Willinks v. Hollingsworth

THIS was an action of assumpsit brought in the Circuit Court of Maryland, by the plaintiffs, who were merchants of Amsterdam, to recover from the defendants, merchants of Baltimore, a sum of money advanced by the plaintiffs in Amsterdam, for the cargo of the Henry Clay a vessel belonging to the defendants, which had been consigned by them to the plaintiffs, with an outward cargo, and with orders respecting her ulterior destination, which showed, that on the failure of getting a freight to Batavia, or of selling her at Amsterdam, she was to go to St. Petersburg, and there take in a return cargo of Russian goods for the United States. The plaintiffs purchased in Amsterdam, with the concurrence of the master, a return cargo for the Henry Clay, partly with the money of the defendants, and partly with money advanced by themselves. On her arrival at Baltimore, the defendants objected to the purchase of this cargo in Amsterdam, as being contrary to express orders, and immediately gave notice to the plaintiffs of their disapprobation of the transaction, and of their determination to hold them responsible for all losses sustained in consequence of this departure from instructions. They, however, received the cargo, and sold it. The declaration contained three counts: the first, for money lent and advanced to the defendants; the second, for money laid out and expended for their use; and the third, for money received by them for the use of the plaintiffs. On the trial of the cause in the Circuit Court, the defendants prayed the Court to instruct the jury, that upon the whole evidence, which is spread on the record, 'the plaintiffs have not any demand in law against the defendants which can be maintained in this action; but that, if they have, the defendants are entitled to a deduct on from the same, of the amount of the loss which the jury shall find the said defendants sustained, by reason of the alteration aforesaid, in the destination to St. Petersburg, of the said ship, and the loading her as aforesaid at Amsterdam.' On this motion the Judges were divided in opinion, and the division certified to this Court. The evidence principally consisted of two letters, dated the 29th of April, 1815, written by M'Kim, one of the defendants, addressed, the one to the plaintiffs, the other to the master of the Henry Clay. That to the plaintiffs was as follows: 'Gentlemen-The owners of the ship Henry Clay having appointed me the ship's husband for this voyage, and from the introduction of our mutual friends, Robert Gilmor and Sons, I have been directed by the owners to consign the ship to your house, also that part of her cargo which I consider belongs to her owners jointly, agreeable to the invoice, amounting to 1,363 dollars 40 cents. 'You will find, that the owners of the ship have shipped tobacco on their separate accounts; the proceeds are to be placed to the credit of John M'Kim, jun. to remain a fund for the purpose of loading the ship if she should proceed to St. Petersburg. The freight and primage, and also Captain Charles Gantt's bills, which are now enclosed, drawn on you for the sum of 6,550 guilders, are to constitute part of the funds for the loading of the ship. 'Our wish is, in the first place, if a good freight or charter can be had for the ship to Batavia, that she should proceed there in preference to any other place. 'And, secondly, if the ship can be sold for 8,000 pounds sterling, you will dispose of her rather than send her to St. Petersburg.' The letter then proceeds to give such a description of the ship as might enhance her value in the estimation of a purchaser, and then adds, 'If the Henry Clay proceeds to St. Petersburg, we must depend on your placing funds there to purchase a cargo of iron, hemp, and other goods. If the funds we have placed in your hands should fall short of loading her, Messrs. Gilmor and Sons have written you to make us any advances that may be deficient. Agreeable to the estimate, what we have ordered from St. Petersburg, will not exceed 45,000 dollars, and you may rest assured, that any sum advanced us will be remitted to you as soon as we know the amount.' The letter to the master was in these words: 'Dear Sir-The ship Henry Clay is given you in charge, that you proceed with all possible despatch for Amsterdam, and it is recommended that you sail north-about at this fine season of the year. The owners of the ship have the greatest confidence in your good management; that you will take care that your disbursements in every foreign port may be as moderate as possible; that you will purchase every article yourself on the lowest terms that may be required for the ship; that you will use the greatest economy in all your expenditures. After your arrival at Amsterdam, your first object is a good charter for Batavia, and if what you know to be a good charter is obtained, you will of course accept it in preference to any thing else. 'And if a good freight cannot be had to Batavia, and the ship can be sold for 8,000 pounds sterling, you have orders to sell her, and we confidently expect that she will bring more, as she cost upwards of 14,000 pounds sterling, and never made one voyage. I hope that every exertion will be made to proceed to St. Petersburg immediately, if you do not go to Batavia, and the ship cannot be sold; as the season is far advanced, no time must be lost. The same industry must be used to get away from St. Petersburg, for fear that you might be detained there all the winter. The owners must also depend on your attention at St. Petersburg, that the hemp is good that you receive.' The letter then gives instructions respecting pilots, protests, &c., and then adds, 'Messrs. Willinks will of course endeavour to consign the ship to a friend of theirs at St. Petersburg, but we have great confidence in a house recommended by Mr. Cumberland D. Williams, Messrs. Meyer and Buxner, and we could wish you to consign the ship to them. If any freight should offer from St. Petersburg to Baltimore, of course, you will accept of it, and if any goods for Philadelphia or New-York should be there, you can inform the shippers how easy they may be sent,' &c. It was also proved, that no freight to Batavia could be obtained, and that the vessel could not be sold at the price limited. February 23d. Mr. Harper and Mr. Winder, for the plaintiffs, argued, (1.) That the present action could be maintained by the plaintiffs for the monies advanced by them at Amsterdam, for the purchase of the return cargo received by the defendants at Baltimore. Even supposing that the defendants might have refused to receive it, yet having actually sold it, and received the proceeds of the sale, this raises an assumpsit to pay the money thus received. In the case of Manella v. Barry, 3 Cranch 415, foreign merchants, sent by their general agent, written orders to their factor in this country, to purchase goods here upon their account, but to ship the goods in the name of the factor, and by those orders the factor was referred to the verbal communications of the general agent, who undertook to order the goods to be shipped in the name of another person, and declared that he had authority from the foreign merchants thus to control and vary their orders; the factor was held to be justified in obeying the new orders of the general agent, though contrary to the first written orders. So, here the consignment of the ship to the plaintiffs was limited to her transactions at Amsterdam, and the control of her ulterior movements was left to the master. The learned counsel here entered into a minute examination of the correspondence, to show that this was its import. 2. The defendants cannot claim a deduction from the plaintiffs' demand of the amount of the supposed loss sustained by the alteration of the intended destination of the vessel to St. Petersburg, and the loading her at Amsterdam. This question depends not on the English statute of set-off, but on the act of Assembly of Maryland, of November, 1785, c. 46. s. 7. This act provides, 'That in case any suit shall hereafter be brought on any judgment, or on any bond, or other writing sealed by the party, and the defendants shall have any demand or claim against the plaintiff, upon judgment, bond, or other instrument under seal, or upon note, agreement, assumpsit, or account proved, as by this act is allowed the defendant, or otherwise according to law, shall be at liberty to file his account in bar, or plead discount to the plaintiff's claim, and judgment shall be given for the plaintiff for the sum only which remains due after just discount made; provided the sum which shall remain due after such discount be sufficient to support a judgment in the court where the cause may be tried, according to its established jurisdiction; and in all cases of suits upon simple contracts, the defendant may file an account in bar, or plead discount of any claim he may have against the plaintiff, proved as aforesaid, or otherwise proved according to law, which may be of an equal or superior nature to the plaintiff's claim, and judgment shall be given as aforesaid.' Unliquidated damages cannot be admitted by way of discount, according to the very letter of the law, and the uniform decisions of the local Courts of Maryland. But even the English statute has received the same construction. Montagu on Set-Off 21, and the authorities there cited; Brown v. Cuming, 2 Caines 33, and note a; Winchester v. Hackley, 2 Cranch 341. Damages for a breach of the implied contract of an agent are, and necessarily must be, unliquidated. If then such damages cannot be set off under the statute, neither can they be admitted incidentally, by way of deduction, upon the equitable principles of an action for money had and received. It would be an evasion of the law to permit such an equitable deduction, which sounds rather in tort than contract. The policy of the law is to prevent two distinct issues, involving controverted questions, from being tried at the same time, thus confounding the simplicity of actions and of proceedings in a Court of law. Mr. Pinkney and Mr. D. B. Ogden, contra, (1.) insisted, that the action could not be maintained by the plaintiffs, there having been a manifest breach of instructions on their part, not justified by the pretended approbation of the master. (2.) The defendants have a right to a deduction for the loss sustained by them in breaking up the intended voyage to St. Petersburg. No part of the money, for which the action is brought, can be said to be received to the use of the plaintiffs, which, by the very nature of their claim, ought in conscience to be applied to the indemnity of the defendants against the breach of contract which originated the plaintiffs' demand. The claim of the plaintiffs arises from a breach of their duty to the defendants. That breach of duty forced the money in question into the hands of the defendants. If the plaintiffs should obtain a judgment for the whole of this money, it cannot be doubted that Chancery would enjoin execution until the extent of the injury inflicted upon the defendants by the acts which produced the judgment could be ascertained by a jury. And surely in this action for money had and received, a Court of law will proceed with the same view, if the existence of the defendants' right to complain is ascertainable (although the exact quantum of the injury is not) by the same evidence, and through the same circumstances, which properly belong to the case of the plaintiffs. The acknowledged nature of the action for money had and received, will otherwise cease, and it will differ in nothing from any other form of action. If we are not to inquire in this action, how, and under what circumstances money was received, in order that we may determine whether, ex aequo et bono, the defendants may retain the whole, or any part of it; and if nothing can prevent a recovery of the whole, but a plea of discount, or a notice of set-off, or such other defence as in ordinary actions may be competent, the character given in the books of the action for money had and received, is a perfect delusion. The case of Dale v. Sollet, 4 Burr. 2133, goes the whole length of this doctrine. The deduction there claimed might, perhaps, have been used as a discount or set-off under the statute; although as the claim was not a liquidated one, it probably could not; but at any rate it was not so used, and consequently, as a discount or set-off, no advantage could be taken of it at the trial. Why then was it allowed in that case? Because of the equitable nature of the plaintiff's action, and of the intimate connection between the claim and the defence, out of which arose the conclusion that the defendant might retain, or stop so much of the money, although it was in fact the plaintiff's money which he received, and although there was no precise contract that it should be stopped out of the money received. The right in that case to stop a reasonable compensation (which the parties had not defined) out of the whole sum which had come to the defendant's possession, was exactly such a right as we now insist upon. It stood, as ours does, upon the qualities of that sort of suit which the plaintiff had instituted, and upon the union of the claim and the defence. The defence, indeed, was less complicated in that case than it is in the present one: but so, too, was the plaintiff's demand. And, besides, a defence is not the less a good defence, or an examinable defence, because it does not depend upon a single fact, or does depend on many facts. A jury can deal with it, nevertheless, and does deal with such defences every day: and there would be a defect of justice if they did not. The defence in this case rests, incontestibly, upon contract, as it did in that. The deduction claimed was in that, as in this, unliquidated in amount. The right to the deduction arose in that, out of the whole circumstances of the case. It does so equally in this. The amount was, in that case, as well as in this, part of the case itself, as respected the demand of the plaintiff. Evidence was necessary on the part of the defendant, to ascertain there the quantum of the deduction, as much as it is here. What case could the plaintiffs in this cause have shown upon any of the counts in their declaration without exposing, or letting in an exposition, of the whole matter on which the defendants rely? Of necessity, the entire transaction was before the jury, and it is upon that, as in Dale v. Sollet, that we contend for the admissibility of a defence which the entire transaction brings under the notice of the Court and jury. And it should seem to be monstrous, that when the whole is regularly and necessarily presented, and the result is that the defendants ought, in conscience and equity, to be permitted to retain an ascertainable part of the money received by them for their own use, they should be turned round to a cross action against persons who appear in their writ to be foreigners, and are not therefore amenable to our judicatures, or that (being probably remediless at law, if they are compelled to part with the whole of the money in their hands) they should be driven into Chancery for an injunction upon grounds of equity, equally available, as we are taught by the authorities, in an action for money had and received. The cross action, to which the other side refer us, must, in truth, try the present action over again; and a verdict for the present defendants, in such an action, could scarcely by reconciled with a verdict in this cause for the whole amount of the plaintiffs' claim. A cross action, which is to unravel the action now sub judice, and which upon the same circumstances is to establish that the present plaintiffs ought not to have what it is now contended they ought to have, seems to be supererogation at least. When a cross action is unavoidable, the necessity must be submitted to; and it is unavoidable where the matters of inquity are not combined in their nature. But, where so combined, an action for money had and received, opens the entire investigation, and can do ample justice without other assistance. Indeed, it cannot do justice at all on such occasions without exhausting the whole investigation. And to affect to administer equity by shutting out one half of the real case, (upon which the equity of the other half depends,) would be a mere mockery. Cross actions are always avoided when it is possible; and here it is not only possible, but absolutely required by the facts. March 8th. Mr. Chief Justice MARSHALL delivered the opinion of the Court, and after stating the facts, proceeded as follows: