White v. Demilt — 2 N.Y. Super. Ct. 405

Majority

p. 405

Henry White versus Samuel Demilt.

Headnote

In an action for the breach of the defendant’s contract to sell and deliver certain goods to the plaintiff, the promise of the latter to accept the goods and pay for them, is a good consideration for the defendant’s promise to deliver them.

When the plaintiff, by the terms of his contract, is to pay for the goods in his own promissory notes, at different dates, it is not necessary for him to aver in his declaration, a formal tender of the notes. It is sufficient if he allege his readiness to accept the goods and pay for them in the manner agreed upon.

The first four counts of the declaration, stated the damages, resulting from the breach assigned, to consist in a loss of the profits of the purchase; but there was a general averment of pecuniary damage at the conclusion of these, as well as the common counts. Upon demurrer to the first four counts, for the want of proper averments of tender and damage, it jvas held that the allegation of special damage at the end of each count might be considered at surplusage^ and that the general averment of damage, at the conclusion of the declaration, was applicable to each separate count.

This was a special action on the case for the non-delivery of certain goods, bargained and sold by the defendant to the plaintiff. The declaration contained four special counts upon the contract, together with the common counts, for goods sold and delivered, money had and received, lent and advanced, &c.

The first count, stated on the 20th of June, 1828, at Peters-burg, in the state of Virginia, the plaintiff bargained with the defendant to buy of him, and the defendant there and then sold to the plaintiff a large quantity of jewelry, ibr the price of 800 dollars, to be delivered to the plaintiff, as soon as the defendant could make out a bill thereof; the said goods to be paid for by the plaintiff in three promissory notes, for equal amounts, at six, twelve and eighteen months : and in consideration thereof, and that the plaintiff had undertaken to accept and pay for said jewelry, in the manner herein before set forth, the defendant undertook to deliver the same as aforesaid. It then averred, that a reasonable time had elapsed, that the plaintiff had always been ready and willing to accept, receive and pay for said goods, in manner aforesaid, and that the defendant had refused to deliver the same; by reason whereof, the plaintiff had lost and been

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deprived of divers great gains and profits, which might and otherwise would have arisen, and accrued to him from the delivery of said goods, &c.

The second count was - similar to the first, except in the statement of damage which was as follows, viz. “By means “ whereof, the said plaintiff hath been deprived of sundry great “ gains and profits, which he might and otherwise would have “ acquired, by re-selling the said jewelry, at much higher and ad- “ vanced prices.”

The third count was substantially the same with the second, stating the damage precisely in the same way.

The fourth count differed from the three preceding ones, in averring a tender of the notes, and a demand of the goods, and stating the damage to be the loss of great gains and profits, which the plaintiff would otherwise have acquired, by re-selling said goods, at higher and more advanced prices j but there was a general conclusion to these counts, (and also to the whole declaration,) stating that the plaintiff had sustained damage by the premises to the amount of 2500 dollars.

To the first four counts, the defendant interposed separate, general demurrers, and pleaded the general issue to the common counts. The plaintiff have joined in the issue of law and fact,— Mr. B. Clarke and J Anthon, for the defendant, presented the following points in writing, in support of the several demurrers.

I. No consideration passed between the parties, in making the contract, nor was any earnest given to bind the bargain. This objection is applicable to all the counts.

II. If the contract can be sustained on the ground of mutual promises, then, as the defendant was not bound to deliver the goods until payment was made, or in other words, as these acts were to be simultaneous, the plaintiff ought to have expressly averred a tender of the notes in payment. This objection effects the first three counts, which contain no such averment. [Clarkson v. Carter, 3 Cowen's R. 84.]

III. The damages in this case form the very gist of the action,

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and if no damages, which the law can recognize, are stated in the declaration, it will present a case of damnum absque injuria, and consequently be demurrable.

The only damage stated in all the counts demurred to, consists of conjectural profits; these can in no case afford a legal rule of damages. Damages to be the subject of a suit, must be proximate, and not remote or depending on a contingency. This objection effects all the counts.

Mr. E. Curtis for the plaintiff, contra,

presented the following argument in writing.

The defendant’s first point consists of two parts -:—1. That no consideration passed between the parties; 2. that no earnest was given to bind the bargain. The answer to the first part is, that the contract is one of mutual promises, and one promise is a valid consideration for the other. The plaintiff’s promise to give the notes, was a good consideration for the defendant’s promise to deliver the goods. The answer to the second part is, that the paying of earnest is no part of the contract, but is in part performance of it; and whether a contract is made valid by being reduced to writing, or by earnest paid, will not appear by the declaration, but by the evidence in support of the declaration: The declaration will cover a contract between the parties reduced to writing. But the question of earnest does not apply to a contract made in Virginia, where they have no statute of frauds, applicable to contracts concerning personal chattels. .

The defendant’s second point is, that the first three counts of the declaration are bad, because, there is not an averment that the notes were tendered. It was formerly considered doubtful, whether the plaintiff, in declaring upon mutual promises, was, or was not, bound to aver an offer to perform on his part. [1 Saund. 320. n. 4. 7. D. & E. 125.] It is now, however, settled, not only in England, but in our own state, that an averment of a readiness to perform is sufficient. [Arch. Pl. 100. 1. East. 203. 2. Bos. & Pul. 447. 5. J. R. 178. 12. J. R. 209.] In the case cited by the defendant’s counsel, from the third of Cowen’s Reports, the

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court merely decided, that on a sale of goods for cash, the vendee is not entitled to possession till he pays the price.

The defendant’s third point, is, that the declaration states a case damnum abique injuria, since no other than conjectural profits are stated as damage. If we cannot recover, by way of damage, our conjectural profits, yet, if the declaration contains a legal cause of action, independent of the averment of conjectural profits, thecourt will t reat that averment as surplusage, when not demurred to specially. Those averments may be rejected in each count, and yet leave a complete cause of action, because, in the fourth count the plaintiff, in conclusion, says, in reference to all the previous counts, “by means of all which premises, the “ said plaintiff says he is injured and hath sustained damage, to the value of twenty five hundred dollars,” and, because also, in the conclusion of his declaration, the plaintiff alleges a general breach, and concludes to the “ damage of the said plaintiff, of “ twenty five hundred dollars, and therefore the said plaintiff “ brings suit,” &c.

The declaration, therefore, stripped of those parts which the defendant calls averments of conjectural profits, is complete, since it sets forth a valid contract, a breach of that contract, and a general averment of damage. But the defendant is mistaken in supposing, that we cannot recover beyond positive damage, or money out of pocket. The only case to be found, that in any degree supports the position of the defendant, is a case in 2 W. Bl. R. [10 78.] and that case, when examined with discrimination, will he found to fall short of the rule of damages contended for in this cause. The true rule is this: when the person bound to deliver, fails, without fault or fraud, the purchaser’s claim is for such damage, as, at the time of the contract was foreseen, as a necessary consequence of the failure.

In Bell’s Commentaries on the laws of Scotland, and the principles of mercantile jurisprudence, [1 Bell 448,] the rule of damages is thus laid down.

“ The claim of the buyer, to whom delivery is refused, is two

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" fold : first, for repayment of the price, if already paid to the sel- “ ler; and second, for indemnification of the loss by non-fulfilment. “ As to the claim for indemnification of loss, the principle is, that “ where the person bound to deliver, is prevented by insolvency, or “ other accident, from fulfilling his engagement, the buyer’s claim “is for such damage only, as at the time of the contract was fore- “ seen, as a necessary consequence of the failure, to deliver the “ article.” “ This principle points out, as the proper object of “ such a claim, the indemnification of that soft of damage which “is directly connected with the subject of the contract—loss “ arising from the want of the article purchased, or'gain, of which, “ by the failure to deliver it, the buyer has been deprived. Thus “ a dealer, who is himself under contract to deliver a quantity of “ corn, buys and pays for one hundred bolls, at 25s. per boll, “ and being, on failure to deliver, obliged to go elsewhere for it, “ he, in consequence of the augmentation of price, pays 50s. for “ the same quantity; he will be entitled to not only claim re-pay- “ ment of the price which he paid, but to claim also, as a creditor “ for 25s. more. And, in the same way, if he buy on speculation, “ and can show that he might have sold the corn at 50s., he is “ entitled to claim re-payment of the price paid, and 25s. more as “ gain, of which he has been deprived.”

The same principles are laid, down by Pothier. [Poth. on Oblig. (Evans') 90, 91.] When the debtor cannot-be charged with any fraud, and is merely in fault, for not performing his obligation ; either because he has incautiously engaged to perform something, which it was not in his power to accomplish, or because he has afterwards improvidently disabled himself from performing his engagements, the debtor is only liable for the damages and interest which might have been contemplated at the time of the contract, for to such alone, the debtor can be considered as having intended to submit.

In general, the parties are deemed to have contemplated only the damages and interest, which the creditor might suffer from the non-performance of the obligation, in respect to the particular thing which is the object of it, and not such as may have been inciden^ tally occasioned thereby in respect to his other affairs.

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This declaration has for a precedent, both Chitty and Wentworth. [2. Chitty. 105. Wentworth 2. vol. 189.]

Mr. Clarke and Mr. Anthon in reply. The case of Clarkson v. Carter, [3. Cowen’s R. 84,] establishes the principle contended for, on the part of the defendant, so entirely, as to preclude all argument.

The vendor, according to that case, when the sale is for cash, is not bound to part with his goods until he receives the cash; so, therefore, when he sells for notes, the party purchasing, has, upon the principle of that case, no right to demand the goods until he has delivered, or at least tendered the notes. The payment or tender of the money, and the delivery or tender of the notes, consequently form essential averments, according to the case cited. Whether this is, or is not, conformable to the English cases, is therefore a matter of no moment, and but little trouble has been bestowed upon the inquiry. The first three counts are, therefore, defective in substance, in this particular, and the general demurrer is sustained.

As to the third point, which affects all the counts, the plaintiff Insists that the averment of damage in the several counts demur- • red to, (which he seems to admit to be bad,) may be rejected, and a complete cause of action still remain; because the fourth count concludes with these words, “ by reason of all which premises he hath “sustained damage, fyc.” To this we reply, 1. That this general clause, whatever may be its value, can and does only, refer to the fourth count, the three preceding counts being perfect in themselves, concluding with a special averment of damage. 2. The “premises” referred to in this averment, are the loss of profits averred In the next preceding sentence, (and in the preceding counts, if it can be made to relate to them,) making this general clause, and the preceding special clause, in effect, the same; and 3d. that as to special damages, which form the very gist of the case, a general averment is no averment; the specific injury must be alleged. The consideration of this last position, therefore, recurs and covers the whole case.

That damage does not necessarily result from the facts set forth in the declaration, viz. “ the non-delivery of goods on a contracts

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" when the vendee has not parted with his money ,” is obvious, in as much as the very same state of facts may be attended with positive gain to the vendee.

If the markets have advanced, he may be a loser by missing his profits, but if they have declined, he is manifestly a gainer by avoiding the loss. That the possible profit is not the rule of damages, seems to be admitted. That there may be a legitimate damage from a non-delivery, is possible, although it is difficult to conceive in what it can consist, profits being shut out. That this damage, therefore, and not the body of facts, forms the gist of the action, is clear, and it necessarily follows that it must be averred, and that specially too, to put the defendant on his defence..

The case cited by the counsel for the plaintiff, from Sir W. Blackstone’s Reports, [Flurea v. Thornhill,] supports these positions. Damages were there sought for the non-delivery of an article sold. De Grey, Chief Justice, commenting on the rule of damages, with reference to profit, observes, “ I do not think the purchaser can be “ entitled to any damages, for the fancied goodness of the bargain “ which he supposes he has lostand Blackstone, Justice, commenting on the rule of damages, with reference to the fluctuation of price in the market, expressly says, that this is immaterial, inasmuch as “ the plaintiff had a chance of gaining as well as of losing by the fluctuation of the priceand to this it may be added, that if he sustained a loss by the rising of the article in the market, it was his own fault, as he, having his money in his possession, might have bought other articles of the same kind, on the very day the contract was broken.

From all this it results, that the facts, standing by themselves, necessarily manifest a case of damnum absque injuria, and that to make such a state of facts actionable, a special, substantive and legal damage must be averred, and the defendant, before he goes to trial, must have the opportunity, on the face of the pleadings, of bringing the alleged damage to a legal test. Under the present form of the counts, a jury might give the profits by way of damage, and it might be exceedingly difficult for the court to redress the grievance. The absence of a proper averment, in this respect,

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being, therefore, clearly matter of substance, is a ground of general demurrer.

The Scotch law cited by the counsel for the plaintiff, is altogether too vague to be applied to any valuable practical purpose, and so far as the Scotch cases have applied it, is manifestly in collision with the sound rules of the English law.

What, in the case of a sale of goods, is the damage “foreseen as “ the necessary consequence of a failure to deliver the article ?” If we interpret this phrase by the cases cited, it means the loss of profit from a rise in the market. What would have been the Scotch rule, if in the cases cited by the plaintiff’s counsel, the articles had declined in the market 1 Upon their own principles, the facts, without the averment of a special damage, would have shown a case of damnum absque injuria.

Had the plaintiff in this case been constrained to purchase the articles,' upon our default, at a higher price, this might have furnished a legitimate ground of damage, which, however, would have required a special averment for the reasons above given.

The Scotch law, therefore, which has been referred to, affords no aid'to'th’e plaintiff whatever, and merely demonstrates the futility of referring to the laws of a comparatively uncommercial country, for rules to aid the ."practical operations of a commercial one.

As to the arguments derived from the precedents, ancient and established forms, which have passed the ordeal of legal tribunals, are undoubtedly of the highest authority. Those referred to in this case have no authority attached to them, not even the name of an experienced pleader. And the counsel for the plaintiff manifestly disapproves of them, being constrained to resort to the rule of rejection and surplusage, to make them at all tenable.

On every ground, therefore, we trust the demurrers are sustained; 1st. for the want of a proper averment of tender; and 2dly. for the want of a proper averment of damage, to give an actionable character to the facts.

This case comes before us on separate demurrers to the first four counts.

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The defendant objects, in the first place, that no consideration for the undertaking on his part is alleged. The answer to this is, that the counts demurred to are upon mutual promises, and that the promise of the plaintiff to accept the goods and pay for them, is the consideration of the defendant’s promise to déliver them. This is no doubt a sufficient averment of a consideration.

The defendant objects, in the second place, that the three first counts do not aver a tender of the notes, by which payment for the goods was to be made. The averment is, that the plaintiff had “ always been ready and willing to accept and receive the goods, “ &c., and to pay for the same at the price and in the manner,” &e. I am of opinion that this averment is sufficient. The formal tender of the notes, which the plaintiff was not bound to part with, until the goods were delivered, could not be necessary.

In Porter v. Rose, [12 J. R. 212,] the court say that the result of all the modern cases on the subject is, that “ where two acts are “tobe done at the same time, as when one agrees to sell and deliver, “ and the other agrees to receive and pay,” an averment, by the purchaser of a readiness and willingness to pay, is necessary, and that such an averment must be proved at the trial. In West v. Emmons, [5 J. R. 179,] the principle is laid down, that where either party has the power to perform, without any act being previously necessary to be done by the other, the party bringing the action must aver performance, or a tender and refusal, which are equivalent to a performance. The action in that case, was upon a covenant, by which the defendant agreed to convey certain premises to the plaintiff; and the plaintiff covenanted to mortgage them to the defendant for a part of the purchase money, and the objection was, that the plaintiff ought to have averred a formal tender of the mortgage, and that the averment that he had always been ready and willing to execute the mortgage was insufficient. The court held otherwise. They say it would have been an idle ceremony to tender a mortgage, actually execúted, when the defendant refused to deliver the deed, and that it would invert the order in which the covenant was finally to be executed. So here, the actual making and tendering of the notes, would have been equally idle, when the defendant refused to deliver the goods.

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The payment, in the natural order of things, was to follow the delivery, and although it was to be simultaneous, it was not to be completed until the goods were actually received.

The doctrine of this case is in accordance with that laid down in Rawson v. Johnson, [1 East. 203,] and in Waterhouse v. Skinner, [2 Bos. and Pul. 447.] In these cases, the action was on an agreement to sell and deliver personal chattels, at a stipulated price, by a given day. The plaintiff averred in his declaration, (as in the case now before us,) that he was ready and willing to pay for the goods, and to receive and accept the same, but that the defendant refused to deliver, &c. The averment was held sufficient, though no actual tender of the money was shown. It was said in those cases, that, under such an averment, the plaintiff must prove that he had the money ready to be paid if the property had been delivered. So in the present case, if the payment for the goods was to have been made in the notes of third persons, it would be incumbent on the plaintiff to prove that he was possessed of such notes ready to be given to the defendant. But the payment being to be made in the plaintiff’s own notes, which he could execute at any moment, it seems to me that a general averment, that he was ready and willing to execute and deliver his own notes, is all that the good sense of the contract requires; and that it was not necessary for him to show that he had actually tendered his notes, formally drawn and executed.

It is objected, in the third place, by the defendant, that in all the four counts, the damage resulting from the breach assigned, is stated to consist of a loss of the profits of the purchase, and that the loss of such profits does not afford any ground of action. In answer to this, it is sufficient to say, that as each count contains a proper breach of the agreement, the general averment of damage, in the conclusion of the declaration, applies to all, and the special averment of damage, in each count, may be rejected as surplusage.

Judgment for the plaintiff, with leave, &c.

[E. Curtis, Att'y for the plff. B. Clark, Att'y for the deft.]

Note.—See Bank of Col. v. Hagner, [1 Pet. R. 466.]