Cobb v. Goodhue

The first question for consideration is, whether the decree was erroneous in directing the bill to be dismissed with costs as to the respondents Brown & Bell. And upon that question, I think there is no room to doubt that the compromise of October, 1838, put an end to all claim of the complainant upon either of those defendants for any expenditures for or on account of the boat. Whatever may be the construction of the original agreement, the testimony establishes the fact that the complainant, about the last of October, 1838, purchased whatever interest Brown had, under the subscription of Brown & Bell, or otherwise, in the subject matter of that agreement ; and that he had previously purchased the interest of Bell therein. And it is evident that it was the intention of the parties that this compromise should put an end to all claims between them on account of the boat, or of thq building thereof; and that the complainant should thereafter be entitled to all the rights of Brown & Bell under any previous arrangements between the parties, whatever those rights were. By the purchase of their interests in the concern he took them cum onere. And the payment by him of a portion of their claim for their extra work upon the boat is wholly inconsistent with the idea that either party then supposed that he was afterwards to be entitled to recover back from them a part of the amount thus paid for the extra work and for other expenditures made by him.- Again, if there was any debt previously existing against Brown & Bell on account of the building of the boat, &c., it was a partnership debt; as they subscribed the agreement as copartners originally; and a compromise with one of the copartners necessarily discharged the other, although he was not present.

But it is said that Brown refused to give the complainant the requisite certificate, to enable him to enrol the boat in his own *115name, unless this compromise was made; and that therefore it ought not to be binding upon him. It is evident, however, from the testimony, excluding that of Brown, that the complainant was not entitled to the certificate in his own name, so as to enable him to sell the boat without the assent of Brown; whether Brown’s interest in the boat was a mere lien thereon, for his half of the $3000 subscribed by Brown & Bell, or was the interest of a joint owner. The putting up the vessel at auction, by the auctioneer, under the direction of the complainant, and the purchase by the complainant himself, was a mere nullity as against the other persons who were interested in the .boat, if they did not afterwards consent to ratify that sale. (Hawley v. Cramer, 4 Cowen’s Rep. 717. Joy and others v. Childs, in the court of errors, Dec. 27th, 1843.) And there is no evidence in the case to show whether the claim of Brown & Bell, for extra work upon the boat, was or was not a fair claim against the com-, plainant. The whole therefore was a fair subject of compromise between the parties, and Brown was right in refusing to give the certificate until his claim upon the boait, as well as that for the extra labor, was in some way adjusted. It would be a violation of all principle, then, for any court to go back beyond that time for the purpose of settling the rights of the complainant and these two defendants. The part of the decree dismissing the bill with costs as to Brown & Bell, must therefore be affirmed, with their costs, upon the appeal, to be paid by the complainant.

I think the assistant vice chancellor was also right as to the construction of the written subscription of Goodhue & Co., and of Durand, one of the members of that firm, in relation to the building of the boat; when taken in connection with the answer, which is responsive to the bill, and the testimony in the case, so far as either party has-been able to obtain any testimony on the subject. Taking all the circumstances into consideration, it is very evident that Durand, who subscribed for.himself and for his firm of Goodhue & Co., did it to assist the complainant in his experiment; without any expectation on the part either of the complainant, or of Durand or his copartners, that as between the *116complainant and them, they were in any event to be liable for any more than the $3500, which they subscribed and paid. And they were probably willing to risk that sum to aid him in the experiment, without any other security for its repayment than their proportionate share of the proceeds of the boat, without the machinery of Burnet, if the experiment failed. They might also have expeeted that the complainant would make them some further compensation for their risk, in case his experiment should prove successful. But there does not appear to have been any definite agreement or understanding on that subject.

The assistant vice chancellor having arrived at the conclusion, however, that the complainant was not entitled to the account and relief prayed for in the bill, the whole foundation of the suit failed; and he was not authorized, without the assent of the parties, to proceed and make an adjustment of the claims of the defendants against the complainant, on account of the proceeds of the sale of the vessel, without a cross bill. But he should have dismissed the complainant’s bill against Good-hue & Co. and Durand, with costs; and without prejudice to their rights at law, in suits which might be brought by them against the complainant for their respective shares of the proceeds of the sale of the vessel, or in any suits which they might institute in this court to recover their rateable proportions of such proceeds. The principle upon which the court below directed their proportions of the proceeds of the vessel to be estimated, I think, was right as between the parties. For if the complainant had laid out more than the $16,500 upon the boat, in additions of a substantial and permanent nature, those additions would necessarily enhance the value of the boat, upon a sale ; and he might very properly be considered as a subscriber to that additional amount, towards the building of the boat. In an equitable adjustment of the proceeds of the sale, therefore, his proportion of those proceeds should be increased pro tanto.

But as I have before said, in relation to the claim of Brown & Bell’, the» sale of the boat by the complainant and the purchasing it in himself, for less than one third of its actual value, was a mere nullity, as against Goodhue & Co. and Durand, if they *117had any interest in, or lieu upon the boat. It is true there is some evidence that 'Goodhue & Co. assented to a sale. But there is not a particle of testimony to show that either of these defendants intended to consent that the complainant should have the property put up in their absence and bid it in himself; and that such a transaction. should be considered a real sale as to them. In the adjustment of their claims, therefore, the amount for which, the complainant actually sold the boat on the 10th of October, 1838, and not the nominal sum at which it was struck off to him, forty days before that time, was the proper sum to be apportioned between the parties.

If both parties consent to an adjustment of the amount upon these principles, without the necessity of further litigation, the decree of the assistant vice chancellor, as between the complainant and those defendants, may be modified accordingly; and without costs to either of them as against the other, upon this appeal. But if a stipulation to that effect is not filed within thirty days after pronouncing this decision, this court must make the only decree which it can properly make upon this bill and upon the facts of the case; that is, to affirm so much of the decree of the assistant vice chancellor ip, relation to the rights of these particular parties as declares or decrees that the defendants Goodhue, Perit and Durand, are not liable to account to the complainant for any part of the expenses, costs and charges incurred and expended by him upon the steamboat Despatch in the bill mentioned, beyond the specified sum of $3500, which sum has been paid by them in full satisfaction and discharge of their subscription ; and so much of the decree as awards costs to those defendants; and to reverse the residue of the decree which adjusts the claims of these defendants for their proportions or shares of the proceeds of the sale of the boat, and dismiss the complainant’s bill as against Goodhue, Perit and Durand, without prejudice to their rights to proceed either at law or in equity, as they may be advised, for their proportionate shares of the proceeds of the sale of the boat.(a)