Gould v. Stanton , 16 Conn. 12 ( 1843 )

Williams, Ch. J.

The defendants, in the first place, claim, that the plaintiff has not shown any interest in the vessels for the use of which he claims an account;

1. Because Manice, under whom he claims, had no title. It is stated in the plaintiff’s bill, and not denied, that Charles E. Phelps, while in life, was the owner of ⅙5/4 parts of the ship Charles Adams, and the brigantine Uxor, engaged in the whaling business; and that, on the 16th day of May, 1833, he made a deed, which purported to convey to said Manice his interest in these vessels, together with other property of the said Charles. It also appears, that said Charles died, and soon after, Benjamin Pomeroy was duly appointed administrator on his estate, and as such, Pomeroy claimed said vessels, and sold all right and interest in them to the defendants, who claim, that standing in the place of the creditors of Charles E. Phelps, they may treat this deed as void as to the creditors of Phelps; and this upon two grounds,—want of consideration, and as fraudulent under the statute of 1828.

The plaintiff, on his part, claims, that it is too late now to make that question, it having been settled, by the circuit court of the United States, on a bill brought by Pomeroy against Manice, to set aside this deed. The defendants object to this judgment as evidence against them, as they were not parties to it. But their only title is derived from Pomeroy, who was party to the suit, and who was concluded by it, and with whom they are privy in estate. Co. Litt. 271. Besides which, they purchased while this suit was pending, and so purchased with constructive notice of that fact. Murray v. Ballou, 1 Johns. Ch. R. 566. Had the defendants purchased of Pomeroy real estate, for which an action of ejectment was pending, that judgment against Pomeroy would be conclusive against them in an action for mesne profits. Jackson v. Stone, 13 Johns. R. 447. Vid. 7 Wend. 152. But here the defendants had actual notice of this litigation, and must have purchased with reference to it; and could they now make this defence, there would be no end to litigation. Hopkins v. McLaren, 4 Cowen, 667. 678, 9. Had Pomeroy recovered in that suit, the defendants would have been quieted in the enjoyment of this property: it is therefore both just and legal, that they should now be concluded by it; though in this case, it is enough to say, that the evidence of the record was admissible against them.

It is said, that the title to this property could not be established under the bill to set aside the deed, but there must be a cross-bill for that purpose. The authorities read show, that it is common and proper to file a cross-bill in such cases; but, we believe, there are none which go so far as to show, that if the court proceed, upon a bill to set aside a deed, to establish the title, without a cross-bill, that such decree would be void,—as the defendants must claim in this case. And if that was even so, it would not follow, that the facts put in issue and found by the court, could be again contested. In that suit, Pomeroy, the grantor of the defendants, made precisely the same claim that these defendants now make, that the deed was void for want of consideration, and also void by the statute of 1828. If this was true, that court would have set the deed aside, as its existence would greatly affect the value of the property. The facts found, therefore, were highly important to the event of that suit. They were, that the deed was given for a full and valuable consideration, and without fraud. The facts thus found, those parties could not again litigate; and although in Crandall v. Gallup, 12 Conn. R. 365. we held, that that decree could not be pleaded as an estoppel, we also held, that as far as the court had found facts necessary to support their decree, so far the parties would be bound. 12 Conn. R. 373.

We think, therefore, in this case, that Pomeroy and those who claim under him, are not at liberty to contest those facts.

Were it necessary for us to go into the enquiry, however, we should come to the same result. This deed cannot be treated as a voluntary deed, though the nominal consideration of one dollar might not deliver it from that objection; but in addition, it is to pay the debts and liabilities of Benjamin F. Phelps; and this might have been founded upon a previous agreement to that effect. And in the absence of all testimony, were it necessary, this would be rather to be presumed, than to presume a fraud; at least, it furnishes prima facie evidence of a consideration, sufficient, in our opinion, to support the deed.

Nor do we see any ground for supposing that this deed is void by the statute of 1828, except such as applies to all deeds given by a person in view of his insolvency, in which one creditor is preferred to another. It is true, that the name of Erasmus D. Foot is introduced with that of Manice, as jointly liable for some of these debts. But this cannot change the character of this deed. It was not given in trust for him, but to pay the debts upon which Manice was responsible; and he was equally responsible, whether Foot was also upon them or not; though the effect of his responsibility might be to relieve him, in some measure, as is always the case where there is more than one surety. Foot’s name is introduced rather as descriptive of the obligation, than as showing a trust for him.

It was also suggested, that the conveyance by Manice to Gould, being in trust, was also void by the statute of 1828, as the parties both lived out of the state, and no bonds were ever given to the court of probate. To which it was said, that if this objection was valid, it could be made only by the creditors of Manice; and as we understood the counsel for the defendants to yield this objection, we notice it no further.

2. It was also contended, that whatever claim might have existed originally in favour of Manice or Gould, it was discharged by Manice, with the assent of Gould, by the writings of the 18th and 31st of October, 1837.

The release executed by Manice of the 18th of October, recites the mutual settlement of all suits and controversies between him and Pomeroy; and he covenants and agrees with Pomeroy not to sue or molest him in his person or estate, for any estate, or act in relation to any estate, of said Phelps, or for any property assigned by said Phelps to Manice, and to save him harmless therefrom: and Gould, by the writing of the 31st of October, gives his assent thereto. Now, although these writings are no release, yet as between the parties, they would be held to amount to a release, to prevent circuity of actions. It is however difficult to perceive how these defendants can claim they are a release to them, or that they amount even to a covenant not to sue them. The writings purport to be personal between the parties, and must have been so intended. They are similar to covenants not to sue a joint obligor or covenantor, which have been always construed not to be a discharge to such obligor or covenantor. Dean v. Newhall, 8 Term R. 168. 2 Wms. Saund. 148. n. Catskill Bank v. Messenger, 9 Cowen 37. In this case, Pomeroy is not a party, in name or in fact; nor is it shown he has any interest in the event of this suit. Could he then maintain any suit against Manice for prosecuting this action? What does he suffer, or how is he molested, we cannot see. And if he could not maintain an action on the covenant, it being a personal covenant, the defendants could not; and if there exists no cause of action upon the covenants, it is impossible for us to see how they can operate as a discharge.

3. The plaintiff then having an interest in these vessels, the remaining question is, can he recover for the use of them; and upon what principle is the account to be taken.

The business in which the vessels were employed, was the whaling business; and the mode of conducting it, is, that the owners, (consisting usually of a number of persons,) appoint some person, usually one of their number, to be manager of the concern. This person orders the necessary repairs, furnishes the supplies, procures the seamen, in short, as ship’s husband, does all that is necessary for the voyage, charging each share-holder his proportional part; and upon the return, after paying expenses and deducting the usual commissions for his own services and advances, and paying the officers and crew such proportions as they stipulated for, divide the balance, being the net proceeds, among the joint owners of the vessel, in proportion to the number of shares by them respectively owned,—much in the same manner as is customary in England. Holderness & al. v. Shackels, 8 B. & Cres. 612. (15 E. C. L. 315.) These agents, thus acting for the whole, become responsible to those who may happen to be owners. In this way, that delay and those conflicts of opinion are avoided, which would arise from the meetings and consultation of such a number of persons as frequently have an interest in these voyages. This agent having been appointed by a majority of the share-holders, is supposed to speak and act the sentiments of the majority; and in ordinary circumstances, that will must prevail. And when a ship is sent out, by a major interest, the minority must not only bear their proportion of the expenses of the repairs, but must also lose their part of the ship, if it should be lost on the voyage; and this, whether they were satisfied with the voyage or not. For it is considered to be for the interest of the country, as well as of the ship-owners, that ships should be employed; and it is more reasonable that they should be employed at the will of the majority, than that the minority should elect, or that they should remain unemployed. Card v. Hope, 2 B. & Cr. 661. (9 E. C. L. 214.) And it is a principle discernible in all mercantile codes, that every encouragement and assistance should be afforded to those who are ready to give to their ships constant employment; and this, not only for the particular profit of owners, but for the general interest and prosperity of commerce. Willings & al. v. Blight, 2 Pet. Adm. Dec. 292. The acts, then, of such agents, within the scope of their authority, are the acts of the owners. The repairs of the vessel are repairs made for them; the supplies are supplies for them; and the proceeds are proceeds to be divided among them: for if it be true, that he who is entitled to the profits, must bear the burthen, it is equally just that he who bears the burthen, should be entitled to the profits.

Had Phelps then lived, and not given the deed to Manice, he would have been entitled to an account of profits from the ship’s husband. It would seem to follow, that when it was decided, that the plaintiff had the title of Phelps, he also must have a similar right, unless he has done some act to forfeit it.

The defendants, however, insist, that if the deed to Manice is good and valid, yet it does not give the plaintiff an absolute title; that he gained only the title of a mortgagee; and that he has never been in possession; and so is neither liable for repairs, nor entitled to profits. Many authorities have been adduced in support of the latter proposition; and whatever doubts may have once existed, we think that this point is too well settled, at the present time, to require support.

But before that principle is applicable to this case, we must require some proof that this is a mortgage. It purports to be an absolute conveyance for a specific purpose. It gives an absolute power to sell and apply; it speaks of no redemption; and it contemplates none. The surplus, if any, is to be paid over to the assignor: so it is in every deed of trust. So far, therefore, there is no feature of a mortgage, but such as attends every deed of trust. But as a part of the consideration is responsibilities not yet assumed by Manice, if he should never assume them, and Phelps should himself pay the debt, if a court of chancery might, in such case, treat this as a mortgage, we apprehend that this would make no difference in the construction which we are now to give to this instrument. It is enough to say, that in form it is not a mortgage; that the parties did not contemplate a mortgage; and that the only event which would lead a court of chancery to treat it as such, has not occurred. When then Judge Thompson said, this deed was in nature of a mortgage, he did not mean to say, it was a mortgage, but merely to say it might be compared to a mortgage, as it had some of the incidents of one. “Nothing,” says Lord Mansfield, “is more apt to confound than a simile. When the court or counsel call a mortgagor a tenant at will, it is barely a comparison: he is like a tenant at will,” We know of no authority, therefore, for calling this conveyance a mortgage.

But if it was a mortgage, we are not prepared to say, that Manice was never in possession. His deed from Phelps is dated the 16th of May, 1833; and, as we have seen, was intended to convey an absolute title. Pomeroy brought his bill for an injunction on the 10th of August following. Now, who had possession from the date of the deed until that time, or until administration taken out? Not Phelps, surely; for he claimed nothing after the deed; and Pomeroy, of course, could have no right before administration granted; and it is not shown that he took possession afterwards. The possession, therefore, must have been holden by those who had actual possession, for the benefit and in behalf of those who had the right of possession, in whom the title was. Abbott, in his treatise on Shipping, says, when a part-owner of a ship not in actual possession, conveys, the possession of the other part-owners may reasonably be considered the possession of the vendee. Abbott 6. And the court said, in Clark v. Richards, that by the transfer of the vessel, the instrument being a genuine one, the title was in the vendee. 1 Conn. R. 54. There was, then, a time, when Manice, having the title, and no one claiming possession against him, must have been considered and treated as an owner in possession; and if he has once taken possession under him in whose right he claims, he is not in the situation of the mortgagee to whom possession has never been delivered. The argument of the defendants must be, that if he once had possession, that possession did not continue in him. That he has relinquished voluntarily is not claimed; nor is it claimed, that the defendants have had any other possession of the vessel than they would have had, if this purchase had not been made. As part-owners in actual possession, they held for themselves and others, who were owners with them. Before the sale, they did not claim to hold or possess the ⅙5/4ths of Charles Phelps, except for the rightful owner. The injunction prayed out by Pomeroy, could not change the possession then existing: the only object of the injunction was, to prevent an improper use of it. Pomeroy having no actual possession, his sale could confer none, unless he had a title. But as he had no title, his sale conveyed nothing, neither title nor possession. If then the possession is changed, it must be merely because the defendants, being in possession as part-owners, having purchased in a worthless title, and claiming under the whole right, must by law be treated as in possession of the whole. Now, if a tenant in common will not suffer his co-tenant to enter upon, demand and claim a right to the whole property, his co-tenant may treat it as an ouster; but it will not deprive him of the right to an account, in the same manner as if he had not been ejected. So here, if the plaintiff was a mortgagee and never in possession, he could not demand an account; yet if he has once taken possession, the wrongful act of the defendant cannot deprive him of the right, which, under the possession, he acquired of calling them to account. We think, therefore, that the plaintiff has a right, whether considered as mortgagee, or as absolute owner, to an account.

It is said, however, that the plaintiff and Manice have both lain by, taking no part in advancements or supplies for the voyage; that they are mere drones in the hive; and can, therefore, have no share in the honey. If the plaintiff is owner, we think he has the rights and is subject to the duties of an owner; and we have only to see what those are. And it is a general regulation in all commercial countries in relation to ships, that the majority in value shall direct their employment. If the plaintiff, therefore, took no part in the voyage, he submitted to be governed by the decision of those who did. If he was not willing to do this, he might apply to a court of admiralty, who would cause a valuation to be made, and require such security as would indemnify the dissenting owner, in case of loss. If such dissenting owner neglects these precautions, the vessel, so far as he is owner, sails as his; and he is liable to all the consequences which may flow to an owner. Such is the doctrine of our own court, in Williams v. Sanger, 2 Conn. R. 220. The plaintiff then, although he was not active in this voyage, run the risk of the loss of his interest, because he did not take the course pointed out by law for relief. Indeed, as he took no active measures of dissent, he may be considered as assenting. “If one part-owner dislike the voyage, and doth not expressly prohibit navigating the ship, and the ship go the voyage, and is lost, in such case he shall not be answered his part; but if the ship returns, he shall have an account for what is earned; and it shall be intended a voyage with his consent, without an express prohibition proved.” Anon. Skinner 230. Strelly v. Winson, 1 Vern. 297. What effect a protest or an express dissent, by a dissatisfied owner, might have, in a court of chancery, or by foreign maritime laws, it is not necessary to enquire, as no such facts exist here. See Horn v. Gilpin, Ambl. 255. The safest course is to apply to the admiralty. Jacobsen’s Sea Laws, 44. For, from a remote period this has been a well settled practice of the court of admiralty in England. Lambert v. Aeretree, 1 Ld. Raym. 223. Anon. 2 Chan. Ca. 36. Opinion of Sir L. Jenkins, 14 Petersd. Abr. 640. n.

And on the other hand, if the major owners are not satisfied with the condition in which they are placed, they also have a right to apply to the court of admiralty to give security for the ship; and then, if she be lost, they shall be discharged against the others. Anon. Skinn. 230. In this case, as there was no express dissent by the plaintiff, and neither party made application for security to a court of admiralty, it may fairly be presumed, that they intended to stand upon their respective legal rights.

It was said, that by the terms of the deed from Phelps, Manice had no right to employ the ship to make a whaling voyage. This is an objection which comes with an ill grace from the defendants, claiming under Pomeroy, by whose act such a shade was cast over the plaintiff’s title as would almost make a sale impracticable. It is a sufficient answer, to say, that there is nothing in the deed expressly forbidding it; and that these defendants are not the persons to call the plaintiff to account for the manner in which he discharges his trust.

The conclusion then to which we have arrived, is, to advise the superior court to accept the report of the committee.

In this opinion the other Judges concurred.

Decree for plaintiff.