Ex. CH.]

hold the railway company liable to reimburse them, in the event of Harding obtaining a verdict, such a sum as he should recover, and their own costs, as well as those of Harding, and reiterating a desire to receive any suggestion in support of the defence; to which letter, on the same day, the company's attorney replied, referring them to his previous letter of the 16th Jan. (paragraph 15). A voluminous correspondence (set out at length in paragraph 20) then followed between the attorneys on both sides relative to the manner in which the accident in question occurred, extending from the 29th May to the 18th June 1872, in the course of which the attorneys of the railway company wrote to the attorney of the now plaintiffs on the 4th June, asking them if they could not arrange to admit the fact of the accident, in order to avoid the necessity of the attendance of a witness at the trial; and adding that he should have no objection to admit, on the part of his clients, the railway company, that, as the fact was, the drawings were dropped into the sea by the servants of the railway company while they were being conveyed to the steam vessel; and subsequently the statement of the railway company's porter, as to the manner in which the accident occurred, was sent by the company's attorney to the attorneys of Messrs. Baxendale, on the 17th June 1872.

21. The plaintiffs, having delivered their briefs to counsel in Harding's action, were again advised that the Carriers' Act afforded no defence, and their attorneys informed the railway company's attorney thereof in the following letter of the 19th June 1872-"We have arranged with the plaintiffs' attorney to admit the porter's statement in evidence so as to save the expense of bringing him up as a witness. We regret to say that our counsel are of opinion that the defence of the Carriers' Act will not avail, as that only refers to carriage by land, and the damage did not take place in course of the land carriage. They are of opinion also, that even if there had been a marine insurance the accident would not be a peril of the sea. It is clear, if these defences will not protect our clients they will not protect yours, and we are instructed to ask you whether, under the circumstance, we shall endeavour to settle the action on your client's account, on the best terms we can? We should add that one of our witnesses has informed us that the plaintiffs would be content with 5001. damages. You know that this sort of communication cannot be relied on, but if it should prove correct, would you, on behalf of your clients, consent to that sum being taken as the damage." reply to that letter, the attorney of the railway company wrote, on the 20th June, that he could not, 'under the circumstances of the case, take any course implying assent on the part of the company to the settlement of the action, as they are prepared to defend any proceedings against them on the question of legal liability."

66

In

22. The action went to trial on the 27th March 1872, and resulted in a verdict for the plaintiff (Harding) for the value of the pictures, viz., 6501. Messrs. Baxendale, the defendants in the action, subpoenaed a number of gentlemen as to the value of the pictures, but after the cross-examination of the plaintiff's witnesses, counsel in their discretion decided not to call evidence on the part of the defendants. A further correspondence then passed between the attorneys for Messrs. Baxendale and

[Ex. CH.

the railway company respectively (set out at length in this paragraph of the case) with reference to the company's indemnifying Messrs. Baxendale for the damages and costs incurred by them in Harding's

action.

23 and 24. On the 18th Dec. 1872, the present plaintiffs paid to the plaintiff Harding the 6507. damages, together with 2481. 138. 4d., his taxed costs in the said cause; and the bill of costs of their own attorneys incurred in and about their defence to such action amounted to 2661. 4s., including counsels' fees and witnesses' expenses, but the same had not been taxed.

25 and 26. On the 30th Feb. 1873, the now plaintiffs brought the present action to recover the three several last mentioned sums. (The copy of the writ of summons and the declaration in the said action are set out at length in these paragraphs of the case respectively).

27 to 31. The defendants (the railway company) on the 19th March, pleaded several pleas, setting up several defences, namely, traversing the baiiment and breach respectively; delivery of the goods on the terms of a special contract, exempting the company from liability unless the goods were declared and a special rate paid, which was not done; the Carriers' Act, and loss from excepted perils of the sea. Subsequently, however, on the 28th March, the defendants, by leave under a judge's order, withdrew all the above pleas, and paid 6501. into court, to which the plaintiffs replied that the sum paid in was not sufficient. The particulars of the special damages referred to in the declaration and delivered to the defendants under a master's order of the 15th March 1873, consisted of the above-mentioned sums of 6501., 2481. 138. 4d., and 2661. 48.

32. The cause came on for trial before Cockburn, C. J. and a special jury at the Lent assizes for Surrey, at Kingston, on the 8th April 1873, when the case was tried by admissions, and the following is a copy of the learned judge's note:

Kingston, 8th April, 1873. Baxendale v. The London, Chatham, and Dover Railway Company. Consignment note between plaintiffs and defendants, to be admitted. The forwarding note between plaintiffs and Harding, ditto. All proceedings in the action, Harding v. Baxendale, to be put in; and all correspondence to be put in. The bill of costs in Harding v. Baxendale to be put in. The court to say whether the plaintiffs are entitled to the whole or any part of the bill of costs; if to part only, that part to be settled by the master on direction from the court. Copy of the necessary documents, with a list thereof, shall be supplied to the court. The plaintiffs to supply the defendants with copies of such as they require. Evidence and admissions to be entered on the judge's notes.

33. The bills of costs in the case of Harding v. Baxendale, are to form part of this case, and the court is to be at liberty to refer to the briefs.

34. A verdict was found for the amount of the two bills of costs, but leave was reserved to the defendants to move to enter the verdict for the defendants, or to reduce the damages to an amount to be held by the court to be recoverable, and to be settled by the master.

on

A rule nisi to that effect was accordingly obtained by the defendants' counsel in Easter Term 1873, against which cause was shown the part of the plaintiffs the following Trinity Term, and after argument the court (Bramwell and Cleasby, BB., sitting in the second division of the court), took time to consider its judgment, which was subsequently on the 27th

Ex. CH.]

June 1873, delivered as follows by Cleasby, B.: This was one of those cases in which a person incurs a liability, in consequence of the neglect or default of a third person in some duty which he owes to him, and when he is brought into court himself, he has a right to expect to recover over against the person by whose default the liability has arisen. In these cases a question of some · difficulty arises as to how far a person is entitled to recover the costs which he has had to pay, and also the costs which he has incurred in defending the action which has been brought against him. Now the case before us was this. The present plaintiffs, Messrs. Baxendale, received a case of pictures belonging to a Mr. Harding, to be forwarded by them to France. They delivered the case to the London, Chatham, and Dover Railway Company, the defendants in the present action, and one of the servants of the railway company negligently permitted the case to fall into the sea at Dover, by which the pictures were seriously damaged. A claim was then made by the owner of the pictures upon the present plaintiffs, and an action was brought by him against them which they defended, but unsuccessfully, and in defending it they incurred and paid the costs, which they now seek to recover from the defendants in the present action. Now we should, I think, abide by the rule acted on by the Court of Common Pleas in the case of Mors le Blanch v. Wilson (28 L. T. Rep. N. S. 415; L. Rep. 8 C. P. 227; 42 L. J. 70, C. P.), the general idea of which is that the jury are to give, as part of the damages, such costs as were reasonably incurred in defending the action, if it was properly defended, or in ascertaining the amount of liability if it was necessary that something should be done to ascertain that amount. Now, applying that rule to this case, we observe that a very large claim was made in respect of these pictures. In the first instance, Messrs. Baxendale could obtain very little information to guide them in settling the action or paying money into court, and they had no means for making any payment in the case. Had it been the case of a loss of ordinary goods or merchandise, of which the value was known, they would have been bound to pay the money into court, and so put an end to the matter. But it was a matter of great difficulty to ascertain what the amount of damage done to the pictures was. It is obvious that damage to a picture is one of those things which cannot be estimated commercially. It is necessary to call skilled witnesses to speak to the original value of the pictures, and to the extent of the damage done to them. That being so, we think that Messrs. Baxendale could not be expected to settle Harding's action out of court before trial, or to pay money into court. It was a necessary consequence of the defendants' neglect that Messrs. Baxendale were put to the expense of ascertaining in a proper way the amount of their liability, in order that they might recover it over against the railway company. So far, therefore, as regards that part of the rule which seeks to have the verdict entered for the defendants, the rule must be discharged, because the plaintiffs are clearly entitled to recover some costs. Then the question arises, was this a case in which Messrs. Baxendale could fairly and reasonably defend the action brought against them by Harding? That depends principally upon two things, namely, the nature of the case, - and the conduct of Messrs. Baxendale and the

1

[Ex. CH.

The

The

railway company in reference to Harding's claim. As soon as that claim was made, Messrs. Baxendale wrote the letter of the 11th Oct., giving the railway company notice of the claim, and asking for their advice and assistance. claim goes on, and Messrs. Baxendale are placed in great difficulty in knowing what to do, and how far and on what ground to defend the action, for the railway company, by their attorney, wrote to them. on the 24th Oct., as follows:-" Instructed by our manager, I beg to acquaint you that this company declines all liability in the matter," thus leaving Messrs. Baxendale very much to take their own course. latter, however, do not stop there, but continue to urge the company to do something in the matter themselves, and on the 12th Dec. they write, "A writ has now been issued. Will you kindly inform us whether you will defend by your own solicitor, or if you wish us to do so on your account? It would be a great mistake to have two actions, one against us and another against you." That is, unfortunately, exactly what has here taken place; but certainly we cannot help saying, not by the fault of Messrs. Baxendale. On the 16th Jan. the railway company write another letter, in which they obviously keep Messrs. Baxendale at arm's length, and leave them to take their own course, for they say, "The company, as carriers, will, of course, if necessary, avail themselves of the provisions of the Carriers' Act." The result then is that Messrs. Baxendale, the present plaintiffs, have done all that they possibly could do to prevent the state of things arising which has arisen, namely, the having two sets of costs in the case. It appears to us to be a case in which the fault was clearly that of the railway company, and in which the latter might fairly and properly have taken upon themselves the defence of the action brought by Harding against the present plaintiffs. But, instead of doing so, they chose to repudiate all liability on their part, and left Messrs. Baxendale to make the best they could of the case. The result, therefore, as to the second part of the rule for reducing the amount of the verdict was this, that there was a verdict for the full amount of costs incurred by the plaintiffs themselves, and also those which they had to pay to Harding in respect of his action. Now, we do not think that it necessarily follows that the verdict ought to stand for the full amount of those costs; but the present plaintiffs are entitled to recover, as damages caused by the default of the railway company, all costs for which they became liable, and which were incurred in having the amount of damages ascertained and in having their liability established; for though we are of opinion that the defence of the Carriers' Act could not have been successfully set up in answer to Harding's claim, yet, as the railway company to the last moment insisted that they might claim the protection of the provisions of that Act, we think that it was quite justifiable in Messrs. Bexendale to have their liability established, putting forward the Carriers' Act as the ground of their defence. The result, therefore, is that the ver dict should be reduced to such an amount of costs as are attributable to establishing the liability of Messrs. Baxendale for the amount re covered against them, having regard to the defence under the Carriers' Act, but not to the defence that they were merely forwarding agents

Ex. CH.]

and not carriers, or any other defence. We cannot deal with the figures, but, with this guide, the parties ought, and will, no doubt, be able to settle the amount.

36. The Court of Exchequer having accordingly discharged the defendants' rule, the latter appealed to the Exchequer Chamber from that decision, and the question for the opinion of the court of appeal now was, whether the said rule should be discharged or not. The court of appeal to make such rule upon this appeal as it should think fit; and to proceed therein pursuant to the provisions of the Common Law Procedure Act 1854.

Points for argument on the part of the defendants (appellants): First, that the defendants are not liable for more than the damage done to the pictares; secondly, that the costs sought to be recovered are not the reasonable or necessary consequences of the pictures being dropped into the sea, and as damages are too remote; thirdly, that the damages as between the plaintiffs and the defendants ought to be measured according to the contract between them, and not according to any other contract, different in its terms, between the plaintiffs and other persons; fourthly, that the defendants' contract was not one of indemnity, and that they are not liable to pay for the costs of improper defence by the plaintiffs of an action brought against them by the owners of the pictures, and that such costs are not damages for not safely carrying the pictures; fifthly, that if this action had been brought before that of Harding v. Baxendale, the damages could only have been measured by the damage to the pictures, and that the measure of damages cannot be altered by the circumstance of which action was brought first; | sixthly, that the defence to the action against the plaintiffs was unreasonable; seventhly, that under no circumstances can the defendants be liable to pay for such of the costs of the action of Harding v. Baxendale as were peculiar to the contract between Harding and Baxendale; eighthly, that the plaintiffs ought to have paid into court, or let judgment go by default; ninthly, that the defendants are not liable for the plaintiffs' costs in the first action, even if they are liable for what was paid to Harding.

Foints on behalf of the plaintiffs (respondents): First, that the plaintiffs acted reasonably in defending the action of Harding v. Baxendale on all and each of the grounds relied upon; secondly, that no substantial saving of costs would have been effected if they had suffered judgment to go by default, and allowed the damages to be assessed under a writ of inquiry; thirdly, that through the course adopted by the plaintiffs a claim of 1000l. was reduced to 6501.; fourthly, that as the defendants were offered the conduct of the defence of the said action, and refused to interfere, the plaintiffs are entitled to an indemnity against costs so long as they acted bona fide; fifthly, that the finding of the court below is not subject to reversal upon appeal, being a finding upon a question of fact.

W. G. Harrison (with him were Day Q.C. and Roland V. Williams) argued the case on the part of the appellant defendants.-The reasonableness or unreasonableness of the conduct of the plaintiffs, Baxendale and Co., in defending Harding's action, is not at all material to the present question, inasmuch as the true ground and reason of the costs sought by them to be recovered in the

[Ex. CH.

present action not being recoverable is, that they were not incurred by reason of or as the result of any breach of contract on the defendants' part. The contract between the plaintiffs and the defen-dants, and not the contract between the plaintiffs and Harding, which is another and different onealtogether, and which contains entirely different terms, should be the measure of damages, if any, in the present action. [He was here stopped by the court, who called on]

Watkin Williams Q.C. (with him was Murphy, Q.C.), on the part of the respondent plaintiff's.All that the plaintiffs now seek to recover from. the company is that part only of the costs which the company, had they defended Harding's action, must themselves have incurred, namely, the costs of the defence under the Carriers' Act, and of the ascertaining the real amount of the damage done to the pictures. The costs of the other defences originally raised by the now plaintiffs are admitted on their part not to be recoverable. [LUSH, J.Do you say that it is a contract of indemnity or special damage ?] The claim is for special damage, and is not founded on any contract of indemnity. [QUAIN, J. On what possible principle can you then ask for more than the value of the goods?] In the case of an acceptor of an accommodation bill against whom an action is brought by an in-dorsee, the drawer, being informed of the action, tells the acceptor there is a reasonable ground of defence, and the latter therefore defends the action, but unsuccessfully, and the result is that he has to pay the amount of the bill and the plaintiff's costs, in addition to his own costs of defence; yet he can nevertheless recover the whole amount as damages from the drawer, notwithstanding there is no contract of indemnity. The present case is analogous in principle to that case. These costs. now sought to be recovered were the natural and proximate result of the breach by the defendants of their contract, for owing to the line of conduct adopted by the railway company, the plaintiffs could not, with any safety or prudence, have taken any other course than that which they followed. It was only by the verdict of the jury that they could possibly ascertain what really was the amount of damage sustained by Harding. [ARCHIBALD, J.-Why did they not at once sue the railway company, and by so doing throw that difficulty upon them?] By defending the action they greatly berefited the company, as they thereby reduced Harding's claim from 1000l. to 6501. [LORD COLERIDGE, C.J.-Was it reasonable conduct on the part of the plaintiffs to incur costs to the amount of 514l. 17s. 4d. in order to reduce 1000l. to 650l., and that too after being advised by their counsel that they had no defence to the action?] It was against the wish of Messrs. Baxendale that the action went on. They would gladly have effected a settlement, and urged the doing so upon the railway compony, but the company would neither assent to that course nor in any way assist or advise the plaintiffs, but they told the latter that there was a defence to the action. [QUAIN, J. They did not tell theplaintiffs that they, the plaintiffs, had a defence, but that the company had one.] Whatever defence the one had the other had also. They were alike in that respect. The liability of the plaintiffs and of the railway company under their several contracts respectively proved eventually to be identical; and though the railway

Ex. Cu.]

company had supposed themselves to be within the protection of the Carriers' Act, yet the case of Behrens v. The Great Northern Railway Company (3 L. T. Rep. N. S. 863; 30 L. J. 153, Ex.; 6 H. & N. 366; affirmed in error 8 L. T. Rep. N. S. 328; 31 L. J. 299, Ex.; 7 H. & N. 950) is an authority showing that the carrier is not protected under such circumstances. The present case falls within the principle of the decision of the Court of Common Pleas, in Mors le Blanch and another v. Wilson and another (28 L. T. Rep. N. S. 415; L. Rep. 8 C. P. 227; 42 L. J. 70, C. P.), in which, as in the present case, there were two distinct contracts, each independent of the other, and in which the court held that the charterers could recover in the second action against the shipowner the amount of damages assessed against them, and the costs in the first action, not on the ground of their having defended that action at the shipowners' request, or with their consent, but because the damages and costs so incurred by them were the natural and proximate result of the shipowners' breach of contract. In that case Brett, J., during the_argument, referred to a passage in the notes to Lampleigh v. Braithwait (1 ̊ Sm. L. C. 6th edit. p. 149), which is applicable here, as follows: Where the plaintiff's claim is of an unliquidated nature and needs investigation, it seems that the defendant may, unless expressly forbidden, incur the expense of investigating it, or at least that very slight evidence is enough to raise an inference that the person ultimately liable has assented to his doing so: (Blyth and another v. Smith, 5 M. & G. 405; 12 L. J. 203, C. P.) It seems to be for the jury in each case to say whether, in defending and incurring the costs sought to be recovered, the plaintiff pursued the course which a prudent and reasonable man unindemnified would do in his own case; and if the jury find that he did, the costs may be recovered.' [LUSH, J.-The difference between Mors le Blanch v. Wilson and the present case is this: In Mors le Blanch v. Wilson the assessment of damages in the action in the first instance against Mors le Blanch determined the amount which he had to pay in consequence of Wilson's default. If Mors le Blanch had brought his action, he could have determined the amount of demurrage which he was liable to pay, that is, which he would have to pay, which is just as good as finding the amount actually paid. The cases of Ogle v. Lord Vane (L. T. Rep. N. S.; L. T. Rep. 2 Q. B. 275; 36 L. J., 75, Q. B; in error L. Rep. N. S.; L. Rep. 3 Q. B. 272; 37 L. J. 77, Q.B.), and Rolph v. Crouch (17 L. T. Rep. N. S. 249; 37 L. J. 8, Ex.; L. Rep. 3 Ex. 44), are authorities in favour of the plaintiff's if not precisely in point; and Ogle's case shows that where a plaintiff has not acted unreasonably, and so disentitled himself from recovering the amount of damages which he has actually incurrred, he may recover it, apart from any ground of contract on the defendants' part to pay it. He cited also Broom v. Hall (7 C. B., N. S., 503); and Dixon v. Fawcus (3 L. T. Rep. N. S. 693; 30 L. J. 137, Q. B.; 3 El. & El. 537), and contended that on all these grounds Messrs. Baxendale, the plaintiffs, were entitled to have the judgment of the court in their favour, affirming the decision of the court below. He referred also to Mayne on Damages, 2nd edit., by Lumley Smith, p. 43.

Lord COLERIDGE, C.J. (after stating the facts).I think that the plaintiffs are not entitled to recover

[Ex. CH.

these costs, and that the defendants are not liable. In the first place, the defence which the present plaintiffs set up in answer to Harding's action was not, in my judgment, a reasonable one, and it had no foundation in law, and of that they were at the first distinctly informed by their own counsel; nor were they either expressly or impliedly authorised by the defendants to set up such a defence; and so there was no good cause for its adoption by the plaintiffs, either by reason of the soundness of their own case, or of any authority so to do on the part of the defendants. But then the plaintiff's may say, "True it may be that we have no right to recover all the costs of the action, yet still we were bound to do something to ascertain our liability, and by our fighting the action, Harding's claim, which originally was for 1000l., was reduced to 6501.; and if we had let judgment go by default the ascertaining the amount of damages by a jury, under a writ of inquiry, would have cost something, and we are at all events entitled to recover that amount." This ground, however, I think, fails the plaintiffs, because such costs are not, in my opinion, the natural or proximate result of the defendants' negligence, and were not costs incurred at their request or for their benefit, or for the benefit of anybody except of the plaintiffs themselves. The court below appears to have decided the case on the authority of Mors Le Blanch v. Wilson (ubi sup.). The two cases, though not precisely similar, are in principle not very easily distinguishable; but although it is difficult to point out a distinction between them, I am nevertheless prepared to say, though with regret, that if Mors Le Blanch v. Wilson is undistinguishable, then it was wrongly decided. Upon these grounds, therefore, I am of opinion that the judgment of the Court of Exchequer in the present case ought to be reversed.

KEATING, J.-I also concur with my Lord and the rest of my learned brethren in the opinion that the plaintiffs are not entitled to recover these costs as damages against the defendants, for such damages are, I think, too remote. The contract between the plaintiffs and the defendants was entirely distinct and separate from that between the plaintiffs and Harding, and was entered into irrespectively of any knowledge on the part of the defendants as to Harding or his contract with the plaintiffs. The costs, therefore, which were incurred by the plaintiffs in defending the action brought against them by Harding, could not, in my opinion, be the natural and proximate result of any default with respect to the pictures on the part of the defendants. A very different question might have arisen if the plaintiffs, Messrs. Baxendale, had defended Harding's action at the request of the railway company-a question discussed in the notes to Lampleigh v. Braithwait (ubi sup.). In the present case, if the question be whether the defence were a reasonable one or not, I am bound to say that I think it was entirely unreasonable. But then it may be said what were the plaintiffs (the then defendants) to do, they must do something, and the question comes, what that something ought to have been. It has been suggested that they should have let judgment go by default, and have had the amount of damages ascertained on a writ of inquiry at a far less expense than fighting the action. But that suggestion touches the question of amount only, and not that of the company's liability. The opinion of the jury was not taken

Ex. CH.]

here as it was in Mors Le Blanch v. Wilson, whether it was reasonable to defend Harding's action at all, and whether the defence was conducted reasonably. My brother Lush perceives a distinction between Mors Le Blanch v. Wilson and the present case, but I confess that I fail to see any difference in principle between them, and the learned counsel for the plaintiff's was entitled in the court below, to rely strongly on Mors Le Blanch v. Wilson, unless it be distinguishable, as has been suggested by my brother Lush, though the decision in that case was not at all in my opinion a satisfactory one. I found my judgment in the present case on the fact that the costs now sought to be recovered by the plaintiffs are not the necessary result of the breach of contract on the defendants' part, the two contracts being, as has been before said, separate and independent contracts. For these reasons, then, I think that the judgment of the court below should be reversed.

LUSH, J.—I am of the same opinion, and think that the plaintiffs are not entitled to recover these costs against the defendants, because they were not the natural or necessary consequence of the breach of contract by the defendants, nor were they incurred at the request or for the benefit of the defendants. The two contracts were entirely different the one from the other, and were independent of each other. The plaintiffs having contracted with Harding to carry his pictures to Paris, instead of carrying or conveying them thither themselves, engaged the defendants to do so by another and independent contract, to which Harding, of whom the defendants knew nothing, was a stranger. The pictures were not within the provisions of the Carriers' Act. The contracts being separate and independent, it may be that the plaintiffs were liable to Harding upon their contract with him, whilst the defendants were not liable to the plaintiffs on the other contract between them, or vice versa. But be that as it may, the plaintiffs' remedy against the defendants was not controlled in any way by their liability to Harding. Upon Harding bringing his action against the plaintiffs the latter informed the defendants that they should hold them liable, to which the defendants replied, declining and denying any liability on the ground that the Carriers' Act protected them, inasmuch as the pictures were delivered to them, the defendants, as an ordinary parcel, unaccompanied by a declaration of value or insurance; and they also declined to give the plaintiffs any assistance in the way of advice, suggestions, or instructions, and left them to deal with the action in such way as they, the plaintiffs, should think proper. This position the defendants took and maintained all through, from first to last, although they were over and over again pressed upon the matter by the plaintiffs. Notwithstanding this the plaintiffs defended the action, and defended it unsuccessfully, a verdict for 6501. damages being recovered against them. The plaintiff might have brought an action against the railway company at once, in which the damage done to the pictures might have been ascertained. In delivering the judgment of the court below my brother Cleasby is reported to have said, "This was one of those cases in which a person incurred a liability in consequence of the neglect or default of a third person in some duty which he owes to him, and when he is brought into court himself, he has a right to expect to recover over against the person by whose

The

[Ex. CH. default the liability has arisen." The default of the defendants in this instance was the not carrying these pictures safely to Calais; but they thereby incurred no liability to Harding. plaintiffs were the only persons who could sue the defendants, and they might, in an action against the latter, have recovered the value of the pictures notwithstanding that they (the plaintiffs) might have a good defence to an action at the suit of Harding. In what possible way, then, can the costs incurred by the plaintiffs in defending the action brought against them by Harding be said to be the consequence of the default of the defendants. The two things are entirely unconnected the one with the other. The court below appears to have thought it was reasonable conduct on the plaintiffs' part to have the amount of damages assessed in Harding's action. Probably it was so, and it was also for their benefit, though certainly not in any way for the benefit of the defendants, nor were they in any way bound by that assessment of damages. It might be that Harding might have recovered 3001. damages against the plaintiffs, and yet the latter might have recovered 1000l. against the defendants. A point was made and insisted on by the learned counsel for the defendants as to the difficulty which would be cast upon the plaintiffs if they were to be obliged, the moment a claim were made upon them, with respect to goods consigned to them to be forwarded, to bring an action instantly against the particular railway company by whose line they had forwarded the goods That may be so, but it is a difficulty which arises from the great extent and intricate character of the plaintiffs' business, and their undertaking to carry goods and then forward them by other carriers, and cannot be considered in this court as in any way influencing the legal relation between the parties. In the Court of Exchequer, the judgment below was based upon the authority of the decision of the Court of Common Pleas in Mors le Blanch v. Wilson; but there is, in my opinion an, essential distinction between that case and the present case. In that case, it is material to observe that it was found by the jury that it was a reasonable thing for the plaintiffs to have the amount ascertained which they would have to pay for demurrage. Speaking for myself, I must say that I think, though with much diffidence, that the decision in that case was a correct one, because the amount of demurrage ascertained in the first action would be of necessity the measure of damages which the defendants would be liable to pay in the second action, unless the facts were in any way controverted. I do not therefore think that, in deciding as we do in the present case, we are, in truth and substance, at all in conflict with the decision of the Court of Common Pleas in that

case.

QUAIN, J.-There is no doubt that, if the present case had been one of a contract of indemnity, very different considerations would have arisen, and the judgment of this court might have been in favour of the plaintiffs, because in such a case, though there may in point of form be two contracts, yet in substance these would be identical, and there would in effect be only one, and that too would be known to each party. In such a case it would be reasonable for the party sued to say to the party who would be ultimately liable, "come in and defend the action." Thus, in the case of a