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the same may be set off against the plain- | added that the plaintiffs, on December 11, tiffs' demand.
1903, and, again, on the 23d day of March, 1904, without the knowledge or consent of the defendant, entered into other agreements with Monaghan and McGuire to sell to them, at different prices and terms of sale, the merchandise purchased from plaintiffs by them, and that since December 11, 1903, the plaintiffs have refused to sell merchandise to Monaghan and McGuire at the prices named in the agreement, though requested to ao so, whereby the defendant was discharged from his liability.
The second joint plea of the same defendants (so numbered in the record) set up in substance the same agreement as the first, except that agreement was alleged to have been made September 11, 1903, and the bond was conditioned for the payment by the principals for all merchandise to be furnished by the plaintiffs on four months' credit. The plea also omitted the agreement that the principals (Monaghan and McGuire) would not be required to pay the plaintiffs until they (the principals in the bond) could make collections from their customers. The plea also alleged that the plaintiffs, shortly after the execution of the bond in suit, wrongfully refused to sell to the principals therein merchandise on credit to the amount of $10,000 at and for the prices stated in the agreement, and wholly neglected and refused to perform the agree ment between them and the principals in the bond, whereby Monaghan and McGuire were forced to abandon their said business and lose all the money and time expended by them in and about the same, and amounting to not less than $10,000, and were, and each of them was, injured and damaged in the sum of $10,000, for which sum the said J. Charles McGuire claimed judgment against the plaintiffs, and the defendants were will-in the bond at and for certain prices speciing that the same should be set off against the claim of plaintiffs.
Thereafter the defendant William McGuire filed three separate pleas. The first separate plea (numbered 1 in the record) alleged an indebtedness of the plaintiffs to William McGuire in the sum of $5,000, for that, on the 11th day of September, 1903, and in consideration of plaintiffs agreeing to sell merchandise to Monaghan and McGuire at and for certain prices named in the agreement, and to give them a continuous credit of $10,000 for merchandise sold to them by plaintiffs, the defendants did agree to and did sign the bond mentioned in the declaration, but the plaintiffs wrongfully refused to perform the agreement, or to sell to Monaghan and McGuire merchandise at the prices named in the agreement, or to allow them the continuous credit mentioned therein, whereby they were prevented from paying for the merchandise purchased and mentioned in the declaration, and the defendant thereby incurred great liability, and was injured and damaged in the sum of $5,000, and claimed judgment therefor, and was willing that the same might be set off against the demand of plaintiffs.
The second separate plea (numbered 2 in the record) set forth the same agreement and bond and consideration therefor that is mentioned in the first separate plea, and
The third separate plea (numbered 3 in the record) alleged that the merchandise mentioned in the declaration as having been sold was purchased by the defendants Monaghan and McGuire under an agreement not under seal, entered into before and since the 11th day of September, 1903, between them and the plaintiffs, and not according to the terms of the bond mentioned in the declaration, wherefore the defendant prayed judgment if he ought to be charged with the said debt by virtue of said bond.
Subsequently the same defendant filed three additional pleas. By the first additional plea (which is numbered 4 in the record) he alleges that prior to signing the bond plaintiffs agreed with the principals therein to sell the merchandise referred to
fied in a letter dated August 25, 1903, sent by the plaintiffs to the principals in the bond. The plaintiffs represented to the defendant that the agreement was applicable to all merchandise to be purchased under the bond, and plaintiffs thereby intended to induce defendant to sign the bond, which he did in reliance upon that statement. Thereafter the principals purchased from the plaintiffs merchandise amounting to $14,477.16 and no more, and the sum of $10,617.55 was for merchandise purchased at the prices agreed upon, and the balance, $3,859.61, was for merchandise purchased at greatly enhanced prices, made under an agreement entered into on or about the 11th day of December, 1903, without the knowledge or consent of defendant; that the principals paid plaintiffs on account of said sum of $10,617.55 the sum of $9,100.48, leaving due to the plaintiffs under the bond $1,517.07 and no more.
By the second additional plea (numbered 5 in the record) the defendant set up substantially the same agreement as to signing the bond and the consideration therefor, and then made the additional averment that the agreement was that the plaintiffs would not at any time exceed the sum of $10,000 in their sales to the principals, but the plaintiffs failed to perform the conditions, or any of them, and refused to sell
at the agreed prices, and also permitted the | 1904. The condition of the boud meant that indebtedness of the principals to continue the defendants should not be called upon from December 10, 1903, to January 21, 1904, to be greatly in excess of $10,000, by all of which defendant was discharged.
to pay until after the expiration of four months from the date of each of the respective purchases. The defendants had, as the By the third additional plea (numbered 6 pleadings show, paid for all the merchandise in the record) the defendant alleged the purchased, except the balance therein statpartnership agreement between the princi- ed, and four months had in fact elapsed pals in the bond, but did not allege that since the last sale. The defendants have, there had been any time ever agreed upon therefore, obtained four months after the for the continuance of such partnership, and purchase before they were called upon to further alleged that during the year 1903 pay. We think the declaration was suffithe principals in the bond had established; cient. a good business, and the bond was executed and delivered to the plaintiffs for the purpose of establishing and maintaining the credit of the principals with the plaintiffs; but that, on or about January 12, 1904, the plaintiffs, for the purpose of securing the customers which the principals in the bond had obtained for themselves, and for the purpose of selling directly to those customers, wrongfully induced Monaghan to withdraw from the partnership and enter the employ of plaintiffs, which Monaghan did, and that thereby the business of the principals was wholly destroyed, and by reason thereof they were unable to pay for the merchandise referred to in the bond and declaration, all of which was without the knowledge or consent of the defendant, by reason whereof defendant was discharged from all liability under the bond.
We are also of opinion that the two joint pleas of J. Charles McGuire and William McGuire, and the first separate plea of the latter, which, it is contended, set up offsets to the plaintiffs' claim, did not allege facts with sufficient distinctness to constitute a defense to the action. Neither of these pleas is sufficiently distinct to constitute a good pleading. What the special agreement was that is alleged to have been made between the principals in the bond and the plaintiffs, in consideration of which the bond was signed by the surety, is not stated with any degree of particularity. It simply states that the agreement in this respect was that the merchandise should be sold to the principals in the bond at and for certain prices specified in the agreement, but the pleas do not set them forth, nor do they state for how long a time such agreement was to remain in existence, nor how the de
Mr. Lorenzo A. Bailey for plaintiffs in fendants suffered damage to the extent
named in the pleas, or to any extent. It is
Messrs. Eugene A. Jones, Simon Wolf, and impossible for a court to see how these Myer Cohen for defendants in error.
Mr. Justice Peckham, after making the foregoing statement, delivered the opinion of the court:
The declaration in this case is attacked by the defendants under the rule that the court will go back to the first substantial defect appearing in the pleadings before the filing of the demurrer. The criticism made by the defendants upon the declaration is that it does not sufficiently show a violation of the terms of the bond. The defendants say the bond limits the liability of the sureties to pay for such merchandise only as was sold on a four months' credit, and that the declaration does not show that the terms of the sale of the merchandise were those which were set forth in the bond. The declaration shows a failure to pay for certain merchandise alleged to have been sold to the defendants, amounting to a stated sum on the date set forth in the particulars of demand, which demand was annexed to and forms a part of the declaration. This demand showed that the last item of sale was made July 27 prior to December 11,
damages would necessarily or probably flow from a violation of said agreement, or that they could form a basis for any legal demand flowing from not longer fulfilling the terms of the alleged contract. The damages alleged in the pleas are most remote, vague, and shadowy in their nature, such as could not have been contemplated by any party to the alleged agreement, as the probable result of its violation. While rules of pleading have become more liberal in modern days, yet, in order to found a cause of action on the alleged shortcomings of another, they must at least be so far plainly set up as to show actual damage and the wrongful act of the other party as the proximate and natural cause. The particulars of the alleged resulting damages should be so far set forth that the court may be able to see therefrom that such alleged damages are neither obscure, vague, nor shadowy, but might, and probably would, naturally result from the acts complained of. Within such limitations, which have always existed, the three pleas are insufficient.
The next succeeding plea is marked in the record the second separate plea of the de
representations were made in writing, or that the letter referred to them in any way. The same consideration existing in regard to the pleas last mentioned would operate here and render the plea insufficient.
The third additional plea (marked 6 in the record) attempts to set up a cause of action against the plaintiffs because, as alleged, they induced the defendant Monaghan to dissolve the partnership between him and McGuire and to enter the plaintiffs' employ, for the purpose, on plaintiffs' part, of increasing the plaintiffs' profits and with intent to wrongfully destroy the business of the defendants Monaghan and McGuire. As the court below well says, there is in this plea no allegation as to how long the partnership was to continue, and no action would lie for terminating or inducing the termination of a partnership at will. Karrick v. Hannaman, 168 U. S. 328, 333, 42 L. ed. 484, 488, 18 Sup. Ct. Rep. 135. We do not see how any legal damage to the sureties under such circumstances can be said to be the proximate, natural, or probable result of such action on the part of the plaintiffs. After the dissolution of the partnership of course no sales could thereafter be made, and in relation to sales already made with credit according to the terms of the bond, it is impossible to see how it could be said that the ruin of the business of the principals of the bond, and hence the damage to the sureties, could be regarded as the probable consequence of the act of the plaintiffs in procuring Monaghan to dissolve the partnership and enter their employ. Whether treated as an offset or recoupment, or simply as an independent cause of action, the plea does not set up facts sufficient to constitute a valid set-off, recoupment, or cause of action.
fendant William McGuire. The court be- | chased under the bond, would require parol low treated this plea, together with the evidence, as there is no pretense that these third separate plea of the defendant, and his fifth (in truth, the second) additional plea, as together resting upon common ground. We think they may be properly so regarded. It is seen from the whole record that the principals in the bond sued on were expecting to have business transactions with the plaintiffs, by purchasing from them liquors, which they expected to sell to others at profit, but the plaintiffs did not care to sell the goods to these principals without some security for payment of the goods sold when cash payment was not exacted. The bond in suit was thereupon agreed to be given as security for the payment of the merchandise to be sold by the plaintiffs to the principals, and which the principals were bound to pay for in four months after the date of each respective purchase. This is a clear and separate contract between the plaintiffs and the signers of the bond, and there is nothing in the declaration or bond which shows the existence of any other agreement than that mentioned therein, or that an alteration in the prices of the goods sold to the principals by the plaintiffs could, or would, have any effect upon the liability of the sureties. The bond being complete in itself on its face, it cannot be seen that any future alteration of the prices for the sale of the merchandise, arrived at between the plaintiffs and the principals in the bond, would be material to or alter the liability of the sureties for the payment of the merchandise sold and delivered at the prices agreed upon, after four months from the date of purchase. There is no allegation in these pleas that any separate agreement was in writing, and the bond itself does not show the existence of any other agreement or the sale of the property upon any other conditions than those mentioned in the bond itself. Under such circumstances evidence by parol going to show any other agreement between the principals of the bond and the plaintiffs would not be admissible. Seitz v. Brewers' Refrigerating Mach. Co. 141 U. S. 510, 35 L. ed. 837, 12 Sup. Ct. Rep. 46; Domestic Sewing Mach. Co. v. Webster, 47 Iowa, 357. In holding these pleas insufficient we think the court below was right.
The judgment of the Court of Appeals was right and is affirmed.
JOHN W. CLARK, Plff. in Err.,
LOUIS GERSTLEY and William Gerstley,
This leaves the fourth (the first additional) and the sixth (the third additional) pleas. The fourth plea alleges that the merchandise referred to in the bond was to be sold at and for certain prices specified in a letter dated August 25, 1903, and sent by Argued January 17, 18, 1907. Decided plaintiffs to Monaghan and McGuire. What those prices were is not stated in the plea, while the representations alleged in the plea to have been made, that the agreement was applicable to all merchandise to be pur27 S. C.-22.
February 25, 1907.
IN ERROR to the Court of Appeals of
the District of Columbia to review a judgment which affirmed a judgment of the Supreme Court of the District in favor of
plaintiffs in an action on a bond given to | ing a carrier from liability for loss by fire secure sales of merchandis on credit. is valid although the regular freight rates were charged and no option was given to the shipper to receive any other form of bill of lading.
See same case below, 26 App. D. C.
Carriers-delivery to-negligence of agent. 2. A carrier which issues bills of lading to a shipper in return for receipts given by a compress company for cotton in the lat ter's custody is liable for loss by fire due to the negligence of the servants of the compress company in caring for the cotton while awaiting the compression and loading which the railway company had ordered done for its own convenience and at its own cost, where such company, if it did not retender of the cotton, or if it were not a valgard the presentation of the receipts as a id tender, could, notwithstanding the rules of the Texas state railroad commission as well as its own rules, have refused to sign the bills of lading.
It is the same action as the foregoing case, just decided, but the plaintiff in error, who was one of the sureties in the bond, separately filed special pleas to the declara- Argued January 24, 1907. tion, which were separately demurred to, and the supreme court sustained the de
murrer. On appeal to the court of appeals the demurrer was not disposed of at the same time as the demurrers to the other pleas in the case, but was postponed to a subsequent time,-April 7, 1905. On that datc the demurrer was sustained and the judgment previously entered affirmed against this plaintiff in error, who then brought the case here on a separate writ of error.
The special pleas filed by the plaintiff in error were seven in number, the first six being the same as filed by the other plaintiffs in error in the case. The seventh set up the failure of the plaintiffs to give notice to the sureties that the principals in the bond had not paid for the goods at the expiration of the term of credit allowed them, and also that the time had been extended by the plaintiffs in which the principals in the bond might pay for the goods sold to them. No definite term of extension was stated. What has already been said in regard to the other six pleas in the case determines the decision in regard to the same pleas hereinabove set forth. In regard to the seventh plea the plaintiff in error says in his brief in this court that he makes no point concerning the same. Judgment affirmed.
W. A. ARTHUR and John C. Ware, Partners as W. A. Arthur & Co., Plffs. in Err.,
TEXAS & PACIFIC RAILWAY COMPANY.
ary 25, 1907.
IN ERROR to the United States Circuit Court of Appeals for the Eighth Circuit to review a judgment which affirmed a judgment of the Circuit Court for the Western District of Arkansas, Texarkana Division, entered on a directed verdict in favor of defendant in an action to charge a carrier with liability for a loss by fire. Judg ments of both courts reversed and the cause remanded for a new trial.
See same case below, 139 Fed. 127.
Statement by Mr. Justice Peckham:
The plaintiffs in error, who were plaintiffs below, filed their complaint against the railway company in the circuit court of the United States for the western district of Arkansas, Texarkana division. The case arose under the laws of the United States, as the defendant was incorporated under an act of Congress passed March 3, 1871 [16 Stat. at L. 573, chap. 122], which act was amended by one passed May 2, 1872 [17 Stat. at L. 59, chap. 132], among other things changing the name of the corporation to that under which it was sued in this case. Upon the trial the court directed a verdict for the defendant, which was affirmed by the circuit court of appeals (139 Fed. 127), and the plaintiffs have come here by writ of error.
The action was to recover damages against the defendant for loss by fire of 50 bales of cotton, which were burned at Texarkana, Texas, September 19, 1900, and which the the defendant at that place, under a through plaintiffs allege had been duly delivered to bill of lading for transportation to Utica, New York. In the third clause of the con
1. A clause in a bill of lading exempt-
ditions stated in the bill of lading was a provision "that neither the Texas & Pacific Railway Company nor any connecting carrier handling said cotton shall be liable for damages to or destruction of said cotton by fire." In the fifth clause of the bill of lading it was provided that "each carrier over whose road the cotton is to be carried hereunder shall have the privilege, at its own cost, to compress the same for greater convenience in handling and forwarding, and shall not be responsible for deviation or unavoidable delays in procuring such compression."
Although the cotton was destroyed by fire, plaintiffs alleged that they were not concluded by the fire clause, which they allege was void "because (1) said bill of lading was executed by said plaintiffs under duress; (2) said provision is unreasonable; and (3) was without a consideration." The freight rates charged in the bill were the regular rates for the shipment of cotton over all lines of railway between Texarkana and Utica, New York, and no option was given to said plaintiffs, as they allege in their complaint, to receive any other form of bill of lading than that exempting the defendant from liability for loss of the cotton by fire, and plaintiffs allege they did not assent thereto.
ported to that place as a place of concentration, where it might be classified and subsequently transported to the East and other parts of the country by the railroads.
The Union Compress Company was an independent corporation, doing business at Texarkana, as a compressor of cotton, which it compressed for the various railroads having tracks at that place. The compress company had a platform on its own land of about 400 x 600 feet, upon which cotton was delivered from wagons and from railroad cars, and the receipt of the cotton was acknowledged by the compress company. From this platform cotton was loaded on the respective cars of the different railroads, the tracks of which surrounded the platform on three of its sides. This platform was within the state of Texas. Substantially all the cotton received at Texarkana was received at this platform. The local platform of the defendant company was not calculated to receive cotton for shipment by the company, on account of its small size, and the defendant's agent testified that he would not know what to do with cotton if offered at this platform, except to send it to the platform of the compress company. When cotton was placed on the platform of the compress company it did not then compress it, but it remained there until further It was also alleged that the place where orders were given, as herein stated. After the cotton was stored after its delivery delivery on the platform, and after the shipto the railway company by the plaintiffs per had procured the written acknowledgwas not a safe place, being on the plat- ment of the receipt of the cotton by the form of the Union Compress Company; compress company, the practice was for the that the platform was not inclosed, and that shipper, when he was ready to have it there was no proper provision made to pre- shipped, to go to the railway company, and, vent the destruction of the cotton by fire, upon the surrender of the receipts of the and that the cotton was at such place ex- compress company to the agent of the railposed to the sparks of passing engines, and way company, the shipper would receive that the employees of the Union Compress from such agent a bill of lading for the Company, which was the agent of the de- cotton, which acknowledged its receipt by fendant, neglected to care for the cotton, the company and the place and person it which caught fire from sparks from a pass- was consigned to, and the shipper had nothing engine and was destroyed, September 19, ing further to do in regard to the cotton. 1900, whereby defendant became liable to He issued no orders for compressing it, and the plaintiffs in the sum of $2,605, the value was not allowed to route it by any particof the cotton. The defendant, by answer, ular route. He would identify the cotton put in issue all the allegations as to negli- covered by the bill and give the destination gence by its own servants or by the serv- point of the cotton and the name of the ants or agents of the compress company, consignee, and there his right ended. The and also denied that the plaintiffs had ever railroad company, when it received from the delivered the cotton to the railway com- shipper the compress company's receipt, and pany; and alleged that at the time it was gave its bill of lading to the shipper, took destroyed it was in the possession and con- the receipts of the compress company and trol of the compress company, which was gave them up, and directed the company to not its agent, and over which it had no compress the cotton and obtain insurance control. upon it covering the responsibility of the Upon the trial evidence was given tending railroad company, and. load it into cars to to prove the following facts: The plaintiffs, | be designated by the railroad company's with offices at Texarkana, were extensive agent. It was a general understanding bebuyers of cotton, which they purchased in tween the railroad company and the comthe surrounding country and had it trans- press company that when the former de