Case ID: mass_9/html/0456-01.html
Source: Caselaw Access Project
Author: {"author": "\n      By the Court.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

James and Thomas H. Perkins versus Theodore Lyman.
    Where one, for a valuable consideration, covenanted that he would not be, directly or indirectly, interested in any voyage to the north-west coast of America, or in any traffic with the natives of that coast, for seven years, it was holden that such contract was not void, as against the policy of the law, being in restraint of trade; and that it was a breach of the covenants for the covenantor to own and tit a vessel for such voyage, although, before her departure, he divested himself of all interest in the vessel and cargo.
    The covenantee’s afterwards becoming a part-owner of such vessel and cargo by purchase, does not take away his right of action, although it may go in mitigation of damages
    
      The declaration in this case was in debt, for that, as the plaintiffs aver, on the 8th of June, 1807, there was, and for many years before that time there had been, a trade and traffic carried on, by merchants dwelling in Boston and elsewhere, to the north-west coast of America, with the natives there, who are uncivilized or savage tribes, to buy sea-otter, land-otter, and beaver skins, and to carry them to China, to merchandise and make profit of; that the said trade is limited- as to the number of such skins, which amount, on an average, to nine thousand skins annually, and which are sufficient only to load, with reasonable expectation of profit, six vessels at most; and that the profits in said traffic depend upon the number of vessels sent to said coast, to be supplied with cargoes therefrom to China aforesaid. The plaintiffs further aver that they, and also the said Theodore, had been such merchants trading to the northwest coast of America; and that said trade can be carried on advantageously by those only who have experience therein, and who have information from year to year of the state of demand on said coast, by the natives there, for the articles, goods, and merchandise, which it is the object * of said trade to exchange with them for the skins aforesaid; — that the profits of said trade are dependent upon such experience and information, and upon the amount of capital which any merchant has power to employ therein; that the defendant was then and there a merchant of great experience and accurate information in said traffic, and was able to employ a very great capital therein ; and the plaintiffs were then and there desirous of having the defendant withdraw himself and his capital from said traffic, and the defendant was also desirous of withdrawing himself therefrom, on being compensated to his satisfaction for the property which he then had with intention to employ the same in said traffic, and on effecting the sale of said property at prices by him fixed and limited; and, to this end, was desirous of disposing of a certain ship called the Vancouver, and her appurtenances, which had been by him employed in said traffic, and also of a quantity of merchandise and provisions, which he had prepared, and had intended to use in the prosecution of a voyage to said coast; and the defendant then and there proposed to the plaintiffs to purchase of him the said ship and appurtenances at a certain sum of money by him fixed and limited, viz., the sum of 8000 dollars; and to purchase the said merchandise and provisions at a certain advance and price also by him fixed and limited ; so that the defendant might withdraw himself and his property from the prosecution of the adventure and voyage which he had intended; he then and there proposed to the plaintiffs that, if they would purchase, as aforesaid, said ship, merchandise, and provisions, he would not, directly or indirectly, make any further adventure to the said coast for the term of seven years; and the plaintiffs aver that they did purchase of the defendant the said ship and appurtenances, and the said merchandise and provisions; and the defendant, having so agreed to sell to the plaintiffs the said ship, &c., and being enabled to withdraw himself from said traffic as to the said ship Vancouver, and having also agreed with the * plaintiffs that he would not, in his own name, or in the name of any other person for him, directly or indirectly, be interested" in any voyage to the said coast, or in any adventure to that coast, or any species of traffic with the natives of that country, for the term of seven years from the said 8th of June, the said parties then and there made a memorandum in writing, between the plaintiffs of the one part, and the defendant of the other part, which was sealed with the seal of the defendant, and by him duly executed and delivered, and which the plaintiffs bring into Court, the date whereof is the day and year aforesaid ; and by which writing, made as aforesaid, it is expressed that the plaintiffs agreed with the defendant to buy of him the said ship, then lying in the harbor of Boston, and to pay therefor, in one year from said date, 8000 dollars; and the defendant, in and by said memorandum, in consideration of having received the promissory note of the plaintiffs, payable to him in one year, covenanted and agreed with the plaintiffs that, provided they should pay the said sum when it should fall due, according to the tenor of said note, he would not, in his own name or in the name of any other person for him, be directly or indirectly interested in any voyage to the said coast, or in any species of traffic with the natives of that country, for the term of seven years from the day aforesaid ; and bound himself, his heirs, &c., in the penal sum of 8000 dollars. And the plaintiffs aver that they did well and truly pay to the defendant the sum due by their said promissory note, when the same became due ; and that, after the making of said agreement in writing as aforesaid, and within seven years from the date thereof, and after the payment of the said sum as aforesaid, the defendant, at said Boston, on the 16th day of March, 1809, regardless of his said covenants with the plaintiffs, was interested and concerned in a voyage or adventure to the said coast, and was then and there owner of a certain _ ship or vessel called the Hamilton, then lying in the harbor of Boston, and had there, on the said 16th of March, loaded with a cargo, and * fitted out the said ship Hamilton, for a voyage to the said coast; and that the said ship did sail, within the said month of March, for the said coast, properly laden, fitted, and prepared, for a trading voyage thereto; the defendant being sole owner of said ship and cargo until about the time of her departure, and interested therein after her departure; and so continued to be interested until he sold and disposed thereof to great profit and advantage to himself; and the plaintiffs further aver that the said ship did proceed to the said coast, and the cargo laden on board her was afterwards, on the 1 st day of May last, used and employed in trade and traffic with the natives of the said coast. And so the said Theodore his covenant with the plaintiffs has not kept, but hath broken the same; by means of all which an action hath accrued to the plaintiffs to demand and have of the said Theodore the aforesaid sum of 8000 dollars. Yet, though requested, &c.
    The defendant, besides two pleas in bar, which resulted in issue to the country, pleaded,
    
      First. That although he, on, &c., was the owner of the ship Hamilton, and the same was laden with a cargo and fitted out for a voyage to the north-west coast of America, by one George Lyman, son of the defendant, with funds supplied in part by the defendant upon credit, and with his knowledge and consent, but on the sole account of said George; and with the intent that, before the departure of the said ship on the said voyage, she should be sold and conveyed to the said George for a good and valuable consideration, and that he, the said George, might sell and dispose of a part of said ship and cargo to some other person or persons; and that, until such sale should be effected, the whole fitting out and preparing for said voyage, and the adventure to said coast, and the
    trade and traffic there, should be done and carried on by the said George, for his account and profit, and afterwards for the account and profit of the said George and such other person or persons, other than the defendant, as might become purchasers * thereof. Of all which the plaintiffs, during the time of the fitting out and preparing for said voyage, had due notice, as well from the defendant as from the said George. And the defendant avers that, during the time of said fitting and preparation, a conversation and treaty were had and carried on between the said George and the defendant in behalf of said George, on one part, arid the plaintiffs on the other part, in which it was proposed to the plaintiffs that they should become purchasers of the said ship and cargo, and interested in the said voyage and adventure to the said coast. And protesting that the said ship and cargo, or any part thereof, or of either of them, at the time of her said departure, or at any time afterwards during said voyage and traffic, were not owned by him ; and that he was not, in his own name, or in the name of any other person, directly or indirectly interested therein, nor in said adventure, nor any species of. traffic, otherwise than as a father and creditor of said George. Nevertheless, the defendant further says that, after the departure of the said ship and cargo, in the declaration mentioned, upon the said voyage, and long before the arrival óf the same on the said coast, the treaty aforesaid, which had been carried on as aforesaid, was completed; and the plaintiffs purchased from said George a part of the said ship and cargo on board the same, and thus became part-owners thereof, and so continued to be during the whole of the said voyage ; and fhat the prosecution of said voyage, and the using and employing of the said vessel in said trade and traffic, were by the license and command of the plaintiffs, and for their benefit and profit, as part-owners of the same.
    To this plea the plaintiffs replied, (protesting that the said ship was not fitted out with intent to be sold, &c.; that they had no notice of such fitting out with intent, &c.; that a treaty and conversation were not had, &c.; that such treaty was not completed; that no such purchase was made; and that the using and employment of said ship *and cargo in said trade and traffic were not by the license and command of the plaintiffs, or for their benefit as part-owners;) that the said ship was by the defendant owned at, &c., on, &c., and was by him there fitted out and prepared for a trading voyage to said coast, and was there used and employed in trade and traffic with the natives thereof, the defendant being the sole owner thereof until about the time of the said ship’s departure, as the plaintiffs have in their declaration alleged ; without this, that the said ship was laden with a cargo, and fitted out for a voyage to the said coast, oh account of said George, as the defendant in his said plea has alleged.
    To this replication the defendant demurred, assigning for causes the following, viz.: —
    1. That he, in his said plea, hath set forth and alleged good and sufficient matter in bar of the plaintiffs’ action, viz., that the plaintiffs did become purchasers and part-owners of the said ship upon the said voyage, and that the said voyage was prosecuted by their license and command, and for their benefit and profit as part-owners ; which the plaintiffs have not in any way confessed and avoided, nor contradicted or denied; but have traversed and attempted to put in issue an allegation in the said plea, which is matter of inducement merely, and which is wholly immaterial to the merits of the action.
    2. That the plaintiffs have answered by way of protestation, only, all the new and material allegations in the said plea; and that the said replication is altogether informal and insufficient.
    
      
      Secondly. In another plea in bar, the defendant alleged that, although the said ship was fitted out, &,c.,‘and did proceed on said voyage. &c., yet that the plaintiffs were part-owners of the said ship and cargo, &c., and that the prosecution of the said voyage, and the using and employing the ship in the said trade, &c., were with the license,- consent, and command, of the plaintiffs
    To this plea the plaintiffs replied that, after the defendant had prepared and fitted out and loaded said ship with a * cargo, &c., and had sent her on said voyage, contrary to his said covenants with them, and long after he had broken his said covenants, as they have alleged, and after said ship had arrived at said coast, they, on the 25th of October, 1809, had notice that the said ship had been so prepared and sent; and that they, on the day last mentioned, to save themselves, as far as in them lay, from some of the losses and damages occasioned by the said acts of the defendant, and also to obviate, so far as they could, the derangement of their plans of trade with said natives, occasioned by the defendant’s acts as aforesaid, and also to preserve an interest and connection in said trade, which they aver were necessary in their future trade and traffic with the said natives, did purchase a part of said ship and cargo, at a great advance and profit to the defendant, and did become part owners of the same ship and cargo.
    The defendant demurred to the said replication, and assigned the following causes of demurrer, viz.: —
    1. Because the plaintiffs therein allege that, after the said ship had departed, &c., they had notice, &c., but they do not allege that at this time they first had notice; so that the time of such notice being given (if material to be alleged) might be traversed or denied.
    2. Because the plaintiffs aver that they, after the supposed breach of covenant by the defendant, purchased, &c. And one of the breaches of covenant assigned by them is, the using and employing of said ship in said trade ; and yet they allege, among other things, as a reason for said purchase, that it was to preserve an interest in said trade; whence it follows, by the plaintiffs’ own showing, either that the said purchase was made prior to the using and employing of said ship in said trade, or that they, by aiding in the continuance of such use and employment, waived all right to damages for the breach of said covenant.
    3. Because the plaintiffs, by their own showing, did, after the alleged breach of said covenants, among other things, “ to save themselves from some of the losses and * damages occasioned thereby,” and to secure to themselves certain. other advantages not specified in or secured to them by the said original deed, purchase a part of said ship and cargo, with full notice that she was then prosecuting said voyage; thus electing and accepting, by way of accord and satisfaction, another indemnification for the very losses and damages, for which, as they say, the said covenant was originally made, and aiding and assisting him in the further breach of covenants made with themselves.
    4. Because the defendant has, in his said plea, alleged that the prosecution of said voyage, and the employment of the said ship in the said trade, were with the license, consent, and command, of the plaintiffs, and for their interest and profit as part-owners of the same ; which allegation they have not denied, except by implication, nor in any way confessed and avoided the same.
    5. Because the said replication is informal, double, not issuable, uncertain, and insufficient.
    There was a second count in the declaration, like that above recited, substituting the brig Lydia for the ship Hamilton, on which count there were similar pleadings.
    The cause was argued, at this term, upon the demurrers, by Dexter and Sullivan for the plaintiffs, and Otis and Bigelow for the defendant.
    
      For the defendant,
    
    it was argued that the declaration disclosed no legal cause of action. The covenant, on which the action is brought, is void, as being in restraint of trade, and so against the policy of the law.  The declaration is bad also, inasmuch as it does not appear but that the Hamilton was employed in the trade at the time of the contract, and then by the proviso in the contract,  it was no breach to employ her in subsequent voyages.
    * Besides urging these general objections to the declaration, the defendant’s counsel went minutely into the consideration of the pleadings, and were replied to at much length by the counsel for the plaintiffs.
    
      
       1P. Will. 197.
    
    
      
       The contract, which was spread upon the record on oyer, had upon one of the pleas which resulted in an issue in fact, contained the following exception: “Provided, and it is fully understood by the parties, that it [the contract] is not in any way to affect the trade of any vessels the said Lyman may no have on that coast, or on their way there.”
    
   By the Court.

In this case, the defendant has contended that he is not restrained by his contract from owning and fitting vessels for voyages to the north-west coast, so that he divests himself of his interest therein before the actual departure of the vessels on their voyages. But we cannot yield to this construction. This is a branch of commerce very limited in its nature. A few ships only can be employed in it with any prospect of gain ; and the true construction of the defendant’s agreement is — I will not be in any way concerned in this trade for seven years from this time. The fact of the plaintiffs’ afterwards purchasing a part of the vessels fitted by the defendant, may properly be considered by the jury, when estimating the plaintiffs’ damages, but does not go to take away their right of action. For when a breach of contract is proved, the only question remaining between the parties is the amount of damages, to which the party complaining is, upon a view of all the circumstances, in equity and good conscience entitled.

As to the point urged for the defendant in the argument, that the contract was void in its origin, as against the policy of the law, being in restraint of trade, — the principle relied on does not apply to the case. This is a trade but lately discovered, and it can be beneficial but to a small number of adventurers. If one adventurer will engage to retire from it for a valuable consideration, and to leave the conduct of it to others, it is lawful for him so to do, and his contract to that effect will be binding on him. Instead of an injury to the public, the community may receive a benefit from such a procedure, as it will go to prevent the trade’s being overdone, and so becoming profitable to none.

The plaintiffs’ replications are adjudged good, and the damages will be assessed by the jury in the trial of the issues in fact joined between the parties, 
      
      
         [Vide S. C., but not S. P., 11 Mass. Rep. 76.— Ed.]