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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Forrest & Barr v. Henderson, Coulborn & co [1869] ScotLR 7_112 (26 November 1869) URL: http://www.bailii.org/scot/cases/ScotCS/1869/07SLR0112.html Cite as: [1869] ScotLR 7_112, [1869] SLR 7_112 |
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Circumstances in which it was held that it had been rightly left to the jury to say (1) whether a sum of £20 per day, stipulated for as “liquidated damages” in the event of delay in the construction of a large derrick crane, was, at the time when the agreement was made, exorbitant and unconscionable; and (2) whether any, or how much, should be paid as damages therefor.
Payment for the crane having been refused, and the jury having given interest on the price from the time it was due, though it was not stipulated for in the agreement, the Court refused to disturb the verdict.
Interest from the date of the verdict was allowed to the purchasers on the sum awarded to them as damages for the delay.
Only three fourths of their expenses were allowed to the pursuers, as the litigation was partly due to their having rashly signed an exorbitant agreement.
On 13th July 1863 Messrs Forrest & Barr, engineers, Glasgow, entered into an agreement to construct a large derrick crane for Messrs Henderson, Coulborn & Co., shipbuilders in Renfrew: The price was to be £2000, and the crane to be ready and erected in four months; and, by letter of 15th July 1863, various specifications in regard to the crane and payment for it were made. A considerable amount of correspondence as to the construction of the crane, and the delay in its construction, followed; and eventually, on 13th January, the following two letters passed between the parties.
Glasgow, 13 th Jang. 1864.
Messrs Henderson, Coulborn & Co.
Gentlemen—We hereby agree to have your crane ready for work by hand by the 16th of March (you giving us all necessary facility for erection at your place, as well as transit of same down the river), under a penalty of £20 sterling per day.
“ Forrest & Barr.
Slip-Dock, Renfrew, 13 th January 1864.
Messrs Forrest & Barr.
Gentlemen—Having this day received from you a letter of guarantee that the new crane you are constructing for us will be ready by the 16th March, under a penalty of £20 per day, to be deducted by us from the price if delay occurs, we at the same time promise to give every facility for the erection and transit of same from Glasgow Harbour. Owing to the great delay incurred, these agreements have been entered into with the view of granting a tangible security to us of the fulfilment of the contract entered into for the construction of the crane, dated the month of July 1863, and are granted in the shape of liquidated and ascertained damages, exigible in the case of default. We therefore, on these conditions, have granted this extended time for completion.—We are, Gentlemen, yours, &c. Henderson, Coulborn & Co.”
On 16th March 1864 Henderson, Coulborn &Co. wrote to Forrest &Barr, stating that as the crane had not been delivered they would hold Forrest &Barr bound to the terms of their letter of 13th January. The crane was delivered on 30th May 1864; and during the four succeeding years an incessant correspondence was carried on between the parties; and a series of complaints and alterations were made by and at the instance of Henderson, Coulborn &Co. But as payment was not made by them of the £2000, Forrest &Barr brought an action, concluding for payment of tire money, and of various outlays incurred by the orders of the defenders, under the two following issues:—
“1. Whether, in terms of the letters of 13th and 15th July 1863, and relative specification, Nos. 7 and 18 and 23 of process, the pursuers contracted to construct and did construct for the defenders a machine known as a derrick crane; and whether the defenders are indebted and resting-owing to the pursuers in the sum of £1400, or any part thereof, with interest thereon from 30th September 1864, as the balance of the price of the crane constructed as aforesaid?
2. Whether, on the employment of the defenders, the pursuers made the furnishings, did the work, and performed the services embraced in the schedule hereto annexed; and whether, in respect thereof, the defenders are resting-owing to the pursuers in the sum of £127, 16s. 8d., or any part thereof?”
And to these they appended a schedule of the said outlays and services, and a claim of interest.
The defenders met these with two counter issues:—
“1. Whether, by letters dated 13th January 1864, copies of which are contained in the annexed schedule, the pursuers agreed to have the said derrick crane ready for work by hand by the 16th of March 1864? Whether the pursuers failed to have said crane ready for work by hand by the said 16th of March 1864? and whether, in respect of said failure, the pursuers are resting-owing to the defenders the sum of £1500 sterling, or any part thereof, as the amount of liquidated damages at the rate of £20 sterling per day, as agreed on in said letters?
2. Whether, by letters dated 13th January 1864, copies of which are contained in the annexed schedule, the pursuers agreed to have the said Derrick crane ready for work by hand by the 16th of March 1864? and whether the pursuers failed to have said crane ready for work by hand by the said 16th of March 1864, to the loss, injury, and damage of the defenders?
Damages laid at £1500.”
To these were appended copies of the two letters above quoted.
The case was tried before Lord Neaves at Glasgow
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October Circuit. A great number of letters were produced, and parole evidence was adduced on the part of the pursuers to establish that the sum of £20 a-day mentioned in the said letters was, in the circumstances, an exorbitant and unconscionable amount as payable for the delay therein referred to; and, on the other hand, evidence was adduced on the part of the defenders to establish that the said sum of £20 a-day was not, at the time when the said letters passed, an unreasonable or exorbitant sum for the parties to fix and agree upon as the ascertained and liquidated damages to be paid by the pursuers to the defenders in the event of delay occurring, as mentioned in the said letters, and also that the parties had themselves fixed the amount after discussion. In the course of Lord Neaves' charge to the jury he left it to them to say “whether the £20 a-day mentioned in the letters of 13th January 1864 was, in the circumstances, an exorbitant and unconscionable amount, as payable for the delay referred to, and asked the jury, in that event, to find what was the utmost amount of actual damage that may have been incurred.”
To this the counsel for the defenders excepted, and asked for a direction to the jury—“That if the jury are satisfied that both the letters of 13th January 1864, contained in the schedule annexed to the issues, passed at that time between the pursuers and defenders, then in law the parties must be held to have liquidated and ascertained the damage, and that the defenders are entitled to a verdict under their first counter-issue for damages, calculated at £20 per day for the period of failure.” But Lord Neaves refused to give this direction, and also “that the legal construction of the pursuers' letter of 13th January 1864, annexed to the issues, is that the sum of £20 per day is to be paid as liquidated and ascertained damages in case of default, without the necessity of proving actual damage.”
The jury found for the pursuers on their first and second issues, with the exception of the sum of £17, 17s., to be deducted from the sum of £97, 17s., claimed as mechanics' time or wages, with interest on the sum of £80, being the balance of said £97, 17s. charged for time or wages, as per the schedule annexed to said second issue. They also found for the pursuers on the first issue of the defenders, and for the defenders on their second issue, with damages of £100.
The defenders having obtained a rule to have the pursuers ordained to show cause why the verdict should not be set aside, preferred the three exceptions to Lord Neaves' charge above specified.
From the evidence, it appeared that the crane was delivered at Renfrew in the end of May 1864; and Mr Forrest stated that the crane was ready to work by hand in the first week of June. He said he had never made so large a crane before; and that the defenders knew its construction would be a work of great difficulty. On the 13th of January 1864 he happened to be in Renfrew, and went to the defenders' office. He said “we had some talk about a guarantee for finishing crane in time. The defenders threatened that they would go elsewhere and get another crane made at my expense. I at last gave a letter, of which I am ashamed. Henderson followed me, and assured me he would not put the penalty in force if I would push on with the crane, and it was upon that footing that I gave the letter. Mr Henderson dictated, and I wrote the letter, being the first letter in defender's schedule.” He further said “Mr Henderson then dictated to Mr Coulborn a letter which Mr Coulborn wrote. I heard what he dictated. I was much agitated; I did not understand all the letter. They showed it to me, and I glanced over it. I did not take it away. I did not take possession of it, and never saw it off the table. Mr Henderson did not intimate to me that the second letter was in any way different from the first, nor did I think there was any difference.” But it was clearly proved that the last letter was written by Mr Henderson. The defenders' account was that they pressed Forrest for the crane, and threatened to go to Liverpool for one if he did not supply it at once. They had many orders for steamers, as they were then greatly needed, owing to the American war; but that, through not having the crane, they were unable to lift into the steamers the heavy beams, and boilers and machinery. Consequently they lost custom, and had steamers thrown on their hands; they had also to pile the machinery in their stores; and had eventually to use shears instead of the crane, and to make the workmen work in night shifts, and thus to pay more in wages. They also complained that the crane was very defective. They considered they had lost much more than £20 a-day—probably about £2500 of direct loss, and £10,000 to £12,000 otherwise. By the account of Mr Lobnitz, one of the partners, all the partners were present at the interview on the 13th January. They pressed Forrest to give up the contract; but as he was a verse to this, they bade him reduce to writing what he said, and told him they would fix the damages if the crane was not finished. Mr Lobnitz said, “Forest said he was quite sure he could finish the crane early in March. We told him the least amount of damages that would be at all adequate would be £50 a-day, as our whole work would be suspended unless we had the crane. We had six or seven ships to be finished within a month of that time, either new ships, or ships getting new machinery. Ultimately Mr Forrest wrote a letter. He objected to £50 as out of the question, but agreed to £20 a-day. We told him to give us the guarantee. Mr Forrest sat down and wrote a letter. He wrote it himself without anybody dictating it. It was his own expression of what was meant. We read the letter. We were all present. This was in the private room, where we had gone soon after we met. Mr Henderson said, ‘this does not imply all we mean.’ He said to Forrest, ‘you had better write it out more fully.’ Forrest said he was not a good hand at a pen, ‘you had better write it.’ Mr Henderson then sat down and wrote the second letter of 13th January. When he had written it he read it aloud to us all, Forrest being still present. He then gave the letter to Forrest to look at. It was, I suppose, approved of by them all, and was sent down stairs to get copied. It was returned and handed to Mr Forrest, who took it. And it was proved by the defenders' letter-book, and the clerk who had charge of it, that the letter was written by Mr Henderson.”
On 16th March 1864 the defenders wrote to the pursuers as follows:—“Dear Sirs,—The time named and agreed upon for the crane you are making for us, being delivered and ready to work by hand, having this day expired, we have to inform you that we shall hold you bound to the terms of your letter of the 13th January.— We are, &c., Hendebson, Coulbokn, &Co.”
And to this, the pursuers replied, on 19th
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March:—“Dear Sirs,—We duly received yours of 16th, and regret to say that we have not yet completed the large crane, the most part owing to parts of it, of very difficult construction, which you are well aware of, and partly owing to having some of it done out of our own work, and of which we have but little control, but every exertion is being made to have it done as soon as possible. As to the condition you name, we cannot allow. Forrest &Bake.” Dean of Faculty and Gifford, for the defenders, argued,—It should not have been left to the jury to say whether the damages claimed were “unconscionable.” “Liquidated damages ” may be intended to limit the damages; or to cover, or to exclude consequential damages. The words of the contract exclude decision by the jury as to the amount of damages. It is for the Court to say whether this is too unconscionable a sum to be “liquidated damages.” The moment the facts were decided it was for the Court to interpose on this point. The jury should not have been allowed to hear evidence on whether or no the damages were unconscionable. The first point is, whether the letters fixed the time when it was to be decided whether the damages were unconscionable? And the second point is, whether the Judge should have directed the jury as he did? The verdict gives interest for four years, but the contract does not give interest. On a review of the evidence, the defenders are justified in maintaining that the verdict should be set aside. Authorities— Johnstony v. Robertson, March 1, 1861; Craig v. Macbeath, July 3, 1863; Addison on Contracts, 1072–8; Sainter v. Ferguson, 7 M. G. & S. Reports, C. B. 716.
Solicitor-General and DEAS, for the pursuers, replied,—The amount of the damages was properly a jury question. If the utmost damage sustained by the defenders was £100, the Judge was justified in directing the jury that £20 a day was the limit of the penalty. The judge was entitled to direct the jury, if they thought £20 a day an unconscionable sum, to fix on what they thought a fair sum for damages.
At advising—
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Now, there are several objections to that direction. In the first place, it deals with one of the letters of the 13th of January only. But both of the letters of the 13th of January had been proved and put in evidence; and I must say this much more, that if the single letter of the pursuers of that date had been to be construed by itself, it would have been in the highest degree doubtful whether this could have been dealt with as liquidated and ascertained damages in any sense. But still further, the direction sought here was objectionable, because it asked the learned Judge to state to the jury what is the legal construction of that letter, and to say that its legal construction is that the sum of £20 a-day is to be paid as liquidated and ascertained damages. Now, I don't think that is its legal construction. But I don't think that the question which the learned Judge had to direct the jury about was a question of legal construction at all. I think it was a question as to the legal effect of the letters that passed on the 13th of January. So that altogether this second direction which was asked from the learned Judge, and which forms the subject of the third exception before us, appears to me to be quite objectionable, and that his Lordship did right in refusing to give it; and, therefore, that the third exception must be disallowed.
But the direction which was asked, and which forms the subject of the second exception, was this, “that if the jury are satisfied that both the letters of 13th January 1864, contained in the schedule annexed to the issues, passed at that time between the pursuers and defenders, then, in law, the parties must be held to have liquidated and ascertained the rate of damage, and that the defenders are entitled to a verdict under their first counter-issue for damages, calculated at £20 per day for the period of failure.” Now, I think this direction, as asked by the defenders, states very fairly what their contention was; and it amounts to this, that if these letters passed between the parties, then, upon the terms of the letters, quite independently of any evidence which was laid before the jury,— quite independently of any circumstances beyond the letters,—they are entitled, upon the occurrence of the failure beyond the 16th of March 1864, to £20 per day, and nothing else. The question is, whether that is a sound contention in point of law, looking not only to the terms of the letters, but to the nature of the case generally, as disclosed in the evidence with which the presiding Judge had then to deal. He refused that direction, and he gave this direction to the jury: he “left it to the jury to say whether the £20 a-day, mentioned in the letters of 13th January 1864, was, in the circumstances, an exorbitant and unconscionable amount, as payable for the delay referred to, and asked the jury in that event to find what was the utmost amount of actual damage that may have been incurred.” I think the learned Judge was justified in refusing to give the direction asked by the defenders, for this reason, among others, that if he had done so he would have been practically, reversing what we did when we settled these issues for the trial of the cause. He would have been telling the jury that in dealing with this matter they could not look beyond the two letters of the 13th of January; and that, whatever might be disclosed in the evidence,—however unfair and unreasonable, or, in other words, however exorbitant and unconscionable they might think the amount stipulated on the 13th of January,—they were bound to give a verdict for £20 a-day in favour of the, defenders if they were satisfied that 1 lie delay had actually occurred subsequent to the 16th of March. The objection to this direction, however, does not entirely depend upon what we did in adjusting the issues, because I think that these letters, although they are expressed in such a way as to make this £20 a-day liquidated and ascertained damage, are not beyond the reach of that equitable control which restrains a party from urging under such a contract an exorbitant and unreasonable claim. And, therefore, in no point of view could I sustain the legal proposition which is embodied in this direction sought of the Judge. But then there remains another very important and very delicate question upon the terms of the direction actually given by the learned Judge to the jury. The complaint which is made of the direction is, that he has left it to the jury to say whether this contract of the 13th of January 1864 regarding damages is to be enforced in its terms, or is to be modified as exorbitant and unconscionable, and the defenders contend that that is not a question for a jury, but a question for the Court. Now there is no doubt that in many cases, and I think one may say in most cases, this will be a question for the Court. In the great majority of cases of this description which are reported in our books, the question has occurred upon the face of the instrument in which the stipulation is made, and the Court have generally had no difficulty, dealing with the instrument itself, in saying whether the penalty or liquidated damages, whichever it might be called, was to be enforced in terms, or was to be modified. Stipulations regarding penal rent in contracts of leases are of this nature, and the Court have generally no difficulty, without taking any evidence or receiving any information except what appears upon
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Upon the first of these questions I cannot entertain any doubt,—I mean that a stipulation for liquidated damages in such a contract as this may be modified upon certain grounds; and I do not think it is necessary to refer to any authority upon that subject.
The second question is, Is it a sufficient ground for modification that the amount is exorbitant and unreasonable as at the time when it is stipulated? I answer that question also in the affirmative, with as little hesitation as I answered the first. If its being exorbitant and unreasonable as at the time the stipulation was made be not sufficient to authorise modification of the amount, I do not know what else could possibly be sufficient for that purpose.
If that be so, the whole question seems to come to turn upon whether this matter of being exorbitant and unreasonable was ascertained in a right and proper way. If it had not been right to send a question of this kind to a jury at all, of course we would not have granted the issue which we did grant. The point about whether one of the letters was or was not delivered, might have been otherwise ascertained, if that had been the only question in dispute between the parties; and there can be no doubt that, when we granted the issue to which I refer, we did consider the more important question, whether we ought to determine the question ourselves, or whether it ought to go to a jury.
But I do not rest upon that, because I am humbly of opinion that what we did in that respect was right in itself. It is quite true, as your Lordship has said, that there may be many contracts that stipulate for penalties or liquidated damages upon the face of them in connection with the admissions of the parties. On the admitted circumstances the Court can see whether the stipulation was exorbitant and unreasonable or not; and in that case undoubtedly we would determine the question without sending it to a jury at all. There may be cases in which we would authorise the ascertainment of two or three circumstances before we came to that conclusion. That may be so. But I think we must always look to what the case really is. Perhaps the most numerous class of cases in our books is that class which your Lordship has mentioned, of stipulations for additional rent in agricultural leases, if the tenant does certain things in the way of cropping which he is prohibited from doing. Now, there is one very palpable difference between a case of that kind and a case of this kind, viz., that there the tenant is prohibited from doing something that he can perfectly well refrain from doing. That is very different from a case in which he undertakes to do something and fails to do it; probably finding himself totally unable to do it. The case we are now dealing with is a case of this last kind. It is a case in which the pursuer undertook to do something, and made great exertions to do it. Whether he made all the exertions he could I do not know; but it is quite plain that he made great exertions to do it, and failed to do it. That of itself requires a knowledge of the circumstances in order to form an opinion in regard to it. You require to know what was the nature of the thing he undertook to do, and how it was that he came to fail to do it, whether it was wilful, or so grossly unjustifiable as to be equivalent to wilful; or whether it arose from circumstances to some extent altogether beyond iris own control. With a view to that, the first thing you require to know is what it was that he undertook. Now without evidence we were not in a position to know really what it was that he undertook. We were not in a position to know what this derrick crane was, what was the nature of its construction, or what difficulties there were in the way of its being constructed within a certain time—whether they were quite easy to surmount, or whether they were very difficult or impossible to surmount. And we see the light that is thrown upon that from the evidence, in which it appears distinctly enough that the undertaking was a very serious one and a very difficult one. It was undertaking to make a machine, one similar to which had not only never been made in Glasgow before, but, as far as the evidence goes, there was not one existing in Glasgow before of the size and weight and nature of this one. And, accordingly, when the pursuer failed to furnish it within the time first stipulated, what the defenders threatened him with was, not that they would get it from somebody else in Glasgow, but that they would go to Liverpool for it, where alone they could expect to get it within the time. All that required to be known and ascertained before judging anything about this. Not only so, but although I quite agree with what
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I should have said, with regard to this being a case in which it was right to inquire into the circumstances, that it is a failure to do something which was undertaken, but which was obviously very difficult to perform. The evidence shows the difficulties. Moreover, it was not at the outset, when the original bargain was made, that the stipulation for liquidated damages was entered into. The original bargain was in July 1863, and up to January 1864 the pursuer was making efforts. There is no reason to suppose that he was not making all the efforts he could to perform the contract, and it was after he had been at great expense in proceeding with the contract that the defenders step in and say “we will hold you liable for heavy damages in consequence of your not having done this in the time stipulated;” it is under that threat, and with this bold over him, that he is led to agree to the stipulation of £20 a-day if he do not finish it within the time specified. Now that appears to me to be a sort of case in which it is easier to interfere equitably to modify the amount of damages than if it had been in the original contract, when he might have shaken himself clear, and said “1 will not undertake it.” He has undertaken it, and incurred large expense in endeavouring to perform it, and then advantage is taken of the position into which he had got to get him to agree to a thing that, if he had not been in that position, he never would have agreed to at all. That, I think, is a position of matters peculiarly favourable for equitable interference to modify the amount
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But when it occurs with reference to a state of facts that is not admitted, but must be ascertained with reference to surrounding circumstances, about which the parties do not agree but differ, when it is sent to a jury for trial, I really cannot see how the Judge could dispose of the question himself on his own judgment, without taking that aid from the jury which I think was really the effect of sending the case to be tried by the jury. I think the Judge might have taken two modes of doing this: he might have requested from the jury a deliverance upon the specific question whether they thought the amount exorbitant and unconscionable in the circumstances under which the letters were exchanged, taking into view all the evidence prior to, at the same time, or subsequently, which legitimately bore upon that question; and having got that answered, if the answer was that they considered it not exorbitant or unconscionable, he might have directed the jury to find on the first of the defender's issues for them. If, on the other hand, the jury replied that they considered it was exorbitant or unreasonable, then his Lordship would have directed the jury to find the utmost amount of actual damage sustained by the defenders. He might have taken that course. It is not a very usual course, but his Lordship might have taken that course. I think that he took substantially the same course; because I read his direction to be simply this—If you, the jury, think that this was not an exorbitant and unconscionable amount under the circumstances you will find for that amount, and you need not give a verdict for the defenders on the second issue; but if you think it was an exorbitant and unconscionable amount, then you will find for the defenders on the second issue of damages,-—which is what they did. My opinion is, that his Lordship took the best and safest mode of disposing of it; and I see no ground for the first exception, that his Lordship “should have directed the jury ”— (reads); or the exception to the manner in which he left it to the jury to say whether, under the circumstances, it was an exorbitant and unconscionable amount. Having come to that conclusion on the bill of exceptions, I have no difficulty on the other part of the case. If the case was rightly left by the presiding Judge to the jury, I see no ground for disturbing the verdict of the jury.
Of one thing I entertain no doubt, viz., that the sum of £20 per day, stipulated for in the letters of 13th January 1864, must, so far as concerns the terms of the contract, be considered to have the legal character of liquidated damages, and not of penalty, properly so called. By the terms of the second of these letters it is expressly declared to be granted “in the shape of liquidated and ascertained damages exigible in the case of default.” About the meaning of these words there can be no dispute, and they fix the nature of the contract in such a way as to raise no question of construction. The stipulation in the contract is, in its
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But to hold—as I very clearly hold—the contract to be on its face one for liquidated damages, by no means terminates the controversy. For there is both principle and authority for maintaining that even a contract for liquidated damages is not beyond au equitable control and modification. If the amount stated is so utterly extravagant and unreasonable as to infer that, if awarded, it would not be proper damages, though so called, but would really amount to a penalty or punishment, there is strong ground for holding that the Court may, and ought, to interfere to deny effect to the mere words of the instrument, and to restrict the sum payable to the utmost amount of actual damages.
I consider the general rule to be, that it belongs to the Court, and not a jury, to exercise this power of equitable control. It is not with a view to construction of the contract that the Court interferes (in the present case I think no necessity of construction exists); it is in order to control the contract; but this office, I think, belongs to the Court just as much as that of construction.
But in exercising this function of control it may be necessary for the Court, just as it often is on a question of construction, to take the aid of a jury in the ascertainment of the grounds on which it is to proceed. The contract may not on its face disclose a case of exorbitance; I think does not do so in the present case. It may depend largely on facts and circumstances whether there is exorbitance or not. And as to these the Court may rightly require the finding of a jury as indispensable to the discharge of its own office.
With these general principles in view, the question arises, what the presiding Judge did in the present case, and whether he was right or wrong in so doing?
We must deal with the direction in this case with the fairness of construction to which all directions given in the course, often in the burry, of a trial are justly entitled. A Judge is not then adjusting nicely framed axioms for a legal textbook. He is giving, on the spur of the moment, a practical judgment for the guidance of all concerned; and in reviewing the direction we are not critically to carp at its terms, but fairly to estimate its true meaning and intent. We must also, I think, in considering the direction given, take into view the terms of the counter directions which were proposed to be substituted.
What the presiding Judge substantially did in the present case, as I have gathered from the bill of exceptions, was to put it to the jury whether in the circumstances, that is, the circumstances in which the contract was made, the sum of £20 a-day was “an exorbitant and unconscionable amount as payable for the delay referred to; ” and if they answered this in the affirmative, to hold that the contract was one to be controlled; that a verdict should be in consequence returned for the pursuers on the first counter issue; and that the jury should go on to inquire under the second counter issue what was the utmost amount of actual damage. This was not done in so many words; hut I think it is what in substance was done. The proceedings may be described not unreasonably by saying that what the Judge did was to consult the jury whether, in their estimation, the sum was at the date of the contract exorbitant and unconscionable, and to declare that if they answered affirmatively he exercised the judicial function of controlling the contract, and laid down that nothing more than the utmost amount of actual damage could be recovered.
1 am not prepared to say that it is incompetent in such a case to reach the judicial conclusion as to whether the sum claimed should be restricted to actual damage or not, by asking the jury whether in their estimation, as practical men of business, the sum stipulated for was at the time exorbitant and unconscionable. It may happen in many cases that to take the opinion of practical men of good sense on this point is the only possible mode of reaching a satisfactory conclusion. In other cases it may be proper to direct the inquiry of the jury to specific facts; and, according as they may find on these facts, to restrict the claim or not. But the facts may be often so difficult of extrication, and so complicated by the intermingling opinions of rival experts, that the only judicious mode of reaching a satisfactory result is to put the matter to the judgment of men of plain common sense, acquainted with everyday business. I am not prepared to say that in the present case this was other than the most judicious course.
I do not therefore dissent from the judgment, that the exceptions ought to be disallowed. But I desire to add, before concluding, that I think it ought not to be inferred from the judgment that in every case whatever in which such a question goes to jury trial the matter is to take the stereotyped course of the jury being asked whether in their opinion the sum stipulated was exorbitant and un-conscionable. I conceive the true legal course in such a case is not for the Judge simply to roll over the whole question on the jury, but himself to decide, with the benefit of the jury's assistance, whether the contract sum is or is not to be restricted to actual damage. The question proper to be put to the jury may vary with the circumstances of the case; and I do not think that any absolute rule, fettering the Judge's discretion as to the question he is to put, can be expediently laid down beforehand.
With regard to the motion for a new trial, I think the points raised were all of them, without exception, points proper for the determination of the jury on the evidence; and I do not consider the jury to have gone so far wrong as to warrant their verdict being disturbed.
Page: 121↓
These are the circumstances in which this case was sent to be tried. I do not wish to defend either the course that was taken or the verdict, so far as we have to do with it, by mere reference to the procedure that took place. I think the procedure was right. The Lord Ordinary, I think, prematurely found that this could be restricted; because, although it is quite true that in some circumstances we may see at once that it ought not to be restricted, while on the other hand we may see at once that it is not restrictable, there are and must be cases in which a court of law cannot know whether it is an unreasonable and iniquitous exaction or not. This appears to me to be one of those cases. A derrick crane is not a nomen juris, so that we should know what the value of it or of the want of it is; nor do we know all the modes in which the shipbuilding trade may be affected by the want of it or the having it. The defenders were prepared with evidence to show that it was a most reasonable stipulation; and if that had been proved to the satisfaction of any person who was the judge of it, the Lord Ordinary's view must at once have gone. Both parties were allowed an opportunity of entering into that, and did so.
What was the Judge to do in these circumstances? If the defenders' contention implied that considerations of equity and iniquity were altogether to be disregarded, I think that was wrong. On the other hand, if it was that the Judge was to take into consideration the evidence of reasonable and unreasonable on both sides, and was himself to decide that, I should certainly have felt that a very difficult task; and the general rule is, that the Judge should leave these questions to the jury. The Judge is not to judge of credibility or of veracity, or of the weight of witnesses. He is to judge whether the amount of evidence is sufficient to go to a jury, but he is not the judge of which shall be believed and which not. That is for the jury, and therefore I cannot see how the Judge could exercise the function of answering the question of whether this was exorbitant and unreasonable or not, i.e., unreasonable so that a man with a good conscience towards his neighbour, and seeking to do to others as he would be done by, would not impose or exact. That is the sort of question I left to the jury. It is quite true the Court will restrict this. But if the Court requires data, the act is still their restriction, but dependent and contingent on these elements, which, in the circumstances of the case, are dark to them till they are enlightened by evidence of those who are the best judges of the facts. These are the grounds upon which I endeavoured to conduct the case, and I cannot say that I am convinced they were not the right grounds. It is a difficult thing to adjust a special verdict; and the question is, whether it has been so erroneously done as to justify the Court in setting aside the result at which the jury arrived. Endeavouring to apply my mind to that question impartially, I cannot say that I think so.
Page: 122↓
The pursuers were only allowed three-fourths of the taxed amount of their expenses, as the litigation was in some measure due to their rashly signing the letter of 13th January 1864.
Agents for Pursuers— Duncan, Dewar & Black, W.S.
Agents for Defenders— J.W. & J. Mackenzie, W.S.