Page images
PDF
EPUB

ual delivery of the note to the Merchants' bank on February 17th, it was on the condition, as the officers of the bank concede, that either the note or its proceeds should be credited on the claim of the Quebec Bank of Toronto. This condition was not performed. On the contrary, it is not disputed that the Merchants' bank, as the agent of appellant, after it had got possession of the note of Weyand & Jung, retained and still retains the draft of November 10, 1869, for $6,502.56, accepted by Bacon & Co. with the bill of lading for 15,000 bushels of barley accompanying it, and also the note of George M. Bacon & Co., indorsed by Hughes, for $6,616.35; that no credit whatever was ever indorsed on either said draft or note; that on February 9, 1870, two days after the note of Weyand & Jung had been received by the Merchants' bank, the note of Bacon & Co. for $6,616.35 was, at the instance of the Merchants' bank, protested for non-payment, and on the same day Bacon & Co. executed a deed of assignment for the benefit of their creditors, for the reason, as they alleged and testified, that they were unable to pay said note or draft. On February 25, 1870, suit was brought by the Quebec Bank of Toronto, in the superior court of Cincinnati, against Bacon & Co., as makers, and John Hughes, as indorser, on the note above mentioned, for the full amount thereof, namely, $6,616.35, and interest. It is clear that the deposit of a promissory note with an agent of a third party, on the condition that it should be used by the agent's principal for a specified purpose, will not confer title so as to authorize the principal to hold the note for a different purpose. Thus, in Smith v. Knox, 3 Esp. 46, it was said by Lord ELDEN: "If a person give a bill for a particular purpose, and that is known to the party taking the bill, as, for example, to answer a particular demand, then the party taking the bill cannot apply it to a different purpose. See, also, Delauney v. Mitchell, 1 Stark. 439; Puget v. Forbes, 1 Esp. 117; Evans v. Kymer, 1 Barn. & Adol. 528.

[ocr errors]

Under such circumstances, without the performance of the condition, there is no delivery in the commercial sense, and no title passes. The present suit is an attempt by the appellant to use the note for a purpose not contemplated by either party when the manual delivery of the note took place. The case of appellant is not aided by the fact that on March 25, 1871, more than a year after Bacon & Co. had failed in business and made an assignment for the benefit of their creditors, it amended its petition in the suit brought on the note of Bacon & Co. for $6,616.35, by averring that the note of Weyand & Jung was taken as a payment on the note sued on in that case, and demanding judgment for only $1,616.35, the balance due after allowing the credit. According to the version of the appellant's witnesses, the understanding was that the credit should be made on February 7, 1870, when the note of Weyand & Jung was handed to the Merchants' bank. By the omission of the Merchants' bank on that day to credit the proceeds of the note of Weyand & Jung, on the claim of appellant, Bacon & Co. were deprived of all the advantages, to secure which the note was left with the bank. The appellant is bound by the acts and omissions of its agent. Having failed in 1870 to use this note for the only purpose for which it was placed in the possession of its agent, it cannot now exact payment thereof as a bona fide holder.

Under the circumstances of this case we are of opinion that there was no delivery of the note of Weyand & Jung to the appellant, and that no title passed to it. As the controversy is between the original parties, and the appellant is not an innocent holder, it is not entitled to the relief prayed for in its bill. The decree of the circuit court, by which the bill was dismissed, was therefore right, and must be affirmed.

(110 U. S. 386)

WEBSTER and another v. BUFFALO INS. Co.1

(February 4, 1884.)

JURISDICTION OF THE SUPREME COURT OF THE UNITED STATES-AMOUNT IN CONTROVERSY. In a suit upon a policy which values the goods insured at a sum less than $5,000, and limits the liability of the insurers to the amount of the valuation, the 'matter in dispute' cannot exceed the stated value of the goods, no matter what may be their actual value; nor can the parties give jurisdiction to the supreme court of the United States by stipulating that judgment, if rendered for any sum, shall be for the real value of the goods, amounting to more than $5,000.

In Error to the Circuit Court of the United States for the Eastern District of Missouri.

Jeff. Chandler, for plaintiff in error.

0. B. Sansum, for defendant in error.

WAITE, C. J. This is a suit upon an open-cargo policy of insurance issued by the Buffalo Insurance Company to the firm of Webster, Heinicke & Coglin "on shipments of merchandise to them at St. Louis, * * *they stipulating to report all such shipments and modes of transit to this office as soon as advised thereof." The aggregate amount of the company's liabilities under the policy was in no case to exceed $5,000 on one vessel at any oner time, unless special arrangements were mutually agreed upon for amounts exceeding that sum. One of the conditions of the policy was that, "in case* of total loss, the adjustments of the same shall be made upon the valuations specified in the policy, if any; but in the absence of a valuation, then upon the invoice price, without reference to the market value of the article in sured." The allegation of Webster & Coglin in their pleading is that, “on the twenty-sixth day of February, 1879, they notified defendant at its office, in said city of St. Louis, of the shipment to them at the said city of St. Louis from the port of Liverpool, England, on some steam-boat whose name was then unknown to said firm, of the merchandise mentioned in the plaintiffs' petition, and requested defendant to enter said shipment on defendant's books at the valuation of four thousand dollars, and then and there delivered to defendant a written and printed application for entering said merchandise under said policy upon a blank form furnished by defendant therefor. Whereupon the defendant, by and through their agents, * * * accepted said notice, and then and there agreed to accept said risk for said firm under said policy of insurance * * * and to cover the merchandise mentioned in plaintiffs' petition under said policy in the sum of four thousand dollars." The goods were lost on the voyage, and this suit was begun on the first of May, 1879. The further allegation is that the goods were worth $5,010, and a judgment is asked for that amount. The defense is that the policy did not include the ocean risk, and was limited to "river cargo" and nothing else.

On the twenty-third of April, 1880, the following stipulation was filed in the cause: "The plaintiffs and defendants agree that the value of the merchandise described in the plaintiffs' said petition is the sum of $4,800, and that upon the trial of this cause neither party shall give any evidence as to said value. Also, that if the court shall be of opinion that the plaintiffs are entitled to judgment, the judgment shall be entered for the sum of $5,010., But this agreement is expressly limited to the single fact of value, and is not to be taken as admitting any right of the plaintiffs to recover in this case. It being well understood by the plaintiffs that as to all facts necessary to be proved by the plaintiffs to entitle them to judgment they must make legal proof thereof, excepting only the value of the merchandise aforesaid."

18. C. 7 Fed. Rep. 399.

00

*389

Judgment was given for the company on facts found, and to reverse that judgment this writ of error was brought.

It was decided in Lee v. Watson, 1 Wall. 339, that "in an action upon a money demand, where the general issue is pleaded, the matter in dispute is the debt claimed, and its amount, as stated in the body of the declaration, and not merely the damages alleged, or the prayer for judgment at its conclusion, must be considered in determining whether this court can take jurisdiction on a writ of error sued out by the plaintiff." Such is now the established rule. Schacker v. Hartford Fire Ins. Co. 93 U. S. 241; Gray v. Blanchard, 97 U. S. 565; Tintsman v. Nat. Bank, 100 U. S. 6; Banking Ass'n v. Ins. Ass'n, 102 U. S. 121; Hilton v. Dickinson, 108 U. S. [2 SUP. CT. REP. 424.] In the present case, although the value of the goods is alleged to have been $5,010, and a judgment is asked for that amount, it appears distinctly, both in the petition of the plaintiffs and their reply to the answer of the defendant, that the insurance was for $4,000 and no more. The loss occurred at some time after February 26, 1879, and the judgment was rendered January 4, 1881, so that if the plaintiffs had recovered according to their claim as stated in the pleadings, their judgment, after interest was added to the amount of the insurance, would have been less than $5,000. Although it was agreed that the goods were actually worth more than $4,000 and the loss was tetal, it was one of the conditions of the insurance that the adjustment should be made upon the valuation specified in the policy. The actual value of the goods at the time of the insurance or of the loss is therefore unimportant.

We cannot accept the stipulation of the parties, that judgment might be entered for $5,010, if the court should be of opinion that the plaintiffs were entitled to recover at all, as giving us jurisdiction. The dispute, as developed in the pleadings, was as to the liability of the company upon a contract of insurance for $4,000, and no more. Arrangements between parties contradictory to their pleadings, and so evidently made for the purpose of enlarging the case sufficiently to bring it within the jurisdiction of this court, cannot be recognized here.

It follows that the writ should be dismissed for want of jurisdiction; and it is so ordered. Dismissed.

(110 U. S. 338)

UNITED STATES v. BEHAN.

(February 4, 1884.)

DAMAGES-BREACH OF CONTRACT-ACTUAL EXPENSES-CLAIM FOR PROFITS.

A party who, after partially performing a contract, is wrongfully prevented from completing it, can recover the expense of his actual outlay, even though by claiming damages for the loss of profits he has treated the contract as existing. Damages in such a case consist of two distinct items: First, the actual expenditure; and, secondly, the profits which might have been realized; and a party wrongfully preventing performance of the contract cannot be heard to deny that the injured party has been damaged to the extent of his actual loss and outlay fairly incurred.

Appeal from the Court of Claims.

Sol. Gen. Phillips and John. S. Blair, for appellant.
J. W. Douglass, for appellee.

BRADLEY, J. Behan, the appellee and claimant, filed a petition in the court below, setting forth that on the twenty-sixth of December, 1879, one John Roy entered into a contract with C. W. Howell, major of engineers of the United States army, to make certain improvements in the harbor of New Orleans, (describing the same,) and that the claimant and two other persons named became bondsmen for the faithful performance of the work; that on February 10, 1881, the contract with Roy was annulled by the engineer office, and the bondsmen were notified that they had a right to continue the work under the contract if they desired to do so, and that the claimant complied with this suggestion and undertook the work; that he went to great expense in providing the requisite machinery, materials, and labor for fulfilling the contract, but that in September, 1881, it being found, by the report of a board of engineers, that the plan of*improvement was a failure, without any fault of the claimant, the work was ordered to cease; that thereupon the claimant stopped all operations, and disposed of the machinery and materials on hand upon the best terms possible, and sent to the war department an account of his outlay and expenses, and the value of his own time, claiming as due to him, after all just credits and offsets, the sum of $36,347.94, for which sum he prayed judgment. The claimant afterwards filed an amended petition, in which the various transactions and his operations under the contract were set forth in greater detail, showing, among other things, that the amount of his expenses for machinery and tools, for materials, and for labor and operations carried on, after deducting the proceeds realized from the sale of the plant remaining when the work was suspended, amounted to the sum of $33,192.90. The petition further alleged that the claimant could have completed the work contemplated by the contract by a further expense of $10,000, and that the amount which would then have been due therefor would have been $52,000, leaving a profit to him of $8,807.10. The petition con. cluded as follows: "Your petitioner therefore respectfully shows that his reasonable and necessary expenditures upon the work above described amounted to $33,195.92, which sum represents the losses actually sustained by peti. tioner by reason of the defendants' breach of the contract. And petitioner further sets forth that the reasonable and legitimate profits which he might have obtained but for the said breach of contract may be properly computed at $8,807.10, assuming $52,000 as the amount to be paid for the completed work. And petitioner further shows that he has not received one dollar from the defendants on account of said work, but that his claim and accom paning accounts, presented to the engineer department, have been transmitted to this court by the secretary of war. Your petitioner therefore al leges that he is entitled to receive from the United States the sum of forty-two thousand dollars ($42,000) over and above all just credits and offsets. Wherefore he prays judgment for that amount."

*341

The court of claims found the material facts to be substantially as stated in the petition. The contract of Roy is set forth in full in the findings, from which it appears that the contracting party was required to furnish and lay down an artificial covering of cane-mats over the sloping portion of the riverbed of the Mississippi in front of the third district of New Orleans, to extend outwards to a depth in the river not exceeding 100 feet, and to be paid therefor at the rate of 65 cents per square yard. The court finds that Roy prosecuted the work under the contract during the year 1880, but his progress not being satisfactory to the engineer officers, the contract was formally annulled and the bondsmen notified, as stated in the petition. In March, 1881, Behan, the claimant, gave notice to Maj. Howell that he would undertake the work, and at his request the major gave him a description of the work to be done, estimated as not exceeding 77,000 or 80,000 square yards, which, at the contract price, would amount to from $50,000 to $52,000.

The court further finds as follows: "The contract was of such a character as to require extensive preparations and a large initial expenditure. The claimant made the necessary preparations for carrying on the work to completion, and in procuring boats, tools, materials, and apparatus for its prosecution. He engaged actively in carrying out the contract on his part, incurred large expenditure for labor and materials, and had for some time proceeded with the work when the undertaking was abandoned by the defendants and the work stopped, without fault of the claimant, as set forth in the following letters:" Then follows a copy of correspondence between the officers and the department of engineers, showing that a board of engineer officers was appointed to examine and report upon the plan of improvement under which the work of the claimant was being carried on, and that this board, on the twenty-third of September, 1881, reported their uanimous opinion that the object sought to be accomplished by the improvement had not been attained, and that under the then existing plan of operations it could not be attained. On the twenty-ninth of September, 1881, the claimant received notice to discontinue the work, which he did at once, and gave Maj. Howell notice to that effect, and called his attention to the exposed situation of the machinery, materials, and other property on hand, and requested instructions respecting the same. No instructions appear to have been given.

The court then finds as follows: "The claimant thereupon closed up his work and sold the materials which he had on hand. Nothing has been paid to him for work, materials, or losses. The actual and reasonable expenditures by the claimant in the prosecution of his work, together with his unavoidable losses on the materials on hand at the time of the stoppage by the defendants, were equal to the full amount claimed therefor in his petition-$33,192.20. It does not appear from the evidence thereon on the one side and the other whether or not the claimant would have made any actual profit over and above expenditures, or would have incurred actual loss had he continued the work to the end and been paid the full contract price therefor.

"CONCLUSION OF LAW.

"Upon the foregoing findings of facts the court decides as a conclusion of law that the claimant is entitled to recover the sum of $33,192.20."

The government has appealed from this decree, and complains of the rule of damages adopted by the court below. Counsel contend that, by making a claim for profits, the claimant asserts the existence of the contract as opposed to its rescission; and that in such case the rule of damages, as settled in Speed's Case, 8 Wall. 77, is "the difference between the cost of doing the work and what claimants were to receive for it, making reasonable deduction for the less time engaged, and for release from the care, trouble, risk, and responsibility attending a full execution of the contract.” And when such a

[ocr errors]
« PreviousContinue »