Dushane v. Benedict

• Decision Date: 14 March 1887
• Citation: 7 S.Ct. 696,30 L.Ed. 810,120 U.S. 630
• Parties: DUSHANE and another v. BENEDICT
• Court: U.S. Supreme Court

120 U.S. 630

7 S.Ct. 696

30 L.Ed. 810

DUSHANE and another v. BENEDICT.

March 14, 1887.

[Statement of Case from pages 630-635 intentionally omitted] Wm. Macrum and A. H. Clark, for plaintiff in error.

W. F. Mattingly and S. Wolf, for defendant in error.

GRAY, J.

This was an action of assumpsit by a rag-dealer against papermakers to recover $813.03 for rags sold and delivered by him to them. The plea was in the peculiar form used in Pennsylvania, with a counter-claim. The plaintiff had a verdict and judgment, and the case comes before us on a writ of error sued out by the defendants.

The plaintiff's motion to dismiss the writ of error for want of a sufficient amount in dispute to give this court jurisdiction, cannot be sustained, since the record shows that the defendants sought to recover the sum of $7,000 in excess of the plaintiff's claim, and this sum was therefore in dispute. Ryan v. Bindley, ,1 Wall. 66; Act February 16, 1875, c. 77, § 3, (18 St. 316.) Whether the defendants could lawfully recover it against the plaintiff in this case was a matter affecting the merits, and not the jurisdiction.

Before proceeding to consider the rulings and instructions at the trial as applied to the facts of the case, it will be convenient to refer to the general rules of law, and to the statute and decisions in Pennsylvania, which bear upon the subject. When a dealer contracts to sell goods which he deals in, to be applied to a particular purpose, and the buyer has no opportunity to inspect them before delivery, there is an implied warranty that they shall be reasonably fit for that purpose. Jones v. Just, L. R. 3 Q. B. 197, 203, 9 Best & S. 141, 150; Kellogg Bridge Co. v. Hamilton, 110 U.S. 108, 3 Sup. Ct. Rep. 537. In such a case, in Pennsylvania, as at common law, the action upon the warranty may be either in contract or in tort. Vanleer v. Earle, 26 Pa. St. 277; Schuchardt v. Allens, 1 Wall, 359, 368. If the seller falsely represents to the buyer that the goods are of a certain quality, or fit for a certain purpose, he is liable to an action for the fraudulent representations, although they are not in a form to constitute a warranty; and in such a case the action must be in tort, in the nature of an action of deceit, and must be supported by proof that he knew the representations to be false when he made them. Kimmel v. Lichty, 3 Yeates, 262; McFarland v. Newman, 9 Watts, 55; King v. Eagle Mills, 10 Allen, 548.

The damages recoverable for a breach of warranty, or for a false representation, include all damages which, in the contemplation of the parties, or according to the natural or usual course of things, may result from the wrongful act. For instance, if a man sells hay or grain for the purpose of being fed to cattle, or such as is ordinarily used to feed cattle, and it contains a substance which poisons the buyer's cattle, the seller is responsible for the injury. French v. Vining, 102 Mass. 132; Wilson v. Dunville, L. R. 4 Ir. 249, and L. R. 6 Ir. 210. So, if one sells an animal warranting or representing it to be sound, which is in fact infected with disease, he is responsible for the damages resulting from a communication of the disease to the buyer's other animals, either in an action of tort for the false representation,—Mullett v. Mason, L. R. 1 C. P. 559; Jeffrey v. Bigelow, 13 Wend. 518; Faris v. Lewis, 2 B. Mon. 375; Sherrod v. Langdon, 21 Iowa, 518; Marsh v. Webber, 16 Minn. 418, (Gil. 375;) or in an action on the warranty, either in tort (Packard v. Slack, 32 Vt. 9; Smith v. Green, 1 C. P. Div 92) or even in contract, (Black v. Elliot, 1 Fost. & F. 595.) See, also, Randall v. Newson, 2 Q. B. Div. 102.

In an action for the price of goods sold or of work done, the defendant may set up a breach of warranty, or a false representation as to the goods, or a defective performance of the work, by way of recoupment of the sum that the plaintiff may recover. In England this is only allowed so far as it affects the value of the goods sold, or of the work done. Davis v. Hedges, L. R. 6 Q. B. 687, and cases there cited. But in this country the courts, in order to avoid circuity of action, have gone further, and have allowed the defendant to recoup damages suffered by him from any fraud, breach of warranty, or negligence of the plaintiff, growing out of and relating to the transaction in question. It will be enough to cite a few cases in which the extent and the reason of the doctrine have been clearly brought out.

In a leading Massachusetts case, in which fraudulent representations as to the soundness of a horse sold were allowed to be set up in defense of an action on a promissory note given for the price, although the horse had not been returned to the seller, Mr. Justice DEWEY, after reviewing the previous decisions in England and in New York, said: 'The strong argument for the admission of such evidence in reduction of damages in cases like the present is that it will avoid circuity of action. It is always desirable to prevent a cross-action where full and complete justice can be done to the parties in a single suit, and it is upon this ground that the courts have of late been disposed to extend to the greatest length compatible with the legal rights of the parties, the principle allowing evidence in defense or in reduction of damages to be introduced, rather than to compel the defendant to resort to his cross-action.' Harrington v. Stratton, 22 Pick, 510, 517. And in a later case in that state, Chief Justice BIGELOW observed that the essential elements on which the application of the principle of recoupment depended, were two only: 'The first is that the damages which the defendant seeks to set off shall have arisen from the same subject-matter, or sprung out of the same contract or transaction, as that on which the plaintiff relies to maintain his action. The other is that the claim for damages shall be against the plaintiff, so that their allowance by way of set-off or defense to the contract declared on shall operate to avoid circuity of action, and as a substitute for a distinct action against the plaintiff to recover the same damages as those relied on the defeat the action.' Sawyer v. Wiswell, 9 Allen, 39, 42. In Bradley v. Rea, 14 Allen, 20, in an action to recover the price of a number of pigs sold in one lot, it was held that the defendant might set up in defense that the pigs sold were warranted or fraudulently represented by the plaintiff to be sound, and free from infectious or contagious diseases, and prove the existence of such a disease in some of the pigs at the time of the sale, which afterwards spread to the others, and of which they died. Mr. Justice HOAR, delivering judgment, after referring to Mullett v. Mason, L. R. 1 C. P. 559, above cited, in which it was held that, in an action for fraudulently misrepresenting that a cow sold was free from infectious disease, the buyer, if he placed the cow with others which thereby caught the disease and died, could recover as damages the value of all the cows, said: 'The nature of the subject-matter of the warranty or deceit is such that when animals are sold in one lot together, the warranty or representation as to the whole being single, we can have no doubt that the same principle should apply to the extent of a recoupment; and that the right to recoup in damages should not be confined to the diminished value of those which are proved to have the disease at the time of the sale.' 14 Allen, 23. A similar decision was made in Rose v. Wallace, 11 Ind. 112.

The later decisions of this court, modifying the earlier decision in Thornton v. Wynn, 12 Wheat. 183, affirm the same doctrine. Withers v. Greene, 9 How. 213; Van Buren v. Digges, 11 How, 461; Winder v. Caldwell, 14 How. 434; Lyon v. Bertram, 20 How. 149, 154; Railroad Co. v. Smith, 21 Wall. 255; Marsh v. McPherson, 105 U.S. 709, 717. In Winder v. Caldwell, Mr. Justice GRIER, who was equally familiar with the common law and with the Pennsylvania practice, said: 'Although it is true, as a general rule, that unliquidated damages cannot be the subject of set-off, yet it is well settled that a total or partial failure of consideration, acts of non-feasance or misfeasance immediately connected with the cause of action, or any equitable defense arising out of the same transaction, may be given in evidence in mitigation of damages or recouped, not strictly by way of defalcation or set-off, but for the purpose of defeating the plaintiff's action in whole or in part, and to avoid circuity of action.' 14 How. 443. In Railroad Co. v. Smith, which was an action against a railroad corporation by a contractor to recover the price of a draw-bridge, it was held that the defendant might show that the construction of the bridge was so defective as to make it unfit for its purpose, and the draw worked so imperfectly as to hinder and delay the running of the cars over it, and might prove the number of hands required to work the bridge as it was built, and the number that would be necessary if it had been properly constructed. Mr. Justice FIELD, delivering judgment, said: 'All damages directly arising from the imperfect character of the structure, which would have been avoided had the structure been made pursuant to the contract, and for which the defendant might have instituted a separate action against the contractors, were provable against their demand in the present action. The law does not require a party to pay for imperfect and defective work the price stipulated for a perfect structure, and, when the price is demanded, will allow him to deduct the difference between that price and the value of the inferior work, and also the amount of any direct damages flowing from existing defects, not exceeding the demand of the plaintiffs. This is a rule of strict justice, and the deduction is allowed in a suit upon the contract, to prevent circuity of action.' 21 Wall. 261.

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