Bryant v. Proctor

53 Ky. 451

• Court: Court of Appeals of Kentucky
• Decided: July 4, 1854
• Status: Published

Opinion

Judge Simpson

delivered the opinion of the court.

Fraud was the only ground relied upon by the-plaintiff in the pleadings, to set aside the agreement of compromise. But it is now contended, on his behalf, that he has a clear light to one-third of the amount realized by Proctor from his business in California, and that the payment of a less sum than he was entitled to cannot be relied upon either as payment or as an accord and satisfaction, to defeat this right. It is undoubtedly the well settled law, that the payment of a smaller or less sum cannot in general be pleaded in bar of an action for a larger sum due; nor can it be relied upon as an accord and satisfaction, because, to make it valid as such, the thing received for the debt or demand must be something to which the creditor was not before entitled, and not merely a part of the thing to the whole of which he had a right at the time of the payment. But this rule of law has no application in this case for two reasons — First. At the time the agreement of compromise was entered into, the three years for which the partnership was to continue had not expired, Proctor had a right to retain and use the whole fund until the end of the terra; Bryant had no right to demand the payment of any part of it until that time. The use of it, iu the meantime, might have resulted in its total loss. During the continuance of the term the interest of the parties was uncertain and contingent. Either might sell or transfer his interest to the other, and the sum paid could not affect the validity of such a sale, if made. The rule of law referred to applies to a certain demand, due and owing at the time, and not to one that is prospective and contingent.

2. Three individuals entered into a partnership, two of whom were to go to California and trade and search for gold for the term of 3 years, at which time adivision of the profits was to be made. One of tho two declines the trip, the other goes cm,'and is successful in making some $25,-000. Held, that by the refusal of the one to go to California the contract •was no longer binding on the other two. The fact that one of the contracting parties, who had made advances to the other two who were to go to California to .trade, &c., hro’t suit for the advances made before the expiration of the three years, was evidence of his a-band'onment of the contract, andan exoneration of the other party who did adventure, and was not entitled to any part of the profits made by the latter in the adventure.

Second. Bryant’s rights, under the contract entered into by the parties, were, to say the least of them, of a doubtful character, and as such were proper matters of compromise. It it be conceded, that the contract created a partnership, and it was one that a court of equity would carry into effect, notwithstanding its apparently hard and oppressive character, still, as one of the partners abandoned the enterprize, and did not on his part comply with the terms of the contract, the others were under no obligations to abide by it, unless they choose to do so. J. M. Bryant was entitled to the services of both the other partners, and Was not bound to accept the services' of one instead of that of both of them, even if Proctor himself consented to the arrangement by which the services of A. Bryant were dispensed with. It might then be contended with great plausibility, that J. M. Bryant, by the suit which he brought in June, 1851, to collect that part' of the capital advanced by him, for which Proctor had executed his note, and the reasons assigned by him in his bill to enable him to maintain the suit, and to attach the defendant’s property, had manifested his determination not to abide by the agreement of partnership, but inasmuch as it had not been complied with by all the parties, to disregard it altogether; for, unless he assumed this ground, he had no right to demand the re-payment of any part of the capital he had advanced to Proctor. It is true, that none of the parties could dissolve the partnership without the consent of ail of them, but as one had failed to comply with its terms, it was not obligatory upon the others without their assent — they were only entitled to a remedy against the partner who had violated the agreement. Under these circumstances, the claim of J. M. Bryant to one-third of the fund accumulated by Proctor, not being clear and indisputable, but one that might have been contested on plausible grounds, was a proper subject of compromise. Unless, therefore, the agreement of settlement and compromise can be vacated upon the ground of fraud, J. M. Bryant is not entitled to any relief, and his petition was properly dismissed by the court below.

The ignorance of Bryant in relation to Proctor’s success in California, and the misrepresentations made to him on the subject by Proctor’s wife, are relied upon as constituting the chief elements of the alleged fraud. The testimony in the cause leaves, in our opinion, no room to doubt that Bryant was at the time he made the agreement of compromise fully apprized that the enterprise had been successful, and that Proctor had accumulated in California a large sum of money. Consequently, he was not deceived by any of the representations on this subject made to him by Mrs. Proctor. He knew as much about the matter as she did, and could not have been mislead or deceived by any of her attempted artifices, or by any of the statements she made to him in relation to her husband’s success in California, even if she did try to create the impression that it was not so great as it had been represented to be. It does not certainly appear that Mrs. Proctor knew that her husband intended to return to Kentucky at the time he did, or that she did not seriously contemplate going to California herself at the time she stated that she was going. It appears from the testimony that Proctor’s return was accelerated, if not induced altogether, by the state of his health, and we are inclined to the opinion that his wife had not been informed of his intention to return at the time the compromise was made, and that his return was not caused by any information he received that a compromise with Bryant had been effected. Besides, it appears that Proctor, when he came to Kentucky, did not intend to remain here, but designed returning again to California, and was actually making arrangements for that purpose when this suit was commenced.

The promise which Mrs. Proctor made to Bryant, to use her influence with her husband when he came back, to induce him to let Bryant have three thous- and dollars ten years, without interest, tends to prove two facts inconsistent with the ground assumed by the plaintiff. If, as the parties seemed to suppose, it was in the power of Proctor to make a loan of three thousand dollars without interest, the irresistible inference would be that he must have made, and had under his control, a very considerable sum of money. And as the influence which was promised was to be exercised when Proctor came back, it is evident that his return was contemplated- by both parties. This promise, which really, according to its terms, amounted to nothing, could not have had the least weight with Bryant, who is proved to be a man of business, in inducing him to enter into the compromise. He knew how much weight to attach to such a promise, unobligaiory in its nature, and depending for its results upon the will of another person. It ought not and could not have had any effect in producing the compromise. It proves, however, that the parties themselves not only expected Proctor to return, but believed that he would bring back with him a large sum of money.

3. Though a party make a compromise under a mistake of the facts; yot if after he is fully informed of the facts, and receive the compromise money, lie will be adjudged to have waived any advantago he might have had from his former ignorance of facts.

But if Bryant entered into the agreement of compromise under a misconception of the true state of facts, in relation to Proctor’s success, and his intention to return to this state, he confirmed the agreement after Proctor’s return, and after he had been fully apprised of the amount of money be brought back with him, by receiving from him, without objection, the balance of the sum which, according to the terms of the compromise, he was to receive, in satisfaction of his claim against him. We cannot doubt, on consideration of all the testimony- on the subject, that Bryant knew when he received this balance from Proctor, the amount of money .that had been brought back by the latter on his return from California.

The only reason that has been urged why this act on the part of Bryant, should not be regarded as a confirmation of the agreement of compromise previously made, is that the sum received by him from Proctor, was due to him, independent of the compromise, and consequently the act of receiving it cannot operate as a confirmation of that agreement. But an examination of the debt duo to him, exclusive of the amount he obtained by the compromise, will prove satisfactorily, that the whole of that debt had been fully discharged by the payment made by Mrs. Proctor, at the time, the agreement was entered into, and that there was nothing due to him at the time he received the money from Proctor, if the compromise be disregarded. To establish this conclusion, it is only .necessary to advent to. the fact, that in the estimate made by the parties on which the compromise was based, Bryant was allowed the sum of $1,285 54, being the one thousand dollars advanced by him as capital, and ten per cent, per annum interest thereon during the time that Proctor had used it. Now he was not then entitled to any part of this sum. He had no claim against Proctor for the return of the capital advanced, until the term of three years had expired, nor would he then have had any right to any interest on it. If this sum be excluded from the estimate, it is apparent that all the balance due to Bryant had been more than paid. It was by the compromise alone that ho had a right to demand this sum, and of coui’se the amount that was paid to liim by Proctor was due to him only in consequence of the agreement of compromise. And if it be conceded, that as Proctor had returned home Bryant might have required the payment of the thousand dollars, still it will be perceived, if a calculation be made, that the sum of money which Mrs. Proctor had paid to Bryant had nearly paid off the one thousand dollars, capital, and also the debts which Proctor owed to Bryant, with legal interest thereon, so that the larger part of the sum which Bryant received from Proctor after his return home was due to him only in consequence of the compromise.

The note for $333 33, which Bryant held on Proctor, was given for one-third part of the capital of one thousand dollars, and consequently, as Bryant was allowed in the settlement the whole of the oapital which he had advanced, he had no right to the amount of this note, and therefore it was surrendered by him to Mrs. Proctor, as it should have been. The note for $273 was left out of the settlement, and the reason Gf this omission does not appear, but, as it was surrendered to Mrs. Proctor by Bryant at the time of the settlement, and when he surrendered to her the note for $333 33, the presumption arises that the consideration of both notes was embraced in some part of the settlement, and for that or some other reason the nbtis were properly excluded from the settlement. If, however, the note for $273 should be included in making an estimate of the debts already due to Bryant, the interest allowed upon the thousand dollars, and the extra interest allowed upon the other debts, would more than discharge it. Independent of the compromise, Bryant had no right to any interest on the sum of one thousand dollars advanced by him as capital, and consequently he received in this item of interest alone the sum of $285 54, under the agreement of compromise.

Then, if it be conceded that Bryant had been imposed upon by the artifices of Mrs. Proctor, and induced to believe that her husband did not intend to return to Kentucky, but would remain in California, and that acting under the influence of that belief, and the apprehension created by it that he would never get anything from Proctor, had entered into the agreement of compromise as the best arrangement he could make under such circumstances, why should he not be bound by his o wn acts, recognizing its validity, an d carryiug it into effect, after he had been fully apprized of the imposition that had been practiced upon him? He knew that Proctor had returned, and he had been informed of the exact amount of money he had realized whilst absent. If, when he entered into the compromise, he had been deceived in relation to these matter’s, he must certainly have been made sensible of the imposition by a knowledge of these facts. Still he did not hesitate to receive the balance due him, under the agreement of compromise, and that agreement was virtually ratified and confirmed by the joint act of himself and Proctor. Pie thus, according to the well settled doctrine upon the subject, waived any right that he might have previously had, to vacate the contract, because its execution had been fraudulently procured.

But we cannot believe that Bryant was deceived or imposed upon by anything said to him by Mrs. Proctor. He was a shrewd, intelligent, business man. He knew that Proctor was very much embarrassed, and had but little property when he left Kentucky, and he must have believed that the money which Mrs. Proctor had was sent to her by her husband, because there was no other source from whence she could have obtained it. If Mrs. Proctor intimated that the time of the return of her husband was doubtful, or that he did not intend to return at all, Bryant knew the object of such suggestions, and how much confidence to place in them. But, as heretofore remarked, the terms of the compromise itself evince that Proctor’s return was contemplated by the parties, and consequently prove that no serious effort could have been made by Mrs. Proctor to impress Bryant with the belief that her husband intended to remain in California. Bryant knew that the result of the adventure was still involved in great uncertainty, notwithstanding Proctor’s success up to that time. He might engage in some speculation before the three years expired, which would eventuate in the entire loss of the whole of his accumulations; he might die there, or on his return home, and that event might produce the same consequences. Or he might be robbed of all his gold, either there or on his route home, and left without anything to bring back with him when he did return. These views no doubt suggested themselves to Bryant, and had more influence in inducing him to enter into the compromise than any representations made by Mrs. Proctor. He preferred a certainty to an uncertainty. He was doing well, realizing a good profit on his investment, and terminating a risking adventure, from which possibly nothing might ever be realized. He felt and expressed himself well pleased with the settlement after it was made, and never manifested any dissatisfaction with it until and after it had been fully consummated by Proctor and himself.

Under all these circumstances, and in view of all the facts proved in the cause, and for the reasons herein expressed, we are clearly of the opinion that the plaintiff was not entitled to any relief, and that the judgment of the court below, by which his petition was dismissed, is correct.

Wherefore, the judgment is affirmed.