Case ID: scl_17/html/0553-01.html
Source: Caselaw Access Project
Author: {"author": "Johnson, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Joseph T. Galloway v. Joseph Hughes, R. W. Hughes, and William Norris.
    Columbia,
    May, 1830.
    What constitutes a delivery of goods by a carrier, where no consignee has ' been named, d -pends upon the usages of the trade. Landing cotton on a wharf in Charleston, it seems, is not a delivery, according to the usage; but. it should be stored to the order of the owner.
    Copartners are bound by the contracts of each other, in relation to all matters incident to the leading object of the partnership; and whether the subject of a particular contract is to be regarded as an incident to the business of the partnership must, in doubtful cases, be determined by reference to the common opinion, and usage, of those most conversant with that business. Thus, where one member of a copartnership, in the business of transporting cotton, by boats, from the upper country to Charleston, contracted to sell, as well as carry, and to bring back the proceeds; held, that the firm was liable upon such contract, on proof, that it was the usage among the -boatmen on the same river, to undertake the sale of cotton, when requested to do so, as an incident to the carriage, and as a means of procuring freight, and that it constituted no objection, that boatmen sometimes refused to undertake the responsibility of selling, and bringing back the proceeds. — vide' Nichols v. Hughes, 2 Bailey, 109.
    This was an action of assumpsit, brought to charge the defendants, as copartners, with the proceeds of sale, of five bales of cotton, the property of the plaintiff. It was originally tried btfore Mr. Justice Richardson, at Union, Spring Term, 1829, on which occasion a verdict was-rendered for the plaintiff. The defendant moved to set aside the verdict; and the motion was argued in the Court of Appeals in May, 1830, when the following opinion was delivered, from which the points made in the case will be fully understood, without any prefatory statement.
    
      
      Per Curiam. Johnson, J. The defendants were partners, t[le fjj-rt, ()f Joseph Hughes & Co. in the business of boat->ng cotton, for freight, from Lockhart’s Shoals, in Broad River, to Charleston. The plaintiff delivered to them five bales of cotton, for which he took a receipt signed by Joseph Hughes, in the name of the firm, wherein they undertook to deliver it in Charleston, in good order, without expressing to what person, or at what particular place, it was to be delivered. Nude, the patroon of the boat, del vered, i. e. landed, the cotton on Kunhardt’s wharf in Charleston. R. W. Hughes, one of the defendants, afterwards sold it, and not having accounted with the plaintiff for the proceeds, this action was brought against the company, to recover the amount.
    The defendants, as a company, resisted the demand, on the grounds: 1st, That the delivery of the cotton on Kunhardt’s wharf was a fulfilment of their undertaking, and that the subsequent disposition of it, by R. W. Hughes, was an act of his own, for which they were not responsible. 2d, That the plaintiff had constituted R. W. Hughes his special agent to sell the cotton, and that act not falling wilhln the scope of their joint undertaking, R. W. Hughes, alone, was responsible for the manner of its execution.
    The facts connected with these questions are not very distinctly ascertained, but from the report of the presiding Judge, and his notes of the evidence taken at the trial, it may be satisfactorily collected, that Neale, the patroon of the company’s boat, placed the cotton on Kuuhardt’s wharf in Charleston, and R. W. Hughes, one of the defendants, took possession of it, and sold it.
    One of the witnesses, who was also concerned in the boating business, stated, that he had applied to the plaintiff to i. be this cotton on freight, but that he declined letting him have .t; and gave as a reason, that the defendants, Joseph, and R. W. Hu-lies, who had carried on the business the year before, when Norris had no connexion with them, had disposed of his col ton to so much advantage then, that he had determined to let them hav, it again.
    In the absence of any positive instructions with regard to the deposition of the cotton, and in the absence also of (he plaintiff himself, or of any agent authorized to receive It, the liability of the defendants rests, mosts obviously, on the question, whether placing it on the wharf, was a fulfilment of their undertaking. If it was, then, as a necessary consequence,any intermeddling with it, on the part of R. W. Hughes, was a trespass, for which his partners were not liable. This c-onclusion may be illustrated in a variety of ways. The contract on the part of the defendants was to carry the cotton to Charleston: and if it had been stipulated, that it should be delivered to any particular individual, and it had been so delivered, the consignee would then have become responsible to the plaintiff for it; and the defendants would have been discharged, although one of them had, by force, or by fraud, regained the possession. That would have been the act of the individual, and not of the firm.
    If, again, it had been stipulated, that it should have been delivered at a particular place, and at a given time, and it had been there deposited, although neither the plaintiff himself, nor any agent, was there to receive it, I apprehend that the undertaking of the defendants would have been discharged by leaving it there; although it might afterwards have been purloined by a stranger. In the absence of any instructions, it becomes then a question, what obligation, the undertaking, to carry, and deliver in Charleston, imposed upon the defendants, when neither the pi untiff, nor any one authorized by him, was there to receive it. This must necessarily depend on .the usage, and the course of trade. If, according to these, the wharf was.the usual place of deposit, then it follows, that the defendants had performed their co,.tract, and the subsequent intermeddling of R. W. Hughes, was an act for which he alone was responsible; but if, on the contrary, their contract imposed a further duty upon them, then they were not discharged, and whether it did, or not, it seems to me can only be resolved by the usage of the trade.
    Without professing to be fully informed upon the subject of this branch of the trade, nor indeed with regard to any other', I may be permitted to suggest a few extreme cases, by way of illustration. And I will suppose, in the first place, that the plaintiff had shipped on board the defendants’ boat, a cargo of mill-stones, to be delivered in Charleston, under the same circumstances. This article is indestructible from weather, and its bulk and weight furnish a sufficient security against its being purloined ; and I should apprehend, that placing the mill-stones on a public wharf would, therefore, be a substantial fulfilment of the undertaking. But if we substitute a cargo of salt, which thieves might purloin, and which the first shower of rain might dissolve, I should unhesitatingly pronounce, that the contract to deliver, was not performed by exposing it on a wharf. Every one knows, that is not the usual place of deposit lor such an article ; and the public stores afford a protection against the dangers, to which it would be exposed.
    The question then arises, as to what, disposition, does the usage of the trade authorize the carrier to make, of a cargo of cotton. If I were left to draw my own conclusion from what I know myself of the trade, I should incline to the belief, that it ought to be stored ; and yet, every one, who has visited Charleston in the trading season, cannot but have noticed, that the public stores are not sufficient to contain all that is sometimes in the market; and whether from necessity, or convenience, it is not unusual to see it ¡filed on the wharves in immense quantities. On this subject, the case reported, furnishes no evidence, either jpro, or con; and it is very apparent, that its importance was not seen, or appreciated, on the trial in the Circuit Court: and that of itself won Id furnish sufficient ground'for a new (rial. •
    The case of Kemp v. Coughtry, 11 Johns. 107, has been re lied on, to establish that the contract to carry, in the absence of particular instructions, implied also an undertaking to sell, and to account, for the proceeds, and that all the partners were liable for the defalcation of one, in not so accounting. That was a contract to carry flour from ’ Albany to New-York, which was sold bv the master of the vessel in the usual course of such carrying business ; and the Court there held, that the partners were liable for the defalcation of the master in not paying over the proceeds. But that determination proceeded on the ground, that, in the. absence of instructions, if. was the duty of the master to sell, according to the usual course of trade, which usage, was established by several masters and owners of vessels concerned in i be, trade. But here, as I have before observed, there was no ev dunce upon the subject, and however confident I may be in the esult of my own observations, I am not disposed to place the rig ,ts of these parties upon it, or to establish a rule to g'ovetu future cases.
    
      If, in relation to the second ground of defence, it be assumed, that R. W. Hughes had an express authority to sell the cotton of the p'aintiff, then the question would arise, whether the other defendants, as partners, would be liable for his defalcation.
    This involves, directly, the extent of the liability of partners ' for the acts of each other; and I cannot better illustrate the rules of law upon that subject than by referring to Chancellor Kent’s Commentaries, vol. 3. p. 17, where, although he professes to do no more than select the leading rules, and give a general analysis of the cases, it will be found, that this has been done with a masterly hand. The result-is a conclusion, drawn by sound reasoning from the nature and character of the partnership, and may be summed up in the liability of all the partners, for the act of any one of them, done in the execution of the objects of the partnership.
    There is no limitation or restraint upon the associations of fnen, for proper, and legitimate purposes. They may be extended to all the pursuits of industry and enterprize; and they may be limited to the catching and selling of ousters. And in every association, the partners are liable for the acts of each other, exactly so far as they are necessary to the object of the partnership, and no further.
    Two men unite their stock in merchandize, and- agree to share the profit and loss. If one purchase goods on account of the concern, (he cither is liable, because that is directly in the pursuit of the object of their association ; but if One should take upon himself to build a castle, and to fortify, and man it, there would be no reason or justice in subjecting the other to-the expenditure incurred by it. He is not bound, because he did not assent to it.
    Supposing the facts to exist, which this question assumes, the inquiry then would be, whether the obligation to sell cotton, carried on freight, is implied in the obligation tb carry; for in that event, alone, would the partners be liable for a defalcation of one in the sale.
    If I were to answer this inquiry, without reference to the usage in regard to it, I should unhesitatingly pronounce that it did npt. The capacity to manage a ,boat, and to strike a good bargain, are not necessarily identified. In the one, physical strength is in some degree indispensable; in the other, a ltnow-ledge of trade is required. One who handles an oar, or a pole, wjtjt dexterity, might find himself overmatched in a market. Or if I were to judge of this matter from my own observation, I should come to the same conclusion. The sale of produce, it is true, is sometimes confided to a boatman, but this is rare. Most of the planters confide that matter to factors, or agents residing in town ; and as a strong illustration of the generality of this usage, it is stated, that the defendant Norris, who is also a planter, confides the sale of his cotton to a factor, although he is concerned in the boating business. But this question, like the former, can only be resolved by the usage, of which there was no evidence on the circuit; and however confident I might feel, I am not disposed to decide it upon my own responsibility.
    It is true, that the evidence of an authority from the plaintiff to R. W. Hughes was slight; but I think the judge stated it rather too strongly, when he advised the jury, that there was no evidence of it.
    Upon the whole, this case has arisen out of rather a new branch of business here. The facts too are involved in some obscurity ; and it is very obvious that the principles which govern it, were not distinctly seen, or understood by the counsel, at the trial below, and were not fully developed to the Court. And for these reasons I think a new trial ought to be had.
    
      New trial granted.
    
    The case came on for a second trial in the Circuit Court, before Mr. Justice Johnson, at Union, in October, 1829.
    On this occasion it appeared in evidence, that contemporaneously with the receipt mentioned in the preceding opinion, Joseph Hughes agreed, verbally, to have the cotton sold in Charleston, and the proceeds brought up and paid to the plaintiff. This the witnesses supposed was to be effected by R. W. Hughes; but his name was not mentioned, and the opinion was merely a surmise from the. fact, that R. W. Hughes was expected to be in Charleston, at the time of the arrival of the cotton. It was also fully proved, that the cotton was landed by the direction of R. W. Hughes, who told the patroon he was about to sell it, but afterwards had it stored on the wharf, to the order of Boyce & Henry, factors, to whom he gave instructions to sell; and the cotton was accordingly sold by them, and the proceeds paid over to R. W. Hughes.
    Mr. Kuuhardt, at whose wharf the cotton was landed, and several factors, and merchants, of respectability, in Charleston, were examined as to the usage, in relation to the delivery of goods brought in boats, and other vessels. They concurred in stating, that merely lauding on the wharf was not regarded as the fulfilment of a contract to deliver goods in Charleston ; but the goods remained under the control of the master, or patroon, until taken charge of by the consignee, or stored in his name. After an order to store, the wharfinger became responsible, although the goods remained on the wharf.
    A large number of witnesses were examined as to the usage in the boating business on Broad River. They concurred in testifying, that from the earliest period of the navigation of that river, it bad been usual with owners'of boats, when requested, to sell the cotton which they carried to market on freight, and bring home the proceeds. This was particularly common when small parcels were sent. It was done as an accommodation, and no charge was made for it. It was however regarded ag hazardous, but the risk was assumed, because it was frequently necessary to do so, as the means of procuring freight, it was J i l l J sometimes however declined, and several boatmen, who had beetl l°ng e|•gaged •« the business, liad always refused to undertake the risk of selling, or bringing back the money. The plaintiff’, it appeared, had been in the habit of intrusting the sale of his cotton to the boatmen who carried it.
    The presiding Judge charged, that it seemed clear from the evidence as to the usage in Charleston, that landing the plaintiff’s cotton on the wharf was not a fulfilment of the defendants’ contract to deliver it; but that it should have been deposited in the public stores in the plaintiff’s name. That this question was, however, immaterial, as it. W. Hughes, one of the defendants, had directed the cotton to be landed, and deposited in the public stores, subject to the order of agents appointed by himself, whom he instructed to sell it; so that the cotton never ceased to be under the control of the defendants, until it was sold.
    The question then was, whether R. W. Hughes had any authority from the plaintiff to sell, separate from, and independently of, his connexion with the firm. The jury were to determine, in the first place, whether the verbal agreement, entered into by Joseph Hughes, was intended to bind only himself and II. W. Hughes, or whether it was intended, and understood, by the parties, to be a contract between the plaintiff and the whole firm. If the latter, then another question would arise; whether Joseph Hughes was competent to bind the firm by such a contract. Copartners were liable for the contracts of each other, only so far as they had reference to the apparent objects for which the partnership was formed The defendants had associated solely for the purpose of carrying on the boating business ; and the object of the copartnership was the profit to be made by transporting cotton on freight. So far as the subject matter of any contract, made by one of the partners in the name of the firm, was incidental to this object, it was binding on the firm; for it was a presumption of law from the existence of a copartnership, that the partners had, to that extent, agreed to be bound by the contracts of each other. Whether the agreement to sell could, in the present instance, be regarded as incidental to the object of the partnership, depended upon the 
      usage, of which the jury were to determine by the evidence. If they were satisfied, that it was a common usage among the boatmen, to hold out this accommodation, as á means of procuring freight, it constituted a part of the service by which freight was earned, and was therefore within the object of the partnership, and all the defendants were liable.
    The jury found for the plaintiff; and the defendants now moved to set aside their verdict, and for a'new trial, on the ground of misdirection'.
    Herndon, for the motion.
    A. W. Thomson, contra.
    
      
      
        No objection was made, at the trial, to the admissibility of the evidence of this verbal agreement, on the ground, that it went to add to, or vary, the wriften contract contained in the receipt; and indeed it was introduced by the defendants, themselves, with a view to establish a separate agency in JEt. W. Hughes for the sale of the cotton. It was, however, made a ground in the subsequent appeal, “that the written contract was the only competent evidence against the firmbut this ground was not urged in the argument, nor, as will be seen, specifically noticed in the opinion delivered by the Court of Appeals. The presiding Judge, in his report, remarks in reference to this ground: “I do not recollect that this objection was relied on; but I was then, and still am. of opinion, that the verbal agreement to sell, may stand with the written agreement to carry, and that both were binding on the defendants. Although they related to the same subject, there was no incongruity, or incompatibility. The one, the contract to sell, was, according to my view of the case, the inducement to the other, and constituted in part the consideration.” To which it may be added, that it is difficult to perceive, in what manner the objection could have availed the defendants, under the views entertained by the Court, on the other questions arising in the case. If the verbal agreement were excluded, then there was no evidence of any agency to sell, in R. W. Hughes, and consequently no delivery; and the defendants were liable on that ground. Whether the verbal agreement bound the firm, depended on the construction of the agreement itself, and the capacity of one copartner to bind the firm by such a contrior,’ and the question could .not be affected by the competency of the evidence by which the agreement was established.
      R.
    
   Johnson, J.

delivered the opinion of the Court.

This cause was tried on the circuit by myself, and upon a careful review of all the questions that were then raised, aided by the arguments of the counsel here, I remain satisfied with the views then entertained, and with the instructions given to the jury; and in this my brethren concur with me, I will use the occasion, however, to express, something more at large, the views which I entertain on the leading question in the case, which is somewhat a novel one in this Court. It is, whether the defendants are bound by the contract of Joseph Hughes, one of the firm of Joseph Hughes & Co. to sell the plaintiff’s cotton in Charleston, and to bring back, or remit him the proceeds.

The general rule, to which all assent, is, that the partners are bound by the contract of one, in relation to a subject matter wiiiiin the objects of the partnership; so that in all cases of tisis sort, it becomes a question, whether, in point of fact, the thing contracted about was within the objects of the partnership, The terms used to designate the objects of the partnership between the defendants are general, and express no more than an association to carry on the trade of boating on the river, on their joint account, and for their joint benefit; and their leading object was, doubtless, the profit to be derived from freights. They imply, however, and necessarily, all the incidents to the leading object. To' earn freight, boats properly manned, provisioned, and equipped, are indispensable; and hence' the obligation of the partners to share the cost of the boats, the hire of hands, provisions, &c.; and it is upon the faith of this joint liability that one partner obtains credit for the firm» These things fail so directly within the objects of the partnership, that no one would question their-joint liability. But, in the mixed and multifarious transactions of men, it is sometimes difficult in a particular transaction to determine, whether it belongs to the actor in his individual, or partnership character; and in the solution of this difficulty, I know of no rule, so certain, practical, and safe, as the common opinion and usage of those most conversant with the business.

In the case of-v. Layfield, 1 Salk. 292, Holt, Chief Justice, held, that bankers, partners, were liable on the undertaking of one of the firm to pay the benefit of a lottery ticket, although it did not 'appear, that any other of the firm had undertaken to be trustees of the lottery. So in the case of Kemp v. Coughtry, 11 Johns. 107, which, in other respects, bears a very strong resemblance to the present, it was held by the whole Court, that the defendants, as partners, were, by usage, liable for money stolen from Coughtry, the proceeds of flour that he had taken, on freight from Albany to New-York, on board a vessel engaged in that trade, of which he was master, and part owner.

On the subject of the usage of this particular trade, there is no contrariety of evidence. The witnesses all agree, that from the first navigation of Broad River, down to the present day, boatmen have been in the habit of selling, particularly small parcels and crops of cotton, which they bad carried on freight, when instructed so to do: and independently of the positive evidence, it is obvious, that they incur the hazard of losing the money on their return, as an inducement to the planters to give them their cotton on freight; and that this service is rendered on account of, and as a partial equivalent'for, the freight.’

This usage, and its legal consequences, are distinctly recognized in the case of Mooreman v De Graffenread, 2 Mill, 195. Títere it was held, that the defendant was liable to pay commissions on sales of cotton made by the plaintiff, who had carried it on freight; on the ground of a special contract to pay commissions, although by the usage of this identical trade, boatmen, who sold cotton, were not intitled to commissions, the freight being a sufficient compensation.

It is no objection to the usage, that boatmen sometimes refuse to sell; or that others never have been requested to do so. A partner may refuse to enter-into a contract by which his firm may be bound, but if he does, they are bound of course.

Colcock, J. and Evans, J. concurred.

Motion refused.