Case Name: Burckle vs. Eckhart and others
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1849-12
Citations: 3 N.Y. 132
Docket Number: 
Parties: Burckle vs. Eckhart and others.
Judges: 
Reporter: New York Reports
Volume: 3
Pages: 132–143

Head Matter:
Burckle vs. Eckhart and others.
Where a contract is made at one place and is to be performed at another, the cause of action upon such contract arises at the latter place.
Therefore, where by a contract made at Oswego (within the fifth circuit) the complainant was to manufacture flour at that place, and deliver it to the defendants in Canada, where they resided, who were to dispose of it there and account for the net profits, and a bill was filed before the vice chancellor of the fifth circuit for an account; held, that the cause or matter did not arise within that circuit so as to give the vice chancellor jurisdiction.
And held farther, that jurisdiction was not acquired on the ground that the subject matter of the controversy was situated within the circuit. The subject matter in such a case has no locality within the meaning of the statute defining the jurisdiction of the vice chancellor.
In order to give a vice chancellor jurisdiction on account of the cause or matter having arisen within his circuit, it must have arisen there exclusively.
Where a bill was filed before a vice chancellor against persons not residing within his circuit, and the defendants voluntarily appeared, and then suffered the bilí to be taken as confessed for want of an answer; held, that such appearance did not confer jurisdiction.
When the cause or matter does no$ arise, and the subject matter of the contro- . versy is not situated, within the circuit of a vice chancellor, the residence of a defendant therein is a jurisdictional fact, and where that is also wanting the mere appearance of the defendant does not cure the defect.
A person employed by a firm and receiving a given share of the profits as a compensation for his services, but having no community of interest in the capital stock of the concern, is not liable as a partner.
A mercantile house engaged in general business, and trading among other things in provisions, employed a person to attend to the purchasing and forwarding of produce, who was to act under the orders of the firm, and have, as a com pensation for his services, one fourth of the profits arising out of the purchase and sale of the produce; held,, that the person so employed was 'not a partner in the business even in respect to third parties.
Appeal from the supreme court, where Burckle brought an action of assumpsit against James Gibb, Thomas Gibb, Elisha Lane, and Isaac R. Eckhart. The suit was upon a "contract made March 2, 1841, between the plaintiff, of Oswego, of the one part, and James Gibb & Co. of Quebec, of the other part. The cause was first tried in January, 1843, when the plaintiff had a verdict which was set aside by the supreme court and a new trial granted. The facts as they appeared on that occasion are stated in the report of the case. (1 Denio, 337.) There was another trial in November, 1845, and the plaintiff again had a verdict which was also set aside by the supreme court. (Nee 3 Denio, 279.) The cause was last tried before Justice H. Gray at the New-York circuit, in December, 1847, and in addition to the facts proved on the first trial, the plaintiff, for the purpose of proving that the defendant Eckhart was' one of the parties of the second part to the contract in question, offered in evidence an exemplified copy of the proceedings and decree in the court of chancery before the vice chancellor of the fifth circuit, in a cause between the parties to this suit, the plaintiff being complainant. The bill described the plaintiff as a resident of Oswego in this state, and the defendants as residents of Quebec, in Lower Canada. It set out the agreement declared on in this suit, which it averred was executed by the defendants, by and under the style, name, and firm of Gibbs Sp Co. The object of the bill was to compel the defendants to account for the profit of a quantity of flour, which the plaintiff had delivered at Kingston, pursuant to the contract. It was taken as confessed, for want of an answer; the defendants having appeared by a solicitor. The decree, which was entered on the 20th of May, 1845, declared that all the defendants entered into the contract as members of the firm of James Gibbs Sp Co., and that the parties proceeded to the execution of its provisions, until Oct. 1841; when the defendants refused to receive any more flour, or perform on their part; the complainant having fully performed on his part; that the defendants were , indebted to the complainant in the sum of $3539,48, for one third the net profits of flour accepted and sold in Canada by the defendants; which the latter were decreed to pay with costs. This evidence was objected to, on the ground that the vice chancellor of the fifth circuit had no jurisdiction of the matters stated in the bill; and the evidence was received by the judge subject to the objection.
After the testimony upon both sides had been given, the defendant Eckhart (upon whom alone process had been served,) moved for a nonsuit, 1st, upon the ground that the decree was not evidence to go to the jury, for the reason above alledged; and 2d, because upon the whole evidence, Eckhart was not shown to be a partner with the other defendants. The non-suit was granted, and the plaintiff excepted. The supreme court sitting in the first district refused to set aside the nonsuit, - and after judgment the plaintiff appealed to this court. The contract in question is sufficiently referred to in the opinion of the court.
G. Wood, for appellant.
H. Denio, for respondents.

Opinion:
Gardiner, J.
Two questions are presented'in this case-1st. Had the vice chancellor of the fifth circuit jurisdiction to make the decree received in evidence upon the trial? and if not, 2d, whether Eckhart is shown prima facie, to be one of the firm of Gibbs & Co. by the other evidence in the cause ? The statute (2 R. S. 168, § 2,) declares, that every circuit judge within the limits of his circuit, shall, concurrently with the chancellor, have, and exercise, all the original jurisdiction, and powers, vested in the chancellor, in all causes, and matters in equity, when such causes and matters shall have arisen within the circuit of such judge. The 2d and 3d subdivisions of the section above quoted are not applicable, and may be laid out of consideration. And the inquiry is, whether the causes and matters in contro versy between these parties, and in reference to which relief was sought in equity, arose in the fifth circuit.
The contract was executed at Oswego, but the duties and obligations imposed by it upon Gibbs &. Co., for a violation of which the bill was filed, were to be performed and discharged in Canada, with a single exception. The flour, after the manufacture, was to be delivered at Kingston, to the agents of Gibbs & Co., who were then to advance to the plaintiff the cost at that place, including all charges for freight; it was to be sold in Canada by Gibbs & Co., the accounts were to be kept there, a partial adjustment of the profits and losses was to be had from time to time, if required, and a " final settlement (in the language of the agreement) and close of accounts to be made at the end of the year 1841, and balances paid, as they appear respectively due by the parties, from one to the other: Gibbs &, Co. having a share of two thirds, and the plaintiff one third of the same." All these provisions, in terms, or by necessary implication, refer to Canada, as the place where the business was to be transacted. The fair inference from the contract is, that the payments of balances, by the respective parties, were to be made at the place where those balances were ascertained. This would be at the place of business of the copartnership, where the accounts were kept. The share of the losses, to be provided for by the plaintiff, were to be paid to Gibbs & Co. who, by the contract, were to advance the cost of the flour at Kingston, and who of course would sustain in the first instance, the loss arising from its depreciation. It certainly is not probable that the parties contemplated the payment of the profits in one country, and the losses in another, particularly as upon the final settlement they were to be paid when and of course where the balance was ascertained. If this is a correct view of the agreement, its performance by Gibbs & Co. was to be regulated according to the laws of Canada, and the balances, when ascertained, were to be paid there, with the interest authorized by those laws, and not according to the laws of the United States. (2 Kent, 460; Story's Conflict of Laws, § 284; Andrews v. Pond, 13 Peters, 77, 78.)
It is true, the contract was made at Oswego, and within the 5th circuit. It is also true, that it is the foundation of the plaintiff's claim: but the place of its execution is not a cause or matter in equity, or any part of it, in controversy between these parties, entitling the plaintiff to relief. Indeed, the fact is not alluded to in the bill.
By the seventh clause of the agreement, weekly statements were to be furnished by the plaintiff of his purchases of wheat, and by Gibbs & Co. of the receipts and sales of flour. A breach of the contract in this respect, by the defendants, is alledged in the bill, and it is insisted that it occurred in the fifth circuit, where the plaintiff resided. It may be doubted whether the agreement contemplated any thing more than that an account of sales and purchases should be forwarded to the parties respectively, by the ordinary modes of conveyance. But if those who were to furnish the statements were bound to guaranty their reception, and the defendants were therefore held to a performance of this part of their contract, at the plaintiff's residence, this fact would not give the vice chancellor jurisdiction. His jurisdiction must be exclusive of any other vice chancellor, when the causes or matters have arisen in his circuit. (2 R. S. 163, § 2.) This must refer to all the matters in controversy, or so much of them as will enable the court to execute full and complete justice between the parties, and determine all further litigation.
If a breach of the same contract should occur in different circuits, it was not the intention of the legislature that the jurisdiction should be divided. For the vice chancellor, when he acquires, exercises jurisdiction, exclusive of all others. (Brown v. Brown, 1 Barb. Ch. Pr. 215, 216; 8 Paige, 443.) Here an important part of the contract was to be performed at Oswego, but the default of the defendants, upon which the plaintiff has rested the whole equity of his bill, occurred in a foreign jurisdiction. The bill should therefore have been filed before the chancellor. It is immaterial whether the matters arose abroad, or in a different circuit in this state. The statute re quires that they shall arise within the circuit of the judge claiming to exercise jurisdiction.
It was said, that if either of the defendants had resided in the fifth circuit, the court would have had jurisdiction, and that by appearing they waived that defect. The jurisdiction of courts is conferred by law, and in no case by consent of parties. When jurisdiction of the subject and person is required as a prerequisite to judicial action, a defendant may waive any irregularities in the mode by which his person is sought to be subjected to the jurisdiction of the court, by a voluntary appearance. He may dispense with the service of process, as he may waive any other personal privilege. But when the defendant is in court as a party, the law gives jurisdiction of the person, without regard" to the question whether his appearance was voluntary or by compulsion. This is all that is meant by consent giving jurisdiction of the person, and all that is decided in the cases to which we have been referred. (Bents v. Graves, 3 McCord's R. 280; Overstreet v. Brown, 4 id. 80.) The residence of a defendant within the limits of the circuit, according to the 3d subdivision of 2d section of the statute above quoted, is a jurisdictional fact which must exist before the court can act at all, either by issuing process or accepting the appearance of a defendant. It is necessary to give jurisdiction of the cause, not of the person. In such case there can be no waiver. (3 McCord, 280.) It is true, that where a particular matter, essential to jurisdiction, is averred by one party, it may be admitted or denied of record by the other. When denied it must of necessity be determined by the court upon proof, like any other question of fact. (6 Wend. 332, and cases; id. 447.) It is the " matter," however, itself, of which the record and proof are the evidence, which is the ground of jurisdiction. The plaintiff in his bill, in this case, alledges that the defendants were nonresidents, and the latter appear and confess the fact. The want of jurisdiction, as to this point, appears upon the record. We think, therefore, that the enrolled decree was not evidence for any purpose against the defendants.
2. Was Eckhart shown, by the other evidence in the cause, to be a member of the firm of Gibbs & Co. ? This point was fully considered when this cause was before the supreme court, after the first trial. (1 Denio, 341, 2.) I concur fully in the reasoning and conclusions reached by the learned judge who delivered the opinion of the court. The distinction between an interest in the profits, as such, and the payment of a sum in proportion to a given quantum of the profits, is to be taken with the qualification that, in the first instance, the stipulated share of the profits are received by individuals in the character of partners, and not as agents, or as a compensation for services. (Coll, on Part. by Perkins, 3d Am. ed. 33, 34, 37, note; Loomis v. Marshall, 12 Conn. 69; 20 Wend. 70.) This is true as between the parties themselves, whatever may be the effect as regards third persons.
.The judgment of the supreme court should be affirmed.