Baring v. Crafts

50 Mass. 380

• Court: Massachusetts Supreme Judicial Court
• Decided: March 15, 1845
• Status: Published

Opinion

Shaw, C. J.

This case having been submitted to the court, upon the facts as well as the law, upon a mass of written and oral evidence, it is difficult distinctly to separate and state the points of law decided.

The question is, whether the defendant was jointly liable with E. Hathaway & Co. and Thomas Popkin, for the plaintiffs’ balance of account; all the other parties having been discharged under the insolvent laws.

It is admitted or proved, that E. Hathaway & Co. (Hathaway, Hathaway, jun. and Richardson) were general partners that the defendant was part owner of vessels with them, not a partner in their general business, but occasionally interested, by particular agreement, in particular voyages and adventures; that he was part owner of the barque Roman; that a voyage was proposed by Hathaway & Co., for that barque, to South America; that Popkin was to be supercargo, and to be jointly interested one third in the voyage; and by agreement between Hathaway & Co. and the defendant, the latter was to be interested with them to the extent of one quarter of their two thirds.

This agreement to share profit and loss rendered the defendant liable to answer jointly, as a partner, so far as third persons were concerned, for all contracts and undertakings made in the prosecution of the voyage, although no name, firm, or special designation was adopted to distinguish such transaction from the general business done in the name of E. Hathaway & Co. This firm, having the general superintendence of the voyage here, and Popkin being supercargo, to conduct the business abroad, the defendant was bound by their respective acts as such agents, so far as they acted within the scope of their authority.

It appears further proved, and is an admitted fact, that at the outset of this voyage, it was to be conducted mainly by means of a letter of credit, for £20,000 sterling, obtained by Hathaway & Co. of the plaintiffs, through T. W. Ward, their agent in Boston. Such letter of credit authorized Popkin to draw bills to the amount specified, on condition of being so drawn within six months from date. Hathaway & Co. then gave an obligation to the plaintiffs, to provide funds for the payment of such bills. It is contended that the defendant is not liable for these bills, because, although he was known to be interested, he did not join in this contract of Hathaway &. Co. Without stopping to consider whether this was within the scope of their authority to conduct the voyage and make all contracts incident to its prosecution, and whether the defendant would not have been bound by their act done as such agents j the answer is, we think, that the bills afterwards drawn by Popkin were not drawn on this credit; that the term of credit had expired, and the plaintiffs were no longer bound by that undertaking, to accept his bills. The defendant’s liability, then, if it existed, did not depend on the contract of Hathaway & Co., made in reference to that letter of credit. It depends upon the question, whether Popkin acted within the scope of his authority, as the agent of the joint concern, in drawing the bills in question. The defendant denies that Popkin was so authorized.

It appears by the letter of instructions given by Hathaway & Co. to Popkin, that they did not place any restraint or limitation on his authority, and that he did carry the credit of the owners with him. Thus, though they strongly recommended a hide voyage, and contemplated that as one of the objects of the adventure, they still left it to his judgment ; and when Richardson cautioned him against coffee, it was with the qualification, unless he should find, &c., implying that it was advisory and not intended as a restriction of his authority.

Suppose then, as his right to draw on Baring, Brothers &. Co. had expired, instead of doing so, he had found a house willing to sell him a cargo of coffee on the credit of the concern ; would not the defendant have been bound as a partner by such contract ? He was to share profit and loss; the contract was for him, and would enure to his use and benefit; and therefore, by the well known rule of law, we think he would have been liable as a partner. Whatever may be the agreement of the parties among themselves, the law makes such parties liable, as partners, to a third person who deals with them, and a joint action will lie. It is founded on the principle that they all share in the profit. And it seems immaterial what is the particular mode of taking the credit or making the contract.

And so it seems that the defendant’s disclaimer, after he was informed that the cargo of coffee had been purchased, and the bills drawn, could not have any effect on the Ñghts of third persons. The letter of instructions to Popkin was an open letter, to be carried with him, as evidence of the authority given him by the owners. If that authority enabled him to bind the owners, and he acted upon it, they must stand bound, as to third persons, although the defendant had some understanding or agreement with his associates, that he was not to be bound, unless in a particular voyage or adventure. He could not restrain the authority of the supercargo by such private agreement, nor could he revoke it after it was executed.

The remaining important question is, whether, in the mode of keeping their books or stating their accounts, the plaintiffs have waived their right of charging the defendant — supposing him liable — or have exonerated him by any subsequen1 act.

When parties agree to transact business jointly, or under an agreement to share in the profits, the name or firm which they use is arbitrary and conventional. They may use the name of both, or of one of them alone, or any distinct designation by which all will be included and bound, as if their names were used. Manufacturers & Mechanics Bank v. Winship, 5 Pick. 11. Etheridge v. Binney, 9 Pick. 272. And when the joint dealing is confined to one transaction, and is conducted by one of the parties, by agreement or mutual understanding, a contract entered into in such name, and with reference to such interest-and dealing,'is binding as well on the party not named as on the party whose name is used. We think, therefore, that as Crafts, the defendant, by agreeing to take a joint interest with Hathaway & Co., and to share profit and loss with them, by operation of law became liqble, jointly with them, to third persons, and as no other name or designation was adopted than that of E. Hathaway & Co., and that designation was used in the instructions, invoices and documents, the plaintiffs, in dealing with such joint concern, and using such name, waived no claim which the law gave them, against the defendant, on his joint liability, by not inserting his name in the accounts. So, if the name E. Hathaway & Co., as a name of firm, once bound the defendant, because it in effect embraced his name and liability the same name must continue to bind him, till some notice of change. Trueman v. Loder, 11 Adolph. & Ellis, 589, and cases there cited. So the manner in which the plaintiffs stated the account in their books would not discharge their claim if it had once existed. Barker v. Blake, 11 Mass. 16. In that case, the particular account had been credited, and the account charged, to one of the partners; but the court held that the creditor did not thereby discharge his claim against the partners. In the case at bar, the keeping of the books and accounts in the name of E. Hathaway & Co., under the circumstances stated, cannot be construed into an intent to exonerate the defendant, and look to the credit of Hathaway & Co. alone. And we can perceive no other evidence tending to show that, if the defendant was originally liable to them, they have done any thing manifesting an intention to waive such claim, or discharge such liability. If he was bound, it was a legal liability in consequence of his being jointly concerned in the voyage; not from the use of his name, nor because he had held himself out, or permitted himself to be held out, as one to whom credit was given. Keeping the account without inserting his name is no evidence, therefore, of an intent to renounce his liability. When the plaintiffs came to make out the account, with a view to assert their rights, they made it to the owners of the barque Roman, so as to charge the persons liable, whoever they might be.

It was insisted by the plaintiffs’ counsel, that the defendant had assented to this statement of the account, in such a manner as to amount to an acquiescence on his part. The fact upon which this argument was raised is this: that the defendant was assignee, under a commission of insolvency, of some of the parties; that the plaintiffs had presented to him their account, charging the owners of the barque Roman; and that he, by receiving it without objection, and paying money upon it, had assented to it. We think there is little weight in the argument; and we lay no stress upon this circumstance. The account was presented to the defendant as assignee. The particular form of it probably did not attrac his attention; and his payments upon it were made from the funds of the insolvent house, who were chargeable at all events.

A question was made, whether any distinction could be taken between the bill for £10,000 and the bill for £7000, on the ground that the latter was accepted by the plaintiffs, supra protest, for the honor of Popkin, the drawer. Why this bill was so accepted does not distinctly appear. The main reliance of the plaintiffs, for their reimbursement, seems to have oeen upon the proceeds of the coffee, pledged for the payment of the bills; and as Popkin accompanied the property to Trieste, to advise and assist in the sale of it, possibly they might consider such acceptance as giving them a more distinct personal claim as against him, inducing him to attend with more zeal and care to their interests. But we do not perceive that this can make any difference. The defendant is not chargeable as a party to this bill, and would not have been so in any mode of accepting it by the plaintiffs. The bill was only the means by which the money was raised by a party authorized to act as the agent of the concern. Suppose Popkin had paid the bill himself; as, being a party, he was bound to do. So far as he was not reimbursed by the proceeds of the coffee, it would have been money paid for the use oi the concern, for which they would be liable to him. Then if, under his authority, not only as agent and manager of the joint concern abroad, but being himself one of the joint adventurers, he engaged the plaintiffs to pay the money for them and receive the proceeds, and these proved insufficient, the plaintiffs became creditors for the balance to the parties jointly responsible.

But further; after Hathaway & Co. knew that the bills had not been drawn within the time limited, and of course that Baring, Brothers & Co. were not bound to accept and pay them according to the terms of their letter of credit, they wrote to the plaintiffs, requesting them to protect these bills. On the payment of the bill of £7000, which had been accepted for the honor of Popkin, the drawer, they take care to say that they hold Popkin, and all other persons, &c., liable to them for the amount. Now, even if they would not, on general grounds, have a right to charge to Hathaway & Co. the money paid on that bill, because accepted specially for the honor of the drawer ; still, after receiving that letter, they were justified in reinstating that charge in the account, as a good charge against the joint concern, and as so,much money paid on their account. And whether Hathaway <fc Co. had received the disclaimer of Crafts, the defendant, or not; or whether, as between him and them, he had a right to disclaim his liability, or revoke their authority to act for the concern; it is obvious that he did not communicate notice of any such fact to the plaintiffs; and as Hathaway & Co. had, by the original agreement, power to act for the concern, this request from them, to pay the bills generally, bound all the parties concerned, and placed them upon the same footing as if the bills had been drawn specifically on account of the owners of the barque Roman. We think, therefore, that no distinction can be made between the bill accepted for the honor of Pop-kin, the drawer, and the bill accepted generally.

Judgment for the plaintiffs