Robinson v. Noble's Administrators/Opinion of the Court

by John McLean

United States Supreme Court

33 U.S. 181

Robinson  v.  Noble's Administrators

Mr Fetterman and Mr Colwell, for the defendant in error, contended:

By the terms of the contract Robinson was bound to furnish Noble, the owner and captain of the steamboat Paragon, with with about three thousand seven hundred barrels of freight to be transported to St Louis; one half to be furnished at Cincinnati, and the other half at the mouth of the Ohio, for the transportation of which was to be paid the sum of one dollar and fifty cents per barrel freight.

It appeared in evidence that he furnished for the long voyage, the full half of three thousand seven hundred barrels, and prevented Noble from taking other freight; but that for the short and profitable voyage, he furnished not quite two-thirds of a load. And in the declaration it is averred as a breach of the agreement on the part of Robinson, that he did not furnish the stipulated number of barrels, freight. In consequence of which Noble sought to recover damages.

It is urged that, by the true effect of the agreement, Robinson is not so discharged, and that he was bound to furnish the three thousand seven hundred barrels, subject only to such deduction as may be reasonable under the qualification of the terms connected with the number three thousand seven hundred, keeping in view the circumstances of the case. It is plain that the owner of a boat, entering into such a contract, would be governed in his arrangements, and in fixing his terms, by the quantity of freight he was to carry. The testimony shows that the amount agreed for, would make about two loads for the Paragon. The voyage was specially undertaken for Robinson; and, doubtless, the rate of the freight was regulated by its length, the time it would occupy, and the amount to be furnished. The boat might make money by carrying two full loads at one dollar and fifty cents per barrel, and lose money by carrying a load and a half at the same price. When Robinson agreed to furnish 'stores supposed to amount to about three thousand seven hundred barrels,' how was he understood by Noble? Did either of them suppose that this stipulation would be fulfilled by a delivery of three thousand one hundred? Surely, these qualifying terms have some reasonable limitation. When we say about three thousand seven hundred, we surely mean more than three thousand, else why descend to hundreds? Some degree of certainty in hundreds above three thousand, is clearly intended. Does not the common and plain intent of the language show that the parties meant some number between three thousand six hundred, and three thousand eight hundred? As hundreds is the lowest denomination to which the parties have descended, the range of the qualification must be kept within one hundred of the number named. Here, then, is the case of a plain agreement to furnish at least three thousand six hundred barrels of freight, and to pay for the same as further agreed. It matters not, in the view of the defendant in error, whether this is a case of a charter-party, or the case of goods carried in a general ship; the construction of the agreement must be the same either way. In relation to this point, our claim arises in the failure of Robinson to furnish the freight agreed upon, and is therefore a claim upon dead freight. The agreement, when understood, constitutes the law of this case, and there can be no rule in relation to charter-parties or freight in general ships affecting its construction, or the rights of the injured party, in reference to the question before the court.

It is objected that the judge erred in laying down the rule of damages on this point to the jury. It is believed that no fairer, nor more honest rule can be found than the one adopted by him, nor does it militate with any decision.

The owner of the Paragon is prevented taking more freight by the conduct of Robinson, for the long voyage and the short voyage, the owner of the Paragon performed his part of the contract. He transports a full load the long voyage, he gets but half a load the short one, and that to him the voyage intended to be profitable.

The judge is correct in saying that Robinson, when there had been a failure on his part to furnish the amount of freight stipulated, should pay for any freight that might have been transported, and which was not transported, owing to his interference or default. Can there be a fairer rule on this subject than the average one as laid down by the judge.

It is believed, that the rule recognized in Story's Abbot, last edition, pages 197 to 200, and the cases there referred to, fully establish the rule laid down by the learned judge to be the law. See also Penoyer v. Hallet, 15 Johns. 332. It is also presumed, that the same answer may be given to the fourth assignment of error, which is nothing more than a consequence from the first.

About on Shipping 278, where the very rule of the court below is laid down distinctly. Holt on Shipping 350; 3 Chitt. Com. Law 399, 407, 408; Beames 190; Laws on Char. Part. 117; Cleme and Catara, 2 Gall. Rep. 73; Edwin and Stafford v. The East India Company, 2 Vernon 212.

2d. It is assigned for error, that the court were wrong in charging the jury, that Robinson having failed to tender to the plaintiff the paper of the Miami Exporting Company or its equivalent, at the time it was due, is obliged to pay the numerical value of the paper with interest.

It appears from the evidence, that at the time Robinson was to have paid in paper of the Miami Exporting Company, or its equivalent, such paper was considerably under par, and that Noble was an indorser on, and liable for a considerable amount to the Miami Exporting Company. It would then have suited him as well as cash. Robinson, however, does not pay when the agreed time arrived, and never has paid, even until this day. And now, after this great delay, he comes forward, and asks to be released from a breach of his contract. This is the case of a contract made in the state of Ohio, as the money is to be paid at Cincinnati.

The contract, then, between these parties, must be governed by the law of the state of Ohio on the subject; see Van Reimsdyk v. Kane et al. 1 Gallison 371; Camfranque v. Burnell, 1 Wash. C. C. 340; Golden v. Prince, 3 Wash. C. C. 313; Green v. Sarmiento, 1 Peters 74, 3 Wheat. Rep. 101 and 146; Cox and Dick v. The United States, 6 Peters 172; Boyle v. Zacharie and Turner, 6 Peters 635; which cases settle the point.

It is apprehended then, that in Ohio the question has been decided both at law and equity. The case of Edwards v. Morris, 1 Ohio Reports 524, was a bill in chancery, filed by the complainant, alleging, that at the time he contracted to pay for certain land in current bank notes of the city of Cincinnati, his agreement was, as he supposed, only to pay in paper of the Miami Exporting Company, which was thirty-three per cent under par, and praying for relief, & c., and that he only may be compelled to pay the real value of that paper. And the case appears, by the report, to have been fully agreed, and the opinion delivered by judge Hitchcock, who says,

The prayer of the bill, in this case is, to enjoin a judgment at law, rendered at the last term of this court, and also to procure a rescision of a contract. Two reasons are assigned why the court should interfere.

1st. A mistake in the terms of the note upon which the judgment was rendered.

2d. A doubt as to the title to the land conveyed by the defendant to the complainant, which land was the consideration of the note.

The facts set forth in the bill, are admitted by the demurrer, and the question to be determined is, whether there is sufficient matter to justify the interference of a court of chancery.

It is the peculiar province of chancery, to relieve against fraud, mistake or accident. But how far parol testimony can be admitted, to prove mistake in a written instrument, has been matter of much altercation and doubt. Mistakes in matter of fact, it seems, may be rectified; and the opinion of the court, in the case of Hunt v. Rousmanier's administrators, 8 Wheat. 174, goes far to establish the doctrine, that where parties, through a mistake and ignorance of the law, execute a writing which does not carry into effect their contract and intention, the true contract and intention may be enforced in chancery.

In the case before the court, the alleged mistake consists in this; the purchase money, which was the consideration for which the note was given, was to have been paid in the notes of the Miami Exporting Company.

The note was to have been made thus payable, whereas, in fact, it was made payable in 'current bank notes of the city of Cincinnati.' The complainant understood, that he was to pay in the numerical value of the notes. If, in consequence of this mistake, the complainant has sustained an injury, he ought to be relieved.

It is an invariable rule in chancery, that he who seeks equity, must do equity. Suppose the notes referred to had been drawn, payable in the notes of the Miami Exporting Company, and there had been no mistake, what must the complainant have done to have defended himself at law, and to have secured to himself the privilege of paying in the notes of that bank. He must have tendered the notes on the day; and ought to have them in court.

The mistake however happened, which rendered it proper that he should come into a court of chancery: what ought he to do here? The contract was, that he was to pay, on a particular day, the sum named in the obligation, in a particular description of bank notes. He ought then to show, that he tendered these notes at the time specified, and he ought to bring them into court, that the opposite party may receive them. The notes, however, are not brought into court, nor is there any pretence that they have been tendered. The complainant, then, does not appear to be ready to do that equity which he requires of the defendant, and on this ground is not entitled to the relief prayed for.

The circumstance that the defendant, some time before the promissory note fell due, stated that he would not receive those bank notes in payment, cannot excuse the complainant in not making the tender.

It is claimed, that an account should be taken of those notes, and that the complainant should only be made liable for their specie value. This cannot be done. Bank notes are considered as money-the holder has a right to look to the banks which issue them for their numerical value in specie, and cannot be compelled to take for them a value fixed by shavers and brokers. The ability or inability of the bank to pay, ought not to be taken into consideration.

The demurrer is therefore sustained, the injunction dissolved, and the bill dismissed with costs.

In the same book, page 178, in the case of Smith v. Goddard, it is ruled at law, that a contract to pay in current bank notes, is a contract to pay in money, if the bank notes are not tendered at the day.

And also, in the before cited case of Morris v. Edwards, on the law side of the court, reported in 1 Ohio Reports, commencing at page 189, the question is fully discussed, both by the bar and the bench; and the question seems conclusively settled. To that case, and to the reasoning of the judges who delivered the opinion of the majority of the court, the attention of this court is respectfully requested.

It is though, that the principle of the Ohio cases, is sanctioned by a decision of judge Washington's, in the case of Courtoir v. Carpentier, reported 1 Wash. C. C. 376. This was an action on a note, given by defendant to plaintiff at Guadaloupe, both parties being French subjects, for the payment of seven thousand eight hundred and twelve livres, in sugars, at money value; it was proved that notes of this description formed a species of circulating medium at Guadaloupe.

That according to the custom of the place, when payment is demanded, or suit brought, three persons are appointed to value the sugar, and determine what quantity should be delivered in payment of the note. That notes of this kind are always in a state of depreciation, from twenty-five to forty per cent, below cash. That when this note was given, it would have been easier to pay three thousand dollars in sugar, than one in cash. That they carried interest only from the time judgment was rendered, or the note registered before a notary. Held, that the law of the place where the contract was made must govern; but since our courts, to which the parties have appealed, cannot give a judgment for sugar, the value in money must be given, which, in effect, is the precise sum mentioned in the note, but that no interest is to be allowed up to the time of the judgment.

As to the term 'about,' and in the agreement it is obvious that it means between the thousand six hundred and three thousand eight hundred barrels-without straining, it cannot be made, in this case, to mean less. It appears, that the half of three thousand seven hundred was a fair load for the boat, and it is obvious, that the contract was made in special reference thereto.

It is believed, that the cases to which the court are referred, will justify the district judge fully in his instruction on all the points to the jury.

Mr Justice M'LEAN delivered the opinion of the Court.

This case was brought into this court, by a writ of error to the district court, which exercises the powers of a circuit court, for the western district of Pennsylvania.

The plaintiffs in the district court, commenced an action of covenant on the following instrument. 'Article of agreement, entered into this 24th day of February, between William Noble of the city of Cincinnati of the one part, and William Robinson, Jun. of the city of Pittsburgh of the other part, witnesseth: that the said Noble hereby agrees, stipulates and binds himself, to and with the said Robinson, to transport and deliver to said Robinson, in the steamboat Paragon, a certain quantity of subsistence stores, for the use of the United States army, supposed to amount to about thirty-seven hundred barrels, estimating one half of the quantity of stores as flour barrels, and the other half as whiskey or pork barrels, the said Robinson delivering one half of the same between the 1st and 10th of March to said Noble, at Cincinnati, and the other half by the 30th of March, at the usual place of deposite, near the mouth of the Ohio; the delivery of which stores is to be made and completed in the order in which they are received, at the town of St Louis aforesaid, on or before the 15th day of April next ensuing. In consideration whereof, the said Robinson hereby agrees and binds himself to pay to the said Noble, one dollar and fifty cents per barrel, one half whereof is to be paid on the delivery of said stores at St Louis, in specie funds or their equivalent, and the other half in Cincinnati, in the paper of banks current therein, at the period of the delivery of said stores at St Louis. In testimony whereof, the parties signed and sealed the instrument, the 24th of February 1821.'

Under the agreement was the following memorandum. 'It is understood that the payment to be made in Cincinnati, is to be in the paper of the Miami Exporting Company or its equivalent.' Signed, William Robinson, Jun.

This covenant being before the jury, the defendant's counsel prayed the court to instruct them, that the plaintiffs could only recover the stipulated price for the freight actually transported, and that they were entitled to no more than the specie value of the notes of the Miami Exporting Company Bank, at the time the payment should have been made at Cincinnati. But the court refused so to instruct the jury, and directed them that they were authorised to take 'all the circumstances into consideration, and to make an allowance for any freight which the master had it in his power to transport, in addition to that which was furnished. That if the lading should not be complete, without the default of the master, the rule is to estimate the freight by means of an average, so as to take neither the greatest possible freight, nor the least, and that such average is the proper measure of damages.

And the judge further instructed the jury, that 'the defendant having failed to tender to the plaintiff the paper of the Miami Exporting Company, or its equivalent, at the time mentioned in the contract, and the plaintiff having performed all he covenanted to perform, is by the laws of Ohio entitled to recover the numerical value of the paper of the Miami Exporting Company in specie, with interest.' And the jury, under these instructions found for the plaintiff two thousand three hundred and seventy-seven dollars and thirty-six cents in damages.

On this statement of the case, the question arises, whether the court erred in refusing to give the instructions prayed for by the defendant. And first, whether the plaintiffs were entitled to recover in damages more than the stipulated price for the freight actually transported.

By the article, Noble agreed with Robinson to transport 'in the steamboat Paragon, a certain quantity of subsistence stores, &c., supposed to amount to about thirty-seven hundred barrels,' &c.; 'in consideration whereof, Robinson binds himself to pay one dollar and fifty cents per barrel.' Under this agreement, only three thousand one hundred and five barrels were delivered for transportation.

The plaintiff's counsel insist, that Robinson was bound by his agreement to deliver the number of barrels specified, subject only to a reasonable qualification of the words 'supposed to amount to thirty-seven hundred barrels;' and that by this rule, the number could not be reduced below thirty-six hundred barrels.

It is clear, from the agreement, that the amount of freight was not ascertained, and that Robinson did not covenant to deliver any specific number of barrels. It was conjectured, there were thirty-seven hundred, and the payment for the transportation was to be at the rate of one dollar and fifty cents per barrel.

The master of the steamboat Paragon proved on the trial, that the second trip which the boat made under this contract, she had not more than two thirds or three fourths of a cargo. And it also appeared, that the reason assigned why a greater number of barrels were not delivered to the master of the steamboat was, that one or two flat-boats, laden with flour, designed as a part of the second cargo of the Paragon, were sunk above Cincinnati.

If Robinson had bound himself to deliver a certain number of barrels, and had failed to do so, Noble would have been entitled to damages for such failure; but a fair construction of the contract imposed no such obligation on Robinson, and consequently, the breach assigned in the declaration is not within the covenant.

It is unnecessary to determine, whether, under a certain state of facts, and with proper averments in the declaration, damages might not be recovered, beyond the price per barrel for the cargo transported, as such a case is not before the court.

There is no pretence that Robinson did not deliver the whole amount of freight in his possession, at the places designated in the contract. In this respect, as well as in every other, in regard to the contract, he seems to have acted in good faith. And he was unable to deliver the number of barrels supposed, either through the loss stated or an erroneous estimate of the quantity. But, to exonerate Robinson from damages on this ground, it is enough to know, that he did not bind himself to deliver any specific amount of freight. The probable amount is stated or supposed, in the agreement; but there is no undertaking as to the quantity.

When the circumstances under which this contract was made are considered; the contingencies on which the delivery of the freight, in some degree depended: the reason is seen, why cautious and indefinite language was used, in regard to the number of barrels, in the contract. And the result proved tat this caution was judicious; as, if the contract had stipulated for a specific amount of freight, Robinson would have been bound to pay the full price of transportation, notwithstanding the loss he sustained.

The court think that there was no breach of the covenant, in this respect, on the part of Robinson, and that the district court erred in not giving the instruction, as prayed for by the defendant.

The second instruction asked by the defendant's counsel in the court below was, that the plaintiffs were not entitled to recover more than the specie value of the notes, in which the payment was to have been made, at Cincinnati.

It was proved, on the trial, that the notes of the Miami Exporting Company, in which, by the contract, the payment was to be made or other notes of equal value, were not worth more in specie, than sixty-six and two thirds per cent.

The express provisions of the contract show, that the payment at Cincinnati was not to have been made in specie, or what was equivalent to specie. The notes of the Miami Exporting company were substituted by the parties, as the standard of value, which should discharge this part of the contract, and the payment of those notes, or any others of equal value, was all that Noble had a right to demand. But, it is contended, that as the payment was not made at the day, it must needs be made in specie, and to the full amount of the sum agreed to be paid in depreciated paper.

In what does this covenant to pay differ from an agreement to deliver a certain quantity of flour, or any other commodity on a given day.

The notes of the Miami Exporting Company purported to be money, and may, to some extent at the time, have circulated as such in business trasactions: but it is manifest, they were not considered as money by the parties to this contract; but as a commodity, the value of which was to be ascertained by the amount of specie it would bring in the market. And if it should not be convenient for Robinson to make the payment in these notes, he was permitted to make it, by the contract, in any other depreciated notes of equal value.

Robinson failed to make the payment at the time, and is he now bound to pay the nominal amount of these notes in specie? What damage has Noble sustained by the non-payment? Certainly not more than the value of the notes, if they had been paid.

Had these notes been equal to specie on the day of payment, Robinson was bound to pay them, or what was of equal value. If they had depreciated to fifty cents in the dollar, Noble was bound to receive them, in discharge of the covenant. Each party incurred a risk in the fluctuations of the value of the notes specified; and nothing could be more unjust, or more opposed to the spirit and letter of the contract, than to require Robinson to pay in specie, the nominal value of these notes. The law affixes no such penalty for default of payment. Robinson can only be held liable to make good the damages sustained through his default; and the specie value of the notes, at the time they should have been paid, is the rule by which such damages are to be estimated.

In this view, it appears that the district court erred in refusing to give the second instruction prayed for by the defendant's counsel; on this ground, therefore, as well as the one first noticed, the judgment of that court must be reversed, and the cause remanded for further proceedings, in conformity with this decision.

This cause came on to be heard on the transcript of the record from the district court of the United States, for the western district of Pennsylvania, and was argued by counsel; on consideration whereof, it is ordered and adjudged by this court, that the judgment of the said district court in this cause be, and the same is hereby reversed, and that this cause be, and the same is hereby remanded to the said district court, with directions that further proceedings be had therein, according to law and justice, and in conformity with the opinion of this court.

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