Case ID: ohio_16/html/0362-01.html
Source: Caselaw Access Project
Author: {"author": "Bead, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Dwight Johnson v. Madison Miller.
    A contract by which one party agrees to furnish whgat to stock a mill, and the other party, with the money advanced by the first to purchase the wheat, convert it into flour, and, after deducting 2£ per cent, and the original cost of the wheat, to receive the -avails of the sale of the flour, does not constitute a partnership.
    In such case, the wheat purchased is the property of the person furnishing the capital, and is only held hy the other as bailee; and, if levied on as his property, may he replevied at the suit of the person advancing the capital.
    This is an action of replevin, reserved in Cuyahoga county.
    The defendant, as sheriff of Cuyahoga county, had levied *upon a quantity of wheat, the property in controversy, as the property of Hutchinson & Co. The plaintiff claims that it belonged to him. It was submitted to the court upon the circuit, upon an agreed statement of facts, which follows, and was reserved for decision here.
    “This case is submitted to the court upon the following facts, proved and admitted, to wit: The property which was replevied, October 20, 1842, consisted of 9,000 bushels of wheat, worth $5,400, which had, on October 19, 1842, been levied upon by the defendant (he then being sheriff of said county of Cuyahoga), and was held by him on an execution in favor of H. B. & M. D. 'Well-man against A. S. &. S. R. Hutchinson and Elijah Bingham, who composed the firm heretofore existing of Hutchinson, Bingham &■ Co., but which was dissolved in 1839, on which execution there was due, August 23,1847, the sum of $3,018.92, the return made by said defendant on said execution of his said levy being as follows: ‘Cleveland, November 1, 1842. In obedience to the command of this writ, I did, on October 19, 1842, levy on 9,000 bushels of wheat, which was replevied out of my hands by the coroner, at the suit of Dwight Johnson, and no money made.’
    “ The wheat in question was purchased under the contract hereto attached, marked ‘ A,’ and was in the possession of Hutchinson & Co., at their said Cleveland City Mills, under said contract, at the time of said levy. The funds employed in the purchase of wheat under said contract, were provided by said plaintiff Johnson, and deposited with M. T. Williams & Dow, and by them paid over to the said Hutchinson & Co., and the said agent of the said Johnson, as they became necessary, and with funds so furnished the wheat in question was purchased, part by said Hutchinson & Co., and part by the agent of said Johnson, as provided in said contract. At the date of said levy said plaintiff had' advanced about $45,000, and had' received by sales of flour in Cleveland and Buffalo, about $18,000, but what amount, *if [488 any, had been sold in New York, or what quantity of wheat and flour wás on hand, did not appear. The firms of Hutchinson & Co., and of William Chard & Co., were the same, and were composed of S. R. & A. S. Hutchinson and Wm. Chard; the latter holding an interest of one-fourth part in the same. Said firms of Hutchinson & Co., and of Wm. Chard & Co., so composed as aforesaid, existed previous to and during all the time embraced in said contract. At the date of said contract, Hutchinson & Co. owed said plaintiff $10,000, and owed to other persons $16,000, which indebtedness continued unpaid at the date of said levy, and at the time of the levy said firm of Hutchinson & Co. was entirely insolvent. Whenever they received money or wheat under said contract, they credited the same to said plaintiff, and charged him with any money deposited for his use, as provided in the contract. During the whole time embraced in the contract the market was declining, ■and the whole loss by means of said adventure was not less than $10,000. This suit was commenced by the assent, and at the request of the said S. R. Hutchinson, acting for said Hutchinson & Co., given the next day after the levy aforesaid. The milling assets, at the date of said contract, of the said Hutchinson & Co., constituted the principal assets of said firm, and which assets in all did not exceed from $2,000 to $3,000. Said milling assets were used as required by said contract, and said firm of Hutchinson & Co. were in no better situation as to assets, during the continuance of said contract. After said wheat was replevied, Johnson returned it to Hutchinson & Co., and the same was floured in pursuance of said contract.”
    The agreement mentioned in the preceding statement of facts is as follows:
    “ This contract, made and entered into at Cleveland, by and between Dwight Johnson, of New York, and Messrs. Hutchinson & ■Co., of Cleveland, Ohio, witnesseth :
    *That Dwight Johnson hereby agrees to furnish wheat, and stock the Cleveland City Mills, to the full capacity of said mills from the date hereof, until the 15th day of November next.
    “ The said Hutchinson & Co., in connection with the agent of said Johnson, shall purchase the wheat, using the best judgment of both parties.
    ■“ The said wheat so furnished to be floured by said Hutchinson & Co., at the Cleveland City Mills, and the said flour to be sold at Cleveland, and at Buffalo by Wm. Chard & Co., or be shipped to Dwight Johnson, New York, as said Hutchinson & Co., may think best for their interest.
    “ The proceeds of said flour to be paid over as fast as sold to tho agent of said Johnson at Cleveland; if sold at Buffalo, the proceeds are to be deposited with H. R. Seymour & Co., to the credit of M. T. Williams & Dow, and when so.deposited, such proceeds shall be at the risk of, and shall be a payment of so much to said Johnson. ’The said Hutchinson & Co. agree that the milling assets they have on hand shall be brought into the milling business as fast as possible, for the purpose of applying on their indebtedness to said Johnson.
    “ All flour retailed at the mill is to be accounted for by Hutchinson & Co., as being paid either for the purpose of carrying on the-mill, the support of their families, or to said Johnson’s agent.
    “ The said Johnson is to receive a commission of 2J per cent, on' all sales of flour, except on single barrels retailed at the mill.
    “At the close of this contract, all proceeds of flour sold which havo come into the hands of said Johnson, shall be paid and applied as follows: 1. To repay for wheat purchased. 2. To liquidate the balance due said Johnson. 3. The balance is to be paid over to said Hutchinson & Co. ■
    “Witness our hands this August 16, 1842.
    “ Dwight Johnson.
    Hutchinson & Co.”
    “ In the presence of Prentiss Dow.”
    *Bishop & Backus, and Bolton & Kelley, for plaintiff, cited the following authorities :
    Story on Bailment, secs. 396, 397, 413, 421, 423; Loomis v. Marshall, 12 Conn. 69; Turner v. Bissell, 14 Pick. 192; 17 Mass. 197; 1 Campb. 331, in notes; 2 H. Blk. 590 ; Coll on Part. 19 ; Story on Part. 60, 373-377 ; Story’s Eq. Jur. 677; 17 Ves. 194, 205, 206.
    Andrews, Foot & Hoyt, for defendant, cited the following authorities :
    Gates v. Gates, 15 Mass. 310; Collins v. Evans, 15 Pick. 63; Dunham v. Wycoff, 3 Wend. 280; China v. Russell, 2 Blackf. 172; 12 Wend. 131; 18 Pick. 278; 16 Pick. 562, 567; 7 Conn. 681, in note; Story on Part. 511.
   Bead, J.

The judgment under which the levy was made was-against Hutchinson, Bingham & Co., the property levied upon is claimed to belong to Hutchinson, & Co., a new firm composed of some of the members of the firm of Hutchinson, Bingham & Co., which had been dissolved. The 9,000 bushels of wheat levied upon, was furnished under the contract with Johnson, and was no part of the assets of the old firm of Hutchinson, Bingham & Co.

The questions in the caso are: 1. Was Johnson a partner?' .2. Under the contract was the wheat the property of Johnson or of Hutchinson & Go?

If Johnson was not a partner and the wheat under the contract was the property of Johnson, it renders it unnecessary to consider, the question respecting the levy upon the partnership property to satisfy the debt of an individual partner, and the rule of damages in case the other partner replevy it, and the action be determined against him, as to whether it shall be the full value of the property replevied, or only the residuary .interest of the debtor partner, after tho settlement of the partnership accounts.

The two questions which we propose to consider, and *which, in our opinion, determines this case, depend entirely upon construction of the contract.

By the terms of the contract Johnson agrees fully to stock the ■Cleveland Mills from the 16th day of August to the 15th day of November, 1842; Hutchinson & Co., in connection with, an agont of Johnson’s, were to purchase wheat.

This wheat was to be converted into flour by Hutchinson & Co., at the Cleveland City Mills, and sold at Cleveland, Buffalo, or •shipped to Johnson at New York, as the Hutchinsons might think best for their interest.

All the proceeds of sale were to go at once into the hands of Johnson or his agents.

The Hutchinsons agree to bring on their milling assets as fast as possible into the milling business, to be applied to discharge their indebtedness to Johnson.

All flour sold at the mill for carrying it on, or for tho support of Hutchinson’s family or Johnson’s agent, to be accounted for.

Johnson to receive 2J per cent, on all sales except the flour retailed at the mills.

On the expiration of the contract the proceeds arising from the sale of flour, are to be applied : 1. To repay for wheat purchased; '2. To liquidate the balance due Johnson; 3. The balance to be paid to the Hutchinsons.

Now this is not a contract of partnership, but a mere mode by which they may appropriate their labor and the use of their mills to the discharge of their debt to Johnson, with tho advantage of ■the rise of the market. The Hutchinsons agree that they will ■employ their own labor and the use of their mills in converting ithe wheat of Johnson into flour and shipping it, for the sum which can be realized for the flour, after deducting the cost of the wheat and 2J per eent. on sales. Now what more is this than a mere compensation for labor expended and the use of the mills. There is one division of property between the Hutchinsons and Johnson. The Hutchinsons take the whole property after deducting 2| per cent, on the sales, which may be regarded *as compensation, or part compensation, to the agent to be employed by Johnson. The bare fact that the compensation is uncertain, or to be taken out of the profits, or to depend upon the profits, does not constitute a partnership.

This is a usual mode of compensation to stimulate industry, effort, and diligence, familiar to the books.

We can not under the contract regard the money to be paid for the wheat as a loan or advancement to the Hutchinsons, so as to constitute tho wheat purchased their property. Johnson agreed to stock the mills—he did not agree to advanco money to the Hutchinsons. In the purchase of the wheat he employed an agent who was to act in conjunction with the Hutchinsons. His part of the contract was to stock the mills with wheat; the wheat was his property, the Hutchinsons were to convert it into flour; they were simply bailees, and their right of possession was only one of bailment.

In this view, the Hutchinsons had no possessory legal right to the wheat subject to levy. They could not dispose of it to a third person, so as to defeat the right of' the bailor. If a third person should seize upon it, it would not deprive the bailor of his property and right of possession, nor does it alter the bailor’s right that the property was seized upon to satisfy the debt of the bailee. The fact that the bailee could not maintain replevin in his own name against the sheriff, the property having been seized in exe. cution to satisfy a debt against him, does not impair in any degree the right of tho bailor. Judgment for plaintiff.