Niagara Falls Paper Co. v. Lee — 20 A.D. 217

Majority

p. 217

Niagara Falls Paper Company, Respondent, v. George A. Lee and Gertrude E. Lee, Appellants.

Headnote

Indemnity bond against damage to vessels by reason of existing contracts — where a vessel is libeled, because of such a contract, the indemnitors cannot show that the contract was void — measure of damages — duty to make the damages as small as possible.

Proof that the vendors of three vessels, which it was claimed had been and were intended to be used as consorts, and of which only one, the St. Louis, was a steamer, had indemnified their vendee “ from any and all loss, damage and liability whatsoever arising from or by reason of any debts or contracts, maritime or otherwise, which were made or contracted prior to the 13th day of February, 1893,” and that one of the sailing vessels was subsequently libeled, on a maritime contract of freight, made prior to February 13,1893, at Milwaukee, where the other sailing vessel then was loaded’ with oats for Buffalo, entitles the vendee to damages for the detention of the vessel libeled; nor can the vendors, as a defense to such claim for damages, show that the claim under which the vessel was libeled was not valid.

Where it appears that, at the time of the libel and detention, the St. Louis was undergoing repairs at Buffalo, and that the vendee did not intend to send her to Milwaukee to tow the two vessels there to Buffalo, and, so far as appears, another steamer could havn been procured to tow the other vessel which was not libeled to Buffalo, the vendee cannot recover for the alleged detention of the St. Louis and that of such last-mentioned sailing vessel, as it does not appear that they were detained as a direct, necessary and natural result of the detention of the libeled vessel.

The law imposes upon a party, subjected to an inj ury by a breach of contract by the other party, the active duty of using reasonable exertions to make the injury as light as possible, and, it seems, of showing with certainty the damages resulting therefrom, and, of not leaving them to speculation or conjecture.

Appeal by the defendants, George A. Lee and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Erie on the 24th day of March, 1896, upon the verdict of a jury for $1,282.47, and also from an order entered in said clerk’s office on the 2d day of April, 1896, denying the defendant’s. motion for a new trial made upon the minutes.

The action was to recover damages that the plaintiff had sustained by reason of delay to the steamer St. Louis and two schooners (the

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Champion and the Potomac), caused by the libeling of the Champion in the United States District Court at Milwaukee in the spring ' of 1892. These vessels, on the 18th of February, 1892, were the property of the defendant Gertrude "E. Lee. On that, day the-plaintiff purchased these vessels of her, taking a bill of sale for each,, and on the 29th day of February, 1892, the defendants, upon a sufficient consideration, executed and delivered to the plaintiff an instrument in writing, as follows:

“This agreement, made the 29th day of February, 1892, by and! between George A. Lee and Gertrude E. Lee, of the city of Buffalo,, parties of the first part, and Niagara Falls Paper Company, of' Niagara Falls, N. Y., party of the second part.

“Witnesseth, that in consideration of the purchase by the- parties-of the second jiart of the vessels St. Louis, Champion and Potomac, ■of and from the said parties of the first part, the said George A. Lee-- and Gertrude E. Lee do hereby jointly and severally, by these-presents, undertake and agree to indemnify and save and keep-harmless the said party of the second part from any and all loss,, damage and liability whatsoever arising from or by reason of any debts or contracts, maritime or otherwise, which were made or contracted prior to the 13th day of February, 1892. The said grantors-to indemnify the grantee against any damage for loss in consequence of any debts or contracts, maritime or otherwise, entered into before-February 13, 1892.”

At the time of the execution of this bond the Champion and the Potomac were at the port of Milwaukee, where they had been left by the St. Louis in the fall of 1891. The St. Louis was at the port of Buffalo. The Potomac was loaded with oats for Buffalo. The Champion was light, having discharged a cargo which had been delivered by rail, but a marine contract for freight had been entered into prior to the 13th of February, 1892, which provided for the-delivery by the Champion of a cargo of corn at Buffalo, and on the 6tli of April, 1892, the Champion was libeled in the United States District Court at Milwaukee upon this, contract. . The Champion was arrested upon the warrant issued upon this libel, and was-detained thereby from the 6th day of April until the 29th of April,, 1892, a period of twenty-three days, when she was bonded and discharged by proceedings taken by the defendants.

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One John L. Crosthwaite, a vessel broker, residing at Buffalo, was the agent and manager of the plaintiff in the transactions, and negotiated the sale of the vessels, received notice by telegram of the libeling of the Champion on the 6th of April, and notified the-defendants immediately, and, according to his testimony, they promised to execute a bond and have the Champion released, and kept promising frequently to do so, but ■ neglected it until the twenty-eighth of April. The St. Lowis was undergoing repairs in Buffalo during the month of April by direction* of the plaintiff, but she was ready to leave for Milwaukee about the twentieth of April, and it would take four and a half to five days for her to make the trip, so that she could not have arrived at Milwaukee' to tow the Champion or the Potomac until about the twenty-fifth of April.. The Potomac remained with her cargo at Milwaukee until the twenty-second of April, when she was towed to Buffalo alone by a vessel procured by the plaintiff. The St. Louis did not go to Milwaukee before the Champion &'s, released, and the plaintiff’s agent testified: “I did not start the St. Louis up there on the 6th-; did not intend to start her at all. I intended to get those boats down here by towing them with outside' steamers. I expected to tow them (the Potomac and the Champion) both together.”

The plaintiff sought to recover in the action upon the indemnity bond above set forth, and over the defendants’ objection gave evidence upon the trial as to the value of use of the St. Louis per day during ten days that the plaintiff’s agent testified that the St. Louis was detained in consequence of the libeling of the Champion. The question put to the agent was: “ Q. How long was the St. Louis-detained waiting for the Champion ? ”

The defendants objected to this question, that there was- nothing ■ to show that the St. Louis had been detained; that the liability of the defendants could go no further than for the detention of the Champion; that it was an improper measure of damages.

This objection was overruled, and the witness answered: “A. I figure it as ten days, and ten the Potomac; the St. Louis and Potomac were each detained ten days.”

The witness was then asked what was the value per day, and over the defendants’ objection that it was not the- proper measure of' damages and as against the defendants was immaterial, the witness

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answered: “ A. On the basis of freights in 1892 she was worth at least one hundred dollars aday with the Potomac, and for ten days one thousand dollars.”'

The trial court submitted the question to the jury whether it was reasonable for the plaintiff- to recover damages for the delay of the /St. Louis and the Potomac, and if so, the jury were permitted to find such damages, to which the defendants excepted.

Carlton E. Ladd, for the appellants.

Frank R. Perkins, for the respondent.

The defendants upon the trial offered to show in effect that the claim or contract upon which the Champion was libeled was not a valid claim; this the trial court refused to permit, and the defendants urge such refusal here as serious error. This contention cannot prevail. The condition of the indemnity bond was that the plaintiff should be indemnified “ against any damage or loss in consequence of any debt or contract, maritime or otherwise.”

It is conceded that there was a maritime contract in existence whereby the Champion was to transport a load of corn to Buffalo, and, as a result of the non-performance of that contract, she was libeled and detained. Against such a mischief the indemnity bond was aimed, and it was not necessary that the plaintiff should establish, as upon a litigation between the parties to the contract, the validity of the contract or that it could be- enforced. The contract was sufficient to create the cause of detention which created the damage complained of by the plaintiff;

In Trustees of Newburgh v. Galatian ( 4 Cow. 340 ) it was held that a bond to save harmless and indemnify against the costs and expenses of a certain act extends to the costs of defending a groundless suit for the act in which the- obligee succeeded, and that the rule that a covenant for quiet enjoyment is not broken until a lawful suit and eviction is technical, applying to that particular covenant, and does not extend to a bond of indemnity.

In Home Lnsurance Company v. Watson ( 59 N. Y. 3 .90-394) an action had been brought upon an indemnity bond which indemnified the insurance company against the claims of a certain per

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son iipon certain insurance moneys and from all costs, etc., that should arise therefrom. Grover, J., said: “ It will he seen that the question Js, whether the word claims, as used in the hond, was intended to include such only as were valid, and which were in fact enforced by legal proceedings, or was intended to embrace such as were asserted by legal proceedings, causing necessary expenditure in the defence, although ultimately adjudged invalid.”

And the learned judge, with his usual clear reasoning, reached the conclusion that the word “ claims ” was not intended to embrace valid claims only, but to embrace any claims, whether valid or otherwise, that might subject the party'indemnified to costs, delay or expense.

The cases cited upon this subject by the learned counsel do not assist us.

The serious question arising upon this appeal relates to the evidence of damages as to the detention of the St. Louis and of the Potomac. The plaintiff’s contention upon .the trial was that these three vessels had been used together upon the Jakes, the two schooners being towed by the St. Louis as its consorts, and that it was in the contemplation of the parties, when the indemnity bond was given, that this condition should continue in regard to these-vessels, and that the detention of one vessel would consequently detain the others. The plaintiff gave some proof tending to show that these three vessels had been previously so used upon the lakes. Such damage as resulted to the plaintiff from the delay of theChampion, by the libel proceedings, it can unquestionably recover. "Whatever damage there, may have been, it was proved in connection with the assumed damage or loss consequent upon the detention of the other vessels, and we cannot say how much of the loss occasioned by the detention of the St. Louis is embraced within the verdict of the jury, and if we conclude, therefore, that the case does not warrant an allowance of damage as to either the St. Louis, or the Potomac, a new trial-must be directed.

To entitle the plaintiff to damages for the detention of the St. Louis it must be made to appear that the vessel was detained as a direct, necessary and natural result of the detention of the Champion, or at least it must appear from the evidence that that was a proper question to be submitted to the jury.

The foregoing statement of facts shows that the St. Louis was in

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no manner detained by the libeling of the Champion. It was not .at the place it should have been if it were intended that it was to ■ tow either the Champion or the Potomac to Buffalo. The concession of the. plaintiff’s agent is to the effect that it was not intended to send the St. Louis to Milwaukee for that purpose, and the evidence connecting the detention of the St. Louis with that of the Champion seems to have been a conclusion of the witness not based upon the facts.

It cannot be said that the damages claimed as to the detention of the St. Louis may fairly and reasonably be considered as naturally arising from a breach of the contract of indemnity.

It was said in Griffin v. Colver ( 16 N. Y. 491 ), by Selden, J.’ that the rule is fundamental- which requires tliat the damages ■claimed should in all cases be shown by clear and satisfactory evidence to have been actually sustained, and that it was a well-established rule of the common law that the damages to be recovered for a breach of the contract must be shown with certainty, and not left to speculation or conjecture.

The most that can be said with regard to these damages is that they were remote and conjectural. The law does not assume to grant relief for all the possible consequences of the.breach of a contract, but confines itself to those direct damages which flow from the breach complained of.

We may cite in support of this, rule Burton v. Pinkerton (L. R. [2 Exch.] 340), where the plaintiff made a contract to serve on board an English ship as one of its crew on a voyage from London tó Rio Janeiro, and back to a final port of discharge. At Rio the master engaged in an illegal business, and the plaintiff left the ship. While at Rio he was seized by the authorities and imprisoned as a Peruvian deserter. In an action for a. breach of the contract the plaintiff was allowed to recover damages for the loss of the wages he might have earned, but -was denied damages for the imprisonment.

Bramwell, B., in delivering the opinion of the court, says : “ It is true that in one sense, the defendant’s conduct caused the imprisonment : but for that, no doubt, the plaintiff would not have been imprisoned. That, however, is not enough. ‘ * * * According to the ordinary rule-damage to be recoverable for the plaintiff must inevitably flow from the tortious acts of the defendant. It must be

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caused by him as the causa causans, and this imprisonment was not so caused.”

In Prosser v. Jones ( 41 Iowa, 674 ) the defendant agreed to give the plaintiff $100 for a threshing machine, and thresh his wheat at any time within four days after notice. This he failed to do, and the plaintiff, whose wheat was unstacked, and who was unable to get another machine to thresh it, brought an action to recover for such injury as it afterwards sustained and the expense of stacking it, but it was held that such damages were too remote to be recovered in an action for the breach of the contract.

Reference may be had also to Fuller v. Curtis ( 100 Ind. 237 ), and to Osborne & Co. v. Poket ( 33 Minn. 10 ).

It is unnecessary to multiply cases further upon this subject.

There seems to have been no difficulty in procuring a steamer to tow the Potomac from Milwaukeee to Buffalo. It was the duty of the plaintiff, upon discovering that the Champion was detained and the St. Louis being in Buffalo, if it desired to tow the Potomac to Buffalo, to procure a vessel for that purpose and not wait for the discharge of the libel upon the Champion.

The plaintiff gave evidence which is claimed to have excused this delay, viz., the promise of the defendants to remove the cause of the detention of the Champion. As the St. Louis was not there to tow either of these vessels, and as' another boat was to be procured for that purpose, there was no object in the Potomac waiting for the Champion, except expense might be saved by towing both of the vessels together. It is hoped that, upon another trial, the obscurity surrounding this situation as to the Potomac will be cleared up so that, an intelligible judgment can be based upon it.

It is unnecessary to further comment upon the situation of the Potomac, or as to any claim of damages that may arise as to its detention at this time, as a new trial must be granted for the errors already referred to.

It is a wholesome rule that should be borne in mind in the disposition of these cases, that the law imposes upon a party subjected to injury from a breach of contract by the other party the active duty of making reasonable exertions to render the injury as light as possible. (Hamilton v. McPherson, 28 N. Y. 72 ; Milton v. The Hudson River Steamboat Co., 37 id. 210 .)

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If, therefore, the delay of the Potomac and of the St. Louis was the result of the negligence of the plaintiff, or the result of its failure to provide other means for occupying, the St. Louis and the Potomac during the period of the tension claimed, the loss should not fall upon the defendants.

The judgment should be reversed and a new trial granted, with costs to abide event.

All concurred, except Follett, J., not sitting.

Judgment and order reversed and a new trial ordered, with costs to abide the event.

Cases cited

Trustees of Newburgh v. Galatian 4 Cow. 340 N.Y. Sup. Ct. p. 220
Hamilton v. McPherson 28 N. Y. 72 N.Y. p. 223