Bell v. Cunningham

The case in equity is substantially narrowed down to the consideration, whether the former judgment, so far as regards the non-investment of the 700 pezzos stated in the case, is correct upon the new facts now alleged; and, if not, whether the defendants are entitled, upon the principles of a court of equity, to any relief. If either ground is against the plaintiffs, their bill fails; they can succeed only by establishing both grounds in their favor. There does not appear to have been a written agreement between Mr. Torrey and Messrs. Cunningham, Loring & Co., in respect to this shipment. Nor does it appear, that the plaintiffs had any other means of knowledge what it was, except from the *93language of this letter, and from the postscript to the letter of the plaintiffs of the 1st of September. That the parties should in a matter resting wholly in parol, differ in respect to what were the terms of the shipment, the shipper supposing, that the advance of the 700 pezzos was to be conditional, and the owners of the Halcyon, that it was to be absolute, and at all events, is not surprising; for differences of this sort are of daily occurrence. But that in so important a contract no written paper should have been executed, and no joint instructions sent to the consignees, is truly matter of surprise, since it was the only effectual means of obviating possible difficulties. Indeed, there is no evidence, that Mr. Torrey ever' saw the postscript to the letter of the defendants to the plaintiffs, and the defendants positively deny that they ever saw the letter of Torrey to the plaintiffs. If I were called upon to decide upon the whole transactions, whether the views taken of the contract of shipment by the defendants, or by Torrey, was a correct exposition of it, I confess, that the strong inclination of my mind would be, that the defendants truly expounded it. Still it is quite possible, that there might have been a very honest misconception of it by both parties, from the imperfect explanations given, and from the strong belief, in the then state of the market, on the part of the defendants, that the half profits must in every event exceed the 700 pezzos. Now the recovery against the plaintiffs having been for damages for the non-investment of the 700 pezzos, as well as the other funds, contrary to orders, it becomes important to consider, whether if these facts and the others now in the case had been before the court at the trial, the court would have authorized by its opinion the recovery of such damages. It is agreed on all sides, that there were no profits on the sugars, which would have justified the advance of the 700 pezzos. And the ques-tiqn turns upon this, whether the plaintiffs were, under the circumstances, bound to make it, and to invest the same accordingly.

It is very certain that the plaintiffs have not disobeyed the instructions given them by Mr. Torrey. They have acted in exact conformity to them. If the present judgment stands good against the plaintiffs, they have no remedy over for the same against Torrey. In what manner could they shape a claim against Torrey. They did not make any advance on his account. He did not authorize them to make any, except conditionally. And, whether in respect to Messrs. Cunningham, Loring, & Co. his orders conformed or not with his contract, was nothing to the plaintiffs. They had no right to bind him to a fulfilment of it And if a recovery is now justifiable against the plaintiffs, it is because they have entered into a contract with the defendants to make an advance and investment under circumstances not authorized by Torrey’s orders. Now this is very material to be considered; for the loss, whatever it is, must be borne exclusively by the plaintiffs. On the other hand, if the defendants are not entitled to retain the damages for the 700 pezzos, against the plaintiffs, still, if Torrey has broken his contract with the defendants, by not permitting the advance to be made, they have a perfect remedy over against him.

First, it is said, that the bill of lading accompanying the consignment of Torrey’s shipment states, that freight is to be paid “as per agreement.” But what agreement?' The defendants say, that the agreement must be that, which they state in the postscript of their letter of the 15th of September, and in the master’s instructions for the voyage. But there is no proof, that these instructions were ever seen by the plaintiffs. The postscript was seen by them. But as there is no reference to any particular agreement, and no written agreement was produced under the hands of the parties, there is no ground to say, that the agreement, under which the plaintiffs were to act, was any more that stated in the postscript, than that stated in their own orders from Torrey. Nor are the terms of the agreement so differently set forth by the postscript and the orders as to be wholly irreconcilable with each other. The 700 pezzos were to be advanced at Leghorn. But the advance, though stated in general terms in the postscript, might still be fairly understood by the plaintiffs as conditional and discretionary, as stated in the orders. And it was their duty to act in a manner, if possible, reconcilable with both. If the parties have, by their neglect to sign joint orders, placed the plaintiffs in a situation to act, and yet they may mistake what is their duty, ought a court of equity to hold them responsible, as if they had been themselves guilty of gross laches and wilful disobedience of orders?

But it is next said, that, if the orders were incompatible, the plaintiffs should have rejected all the consignments both of ship and cargo, and thus have protected themselves from responsibility. I exceedingly doubt,, whether, under the circumstances, they would have been justified in so doing; and if the defendants had sustained any injury from their refusal, it would have been difficult to have exonerated themselves from the payment of damages. Because they could not carry into effect all the contracts of all the parties, they were not bound to reject alL .And if they were at liberty to accept the consignments of Messrs. Atkinson & Rollins, and others, there is no ground to say, that they were bound to reject the consignment of Torrey. The argument for rejection goes,, as it seems to me, to the whole consignments, if to any. But if they might have rejected' all, or a part, still the inquiry is, whether-they were bound so to do? I think they were not They had a right to receive the other consignments, and also that of the vessel,. *94in order to reimburse themselves, for their purchases already made, and to be made, of tiles and paper. And if they had refused the consignments, there is no pretence to say, that they were bound to supply the tiles and paper. The rejection would have been owing to a neglect on the part of the defendants, or of the shippers, and not of the plaintiffs. But I do not accede to the doctrine advanced at the bar, that, where there is a consignment of ship and cargo, belonging to different persons, and the ship-owner construes his contract one way, and the shippers another way, the consignees are bound at their own peril to settle on the spot the rights of the parties. My opinion is, that the consignees are bound to obey the orders of the consignor, and not of the ship-owner, if there be any discrepancy between them. It is true, that the ship-owners are not bound to deliver the goods unless the consignees agree to pay freight, &c., according to the contract between them and the shippers. And they may insist upon an absolute agreement to this effect on the part of the consignees, before the delivery, if there be any dispute as to what the contract is; and the consignees will be then bound by their own agreement But where no such dispute is known or understood at the time of the delivery, and it passes sub silentio, then the consignees cannot protect themselves in disobeying the orders of the consignors. They are bound to pursue them; and if any injury arises to the other side, the remedy lies against the consignors, and not against the consignees. In the present case there is no evidence to show, that the master of the Halcyon demanded back Torrey’s sugars, or that he expressed dissatisfaction with the conduct of the consignees under the circumstances. It is true, that the defendants, in their letter of the 18th of April, 1825, do complain to the plaintiffs of their breach of orders in not investing the 700 pezzos, as well as the other funds. But the plaintiffs, in a reply of the 27th of .Tune, 1825, state the reason. “The sum of 700 pezzos, which were to be advanced here, on account of half profits of the Halcyon cargo of sugar, not having been due from a default of profits, we considered ourselves authorized to act with a discretionary power, otherwise be assured, that we never deviate from orders.” No reply was ever made by the defendants to this letter. And this, to some extent at least, furnishes a presumption in favor of their acquiescence in the fairness of the plaintiffs’ conduct, though its legal correctness may not have been admitted.

There is another consideration not wholly Immaterial. As the postscript was not communicated to the plaintiffs until the arrival of the brig, they had no means of knowing, or even of conjecturing, that there would be any discrepancy between the contract, as •understood by Torrey and by the defendants. It was too late then to consult either party; for the delay would have been equivalent to a loss of the voyage. The plaintiffs, then, were compellable to act in a new emergency; and their conduct, if bona fide, is certainly entitled to great indulgence. It does not appear that Messrs. Murdock, Storey, & Co., the shipper’s agents at Havana, made any communication to the plaintiffs on the subject; so that they were left wholly to thread their way by the light of the orders of Tor-rey and the postscript. The ground of recovery for the non-investment of the 700 pezzos certainly was, that there was no proof, that the advance was not absolutely ordered by the consignor of the shipment. If it had appeared otherwise, I am free to say, that I should have given a different direction to the jury on this point. It seems to me, that where an agent receives orders from the consignor giving one interpretation to the contract, and from the ship-owner giving a different interpretation, he is not required to reject the consignment; but he may receive it and act for the benefit of both parties, and remit the question, for them to decide it for themselves. I do not think he is bound to involve himself in a law-suit by a breach of the orders of the consignee. In the present case, if it stood before the jury, as it now does, I should be of opinion, that, however equitable might be the claim for damages by the defendants against Torrey, that claim ought not to be sustained against agents, who have acted bona fide, and without any wilful act done in breach of their duty.

The remaining question is, whether, the recovery having been had perfectly justifiably by the defendants upon their own view of the case, the plaintiffs have now any right to relief against the full effect of that judgment. I agree entirely to the doctrine, that, if the defendants have had full knowledge and means of making a complete defence, and have omitted so to do, that furnishes no ground for a new trial at law or in equity. This, however, is not the case of an application for a new trial, either at law or in equity. It is an application for an injunction pro tanto to the judgment for what is not conscientiously due from the plaintiffs, however conscientiously the defendants might deem themselves entitled to retain it. The language of the court in the case of Marine Ins. Co. v. Hodgson, 7 Cranch, [11 U. S.] 332, 2 Pet. Cond. Rep. 516, seems to me to contain so cogent and clear an exposition of the time principles, which ought to govern a court of equity on this subject, that it is useless to go farther into the authorities upon the general doctrine. The ground of the present bill is, that the plaintiffs were taken by surprise at the trial, and had no opportunity to avail themselves of the de-fence, which they now set up; that they have been guilty of no negligence; and that they have lost their cause from sheer mistake and ignorance of the nature and extent of the claim against them.

*95The first question is, whether the plaintiffs had any notice of the claim on account of the non-investment of the 700 pezzos. No notice in pais, that it was contemplated in the suit, is established. But the defendants insist, that they always did contemplate it as a part of their demand, and that it is covered by the counts in their declaration, and therefore constructively brought home to the knowledge of the plaintiffs. The suit was originally brought in the state court in 1S27, and was removed into the circuit court, and came on for trial at October term, 1828. The original declaration contained, besides the money counts, only one special count, and that was in the most general form, alleging that Bell, De Youngh & Co. had undertaken, out of certain funds of Messrs. Cunningham, Loring & Co., to purchase for them at Leghorn upon commission, 2200 pezzos in value of marble tiles of certain specified dimensions, and had broken their contract. Upon the trial, it appearing to the court, that the special agreement produced in evidence was not sufficiently set forth, the then plaintiffs obtained leave to amend, and filed three new counts, upon which a trial was had at the same term. The first new count is in substance founded on the original letter of the 15th of September, 1824, and recites it, without any allusion whatever to the postscript, and avers the freight-money recovered to have been, (under a videlicet,) 3449 pezzos, and a neglect to make the investment The second new count states the voyage to Havana, the leaving of goods there to be carried from thence to Leghorn, on freight for certain moneys to be paid by the owner's thereof to the then plaintiffs, and their intention to invest at Leghorn 2200 pezzos of such moneys, so to be received, in marble tiles, &c., the residue of such moneys, after deducting disbursements, in wrapping-paper, and a promise of the then defendants out of such moneys to make the purchases accordingly. It then avers, that a large sum became due, payable at Leghorn to • the then plaintiffs, for the freight of the said goods, to wit, 3439 pezzos, which was received by the then defendants, and alleges a breach in the non-investment. The third new count alleges the contract to be, that heretofore, to wit, on the 9th of December, 1824, the then defendants had in their hands a large sum of money, to wit $5000, the property of the then plaintiffs; and the then defendants undertook to purchase for the then plaintiffs 2200 pezzos in value of marble tiles &c., and to invest the residue thereof, after deducting disbursements, in wrapping-paper, &c., &c.; and then proceeds to state a breach by non-investment, by which the then plaintiffs had sustained damages to the amount of $7000.

The original declaration certainly contained no count adapted to make out a case under the postscript. And it does not appear to me, that the first or second new counts, in the manner in which they are actually framed, can cover any claim for the non-investment of the 700 pezzos. They seem to me exclusively adapted to meet the case of the non-investment of the funds under the original letter, independent of the postscript. The only count, which seems entitled to cover the 700 pezzos, is the third new count; and unless my recollection misleads me, this was the count, on which the right to recover was, at the trial, mainly, if not exclusively rested. Now, it cannot escape observation, that this count is vei'y general in form, and conveys not the slightest information as to any particulars of the funds. The gravamen, which it principally purports to insist upon, is the non-investment of the 2200 pezzos in marble tiles, and the statement of the funds is under a videlicet, and merely introductory. Had, then, the plaintiffs any reason to suppose, that they constituted a part of the claim of .Messrs. Cunningham, Loring & Co. against them? I do not ask, whether the latter contemplated it as a part of their claim; for that may be admitted, and yet the posture of the case be not changed. I am of opinion, that there is no evidence in the case, that could reasonably lead the plaintiffs to such a conclusion. It is true, that Messrs. Cunningham, Lor-ing & Co. did, in their letter of the 18th of April, 1825, complain to the plaintiffs of the non-investment of the 700 pezzos, as a grievance. But the plaintiffs in their reply of the 27th of June, 1825, already alluded to, stated, that the advance of the 700 pezzos was to be conditional and discretionary, in case there were half profits. The omission on the part of Messrs. Cunningham, Loring & Co. to reply to that statement, would naturally lead the plaintiffs to presume, that so far at least they acquiesced in the justification set up by them. And the original declaration gave no notice of any different intention. And there is no pretence to say, that, by any other matters in pais, the plaintiffs had any special notice of this claim being insisted on.

Now even supposing the new counts gave the most perfect notice of the claim at the trial, it is most manifest, that the plaintiffs could not be apprized of it; for they were in a foreign country, and utterly without any conusance of the proceedings at the trial. The new counts were filed after the trial commenced, and a delay of a short period only was allowed before the trial was again resumed. I have no right to refer to my own recollection of the occurrences at the trial. But it has been stated at the bar, and admitted to be correct, that although Messrs. Cunningham, Loring, & Co. insisted, that they had always intended to make this claim, the counsel for Messrs. Bell, De Youngh, & Co. expressed an utter surprise at the information, and asserted his prior ignorance of any such claim. And it is not now denied, that such was the fact on his part. And it is *96not controverted, that, at that time, he had not the slightest knowledge of the orders of Mr. Torrey, so as to enable' him to avail himself of that defence.

What, then, is the case before the court? Foreigners are sued in an action, which gives them no notice of the particular claim. Their counsel, the foreigners being resident abroad, go to trial upon the declaration, as it stands, and that declaration is not supportable. New counts are filed, by leave of the court, which cover a claim not before embraced in the actual frame of the declaration. The foreigners have no notice of it, and of course no means of instructing their counsel on any point of defence. The trial immediately proceeds, and a verdict is obtained, which upon facts, which could have been supplied upon due notice by the foreigners, would not have been recovered according to the principles of law. Upon such a case, where the recovery must be, if maintained, a final loss to the parties; where they can receive no ulterior remedy; where they acted merely as agents, bona fide, and according to the orders of their principal; can there be a doubt, that a court of equity ought to furnish redress? It is a case of substantive, unqualified surprise. Even courts of law do not hesitate to grant new trials in cases of surprise. It is a case of persons abroad, who are necessarily compelled to rely on counsel at a distance, and without the means of immediate communication with them. And in such cases, courts of law look with more indulgence in granting new trials, even where the attorney may not be presumed to be wholly without negligence, and more diligence might have brought the proper defence to his knowledge, the papers being in his possession. Broadhead v. Marshall, 2 W. Bl. 955; Grant, N. Trials, 132, 115.

Looking, then, to the case, as it is now presented to the court, I feel, that I am doing no more than what every court of equity would, under like circumstances, feel itself bound to do; to grant relief, and a perpetual injunction as to so much of the judgment, as is covered by the damages given on account of the non-investment of the 700 pezzos. This is readily ascertained by mere computation, and applying the rule of proportion. I make this decree without the slightest intention of suggesting, that the defendants have insisted upon a hard and unconscionable verdict, or have been wanting in all due equity. They have sustained great losses by the misconduct of the plaintiffs in not complying with their orders; and might fairly enough claim to retain any sum, which was not beyond those losses. And, inasmuch as they have been in no default, I do not see that they ought to be deprived of their costs in this suit.