§ 694. MISCELLANEOUS BONDS. 373 but that, upon a hearing in equity, this evidence would be admissible in reduction of damages.1** § 694. Miscellaneous bonds.—In an action on a sequestration bond, the plaintiff, in addition to the rents, may recover expense and inconvenience of removal.(*) A commissioner to construct a drain filed a bond, and collected the assessment for building it; but he failed to complete the drain. In an action on the bond it was held that the measure of damages was the amount required to complete the drain.() In an action on a bond given by an administrator upon obtaining a license to sell real estate, the measure of damages is the amount of the proceeds of the sale not accounted for by the administrator, and the costs of proceedings to compel him to account, but not counsel fees paid in such proceedings. (©) 1 City of Lowell v. Parker, 10 Met. 309, 315. For cases in other States, see State Treasurer v. Weeks, 4 Vt. 215; Governor v. Matlock, 1 Hawks 425; Duncan v. Klinefelter, 5 Watts 141; Hazard v. Israel, 1 Binn. 240; Shewel v. Fell, 3 Yeates 17; s. c. 4 Yeates 47; Eaton v. Ogier, 2 Mẹ. 46; Riggs v. Thatcher, I Me. 68; Gibson v. The Governor, 11 Leigh 600; Brugh v. Shanks, 5 Leigh 598; Rootes v. Stone, 2 Leigh 650; Smith v. Hart, 2 Bay 395; Patten v. Halsted, I N. J. L. 277; Gerrish v. Edson, I N. H. 82; (^) Blum v. Gaines, 57 Tex. 135. CHAPTER XXIII. THE MEASURE OF DAMAGES IN ACTIONS UPON NEGOTI- $695. The face value recoverable. 697. Interest by the civil law. 703. Pledged paper. 704. Measure of liability of an in- 705. Costs of prior suit. 707. Damages for failure to accept 708. Damages in cases of fraud and estoppel. § 695. The face value recoverable.-* The subject of negotiable paper is so amply discussed in the various treatises devoted to this particular branch of the law, that it will only be necessary for us in this place to take a brief view of the general principles regulating the compensation awarded for the breach of contracts of this class.** When recovery can be had upon a negotiable instrument, the amount of recovery is the face value of the instrument, without regard to the amount actually paid for it by the holder. (") The case of a pledgee presents an exception to this general rule, which will be considered later. In Massachusetts the anomalous doctrine prevails that in a suit between the original parties, if the consideration of a note is inadequate, or fails in part, the amount equitably due may be recovered in an action upon the note. (b) So where a note was given (^) Murphy v. Lucas, 58 Ind. 360; Murray v. Judah, 6 Cow. 484; Deas v. Harvie, 2 Barb. Ch. 448; Croft v. Bunster, 9 Wis. 503. () Sanger v. Cleveland, 10 Mass. 415; Daggett v. Daggett, 8 Cush. 520. § 696, 697. INTEREST BY THE CIVIL LAW. 375 for the purchase of a horse, which proved to be unsound, the court deducted from the amount of the note the difference in value of the horse if he had been sound and as he actually was. (*) § 696. Interest.-* In actions brought on promises to pay a liquidated sum of money, as on promissory notes or bills, where no question arises as to the currency or rate of exchange, the rule of damages is a fixed and arbitrary one. It is identical with the rate of legal inter est. The actual damages may be much greater; the nonperformance of the obligation may have occasioned the greatest distress, nay, even extreme positive loss; it may have produced actual insolvency. These remote results the law, however, does not investigate.() It takes the rate of interest as the measure of damages; and so, says Pothier, "as the different damages which may result from the failure to perform this kind of obligation vary infinitely, and as it is as difficult to foresee as to excuse them, it has been found necessary to regulate them as by a species of penalty, and fix them at a precise sum.”1(c)** § 697. Interest by the civil law.* With this, the general language of the modern civil law accords. The damages resulting from the non-performance of contracts to pay money are limited to the infliction of interest. "Interest," says Domat, "is the name applied to the compensation which the law gives to the creditor who is entitled to recover a sum of money from his debtor in default.' So, too, the Roman law: In bona fidei contractibus usuræ ex morâ debentur. 1 Traité des Oblig., part i, ch. ii, art. 3, 170. 2 Liv. iii, tit. v, § I. L. 32, § 2, Ff. Deusur.; propter moram. L. 17, § 3, in fine eodem. (*) Davis v. Elliott, 15 Gray 90. (b) Lewis v. Lee, 15 Ind. 499. () Heyman v. Landers, 12 Cal. 107. These principles, equally recognized by our system, are embodied in the French Code by a positive provision,' the correctness of which is thus supported and expounded by one of the ablest commentators on that law: "It is certain that the non-payment of money when due may cause, and often actually causes, the creditor loss much beyond the legal interest on the sum. For want of the funds on the receipt of which his calculations are made, he may have been compelled to borrow, himself, and to submit to the exactions of the usurer. He may have been prosecuted, in a manner calculated to destroy his credit. He may have been ejected from his property; have become bankrupt; his house may have gone to ruin for want of repair. He may have lost highly advantageous bargains. "But how are we to distribute these losses according to their real cause, and fix on those which should be imputed to the party in default? How is any equitable valuation to be made of them? Add to this, that the non-payment of money is the most common of all cases which give rise to damages, and we shall perceive that the peace of society would be harassed by this infinite multitude of settlements, and the litigation that would result from them. "The law prevents this, by declaring that the damages shall never exceed legal interest from the day that payment becomes due; and this, which is a species of forfeiture, may often be advantageous to the creditor. "Whatever may be the damage that he has suffered by the delay in receiving his funds, whether the debtor was animated by malicious or even fraudulent motives, the creditor cannot, it is true, demand any other compensation than legal interest on his demand. But, on the other hand, he is not required to prove the damages that the delay may have caused. And this 1 Dans les obligations qui se bornent au paiement d'une certain somme, les dommages et intérêts résultants du retard dans l'exécution ne consistent jamais que dans la condamnation aux intérêts fixés par la loi, sauf les règles particulières au commerce et au cautionnement. Ces dommages et intérêts sont dus, sans que le créancier soit tenu de justifier d'aucune perte. Ils ne sont dus que du jour de la demande, excepté dans les cas où la loi les fait courir de plein droit. Code C. Art. 1153. § 697. INTEREST BY THE CIVIL LAW. 377 provision, which fixes the measure of damages for non-payment of money at legal interest, is founded on a principle of equity. "In cases of the non-performance of other contracts, the party in default, as the lessee who violates his contract of letting, or the architect who, by his negligence, causes the destruction of a house, must be fully apprised of the nature of the loss that may result from the non-performance of his duty; whereas with money it is different. "On the contrary, the engagement to pay a sum of money has no precise relation to any particular damage; it is impossible to know what will result from its non-payment; it is impossible to see what the creditor will lose, or how much he will lose; whether he will be compelled to borrow-whether he will be driven from his house and reduced to bankruptcy--whether his business or his credit will suffer; it is impossible to predict any , one event among the thousand which are possible, and which depend upon the situation of the creditor's affairs. "Money being the common measure of all things, has not, like other things, any peculiar function. It takes the place of all other things. The loss experienced, then, by those who are not paid at maturity is as diversified as the use that they might make of the money, and as unforeseen as the wants from which the injury might arise. They are, in regard to the debtors, like fortuitous cases, impossible to foresee, and which for this reason their obligation does not embrace." 1 And it should be borne in mind, as Pothier also well remarks, that if, on the one hand, the creditor cannot recover anything beyond the legal interest, so, on the other hand, he is not put to any proof of damage whatever.' It is an arbitrary assessment of damages, in the nature of the Lex Aquilia of the Roman system. He can, it is true, recover but the legal rate of interest; but then, on the other hand, he might, in fact, not have been able to gain any interest whatever during the time he has been deprived of his funds.** 1 Touillier, vol. VI, liv. 3, tit. 3, ch. iii. De l'Effet des Obligations, 230 et seq. So says the civil code of Louisiana, "The damages due for delay in the performance of an obligation to pay money, are called interest. The creditor is entitled to these damages without proving any loss, and whatever loss he may have suffered, he can recover no more." Art. 1935. |