Brisban v. Boyd

4 Paige Ch. 17 | New York Court of Chancery | 1832

The Chancellor.

The questions in controversy between the parties in this case relate to two items in the account as settled by Hemden, the former partner of Brisban. By the articles of copartnership between Brisban and Hemden, which are admitted by the stipulation in the cause, it appears that •they entered into a limited partnership for the term of five years, commencing on the 10th of October, 1817. During the continuance of this copartnership, the defendants Boyd and Suydam were their agents or factors in the city of New-York. In 1822 Brisban and Hemden shipped 113 bales of cotton from Alabama, consigned to Boyd and Suydam, as commission merchants at New-York, to be sold for the account of the shippers; which cotton was received by them in June of that year. In consequence of a regulation of the board of health of New-York, it became necessary to store the cotton out of the city, and it was accordingly stored at Brooklyn, the usual place of deposit, under such circumstances; where it was soon after burned and lost. The complainant claims to charge Boyd and Suydam with this loss, on the ground that it was their duty to have insured the cotton thus deposited by them in a building which was liable to be destroyed by fire. The cases cited by the complainant’s counsel, in relation to this claim, show that a commission merchant has such an interest in goods consigned to and received by him for sale, that he may insure in his own name to the full value of the goods. But it does not follow from this that it is his duty, without any express or implied directions to that effect from his principal, to insure the goods for the benefit of such principal. And there is no evidence in this case of any usage of trade, from which the duty of the defendants to insure the goods can be implied. If the defendants had made themselves liable for the loss, by their negligence in placing the cotton in an unsafe place of deposit when a safe one might easily have been obtained, as that fact is not admitted in the answer, the complainant should have filed a replication, and should also have established the fact of negligence by proof. As the case now stands, upon bill and answer, I think Boyd and Suydam are not chargeable with the loss upon the cotton which was destroyed by fire.

Upon the other question, as to the loss upon the 300 bales consigned to them on joint account, I see no reason to change the opinion expressed by me, in March, 1830, upon the application to dissolve the injunction. By the letter of the 16th of January, 1823, Hernden, acting in behalf of his firm, informs Boyd and Suydam that he has not been able to execute their order for cotton, for the prices at which he was limited by them; that Brisban.and Hernden had therefore drawn on them for money, to be invested in cotton which they had concluded to purchase on their own account; and states that they expected to ship 600 bales or more. But he proposes to Boyd and Suydam to permit him to consider 300 bales on joint account of themselves and Brisbin and Hernden, if they should elect to do so, and should give notice of such intention immediately after the receipt of that letter. That letter was received at New-York about the 13th of February. Boyd and Suydam immediately answered it, consenting to take the 300 bales on joint account, as proposed; and they requested Hernden to designate and mark the cotton on joint account, and to advise them when it was shipped. The moment this proposition was accepted by Boyd and Suydam, and the letter containing that acceptance had been transmitted to Brisban and Hernden, there was a valid contract for a joint adventure in the 300 bales of cotton; which contract neither party had a right to rescind, without the consent of the other. The connsel for Boyd and Suydam supposes that the request to designate and mark the 300 bales on joint account, and to inform them when it was shipped, were conditions imposed upon the acceptance of the proposition. I do not, however, so understand the letter of the 13th of February. That letter was an unconditional acceptance of the offer contained in the letter of the 16th of January, to which it was an answer. And what was said as to designating and marking the cotton, and informing them of the time of shipment, was merely directory as to the manner in which they wished the 300 bales belonging to the joint concern to be sent. These directions were substantially complied with, by the letter of the 12th of April, designating which of the 393 bales shipped were not to be considered on joint account if the consumers did not choose to take an interest in a greater number than the 300 bales. The marks upon the 93 bales, which were not to be considered on joint account, being designated, all the other bales, whatever particular marks they might have thereon, were of course to be considered by both parties as their joint property. In the execution of orders sent to merchants abroad, it can never be expected that every part of the letter of instructions should be taken literally. And it could not have been expected by Boyd and Suydam that Hernden should place on each of these 300 bales of cotton a particular mark; specifying in terms that it belonged to the joint concern of Boyd and Suydam and Brisban and Hernden. Their only object was to have the cotton so designated and marked, that with the aid of the correspondence connected with the shipment, Boyd and Suydam, the consignees, might be able to ascertain what portion of the shipment belonged to the joint concern, and what to Brisban and Hernden exclusively. This object was fully accomplished by the manner in which the property of each concern was distinguished in the letter of the 12th of April; which letter reached New-Yorlc before the arrival of the cotton.

The cotton having come to a losing market, and that fact not being communicated to Brisban and Hernden, they cannot in equity be bound by any acquiescence in the letter of the 11th of May, 1822, in which letter Boyd and Suydam thought proper to treat it as the sole property of Brisban and Hernden; intimaling at the same time, however, that it would probably produce a small profit.

Under the peculiar circumstances in which Hernden was placed, on his return to New-Yorb, I am not prepared to say he would not himself have been entitled to relief against a settlement, in which any of his substantial rights were disregarded. It is not necessary, however, to examine that question in this case, as he is only a defendant in the cause. And the counsel for Boyd and Suydam and of Hernden, upon the hearing, expressly signified to the court that they had no wish to take testimony as against each other, so as to litigate the matter between themselves. Brisban alone appears to be interested in the proper adjustment of the matters in difference between his firm and Boyd and Suydam.

As Boyd and Suydam expressly deny all knowledge of the partnership having terminated, at the time of the settlement with Hernden, in the fall of 1823, if they had sold goods or parted with the property to him as a partner, Brisban might perhaps have been liable to them in the same manner as if the partnership had continued. But after the actual dissolution of the firm, one of the partners cannot bind the other by the acknowledgment of a debt which is not legally or equitably due; or by giving a note for such supposed debt. (15 John. Rep. 409. 4 Mumf. Rep. 215. 9 Cowen’s Rep. 433.) The want of knowledge of the dissolution of the partnership cannot benefit a customer who loses nothing by his ignorance of the fact, and who is only to be placed in the same situation as he would have been if the fact had been communicated to him in season. A customer who sells goods to one of the former partners, on the credit of the firm, and without notice of the dissolution, may have a legal claim against his copartners for the goods sold. But if he was informed of the dissolution of the partnership immediately after the sale, and while the goods remained in his own hands undelivered, a court of equity never would permit him to recover for those goods, against the former partners of the vendee. So in this case, it being established by the written correspondence stated in these pleadings, that one half of the loss on the 300 bales of cotton should have been deducted from the balance due to Boyd and Suydam, on their accounts with Brisban and Hernden, they cannot be permitted to take advantage of the fact that they obtained the partnership note from Hernden without knowledge of the dissolution of the firm; and thereby enable themselves to recover a sum of money from Brisban which is not justly due.

The accounts between the parties must be re-stated, or taken before a master on a reference, for the purpose of ascertaining the balance, if any, which is really due to Boyd and Suydam from the firm of Brisban and Hernden; charging the former with one half of the loss upon the 300 bales of cotton, and rejecting the complainant’s claim for the 113 bales of cotton destroyed by fire. And the question of costs and all other questions and directions are to be reserved until the coming in of the master’s report.