Denney v. Wheelwright

Cooper, J., delivered the opinion-of the court. Aside from the questions arising..oil the set-off of the defendants, the only real controversy is. as-to whether the lumber shipped to B,io was .a consignment by .the defendants for sale for their account and at their risk,'or was sold by them to Yon Sacks, pr was consigned on a guarantee by Yon Sacks that it should in any event net the defendants not less than a certain price. These were questions of fact for the jury, and, from a careful examination of all the evidence, we fail to discover anything from which it could have 'inferred any other fact than that the shipment was aii ordinary consignment off goods for,sale on which the consignee advanced a certain sum. In such cases there can be no doubt that the advances are to be repaid out of the proceeds of the :sale' of the goods consigned, and if they are-insufficient then the consignor- miist make good the deficiency. k There is nothing whatever to indicate an intention or contract on the part of Wheelwright & Co. or of Yon Sacks, to740 guarantee any net sum whatever on the price at which the' lumber should be sold. If Denney & Co. so construed the contract it was their own fault, and such misconstruction cannot give them a right to retain the money advanced and leave the loss to fall on the consignee or on their own agent. It being settled that the consignment was for and on account of Denney & Co., and that Wheelwright & Co. were acting in the matter as their agents, the law implied a contract on the part of the principal to indemnify the agent against all damages which he sustained arising out of acts rightly done in the prosecution of the business of the principal. Whart. on Ag., sect. 315; Stocking v. Love, 1 Conn. 579; Eliott v. Walker, 1 Rawle, 126 ; Darcy v. Lyle, 5 Binn. 441 (1 Am. Ld. Cas. 856). The defendants were duly notified of the pendency of the suit by Von Sacks, the consignee, against the plaintiffs, and requested to appear and defend the same. This they failed to do, and although they were not parties to the proceedings, they might have interposed therein and defended the suit. Having-failed so to do, they are bound by the judgment. 1 Greenl. on Ev., sect. 523 ; Pickett’s Exrs. v. Ford, 4 How. (Miss.) 246 ; Cartwright v. Carpenter, 7 How. (Miss.) 328; Robinson v. Lane, 14 Smed. & M. 161. The plaintiffs were entitled to the recovery obtained unless the set-off claimed by the defendants ought to have been allowed. The set-off arose out of the following facts: Wheelwright & Co., in the year 1877, were engaged in business under the firm name of Moseley, Wheelwright & Co., and in such business became indebted to the defendants as acceptors on two bills of exchange drawn by one Cause, one of said bills being for the amount of $2,994.11, and the other for $1,431.19. In the year 1878 the defendants filed their petition in the District Court of the United States for the District of-Massachusetts, sitting in bankruptcy, praying that they might be adjudicated bankrupts, and discharged from the obligation of their debts, and on the first day of April, A. D. 1879, a certificate was granted to- them by said court dis — 741 — charging them from their debts which were in existence on the 23d daiy of February, 1878. To the plea of payment and set-off the plaintiffs replied their discharge in bankruptcy, and to this defendant? rejoined by the allegation of new and subsequent promises by the plaintiffs to pay the debts due by them. The evidence in support of the new promises was conflicting ; but for the purpose of testing the correctness of the instructions given for the plaintiffs, we must be guided by that introduced by the defendants, as it was upon the theory that the facts existed which such evidence tended to prove, that the instructions were given. As to the new promise made by the plaintiff Wheelwright, the defendant Denny, testifying, says: “Sometime after their bankruptcy, on the 4th or 5th of February, 1880 (the night before we entered into the arrangement in writing whereby we were to sell him all Boston flooring manufactured by us during the year at $1.5 per thousand, and therefor he was to pay us an additional dollar per thousand upon the barred debt), Mr. Wheelwright remained all night at mj^house in Moss Point. He was anxious to get me to sell lumber to him again. I told him I wanted an understanding-first as to the old debt. He said he intended to pay it all, and hoped to pay it all. After further conversation he said he intended to and would pay it all, "as soon as he was able.” The contract for the sale of the Boston flooring refen-ed to by this witness is as follows : — , “ ScraNTON', Miss., February 5, 1880. “ Messrs. W. Denny & Go. “Dear Sirs: We hereby agree to pay you $1 per M. on all lumber shipped to us from your mill under contract of this date, to apply on the debt of. our estate to you until the said debt is paid, said extra dollar por M. to be paid at the time of clearance of each vessel. Yours very truly, “ Moseley, Wheelwright & Co.” The other verbal promise to pay this debt was made by — 742 — Moseley, and this, too, is proved by the witness Denny, who says: “I asked Moseley when he agreed to pay $20 per thousand [the witness ,is speaking of a conversation in which the contract to sell to the plaintiffs all the Boston flooring manufactured by them during the year 1880 at $15 per thousand, was(i changed to a contract to sell the- same character of flooring at $20], will you pay an additional dollar per thousand to go on the old debt?” He replied: “ I have a new partner now, and cannot so promise, but I will pay the old debt, and I hope and intend to pay every dollar of it before the expiration of the coming year.” In addition to these verbal promises to pay the debt, the defendants relied on certain letters written by the firm, of Wheelwright &Co. to their own. We extract from these. In letter written on the 14th of July, in reference to the proposed shipment to Rio, and speaking of-the commissions which might be thereby earned by their firm, the plaintiffs say: “Whatever we make on this, we will pay over on account of the debt of our old firm.” In a letter of date of October 4, 1879, the plaintiffs, writing about the trade in which they were engaged, and the fact that it was not remunerative, said: “If we could make a fair thing of it, we could pay off the old debt in a reasonable time. As it is, the utmost we can do is $500, .towards which we both contribute (here and in Boston, though here we have done nothing with you as yet), and not having the money at present, we can only agree to accept a sixty-day draft for that amount, which we will pay at maturity. We wish we could do more, and assure you that we will, as soon as the business justifies it.” In a letter dated September 6, 1880, the plaintiffs, writing in relation to the settlement of the controvery arising from the shipment of the lumber to Rio, said: “As we have said from the beginning, we will do anything in our power to forward it. Mr. Yon Sacks will take part of the settlement in Rio deals, and we will try and keep the matter out by paying you something on our old debt.” — 743 — As to the new promises, the propositions of the defendant in the court below, were: First, that there was an unconditional promise, jointly and severally made by the plaintiffs ; and, second, that if the promises were conditional, then the evidence showed that the condition had happened and that the promises had become absolute. On the part of the plaintiffs, it was contended that the evidence did not disclose any joint promise by them, and that if any promise at all was made, it was conditional, and the condition was not proved to have occurred. On the application of the plaintiffs the court instructed the jury as follows : “ Even if the jury should find from the evidence that both plaintiffs had made express and distinct promises to pay the old debts, yet if either or both of such plaintiffs made such promises upon'any condition, it devolves upon the defendants who set up the new promises to prove to the- satisfaction of the jury that the condition has happened upon which they agreed to pay, and so if they promised to pay when they became more prosperous, or better able, the jury cannot regard the set-off as proved unless the plaintiffs are shown to have been at the commencement of this suit more prosperous or better able to pay said old debt than when such promise was made.’,’ For the defendants the court instructed the jury that, “ If they believe from the evidence before them, that these plaintiffs jointly and severally, by writing or verbally, since their discharge in bankruptcy, promised to pay two drafts filed as offsets to this suit, or that they jointly or severally promised, either verbally or in writing, to pay the same as soon as they were able to pay said notes, and that if they further believe from the evidence before them that both of these plaintiffs, since making said promises, have been able to pay the same from their business, then the jury wil,l allow both of said notes or protested bills of exchange and all interest, less the several sums of money that have been paid on the same.” Neither instruction correctly announced the law. — 744 — The fault of that giveu for the plaintiffs is that it required the defendants to prove not only that the condition had happened upon which the promises of the plaintiffs became absolute, but that it continued up to the commencement of the suit. If the promise of the plaintiffs was to pay these notes when or if they became able, then when they became able the promise became absolute, and a right of action existed in favor of the defendants which would not be lost by the subsequent insolvency or inability of the plaintiffs to pay the debt. The question was not whether the plaintiffs were at the institution of their suit able to pay the debts, but whether at any time after their promise it became absolute by the happening of the condition. In the instruction for the defendants this was announced as the law. But the instructions are directly in conflict on this point, and we cannot say which was accepted by the jury as their guide. The eri’or in that given for the defendants is that by it the j.ury were instructed that the set-off should be allowed if the plaintiffs, jointly and severally or jointly or severally, promised to pay the old debt. Ordinarily such an error would result in a reversal of the judgment, but a careful examination of the record has failed to disclose any evidence sufficient to have authorized the jury to allow the set-off. There appears to have been an unequivocal, absolute promise on the part of Moseley as an ndividual, and a conditional promise on the part of Wheelwright, which promise became absolute by the happening of the condition on which he agreed to pay, but there is nothing to show that the plaintiffs jointly ever promised, absolutely or conditionally, to pay the debt evidenced by the notes (or bills of exchange) filed as a set-off. They agreed to pay $1 per thousand extra on all Boston flooring sold to them in the year 1880 under their contract of February 5, 1880; but the evidence shows that they complied with this contract according to its terms, and beyond this they were not bound. By — 745 — their letter’of October 4, 1879 (if it be admitted that it was the letter of the firm and not of the member by whom it was written), they agreed to pay $500, and agreed “to do more as soon as the business justifies it.” How much more they proposed to pay is not shown ; but it is shown that the $500 was paid, and afterwards the firm did “ do more ” by paying $301.02 September 4, 1880 ; $217.32 May 19, 1880 ; $259.70 June 15, 1880; $289.99 July 6, 1880; $280.93 October 18, 1880, and $320.53 December 9,1880. So in their letter of July 14,1879, they agreed to pay on the old debt whatever commissions might accrue to them by reason of the contemplated shipment to Rio ; but it is shown that they had no commissions arising from this shipment. By their letter of September 6, 1880, they agreed, if the defendants would repay to You Sacks the amount advanced by him on the shipment to Rio, they would aid in its settlement by “paying something on the old debt;” but the defendants did not accept this offer, and the plaintiffs were thérefore not bound by it. We are of opinion that there was’never any agreement absolute or conditional by which the plaintiffs were jointly bound for the payment of the debt attempted to be set-off, and though the defendants might under the several agreements of the individuals composing the firm have brought separate suits against each, they could not have sued both jointly ; and because a set-off is only a cross-action, the several debts of the plaintiffs cannot be set-off in au action brought by them jointly. The judgment is therefore affirmed.