Leonard v. New York, Albany & Buffalo Electro Magnetic Telegraph Co. , 1870 N.Y. LEXIS 10 ( 1870 )

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[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] The appellant seeks a reversal of this judgment, upon two grounds, and, unless we find its position right in reference to one or both of them, it is conceded that the judgment must be affirmed.

1st. It claims, that the plaintiffs' agent, Staats, was guilty of negligence in not stopping and unloading the vessel, after he received plaintiffs' dispatch of the 26th of September, and thus avoiding most of the damage, which plaintiffs sustained. Before this dispatch was received, the loading of the vessel was completed, the bill of lading was signed and delivered to the master, and he had procured his clearance from the port of Oswego. Staats knew these facts, and knew, also, that it was usual for vessels, at that season of the year, to hurry their departure. Relying upon these facts, and supposing the vessel had actually sailed, he made no effort to detain her. From all this, the referee found, that there was no negligence on the part of Staats, and I see no good reason for disturbing his findings. There were sufficient grounds for concluding, in good faith, that the vessel had sailed; the facts indicated that she had sailed, and I do not see how Staats could be charged with the want of ordinary diligence, in relying upon them. The greatest degree of diligence would, doubtless, have required Staats to have made inquiries for the vessel, after he received the dispatch. But, he was only bound to ordinary diligence, and I do not see how we can find the want of such a degree of diligence against the finding of the referee, and in favor of a party, who, upon this question, has the affirmative. (Hamilton v. McPherson, 28 N.Y., 76;Milton v. The Hudson River Steamboat Co., 37 N.Y., 210; Costigan v. The Mohawk Hudson R.R. Co., 2 Denio, 609;Dorwin v. Potter, 5 Denio, 306; Shearman Redfield on Negligence, § 598.)

But, aside from this, it is by no means certain that Staats could have obtained the salt from the vessel, if he had made the effort. He had made a valid contract to have the salt transported to Chicago, and the other party to the contract had taken possession of the salt, and entered upon the execution of the contract. What right had Staats to take the salt away from him? I know of no process of law, by which he could have done it. And what right did the defendants have to ask Staats to violate his contract with that third party, in order to shield it from the consequences of its own wrong. I am, therefore, clearly of the opinion, that the alleged negligence furnishes no defence to the action.

2d. It is also claimed, that the referee adopted an erroneous rule of damages, and that the plaintiffs should not, in any event, have recovered more than they actually disbursed for freight on the salt to Chicago. The measure of damages to be applied to cases as they arise, has been a fruitful subject of discussion in the courts. The difficulty is not so much in laying down general rules, as in applying them. The cardinal rule undoubtedly is, that the one party shall recover all the damages which has been occasioned by the breach of contract by the other party. But this rule is modified in its application by two others. The damages must flow directly and naturally from the breach of contract, and they must be certain, both in their nature and in respect to the cause from which they proceed. Under this latter rule, speculative, contingent and remote damages, which cannot be directly traced to the breach complained of, are excluded. Under the former rule, such damages are only allowed, as may fairly be supposed, to have entered into the contemplation of the parties when they made the contract, as might naturally be expected to follow its violation. It is not required, that the parties must have contemplated the actual damages, which are to be allowed. But the damages must be such, as the parties may fairly be supposed to have contemplated, when they made the contract. Parties entering into contracts, usually contemplate that they will be performed, and not that they will be violated. They very rarely actually contemplate any damages, which would flow from any breach, and very frequently have not sufficient information to know what such damages would be. As both parties are usually equally bound to know and be informed of the facts pertaining to the execution or breach of a contract, which they have entered into, I think, a more precise statement of this rule is, that a party is liable for all the direct damages, which both parties to the contract would have contemplated as flowing from its breach, if, at the time they entered into it, they had bestowed proper attention upon the subject, and had been fully informed of the facts. In this case, then, in what may properly be called the fiction of law, the defendant must be presumed to have known that this dispatch was an order for salt, as an article of merchandise, and that the plaintiff would fill the order as delivered; and that, if the salt was shipped to Chicago, it would be shipped there as an article of merchandise, to be sold in the open market. And the market price in Chicago being less than the market price in Oswego, that they would lose the cost of transportation, and the difference between the market price at Chicago and the market price at Oswego. I think, therefore, that the rule of damages, adopted by the referee, was sufficiently favorable to the defendant. The damages allowed were certain, and they were the proximate, direct result of the breach.

I do not think, under the facts of this case, that the plaintiffs, when they found the state of the Chicago market, were bound to re-ship this salt to Oswego. For anything that appears in this case, the cost of transportation to Oswego would have been equal to the difference in the market price between the two places. Then there was the risk of the lake transportation at that season of the year, and the uncertainty in the Oswego market, when the salt should again be landed there. If the plaintiff had shipped it, and it had been lost upon the lake the total loss would not have been chargeable to the defendant. By the wrongful act of the defendant, the salt had been placed in Chicago, one of the largest commercial centers in the country, and the plaintiffs had the right to sell it there in good faith, and hold the defendant liable for the loss.

I have, therefore, reached the conclusion, that the judgment must be affirmed; and in reaching this conclusion, I believe I am sustained by principles well settled, and by adjudged cases quite analogous. (Sedgwick on Damages, 37; Hadley v. Baxendale, 9 Excheq., 341; British Columbia c. Co. v. Nettleton, 3 Law Reports, Common Pleas, 399, 408; Wilson v. The Newport DockCo., 1 Law R., Excheq., 176; Griffin v. Colver,16 N.Y., 489; Hamilton v. McPherson, 28 N.Y., 72; Kent v. HudsonR.R. Co., 22 Barb., 278; Medbury v. The N.Y. Erie R.R.Co., 26 Barb., 564; Scoville v. Griffith, 2 Kern., 509;Cutting v. Grand Trunk R.R. Co., 13 Allen, 381; Squires v.Western Union Telegraph Co., 98 Mass., 382; Wenger v. UnitedStates Telegraph, 55 Penn., 262; N.Y. Washington Tel. Co. v.Dryburgh, 35 Penn., 298; Williams v. Barton, 13 Louisiana R., 494.)

Judgment affirmed with costs.