Case ID: ny_10/html/0051-01.html
Source: Caselaw Access Project
Author: {"author": "Edwards, J. Gardiner, Ch. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Wright, Pres’t of Luther Wright’s Bank, against Hooker.
    Under the Code of Procedure, it is sufficient if facts be stated in the complaint which warrant the judgment, although the grounds upon which the judgment was rendered were other than those evidently contemplated by the pleader.
    Partners may adopt any name for the transaction of their partnership business, and may bind themselves by different partnership names, in their different places of business.
    Where X. & Co., residing at 0., in pursuance of a partnership agreement with H. of T. for carrying on the transportation business, which was conducted at 0. in the name of. I. .& Co., and at T. in the name of H., drew a hill of exchange on H., in the name of and payable to the order of X. & Co., which was endorsed by I. & Co., discounted by the plaintiif, and the proceeds applied to the general partnership business; H. having refused to accept, in an action .against I. & Co. and H. jointly, it was Held, that H. was liable not only for money lent to the partnership, but also as one of the joint drawers of the bill.
    On the 16th of April, 1849, an agreement was entered into by Benjamin Isaacs and Isaac S. Isaacs, of Oswego, and James H. Hooker, of-Troy, in the following terms:
    “ Memorandum of an agreement made' and entered into this 16th day of April,. 1849, by and between'James H. Hooker, of Troy, New-York, of the first part, and Benjamin Isaacs & Co., of Oswego, New-York, witnesseth:
    “ That the parties hereto hereby agree to continue to run the transportation line upon the Erie and Oswego ■ canals during the navigable season of 1849, known as the Oswego, Troy and Ohio Line, to connect at Troy with the old line ‘ Troy tow-boats,’ and at Oswego with the party of the second part; each party to have an equal interest, that is, James H. Hooker is to share one-half, and B. Isaacs & Co. the other half of the profit or loss of said line.
    The business of said line shall be done with boats owned or chartered by the parties hereto, and no boat shall be purchased for said line without consent of both parties.
    “ The party of the first part is to furnish such clerks and agents at Troy, Albany, New-York and Boston, for the purpose of conducting the business of said line, as may be necessary, for which the parties hereto are to pay in proportion to their respective interests.” (Then follows a table of the shipping charges to be allowed to B. Isaacs & Co. upon goods received at Oswego from the line for transportation westward, or received from the lakes and shipped by the Oswego, Troy and Ohio Line.)
    “ The party' of the first part hereby agrees to become accountable for all property and charges delivered him at Troy, and the parties of the second part hereby agree to become accountable for all property and charges delivered them at Oswego.
    “ The books and accounts of the said Oswego, Troy and Ohio Line ate to be kept at Troy by the party of the first part, and a statement of the business thereof rendered to the parties of the second part at least once in each month during the season of navigation.
    “ It is expressly understood and agreed among the parties hereto, that no drafts shall be made upon the party of the first part by the party of the second part, neither will the party of the first part accept any such draft, unless for money in his hands due to the parties of the second part for charges and tolls advanced by them, and accompanied by bills of lading representing charges consigned to him; the said parties of the second part hereby agreeing to raise the necessary funds for paying charges and tolls on all property shipped by said Oswego, Troy and Ohio Line from Oswego or vicinity, without drawing upon the party of the first part, except as hereinafter mentioned; it being understood that the said parties of the second part may, as often as twice or three times each month during the season of navigation, render to the said party of the first part an account of charges and tolls advanced by them on property shipped by said line to the said party of the first part, and deduct therefrom the charges on all goods up received by them, and draw upon the said party of the first part, at twenty or thirty days or longer time, for the balance actually in his hands; and should a balance at any time be found to be due on such statements to the party of the first part, it is to be immediately paid in cash. A general settlement of all the business of the said Oswego, Troy and Ohio Line shall be made at Troy on the first Monday of January next, and any balance then found to be due from one party to the other shall be paid immediately.
    
      “It is Understood that the said line shall use all its influence for the house of B. Isaacs & Co,, at Oswego, and said Isaacs & Co. to give all their influence' and business to said line.
    “It is expressly understood that nothing contained in this agreement shall be so construed as to create any associated interest or partnership between the parties hereto, excepting the one particular business of the Oswego, Troy and Ohio Line, and that only as regards the legitimate freighting business by said line/’
    " The agreement concludes with a clause providing for a discontinuance and settlement of the business.
    No general partnership name being adopted, the business of . the concern was done at Oswego in the name of B. Isaacs & Co., and at Troy in the name of James H. Hooker.
    In August, 1849, B. Isaacs & Co. drew upon Hooker a bill in the following terms :
    “ $1000. Oswego, 7ih August, 1849.
    “ Thirty days after date please pay to the order of B, Isaacs & Co. one thousand dollars, value received,, and charge the same to the account of ch’gs.
    “B. Isaacs & Co,
    “ To James H. HooEer, Troy, N. Y.”
    This bill was endorsed by the payees and discounted by the plaintiff. B. Isaacs & Co. received the avails, with which they purchased com on account of the partnership, which was forwarded to and received and sold by Hooker, who refused, however, to accept the bill. The plaintiff brought • this action in March, 1850, against the Isaacs and Hooker jointly, to recover the amount of the bill or the money advanced upon it. "There were special counts stating the foregoing facts, but not directly charging Hooker as a drawer of the bill, and also counts for money lent by the plaintiff to the defendants. Hooker alone defended; and the 'cause was brought to trial at the Oswego circuit in June, 1850, before Mr. Justice Allen, a jury being waived. Some of the facts appearing in evidence are mentioned in the opinion of Edwards, J., below. The judge held that Hooker was “ liable as drawer upon the bill in suit,” and on that ground gave judgment for the plaintiff for the whole amount of it. The supreme court in the fifth district affirmed this judgment at general term, Pratt, J., delivering the opinion, in which it was held that the circuit judge erred in the ground upon which his judgment was based, but that the defendant was liable for money lent. Hooker appealed to this court, and the cause was argued here by
    
      H. P» Hunt for the appellant, and
    
      George F. Comstock for the respondent.
   Edwards, J.

For the purpose of determining whether the defendant Hooker is liable upon the draft in question, and, if so, in what capacity, it will be necessary to ascertain what were the business relations existing between him and Isaacs & Co.

It appears by the bill of exceptions that on the 16th of April, 1849, the defendant Hooker, as party of the first part, and the defendants Benjamin and Isaac S. Isaacs, using the name of Benjamin Isaacs & Co., as parties of the second part, entered into an agreement to continue to run the transportation line upon the Erie and Oswego canals, known as the Oswego, Troy and Ohio Line; each party to have an equal interest in the profits, and to bear an equal share of the loss. The business of the line was to be done with boats owned or chartered by the parties to the agreement; the clerks and agents to be employed at Troy, Albany, New-York and Boston, for the purpose of conducting the business of the line, were to be paid for their services by the parties according ■ to their respective interests. The books of account of the business were to be kept by the party of the first part at Troy, and he was to forward a statement of the accounts to the other parties at least once in each month. And, finally, the agreement states that nothing therein contained shall be so construed as to create any associated interest or partnership between the parties thereto, excepting m the one particular business of the Oswego, Troy and Ohio Line, and that only as regards the legitimate freighting business.

This agreement, it will be seen, in express terms created a partnership, ■ and the first question to be considered is, what was its extent, or rather, what is the meaning of the words legitimate freighting business P

The best exposition" to be adopted is, undoubtedly, that which was given by the parties themselves. It will be observed, then, that the partnership agreement was a continuation of a previously existing arrangement, and it appears, by the account which was kept between the parties during the year 1848, that numerous entries were made of drafts accepted by the defendant Hooker, which were drawn against wheat and- flour, which, as stated by one of the witnesses, were purchased by Isaacs & Co.,. and sent to Hooker for the account of the line, and in order to freight its boats. Ik was also proved that the same practice continued after the partnership agreement of 1849 was entered into. Indeed, the agreement itself makes express provisions for transactions of such a character. It further appears that, according to the course of business between the parties, whenever produce was paid for in cash by Isaacs & Co., at Oswego, they raised the money by procuring a discount of drafts drawn by themselves upon Hooker. This was known to and acquiesced in by him, and, with a few exceptions, the drafts were paid by him. It. seems to me, then, that the conclusion is irresistible, that the purchase of the com by Isaacs & Co., for the purpose of being sent by them, upon the line of boats owned by the partnership, followed by actual shipment to Hooker, constituted a part of the legitimate freighting business, and that all the parties so understood it, and became liable upon, such purchase, and also for all moneys advanced for the purpose of enabling them to make it. * But if there- were any doubt as to the capacity in which Isaacs & Co. acted in making the purchase in question, I- think that it is removed by the particular circumstances of the case. It appears from the bill of exceptions that shortly' before the purchase was made the defendant Hooker sent a person in his employ to Oswego with a letter addressed to. Isaacs & Co. The letter states that the bearer of it will talk to Isaacs & Co. in relation to business; that he will inquire about com, and will advise with them. It also appears that, after thp receipt of this letter, the bearer of .it went with Isaacs &, Co. to look at different lots of com, and was informed by them that they were going to buy the com. in question, and was afterwards informed by them that they had purchased it, and he neither -said nor did anything expressive of his disapprobation of their acts. It-further -appears that Hooker was telegraphed as to the price of the com before it was purchased, and that no answer was received from him ; and, finally, it appears that the com was shipped to Hooker to be disposed of on account of the line, and that it was received and disposed of by him. Under these circumstances it seems to me that we must come to the conclusion that the com was purchased for the benefit of the partnership, and that all the members of the partnership are liable for the money which was advanced to Isaacs & Co. to enable them to make the purchase. ■

The next question is as to the capacity in which they are liable, or rather, as the other two defendants have made default, as to the capacity in which the defendant Hooker is liable. The justice by whom the action was tried held that he was liable as one of the drawers of the bill. The court-at general term held that he was liable for money lent. In my judgment there is sufficient in the case to establish his liability in either capacity. It will be observed that the parties had not, by their articles of agreement, adopted any partnership or firm name. But it appears that the partnership business at Oswego was done in the name of Isaacs & Co., with the acquiescence and approbation of all the members of the firm, and the name of Isaacs & Co. was, as to such business, the partnership name. It must follow, therefore, that as the money in the case before us was advanced upon the discount of a draft drawn in the name of Isaacs & Co., and was used by the firm in its partnership business, all the members of the firm, including the defendant Hooker, became liable as drawers. It is no objection that his name does not appear as drawer, for, as the partnership name was used in the partnership business, all the partners were embraced in it. This is the principle which was established in the somewhat analogous case of The Bank of Rochester v. Monteath (1 Denio, 402).

The learned justice who delivered the opinion of the court at the general term seems to have thought that, in the case above cited, the defendant should have been held liable for money lent, and not as party to the bill in suit, and he refers to the cases of' Allen v. Coit (6 Hill, 318), and Rogers v. Coit (ib., 323). Whether the court, in forming their opinion in the case of The Bank of Rochester v. Monteath, thought that the facts differed from those in the two cases last cited, or whether they intended to overrule these cases, does not appear; but, if the facts are to be regarded as the same in all the cases, I should unhesitatingly adopt the rule laid down in the case of The Bank of Rochester v. Monteath as the correct one.

It is contended, however, that there is not sufficient stated in the complaint to authorize the court to hold the defendant Hooker liable as one of the drawers of the bill. The Code of Procedure requires that the complaint shall contain a statement of the facts constituting the cause of action. In this case it is stated that all the defendants were purchasers; that Isaacs & Co. conducted the business of the partnership at Oswego in their names; that as parties they bought a large quantity of corn for the benefit of the firm, and drew a draft upon Hooker, in the name of Isaacs & Co., for the firm, which the plaintiff discounted, and that Hooker received the corn purchased by means of the discount, and that it was sold and disposed of by him. I think that these allegations are sufficient to sustain the judgment of the court that Hooker became liable as one of the drawers of the bill in suit. It is true that it would appear that the person who drew the complaint contemplated that Hooker would be held liable in some other capacity. But that is immaterial. The very object of the new system of pleading was to enable the court to give judgment according to the facts stated and proved, without reference to the form used or to the legal conclusions adopted by the pleader.

The judgment should be affirmed.

Gardiner, Ch. J.

It may perhaps be questioned whether the plaintiff is not bound to sustain his recovery upon the ground, and the only ground, upon which it was allowed by the learned judge before whom the cause was tried. Whether this be so or not, I think the ruling was correct. The last count in the complaint charges that the defendants were copartners in the forwarding, transportation and other business, at Troy and Oswego and at other places; that Hooker conducted the business of the firm at Troy and the Isaacs at Oswego; and that the latter, for the said firm, on the 7.th of August, 1849, drew the draft in question. There was certainly evidence, I think very strong evidence, tending to prove the allegation in the-complaint above mentioned. It is, however, sufficient to say that there was some proof, and that the judge who tried the cause without the intervention of a jury must have found the facts substantially as stated in the complaint, as he placed the plaintiff’s right to recover exclusively upon that ground. If so, the judgment was warranted by the principle established in The Bank of Rochester v. Monteath (1 Denio, 402), and in The Bank of South Carolina v. Case (8 Barn. § Cress., 427).

The whole court concurring,

Judgment affirmed.