Dana v. Fiedler — 12 N.Y. 40

Majority

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Dana and others against Fiedler.

Headnote

Parol evidence is admissible to explain the meaning of characters, marks and ' technical terms used in a particular business, and which are unintelligible to persons not acquainted therewith, where they occur in a written instrument and the explanation is consistent with its terms.

Accordingly, where a written contract was for the sale and delivery of “ one hundred and fifty casks, of one ton each, best madder 12 1-4;” Held, that parol evidence was competent to prove the signification among dealers in madder of the figures as used in the contract, and that they meant 12£ cents per pound.

■ In an action on a contract to recover damages for the non-delivery of mer1 cliandise, the plaintiff is entitled to recover the difference between the contract price and the market value of the article at the time and place specified for its delivery, with interest thereon.

It is not within the discretion of the’jury to allow interest or not; the plaintiff is legally entitled to interest.

In ascertaining the amount of damages, the evidence should be confined to the actual market value of the article sold at the time and place of delivery; and the defendant is not allowed to inquire as to the probable effect of adding to the quantity in market that which he agreed to deliver.

The amount of damages depends upon the market price at which the vendee could have purchased the commodity at the time and place of delivery, not that which he could then and there have sold it at, if it had been delivered to him.

In an action to recover damages for the non-delivery of one hundred and fifty tons of madder at a specified price, it is not competent for the defendant to

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inquire as to its market value in quantities equal to that named in the contract, unless it is first shown that there was a market price for it in such quantities.

Nor will he be permitted to inquire as to the usual difference between the price of the commodity on sales thereof in quantities as large as that agreed to be delivered, and when sold in smaller quantities, when it does not appear that it was or could be purchased at the time and place for the delivery in the quantity specified in the contract.

When there are no sales of the article contracted for on the day when it should have been delivered, reference may be had, to ascertain its market value on that day, to sales made within a reasonable period before and after.

But where a witness testified that he knew of no sales on that day, but did know of sales made two weeks thereafter, the exclusion of a question put on his cross-examination, as to the market value of the commodity during a period of three months before and after the day for delivery, is not error.

Action in the New-York common pleas to recover damages for the non-delivery of one hundred and fifty casks of madder, of one ton each. The cause was tried before Mr. Justice Woodruff and a jury, in May, 1851. The plaintiffs proved and read in evidence the following instrument:

“ New-York, October 23d, 1849. Bought of Ernest Fiedler, Esq., account of William P Dana, for Fearing 5c Hall’s acceptance, one hundred and fifty casks “of one ton each” best EXFF madder, 12 1-4, 6 ms. The agreement is, that it shall all be delivered on or before the first day of April next, dangers of the sea excepted. The quality to be approved by me.

By your obedient servant,

Randall H. Greene, Broker, &c.” Across the face of this instrument were the words, “ I agree to this contract, Ernest Fiedler,” hi the handwriting of the defendant. During the trial the counsel for the plaintiffs, with a view to explain the meaning of the figures “ 12 1-4” in the contract and point their application, asked a witness the following question : How is madder usually sold? To this question and the answer thereto the counsel for the defendant obj ected. The court overruled the obj ection and the counsel for the defendant excepted; the witness

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answered, that madder was usually sold by the pound and at so many cents per pound. There was no evidence tending to show that it was ever sold in any other way. The counsel for the plaintiffs, with the same view, proved that among merchants and dealers in madder, the figures, “ 121-4,” standing in the connection in which they did in this contract, would be understood to apply to and express the price per pound in cents at which the madder was sold; that they would be understood to mean 12£ cents per pound. To this evidence the counsel for the defendant in due time objected; the objection was overruled and he excepted.

The plaintiffs proved that on the first of April, 1850, they demanded of the defendant the madder mentioned in the contract, tendering to him therefor the acceptance of Fearing & Hall for the price at six months, and that the defendant declined to deliver it. The plaintiffs called a witness who testified that he resided in New-York; was a merchant and a dealer in madder in the spring of 1850 ; that he did not sell any madder on the first day of April, 1850 ; that he sold some about the fifteenth of "that month at fifteen cents per pound, and1 that he thought that 15 J cents per pound was the market value of best EXFF madder on the first day of April. On a cross-examination of this witness by the defendant’s counsel, he testified that there was but a small quantity of madder in the market on the first of April. The counsel.for the defendant, on the cross-examination of this and other witnesses called by the plaintiff to prove the market value of' madder in New-York on the first day of April, 1850, put to them the following questions, each of which was objected to by the counsel for the plaintiffs, and the objection sustained by the court, and the defendant’s counsel duly excepted, viz: What would have been the effect of an additional supply of madder to the extent of .150 casks in the market on the first of April, 1850, in the market value or supposed market value of the article ? In reference to the ordinary supply in the market, is or is not 150 tons

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an unusually large supply? Would or would not 150 tons constitute a large supply for the Few-York market at any one time ? What kind of a stock, as regards an usual or ordinary quantity for a single printing works, would the quantity of 150 tons be ? What kind of a stock would 150-tons be in reference to supplying the usual demand of the Few-York market ? Previous to putting these questions, the counsel for the defendant stated to the court that they were asked in reference to the question of the amount of plaintiffs’ damages.

One of the witnesses called by the defendant was asked by his counsel the following question; What was the market value oí best French madder EXFF for a quantity as large as 150 casks on the first of April 1850 ? To this the counsel for the plaintiff objected, so far as the words “for a quantity as large as 150 casks;” the court decided that the question might be answered if it was shown that there was a market value for the article in such quantities, stating that the question to be determined was what amount would it have cost the plaintiffs to purchase the contract quantity on the day named, not what it could have been sold for by the defendant. To this ruling the counsel for the defendant excepted. The witness then testified that he did not believe that as large a quantity as 150 tons could have been sold in market in one day ; that there is a difference in price between sales in small quantities and quantities as large as 150 tons. Thereupon the counsel for the defendant asked the witness the following question ; What is the usual difference in the. price of madder on sales of quantities as large as 150 tons, and sales of- two, three or five tons ? To this the counsel for the plaintiffs objected; the objection was sustained by the court and the defendant’s counsel excepted. The witness further testified that the market value of madder in Few-York on the first of April, 1850, at wholesale, for cash, was from 13£ to 14 cents per pound. The counsel for the defendant thereupon put the following question to the witness; la

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what quantities at a single sale would 13¿- to 14 cents have been the fair market value on that day? This was objected to by the counsel for the plaintiffs and excluded, and the counsel for the defendant excepted.

• On the cross-examination of one of the plaintiffs’ witnesses, who was a dealer in madder and had testified that he did not know the market rate of madder on the first of April, but that sales were made about the middle of April at 15£ cents per pound, and that he did not know that the price raised from the first to the middle of April, the counsel for the defendant put to him the following question; What was the market value of madder for a period of three months before and after the first of April, 1850 ? The question and the answer thereto were objected to and excluded by the court, and the defendant’s counsel excepted. There was a large mass of evidence given on the trial, and many of the questions made in the court below were not presented to this court. The foregoing, with the statements contained in the opinion, render the decision of this court sufficiently intelligible.

Prior to the commencement of the suit, Dana transferred an interest in the contract to the other plaintiffs.

In charging the jury, Justice Woodruff stated that the rule of damages was the difference between the market value of the article contracted for on the day it should have been delivered, and the price which Dana agreed to pay for it. That in ascertaining this difference, they should take into view the fact that the purchase was at six months, and that the most of the prices testified to, were prices of the article on a credit for the periods named by the witnesses. Having, by the proper allowances for credit, ascertained such difference of value, the plaintiffs, if they recovered, were entitled to interest thereon from the maturity of their contract. To so much of the charge as allowed interest on the difference in value, the counsel for the defendant duly excepted, and -the jury thereupon rendered their verdict for $9750 difference

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of value, and interest thereon for 7£ months, $426.56, amounting to $10,176.56.

Judgment was entered upon the verdict and the defendant appealed. The common pleas sitting in general term held that the charge as to interest was erroneous, and that it should have been left to the jury to allow interest or not in their discretion, but allowed the judgment to stand for the amount of damages and costs, on condition that the plaintiffs remitted the amount of interest included therein, which was done. (See Smith’s N. Y. Com. Pleas Reports, 463.) The defendant thereupon appealed to -this court.

F. B. Cutting, for the appellant.

A. F. Smith for the respondent.

On reading the contract of the parties, it appears upon its face to be expressed in so short terms in Respect to the price as to be unintelligible. The instrument of payment is expressed, viz., Fearing & Hall’s acceptance, and the figure and abbreviation, “ 6 ms.,” eveu . without evidence to show that “ ms.” is the ordinary contraction for months, are probably, and with that evidence are certainly, sufficient to enable a court to say that the acceptance was to be at 6 months. That it was to be delivered in payment upon the delivery of the property purchased, results from the absence of any contrary stipulation, that being the rule of law as to time of payment. In the contract, this expression, fixing the time which the paper to be given in payment shall have to run, is preceded by the figures 12 1-4, without any marks of notation or other signs which can enable a court to say what, in reference to the contract, is the signification which the parties attached to them and intended to convey by their use. The figures read “ twelve and a quarter,” and occurring where they do, every term of the contrast, except the price, being ascertained, a court

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is bound to conclude that they relate to the price, although it is at the same time unable to declare,. from the writing itself, either in what denomination of money the price is expressed, or for what quantity of the article the named price is to be the equivalent. In this state of the case parol evidence was received that madder, the subject of the contract, is usually sold by the pound and at so many cents per pound, and no evidence was offered to show that it was ever sold in any other way. It was also shown, that among merchants these figures, standing as they do in this contract, would be understood to express, in cents, the rate per pound at which the madder had been sold. The first question in the case relates to the admissibility of this evidence. The legal tendency of the evidence is to show that among dealers in the article in question, this contract, although so elliptical in its expressions, would convey a definite meaning. Evidence. is always admissible to explain the meaning of terms' used in anyparticular trade or occupation, when their meaning1 becomes material in order to construe a contract; and the; principle on which the rule is founded, extends to forms of expression commonly used in any particular business as well as to single words. In both cases the evidence is admitted as a means of enabling the court to declare what the language of the contract did actually express to persons standing in the position of the contracting parties, and so to ascertain what it does express to the court, which, for this purpose, is bound to place itself in their 'position. I am not aware of any case in which the precise point in this case has been adjudged. In Cooper v. Smith (15 East, 103), the memorandum on which the suit was brought contained merely the vendee’s name, and the expression, “40 of 3 — 58s.” This was explained by evidence to mean forty sacks of flour, called thirds, at 58 shillings per sack. Ho question was, however, made upon it; although the case turned on the sufficiency of the memorandum, which, being Unsigned, was held to be insufficient. Upon principle,

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however, the evidence was admissible; for it would be intolerable that a writing which, to the parties and to persons standing in their situation, contained language sufficient to express their meaning, should fail of effect, (Wigram on Ex. Ev., 174, 175; 1 Greenleaf Ev., §§ 282, 288, 292, 298.)

The next question to be considered relates to the exclusion of questions offered to be put by the defendant as bearing upon the measure of damages. The rule of damages laid down in the charge was, that the plaintiffs were entitled to the difference between the market value of the article contracted for, on the day it should have been delivered, and the price which the plaintiffs agreed to pay for it: To tills there was no exception, and it is not now affirmed to be incorrect.

The questions excluded were put in various forms, but their admissibility is urged upon the ground that, in ascertaining the market value of the madder, the jury were to consider how the plaintiffs could have disposed of the madder in question if it had been delivered to them Accordingly, inquiries were made as to the probable effect on the market price of an additional supply of 150 casks ; whether a quantity of 150 tons was not a large supply to the market, in reference to the amount ordinarily in market; and whether the same quantity would not be a very large supply for a single printing works. The evident object of all these inquiries was to show that, if the defendant had performed, and the plaintiffs had desired to sell the whole quantity, the market price would have been lowered by throwing so large a quantity at once upon the market. A sufficient answer to all these exceptions is, that they are founded upon an attempt to substitute a hypothetical market value for the actual market value. They call upon the jury to speculate as to the consequences which would have resulted to the plaintiffs if the defendant had performed his contract. The rule of damages was correctly laid down by

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the court (Clark v. Pinney, 7 Cow., 681 ; Dey v. Dox, 9 Wend., 129 ; Davis v. Shields, 24 Wend., 322 ); and the market value of the article on the day of delivery, which that rule fixes as the test, requires an investigation of the actual condition of the market, and does not warrant the consideration of the conjectural consequences of a state of things which did not exist.

The principle on which the rule rests is, the indemnification of the injured party for the injury which he has sustained. In a suit by the vendor against the vendee for non-acceptance of the articles sold, in order to give him a complete indemnity, he must recover the difference between the agreed price and that at which he could sell on the day when the vendee was bound to receive and pay for the tiling bought. So, on the other hand, in a suit by the vendee against the vendor for non-delivery, his complete indemnity is to receive that sum which, with the price he had agreed to pay, would enable him to buy the article which the vendor ,iad failed to deliver. The value in the market on the day forms the readiest and most direct method of ascertaining the measure of this indemnity in both cases, and accordingly, where a market value for the article exists, the law has adopted that standard.

Some other rulings of the court, in respect to the rejection of questions put by the defendant’s counsel, are to be considered. The first was an inquiry as to the market value of madder on the day when, by the contract, it should have been delivered, in as large a quantity as 150 casks. This inquiry was rejected, unless it was first shown that there was a market value for the article in such quantities. The limitation thus imposed by the court was correct, for otherwise the question only called upon the witness to speculate upon the probable consequences of attempting to buy or sell such a quantity upon the day when the delivery ought to have been made. If admitted, it would have brought to the consideration of the jury the same question

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we have already concluded they were not to pass upon. It moreover called for no matter of fact within his knowledge, but only for his judgment upon a question as to which, if a judgment was necessary to be formed by any body, the jury were the proper tribunal and were competent to form it. Another question alluded to was asked in these terms; “ What is the difference in the price of madder on sales as large as 150 tons, and sales of two, three or five tons ?” This question called upon the witness for some average estimate to be formed by him as to the difference in price spoken of, and not for facts lying within his knowledge, and was on that account properly excluded. Nor do I think it was proper, by way of founding an argument upon the answer sought for, that the plaintiffs should be limited to such a price as could be procured for the whole quantity of 150 tons in a single sale. No facts were in evidence to warrant the supposition that the plaintiffs could have procured the quantity which the defendant had agreed to deliver to them, by a single purchase. In the absence of such facts, at least, the inquiry was in that aspect irrelevant. In every other aspect it only presented the same question which, upon this branch of the case, was first considered. Another question arises upon the exclusion of an inquiry by the defendant’s counsel as to the range of the market value of madder, for a period of three months before and after the day when the delivery was due. As no sales were shown on the precise day, it was necessary to have recourse to sales before and after the day, and for that inquiry a reasonable range in point of time was allowable; but, in some degree, the extent of time which shall be included in such an inquiry must rest in the discretion of the court which tries the cause. Sales were shown in this case on the 10th and 15th of April. From a subsequent alteration in the price, no legitimate inference could be drawn as to the market value, prior to those sales ; and the question put was too broad in its terms and embraced too great a period of time to entitle

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the defendant to insist, as matter, of right, upon its being allowed to be put.

Another ground of objection to the judgment is, that the general term of the common pleas, having decided that the judge at the trial erred in instructing the jury that interest was to be recovered as part of the damages upon the amount of difference between the contract price and the' market value, did not grant a new trial absolutely, but only in the event that the plaintiffs should refuse to strike out the amount of interest which had been separately assessed by the jury, and in case of their consent denied a new trial and awarded costs, to them.

I think the decision at the trial was correct upon principle. Interest is a necessary item in the estimate of damages in this class of cases. The party is entitled on the day of performance to the property agreed to be delivered; if it is not delivered, the law gives, as the measure of compensation then due, the difference between the contract and market prices. If he is not also entitled to interest from that time as matter of law, this contradictory result follows, that while an indemnity is professedly given, the law adopts such a mode of ascertaining its amount, that the longer a party is delayed in obtaining it, the greater shall its inadequacy become. It is however conceded to be law, that in these cases the jury may give interest by way of damages, in their discretion. Now, in all cases, unless this be a i exception, the measure of damages in an action upon a contract relating to money or property is a question of law, and does not at all rest in the discretion of the jury. If the giving or refusing interest rests in discretion, the law, to be consistent, should furnish some legitimate means of influencing its exercise by evidence, as by showing that the party in fault has failed to perform, either wilfully or by mere accident, and without any moral misconduct. All such considerations are constantly excluded from a jury, and they are properly told that in such an action their duty is to inquire whether a

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breach of the contract .has happened, not what motives induced the breach.

That by law a party is to have the difference between the contract price and the market price, in order that he may be indemnified and because that rule affords the measure of his injury when it occurred; that he may not as matter of law recover interest, which is necessary to a complete indemnity; that nevertheless the jury may, in their discretion, give him a complete indemnity, by including the amount of interest in their estimate of his damages; but that he may not give any evidence to influence their discretion, presents a series of propositions, some of which cannot be law. The case of Van Rensselaer v. Jewett (2 Comst., 141) establishes a principle broad enough to include this case, and has freed the law from this as well as other apparent inconsistencies-in which it was supposed to have become involved. The right to interest, in actions upon contract, depends not upon discretion but upon legal right, and in actions like the present is as much a part of the indemnity to which the party is entitled as the difference between the market value and the contract price. If, therefore, the general term committed any error, it is not one of which the defendant can complain, as it was in his favor, and deprived the plaintiffs of part of the relief to which they were by law entitled.

The judgment should be affirmed.

All the Judges concurred in the foregoing as to explaining the written contract by parol evidence, except Gardirer, C. J.

They all concurred, also, in that part of the opinion as to the right to recover interest, except Selden, J.

Denio, Ruggles, Edwards and Allen, Js., concurred in the result of the opinion, that no evidence as to the market value of madder at the time for its delivery was improperly excluded.

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Gardiner, C. J., Parker and Selden, Js., were of opinion that evidence touching the market value of the madder was erroneously excluded, and on this ground were in favor of reversing the judgment.

Judgment affirmed.