Gray v. . Central R.R. Co. of New Jersey

This action was brought to recover of the defendant damages, because of a breach of its contract to buy a steamboat. The plaintiffs had judgment upon the verdict of a jury, which awarded interest upon the sum in which the plaintiffs were found to have been damaged. Upon appeal to the General Term, that court ordered a modification of the judgment, by reducing the verdict to the amount found by the jury, exclusive of interest, and affirmed the judgment as so modified. From the judgment of affirmance the plaintiffs and the defendant have appealed; the former because of the reduction in the amount of their recovery and the latter because any recovery by the plaintiffs was sustained.

In so far as the judgment appealed from affirms the plaintiffs' recovery of damages for breach of the contract, I see no legal reason for disturbing it. The important question for us to determine arises upon the plaintiffs' appeal from the determination of the General Term, that the jury should not have been allowed to add interest to the amount in which they found the plaintiffs to have been damaged. This being an action for the recovery of unliquidated damages, whether interest was recoverable therein depended upon how far the plaintiffs' demand was such that it was capable of being ascertained, or computed, if only approximately, by reference to established market values. That is to say, if this case were one where, according to the evidence, it appeared that a steamboat, like the one in question, had a more or less well-established value in the market, so that, upon the indefensible refusal of the defendant to complete its contract of purchase, it could be said to have been chargeable with a knowledge of the damage sustained, actual or approximate, then the plaintiffs' recovery should carry interest, as matter of law. (McMahon v. New York Erie Railroad Co., 20 N.Y. 463;Mansfield v. New York Central H.R.R.R. Co., 114 N.Y. 331.)

The evidence shows that this steamboat had been bought by the plaintiffs from the United States government, and was, thereafter, offered for sale by them as a second-hand steam ferry boat. There was evidence given by two witnesses, called by the plaintiffs, as to what was the fair market value of such a vessel. But that there was a market value, or price, in the ordinary sense of those terms, for such an article, was not made out by the evidence; or, at least, not in a satisfactory or conclusive manner. The witnesses, who testified upon the subject, were competent to express an opinion as to what such a vessel was worth in her condition; but that would only go to prove what her actual value may have been, in the opinion of those familiar with the business of boat building, and would not, necessarily, show that there was any established market value or rate. From the evidence it would rather seem that the market value spoken of was merely synonymous with the actual value. The instruction given by the trial judge to the jury was, that the plaintiffs' damage must be measured by the difference between the contract price and the market value of the boat at the time she should have been received and that, in addition, they were entitled to add interest to the amount found to be that difference. An exception was taken by the defendant to that instruction and, at the General Term, the court, in reviewing the judgment upon the appeal, was at liberty to determine upon the facts whether such an instruction with regard to interest was correct. If, from those facts, it did not appear to the court that the evidence justified a finding of there being an established market value, or rate, for such vessels, by reference to which the defendant might have ascertained the extent of the damage which the plaintiffs might sustain from its refusal to complete the contract, then, I think, the determination of the court, in striking out the award of interest from the verdict, should not be disturbed by us. I think, not only, that there was a clear latitude for the exercise by the General Term of its judgment in that respect upon the facts, but that it could not be well said that those facts brought the case within the rule as to the allowance of interest upon unliquidated demands, as we must regard it to be settled by the decisions of this court. In the early case of Van Rensselaer v. Jewett (2 N.Y. 135), the rule was laid down that, where a debtor is in default for not paying money, delivering property, or rendering services, in pursuance of his contract, he is chargeable with interest, from the time of default, on the specified amount of moneys, or the value of the property, or services, at the time they should have been paid or delivered. That was a case where the action was for rent payable in specific articles. In the subsequent case of McMahon v.N.Y. E.R.R. Company (20 N.Y. 463), where the action was to recover for work performed and materials furnished by the plaintiff in the construction of the defendant's road, the case of Van Rensselaer v. Jewett was referred to and carefully considered. Judge SELDEN said that, "The old common-law rule, which required that a demand should be liquidated, or its amount in some way ascertained before interest could be allowed, has been modified by general consent, so far as to hold that if the amount is capable of being ascertained by mere computation, then it shall carry interest; and this court in the case of VanRensselaer v. Jewett went a step further, and allowed interest upon an unliquidated demand, the amount of which could be ascertained by computation, together with a reference to well-established market values; because such values in many cases are so nearly certain, that it would be possible for the debtor to obtain some proximate knowledge of how much he was to pay. That case went, I think, as far as it is reasonable and proper to go in that direction. So long as the courts adhere even to the principles of that case, they are not without a rule which it is possible to apply." In Mansfield v.N.Y.C. H.R.R.R. Company (114 N.Y. 331), where the action was for damages for breach of a contract to construct a grain elevator, Judge BRADLEY, with some care, reviewed the question and the cases, where it had been discussed, and he sums up the matter in this language, in referring to the doctrine of the cases: "So far as I have observed, it has not been extended to actions to recover unliquidated damages for breach of contract, unless the means are accessible to the party sought to be charged, of ascertaining the amount by computation or otherwise, to which the other party is entitled." It was held in that case, because the amount of the claim for damages was entirely uncertain, and was closely contested by the defendant, that the question of interest should have been excluded from the consideration of the jury upon the trial. These cases, and others which might be cited, in my judgment, have so far settled the rule in this state that we should not undertake at the present day to abrogate it and the careful consideration which it has received by the courts justifies us in refusing to give it any further extension.

Nor can it be said that adherence to the rule is prejudicial to the rights of those who are situated as were the plaintiffs here. When the defendant refused to perform its contract, the plaintiffs could have brought an action against it to recover the contract price of the vessel; in which case a recovery by them would carry interest. Or they could have sold the vessel for the account of the defendant and have brought an action to recover the difference between the amount realized upon the sale and the contract price, in which case a recovery would, also, carry interest. What the plaintiffs did, however, instead of adopting either one of these courses, was to retain the property as their own and to bring this action for the damages sustained by the refusal of the defendant to perform its contract. They thus brought themselves within the operation of the established rule, so far as a recovery of interest was concerned, and failing to make a case upon the evidence, in which interest became recoverable upon the amount of damages proved to have been sustained, the rule should control.

I think the judgment should be affirmed, but without costs to the plaintiffs, or to the defendant.