Richardson v. Dickinson

This action arises out of an agreement between the plaintiff and defendant to share between them, in certain proportions, the profits which might result to the latter in an adventure of the Cheshire Company, to which he was a party. The plaintiff advances $500, being one half of the defendant’s just contribution to the adventure referred to ; the defendant agrees to associate himself with the company, to conform with the terms of their association so long as he shall remain in it, and not to separate from it except in conformity with those terms. “And in the final-division and distribution of the effects of said company, the said Richardson shall be entitled to one fourth part, and the said Dickinson to three fourth parts of the profits accruing from the enterprize. The sum of $1,000, advanced by the par*222ties, shall be equally divided between them, if there should be no loss,” &c. They also agree that in case of a dividend of profits, Dickinson shall remit to Richardson one fourth part of the profits accruing on his share. There are some other stipulations, but all are subordinate to the ruling idea that Richardson, advancing one half the capital to make up the defendant’s contribution to the Cheshire Company, was to be entitled to one fourth part of the profits that might accrue from the enterprize.

The Cheshire Company sailed on the 1st of March, 1849, and prosecuted their adventure until about the 1st of November following, when the defendant sold his interest in it to his associates for $2,000. Of this he received $1,500, the remaining $500 having been retained by the directors for the plaintiff, and afterwards paid to him.

By this salé the defendant has clearly gained $1,000, but contends that he is not bound to account with the plaintiff for any part of it, because the Cheshire Company had, at the time of the transaction, made no profits. But the defendant himself made a profit by means of his share in the company, and it is for one fourth part of the profits, accruing to himself, and not to the Cheshire Company, that he has undertaken to account. “ Profits accruing from the enter-prize ” to the amount of $1,000, are found in the defendant’s hands, and whether the Cheshire Company gained or lost on the whole, seems hardly material as respects his liability, so long as the gain has accrued to his share, or to himself, by reason of his share in the enterprize. But if the parties intended, by a somewhat doubtful form of expression, to apportion between themselves the defendant’s share of the profits which the company might make, it does not lie with the defendant, who has sold his interest in the company and his right to the eventual profit, at an advance of $1,000, to deny that there were, or that “in the final division and distribution of the effects of the company/’ there *223would have been profits accruing to his share to that amount. In finding that at the date of the sale no profits had accrued to the company, the case must not be understood to disaffirm a fact which it perfectly establishes, that something had intervened to give a value to the shares, greatly in advance of the first investment. What this was does not distinctly appear, nor whether it affected the interests of the company collectively, or attached only to the shares in severalty. The defendant does not explain how the value of the shares appears to have doubled and trebled, while the value of the whole remains the same. His interest in the company must, till otherwise explained, be taken to have been his interest in the final distribution of its effects. This is what he sold, and what he had undertaken to account for with the plaintiff. If he has sold it for more than its value, he must nevertheless account.

Nor is the plaintiff bound by the act of the directors, who were authorized to retain in his behalf the share and profits which might belong to him. There is-no evidence that the directors assumed to adjust, in behalf of the plaintiff, his -claim upon the defendant, or that'they had any authority to do so. The plaintiff agrees with the defendant that the directors may retain his share. He does not agree to forfeit it if they neglect to do so.

The plaintiff’s omission to proceed to arbitration is no waiver of his claim. “ It requires a strong case to deprive a party of his right to a decision in this court.” Lord Eldon in Street v. Bigby, 6 Ves. 815. The plaintiff had, át most, but an option to proceed ex parte on the refusal of the defendant to join in the arbitration. He had not bound himself to do so.

A court of law cannot infer that there was fraud in the transaction of the 1st of November, and that the defendant might have received for his share an amount approaching somewhat nearer to the value phich the other shares bore *224four weeks later, and, therefore, limit his liability to what he actually received from the sale.

Judgment for the plaintiff for $250, and interest from the time of demand made.