Brigham v. Dana

The opinion of the court Was delivered by Redfield, Ch. J. It is obvious that the principal question in this case is, whether the contract between the parties makes the return of the money advanced dependent upon the event o't that amount being realized in the contemplated adven ture, over and above all losses and expenses. For if not, then it is a mere loan, and the only risk incurred by the plaintiff is the solvency of the defendant, and the agreement to divide the profits of the adventure is either a cloak for usury, or an unconscionable extortion which the law will not sanction, according to the cases of Burton v. Blin, 23 Vt. 151; Morse v. Wilson, 4 T. 353; Gordon v. Hobart, 2 Story 243, and many others. But if the money was really hazarded in the adventure, and its return depended upon the net results of such enterprise, it is not a contract which the law refuses to sanction, and if not a strict partnership, it is a joint adventure* in the result of which the plaintiff has such an interest as will enable him to call 'the defendant to account in this form of action. And we do not perceive but the claim is correctly described in the declaration in some of the counts, for it seems to be put in all the more common forms of declaring upon such and similar undertakings. The defendant is charged as partner and as bailiff and receiver of goods and money to plaintiff’s care, or to the joint profit of the plaintiff and the defendant. If then the plaintiff really is entitled to demand an account of the enterprise, and to have a portion of the money raised by defendant during such adventure, we do not see why he is not correctly described as having been the receiver of such — 8 — money as now in justice and equity belongs to the plaintiff under the contract. In looking into the contract by the light of attending circumstances, and the conduct of the parties in carrying it into effect, we think, I. There is no undertaldng, either express or implied, to refund the money unless the defendant obtained enough from the adventure, over and above expenses and losses, to enable him to do so. Yery little is to be inferred, doubtless, from the forms of expression and the terms Used in a contract so inartidcially drawn, where the purpose evidently was to express the substance of the contract without reference to any formality, but some conjecture arises even in such a case from the form of expression. The contract speaks of the outfit as being “ paid to the full satisfaction ” of the defendant, or to be so paid at his entering upon the adventure, which would seem to imply that it was not a loan. But in regard to the return of the money, the same form of expression is indeed used: “ sufficient to pay the outfit,” “ and enough shall fall (to the plaintiff) in the division to pay my outfit,” which would rather imply that it might be regarded by the parties as a debt. But this form of expression is consistent enough with the idea that the plaintiff’s advance was first to be refunded to him in the distribution of the avails of the undertaking, and this the contract evidently does stipulate for. And this is altogether consistent with the contract creating a strict partnership. And the fact that the plaintiff was also to have interest upon the money advanced, at the same rate which he paid for it, will not destroy its character of a partnership. For it is common for one partner to advance money and stipulate that he shall first be paid his money and interest, and this leaves it none the less a partnership. Nor will the question of partnership be affected by the amount advanced, whether more or less, unless the sum is so small as to imply fraud, or duress, or extortion. And it does not occur to Us that there is any such disparity between the sum advanced and the service of the defendant^ which is put as its equivalent in the contract, as to imply any want of freedom on the part of the defendant. The transaction - is of a class which will scarcely bear much comparison with the ordinary transactions of life. It concerned a business which has proverbially and justly been denominated “ the gold fever” and “ the gold mania.” — 9 — Men were almost literally insane in regard to it, as indeed most of us are, more or less, upon this subject, in some form. But this, so far from justifying courts in refusing to carry any contract into effect which has relation to the subject, should enable us more readily to comprehend and understandingly to interpret the stipulations of the parties. There is then, as we said, no stipulation to refund the money advanced, absolutely and without reference to so much being earned. The stipulation, which is claimed to amount to this, is that in case of decease, the defendant agrees that this sum shall be “ taken out of any money or interest left by him,” but this is just as well understood of the money or interest left of the California enterprise, as of all his estate. And the very next sentence shows that the parties so understood it, for it provides that the “ remainder, if any, shall be equally divided between the parties,” which of course could not mean his whole estate. All the other stipulations are more consistent with this view than with any other. For it says the outfit is to be first refunded ; “enough shall fall in the division to paying the outfit, if accumulated.” The plaintiff calling for the money advanced before the time expired is nothing provided for in the contract, even by implication, nor do we think it makes much for the defendant’s view in regard to the construction. It was natural for the plaintiff to desire to get back his advance as soon as he could, and the defendant’s mere promise to refund as soon as he could and not doing so amounts to but little as evidence of the practical construction of the parties. H. It does not seem to be requisite to the constitution of a strict partnership, that each partner as between themselves, should be liable to share indefintiely in the losses of the concern. An agreement to share in the profits and consequently in the losses, as they affect the adventure, will ordinarily be held sufficient to constitute a strict .partnership. Buckman v. Barnum, 15 Conn. 67; Loomis v. Marskell, 12 Conn. 70; Bond v. Pittard, 3 M. & W. 357. And in the present case in the view we have taken of the proper construction of the contract, it is obvious the plaintiff was liable to be affected by the losses to the full extent of his capital and the anticipated profits. — 10 — III. It is certainly not necessary to tlie constitution of a general partnership, that the partners should be proportionate joint owners of the property belonging to the concern, or some of them, and out of which the profit is expected to arise, although that is the more common condition of the title, and tlie natural implication in the absence of some stipulation to the contrary. But it is not uncommon, and the cases certainly sanction a stipulation that the capital of the concern shall vest and remain in one or more ol the number less than the whole who may have furnished it. Ex parte. Hamper, 17 Vesey 404. All that seems indispensible upon this head is that the parties shall be jointly interested in the profits or affected by the losses or net profits of the concern. So that taking the case in all its bearings, we do not see why it may not be regarded as a partnership in a single adventure. Coblyer on Part., Sec. 170. IV. In regard to the account, although the terms used in the writ» ten contract strictly import nothing more than the business of “ digging gold,” yet it seems from the correspondence of the parties, that the defendant regarded the change as still continuing the business for the joint interest, and to this the plaintiff seems to have assented. He claimed the account of the defendant’s whole earnings soon after he came home, and no question seems ever to have beeti made between the parties but he was equally a partner in the whole business. We think, though this is evidently going somewhat beyond the terms of the written contract, it must be regarded as coming within the account to be rendered under the judgment. This portion of the account is specifically claimed in the declaration, and the evidence is all submitted to the court upon the trial of the issue to account, and no question is raised in regard to the extent of the partnership, and we must presume from the evidence and the general judgment to account, that all facts were proved which the testimony tended to prove, and which are essential to defendant’s liability to account upon all the counts. In this view we do not perceive how the defendant can expect to escape from the account of the profits of the furnishing business. 2. In regard to the items for expenses of sickness and time there is certainly some difficulty. — 11 — We are inclined to say, that as the defendant had the fever before he arrived at home, and might properly have stopped on the way and regained his health before coming home, when the expenses of his sickness would properly have formed a portion of his expenses in returning home, these should be deducted from the gross avails, as a necessary incidental loss or expense. What is said in the contract in regard to the outfit being “ to carry to and from California,” really is no restriction upon the amount, but only to designate the purpose of the advancements5 that it was intended for and was to be applied towards the expenses going and coming. And the limitation as to time is very indefinite ; two years, or more if thought best by the parties. If taken sick or meeting with any accident upon the way home, the defendant is by reasonable necessity detained, his expenses must be borne out of his earnings till he can fairly get home or ought to reach home by the use of reasonable diligence. Till he gets well enough to travel he can hardly be said to get home. The plaintiff should no more be allowed to deprive the defendant of his claim to the expenses of the sickness because he came home before he should have done, than if he had done it under mental aberration, which certainly Could not bind the party. 3. But we have not been able to perceive any ground upon which his time can be reckoned against the money in his hands. He was in no event to be allowed for his time, and we think this item must be disallowed. 4. In regard to the settlement and receipt, which seems to have been urged before the auditors as one ground of defense, and which is here not waived, We do not well see how it can prevail. 1. It was not understood by the parties as any settlement. The defendant so intended it, but this seems not to have been made known to the plaintiff and he did not so intend it, and would not have accepted the money if he had known that it was upon any such condition. 2. The defendant stood in such a fiduciary relation and possessed such superior knowledge in regard to the business, and this obtained in the business under such circumstances that the plaintiff was equally with himself entitled to its benefit, that the law will — 12 — not sanction a settlement induced by positive mirepresentation, and probably not one induced by suppression of important facts, calculated and intended and known to have misled the plaintiff. So that upon both grounds the settlement, as it is called, cannot avail the defendant. Judgment reversed and sum allowed for time deducted, and judgment on report for the remainder.