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such insurance, and their improper deviation from the usual course of 'business, the said insurance became of no use or value, and the defendant, by reason of such improper conduct and deviation, had sustained damages to the amount of the said one-third of the said freight so insured; and the plaintiffs thereby, before the commencement of this suit, became liable to the defendant for the same,-being the amount in and by the said first count claimed by the plaintiffs to be repaid and returned to them by the defendant,-and liable to make good to the defendant such amount as he should have to return to the plaintiffs under the said charter-party; and any and every sum of money paid or returned by the defendant to the plaintiffs in respect of the said freight, or recovered by the plaintiffs under the said first count, will be the damage *sustained by the defendant by reason of such improper conduct and deviation as aforesaid, and the defendant will thereby be damnified to that extent.

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Ninth plea, as to 185l. 38. 9d., parcel of the plaintiffs' claim as to the residue of the declaration, and other parcel than the sum of 891. 108. in the seventh plea excepted,-that the said sum of 1857. 38. 9d. was the amount of one-third of the freight in the first count mentioned which was by the terms of the charter-party therein mentioned to be returned by the defendant to the plaintiffs if the cargo of the vessel therein mentioned was not delivered at the port of destination; and the said sum of 1851. 3s. 9d., parcel, &c., was made up of the two sums of 1667. 11s. 11d. and 127. 19s. 2d. in the said first count mentioned, and the costs of insuring, in that count also mentioned, being the further sum of 5l. 12s. 8d.; and the said sum of 1851. 3s. 9d. in the same sum sought to be recovered by the first count of the declaration as one-third of the said freight: That the said sum of 1857. 3s. 9d. is not payable by the defendant to the plaintiffs otherwise than under the terms of the said charter-party in the first count mentioned, and as the one-third part of the freight to be returned to the plaintiffs in case of the non-delivery of the cargo therein mentioned at the port of destination; and that the same, if recoverable at all, was recoverable under the said first count: That the said vessel in the said count mentioned was wrecked and lost, and the delivery of the cargo at the port of destination wholly prevented, in the manner in the second plea mentioned,—and which second plea the defendant averred to be entirely. true, and the plaintiffs thereupon claimed from the defendant the said sum of 185l. 3s. 9d. as money received by the defendant for the use of the plaintiffs, and as money paid by the plaintiffs for the use of the defendant at his request: That, before the commencement of this suit, the plaintiffs, *by reason of their negligent and improper con*51] duct in insuring as in the said second plea mentioned, and their improper deviation from the usual course of business therein mentioned, had become and were, and still remained, liable to indemnify the de

fendant against paying or returning to the plaintiffs the said sum of 1851. 38. 9d., or any part thereof, and to make good to the defendant the loss sustained by such negligent and improper conduct and deviation, such loss being the said sum of 185l. 38. 9d. in the introductory part of that plea mentioned; and that any and every sum of money payable or returnable by the defendant to the plaintiffs in respect of the said freight, or recoverable by the plaintiffs under the said first count, would, if paid or returned to, or in any way recovered by the plaintiffs, be lost to the defendant, and would be the damage sustained by the defendant by reason of the said negligent and improper conduct and deviation of the plaintiffs.

The plaintiffs demurred to these two pleas; the grounds of demurrer stated in the margin being,-as to the second plea, that it confessed but did not avoid the causes of action contained in the first count,— and as to the ninth plea, that it confessed but did not avoid the cause of action contained in that part of the declaration to which it was pleaded.

Channell, Serjt., in support of the demurrer.(a)-The *plain[*52 tiffs seek to recover, under the terms of the charter-party, the one-third freight which they have paid to the master, the event having happened which was to entitle them to claim such return. The defendant sets up in answer that which at the utmost amounts to a claim for unliquidated damages, which properly forms the subject of a cross action. The authorities upon this subject are collected in Turner v. Davies, 1 Wms. Saund. 148, 150, n. (2); and they will generally be found to be cases where there were cross demands and obligations in the nature of debts. In Carr v. Stephens, 9 B. & C. 758 (E. C. L. R. vol. 17), 4 M. & R. 590, a receiver of rents of an estate to a share of which a married woman was entitled, having in his hands money due to her, by the direction of the husband, accepted a bill on the faith of that fund, drawn by a creditor of the husband for money lent to him: before the bill became due, the husband and wife gave a joint direction to the receiver to pay over the money to a third person, which he did

(a) The points marked for argument on the part of the plaintiffs, were,

As to the demurrer to the second plea,-"that the second plea discloses nothing in bar of the action as set forth in the first count; that it admits the undertaking of the defendant to return the proportion of freight paid in advance, in case the cargo were not delivered at the port of destination, and the fact that it was not so delivered, and that the amonnt so to be returned has not been paid, and sets up as an answer, that, by mere negligence of the plaintiffs, the defendant had lost the benefit of an insurance on the freight; that this is a confession, without an avoidance; that the matter alleged in the second plea amounts at most to a substantive cause of action for unascertained damages; that the doctrine as to circuity of action does not apply; and that there is no contract, express or implied, in the charter-party, on the part of the plaintiffs, to indemnify the defendant against negligence of the plaintiffs in insuring the freight:"

And, as to the demurrer to the ninth plea,-"it will also be contended that the ninth plea is either an attempt to set off a claim for damages against an admitted debt, or a special and expanded plea of never indebted, which is not borne out by the facts alleged in the plea, and that, on the contrary, the facts stated show that the defendant was indebted, and disclose nothing which excuses or exonerates him from the payment of such debt."

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before the commencement of the action: when the bill became due, the acceptor refused to pay it, unless the drawer would indemnify him against the claim of the husband and wife to have the money paid according to their order: an indemnity was given, but the acceptor *53] *still refused to pay; and it was held that the drawer could not maintain an action on the bill, as it would only lead to a circuity of action, as the acceptor, being bound to pay the money according to the order of the husband and wife, might recover it back by suing on the agreement to indemnify. At the trial, Lord Tenterden ruled that the plaintiff was entitled to recover, and that the defendant must resort to the indemnity for reimbursement: but, when the case came before the court, his Lordship said: "Upon further consideration, I think I was wrong in deciding that the plaintiff might recover on the bill, and that the defendant must resort to the indemnity; for, that would only lead to a circuity of action. It appears, that, before the bill became due, Mr. and Mrs. H. ordered the defendant not to pay it with the money in his hands, and to which they were entitled. He was bound to comply with that order; and, if he afterwards was compelled to pay the plaintiff, he would be liable to pay the amount to Mr. and Mrs. H. over again, and entitled to sue on the indemnity. In order to avoid that circuity of action, I am of opinion that we ought to hold that the present action is not maintainable." That was a clear case of set-off. Connop v. Levy, 11 Q. B. 769 (E. C. L. R. vol. 63), was somewhat like Carr v. Stephens. That was an action of assumpsit by executors, the first count being for work and labour of the testator, money paid by him, and money due upon an account stated with him, with a promise to him; the second being for work and labour and money paid by the plaintiffs as executors, with a promise to them as executors. The defendant pleaded, that the testator, in consideration of the defendant consenting to act on a provisional committee for a projected railway, agreed to indemnify him from any charges on account of the railway; that the work was done and moneys paid by the plaintiffs in and about *surveying the line, and the account was stated by them in respect *54] of the same work, &c.; that all the causes of action accrued after the promise to indemnify, and that the defendant made the promises only in his character of member of the committee; that the railway was abandoned, and the work and payments became of no value, and all sums recovered from the defendant in respect thereof would be lost to the defendant, and he would be damnified to that extent. Upon special demurrer, this was held a good plea, for avoiding circuity of action, to both counts,-since the defendant, on the facts alleged, was entitled to recover from the testator in his life, or from his representatives, as much as they would recover from him. That was the case of an express indemnity. [MAULE, J.-It was an indemnity against a pecuniary demand.] Which, when ascertained, would amount to a debt.

[MAULE, J.-There the testator had entered into a contract which would be performed by the payment of a sum of money. Here the plaintiffs contracted to effect a policy of insurance; that is not a contract which can be performed by paying money. In Allen v. Cameron, 1 C. & M. 832 (E. C. L. R. vol. 41), A. contracted, in consideration of 2201. 10s., to sell and plant a quantity of trees on B.'s land, and also that he should and would, at his own costs and charges, well and sufficiently keep in order the said trees aforesaid for two years after the planting, and that such as should die during that period (except from injury by sheep, game, or cattle) should be replaced by him:” in an action to recover the price,-it was held that evidence of non-performance by A. of any part of the contract on his part, was admissible in reduction of damages.(a) JERVIS, C. J.—If this had been an action to recover the balance of freight, and the defence set up had been that the contract had not been completely *performed, Allen v. Came[*55 ron would have been to the purpose.] The partial non-performance of the contract in that case was properly allowed in reduction of damages. Here, however, the claim set up by the defendants,-that the plaintiffs were guilty of negligence in effecting an insurance,—is quite independent of the contract for the breach of which the plaintiffs declare, and sounds in damages. The defendants' complaint involves several matters,-whether there was any such promise or duty as alleged, whether there was any consideration for the promise, whether the plaintiffs were guilty of the alleged breach of promise or duty, and what were the damages resulting from the alleged neglect. It may be that the underwriters were solvent or the ship unseaworthy. These, and many other considerations would be involved if the claim were presented by way of cross action. [JERVIS, C. J.-Does not the plea by the averments preclude those defences which might be set up in a crossaction?] That must be conceded: nor can it be contended, that, so far as the language of the plea goes, it does not distinctly allege that the policy became ineffectual owing to the plaintiffs' negligence in deviating from the customary course: but the question is whether the law will give effect to such a plea. If there is any contract of indemnity at all, it is by way of implication only.

Rew, contrà.(b)—The plea is good, not on the ground of set-off, but upon the doctrine of avoiding circuity of action; as is said by Lord Denman, in Walmsley v. *Cooper, 11 Ad. & E. 216 (E. C. L. R. vol. 39), 3 P. & D. 149,—“A covenant not to sue has been held equivalent to a release, on no other principle than that of avoiding

(a) And see Dawson v. Collis, 10 C. B. 523 (E. C. L. R. vol. 70.)

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(b) The points marked for argument on the part of the defendant, were,-" That the second and ninth pleas sufficiently avoid the causes of action to which they are respectively pleaded; that the pleas show that the amounts claimed, if paid to the plaintiffs, would be recoverable back by the defendant; and that the defence set up in each case was maintainable, in order to avoid circuity of action."

circuity of action, i. e. the scandal and absurdity of allowing A. to recover against B. in one action, the identical sum which B. has a right to recover in another against A." That is precisely what will happen in this case, if this plea be not held to be a defence. The sum recovered by the plaintiffs in this action, will be precisely the sum which the defendant would recover in a cross action. This is not, it is true, an express contract of indemnity. The cases in the notes to Turner v. Davies, are not confined to liquidated damages: one of the earliest was a case of trespass on one side and covenant on the other. [CROWDER, J.-Is there any case to show that one who neglects to insure according to his contract, himself becomes an insurer?] None in our courts. [MAULE, J.-Suppose a man agrees to effect an insurance for another by a given day,-if he omits to do so, no doubt he is liable to be sued for damages.] In that case, if the ship were lost, the party would be liable to the full amount agreed to be insured. [MAULE, J.-But, suppose the merchant has notice of the broker's failure to insure, in time to effect the insurance himself,-is he to lie by, and then claim a full indemnity from the broker?] This case is more like Simpson v. Swan, 3 Campb. 291, where it was ruled by Lord Ellenborough, that, where a factor, upon selling goods, takes from the purchaser a security payable to himself, and gives his own security to the principal for the net proceeds, without disclosing the name of the purchaser,-if the latter becomes insolvent before paying his security, the factor cannot compel the principal to refund the money received by him as the price of the goods. "This," said his lordship, "is an action for money had and received, which is an equitable action, and it ought not to succeed unless the plaintiff's claim be founded in equity and good con; *571 science. But it would be unjust and unconscientious to throw this loss upon the defendant, if it arose from the negligence or misconduct of the plaintiffs themselves; and we have it proved that Beckwith, to whom these goods were sold, was notoriously in insolvent circumstances at the time of the sale. Upon that evidence the plaintiffs would be liable to an action for selling the goods to him; and on that ground likewise, they cannot be permitted to recover back the money they paid upon their promissory note, which they might be compelled to repay in the shape of damages." In Sedgwick on Damages, 2d edit. p. 338, it is said: "It may be stated as a general rule, that, in all cases of agency, whether the agent be one of private selection or virtute officii, whether factor or sheriff, the omission or misconduct of the agent in regard to the matter with which he is charged or intrusted, renders him liable to the principal in damages; and, where he has been appointed to obtain or receive any given sum of money, or security therefor, and it appears that he was guilty of misconduct, and that the money or security was not obtained, these two facts will, in the absence of other proof, be treated as cause and effect. The negligence will be held to

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