COMMENTARIES ON EQUITY JURISPRUDENCE. CHAPTER XIX. COMPENSATION AND DAMAGES. [* § 794. Courts of equity do not commonly award damages. § 794 a. But will for breach of duty in trustees and some other cases. § 795. Damages ascertained by reference to master or jury. § 796-798. Will not award damages except as incidental to other relief, and where specific performance should be decreed. § 799. Other cases rest upon peculiar grounds, or involve fraud. § 799 a. Equitable damages awarded defendant as compensation. § 799 b. Equity will not award damages for useful improvements.] § 794. IT is in cases of bills brought for a specific performance that questions principally (although not exclusively) arise, as to compensation and damages being awarded by courts of equity; and therefore it is convenient, in this place, to consider the nature and extent of the jurisdiction, exercised by courts of equity as to compensation and damages. It may be stated, as a general proposition, that, for breaches of contract, and other wrongs and injuries, cognizable at law, courts of equity do not entertain jurisdiction to give redress by way of compensation or damages, where these constitute the sole objects of the bill. For, wherever the matter of the bill is merely for damages, and there is a perfect remedy therefor at law, it is far better that they should be ascertained The same principle of compensation and damages is applied in granting relief EQ. JUR. VOL. II. 1 against penalties and forfeitures, as will be seen in a future page. by a jury than by the conscience of an equity judge.1 And indeed the just foundation of equitable jurisdiction fails in all such cases, as there is a plain, complete, and adequate remedy at law. Compensation or damages (it should seem) ought, therefore, ordinarily to be decreed in equity only as incidental to other relief sought by the bill, and granted by the court; 2 or where there is no adequate remedy at law; or where some peculiar equity intervenes. Thus, for example, if, pending a suit for a specific performance of an agreement for a demise of quarries, a part of the subject-matter of the demise is abstracted, compensation may be obtained therefor by a supplemental bill.4 1 Gilbert, For. Roman. ch. 12, p. 219; Clifford v. Brooke, 13 Ves. 130, 131, 134; Blore v. Sutton, 3 Meriv. 247, 248; Newham v. May, 13 Price, 749, 752; Wiswall v. McGown, 2 Barb. 270; Shepard v. Sanford, 3 Barb. Ch. 127. 2 Lord Chief Baron Alexander, in Newham v. May (13 Price, 752), said: "The cases of compensation, in equity, I consider to have grown out of the jurisdiction of courts of equity, as exercised in respect to contracts for the purchase of real property, where it is often ancillary, as incidentally necessary to effectuate decrees of specific performance." And he added: "It is not in every case of fraud that relief is to be administered in equity. In the cases, for instance, of a fraudulent warranty on the sale of a horse, or any fraud in the sale of a chattel, no one, I apprehend, ever thought of filing a bill in equity." Ante, § 779. 3 Newham v. May, 13 Price, 732; Ranelaugh v. Hayes, 1 Vern. 189; ante, § 711. 4 Nelson v. Bridges, 2 Beavan, 239. In this case Lord Langdale said: “It has already been declared that the plaintiff is entitled to a specific performance of the agreement; but, pending the proceedings, the very subject of the agreement, to which the plaintiff has by the decree been declared entitled, has been abstracted. The stone, or a quantity of the stone, which the plaintiff had obtained a license to quarry, has actually been taken away by the defendant Wordsworth; so that while the performance of the agree ment has been resisted and delayed by the defendants, they, or one of them at least, has taken away a portion of the very subject-matter of the suit, and the plaintiff has been thereby for ever deprived of the full benefit of his contract. If that circumstance had been known at the first hearing, I cannot have the least doubt but that the court would, in the exercise of its jurisdiction, have put in a due course of investigation the question of the amount of compensation which ought to be made to the plaintiff. This matter, it appears, was not brought to the attention of the court at that time, and a supplemental bill is now filed by the plaintiff, for the purpose of obtaining compensation. It is said that such compensation might originally have been had at law; or, if not, that at least it might have been obtained at law, by perfecting the decree for the specific performance of the agreement in some particular form. I am of opinion that it is not necessary for this court, when it has once entertained jurisdiction in a case, to resort to. that circuitous mode of giving relief; I think, moreover, that if this matter had been before the court at the first hearing, it would have been put in a proper train of investigation. Under these circumstances, therefore, it appears to me that the plaintiff is now entitled to relief; but the form in which that relief is to be given is certainly a matter of very serious consideration. I think that the amount of what is due to the plaintiff ought to be ascertained by means of an action at law; and I do not clearly see how it can be satisfactorily done in any other way. In this, and perhaps in all cases, the profit made by the defendants is not the measure of the damages done to the plaintiff; for we find that the quarry was not worked in a way to make the most of it. § 794 a. So strictly has the rule been construed, that it has been thought that, even in cases where no remedy would exist at law, as, for example, in cases where a trustee, by a breach of his trust has injured the property, a court of equity would. not award damages therefor, although, if by reason of such breach of trust, the trustee had made profits, it would make him accountable therefor. But it certainly may admit of some question, whether, in a case of that character, where there would otherwise be an irreparable injury and wrong, a court of equity ought not to grant redress to the injured party, since at law there would be no remedy.1 § 795. The mode by which such compensation or damages are ascertained is either by a reference to a master, or by directing an issue, quantum damnificatus, which is tried by a jury. The latter used to be almost the invariable course in former times, in all cases where the compensation was not extremely clear, as to its elements and amount; and this course is still commonly resorted to in all cases of a complicated nature. But the same inquiries may be had before a master; and in cases where such inquiries do not involve much complexity of facts or amounts, this course is now often adopted.2 Mr. Bridges, thinking the validity of the 1 The Corporation of Ludlow v. Greenhouse, 1 Bligh (N. s.), 18, 57, 58. In this case, Lord Redesdale said: “Is there any case in which the Court of Chancery has awarded damages for a breach of trust? Lord-Keeper Coventry was of opinion that he could not. In the case of a chapel of which I am trustee, Lord Coventry declared that where there was a gross breach of trust, all he could do was to make the persons who had committed it account for all the profits they had made, though the thing had received considerable damage." See Pratt v. Law, 9 Cranch, 456; post, § 799. [* There can be no question that a trustee is liable, in a court of equity, to respond in damages for culpa ble negligence in the performance of his duty, whereby he failed to receive such profits upon the trust estate as he otherwise would have done. Osgood v. Frank-. lin, 2 Johns. Ch. 1; s. c. 14 Johns. 527; Willard's Eq. Jur. 614; Brightly, Eq. Jur. 356. It seems a solicitor may be sued by his client in equity for loss resulting from his negligence, but not if the claim is nakedly for damages. See Chapman v. Chapman, L. R. 9 Eq. 276.] 2 Gilb. For. Roman. 219; Denton v. Stewart, 1 Cox, 258; Greenaway v. § 796. Wherever compensation or damages are incidental to other relief, as, for instance, where a specific performance is decreed upon the application of either party, with an allowance to be made for any deficiency as to the quantity, quality, or description of the property, or for any delay in performing the contract; there, it seems clear, that the jurisdiction properly attaches in equity; for it flows, and is inseparable from the proper relief.1 So, where a bill is brought by the vendor against the vendee for a specific performance of the contract of sale, and of a payment of the purchase-money, if the decree is for a specific performance, equity will decree the payment of the purchase-money also, as incidental to the general relief, and to prevent a multiplicity of suits, although the vendor might in many cases have a good remedy at law for the purchase-money.2 So, where a contract for the sale of lands has been in part executed by a conveyance of a part of the lands by the vendor, but he is unable to convey the residue, equity will decree the payment to the vendee of a proportionate part of the purchase-money with interest, if he has paid more than the part of the lands conveyed entitle the vendor to hold. But, where a specific performance is denied, there is somewhat more difficulty in establishing the propriety of exercising a general jurisdiction for compensation or damages. It was strongly said by the Master of the Rolls, on one occasion, where a specific performance was sought and refused, because the vendor had rendered himself incapable of performing the contract: "The party injured by the non-performance of a contract has the choice to resort, either to a court of law for damages, or to a court of equity for a specific performance. If the court does not think fit to decree a specific performance, or finds that the contract cannot be specifically performed; either way, I should have thought there was equally an Adams, 12 Ves. 401, 402; Todd v. Gee, 17 Ves. 278, 279; Phillips v. Thompson, 1 Johns. Ch. 150; Pratt v. Law, 9 Cranch, 493, 494; Parkhurst v. Van Cortlandt, 1 Johns. Ch. 273, 285, 286; Watt v. Grove, 2 Sch. & Lefr. 513; 1 Fonbl. Eq. B. 1, ch. 3, § 8, note (b); 2 Fonbl. Eq. B. 5, ch. 1, § 5, note (s); Woodcock v. Bennet, 1 Cowan, 711. 1 Ante, § 709, 711. See Todd v. Gee, 17 Ves. 278, 279; Grant v. Munt, Cooper, Eq. 173; Ferson v. Sanger, Davies, 260; Newham v. May, 13 Price, 752 (x); Mortlock v. Buller, 10 Ves. 306, 315; Dyer v. Hargrave, 10 Ves. 507; Howland v. Norris, 1 Cox, 31; Halsey v. Grant, 13 Ves. 77; Forrest v. Elwes, 4 Ves. 497; Hedges v. Everard, 1 Eq. Abr. 18, pl. 7; Hepburn v. Auld, 5 Cranch, 278. 2 See Brown v. Haff, 5 Paige, 235, 240; Withey v. Cottle, 1 Sim. & Stu. 174; Adderley v. Dixon, 1 Sim. & Stu. 607; Cathcart v. Robinson, 5 Peters, 209; ante, § 711, 723, 772, 775, 790. 3 Pratt v. Law, 9 Cranch, 456. 4 Sir William Grant, in Greenaway v. Adams, 12 Ves. 401; ante, § 711, 714, 723. end of its jurisdiction; for, in the one case, the court does not see reason to exercise the jurisdiction; in the other the court finds no room for the exercise of it. It seems that the consequence ought to be, that the party must seek his remedy at law." But, upon the footing of authority, he nevertheless proceeded to decree compensation in that case, by reference to a master.1 § 797. There is much weight in the reasoning of the Master of the Rolls; and the only assignable ground upon which the jurisdiction can be maintained in such a case, is to prevent a multi 1 Ibid.; s. P. Denton v. Stewart, 1 Cox, 258; 1 Fonbl. Eq. B. 1, ch. 1, § 8, note (z); id. ch. 3, § 8, note (b); 2 Fonbl. Eq. B. 5, ch. 1, § 5, note (s); ante, § 711, 714, 723. In Sainsbury v. Jones, 5 Mylne & Craig, 1, 3, Lord Cottenham said: "I certainly recollect the time at which there was a floating idea in the profession, that this court might award compensation for the injury sustained by the non-perform ance of a contract, in the event of the primary relief for a specific performance failing and I have formerly seen bills praying such relief; but that arises from my having known the profession sufficiently long to recollect the time when the decision of Lord Kenyon, in Denton . Stewart (1 Cox, 258), had not been formally overruled; but at that time very little weight was attached to it, and very few instances occurred in which plaintiffs were advised to ask any such relief; and for a short time Sir William Grant's decree in Greenaway v. Adams (12 Ves. 395) added something to the authority of Denton v. Stewart, although he threw out strong doubts, as to the principle of that case. This, however, lasted but a short time, for Greenaway v. Adams occurring in 1806, Lord Eldon, in 1810, in Todd v. Gee (17 Ves. 273), expressly overruled Denton v. Stewart; and from that time there has not, I believe, been any doubt upon the subject. Certainly, during the thirty years which have elasped since that time, I have never supposed the granting any such relief as being within the jurisdiction of this court. Indeed, before that case, Sir W. Grant, in 1807, in Gwillim v. Stone, 14 Ves. 128, refused to follow his own decision in Greenaway v. Adams, because the plaintiff did not ask a speci fic performance; that is, in a case pre. cisely the same as the present; for, upon this appeal, the plaintiff does not ask a specific performance. Had it been supposed that this court had the jurisdiction contended for, every bill for a specific performance would have prayed compensation, in the event of the vendor proving not to have a good title. It is true that, in this case, the compensation sought is not against the vendor, but against a person who falsely assumed authority to sell; but this places the case still wider from the principle upon which this court exercises its jurisdiction in cases of contract; because, as against such agent there is no case of contract, but a mere claim for compensation, for damages arisen from there being none which the purchaser can enforce." In Woodcock v. Bennet (1 Cowen, 711), the court held that where a party has put it out of his power to perform his contract speci fically, the bill for a specific performance ought to be retained, and an equivalent in damages awarded, to be assessed, on reference to a master, or by a jury upon an issue of quantum damnificatus, as the circumstances may require. See also Andrews v. Brown, 3 Cush. 130. [The subject is fully discussed in Milkman v. Ordway, 106 Mass. 232; where it is held that where specific performance is impossible, owing to defect in title, capacity, &c., developed in the course of the proceedings, and not known to the plaintiff at the time of bringing suit, compensation may be decreed. See ante, § 749 c, note. See also Harrison v. Deramus, 33 Ala. 463; Tenney v. State Bank, 20 Wisc. 152; Sugg v. Stowe, 5 Jones (N. C.), Eq. 126; O'Meara v. North Am. Ins. Co., 2 Nev. 112; Carroll v. Wilson, 22 Ark. 32.] |