Archer v. Dunn

The opinion of the Court was delivered by Gibson, C. J. To judge of the objection to the form of the action, it is necessary to consider how the parties stood at first, and how they stand now. By the original contract between Samuel Archer, Whitton Evans, and the partner firm of I. C. Jones, Oakford & Co., they agreed with the defendant and with each other, to enter into the Chinese trade for a period of not less than three nor more than five years; the first named parties furnishing capita] to send two ships yearly to Canton by way of England, and the defendant furnishing his services in selling the goods at Canton, and investing the proceeds in return cargoes separately consigned, in proportion to their respective shares, to the parties resident in Philadelphia. It was agreed that the defendant should not bear a part of any loss on dry goods, but that he should share, equally with the others, the profits arising from a sale of them, and have a commission on specie as well as on the other parts of — 360 — each cargo. His profits and commissions were to be taken out at Canton and shipped on his separate account in one of the company’s vessels; and the funds of the other parties were to be invested for each of them, on separate account, in Chinese goods, separately invoiced, and consigned to them in proportion to their shares without regard to the state of the partnership accounts. It is plain from this, that there were two special and distinct partnerships ; the one between all the parties to the contract as regards the dry goods, and the other betwixt the parties of the first part as regards the rest of the cargoes, the defendant being, in regard to the latter, no more than a factor; and it is plain also, that joint ownership of the funds was to cease as soon as they were invested in return cargoes on separate account. This arrangement continued in force during the contemplated period of five years, and was succeeded by another between the defendant on,the one hand, giving him a commission on dry goods instead of profits, and Samuel Archer and Jones, Oakford & Co. on the other, Whitton Evans having retired. By this the defendant ceased to be a partner; and it was in turn succeeded by yet another on the same terms, except that the concern gave a guaranty that the commissions should not fall short of $25,000 the year. The money for which this action is brought is the proceeds of sales made in the second and third periods. On these facts, it is clear that several actions could not be maintained on the special contract, as it was made with the plaintiffs jointly. In Vaux v. Steward, (Styles 156), and Vaux v. Draper, (id. 203), a joint action was maintained on a promise to two in consideration of £10 paid to procure the restoration of their cattle which had been distrained, because the consideration had moved from the plaintiffs jointly. Here the consideration — the employment of the defendant by the plaintiffs as their factor— certainly moved from them jointly. What matters it, then, that the proceeds were to be divided at Canton, and the share of each partner separately consigned to him without waiting for a settlement of the parnership accounts ? That arrangement was a matter betwixt the partners themselves, and for their private convenience. Partners are tenants in common of the partnership effects; and their interests continue to be blended till they are separated by actual partition. But it is argued that the present action is brought on an implied promise which is joint or several, as the consideration is joint or several; and so the law was held in Boggs v. Curtin, (10 Serg. & Rawle 211); but the consideration, moving as it did fi’om the plaintiffs as partners, was joint, and the resulting promise is consequently joint. The money in the defendant’s hands was received by him as the price of the partnership effects; and being partnership funds when it was received, it remained so, being undivided by separate investment. There are cases in which an action may be brought jointly, though the interests to — 361 — be recovered depend not even on a joint consideration; as in Corryton v. Lethbye, (2 Saund. 115), in which several owners of mills, at the one or the other of which the defendant was bound to grind his barley and wheat, were allowed to join in an action for grinding at another mill, because damages might be twice recovered if they were allowed to bring several actions. Would not the defendant in this instance have been equally vexed by a multiplicity of suits 1 Independently of policy, however, this action is maintainable on principle. The effects were joint when they were sold; they were sold on joint account; and the price was joint when it was received. It ought to have been parted and invested, but it was not. Being recoverable from the buyer only on partnership account, it was received by the defendant on partnership account; and it could consequently be recovered from him only as so much received to the use of the concern. Had the defendant separated and invested one of the shares, a curious question might have arisen as to joinder in an action for the other. The partner entitled to it might perhaps have maintained a several action for it; but had more than one been entitled, perhaps all would have been bound to join. The action is therefore well brought; and this determination of the point is decisive also of the question of set-off betwixt the defendant and the personal representatives of the deceased partner. Defendants may undoubtedly set-off the cross demand of one of them, and thus, with the assent of all, pay their joint debt with his several property, for, as was held in Stewart v. Coulter, (12 Serg. & Rawle 252), no one can be hurt by it; but there is no instance of a set-off of a debt due by one of several plaintiffs, because that would enable the defendant to pay his debt to the prejudice of the others. The point is too clear for elucidation; and it was, besides, directly decided by this court in Henderson v. Lewis, (9 Serg. & Rawle 379). The question of commission depends on the interpretation to be put on the contract of the parties, collected from their letters and acts; for the memorandum prepared by the defendant at Canton, was not executed by the plaintiffs. It has, however, been legitimately referred to for the defendant’s understanding of the agreement ; and it is enough to say that it is as obscure and uncertain in its terms, as mercantile contracts usually are. Blanks were left in it for the rate of commissions, to be filled by the plaintiffs; and in the letter which accompanied it, the defendant said; “ I must leave for your decision to fill (the blanks) at either the five per cent, for the sales and investment of dry goods agreeably to your offer under the date of the 4th mo. 15th, 1825, or say two and a half per cent, on sales of dry goods, and two and a half for investing the proceeds, which amounts to the same; ok on my terms of three per cent, on the gross amount of sales of dry goods, and three per cent, for investing the nett proceeds.” The plaintiffs — 362 — did not fill the blanks at all, and the question rests on the interpretation of the first alternative. The clause in the memorandum stands thus: “ The first named parties agree to allow Nathan Dunn, for his services, the following commissions, to wit,-per cent, on the-amount sales of dry goods, and-- per cent, for the investing of the proceeds; and three per cent, on all specie shipped, and three per cent, on sales, and three per cent, for the investment of all other cargo, and three per cent, on the ships’ and factory disbursements, to be received in Canton.” This makes the matter no clearer than the proposition in his letter. In both he asked three per cent, on the gross amount of sales; and if he demanded that as the basis of the larger commission, it would be singular if he had consented to take any other for the smaller one. Yet if he meant to insist on the gross amount for each, it is singular that he did not say so in regard to both. But it is clear that the sum on which the commission was to be charged, was the amount of sales, whether gross or nett, and not the amount of the investments; otherwise two and a half on sales, and the same on the investments, would not “ amount to the saíne” as five per cent, on either. The same amount could be obtained only on the basis of an intermediate sum. In a subsequent part of the correspondence, the plaintiffs, after reciting the clause in the defendant’s proposal already quoted, say: “ Now thou will perceive that it is here left discretionary with us to pay either the five per cent, on the amount of sales, or to divide it as mentioned in thy letter, two and a half on the sales and two and a half on the nett proceeds. When we made the offer of five per cent., we were of opinion with thyself that it amounted to the same, or nearly so, say the amount of investments being less than the sales by the amount of thy commissions.” The inference is, that they thought the difference too small to be a ground of objection. To say two and a half per cent, on sales, and two and a half for investing, is not necessarily to say two and a half on the sum invested. The sentence is elliptical, and supplying the parts omitted, would stand thus: two and a. half on the sales for selling, and two and a half on the sales for investing. By no other interpretation could the apportioned parts of the commission be made the same as five per cent, on the sales. It is clear, then, that they were to be charged on the same sum; but whether on the gross amount or nett proceeds of the sales, would be a difficult question were it not settled by the contemporaneous construction of the parties. In the last year of the second period, the defendant transmitted the accounts to that date, accompanied by a letter, in which he said: “ In charging commissions on the sales of dry goods and for the investment of the same, I have followed literally your letter on the subject, of the 4th mo. 15th, 1825, which would not have been required to be noticed here but for my misconstruction of it when I formerly wrote you — 363 — on the subject.” Yet the commissions in those accounts were charged at five per cent, on the gross sales; and this passed without objection till he had returned to America. If this were a misconception on his part, they were bound to undeceive him by the first opportunity; and the same principle of charging was suffered to run through the succeeding contract. Still farther, when the terms of his compensation for the third period were under discussion, and when the plaintiffs demanded a reduction, they said: “We had hoped that the extent of commissions in our business had been so great that in any new arrangement we should have been able to have them reduced to two per cent, on sales and two per cent, for investments; this would amount to a large yearly sum; this you can take into consideration, and if you think well of adopting it, we shall be pleased; if not, we prefer as the fairest mode that you charge two and a half per cent, on sales, and two and a half per cent, on the investment.” This last would produce no reduction, if the former contract allowed no more; and there is certainly a difference on sales, and a per-centage on the nett proceeds of sales. We, therefore, think the defendant is entitled to five per cent, on the gross amount. As regards amount, however, the important-question is, whether the Isabella’s cargo belongs to the second or the third period of the business. Perhaps the plaintiffs were bound to send two ships yearly by way of England. The dry goods could be advantageously laid in only there; and the plaintiffs had engaged to send that number in the first agreement, which was the basis of those that followed. Subsequently to it they speak of allowing him certain privileges “ in two ships annually from the United States, via England, to Canton;” and a commission of so much per cent. “ on the sales of dry goods received from England.” But in the happening of a certain contingency, they were not to send two or any other number. In the memorandum of agreement, sent to the plaintiffs for execution, it was provided thus: “ It is understood that if the information received from Nathan Dunn, by the first named parties, of the state of the - Canton market for dry goods, should be so unfavourable as to make it necessary to suspend their operations for a season to prevent loss, in such an event, their engagement to send two ships in each year via England to Canton, is not to be considered binding.” Though this instrument was not formally executed, its conditions are to be taken for a part of the contract, because they were not rejected, and the parties went on with the business on the basis of them. Now, the defendant had, in three of his letters, given a very discouraging account of the state of the Canton market, and in a fourth he said: “ I am notv of opinion it will be pretty safe to forward two cargoes in each season to this country, unless the shipments by Americans or the East India company are more than usual, or there are depressions in the Canton market. If not in time to ship in sea — 364 — son, to be deferred to the regular season of the next year.” This intimation was promptly responded to by an order to the agent in England to prepare a cargo which could not however be shipped for the spring season, and the vessel was consequently despatched as a fall ship. During the residue of the term, two other vessels were sent at regular intervals, and the whole contract was in this respect complied with. Had it been the plaintiffs’ duty to send the Isabella under it, every interpretation consistent with the words ought to be made from the circumstances, favourable to an intention to do so: but as they were at liberty to send her as they pleased, we are bound to give their expressions their plain and natural meaning. It is to be remarked, that they had written a letter requesting the defendant to remain at Canton for a third period, to which they had not received an answer; and that, had they waited to hear from him, the lateness of the season would, in case of his acceptance, have caused them to lose a voyage. In these circumstances they say, “Notwithstanding there has not been time for us to receive an answer to our communication made to thee in the 4th month last, relative to a continuance in Canton as our agent, yet from the remarks in our letters now received, particularly No. 12, we infer that thee was inclined to remain a further period, and, from the liberal terms offered by us, we can not but suppose they would be accepted. We have concluded to forward thy letter to S. T. Jones, and request him to prepare á cargo, &c. We shall therefore rely on thy remaining to take charge and dispose of this cargo, whether our proposition is accepted or not; and if it is accepted, we shall go on to fulfil our part of it. Thee will be aware that had we waited for thy reply, it would have hurried us very much to send two cargoes next year, and would have made them very late.” Was not the cargo of the Isabella intended to be one of them 1 It is evident that this ship was sent in anticipation of the defendant’s acceptance; and that, had he previously signified a rejection, she would not have been sent at all. Whether he was bound to remain a single day beyond the limit of the existing contract, enters not into the question; it is sufficient for all the purposes of intention that the plaintiffs thought he was not. They threw themselves upon his generosity to stay and take charge of the cargo in any event; and it is plain they intended to send this ship in part fulfilment of the expected contract, should it be assented to. The circumstance that she was charged to the second contract, in the accounts received by the plaintiffs, without exception by them, is not sufficient to overbear an inference so manifest. The remaining question has regard to the interest; and it is to be determined by the law of the place where the contract was to be executed. The rate allowed by it may always be expressly reserved, though it exceed the rate allowed by the law of the domicil, or the law of the forum; and where no rate is stipulated, — 365 — the parties áre presumed to have contracted in reference to the law of the place of performance, whether it be statutory or customary. 3 Burge’s Confl. of Laws 771; 2 Story’s Com. 251. The law of the forum is never appealed to. What matters it then that the defendant resumed his domicil of origin shortly after the debt was contracted ? In consequence of the severity of the rule in this particular instance, I have desired to find an authority to make it an exception; but I have found none. The contract was to be executed in China, and the measure of damages for the breach of it, is the customary rate of Chinese interest. The defendant invested the money at Canton on his own account, and made the profit on it which the plaintiffs ought to have made; and he must consequently pay the same interest that he would have paid, had he remained abroad. Judgment for plaintiffs, the amount to be settled by the counsel.