Mondel v. Steel

Mondel v. Steel.

EXCH. OF PLEAS.

Original Citation: (1841) 8 M & W 858

English Reports Citation: 151 E.R. 1288

S. C. 6 Dowl. (N. S.) 1; 10 L. J. Ex. 426. Referred to, Heyworth v. Hutchinson, 1867, L. R. 2 Q. B. 451; Davis v. Hedges, 1871, L. R. 6 Q. B. 689; Towerson v. Aspatria, etc., Society, 1873, 27 L. T. 276.

[858] Mondel v. Steel. Exch. of Pleas. 1841.- Special assumpsit on a contract to build a ship according to a specification, assigning a breach in not building the ship with scantling, fastening, and planking, according to the specification, and alleging special damage. Plea, that the defendant had sued the plaintiff' for the balance of the agreed price of the ship, after payment of 3500, and also for a sum of 150 for extra work, in the form of an action for work and labour, and for goods sold and delivered ; that issue was joined, and, on the trial of the cause, the now plaintiff'gave evidence in his defence of the same breach of contract alleged in the declaration, and insisted, if the amount of compensation to which he was entitled exceeded or equalled the balance and value of the extra work, that he the now plaintiff was entitled to a verdict; if less, then he was entitled to a deduction, upon the amount of both, to the extent of such amount of compensa¡tion : that the Judge who tried the cause so directed the jury, and the jury found that the now defendant had committed a breach of the contract, and that the now plaintiff was entitled to some compensation, which they deducted from the price of the ship and the value of the extra work : that the now defendant had judgment for the amount, after such deduction had been made, since the com¡mencement of this suit:-Held, that the plea was bad on general demurrer.- Held, also, that all that the plaintiff could by law be allowed in diminution of damages on the former trial, was a deduction from the agreed price, according : to the difference between the ship as she was at the time of delivery, and what she ought to have been according to the contract: but that any claim for damages on account of the subsequent necessity for repairs could not be allowed in the former action, and might be recovered in this.-In all actions for goods sold and delivered with a warranty, or for work and labour, as well as in actions for ; goods agreed to be supplied according to a contract, it is competent for the defen¡dant to shew how much leas the subject-matter of the action was worth by reason of the breach of the contract: and to the extent that he obtains, or is capable of obtaining, an abatement of price on that account, he must be considered as having received satisfaction for the breach of contract; and he is precluded from recovering in another action to that extent, but no more.

Special assumpsit on a contract to build a ship for the plaintiff, at a certain rate per1 ton, and according to a certain specification (setting it out); and the breach assigned was, for not building the ship with scantling, fastening, and planking, according to the specification; by reason whereof the ship, in a certain voyage, was so much strained that it became necessary to refasten and repair her; and thereby thef plaintiff lost the use of her during the time she was undergoing such repairs.

'Plea, that the plaintiff ought not further to maintain his said action in respect of the-said alleged breach of contract in the declaration mentioned, because the defendant says that he the defendant, heretofore, to wit, on &c., before the Barons of her Majesty's Court of Exchequer at Westminster, in the county of Middlesex, irapleaded the plaintiff in an action on promises, and by the said action sought to recover from the plaintiff, over and above a sum of 21. 4s. 9Jd. hereinafter mentioned, the sum of 861. 6s. 4d., being the balance of the price of the said ship in the said declaration mentioned, calculated according to the provisions and terms of the said memorandum of agreement [859] therein also mentioned, and which remained unpaid to him the now defendant, after the payment by the now plaintiff to him of the sum of 31. 5s., in the said declara¡tion also mentioned, and after credit being given to the now plaintiff for two other sums hereinafter mentioned ; and also to recover from the now plaintiff the further suni of 1341. 3s. 2d., being the value of certain work, labour, and materials done and provided for the now plaintiff by the now defendant in and about the said ship, and

M.&W.880. MONDEL V. STEEL 1289

which were extra of and in addition to the work, labour, and materials mentioned and included in the said memorandum of agreement. [The plea then set out the whole of the pleadings in that action, which was inrlebitatus assumpsit in 4000, for work and materials, goods sold and delivered, and on an account stated:-pleas, 1st, except as to '21. 4s. 9jd., parcel &c., non assumpsit ; 2nclly, as to the 21. 4s. 9id., payment into Court of that sum, which the now defendant accepted ; 3rdly, except as to 21. 4s. Bjd., payment, which was denied by the replication ; 4thly, except as to 21. 4s. 9d., a sot-off for work and materials, goods sold and delivered, money paid, and on an account stated. The plea then proceeded as follows :]- And the defendant further saith, that all the said issues were duly joined between him the now defendant, and the now plaintiff, and afterwards, to wit, at the General Sessions of Assize holden at Liverpool, in and for the southern division of the county palatine of Lancaster, on &c., before Sir William Henry Maule, Knight, one of the Justices of our Lady the Queen of her Court of Common Pleas at Westminster, and Sir Robert Mounsey Rolfe, Knight, one of the Harons of our said Lady the Queen of her Court of Exchequer at Westminster, Justices of our said Lady the Queen of her Court of Common Pleas of the said county palatine, the said issues so as aforesaid joined came on in due and regular form of law, to be tiled before the said Sir Robert Mounsey Rolfe, and the same [860] were then tried in due course of law, by a jury of the county duly summoned, chosen, and sworn in that behalf, between the now defendant and the now plaintiff. And the defendant further says, that at the said trial he, the now defendant, duly proved and gave in evidence the said memorandum of agreement in the said declara¡tion mentioned, and further proved the delivery to and acceptance by the now plaintiff of the ship thereby contracted to be built, and that the pi-ice thereof, calculated according to the provisions and terms of the said memorandum of agreement in that behalf, amounted to the sum of 360cSl. 3s. 10d., whereof the now plaintiff had paid him, the now defendant, the said sum of 3500 in the said declaration mentioned, and was also entitled to credit for two other sums, namely, 181. 7s. 6d. and 31. 10s., leaving the said sum of 861. 6s. 4d., the balance, unpaid to the now defendant; and ha the defendant further proved and gave evidence that he, the now defendant, had done and provided for the now plaintiff, and at his request, for the said ship, work, labour, and materials, to the value of 1341. '3s. 2d., which was extra of and in addition to the work, labour, and materials in the said memorandum of agreement mentioned. And the now defendant further says, that the now plaintiff, at the said trial, and in defence of the said causes of action of him the now defendant, and in answer thereto, averred and gave evidence of the very same and identical breach of contract alleged by the now plaintiff to have been committed by the now defendant hi the gaid declaration in this suit, that is to say, that the now defendant did not build the said ship of the very best materials, in conformity with the said specification in the said declaration mentioned, and did not build the same with the whole of the scantling, fastening, and planking inside and outside, such as is mentioned in Lloyd's Survey Book for a twelve years' ship, but omitted and neglected so to do. And the defendant further says, that the now plaintiff, at the said trial, produced witnesses and [361] gave evidence in support of his said alleged defence, and in answer to the said Causes of action of him the now defendant; and then insisted at the said trial, that if the said jury were of opinion and found that the now defendant had committed the said breach of contract, or any part thereof, and that the amount of compensation or of damages to which he the now plaintiff was entitled by reason thereof, exceeded or equalled the amount of the said balance, and the value of the said extra and additional work, labour, and materials as aforesaid, that he, the now plaintiff, was entitled to have the verdict found for him. And further, that if the said jury were of opinion and found that he the said plaintiff was entitled to any compensation or damages in tespect of the said alleged breach of contract, or any part thereof, although the $ame tnight be less in amount than the amount of the said balance, and the said value of the said extra and additional work, labour, and materials, that he the now plaintiff was entitled to have the same deducted from the said last-mentioned amount; and the said now plaintiff then prayed the said Baron to state to and inform the said jury, that he the now plaintiff was so entitled. And the defendant further saith, that in pursuance of such prayer of the now plaintiff, and in accordance therewith, the said Baron did then, in summing up the evidence at the said trial, state to and direct the said jury, that if they found and were of opinion that the now defendant had corn-Ex. Drv. vii.-41*

12BO MONDEL V. STEEL 8 M. & W. 882.

minted the s;iid alleged breach of contract, or any part thereof, that they should decide and ascertain what was the amount of compensation or damages to which the now plaintiff was entitled by reason thereof ; and that if the said compensation or damages equalled or exceeded the amount of the said balance, and the value of the said extra and additional work and labour and materials, that they should find their verdict for the plaintiff in this action ; and that if the amount of compensation or damages to which [862] they found the plaintiff in this action was entitled, was less than the amount of the said balance and the value of the said extra and additional work and labour and materials, that they should deduct such compensation or damages from the said amount, and find their verdict for the defendant in this action for the difference only. And the defendant further says, that the said jury, in pursuance of suah direction, did then find that the defendant in this action had committed a breach of the said contract in the declaration in this action mentioned, and that the plaintiff in this action was entitled to compensation and damages in respect thereof; and then found their verdict for the now defendant, for the difference only between the said compensation and damages which they so found the plaintiff in this action was entitled to by reason of the said breach of contract, and the amount of the said balance, and tha value of the said extra and additional work and labour and materials as aforesaid, that is to say, for the sum of 120 only, which was considerably less than the amount of the said balance as aforesaid, and the value of the said extra and additional work and labour and materials. And the defendant further says, that the said jury then found all the said issues so as aforesaid joined for him the defendant, and assessed his; damages on occasion of the premises in the said action, besides his costs and charges by him in his said suit, to the said sum of 120 as aforesaid, and those costs and charges to 40s.; and such proceedings were afterwards had in her Majesty's said Court of Exchequer at Westminster, that afterwards, and after the commencement of this suit, to -wit, on &c. aforesaid, it was considered by the said Court that the now defendant should recover against the now plaintiff his said damages, costs, and charges by the jury aforesaid in form aforesaid assessed, and also 262 for his costs and charges by the said Court adjudged of increase to the now defendant, with his assent, which said [863] damages, costs and charges in the whole amounted to 384, and the now plaintiff in mercy, &c.; as by the record and proceedings thereof still remaining in the said Court of our Lady the Queen, before the Barons of her Exchequer at Westminster, more fully and at large appears, which said judgment still remains in full force and effect, not in the least reversed or made void. And the defendant in fact saith, that the said alleged breach of contract by the now defendant, or by the plaintiff in the declaration in this suit alleged, is the very same identical breach of contract so alleged and proved by the now plaintiff at the said trial, and relied upon by ;him as aforesaid, and for and in respect of which he obtained such compensation and damages as aforesaid. Verification and prayer of judgment.

Special demurrer, and joinder in demurrer.

Cleasby in support of the demurrer. The plea is bad in substance. The facts stated in it afford no answer to the present action, which is brought to recover the special damage resulting from the breach of contract. He was then stopped by the Court, who called on

Martin to support the plea. The plea shews that the defendant has already received a compensation for the breach of contract, and that is an answer to the action. If a person elects to receive compensation for a breach of warranty or contract, it ia a satisfaction. An impression formerly prevailed, that when a party contracted to pay a stipulated price for work and labour, the party performing it was entitled to recover the stipulated price, and that the only remedy for a breach of the contract was by a cross action. But in Hasten v. Butter (7 East, 479) a different opinion was entertained, and it was there held, that where the plaintiff declared upon a quantum meruit for work and [864] labour and materials, it was competent to the defendant, even without notice to the plaintiff, to prove that the work was not worth so much as the plaintiff clajmed ; and if it appeared that the plaintiff had been paid on account as much as the work was worth, he could not recover. In Pmtlton v. Lattimore (9 B. & C. 259; 4 Man. & By.ò 208), where, by a contract for the sale of cinque-foin seed, the vendor warranted it to be good new-growing seed, and soon after the sale the buyer was told that it did not correspond with the warranty, and he afterwards sowed part and sold the residue; it was held, that in an action to recover the price, it was competent to

8M. &W. 86S MONDEL V. STEEL 1291

the buyer to shew that the seed did not correspond with the warranty. Bayley, J., there says, "From the nature of the article and of the contract of warranty, I think the vendee was not bound to return the seed without using it; that by keeping it he has not precluded himself either from bringing an action for breach of the warranty, or from insisting on such breach in this action, in order to shew that the seed was of less value than the seller represented it to be." And Littledale, J., says, " I am of opinion, that where goods are warranted, the vendee is entitled, although he do not return them to the vendor or give notice of their defective quality, to bring an action for breach of the warranty; or if an action be brought against him by the vendor for the price, to prove the breach of the warranty, either in diminution of damages or in answer to the action, if the goods be of no value." [Alderson, E. If two-thirds of the seed were bad, and one-third good, the vendor would be entitled to damages for that which is good.] This is the case of a single article, that of a ship. eThis doctrine is more fully gone into in the case of Street v. May (2 B. & Adol. 456), where it was held, that a person who had purchased a horse warranted sound might, in an action by the vendor for the price, give the breach [865] of warranty in evidence in reduction of damages. It was there said by the plaintiff's counsel in argument, that " a defence of this kind is in the nature of a cross action upon the warranty, and is admitted in order to avoid circuity of proceedings," and that view is adopted by Lord Teuterden, 0. J., in delivering the judgment of the Court:-"The cases have established that the breach of warranty may be given in evidence in mitigation of damages, on the principle, as it should seem, of avoiding circuity of action." It would be quite absurd to say that it is to avoid circuity of action, if the other right of action is not extinguished. [Parke, B. This is riot the case of a warranty ; it is an agreement to build a ship of a given description, and if it is not built according to the agreement, the vendee is not bound to receive it; but if he does receive the ship, is he 'not bound on a new contract on a quantum meruit, to pay for its] In Tlumitcm v. Place (1 M. & Kob. 218), Parke, J., was of opinion, that where a tradesman furnishes work differing ifrom the specification agreed on, he is not entitled to the actual value of the work, but only to the agreed price, minus such a sum as it would take to complete the work according to the specification. [Parke, B. The rule there laid down does not apply to the present case : that action was on a quantum meruit.] The object is the civoiding circuity of action, and that must necessarily involve the extinguishment of the other right of action. The cases shew, that although the plaintiff might have sued originally for the damage sustained for the breach of contract, yet that, having given the breach in evidence in reduction of the damages claimed in the former action, he has thereby exercised the option which the law allowed him, and, as in the case of a set-off, has precluded himself from bringing this action. Allen v. Cameron (1 Or. & M. J332) meets the objection as to the distinction between a warranty and a contract of this [866] kind. There A. contracted, in consideration of 2201. 10s., to sell and plant a quantity of trees on B.'s land; and also that he would, at his own costs and charges, keep in order the trees for two years after the planting, and that such as should die during that period should be replaced by him; and in an action to recover the price, it was held that evidence of non-performance by A. of any part of the contract on his part, was admissible in reduction of damages. Bayley, B., there says, in the course of the argument, "Street v. Blay goes almost the whole length of this case;" and in giving judgment he says, " Is the plaintiff liable to an abatement from the amount agreed on in respect of misconduct on his part, or non-fulfilment of what he is bound to perform? The case of Street v. Blay puts this in a plain and satisfactory point of view, not leaving the defendant to a cross action to recover for the diminution iu value by reason of the plaintiffs non-performance of the contract, but entitling him to deduct the amount of damage he has sustained thereby; that is a very plain and intelligible rule, and the present case shews the wisdom of it." That authority goes the entire length of what the present defendant is contending for. The contrary doctrine would be exceedingly unjust. If a party elects to derive a benefit by ;i plea in a former action, it estops him from bringing a cross action. The policy of the law is to compel the party to come forward with the whole of his case, and not to permit him to lie by and see his opponent's case, and then bring a cross action. In Henndl v. fairlamb (3 Esp. 104), it was held that a party cannot bring an action for what has been the object of a set-off in a former action by the defendant against him. That is the view taken of this subject in Chitty on Pleading, (vol. i. p, 571, 6th edition), where

1292 MONDEL V. STEEL 8 M. &W. 867.

it is said, " These statutes were passed for the benefit of defendants, and they are not imperative; so that a defendant may waive his right to set [867] oft', and bring a cross action for a debt due to him from the plaintiff'; and where he is not prepared, at the time the plaintiff sues him, to prove his cross demand, it is most advisable not to plead or give notice of set oft'; for, in case he should go into evidence upon the trial in support of his cross demand, and fail in the attempt, he cannot afterwards proceed in a cross action for the amount; and a party cannot bring an action for what he has succeeded in setting oft' in a former action against him." He also cited Eastmure v. Laws (7 Scott, 461), (hUram v. More-wood (3 East, 347), and Com. Dig. Action (K. 3).

Cleasby, in reply. There was nothing whatever in the former action to denote what amount of damage had been sustained in consequence of the breach of the contract. It is an assumption, to say that the defendant has made his election. Even if this were like the case of Street v. Bluy, the giving in evidence a breach of the agreement in reduction of damages, in the former action, would not prevent the defendant in that action from afterwards bringing an action to recover the special damage sustained by the breach of contract. Avoiding circuity of action means that the party should not be compelled to pay the whole sum specified in the agreement, and then be driven to a cross action. The distinction between the present case and those cited is, that this claim could not be pleaded as a set oft', so that the plaintiff' in the original action would at all events be entitled to recover nominal damages. There is no analogy between this case and a set-oft', because this matter was no answer to the former action. No claim was made in respect of the breach of the contract, but the defendant merely insisted on the breach of contract as shewing that the plaintiff" in that action was not entitled to recover the sum agreed upon, but only on a quantum meruit. [868] Suppose the defendant in that action had paid into Court all that the plaintiff' was entitled to recover, could not he afterwards sue for the breach of contract? A set-off is a satisfaction of the counter claim, which this was not. It does not appear that the jury have given any compensation for the special damage arising from the breach of contract. The plea, therefore, is no answer to the action.

Cur. adv. vult.

The judgment of the Court (a) was now delivered by Parke, B. In this case, the declaration is in special assumpsit on a contract to-build a ship for the plaintiff', at a certain rate per ton, and according to a certain specification : and the breach assigned is for not building a vessel with scantlings, fastenings, and planking, according to such specification; by reason whereof the ship, on a voyage from London to New South Wales and back, was so much strained that it became necessary to re fasten and repair her.

To this declaration there was one plea, to which it is unnecessary to allude, as it was admitted to be bad on special demurrer, and is to lie amended ; and a second plea, on which the question, which we have taken time to consider, arises.

This plea states in substance, that the defendant had sued the plaintiff for the balance of the agreed price of the vessel, after payment of 3500, and also for a sum of 134 odd for extra, work, in the form of an action for work and labour, and for goods, sold and delivered ; that issue was joined, and, on the trial of the cause, the plaintiff' gave evidence in his defence of the same breach of contract alleged in the declaration ; and insisted, that if the amount of compensation to which he was entitled, exceeded [869] or equalled the balance of the price and the value of the extra work, the now plaintiff was entitled to a verdict; if it was less, that he was entitled to a deduction from the amount of both, of such amount of compensation. The plea proceeds to state, (and, we must assume, correctly, for the purposes of this argument, though the statement has arisen from mistake), that the learned judge before whom the cause was tried, my brother Rolfe, so directed the jury ; and that the jury found that the now defendant had committed a breach of contract, and was entitled to some compensation, which they deducted from the price of the vessel and value of the extra work; and the now defendant had judgment for the amount, after such deduction had been made, since the commencement of this suit.

The plaintiff' demurred to this plea, assigning several causes of special demurrer, which it is not necessary to notice, as we are all of opinion that it is bad in substance.

The ground on which it was endeavoured to support the plea, in a very ingenious

(a) Parke, B., Alderson, B., Gurney, B., and Eolfe, B.

8M. &W. 871/2. MONDEL V. STEEL 1293

argument, was this : that a defendant in an action for the stipulated price of a chattel, which the plaintiff had contracted to make for the defendant of a particular quality, or of a specific chattel sold with a warranty, and delivered, had the option of setting : up a counter claim for breach of the contract in the one instance, or the warranty in the other, in the nature of a cross action ; and that if he exercised that option, he was in the same situation as if he had brought such an action; and consequently, could not, after judgment in one action, bring another; and the case was likened to a set-off under the statutes. This argument was founded on no other authority than an expression of Lord Tenterden in giving the judgment of the Court in the case of Street v. Blay (2 B. & Aid. 462), his lordship having said that a breach of warranty might be given in evidence in an action for the price of a specific [870] article sold, in mitigation of damages, " on the principle, it should seem, of avoiding cireuity of action." But we are all of opinion that no such inference is to be drawn from that expression; what was meant was, that the sum to be recovered for the price of the article might be reduced by so much as the article was diminished in value, by reason of the non-compliance with the warranty ; and that this abatement was allowed in order to save the necessity of a cross actioti. Formerly, it was the practice, where an action was brought for an agreed price of a specific chattel, sold with a warranty, or of work which was to be performed according to contract, to allow the plaintiff to recover the stipulated sum, leaving the defendant to a cross action for breach of the warranty or contract; in which action, as well the difference between the price contracted for and the real value of the articles or of the work done, as any consequential damage, might have been recovered; and this course was simple and consistent. In the one case, the performance of the warranty not being a condi¡tion precedent to the payment of the price, the defendant, who received the chattel warranted, has thereby the property vested in him indefeasibly, and is incapable of returning it back ; he has all that he stipulated for as the condition of paying the price, and therefore it was held that he ought to pay it, and seek his remedy on the plaintiffs contract of warranty. In the other case, the law appears to have construed the contract as not importing that the performance of every portion of the work should be a condition precedent to the payment of the stipulated price, otherwise the least deviation would have deprived the plaintiff of the whole price; and therefore the defendant was obliged to pay it, and recover for any breach of contract on the other aide. But after the case of Sa/sten v. Butter (7 East, 479), a different practice, which had been partially [871] adopted before in the case of King v. Boston (7 East, 481, n.), began to prevail, and being attended with much practical convenience, has been since generally followed ; and the defendant is now permitted to shew that the chattel by reason of the non-compliance with the warranty in the one case, and the work in con¡sequence of the non-performance of the contract in the other, were diminished in value; KM v. Atkinson (2 Camp. 64), Thornton v. Place, (1 M. & Bob. 218), &c. The same practice has not, however, extended to all cases of work and labour, as for instance, that of an attorney, Templar v. M'Lachlan (2 T. R. 16), unless no benefit whatever has been derived from it; nor in an action for freight; Shiels v. Davies (4 Camp. 119). It is not so easy to reconcile these deviations from the ancient practice with principle, in those particular cases above-mentioned, as it is in those where an executory contract, such as this, is made for a chattel, to be manufactured in a particular manner, or goods to be delivered according to a sample ; Gennaine v. Burton (3 Stark. 32); where the party may refuse to receive, or may return in a reasonable time, if the article is not such as bargained for ; for in these cases the acceptance or non-return affords evidence of a new contract on a quantum valebat; whereas, in a case of a delivery with a warranty of a specific chattel, there is no power of returning, and consequently no ground to imply a new contract; and in some cases of work performed, there is difficulty in finding a reason for such presumption. It must however be considered, that in all these cases of goods sold and delivered with a warranty, and work and labour, as well as the case of goods agreed to be supplied according to a contract, the rule which has been found so convenient is established ; and that it is competent for the defendant, in all of those, not to set-off, by a proceed¡ing in the nature of a cross action, the amount of damages [872] which he has sus¡tained by breach of the contract, but simply to defend himself by shewing how much less the subject-matter of the action was worth, by reason of the breach of contract; and to the extent that he obtains, or is capable of obtaining, an abatement of price on

1294 PRIOR V. HEM BROW 8 M. to W. 1/213.

that account, - he must be considered as having received satisfaction for the breach of contract, and is precluded from recovering in another action to that extent; but no more.

The opinion, therefore, attributed on this record to the learned Judge is, we think, incorrect, arid not warranted by law ; and all the plaintiff could by law lie allowed in diminution of damages, on the former trial, was a deduction from the agreed price, according to the difference, at the time of the delivery, between the ship us she was, and what she ought to have been according to the contract: but all claim for damages beyond that, on account of the subsequent necessity for more extensive repairs, could not have been allowed in the former aetion, and may now be recovered.

We have already observed in the course of the argument, that the defence made in the second plea cannot be supported on the ground that it discloses a mutual agree¡ment by the plaintiff and defendant to leave the amount of the cross claim to the jury as arbitrators, and that they have made an award. The plea does not state any such agreement, or an equivalent thereto. Our judgment must therefore be for the plaintiff.

Judgment for the plaintiff.