Cornwall v. J.J. Moore & Co.

• Decision Date: 24 October 1904
• Docket Number: 12,619.
• Citation: 132 F. 868
• Court: U.S. District Court — Northern District of California
• Parties: CORNWALL et al. v. J. J. MOORE & Co.

132 F. 868

CORNWALL et al. v. J. J. MOORE & Co.

No. 12,619.

United States District Court, N.D. California.

October 24, 1904

Monroe & Cornwall, for libelants.

Nathan H. Frank, for respondent.

DE HAVEN, District Judge.

The ship Spartan was chartered to the defendant, a corporation on January 16, 1902, to carry a cargo of grain, lumber, or other merchandise from San Francisco, the vessel's home port, to Sydney or Melbourne, as the defendant should elect. The charter provided for 14 days, to commence 24 hours after the vessel was at the dock ready to receive the cargo, and also contained the following provision:

'Captain to furnish charterers a certificate from charterers' marine veyor (at San Francisco) that the vessel is in proper condition for the voyage. Should the vessel fail to pass a satisfactory survey, this charter to be void at charterers' option.'

On January 29, 1902, the libelants notified the defendant that the Spartan would be ready to receive cargo at 9 o'clock in the forenoon of the next day. In reply, the defendant on the same day addressed to the libelants the following letter:

'We beg to acknowledge the receipt of your favor of even date from which we perceive that you decline to accede to the suggestion contained in ours of yesterday. Inasmuch, therefore, as you have failed to furnish us with a certificate from charterers' marine surveyor at San Francisco, that the vessel is in proper condition for her proposed voyage, as provided in the charter party, we beg to notify you that we avail ourselves of the option therein contained, to consider the charter party void, and the same is accordingly cancelled.'

The Spartan's managing owner replied to this letter on January 30th, saying:

'As to your statement in your favor of the 29th inst., as follows: 'We avail ourselves of the option therein (charter party) contained to consider the charter party void, and the same is accordingly cancelled,' I beg to state that I refuse to admit, but deny, that the said charter party is cancelled, or void, and I refuse to admit, but deny, that under such charter party and the facts as they exist, you have, or ever had any option to consider the said charter party void or cancelled, or otherwise than in full force and effect, and I hereby respectfully notify you that I consider the said charter party to be in full force and effect and uncancelled, and will abide by and live up to said charter party and all its terms, and expect you to do the same.'

On the same day the libelants received from a ship broker the following written offer, which the testimony shows was sent at the suggestion of the defendant and on its behalf:

'Mr. Moore informed us this afternoon he had cancelled charter party of the ship to Melbourne, etc. We can make you a firm offer on her from Puget Sound as follows: 40S. Sidney 4 8/9 Melbourne N.W.F. with 20 days for loading and custom of the port for discharge. All other terms per usual lumber C.P. There is also business to be had for China and West Coast, but must have refusals.'

The Spartan's managing owner, acting for the libelants, replied to this offer on February 1st, saying:

'You are mistaken in believing that the charter party with J. J. Moore & Company has been cancelled. The charter is still in full force and effect and the lay days are counting against J. J. Moore & Company, one of them having passed. Under these circumstances there is no necessity of considering any further charter at present for the ship Spartan. Should it later appear that J. J. Moore & Company desire to break and do break the agreement of charter for the ship Spartan I will then, of course, consider any further offers for a new charter in order that the amount of damage in the matter may not be unnecessarily increased.'

Upon the trial of the case the court found that the defendant, in refusing to load the Spartan, was guilty of a breach of the charter party, and the case was referred to a United States commissioner to ascertain and report the amount of damages sustained by libelants. 125 F. 646. Upon the hearing before the commissioner the parties entered into the following stipulation:

'It is agreed that if the vessel had sailed upon the voyage provided for in the charter party, the profits to her on that voyage would have been three thousand six hundred sixty-two and 91/100 dollars ($3662.91). It is understood that this leaves open the question whether or not the libelants are entitled to any damages whatsoever, under the evidence as already introduced; it being the contention of the respondent that the alleged failure to seek and obtain other employment, or accept other employment offered to them, during said term, deprives them of the right of such recovery. This question is to be referred to the court for decision.'

1. In the former opinion in this case, 125 F. 646, it was said, quoting the language used in Leblond v. McNear (D.C.) 104 F. 826:

'The measure of damages in this class of actions seems to be well settled. In an action against the charterer of a ship for a total breach of his contract, the measure of damages is the net amount that would have been earned by the vessel under the charter sued on, less the net amount earned, or which might with reasonable diligence have been earned, by the vessel during the time required for the performance of the voyage named in such contract of charter. Smith v. McGuire, 5 Hurl. & N. 544; Utter v. Chapman, 38 Cal. 659; Id., 43 Cal. 279; Ashburner v. Balchen, 7 N.Y. 262; Dean v. Ritter, 18 Mo. 182; Steamship Co. v. Card (D.C.) 59 F. 159; 3 Uth.Dam.pp. 179-181.'

This rule, in so far as it provides for the mitigation of damages in an action of this character, is based upon the principle that, if a party entitled to the benefit of a contract can with reasonable exertions protect himself from loss arising from a breach, it is his legal duty to do so. Heckscher v. McCrea, 24 Wend. 304. But in the application of this rule the law imposes upon a defendant guilty of a breach of contract the burden of proving in mitigation of damages that the other party could with reasonable diligence have reduced to prevented the damage occasioned by such breach. Costigan v. Mohawk & H.R.R. Co., 2 Denio, 609, 43 Am.Dec. 758; Hamilton v. McPherson, 28 N.Y. 72, 84 Am.Dec. 330; Utter v. Chapman, 43 Cal. 279. There is no evidence that the libelants refused any offer of employment other than the one above sonable diligence have obtained other employment for the Spartan during all or any portion of the time which would have been required for the performance of the...