Stewart v. Rogers , 19 Md. 98 ( 1862 )

Bowie, C. J.,

delivered the opinion of this Court:

The appellees sued the appellant on the 26th July 1858. The nar. contains the usual common counts, in the form prescribed by the Act of 1856, ch. 112, and a special count on an agreement. The defendant pleaded :

1st. That lie never was indebted as alleged.

2nd. That he diet iiot agree as alleged.

The plaintiff’s original firm were the ship’s husband, of two vessels, belonging to the defendant, which were placed under their management and control, on the terms and conditions in two papers, marked N E. & Co., No. 1, and N. E. 8s Co., No. 2.

N. E. & Co., No. 1.

Baltimore, 18th October, 1852.

Nathan Rogers &, Go., Merchants, Baltimore, have full authority to take charge of the new "barque “Linda Stewart” and brig “Thomas E. Stewart,” both of Baltimore, uniter an arrangement I have made with them, as my agents in the control and management thereof, and the captains and all concerned, will govern themselves accordingly, (liven under my hand. Signed—James A.-Stewart.

N. R. & Co., No. 2.

Baltimore, Oct. 15th, 1852.

James A. Stewart, of Cambridge, Dorchester county, Md., being the owner of a new barque which he has had built and fitted out, called “Linda Stewart,” and also of the brig “Thomas R. Stewart,” has placed the said vessels with tis, to he managed by ns, as his agents, to the best advantage, according to our judgment, and to facilitate the better employment of the said vessels, and to secure us for any necessary advances that we, may make for the said ves•sels, or to James A. Stewart, or any liabilities that we may incur on account of tlie said vessels or order, the said Stewart has signed the necessary certificate, to enable us to have the said barque registered in our names, avo hereby agree and oblige ourselves to manage the said vessels to the best advantage, according to our judgment, for the said Biexoart, and to pay over to the said SteAvart, or his order, from time to time, as they may accrue, any and all net profits arising therefrom, charging for our services such usual commissions as are generally charged; and we further agree and oblige ourselves to surrender up the said vessels and the control thereof to Stewart, his heirs, executors, administrators or assigns, at any time when he or they may desire the same’, upon payment to us of any sum or sums that may be due to us, on account of the usual and necessary expenses of the said vessels, more than the profits arising from the said vessels, and all advances that may be made to the said Stewart or order, if any should be made, and securing us for any liabilities that Ave may incur, as aforesaid. We further agree, in case we put the said vessels, or either of them, in for one-third of the cargo on the vessel’s account, where an adequate freight cannot otherwise be obtained, the said vessels, or either of them, or the said Stewart, are to be allowed for one-third of the profits thereon, and in case of doss by the said vessel or vessels being thus interested, the said vessel or vessels, or James A. Stewart, are not to be answerable for any such loss beyond the freight of the said vessel or vessels, respectively, for each respective voyage. It being hereby understood, in any event, that although the said barque is registered in our names, by the authority of the said Stewart, for the purposes aforesaid, that Ave set up no claim to the same, or any part thereof, or to the brig £ Thomas R. Stewart, ’ ’ other than for any advances that may be made by us on her or their account, or to the said James A. Stewart or order, or for liabilities incurred as aforesaid, but the said barque c ‘Linda Stewart” and brig “Thomas R. Stewart” belong of right to the said Bleioart, and are subject at all times to hie disposal, by the said Stewart, his heirs, executors, administrators or assigns, paying to us any advances that we make for him, more than the profits arising from the said vessels., according to this agreement) and securing us for liabilities incurred as aforesaid.

N. Rogers,

Nathan Rogers, Jr.

Tost:—Henry Hartbin. Charles Butler.

These papers being admitted in evidence, the appellees proved that Nathan Rogers, Nathan Rogers, Jr., and Charles Butler, constituted the firm of Nathan Rogers & Go., from the 15th October 1852, (the date of the agreement,) to the 31st December 1853, and transacted all business connected with the management of the vessels, in said firm’s name. That Nathan itogers, Jr., retired from the firm on the 31st December 1853, Nathan Rogers, Sen., and Charles Butler remaining, and constituting the firm until 1st March 1856, when John P. Rogers became a partner, and Nathan Rogers, Sen., Charles Butler and John P. Rogers constituted the firm from 1st March 1856, to July 185?, when Butler retired, and Nathan Rogers, Sen., and ■John P. Rogers composed the firm from the 1st July 185?, to 2nd July 1858, when N. Rogers, Sen., died, John P. Rogers surviving. That Charles Butler and N. Rogers, Jr., are still living; that John P. Rogers proceeded, as surviving partner, to settle the business of Nathan Rogers & Co., under the name of Nathan Rogers & Co., and continued the same business in the same name, without having any partner.

The appellee further proved that the original firm of N. Rogers & Co. took charge of the brig and barque belonging to tlic defendant, by virtue of the agreement of the 15th and 18th October 1852, and that the brig (until she was lost, shortly after the 2?th December 1853) and tbe said barque were managed by the firm of N. Rogers & Go,,. composed of partners, as before stated, according to the dates above mentioned. The appellee then produced sundry accounts current between the said brig and barque and owners;, on the one side, and the firm of N. Rogers & Co. on the other, marked A, B, O, D, E, E, G, O, P and X, running from August 1st, 1853, to 1858, inclusive, which said accounts were produced at the trial, by the defendant, upon notice to produce them given at the bar, by the plaintiff's counsel.. The plaintiff proved that account B was delivered in March 1856 ; C in October 185.6 ; D in January 185V ; E in June 1858 ; E in May 1858-; G in June 1858 ; 0 in April 1858 ; P and X in the Fall of 1856 ; that the barque was sold on the 18th June 1858, by John P. Rogers, at public sale,, after due notice,, and purchased by plaintiff, for $8,000 ; that the last voyage of the barque commenced in the life of N., Rogers, Sen.„ and terminated after his death; and all the items in said account, subsequent to the death of N.. Rogers-, Sen., except in regard to the sale of the barque, were incidental and necessary to the winding Up of said voyage. The plaintiff algo offered in evidence paper No.. 6,. being a duplicate of the original agreement, dated 2Vth January 185.3, signed by Nathan Rogers and Charles Butler, to shew that the defendant was aware, at the date of No. 6,. that N.. Rogers, Jr.., had retired from the firm. The plaintiff also offered all the correspondence between the firm of Nathan Rogers- & Go. and the defendant, from the 18th October 1852, to 12th August 1858.

The plaintiff, by his counsel, having announced that he had closed his testimony, except as to rebutting evidence, the defendant, by his counsel, made the following motion to the Court:

“The defendant, by his counsel, moves the Court to rule' out all testimony that has gone to the jury in reference to accounts current, or the items of account between Naths© ‘Rogovs, Nathan Rogers, Jr,, and Charles ‘Butler, trading under the uamo of N. Rogers & Co., and the defendants, and in reference to accounts current, or the items of account between Nathan Rogers, Charles Butler and John P. Rogers, trading under the name of N. Rogers & Co., for the reason that it was objected to by the defendant when offered, as inadmissible, and admitted by the Court, with the understanding’ that it was to be followed up by the plaintiff, and the plaintiff has closed his testimony, and failed to follow it up by testimony sufficient to make it admissible which motion was overruled by the Court, and the defendant excepted.

The defendant having offered certain testimony, and closed, submitted the following prayers, No. 1, No. 2, No. 3, No. 4, No. 5, No. 6, No. T:

Prayer No. 1.—The defendant, by his counsel, prays the Court to instruct the jury, that if they believe, from the evidence, that Nathan Rogers and John P, Rogers, named in the declaration, on the 1st day of July i BS1?, formed a partnership for the purpose of conducting the shipping business, under the name and firm of N. Rogers & Co., and that the said Nathan Rogers, before the institution of tliis suit, departed this life, leaving the said John P. Rogers his surviving partner, that under the pleadings in this cause they cannot find a verdict for the plaintiff on account of any transactions between the defendant and any firm composed of other partners, unless they further believe, from the evidence, that subsequently to the formation of the said first mentioned firm, the defendant has acknowledged an indebtedness on account of said transactions, and expressly promised to pay the same to the said first mentioned firm, or to tlie plain tiff, as the surviving partner thereof.

Prayer No. 2.—-The defendant, by his counsel, prays the Court to instruct the jury, that if they believe, from the evidence, that the defendant, on the 15th day of October 1852, was the owner of the brig “Thomas R. Stewart,” and the barque “Linda Stewart,” and that afterwards, on the same day, he placed the said vessels under the management and control of Nathan Rogers, Nathan Rogers, Jr., and Charles Butler, by virtue and according to the terms of the special •contract executed by them on that day, and offered in evidence by the plaintiff, and that the said Nathan Rogers, Nathan Rogers, Jr., and Charles Butier wore at that time partners, trading under the name and firm of N. Rogers & !Co., and with the knowledge and assent of the defendant, afterwards transacted all business connected with the management of said vessels, in the firm and name of N. Rogers & Co., down to the 31st day of December, 1853; and if they further believe, from the evidence, that on said last mentioned day, the said Nathan Rogers, Jr., retired from the •said firm, and the said Nathan Rogers and Charles Butler became partners, under the name of N. Rogers & Co., and took upon themselves the management of the said vessels, ■and continued to manage them in the said firm and name of N. Rogers & Co., down to the 1st day of March 1856, and on the said last mentioned day the said Nathan Rogers, Charles Butler and John P. Rogers, the plaintiff in this action, became partners, under the said firm and name of N. Rogers & Co., and took upon themselves the management of said vessels, and continued to manage them in the said firm and name of N. Rogers & Co., down to the 1st day of July 1851, and that on said last mentioned day the said Charles Butler retired from the said firm, and the said Nathan Rogers and John P. Rogers became partners, under the said firm and name of N. Rogers & Co., and took upon themselves the management of the said vessels, and continued to manage them in the said firm and name of N. Rogers & Co., down to the 2nd day of January 1858, and that on said last mentioned day the said Nathan Rogers departed this life, leaving the said Joint 1\ Kogers his surviving partner,that then they cannot find a verdict for the plaintiff oñ account of any transactions connected with the management of the said vessels, or either of them, which occurred prior to the date at which the said last mentioned firm was formed, unless they further believe, from the evidence, that tlio defendant knew who composed said firm, and with such knowledge, acknowledged an indebtedness on account of said transactions, and expressly promised to pay the samo to the said last mentioned firm, or to the plaintiff, as the-surviving partner thereof.

Prayer No. 8.—That if they "believe, from the evidence, the facts mentioned in the preceding prayer, that they cannot find a verdict for the plaintiff, oil account of any transactions connected with the management of the said vessels^ or either of thorn, which occurred subsequently to the formation of the said last mentioned firm of Eathair Kogers and John P. Kogers, trading under the name of N. Kogers &s Co., unless they further believe, from the evidence, that the defendant l',new who the partners were who composed the said firm, and v-ith such, knowledge recognized the said firm as- Ms agents, for the management of the said vessels", or either of them.

Prayer No. 4.—That if they believe, from the evidence, that the defendant placed the barque “Linda SteWart,” of which he was the owner, under tlie management and control of the firm of N. Kogers & Co., by virtue of tbe contract, dated on the 15th day of October 1852, and offered in evidence by the plaintiff, and that the said firm was at that time composed of Nathan Kogers, Nathan Kogers, Jr., a'nd Charles Butler, and that afterwards any changes were made in the partners of the said firm, either by the retire* ment of one or more of the original members thereof, or by the introduction of a new member therein, and that after such change in said, firm, any losses occurred to the said firm by reason of their putting in the said barque any part •of any cargo on the said barque’s account, that then the ■defendant is not responsible in this action for any such loss, unless they further believe, from the evidence, that at or before the time of putting in any such part of any cargo on the said barque’s account, the defendant knew who composed the firm so putting in the Same, and with such knowledge expressly agreed that he oí the said barque would be responsible to the firm so putting in for any loss that might ■result therefrom.

, Prayer No. 5.—The defendant, by his'counscl, prays the 'Court to instruct the jury, that all the evidence offered by the plaintiff, as to any charge for interest, are matters Within their discretion, in the consideration of the claim of •the plaintiff, unless they should find, from the evidence, that there was an express agreement to pay interest, and that in no event -should they allow as interest any item of «charge for the same, whore more than six per cent, per annum has been claimed upon any loan, advance or other indebtedness, unless they should also find, from the‘evidence-, that such item of interest is charged in a foreign country, and that such rate of interest as charged, is allowed by the laws thereof.

Prayer No. 6.—The defendant, by his counsel, prays the Court to instruct the jury, that if they believe, from the •evidence, that John P. Rogers made sale of the barque '“Linda Stewart,” without authority; that then he was guilty of an unlawful conversion of the same, and no charge on ■account of indebtedness in the management of the same should be allowed by them; that if they believe the said barque-belonged to James A. Stewart, the defendant, that .the said John P. Rogers 'Could not make sale of her without'authority from'the said Stewart, and if ho did so, he was a trespasser ; that the agreements (see ante page 105) between James A. Stewart dhd Nathan Rogers, Sen., Nathan Eogers, Jr., and Charles Butler did not authorize the said Nathan Kogers, Sen., Nathan Kogers, Jr., and Charles Butler, or John P. Eogers, to make sale of the said barque.

Prayer No. 7.—That the plaintiff is not entitled to claim commissions for any acts done by him, or those under or through whom he claims, as the agent or agents of the defendant, if the jury should believe, from the evidence, such acts to have been so done ; provided they further believe, from the evidence, that in the performance of said acts, the party performing the same was guilty of such negligence or unskilfulness that the defendant derived no benefit therefrom.

The Court made an addition to, and modification of, the 7th prayer, and granted said 7th prayer with the said addition and modification, which is as follows, to wit:

That the plaintiff is not entitled to claim commissions for any acts done by him, or those under or through whom he claims, as the agent or agents of the defendant, if the jury should believe, from the evidence, such acts to have been so done ; provided they further believe, from the evidence, that in the performance of said acts the party performing the same was guilty of such negligence omnskilfulness that the defendant derived no benefit therefrom ; but if the jury shall believe that in the performance of said acts, the piirty performing the same therein acted with a proper knowledge of, and a proper regard for, the interests of the defendant, then the said plaintiff is entitled to claim commissions for said acts so done, notwithstanding no benefit may have resulted therefrom to the defendant.

The Court granted the 5th prayer of the defendant, but rejected the 1st, 2nd, 3rd, 4th and 6th, and granted the 7th with the modification as above, from which refusal to grant the said prayers and modification of the 7th, the defendant excepted.

The first exception arises on the motion to exclude the plaintiff's testimony as to the accounts and items therein, referred, to.. (See ante page 108.)

The question or point presented by this exception, is-substantially the same with those in the 1st, 2nd and 4th prayers, viz., that in the absence or failure of evidence off an acknowledgment of indebtedness and express promise by the defendant to pay the plaintiff, the evidence as to the accounts and the items enumerated in the motion should be excluded, because those accounts were “res inter alios actce and the causes of action represented by those accounts could not be recovered by the plaintiff, without evidence of such < acknowledgment of indebtedness and express promise by the defendant. The prayers above referred to, being based upon the same theory, (that an, acknowledgment and express promise are necessary to be proved, to enable the plaintiff to- recover,) we will consider them and the first exception together. The position assumed by the defendant in his motion and those prayers, if correctly interpreted, is not tenable, dioses in action, between partners and others, like choses in action between individuals, rest in privity of contract, and, at common law, could bo sued on only in the name of the parties thereto, or their legal representatives.

Exceptions to the rigid rule of the common law, growing out of the doctrines of equitable actions and implied assumpsits, have long been recognized and adopted. In Surtees vs. Hubbard, 4 Esp. Rep., 203, Lord Ellenborough said: “Choses in action, generally, are not assignable. Where a party is entitled to money, and assigns over his interest to another, the mere act of assignment does not entitle the assignee to maintain an action for it. The debtor may refuse his assent; he may have an account against the assignor, and wish to have his set off; but if there is any tiling Wee assent on the part of the holder of the money,in that case I think this, which Is an equitable action, is maintainable.” The principle of this decision was early incorporated in our own adjudications. In Allsion vs. Contee, 4 H. & J., 351. it was determined, that where three partners dissolve, and two of them form a second partnership, assuming the debts of the old firm, and, after notice or knowledge of this arrangement, a debtor of the old firm promises to pay tho new firm, the latter could sue in its own name, alone, for the debt. This case resembles, in many of its features, that now under consideration. More recently, the decision in 4 Esp. Rep. lias been cited and expressly approved, by the Court of Appeals of this State, in Barger & Collins, 7 H. & J., 213. There it was held, that although all the partners must sue on a contract made with the partnership generally, if, after a dissolution, a claim is assigned to one of the parties, the assignee can sue in his own name, by proof that the debtor, with notice of the dissolution and assignment, promised to pay the assignee, and such promise may be implied from the acts of the debtor, as well as expressly proved. The general remark of the Court, in Crawford vs. Burke, 4 Gill, 213, viz., “Prior to the Act of 1829, ch. 51, the assignee of a chose in action, unless'it veas negotiable by the mercantile law, was obliged to sue in the name of the assignor, or, if he was dead, in that of his personal representative, is to be construed, in connection witli the subject matter. That was the case of a written assignment, under the Act of 1829, ch. 51, in which tho Court held, the assignee, suing in his own name, need neither aver, in his declaration, a promise by the defendant to pay him the account, nor that it was bona fide as-signed to him. The Court were speaking of the effect of assignment solely, at common law, in contradistinction to a written assignment, under the Act referred to, and correctly laid down the general rule, without adverting to the effect of an assignment, parol or written. followed by assent or assumpsit, express or implied. "Wé think, therefore, the ruling of the Court below, in rejecting the defendant’s motion to exclude the testimony as to the accounts and the items thereof, and refusing the defendant’s 1st, 2nd and 4th prays, was correct, because they imposed upon the plaintiff the necessity of producing evidence, which the law did not require ; it being competent for the jury to find, from the facts proved, whether there was an assignment or transfer of the accounts from the old firm to the new, and whether the defendant assented to it, and promised, expressly or impliedly, to pay the balance to the plaintiff.

The defendant’s third prayer refers to the agency established between the original firm of Nathan Rogers & Co. and the defendant, and declares that the transactions connected with the management of the vessels, which occurred subsequently to the formation of the last mentioned firm of Nathan Rogers & Co., are not subjects of charge against the defendant, unless he knew who the partners were who composed the said firm, and with such knowledge recognized the said firm as his agents. In contracts of a continuing nature, as guaranties for advancements to be made, or bonds for the faithful discharge of a duty, questions often arise as to their true extent and operation, when there has been any change of the partners, by the retirement of the old, or the admission of the now one; for instance, whether the guarantee.would be liable either to the old firm or to the new, for any such advances or credits, after any such change?

“It has been held, that the guarantor would not be liable therefor ; and that no such guaranty ought to be extended beyond the actual import of its terms, but that it ought to be limited to advances and credits made by the original firm only.” Story on Part., sec. 245. In Weston vs. Barton, 4 Taunt. Rep., 613, 682, Sir James Mansfield said, “It is not necessary, now, to enter into the reasons of these decisions, but there may be very good reasons for such conslructioua. It is very probable that sureties may be induced to enter into such a security, by a confidence which they repose hi the integrity, diligence, caution and accuracy of one or two of the partners. In the nature of tilings, there cannot be a partnership consisting of several persons, in which there are not some persons possessing these qualities in a greater degree than the rest, and it may be that the partner dying, or going out, may be the very person on whom the sureties relied. It would, therefore,-be very unreasonable to hold the surety responsible after such change.” These considerations apply, if possible, more strongly to the agencies of the character in question, where the largest confidence is involved, and the largest capital may ho invested.

This prayer is only an assertion of the common law maxim, “delegatus non potest delegare.” The agency, like the accounts, might have been transferred with the knowledge and assent of the defendant, from the old to the new firms, but this transfer and assent must be manifested by some evidence that the defendant know who constituted the new linns, and recognized the said firms as his agents in the management of his vessels, or either of them. Unlike the prayers before mentioned, this did not impose on the plaintiff any illegal requirements ; did not prescribe any mode of proof, positive or presumptive, of the knowledge and recognition prior or subsequent, but required the jury to find facts which, it seems to us, were material to the issues, and, as such, should have been granted.

Prayer No. 6, assumes that the plaintiff forfeited all claim to charges for services, management, advancement, &c., if the‘ jury believed he sold the barque without authority. This assumption is erroneous. The plaintiff might, by the course of dealing between the defendant and himself, Lavo become entitled to a balance on account against the defendant, and the latter have a claim against the former, for the amount of the vessel improperly sold; ■the conversion or trespass of the plaintiff would, not extinguish the debt of the defendant. This defect justified the Court below in rejecting the prayer* without deciding whether the plaintiff had, under the contract, a power of sale for the general balance due ou their advancements and liabilities for the vessel. The contract of the 18th October 1852, recites, that to facilitate the hotter employment of the said vessels, and to secure (the appellants) for any necessary advances that they may make for said vessels, or to James A. Stewart, or any liabilities they may incur on account of said vessels, or order, the said Stewart has signed the necessary certificate to enable them to have the said barque registered in their names, and the appellants agreed to surrender said vessels, or the control thereof, to appellee, or his assigns, upon payment of any sum due them, over and above the nett profits, and all advances to said Stewart, and securing’ them for all liabilities therefor. There is an express reservation of a lien on the vessels for advances to said vessels, or their owner, or to his order, and all liabilities therefor, with the legal title and possession in the plaintiffs. . Independently of such a contract, although a mooted question, the better opinion seems to he, that a lien existed in behalf of the ship’s husband, for advances. Story on Part., 444, 20. John. Rep., 611, note 3. A pawnee, at common law, may file a hill in equity against the pawner, for foreclosure and sale, or he may proceed to sell ex mero motw? upon giving due notice of Iris intention to the pledger. Story on Bail’ts, sec. 310. 2 Kent’s Com., 453. It appears in this case, that the defendant was notified of the balance against him for advances, and of the plaintiff’s intention to sell.

The modification of the 7th prayer, when taken in conuoetion with the points presented, does not seem subject to exception. The proposition presented by the defendant,, was, that if tiro jury believed the vessels wore managed so unskilfully that no benefit accrued to the defendant from the services anil management of plaintiff, or those through whom he claimed, then the plaintiff was entitled to no commission ; an instruction which might, we think, have been safely given, without misdirection. The Court helow did not reject this proposition, hut added, from abundant caution, a modification not conflicting with it, that if the jury believe that, in the performance of said acts, tire party performing the same therein, acted with a proper knowledge of, and a proper regard for, the interests of the defendant, (that is, not unskilfully,) the plaintiff is entitled to claim commissions for acts so done, whether any benefit resulted or not. In other words, that the agent’s commission did not depend upon the profitable result of the adventure, if lie discharged his duty faithfully. No allusion was made to the instruments under which the agent acted, and no presumption was to bo drawn unfavorable to its observance ; on the contrary, “a proper regard for the interests of the defendant,” implied a strict observance of all the obligations of the agent, written or otherwise.

(Decided December 3rd, 1862.)

We concur with the Court below in its rulings on the first exception, and in the rejection of the appellant’s 1st,, 2nd, 4th and 6th prayers, and modification of the 7th, but think there was error in rejecting the defendant’s 3rd prayer, and therefore reverse the judgment and remand-the cause upon procedendo.

Judgment reversed and cause remanded.