Opinion — Fairmont Glass Works v. Cub Fork Coal Co.

" SE eA

emcamenienene

SUPREME COURT OF THE UNITED STATES.

No. 314.—Octosrr Term, 1932.

On Certiorari to the

United States Circuit

Court of Appeals for the

Seventh Circuit.

Fairmount Glass Works, Petitioner,

' vs.

Cub Fork Coal Company, et al.

[January 9, 1933.]

Mr. Justice BraNnpets delivered the opinion of the Court.

Cub Fork Coal Company and Paragon Colliery Company brought

this action in the federal court for southern Indiana to recover

from Fairmount Glass Works $32,417, with interest, as damages for

breach of a contract to purchase 17,500 tons of coal, at $6.50 per

ton f.0.b. mines, deliverable in twelve monthly instalments be-

ginning June 1920. Jurisdiction of the federal court was invoked

on the ground of diversity of citizenship. The Glass Works

pleaded in bar several defenses; emd it also set up a counterclaim

in the sum of $2,000 as damages for failure to make delivery as

provided by the contract. Three trials before a jury were liad.

At each of the first two the verdict was for the defendant; and

each time the judgment entered thereon was reversed by the Cir-

cuit Court of Appeals with a general direction for a new trial,

(19 F. (2d) 273; 83 F. (2d) 420). On the third trial the plain-

tiffs recovered a verdict for $1; and, after further proceedings,

judgment was entered thereon with costs.

The plaintiffs appealed to the Cireuit Court of Appeals ‘‘for

the reasons set forth in the assignment of errors’’. The errors

assigned were the failure to give eleven requested instructions.

Nine instructions sought related solely to the question of liability.

None of the instructions requested and refused related to the

measure of damages. But the first asked for a directed verdict for

$42,773.50, and the second asked that if a verdict were rendered

for the plaintiffs the damages be set at $42,773.50. The charge

given was not otherwise excepted to. It had appeared at the trial

eee ne |

2 Fairmount Glass Works vs. Cub Fork Coal Co., et al.

that after receiving in instalments about 6,330 tons of coal, the

defendant refused, on December 4, 1920, to accept further de-

liveries; and that there was a continuing serious decline in the

market price of coal from that date to the end of the twelve months

fixed by the contract for delivery. The defendant had insisted

upon the several defenses pleaded in bar as well as upon the

counterclaim. After the verdict the defendant was allowed to

amend the counterclaim, so as to allege that the market price of

coal was $11 a ton at the time plaintiffs failed to make the de-

liveries therein referred to and that the defendant’s damages from

such failure were $10,000. The record recites that a motion for a

new trial was made by the plaintiffs and overruled, and that the

overruling was excepted to; but the grounds of the motion, and

of the refusal to grant it, are not stated. The errors assigned do

not inelude any reference to the motion for a new trial; or to the

exception which was taken to tne allowance of the amendment of

the counterclaim after verdict.

The Cireuit Court of Appeals deemed it unnecessary to consider

the nine instructions relating to liability, since the verdict for

the plaintiffs ‘‘upon the issues which determined liability was

amply sustained by the evidence.’’ Nor did it discuss the two in-

structions which alone referred to the amount of damages recover-

able. But it made an order substantially as follows: If within

thirty days the parties shall stipulate that the judgment be modi-

fied by substituting for $1 the sum of $18,500 for other agreed

sum] with interest at the rate of five per cent from December 4,

1920 and costs, the judgment as so modified shall be affirmed;

otherwise the judgment shall be reversed and a new trial be had ©

‘limited only to an ascertainment of appellants’ [ plaintiffs’| re-

eoverable damages and the amount of appellee’s counterelaim, if

upon a new trial it appears that appellee is entitled to any re-

covery or set-off on its counterclaim.”’ 59 F. (2d) 539. As the |

parties did not stipulate for the modifieation suggested by the —

Court of Appeals. it ordered that the judgment be reversed with =

costs, and that the cause be remanded to the Distriet Court with |

direction to grant a new trial limited as stated. The defendant —

petitioned this Court for a writ of certiorari on the ground that

the Circuit Court of Appeals, in violation of the Seventh Amend-

ment of the Federal Constitution, re-examined the verdict of the §

th

iS

a ne

4

Ad

¢

:

i

4

:

a

3

FA

4

:

est

*,

fi

RCS Bat

-

:

i

’

:

3

‘a

;

i

i

Fairmount Glass Works vs. Cub Fork Coal Co., et al. 3

jury otherwise than according to the rules of the common law

and reversed the judgment solely for alleged error of fact in the

verdict and for the alleged error of the trial court in overrul.ng a

motion for a new trial. Certiorari was granted, 287 U. S. —.

The reasons assigned by the Circuit Court of Appeals for its

action were substantially these: It appears that a large sum is

recoverable as damages; that the minimum recoverable may be de-

termined with substantial accuracy by computation, for the de-

fendant “‘breached its contract without justifieation on December

4, 1920” and ‘‘the market price of coal is shown for each day of

the month, and the average price per month is also disclosed, so

that the actual amount of damages is quite definitely ascertain-

able’’ despite ‘‘a slight discrepancy in the statements of wit-

nesses’, The amount shipped and the amount received are also

quite definitely ascertainable, despite a discrepancy ‘due appar-

ently to the fact that the railroad confiscated a small amount of the

coal on several oceasions.’’ Computing plaintiffs’ damages “upon

the basis most favorable to the’? defendant, and the defendant’s

damages on the counterclaim also on the basis most favorable to

it, plaintiffs appear clearly to be entitled to $18,250 with interest

at the rate of five per cent from December 4. 1920 and costs. As

the jury fixed the damages at $1, the verdict should have been set

aside and a new trial granted. Since in view of Slocum v. New

York Life Insurance Co., 228 U.S. 364 the court is “not at liberty

to direct judgment for such amount as we believe would fairly

represent’’ plaintiffs’ damages, the parties should be given the op-

portunity of disposing of the ease without further litigation by

entering into an agreement as to the damages. If the parties do

not so agree, a new trial should be granted; limited to the ascer-

tainment of damages, as in Gasoli,.e Products Co. v. Champlin,

283 U. S. 494,

If the refusal to grant the motion for a new trial was deemed

by the Circuit Court of Appeals plain reversible error it was

at liberty under its rules to notice the error although not assigned ;1

‘Rule 10 (4) of the Cireuit Court of Appeals for the Seventh Circuit pro-

vides: ‘*The court may notice a plain error not assigned.’’? See Reliable

Incubator & Brooder Co. v. Stahl, 105 Fed. 663, 668. A similar rule obtains

in this Court; and in each of the other Circuit Courts of Appeals except

the Eighth. For examples of the application of these Rules, see United States

a

3

“fe

s

f

4

BY

+

x

is

Bs

4

4

4

te

Dah SP RANT YRS MIR RH

+ Fairmount Glass Works vs. Cub Fork Coal Co., et ai.

and the omission from the record of the grounds of the motion

would be no obstacle to a review, since the motion was obviously

directed to the failure to award substantial damages.? But we are

of opinion that the action of the District Court was not reversible

error.

First. The rule that this Court will not review the action

of a federal trial court in granting or denying a motion for

a new trial for error of fact has been settled by a long and

unbroken line of decisions;? and has been frequently applied

where the ground of the motion was that the damages awarded

by the jury were excessive or were inadequate.* The rule

precludes likewise a review of such action by a cireuit court of

appeals. Its early formulation by this Court was influenced by

the mandate of the Judiciary Act of 1789, which provided in § 22

that there should be ‘‘no reversal in either [circuit or Supreme]

v. Tennessee & C. R. R. Co., 176 U. 8. 242, 256; Columbia Heights Realty Co.

v. Rudolph, 217 U. S. 547, 552; Weems v. United States, 217 U. S. 349, 358;

Mahler v. Eby, 264 U. S. 32, 45; New York Life Ins. Co. v. Rankin, 162 Fed.

103, 108. Compare Pierce v. United States, 255 U. 8. 398, 405-406.

2Contrast Reliance Coal & Coke Co. v. H. P. Brydon & Bro., 286 Fed. 827,

832, where the moving party was the defendant, against whom the verdict

had gone.

3See e. g., Henderson v. Moore, 5 Cranch. 11, 12; Marine Ins. Co. v. Young,

5 Cranch. 187, 191; The ‘‘Abbotsford’’, 98 U. S. 440, 445; Railway Co. v.

Twombly, 100 U. S. 78, 81. In numerous cases no reference is made, in deny-

ing review, to the grounds for the motion. EF. g., Barr v. Gratz, 4 Wheat.

213, 220; Brown v. Clarke, 4 How. 4, 15; Kerr v. Clampitt, 95 U. S. 188,

189; Ayers v. Watson, 137 U. S, 584, 597; Van Stone v. Stillwell & Bierce

Mfg. Co., 142 U. S. 128, 134; Holder v. United States, 150 U. 8. 91, 92;

Blitz v. United States, 153 U. S. 308, 312; Clune v. United States, 159 U. 8.

590, 591; Addington v. United States, 165 U. 8S, 184, 185; Pickett v. United

States, 216 U. S. 456, 461.

4Railroad Co. v. Fraloff, 100 U. S. 24, 31; Wabash Ry. Co. v. MeDaniels,

107 U. S. 454, 456; Arkansas Cattle Co. v. Mann, 130 U. S. 69, 75; Fitz-

gerald Constr. Co. v. Fitzgerald, 137 U. S. 98, 113; Lineoln v. Power, 151

U. S. 436, 438.

sChesapeake & Ohio Ry. Co. v. Proffitt, 218 Fed. 23, 28; Ford Motor Co. v.

Hotel Woodward Co., 271 Fed. 625, 630; Alaska Packers’ Ass’n v. Gover,

278 Fed. 927, 929; Boston & Maine R. R. Co. v. Dutille, 289 Fed. 320, 324;

Louisiana Oil Refining Corp. v. Reed, 38 F. (2d) 159, 162; Geo. E. Keith

Co. v. Abrams, 43 F. (2d) 557, 558; Southern Railway Co. v. Walters, 47 F.

(2a) 3,7; Grand Trunk W. Ry. Co. v Heatlie, 48 F (2d) 759, 761.

¥Ses

ae

o

Fairmount Glass Works vs. Cub Fork Coal Co., et al. 5

court on such writ of error . . . for any error in fact.’

Sometimes the rule has been rested on that part of the Seventh

Amendment which provides that ‘‘no fact tried by a jury, shall

be otherwise re-examined in any court of the United States, than

according to the rules of the common law.’ More frequently the

reason given for the denial of review is that the granting or re-

fusing of a motion for a new trial is a matter within the discretion

of the trial court.*

It has been suggested that a review must be denied because of

the historical limitation of the writ of error to matters within the

record, of which the motion for a new trial was not a part.’ Com-

pare Judge Learned Hand in Miller v. Maryland Casualty Co., 40

F, (2d) 463. But the denial of review can no longer rest upon

this ground, since the record before the appellate court has been

enlarged to include in the bill of exceptions a motion for a new

trial, made either before or after judgment. Compare Harrison

v. United States, 7 F, (2d) 259, 262. Under certain cireumstances

the appellate court may enquire into the aetion of the trial court

®Act of September 24, 1789, e. 20, 1 Stat. 84-85: compare Rey Stat. §1011,

28 U. S. C., § 879. See Marine Ins. Co. v. Young, 5 Cranech, 187, 190; and

the diseussion in 32 Columbia Law Review, pp. 860-869.

*See Metropolitan R. R. Co. v. Moore, 121 U. S. 558, 573; Williamson v.

Osenton, 220 Fed. 653, 655.

SZacharie v. Franklin, 12 Pet. 151, 163; United States v. Hodge, 6 How.

279, 281; Warner v. Norton, 20 How. 448, 461: Pomeroy’s i -ssee v. Bank

of Indiana, 1 Wall. 592, 597-598: Freeborn v. Smith, 2 Wall. 160, 176:

Sparrow v, Strong, 3 Wall. 97, 105; Ewing rv. Moward, 7 Wall. 499, 502;

Chicago v. Green, 9 Wall. 726, 735: Tnsurance Co, v. Barton, 13 Wall. 603,

604; Neweomb v. Wood, 97 U. 8S, 581, 583-584: Railway Co, v. Heek, 102

U.S. 120; Springer v. United States, 102 U. S. 586, 595: Missouri Pac. Ry.

Co, v. Chicago & Alton R. R. Co., 132 U.S. 191; Fitzgerald Constr. Co. v.

Fitzgerald, 137 U. 8. 98, 113; Holmgren rv. United States, 217 U. 8. 509, 521.

*At early common law in England writ of error and motion for a new

trial were mutually exclusive remedies. See 1 Holdsworth, History of English

law, p. 226. The motion was addressed to the discretion of the court in bane.

3 Bl. Comm, 392. Review by the Exchequer Chamber of the refusal to grant a

new trial was allowed in a limited elass of eases by the Common Law Pro-

eedure Act, 1854, 17 & 18 Viet., c. 125, § 35, which provided, however, that

“‘where the application for a new trial is upon Matter of Diseretion only, as

on the ground that the Verdict was against the Weight of Evidence or other-

wise, no such Appeal shall be allowed.’’ Since the Judieature Acts, which

abolished proceedings in error in civil eases and substituted an appeal, (see

ae

Be

t

}

6 Fairmount Glass Works vs. Cub Fork Coal Co., et al.

on a motion for a new trial. Thus, its denial may be reviewed if

the trial court erroneously excluded from consideration matters

which were appropriate to a decision on the motion, Matto vy.

United States, 146 U. 8S. 140; Ogden v. United States, 112 Fed. 523;

or if it acted on the mistaken view that there was no jurisdiction to

grant it, or that there was no authority to grant it on the ground

advenced, Felton v. Spiro, 78 Fed. 576, 581; Dwyer v. United

States, 170 Fed. 160, 165; Paine v. St Paul Union Stockyards Co.,

35 F. (2d) 624, 626-628. It becomes necessary, therefore, to deter-

mine whether the circumstances of the case at bar justify an en-

quiry into the trial court’s refusal to set aside the verdict. :

Second. It is urged that the motion for a new trial presented 4

an issue of law. The argument is that on the motion or on the 4

court’s own initiative the verdict should have been set aside as *

ineonsistent on its face, since if the plaintiffs were entitled to re- ;

cover at all they were entitled to substantial, not merely nominal, ]

damages. The case, it is contended, is comparable to one in which ;

the award of damages exceeded a statutory limit, see Southern Ry. 4

Co. v. Bennet, 233 U. S. 80; or was less than an amount undis-

puted, Glenwood Irrig. Co. vy. Vallery, 248 Fed, 483; Stetson v.

Stindt, 279 Fed. 209; or was in pursuance of erroneous instrue-

tions on the measure of damages, Chesapeake & O. Ry. Co. v.

Gainey, 241 U. S. 494, 496;?° or was in clear contravention of the

instructions of the trial court, United Press Ass’n v. National News-

papers Ass’n, 254 Fed, 284; compare American R. R. Co. v. San-

tiago, 9 F. (2d) 7538, 757-758.

To regard the verdict as inconsistent on its face is to assume that

the jury found for the plaintiff and failed to perform its task of

assessing damages. The trial judge was not obliged so to regard

the verdict. The defendant had insisted upon several defenses

Judicature Act, 1875, 38 & 39 Vict., ¢. 77, Order 58 (1) ), appellate pro-

cedure has been regulated by Rules of court. Compare Supreme Court of

Judicature (Consolidation) Act, 1925, 15 & 16 Geo. V, «. 49, $99 (f), as

amended by 18 Geo. V, ¢. 26, § 8. The present Rules provide that applications

for new trials are to be made to the Court of Appeal, which shall have the

same powers on the hearing as it exercises on an appeal, Se. Annual Prae-

tice, 1933, Order 39, Rules 1 and 2.

10Compare, also, James v. Evans, 149 Fed. 136; East St. Louis Cotton Oil

4 Co. v. Skinner Bros. Mfg. Co., 249 Fed. 439; Eteepain Co-op, Soc. +.

Lillback, 18 F. (2d) 912, 915.

a

2

:

@

“ wi

Fairmount Glass Works vs. Cub Fork Coal Co., et al. 7

and had set up a counterclaim. The plaintiffs were not entitled

to a directed verdict. The evidence was voluminous; and, on

some issues at least, conflicting. The instructions left the con-

tested issues of liability to the jury. The verdict may have rep-

resented a finding for the defendant on those issues;!' the reason

for the award of nominal damages may have been that the jury

wished the costs to be taxed against the defendant. The defendant

did not complain of the verdict. The record before us does not

contain any explanation by the trial court of the refusal to grant

a new trial, or any interpretation by it of the jury’s verdict."

In the absence of such expressions by the trial court in the ease at

|

)

;

bar, the refusal to grant a new trial cannot be held erroneous as

a matter of law. Appellate courts should be slow to impute to

juries a disregard of their duties, and to trial courts a want of

diligence or perspicacity in appraising the jury’s conduct. Com-

pare Union Pacific R. R. Co. v. Hadley, 246 U. 8. 330, 234: Dunn

v. United States, 284 U. 8. 390, 394.

Third. Iv is urged that the refusal to set aside the verdict was

an abuse of the trial eourt’s discretion, and hence reviewable.

The Court of Appeals has not declared that the trial judge abused

his diseretion, Clearly the mere refusal to grant a new trial where

nominal damages were awarded is not an abuse of diseretion. This

Court has frequently refrained from disturbing the trial court’s

approval of an award of damages which seemed excessive or inade-

18ee Olek v. Fern Rock Woolen Mills, 180 Fed. 117; Vanek v. Chicago

G. W. Ry. Co., 252 Fed. 871; Fulmele v. Forrest, 27 Del. 155. In a number

of instances state appellate courts have taken this view of the verdiet.

Spannuth v. C. C. CG. & St. ZL. Ry. Co., 196 Ind, 379; Hubbard v. Mason City,

64 Towa 245; Wavle +. Wavle, 9 Tun 125; Snyder v. Portland Ry., L. & P.

Co., 107 Ore, 673, 678-684; Krulikoski v. Sparling, 82 Wash. 474 (but see

Bingaman v. Seattle, 139 Wash. 68, 72-73); see Haven v. Missouri R. R.

Co., 155 Mo, 216, 223, Contra: Miller v. Miller, 81 Kans. 397; Bass

Furniture Co, v. Electrie Supply Co., 101 Okla, 293; see Johnson v. Frank-

lin, 112 Conn, 228, Compare Pugh v. Bluff City Excursion Co., 177 Fed,

399, in which the jury returned a verdict for nominal damages after the

trial court, upon the jury’s request to rule on the propriety of this, gave an

instruction couched in gencralities,

‘Compare Minneapolis, St. P. & 8. 8S. M. Ry. Co. v. Moquin, 283 U. 8.

520, in which the trial court, expressing the opinion that the verdict was ex-

cessive because of passion and prejudice, nevertheless refused, on the filing

of a remittitur, to grant a new trial.

Pee

j

£

3

°

iY

:

‘|

,

8 Fairmount Glass Works vs. Cub Fork Coal Co., et al.

quate, and the circuit courts of appeals have generally followed

a similar polity.** Whether refusal .o set aside a verdict for fail-

ure to award substantial damages may ever be reviewed on the

ground that the trial judge abused his diseretion, we have no oe-

easion to determine.

Fourth. The respondents contend that the District Court erred

in charging that the measure of damages was the difference be-

tween the contract price and the market price at the time of the

breach, instead of the market prices at the times for delivery: and

that this error may be relied upon here in support of the judgment

of the Court of Appeals. Compare United States v. American

Railway Express Co., 265 U. 8. 425, 435-436; Langnes v. Green,

282 U. 8. 531, 5388; Story Parchment Co. V. Paterson Co., 282

U. 8. 555, 561, There was no request for an instruction on this

subject and no objection was made to that given until after the

jury had retired. The trial judge was under no obligation to re-

call the jury. Moreover, the instruetion given and the refusal to

recall the jury were not assigned as error on appeal to the Court

of Appeals; nor did that court mention the matter. Under the

Rules of both the Court of Appeals and this Court the exeeption

taken after the jury retired came too late to furnish a basis for

review.’ We have, therefore, no occasion to consider the mean-

ing of the charge given, its correctness as a matter of law, or the

materiality of the error, if any, in giving it.

The judgment of the Cireuit Court of Appeals is reversed and

that of the District Court is affirmed.

138Sce Wilson v. Everett, 139 U. 8. 616, 621; Herencia v. Guzman, 219

U. S. 44, 45; Southern Ry, Co. v. Bennett, 233 U. 8, 80, 86-87; St. Louis

& Tron Mt. Ry. Co. v. Craft, 237 U. S, 648, 661; Louisville & Nash. R. R. Co.

v. Holloway, 246 U. 8, 525, 529; and eases cited in note 4, supra.

14S0e enses cited in note 5, supra. Compare, however, Cobb v. Lepisto, 6

F. (2d) 128.

i5See Rule 9, paragraph 1, of the Rules of the Cireuit Court of Appeals

for the Seventh Cireuit; and Rule 8, paragraph 1, of the Rules of this Court.

Also Phelps v. Mayer, 15 How. 160, 161; Hickory v. United States, 151

U. S, 303, 316; Ford Hydro-Eleetrie Co, v. Neely, 12 F, (2d) 361.

+ Sim

a

ate

ox

Rit

op RS

25s

SUPREME COURT OF THE UNITED STATES.

No. 314.—Ocroper Term, 1932.

Fairmont Glass Works, Petitioner, ) On Writ of Certiorari to

vs. the United States Cir-

Cub Fork Coal Company and Paragonf cuit Court of Appeals

Colliery Company, Respondents. for the Seventh Cireuit.

[January 9, 1933.]

Mr. Justice Srone and Mr. Justice Carpozo, dissenting.

A verdict found in contravention of the instructions of the

court may be reversed on appeal as contrary to law.

So much the prevailing opinion apparently concedes,

The verdict of $1 returned by the jury upon the trial of this

cause may not be squared with their instructions and hence was

properly annulled.

By the instructions of the trial judge they were required, if

they found that the defendant had broken its contract, to award

to the plaintiffs the difference between the contract price of the

coal and its market value, after allowance for the defendant’s

counterclaim. The evidence most favorable to the defendant, both

as to claim and counterclaim, made it necessary, if there was any

breach, to return a substantial verdict, the minimum being cap-

able of accurate computation. The distinction is not to be ignored

between this case of a breach of contract and the cases cited in the

prevailing opinion where the liability was in tort. Here the mini-

mum, if not the maximum, damages are fixed and definite. There

the diseretion of the jury was not subject to tests so determinate

and exact. The question is not before us whether even in such cir-

cumstances there may be revision on appeal. Cf. Pugh v. Bluff

City Excursion Co., 177 Fed. 399. Enough for present purposes

that in the circumstances of the case at hand the verdict for $1 is a

finding that the contract had been broken, and this irrespective

.

;

:

:

2 Fairmont Glass Works vs. Cub Fork Coal Co. et al.

of the motive that caused the verdict to be given. What the

motive was we cannot know from anything disclosed to us by the

record. Nothing there disclosed lays a basis for a holding that

the nominal verdict for the plaintiffs was designed to save them

from the costs which the law would have charged against them if

there had been a verdict for defendant. The jury were not in-

structed as to the liability for costs, and for all that appears had

no knowledge on the subject. Nor would such a motive, if there

were reason to ascribe it, rescue them from the reproach of dis-

obedience and error. It would merely substitute one form of mis-

conduct for another. It would do this, moreover, in contradiction

of the record. By no process of mere construction can a verdict

that nominal loss has resulted from a breach be turned into a ver-

dict that there had been no breach at all. On the face of the record,

the jury found there was a wrong, and then, in contravention of

instructions, refused, either through misunderstanding or through

wilfulness, to assess the damages ensuing.

Justice is not promoted in its orderly administracion when such

conduct is condoned.

Beem mmm ect ener: SMI TRE LE ELLOS TL LTA EIN ITU: I Re

i a tne