Statement of Facts.

rags were very filthy, emitted a sickening smell, and were infected with the small-pox; that twelve days afterwards the small-pox broke out in the mill, and caused the death of some of the work-people, disabled others, frightened away some, and prevented customers from coming to the mill; that the infected condition of the rags was the cause of the breaking out of the disease; that the defendants supplied the sick with provisions and other necessaries to the amount of $200, and were obliged to run their mill short-handed, made less paper, and lost a considerable part of a profitable country trade; but offered no other evidence of the particulars of the damage which they had suffered.

While one of the defendants was on the witness stand, their counsel asked him what he estimated the amount of his damage to be. The plaintiff's counsel objected to the question, on the ground "that it was not competent for the witness to give a lumping estimate of the defendants' damages, but that he should specify the items of damage, and testify to facts, his opinion being inadmissible." The court sustained the objection and excluded the evidence.

The court also excluded testimony of one of the persons who had taken the small-pox, that the breaking out of the disease was caused by these rags; and testimony of another workman, that two of his children had taken the small-pox by playing with infected rags.

In answer to an inquiry of the court, just before charging the jury, "what, under the proofs, the position of the defendants was," their counsel stated that "the defendants only insisted upon their counterclaim for damages on the cause of action growing out of the infected condition of the rågs;" and thereupon the court charged the jury as follows:

"The sale at the price sued for and the delivery of the rags are admitted, and it is shown that the defendants used the whole of them in the manufacture of paper, which they disposed of. The defendants, however, allege, and this is the sole ground of defence insisted on, that the rags were infected with small-pox, and introduced the disease among the defendants' employees, a number of whom took small-pox, and

Opinion of the Court.

several of whom died of the disease; and the defendants maintain that, by reason of such introduction of the disease into their mill, they were injured in their business, and sustained damages in excess of the plaintiff's claim, and hence that they not only have a full defence to this claim, but are entitled to a certificate for the damages sustained by them in excess of his claim."

"The defendants go to the length of charging that the plaintiff knew the rags were infected with small-pox when he shipped them to the defendants, and in so doing acted with positive bad faith to the defendants. But it seems to me that the evidence would not justify the jury in so finding, or the court in submitting to the jury the question of bad faith; nor can I now recall evidence sufficiently showing that the plaintiff was even guilty of culpable negligence in his purchase of these rags.

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However, the damages claimed by the defendants, if not in their nature too remote and speculative, are, it seems to me, altogether uncertain under the evidence. I am of opinion, and charge you, that the evidence in the case is not such as would enable the jury to ascertain the amount of damages, if any, which the defendants sustained.

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Upon the whole case, the court instructs the jury to find a verdict for the plaintiff for the amount of his claim.”

The jury returned a verdict for the plaintiff accordingly, and the defendants excepted to the rulings excluding evidence, and to those portions of the charge above printed in italics, and sued out this writ of error.

Mr. W. Macrum for plaintiffs in error. Mr. A. H. Clarke was with him on the brief.

Mr. William F. Mattingly for defendant in error. Mr. Simon Wolf was with him on the brief.

MR. JUSTICE GRAY delivered the opinion of the court.

This was an action of assumpsit by a rag-dealer against papermakers to recover $813.03 for rags sold and delivered by him to them. The plea was in the peculiar form used in Pennsylvania, with a counterclaim. The plaintiff had a verdict and

Opinion of the Court.

judgment, and the case comes before us on a writ of error sued out by the defendants.

The plaintiff's motion to dismiss the writ of error, for want of a sufficient amount in dispute to give this court jurisdiction, cannot be sustained, since the record shows that the defendants sought to recover the sum of $7000 in excess of the plaintiff's claim, and this sum was therefore in dispute. Ryan v. Bindley, 1 Wall. 66; Act of February 16, 1875, c. 77, § 3, 18 Stat. 316. Whether the defendants could lawfully recover it against the plaintiff in this case was a matter affecting the merits, and not the jurisdiction.

Before proceeding to consider the rulings and instructions at the trial, as applied to the facts of the case, it will be convenient to refer to the general rules of law, and to the statute and decisions in Pennsylvania, which bear upon the subject.

When a dealer contracts to sell goods which he deals in, to be applied to a particular purpose, and the buyer has no opportunity to inspect them before delivery, there is an implied warranty that they shall be reasonably fit for that purpose. Jones v. Just, L. R. 3 Q. B. 197, 203; S. C. 9 B. & S. 141, 150; Kellogg Bridge Co. v. Hamilton, 110 U. S. 108. In such a case, in Pennsylvania, as at common law, the action upon the warranty may be either in contract or in tort. Vanleer v. Earle, 26 Penn. St. 277; Schuchardt v. Allens, 1 Wall. 359, 368. If the seller falsely represents to the buyer that the goods are of a certain quality, or fit for a certain purpose, he is liable to an action for the fraudulent representations, although they are not in a form to constitute a warranty; and in such a case the action must be in tort in the nature of an action of deceit, and must be supported by proof that he knew the representations to be false when he made them. Kimmel v. Lichty, 3 Yeates, 262; McFarland v. Newman, 9 Watts, 55;1 King v. Eagle Mills, 10 Allen, 548.

The damages recoverable for a breach of warranty, or for a false representation, include all damages which, in the contemplation of the parties, or according to the natural or usual course.

1 S. C. 34 Am. Dec. 497.

Opinion of the Court.

of things, may result from the wrongful act. For instance, if a man sells hay or grain, for the purpose of being fed to cattle, or such as is ordinarily used to feed cattle, and it contains a substance which poisons the buyer's cattle, the seller is responsible for the injury. French v. Vining, 102 Mass. 132; Wilson v. Dunville, 4 L. R. Ir. 249, and 6 L. R. Ir. 210. So, if one sells an animal, warranting or representing it to be sound, which is in fact infected with disease, he is responsible for the damages resulting from a communication of the disease to the buyer's other animals; either in an action of tort for the false representation; Mullett v. Mason, L. R. 1 C. P. 559; Jeffrey v. Bigelow, 13 Wend. 518;1 Faris v. Lewis, 2 B. Monroe, 375; Sherrod v. Langdon, 21 Iowa, 518; Marsh v. Webber, 16 Minn. 418; or in an action on the warranty, either in tort; Packard v. Slack, 32 Vt. 9; Smith v. Green, 1 C. P. D. 92; or even in contract. Black v. Elliott, 1 Fost. & Finl. 595. See also Randall v. Newson, 2 Q. B. D. 102.

In an action for the price of goods sold, or of work done, the defendant may set up a breach of warranty or a false representation as to the goods, or a defective performance of the work, by way of recoupment of the sum that the plaintiff may recover. In England, this is only allowed so far as it affects the value of the goods sold, or of the work done. Davis v. Hedges, L. R. 6 Q. B. 687, and cases there cited. But in this country the courts, in order to avoid circuity of action, have gone further, and have allowed the defendant to recoup damages suffered by him from any fraud, breach of warranty, or negligence, of the plaintiff, growing out of and relating to the transaction in question. It will be enough to cite a few cases in which the extent and the reason of the doctrine have been clearly brought out.

In a leading Massachusetts case, in which fraudulent representations as to the soundness of a horse sold were allowed to be set up in defence of an action on a promissory note given for the price, although the horse had not been returned to the seller, Mr. Justice Dewey, after reviewing the previous decisions

1 S. C. 28 Am. Dec. 476.

Opinion of the Court.

in England and in New York, said: "The strong argument for the admission of such evidence in reduction of damages in cases like the present is, that it will avoid circuity of action. It is always desirable to prevent a cross action where full and complete justice can be done to the parties in a single suit, and it is upon this ground, that the courts have of late been disposed to extend to the greatest length, compatible with the legal rights of the parties, the principle allowing evidence in defence or in reduction of damages to be introduced, rather than to compel the defendant to resort to his cross action." Harrington v. Stratton, 22 Pick. 510, 517. And in a later case in that state, Chief Justice Bigelow observed, that the essential elements on which the application of the principle of recoupment depended were two only: "The first is, that the damages which the defendant seeks to set off shall have arisen from the same subject matter, or sprung out of the same contract or transaction, as that on which the plaintiff relies to maintain his action. The other is, that the claim for damages shall be against the plaintiff, so that their allowance by way of set-off or defence to the contract declared on shall operate to avoid circuity of action, and as a substitute for a distinct action against the plaintiff to recover the same damages as those relied on to defeat the action." Sawyer v. Wiswell, 9 Allen, 39, 42.

In Bradley v. Rea, 14 Allen, 20, in an action to recover the price of a number of pigs sold in one lot, it was held that the defendant might set up in defence that the pigs sold were warranted or fraudulently represented by the plaintiff to be sound and free from infectious or contagious diseases, and prove the existence of such a disease in some of the pigs at the time of the sale, which afterwards spread to the others, and of which they died. Mr. Justice Hoar, delivering judgment, after referring to Mullett v. Mason, L. R. 1 C. P. 559, above cited, in which it was held that in an action for fraudulently misrepresenting that a cow sold was free from infectious disease, the buyer, if he placed the cow with others which thereby caught the disease and died, could recover as damages the value of all the cows, said: "The nature of the subject matter of the warranty