Nathaniel L. v. Waddington

| N.Y. Sup. Ct. | Jan 15, 1818

Spencer, J.

delivered the opinion of the court. This cause has given rise to several novel and important questions; and when the interesting results, growing out of these questions, are duly estimated, it is impossible to approach them without great solicitude and anxiety.

In considering this cause, I have found it unnecessary to decide some of the points which were ably discussed by the counsel; for having arrived at a satisfactory conclusion on one of them, which must be decisive as to the plaintiff’s claim, T have considered it unnecessary to express any opinion on the others.

Upon the fullest reflection which I have been able to give to the subject, my opinion is, that the declaration of war between the United States and Great Britain produced a suspension during the war, or, ipso facto, a dissolution of the partnership previously existing between the defendants, so that the one is not responsible upon the contract, express or implied, of the other. It will be perceived that this proposition assumes the fact that the partnership between the defendants had not become dissolved by the efflux of time, or the acts of either of the partners, although this point is, in itself, very questionable. . The better conclusion from the evidence is, that the partnership expired by its own limitation during the war ; and the existence of the war would, at all events, dispense with the public notice which is, in general, necessary to the valid dissolution of a partnership.

The case discloses that the firm of Henry Waddington & Co. consisted of Henry and Joshua Waddington ; that Henry is a British subject, resident, before and during the war, in London, conducting the partnership concerns there, whilst the defendant was resident here. The negotiations which gave rise to the present suit took place in England, and exclusively with Henry Waddington, during the late war between this country and Great Britain.

It was admitted on the argument, and so the fact undoubtedly isj that the proposition I have advanced is neither supported nor denied by any judicial decisions or elementary writer of the common law; but, if I mistake not, it is supported by the strongest reasons, and by necessary analogy with adjudged cases.

The first inquiry is, what are the objects and ends of partnerships. They are entered into with the view, that, with the joint funds, skill, and labour of the several partners, the interests of the concern may be advanced and promoted. There may be, and frequently are, different inducements influencing each partner: one may have more capital and credit; another may have more skill, activity, and experience. The one may choose to be a dormant and inert-partner, furnishing an equivalent for the services and skill of the other, and leaving the business entirely to his control and management. But unexplained as this partnership is, we must understand it to be, an union with a view to the employment of the joint capital, labour, and skill of both the partners, for the purposes of internal and external commerce between this country and Great Britain. That the object of the partnership embraced both these objects of internal and external trade, would seem to be unquestionable from the local position of the partners.

That the death, insanity, and bankruptcy of one of the partners operates as a dissolution, was not questioned in the argument; and a respectable elementary writer, Mr. Watson, is of opinion that the marriage of a feme sole partner would produce the same consequence. The cases of Pearce v. Chamberlain, (2 Ves. 33.) and Sayer v. Bennet, (Watson, 382.) and several other cases cited by. him, all go to establish the general principle, that death, insanity, and bankruptcy, work a dissolution of partnerships ; and they proceed on the principle, that the other partners are not bound to admit the representatives of a deceased or insane partner, into the concern, the confidence having been originally placed in the personal skill and assistance of those no longer able to afford it.

• Let these principles be applied to thp present case, and it would seem that the same result is inevitable. In what situation did the war put the defendants, as regarded each other ? Most undeniably, the two nations, and all their citizens, or subjects, became enemies of each other, and the. consequence of this hostility was, that all intercourse and communication between them became unlawful. This is not only the acknowledged principle of the law of nations, but is also a part of the municipal jurisprudence of every country. I need not cite cases in support of a position, which has so repeatedly been recognised in the English courts, and in our own, possessing as well admiralty as common law jurisdiction. Another consequence of the war was, that the shipments made by each of the partners would be liable to capture and condemnation, by the cruizers of the government of the other; and another very serious evil attended them : no debts contracted in the partnership name could be recovered in the courts of either nation ; they not having, in the language of the law, a persona standi injudicio, whilst they were amenable to suits in the courts of both nations. (The Hoop, 1 Rob. 201.) It is true, the same disability to sue for debts due the firm antecedent to the war, would exist. This, however, does not weaken the objection ; it remains still an important item, in considering whether a partnership exists, when the new debts created are to be liable to the same disability. It appears, that Joshua Waddington is a citizen of the United States ; and it has been already mentioned that Henry Waddington is a British born subject. They owed different allegiances, and it became part of their duty to lend all their aid, in a vigorous prosecution of the war, the one to the United States, and the other to Great Britain; and, it appears to me, that it would not comport with policy or morality, that the law should imperiously continue a connection, when, by its very continuance, it would afford such strong inducements to a violation of that fidelity which each owes to his government.

Again ; all communication and intercourse being rendered unlawful, and it being a well-established principle, that either partner may, by his own act, dissolve a partnership, unless restrained to continue it for a definite period, by compact, in what manner could such intentions be manifested during the war ? It might, indeed, be made known to the public of one of the countries, but it could not be notified to the public of the hostile country; and thus, unless the war produced a dissolution, he would be responsible, notwithsj-an(jj[ng he had the desire to dissolve the connection, merely from inability to make known that determination ; an inability, produced by events utterly uncontrollable. When the objects and intentions of an union of two or more individuals, to prosecute commercial business, are considered ; when it is seen that an event has taken place, without their fault, and beyond their control, which renders their respective nations, and along with them, the defendants themselves, enemies of each other; that all communication and intercourse has become unlawful; that they can no longer cooperate in the conduct of their common business, by affording each other advice, and are kept hoodwinked, as to the conduct of each other; that the trade itself, in which they were engaged, has ceased to exist; that if they enter into any contracts, they are incapable of enforcing their performance, by an appeal to the courts; that their allegiance leads them to support opposite and conflicting interests ; I am compelled to say, that the law cannot be so unjust as to pronounce, that a partnership, so circumstanced, when all its objects and ends are prostrated, shall continue ; and, with the clearest conviction upon my mind, and in analogy to the cases to which reference has been made, I have come to the conclusion, that the partnership between the defendants was, at least, suspended, and I incline to the opinion, that it was, ipso facto, dissolved by the war, and, consequently, that the defendant, J. W., is not liable to this action.

Much stress was placed upon an affidavit, made by thé defendant, Joshua Waddington, in March, 1813, annexed to a petition presented to the district court, to obtain the remission of the forfeiture, incurred by the importation of goods from England, by Joshua Waddington fy Co. in 1812, in which he states that Henry Waddington conducts the firm of Henry Waddington Co. and that firm is composed of Henry Waddington, and the defendant; and it has been insisted, that this is an admission of the existence of the firm at that time. Ithas not been shown, that Joshua Waddington has done any one act, as a partner, after the war; and if the affidavit amounts to an admission, it is a mistake of the law upon the subject, and does not affect him. It has not been shown, that, in point of fact, the plaintiffs ever knew of this affidavit, or were misled by it. Had the defendant even promised to pay the demand claimed by the plaintiffs, if there was no prior liability, the promise would have been a nudum pactum. There is, however, strong reason to believe, from the evidence of Mr. Ogden, that the mistake in the law was entirely attributable to the hurry of the moment, and that it did not originate with Joshua Waddington ; but, I think, that the affidavit, construed in reference to the subject matter of it, does not mean to say that the partnership then existed, but that the goods belonged to that firm, when they were shipped, and when they arrived.

It has, too, been strongly put, that the plaintiffs contracted this debt with the firm, on the faith that Joshua Wadding-ton was a partner, and that he ought to have publicly communicated the dissolution of the partnership. I am perfectly satisfied that J. Waddington has acted in good faith; there is no pretence that he has done any thing to mislead the plaintiffs, or the public, unless his silence be so considered. If the law worked a suspension, or dissolution, of the partnership, every person dealing with Henry Waddington was bound to take notice of that fact; and, with the old dealers of the firm, there was knowledge of all the material facts, which enter into the determination of the cause.

Judgment for the defendant.