at the time when he became so liable. This property being ⅞¾ promissory noto against George Cruden, the question is, whether the enquiry ought to be confined to a mere casting of interest on the note, in order to ascertain the amount at the time when the liability commenced, or whether the enquiry should he extended to the ability of the promissor to pay it at (hat time? And as to this question, it appears to me, there can be but one opinion, if, in forming this opinion, we are ¡governed by the sound dictates of the understanding, and not by metaphysical nicities. When 1 say this, 1 mean, if we take up the question without any technical ideas on the subject, and without any precedents to guide us. In this point of view, surely it must be a very important enquiry, whether or not, the promissor were a bankrupt ? Because, if in fact he was a bankrupt, and was worth nothing, he eoujd pay nothing. The note, in such case, would letch nothing in market. In short, we get a rule for damages, by making the same enquiry in order to ascertain the value of the note, which we should make to ascertain the value of anv other property. It is a plain, simple enquiry, and the result is clear.

• But it may be, and indeed, has been objected, that the promissor, if sued on the note, never can say, that if is of less value than the principal and interest due on it, on the ground of his being unable to pay it. This ¡Manciple, it is said, will hold good both when the promissor is sued on the note for the non-performance of his contract, and when an action of trespass or trover is brought against him for having tortiously taken it, or for tortiously holding it. I agree to this principle. It strikes me, however, that the case of the promissor, when an enquiry is made as to the value of the note, stands on a different ground from that of an agent or attorney. By entering into the contract, the promissor engages to pay the promissee a specified sum, and si never shall lie in his mouth to say, when sued on the contract, that he is not obliged to perform it specifically. And it would be absurd to have a different rule of damages, if sued on the contract, from what would take place, if sued in trespass or trover. This, in triith, would be to give him a premium for unwarrantably laying his hands on ¡he note.

Again, I apprehend, there is another principle which distinguishes f lie case of the proinissor from t he case of the agent. .By executing the note for a certain sum, he has set a value, upon it, and this sum shall no more he departed from by him, than the value of property insumí, shall be departed from by the parties to a valued policy of insurance. He virtually, though not in so many words, engages that the note, as to him, shall he of a particular value-, u? long as by law he shall be obliged to pay it. if he tornou?!y seize on the note, and convert it to his own use, this value is fixed on him ; and il an action be brought against him for thus seizing and converting it, he must refund the same value in damages, and perhaps, somewhat more, for the tortious seizing. The case o; an agent, as I think, is not so. He takes a note to collect) or to use due means for the collection. He neglects these means. The question is, what damage has the principal suffered by this neglect ? Has he lost his debt by such neglect 1 If so, the agent ought to be answerable for the •whole. If, however, the debt be a bad debt, the debtor not having a cent of property, shall the principal make it a good debt against the agent ? I trust the law will warrant no such unjust speculation.

But further, it appears to me, though this very question may never have been decided, yet, that cases have been decided, which bear strongly upon it. It is a well known fact, that public securities, as they are called, have, in years past, been greatly depreciated. Many notes have been given payable in those securities, at a future day. These notes have been sued, and the question has been, as to the rule of damages ; and what has been the rule given by the court ? The answer is, the value of the securities at the timé, when, by the contract, they were to be delivered. How is that value to be ascertained ? By testimony as to their worth in market at such time. What are these securities, but promissory notes in favour of an individual against the government ? The government, if suable, would be liable té pay the face of them, in the same mariner as an indivhhfó) would be obliged to pay the face of his note,

II may be said, that an officer neglecting to do Ms duty on an execution, whether the debtor be solveiit or insolvent, is liable to the creditor far the whole debt. So also, if the sheriff suffer his prisoner to escape from gaol, being imprisoned on an execution, he is-irr like manner liable. Be it so. Such have been the decisions. These cages stand oh peculiar grounds. They, together with one I shall hereafter mention, are exceptions from the general rule. One reason, perhaps, why the sheriff and other officers, have been held to answer for the whole debt, is, that they are public officers, sworn to do their duty ; arid it might be dangerous to the community, if they might speculate upon the ability'of the debtor, and he thereby induced to neglect their duty, under an idea that small damages only could be given against them. The, statute, however, places neglect of duty, with respect to all writs, both of mesne process and execution, on precisely the same ground, to wit, by directing the court or justice, to “ award damages to the party aggrieved, having respect to the quantity or quality of the action, and the peril that might have happened to him, by tlje delay which he suffered,” It is possible, also, that the practice of assessing damages in this manner, may have been adopted from the practice in Westminster-Hall, of obliging the sheriff to pay the whole debt, when a particular kind of action, I mean the action of debt, is brought against him for the escape of a prisoner. By the common law, no action of debt would lie against the sheriff for an escape 5 but a reparation in damages must have been obtained by an action on the case, in which, a jury were called upon to assess the damages. And by an equitable construction of the statutes oí Westm. 2. eh. ¡3. and Rich. II. eh. 12. an action of debt was held to lie against the sheriff or gaoler, having in their custody a prisoner, charged in execution, for a sum liquidated and ascertained. After this action came into use, the debt was supposed to he transferred from the debtor to the sheriff or gaoler, and the whole was given against them, upon the principle, that in debt, the whole, or nothing, must be recovered.

But the principle of giving the damage actually sustained, ii' case be brought against the sheriff instead of debt, has been recognized in modern times. I alinde more particularly, to the case of Bonafous v. Walker, 2 Term Rep. 126. io establish 1 his point. That was an action of debt, brought, against the marshal of the marshalsea, for an escape ol' a prisoner, on execution in his custody. It was tried before Mr. Justice Butler, and a verdict obtained for the whole debt. A rule to shew cause, why there should not be a new trial, was granted, and among other reasons for a new trial, it was urged, that Use jury were not obliged to award to the plaintiff the whole debt, though it was an action of debt. In urging this point, ii was stated by the counsel, that if the action had been an action on the case for the same cause, it. was admitted, that the jury might have given nominal damages. Mr. Justice Bailer, in giving his opinion, says, “ The distinction between an action of debt, and on the case, is this ¡ at common law, an action on the case only lay against the sheriff or gaoler for an escape, in which case, the creditor might recover damages for the officer’s misconduct, but still he had a right to recover the debt against the original debtor.” “ But the statutes gave an action of debt against the sheriff or gaoler, to recover at once, the sum for which the prisoner was charged in execution.” “ Now, these being affirmative statutes, did not take away the common law-remedy ; so that the creditor has his election ; but if he adopt the latter, he must recover the whole sum.”

The other exception abovementioned, is that of a bill of exchange. It is an agreed point, that in order to make the drawer liable on a protested bilj, it is essentially requisite to give him due and seasonable notice of its non-acceptance, or non-payment. This must be done in every instance, except where the drawee has no effects of the drawer in Ids hands. This, though urged to be a point now settled, yet it has been formerly much discussed in Great-Britabi; and it has been again and again contended, if the drawer had not suffered by the want of notice, that is, if there had been no alteration of circumstances in the drawee, so as to affect (lie drawer, that he should be liable, though he had no seasonable notice of the bill being dishonoured. But as I have before observed, the technical rute is, Shat notice shat! he given. There is so much business done in the commercial world, by negotiating bills of exchange, that it is thought better (o adopt such a rule, though it may work mischief, in particular cases, than to have the question open in every case, w hether the drawer has actually suffered by the lach-⅝-s of the holder ?

. It was admitted by the counsel, who argued in favour of granting a new trial, that an attorney would not, in every instance, be liable to the extent of the debt, in case of mismanagement in collecting it. To prove this position, they cited Russell v. Palmer, 2 Wits. 325. where an attorney was sued for not charging the defendant in execution within two terms ¡¡ext after recovering judgment, by means of which, he wa? discharged from his confinement in gaol. A verdict was obtained for a considerably less sum than the amount of the debt. The principle, that the jury were not obliged in assess in damages the whole debt, was recognized by the court; and the reason given, why no more damages were assessed in that case, was, “ that there was some evidence, that Stewart (the debtor) was not totally insolvent, and that Russell (the creditor) possibly might be able, in time coming, to obtain some part of his debt, by execution against his goods,” &c. The same principle is also recognized in the case of Pitt v. Yalden, 4 Burr. 2060. It was an application made to the court to proceed summarily against the attorney, and to oblige him to pay the debt and costs, for not having declared against the defendant within two terms. The court refused the application, and said, the plaintiff must proceed by way of action against the attorney to recover his damages, to be assessed by a jury : And Mr. Justice Yates gives it as a reason why the damages ought to be assessed by a jury, that “ the whole of the debt might not be recoverable.” I presume the case from Wilson was cited to prove, that though the whole debt is not always the rule of damages against the attorney, in a case of mismanagement, yet, that where a sum short of that is given, it is only in a caso where the defendant is solvent, and the debt still recoverable. I think Hie case proves more than this. The court do not say, that the debtor is still able to pay the debt, but only, that “ there was some evidence that Stewart (the debt- or) was not totally insolvent, and that Russell (the creditor) might he able, in time coming, to obtain some part of hi? debt, by execution against his ¡roods." The case proves that an enquiry may be gone into, with respect to the qttanr. turn of the damages sustained by the principal, on account of the neglect or mismanagement of the attorney. The enqui-ry was, what has the principal suffered by the conduct of the attorney ? Let the same enquiry be made in the present case. To this point, the evidence offered, was material.

Again, it is to he noticed, that Mr. Justice Yates says, in the case cited from Burrow, “ that the whole of the.debt might not be recoverable.” If he meant (as I think the words will bear that construction,) that the whole debt might not be recoverable, Because the debtor might be unable to pay, it is a case directly in point. But it may be said, that he meant only, that the whole debt demanded in the declaration, might not be recoverable, as he afterwards says, “ The real debt is not ascertained, nor the, quantum of it.” Perhaps the words may bear either construction, and perhaps both.

The case of Le Guen v. Governeur & Kemble, 1 Johns. Ca. 437. in nota, was cited to prove, that nothing short of the principal and interest of the note ought to have been given by way of damages. This case was determined in the Supreme Court of ,the state of New-York, and (he judgment was affirmed by the Court of Errors of the same slate. It is a very long case, and several points were determined by the court, but none that I have been able to find, have any bearing on the present question. The great point in that case was, whether Bmerneur and Kemble, (being agents of Le Gum,) by refusing to authorize him to receive the avails of certain shipments to Frame, after taking out certain ex-pence», had not, at all events, made themselves liable to him for the whole property shipped, according to the value of it, as sold by them in Nem-York, they-having ostensibly ).ti ¡t to (tom/ Lope:' & Ruara ? or whether the rule of damages should he the net produce of the sales, after baking out certain balances and expences ? The court determined, that Governeur & Kemble by not giving the authority to Le Guen, which, it was said, they were by the contract bound to give, had taken the whole property to themselves, and should be answerable for the value of it, when shipped at Nerv-YorJc, in the same manner as a factor would be liable, who was instructed by his principal to sell goods for cash, but yet should self on a credit The factor, in such case, must answer to his principal for the value of the goods, whether he should ever receive any thing for them or not. So said the court in that case, “ Governeur & Kemble must pay to Le Gum the value of the goods at New York, to wit, the amount of the note of Gomes, Lopes & Rivera, which they had given for them and there was no question made, but the note was a good note at the time it was executed.

From the best consideration, therefore, which I have been .able to give this subject, I am of opinion there ought to be no new trial of this case.

I think, as I have before observed, that in cases of this kind, evidence of the ability of the promissor to pay the note, may be received. If the note, on investigation, should ali-near to be good, it ought to make no difference in assessing damages, whether the promissor be a punctual or a slack man ? Interest would be given, by way of damages, for delay of payment. If, however, on such investigation, the promissor should appear to be a bankrupt, and to be unable to pay any thing, the note then would be worth nothing, and no more than nominal damages ought to be given.

I have been more minute in my observations than I should Siave been, had not several of my learned brothers entertained a different opinion on this subject, from me. This circumstance alone, would cause me to distrust myself, in every case, where I had the least doubt I have no doubt, however, in the present case; but after all, it is possible I may he wrong.

Iti this opinion, Reeve, Trcmbi'Mi, Edmond, Bbainaks: and Baldwin', .is. severally concurred. Mitchem,, Eh- J. dissented to the opinion of the majority of the court.

Smith, J.

'Hie gist of this action is the giving op a note, by the defendant, without authority, which was the property of the plaintiffs ; and ail. that is stated relative to the giving lip the bill of exchange for the note, the former suit, and notifying the plaintiffs of that transaction, might as well have been omitted ; and being stated, only serves to shew how the plaintiff» came by the property of the note. If the plain tiffs had made that exchange themselves, or obtained the note in any other course of dealing, this cause would stand on the same ground it now does.

It is conceded upon the record, that this note was tin-property of the plaintiffs, and was given up by the defendant, without authority. His taking back the Hi! of exchange and offering it to the plaintiffs, can avail nothing. They were clearly not bound to receive it. None of the facts, therefore, which took place, either before or after, giving up the note in question, could have any effect to mitigate damages ; but if they could, proof of insolvency would not vary their operation, or increase their force.

The only question, therefore, which this record presents, is, whether proof of insolvency of the promissor of a note, can be admitted to mitigate damages, where the defendant has given it up without authority ?

1 consider the law to be well settled on this subject. If an attorney ⅛ guilty of any negligence, or other misconduct, in the management of a claim put into his hands for collection, which occasions delay or hazard, merely, he is liable for the actual damages sustained ; and the creditor may Bill! pursue his remedy against his debtor : and in a case of this description, it would be proper proof to mitigate damages, that the debtor was a man of sufficient property to pay the whole, or a part of the debt, though proof that he was insol-.¿ni, and had no property, could not 1»*; admitted io militate damages. But if the attorney, !>y his negligence, rr miseon-duet, extinguishes the dell, either by cancelling, or giving tip, or destroying the security, lie a; once assumes the do!»

What if the debtor is insolvent Í The money might he secured through (he medium of friends, or lie may become a man of properly hereafter, and the money may be coii< c;ed. The rale would be the same, wliere notes are taken wrongfully from the possession of the creditor, or wrongfully converted.

But it is objected, that the mle of damages, wherever property is illegally taken, or disposed of, is the value of the property, and that proof of insolvency in the debtor, only goes tc the value of the article. I admit, that the value of the article taken or disposed of, is the proper rule of damages ; but the only legal value of a credit is the amount of it, and no other rule of valuation can be adopted. The ability of men to pay their debts cannot be graduated. One man without property, may be more safely trusted, than another with a large estate, if the credit is to be given for a long period. One man may have a large estate in possession, hut owes more than it is worth ; still his credit may be good : Another may possess more property in value than the amount of his debts, but has lost his credit. One man may have habits of industry and economy, worth an estate. The in-‘egrity of another may induce those best acquainted with jiiru, lo give him credit ; and while he might be proved insolvent, and a jury thereby induced to give but a small sum foi a uote wrongfully taken ; yet the creditor might be unwilling to pari with it for a sum short of the full nominal unouer. The habits of another may be generally correct, >ut is addicted to some pernicious vice, which injures his prospects of success: Another may have property in expectancy ; and in this case, the age of bis ancestor, the state ,i his constitution and health, the amount of bis property, a ad number of other heirs, are all matters of consideration, in coming to a result, as to the value of the debt. — Again, ■he situation of a debtor’s family, the health of his wife, and that of his children, their habits and pursuits, must all be subjects of enquiry. In short, there is such an infinite variety of shades in the circumstances and prospects of men, that an attempt to estimate the real value of their debts, would lead to endless enquiry, and produce no beneficial result.

But again, when you have obtained judgment against the wrong-doer, you have but a debt against another ; and who knows that the prospect of collecting the money, is better than it was against the original debtor ? One may be insolvent, and so may be the other; shall we then, enquire into the circumstances of the defendant also, and give more or less damages, as we find his solvency to compare with that of the original debtor ? This must he done, if the enquiry is admitted at all; for surely, the creditor ought to be placed in as good a situation as though he had not sustained the injury ; and it would do manifest injustice to give him judgment for a less sum than was due to him before, unless you give him an equivalent by bettering his security.

Suppose the debtor himself converts a note, shall we adopt a different rule of damages, from the one adopted in case a third person converts it ? Is not the value of the article as much the rule of damages, in the one case as in the other ; and is not the value the same to the creditor, in both cases ?

If a sheriff suffers a voluntary escape of a debtor, taken in execution, he thereby assumes the debt, though the rule of damages, in all cases of misconduct in a sheriff, is the same as in injuries by others. The real damage sustained, is the rule in both cases ; but where that injury consists in the destruction of a debt, the amount of the debt is the only rule of damages. Will it be said, that a sheriif, who has suifered an escape, cannot avail himself of the insolvency of the debtor ; and yet, that an attorney, who has, without authority, and in violation of his duty, given up a security, may avail himself of such insolvency ? This would be making a distinction, where there is no difference in circumstances ; both would be guilty of a breach of duty ; both would be liable to tbe real damages; and the only question ■vould be. what arc the amount of those damage:- ? if these is any difference, it. would be iu favour of the sheriff, because Che creditor may take out another execution, and still take ihc debtor; whereas, in the other case, there is no possible remedy against tin: debtor. J am, therefore, clearly ul opinion, that the amount of the debt, in a case of tisis kind, b-the only rule of damages; but, if we were to adopt any different rule, still, I think the enquiry should be, what is the security worth in the market, to be sold at the risk of the purchasers ? and the rule should be its appraised value. I see no more propriety in enquiring into the particular circumstances, situation and prospects of a debtor, in order to estimate the value of his security, than I should to enquire iulo the particular situation, soil, and quality of lands, in order to estimate their value; or the shape, proportion, carriage or gait of an horse, in order to estimate his value. These en-quiries would lead to endless investigations, and produce nothing but doubt and uncertainty.

Suppose we were to form an estimate upon the value oi bank stock, which is claimed to be worth either more or less than par, should we enquire into the amount of dividends, and into all the minute circumstances which might affect those dividends in future; or would the enquiry be, what is the worth in market; and could not the court take at once its appraised value for their rule ? Or suppose the case of a public security, which is claimed to be depreciated, and the court are about to form an estimate of its value, will the court enquire into all the minute circumstances attending it ; or will they be governed by its value in the market ?

i think, therefore, that proof of insolvency, in any point ol* view, could net be admitted 4 and that a new trial ought to be granted.

.-■■wíkt, J.

The plaintiffs were not bound to accept the mil of exchange m lieu of the note- It was a breach of trust and duty in the defendant to give up the note and truce back the bill of exchange ; and he can take no benefit of such wrongful act. It is not for him to say, that one is as good tí inií other: be lias noted without authority, anil ought tu suffer the consequences of ü. I think that the case stands precisely on the same ground as if the defendant had given up the note against the directions of the plaintiffs, and had not received hack the lull of exchange ; and that the only question ⅛ whether the defendant can give in evidence the insolvency of Cmfew ?

I! is a clear principle of justice, and 1 apprehend no precedent can be found to the contrary, w herí? a man wrongfully takes ot destroys a chose in action be lunging to another, ta a bond, bilí or note, that it is not competent for such wrongdoer to anew, in mitigation of damages, that the debtor was insolvent; but the rule is the amount of such bond, bill or note, r>r ether chose in action. So, if an agent or attorney should, without authority, from this principle, give up or destroy a note, bond, or other chose in action, the same rule of damage* would apply. This rule ⅛ founded in the highest reason. For it never can be ascertained, that the debtor would not have paid the whole sum. It does not conclusively follow, that because a man is bankrupt, that he will not pay his debts; he may have means not apparent; — friends also would assist him: he may make great exertions to save his credit; and he may, at some future time, become able to pay the whole.

Suppose, in this case, the court render judgment for one dollar damages, and Cruden, in a short time, should become heir to an independent estate, and should discharge all his debts ; such judgment would then operate with the greatest injustice as it respects the plaintiffs. The only rule, then, that under all possible circumstances, can do justice to the party injured, is to give him the nominal amount of 1⅛ claim. A wrong-doer cannot complain of this : He has des troyed the evidence of a debt, and it is not for him to say, that it is of less value than it purports to be : And courts are not bound to exercise such a tender regard for him, thai for fear he should pay more than the thing was possibly worth, the innocent proprietor should be subjected to the chance of taking less. Wrong-doers ought to suffer to the utmost posible extent of the injury they have coram'iti'd.

Where an agent or attorney, intrusted with a noto, or other chose, ia guilty cf a neglect of his duty, and retain? tin-note, ¿m. so that the claim of the principal is not destroyed there it would be reasonable to enquire into the ability the debtor : and the just rule of damages would he Ihv n-.-liird amount oi the injury sustained. The case of Russell v Palmer. 2 Wils. 325. so much relied on by the temar I fo; the defendant, goes no further than this. That was an &c fen against an attorney for a neglect of doty, in not charging a debtor in execution within due time ; and it appearing in evidence, that the debtor was not totally insolvent, and that the plaintiff might recover part of his debt, the jury were fold they might fiad what damages they pleasedj and they accordingly found less than the debt.

I think a new trial ought to be granted.

New trial not to be granted.