author: Mr. Justice WOODBURY

text:
    Thomas Davis, Plaintiff in error, v. William M. Tileston and Company.
    Where a'bill in equity sought to enjoin a judgment, and charged that the complainant had a good defence which he did not know of at the time when judgment at law was rendered against him, and charged also that he was entitled to pay the debt -in the .depreciated notes of a particular bank, of which advantage it was attempted to deprive him by fraud and collusion, and this bill was demurred to, it was error in the court below to sustain the' demurrer.
    This case was brought up by writ of error from the District Court of the United States for the Northern District of Mississippi.
    In the year 1838, Thomas Davis, the plaintiff in error, received three thousand dollars from the Aberdeen and Pontotoc Railroad and Banking Company in thie notes of that institution, and gave his bond for the. delivery of seventy-five bales of cotton at the town of Burlingham, on the Tallahatchie River, on or before the 1st day of the ensuing March. According to his own statement in. the bill which he afterwards filed, he paid $ 1,685.50, and delivered eighteen bales of cotton, subject to the order of the company. The precise time of this payment and delivery was not stated.
    On the 12th of December, 1839, William M. Tileston and Charles N. Spofford, residing in New York, and carrying on business under the name , of William M. Tileston & Co;, obtained a judgment in the District Court of the United States for the Northern District of Mississippi against the. Aberdeen and Pontotoc Railroad and Banking Company, for a sum of money, the amount whereof is nowhere stated in the record.
    Upon this judgment, a writ, called a writ of garnishment, was issued by way of' execution, and served upon Davis. This writ was returned, duly executed, to June term, 1840. ■
    At December term, 1840, judgment was- rendered against Davis and his securities, as debtors to the Aberdeen :and Pontotoc Railroad arid Banking Company for;$> 1,861 and costs.

      A fieri facias was issued upon this judgment in favor of Tileston & Co., returnable to June term, 1841.
    . On the 10th of June, 1841, Davis paid, on account of the judgment, $242.77, which was duly credited.
    At December term, 1841, a return was made of property levied upon, with its valuation, but no further proceedings appear then to have taken place.
    In. July, 1843, Davis .filed a bill on the equity side of the court against Tileston & Co., to enjoin- the judgment obtained against him at December term, 1840. . The bill recited the above facts, and then proceeded thus: —
    “ Your orator further states unto your Honor, that,, before the rendition of the said judgment upon the said garnishment in favor of William M. Tileston & Co. against your orator, he paid upon the said cotton bond $ 1,685.50, or about that sum, and delivered at the town of Burlingham, according to his con-: tract, eighteen bales of good cotton, averaging in weight about five hundred pounds, and subject to the order of the said Aberdeen and Pontotoc Railroad, and Banking Company, and which cotton was shipped on board of steamer Big Black, Steilling, master, without the orders of or being subject to thé control of your orator; and said cotton was left by said steamer at the house of ánd'in the care of Young & Richards, Vicksburg, Miss., and by them twelve of said bales were shipped to George Buckanan, of New Orleans, for . the benefit of and on account of the said Aberdeen and Pontotoc Railroad and Banking Company. The remaining six bales wére shipped and sold in New Orleans, from the said house of Young & Richards in Vicksburg, for the benefit of and. in the name of one Dickens, for between fourteen and fifteen cents per pound; and the said Dickens was found by your orator on the western bank of the Mississippi River, in the State of Arkansas, about forty miles above Memphis, Tennessee; and the proceeds of the sale of the said six bales of cotton were collected from him by your orator, amounting to about four hundred dollars, but not one cent has ever been collected for the twelve bales shipped to Buckanan, for and on account of the said bank, or applied by said bank to the credit of your orator’s bond.
    “Your orator further states, that, relying upon the statements of the agents of the said bank, solemnly made and often reiterated, that they knew nothing about the twelve bales of cotton or any other part of the eighteen bales shipped as before stated, he did not know- of the shipment of said twelve bales of cotton from Young & Richards, Vicksburg, to Buckanan, of New- Orleans, for and on account of the said Aberdeen and Pontotoc Railroad and Banking Company, until long after the rendition of said judgment in December, 1840, against your orator, as a debtor to said bank, in favor of the said William M. Tileston &> Co., and was kept from his legal and lawful defence and credits, on the trial of said garnishment, by the false assurances of-the bank and its agents, so made to your orator as aforesaid, and, as your orator fully believes, intended for and made to lull him to sleep, and impose upon his general credulity and confidence' in his fellow-man where the least show of honesty is to be discovered. ' Your orator further states unto your Honor, that he was not apprised of, but wholly ignorant of the fact, that the said twelve bales of cotton were shipped by the agents of the said bank from Yicksburg to New Orleans, as above stated, until by a critical examination, about a year or thereabouts since, through his agent, the facts were ascertained to be as before stated.”
    The bill then proceeded to charge a fraudulent combination between the bank and Tileston & Co., by setting up a fictitious claim against the bank for the purpose of depriving Davis of the benefit of paying the bank in its own depreciated notes, and finally averred that the only part of the debt still due was $ 809.47, which he tendered in the notes of the bank.
    An injunction was issued according to the prayer of the bill.
    In June, 1844, the defendants filed a demurrer, and assigned the following causes: —
    1st. The bill shows that the complainant had' a full and complete- remedy at law, which he has neglected.
    2d. That the bill shows that complainant knew, at the time he1 answered the garnishment against him, that no credit had been given for said cotton, and having at that time acquiesced in the conduct of the bank, and acknowledged himsélf indebted to the amount of defendant’s judgment, he cannot now reopen the judgment in this court to be heard, to deny what he might and ought to have denied in his said answer to said garnishment.
    3d. That it appears, by complainant’s own showing, that judgment was rendered against him on his answer at December term, 1840; that he made a payment and satisfaction of said judgment by the execution and forfeiture of a forthcoming bond in May, 1841; that as late as between June and December, 1841, he took the benefit of the.valuation law on said execution, and postponed further action by the said defendants for twelve months thereafter, without ever settling up the matter contained- in his bill, or claiming any deduction or offset from the said judgment in favor of defendants.
    4th. That the pretended charge of fraud is not specifically stated, but is fague, uncertain, and indefinite in general.

      5th. That the said bill seeks to offset the judgment of defendants against said complainant on his answer, and to pay and discharge the same with the bills and liabilities of the Aberdeen and Pontotoc Railroad and Banking Company, obtained by .him after he has acknowledged himself indebted in his answer, and after judgment has been rendered against him in favor of defendants, and after he has executed a forthcoming bond, and the same has been forfeited and become a new judgment against him in favor of defendants, and after he has availed himself of the valuation law on said judgment
    6th. That the said bill shows no equity on its face.
    There being a joinder in demurrer, the case was, on the 11th of June, 1844, set down for hearing on the bill and demurrer- at the next term of the court.
    On the 2d of December, 1844, a rule for decree pro confesso was entered, and on the 3d of December, the defendants, Tiles-ton & Co., filed their answer, which it is not necessary to recite.
    On the 6th of Decémber, 1844, the final decision of the District Court was signed and ordered to be enrolled, as follows: —
    “ This cause came on to be heard at this term, and was argued by counsel; and thereupon, upon consideration thereof, it was ordered, adjudged, and decreed as follows, viz.: that the demurrer of the defendants to the said bill of complaint of the complainants be sustained, and the said bill dismissed.
    “ It is further ordered, adjudged, and decreed, that the defendants go hence and recover of the complainants the costs in and about this cause' expended, for which execution may issue.”
    The complainant appealed from this decree to this court.
    The cause was argued by Mr. R. Davis, for the appellant, and Mr. S. Adams, for the appellees.
   Mr. Justice WOODBURY

delivered the opinion of the court.

The judgment in this case below was founded entire’y on the bill in chancery and the general demurrer to it.

There is in the record an answer filed a few days previous to the judgment. But the cause having before been set down for a hearing on the bill and demr rer', the answer does not appear to have been at all considered, —for that or some other reason, — and is not referred to in the decision.

The only question for consideration by us, then, is, whether . the judgment dismissing the bill on the demurrer was correct.

Upon a careful examination of the facts and principles involved, we feel constrained to come to the conclusion that it was not correct. We are.reluctant to form this conclusion, because, on examining the contents of the bill, it does not in some aspects of it appear free from what is exceptionable, and the answer, if open to consideration now, would show a denial of most of its material allegations.

But as the answer in the present decision must be put out of the question, and as the demurrer admits all facts duly alleged in the bill, the plaintiff seems entitled to judgment on these admissions, though, to prevent injustice by oversight or mistake, we shall take care to render such an opinion that the respondents can be enabled in the court below to avoid suffering, if they possess a real, and sufficient defence to the bill. The grounds of our judgment are as follows.

The demurrer,-by admitting the truth of the allegations in the bill, admits these facts: —

1st. That the complainant had a good defence to a large part of the original- judgment recovered against him, as garnishee of the bank, and which he did npt know at that time.

2d. That he was entitled to pay to the original creditor, the bank, its own notes in discharge of any balance due to it, and which, were under par, and that, through fraud between the bank and the respondents, the demand against him was assigned' to them, and he sued as garnishee of the bank, in order to exclude the payment in its notes.

The former judgment having been in the District Court of -the United States, these grounds for an injunction against the ■further enforcement of it till the mistake as to the defence is corrected, and the balance allowed to be; satisfied in notes of the bank then held, or an, equivalent to their value at the time of the judgment, seem equitable on these allegations, thus admitted.

The respondents can, ex cequo et bono, claim to stand in no better condition than the bank. If there was a further good defence against the bank, there was against them. And if in ■any material respect they and the bank fraudulently combined, by or in that suit, to deprive the debtor of any legal advantage, the least which can be done in equity is to restore him to it.

What is the answer to this view? -Not that the demurrer does not in law admit the goodness of a further defence, and one not known at the judgment, and likewise the existence of fraud by those parties, but that the statement of the defence is not entitled to full credit, is contradictory, and develops culpable neglect to enforce the defence, and that the fraud is not set out with sufficient detail.

But so far as regards the credibility to be given to the statement of the further defence in the bill, that statement cannot be impugned on a demurrer. The truth of it can be doubted only where a denial of it is made in an answer, or proof is 'offered against it, neither of which is now before us. The next objection, founded on some supposed contradictions in the bill, as if not knowing the existence of the defence when he delivered the cotton on which it is founded, can be reconciled on various hypotheses, which need not here be detailed. For, however this may be, we think the allegations sufficiently distinct on a general demurrer.

The validity of the defence as alleged is resisted as the last objection, and rests on- the ground, that he had an opportunity to make it at law and omitted to improve it. .This principle is conceded to be correct, if the defence was then known. But the bill avers he was ignorant of the existence of the defence when the judgment'was recovered. This excuse in some instances might not avail him at law. It has been settled, that in an action at law, if the party omits to make a defence which existed to a part or all of the cause of action, he can afterwards'-have no redress in a separate legal proceeding. Tilton v. Gordon, 1 N. Hamp. 83; 7 D. & E. 269; 1 Ld. Raym. 742 ; 9 Johns. 232; 2 N. Hamp. 101; 12 Mass. 263. In such case, he can sometimes obtain relief by a petition for a new trial, but seldom in any other manner.

In certain instances, if the defence arose out of something subsequent to the orig’ '.al cause of action, such , as a part payment of money, or a delivery of property to be applied in part payment, and the creditor neglected to make the application, it has been held that this may be treated even at law as a distinct.transaction, the creditor having thus rescinded or failed to fulfil his promise to apply the money,, and a separate action be then maintained to recover it back. Snow v. Prescott, 12 N. Hamp. 535; 7 N. Hamp. 535.

However this should be at law, there is strong equity and. substantial justice .in it, and much more in cases where, as is usual, the debtor is defaulted, having, no defence to the original cause of action, and supposes that the creditor, in making up judgment, will deduct all payments and all promised allowance, and does not discover the neglect to do it till after execution -has issued.

The present application being in equity and not at law, a party in the former is clearly entitled to an injunction, if there was accident, or mistake, or fraud, in obtaining the judgment.

So ignorance of a defence goes far, sometimes, to repel negligence, though standing alone it may not be a sufficient ground for such relief. See 1 Bibb, 173; Cook, 175; 4 Hayw. 7; 4 Mumford, 130 ; 6 Hammond, 82 ; Brown v. Swann, 10 Peters, 498, 502; 2 Swanston, 227; Thompson v. Berry, 3 Johns. Ch. 395.

On this point, however, we give no decisive opinion, because all of us are not-satisfied that a clear remedy can be given at law on these facts by a separate action, and as we have jurisdiction of this cause on' the other ground of fraud, we advert to this merely as being one of the plausible reasons in favor of an injunction, till the whole matters between the parties can be further investigated. (See reasons for this course in- United States, v. Myers, 2 Brock. 516; 1 Wheat. 179; 2 Caines’s Cas. in Err. 1; 10 Johns. 587 ; 1 Paige, Ch. 90.)

The existence of fraud in obtaining the original judgment,which is the other ground assigned for relief, is next to be considered. It is not only alleged' generally, but in the details, so far as .already specified, in this opinion. A general allegation of . it in the bill would have been sufficient, if so certain as to render the subject-matter of it clear. (Nesmith et al. v. Calvert, 1 Woodb. & Minot, 44; Smith v. Burnham, 2 Sumner, 612; and Jenkins v. Eldridge, 3 Story, R. 181.) The-demurrer admits the fraud, thus set out, and the law is undoubted, that our jurisdiction in equity extends over frauds generally, and in a-special manner one like this, to which it is doubtful whether any remedy ' existed by law when defending the original action. 2 Caines’s Cas. in Err. 1; 10 Johns. 587; 1 Paige Ch. 90; 2 Stuart, 420.

The character of this fraud,'as admitted by the demurrer to exist, is ene of great injustice to the community, it being equitable, no less than legal, in Mississippi,.by an express statute, for debtors of a bank to make payment to it in its own bills. (Laws of Miss., A. D. 1842, p. 140.)

It seems generally allowable, even on common law principles, as a set-off. See the express declaration to that effect by this court in The United States v. Robertson, 5 Peters, 659; see also Planters’ Bank v. Sharp et al., at this term.

Looking probably to a transaction much like the present, the court, in 5 Peters, say, — “ So far as these notes were in possession of the debtor at the time he was summoned as a garnishee, they form a counter claim, which diminishes the debt to the bank to the extent of that counter claim.” But how the balance is to be paid in respect to notes, the court forbore to give any opinion (p. 684).

■ Any assignment or other proceeding got up with the fraudulent intent of preventing the exercise of that right, as is here alleged and admitted, cannot receive the countenance of this court. But we do not decide on the extent at law to which such a defence can be made in Mississippi, or in respect to the manner of paying the balance; as all our conclusions here rest entirely on the averments and the admission of their correctness by the. demurrer.

In coming to our conclusions, we by no means would be understood, as before intimated, to approve all the language or forms of allegation adopted in this bill. But we are forced to think that enough is stated in it, in substance, to give us jurisdiction, and to entitle the complainant to relief, when the statement is not denied by the respondents.

The judgment below in favor of . the demurrer is, therefore, reversed.. But in order that justice may be done between these parties, on the answer and any evidence either of them may wish to file, final judgment is not rendered here for the plaintiff, but the case is remanded, in order that leave may be given to the respondents to withdraw their demurrer, and the cause be heard on the bill and answer, if no evidence is desired to be put in; or on these and -such evidence as the parties may wish to offer.

Order.

This cause came on to be heard on the transcript of the record from the District Court of the United States for the. Northern District of Mississippi, and was argued by counsel. On consideration whereof, it is now here ordered and decreed by this court, that the decree of the said District Court sustaining the demurrer to the bill of complaint be and the same is hereby reversed with costs, and that this cause be and the same is hereby remanded to the said District Court, in order that leave may be given to the respondents to withdraw their demurrer, and that the cause Jnay be heard on the bill and an-, swer, if the parties do not desire to put in any evidence; or on the bill and answer and such evidence as. the parties may wish to offer.


source: Caselaw Access Project

author: Mr. Justice McLEAN

license: Public Domain

text:
    Henry Mathewson, Respondent and Appellant, v. John H. Clarke, Administrator of Willard W. Wetmore, Appellee.
    Although a new member cannot be admitted into a partnership without the consent of all parties, yet a person who has obtained a share in the concern can, after the partnership has expired, maintain a suit in chancery for his share of the profits.
    The language of the complainant in his bill, “ that he became interested in a ship and cargo at and Horn Gibraltar,” is decisive of the question of time when his Interest commenced, and shows that he had no interest until she arrived at Gibraltar.
    Where a master and supercargo was to receive a certain sum per month as wages, and a commission of five per cent., and also one tenth of all the profits, arid it was agreed that these were to be in full of all services and privileges, the master and supercargo had no right to traffic upon his own account, for his own benefit. If the master and supercargo, after the loss of bis first vessel, charters another and uses the capital of his partners in prosecuting his trade, informing his owners thereof and expressing his willingness to continue the business- upon the same terms as before, to which they did not object, such continuance of the business must be governed by the same rules which regulated the transactions in the first ship.
    This was an appeal from the Circuit Court of the United States for the District of Rhode Island.
    The record was very voluminous, -being a printed volume of more than five hundred pages, which contained numerous letters and accounts relating to trading voyages to different and distant parts of the world, from October, 1820,' to November, 1826. There were three reports from masters in chancery in the court below, and a supplemental report made to this court by agreement of counsel and sanction of the court. The arguments of counsel referred to a great number of .these transactions, of which it is impossible to give any other than, a general outline.
    In the year 1820, there were in. Providence, Rhode Island, two\ mercantile houses, one known , by the name and firm of Edward Carrington & Co., and the other by that of Cyrus Butler. The house of Edward Carrington Co. was composed of Edward Carrington and Samuel-Wetmore.
    In October, 1820, these two houses made the following agreement with Henry Mathewson, the present appellant.

      “ This agreement wjtnesseth: That whereas Messrs. Lynch, Hill, & Co., of the republic of Chili, have contracted and agreed with his Excellency, General .San Martin, commander-in-chief of said republic, to fúrpish to him, or said government, a quantity of military stores, which contract has been assigned to Cyrus Butler and Edward Carrington & Co., who have undertaken to furnish the same. Wherefore the said Cyrus Butler and Edward Carrington & Co. on the one part, and Captain Henry Mathewson on the other, part, all of Providence, in the State of Rhode Island, on the 12th day of October, A. D. 1820, make and enter into the following agreement, and stipulations, viz.: —
    “ 1st. The said Henry Mathewson agrees to take the command of the ship or vessel the said Butler and Carrington & Co. shall provide for said expedition, and.at all times to act as captain and supercargo thereof.
    “ 2d. The said Mathewson is to proceed to Europe, attend to . the purchase of said .military stores, proceed therewith in said Ship to Chili and Peru, deliver the same, receive the payment therefor, and do all and every thing that may be necessary and advisable for the faithful accomplishment of said contract; both as regards the delivery of the military stores and the receiving the payment therefor, whether the said payments shall be in.cash or in produce of the republics; and with the said payments, proceed to such ports in China. Europe, or the United States as may be considered mpst advantageous, and according to the instructions and recommendations of said Butler and Carrington & Co. Providing, further, that ' should.any circumstance have occurred, or should occur, to prevent the contract being complied with- on the part of the Chilian or Peruvian government, or by General San Martin or his successor, then the said Mathewson is to use his best abilities and exertions to dispose of said military stores in the most advantageous manner, and to [the] best profit; and the proceeds of such sale embark on board said ship, and proceed therewith to' such ports in China, Europe, or the United States as may be considered most, advantageous, and according to the recommendations and instructions of said Carrington &> Co. and C. Butler.

      “ 3d. '.The said- Butler'and Carrington & Co., on their part, promise to allow and pay the said Mathewson fifty dollars per month, as wages as navigator and master "of the ship, and also the sum of seven hundred dollars as commission for attending and procuring the purchase of said military stores in Europe, for delivering and making the sale of the same in Chili or Pe-. ru, receiving the, payment either in cash or produce of the republics, and delivering the same in China, Europe, or the United States, — he conforming always to the instructions, and recommendations of said Butler and Carrington & Co, The Said Mathewson is to have allowed him all travelling expenses and charges that attach to -business.

      “ It is further'mutually agreed between the aforesaid parties, that after delivering or depositing the'proceeds of the aforesaid military stores, and completing and finishing the aforesaid agreement, according to the tenor thereof, a'new voyage and adventure is to be begun in the following manner: —•

      “ 1st. The said Henry Mathewson is then to be admitted an owner in said ship of one tenth part, at the rate of her first cost in the United States, including repairs on hull, sails, and rigging, that may he put on .her after her purchase, either in [the] United States, Europe, or elsewhere ; and also owner of one tenth part of her cargo, on such new voyage and adventure.
    “ 2d. Said Butler and Carrington & Co. agree to sell said Mathewson, and he agrees to purchase, one tenth of the ship, on the terms heretofore , described in article-first.
    “ 3d. Said Cyrus Butler and E. Carrington & Co. agree to furnish the sum of fifty thousand dollars (as a cargo for said ship) at the port where the said ship shall. deliver and deposit the proceeds of said military stores.
    “4th. The said Mathewson is to allow said Butler and E. Carrington & Co., interest, at the rate of six per cent, per annum, for. his one tenth of ship and cargo, from the’ time the proceeds of the military stores (heretofore mentioned) are delivered or deposited in manner as heretofore stipulated.
    “ 5th. The said Mathewson is, in this new voyage, to have liberty to proceed tq such ports, countries, and places, backward and forward, for trade,'freight, or other employment of the ship and cargo, ás he may think most for the interest and advantage of the concern in said ship and cargo.
    “ 6th. In this new voyage, as before described, it is mutually agreed, the said Mathewson shall have fifty dollars per month, as. wages as commander and navigator of said ship, to commence with the new voyage, and as supercargo a commission, .of five per cent, on the net amount [of] all property safely returned to the United States, Canton, or Europe, proceeding from the original stock of fifty thousand dollars, together with one tenth of alb, the profits and earnings made in the voyage or voyages,, freights or otherwise.
    “ 7th. It is agreed that the^ wages and commissions specified apd agreed for in the sixth article are to be in full of all services and' privileges to Captain Mathewson, as,master and supercargo during the voyage or voyage^-heretofore specified or otherwise.
    “ It is understood, the said Mathewson is to have no privilege in the first voyage heretofore specified, and that the wages apd commissions óf seven hundred dollars allowed on that voyage áre to be paid in the United States at ,the end of voyage.
    (Signed,)
    Cyrus Butler,
    Edward Carrington & Co.,
    Henry Mathewson,”
    In pursuance of this agreement, Mathewgon repaired to. Europe, and in December, 1820, at the Texel,. received the ship Mercury and her cargo from the other parties. He also, received two. sets of instructions, one genuine, and the other fictitious, to be used in case of capture. . The true instructions commenced in this way: —,

      “ Providence) November 13, 1820.

      “ Gapt. Henry Matbewson :

      “ Sir, — We herewith hand you the letter of Messrs. Lynch, Hill, & Co., of Valparaiso, to Edward Carrington & Co., under date of June 15, 1820, accompanied with a contract made by their Mr. Lynch with General San Martin, commander-in-chief of the Chilian and Peruvian armies, and in behalf of said government. You will observe, on perusal of the letter and contract, that the muskets, carbines, and sabres, expressed in the first, article in the contract, are to be furnished by Lynch, Hill, & Co. themselves, and that the same articles mentioned in the second article are 'the ones intended to be supplied by ourselves, and are the same as we directed to be purchased by yourself in Europe, viz.: —-
    20,000 muskets, of good proof.
    7.000 carbines.
    7.000 cavalry sabres.

      “ The prices, you will observe, are stipulated at eight and a half dollars for the muskets, six dollars for the carbines and cavalry sabres, to be imported into Peru free of duties, and the proceeds; or payment for the same, is also allowed to be exported free of duties. The delivery of the said arms to be at any one port in Peru in possession of the patriots 'under General San Martin, or where, on your arrival at any one of said ports, General San Martin may determine, on the coast of Peru; You will observe the contract provides that any articles, the produce of Peru, may be received in payment (at the current market price) for the arms; always by the agreement and consent of- both contracting parties, and that the same may be exported free of duties. You will also observe, that the duties on the import of - any other articles of. merchandise by said Lynch, into the port of Peru, are to be admitted towards the payment, of the said arms. You will also observe it is understood, that, if the, payment is made in specie for said arms, it is permitted to be exported free of duties.”
    The instructions then proceeded to tell him how to arrange his cargo, what to do when he got to Valparaiso, and continued thus:—
    “ In the execution of this business it will require your best attention and circumspection to weigh well all points and circumstances, and, in conjunction with Lynch, Hill, & Co., pursue that course best calculated to have the contract complied with, taking care at the same time, as much as possible, to have, the payment therefor placed under favorable circumstances ; or if circumstances should have occurred to defeat the expedition, and with it destroy the hope of having the contract complied with, you are then to adopt the next best plan to make the sales of our property to the- best advantage. If the contract is complied with by General San Martin, ■ we should recommend your fully loading the ship with copper, (taking the same as payment towards the arms, particularly as it is to be allowed export free of duties); and taking copper may facilitate and help the government, and be the means of getting-payment before the expiration of the eighty days limited in the contract, ánd taking the balance in specie, and proceed immediately to Canton; or if the contract is not complied with, and you should make thi sale in Chili, or other place where copper can be procured at not exceeding fifteen or sixteen dollars the quintal on board, we should then also recommend your loading with , copper, particularly if it should aid you in making sales of the arms; and then taking the balance in. specie, and proceed direct for China. After having disposed of the aims, and obtained the payment for the same, it will be of much- importance that you reach China as direct, and with as little delay, as possible. In order that a second deposit may be had for the property, and that a new voyage may be begun anew, without any regard to the present one, after reaching Canton you will deliver all our property to Messrs. S. Russell & Co., except the fifty thousand dollars, which you are to retain as a capital for the ship in any future operations you may think it advisable to undertake, either by trading or freighting, according as you think most profitable for all concerned; - perhaps a cargo from China for Chili or Peru may be a good investment. However, after you get to Canton, and take the fifty thousand dollars as a capital, you must be your own master, and do that which is best.”
    The instructions then proceeded to provide for many contingencies,- and concluded with a general reference to conversations between the parties before Mathewson left the United States.
    The fictitious instructions provided entirely for a trading voyage to Columbia River, thence to Canton, &c.
    In April, 1821, having purchased a cargo of arms, Mathewson sailed from" Bremen, in the ship Mercury, for Valparaiso, and arrived there in August of the same year.

      From Valparaiso he went, to Lima, where he arrived in September.
    On the 1st of June, 1831, a transaction occurred at Provi- • dence which was the basis of this litigation. Willard W. Wet-more (and his administrator, the present defendant in error) claimed to have been admitted on that day as a partner in the firm of Edward Carrington & Co., and the following entry upon their books was produced upon the call of the defendant Mathewson.
    “ Providence, June 1st, 1831.
    Day-book.
    Edward Carrington & Co. —New concern.
    Edward Carrington f,
    Samuel Wetmore if-,
    W. W. Wetmore -|.”
    And commencing on the first page, under date of 1st June, 1831, and continuing through several pages* Edward Carrington & Co., old concern, are credited with the sum of $ 118,987.33, for their interest in various adventures, and shipments then outstanding.-
    The corresponding leger is headed, “ New concern, leger A,” and commences with the same date.
    Let us return to* the voyages of Mathewson.
    , At Tima hé sold his cargo of arms, and was detained there nearly ten months waiting for payment from the Peruvian government.
    In June, 1833, having chartered the Mercury, at Lima, to a person by the name of Rodolpho, he sailed with the proceeds of. the arms for Gibraltar, by way of Rio de Janeiro, and arrived at Gibraltar in November, 1833.
    In December, 1833, he sailed from Gibraltar, on a trailing and freighting voyage, with freight and merchandise for the joint account of the owners.
    Arrived at Rio, February, 1833.
    Sailed from Rio, February, 1833.
    Arrived at Valparaiso, April, 1833.
    Arrived at Callao, July 1, 1833.
    Left Callao, September, . 1833.
    Arrived at Arica, October,. 1833.
    Left Arica for Callao, October 35, 1833.
    Arrived at Callao, December, 1833.
    Sailed from Callao for Canton, January 1, 1834.
    Arrived at Canton, April 10, 1834.
    Left Canton for South America,. July 11, 1834.

      Arrived at Monterey, October 25, 1824.
    Left Monterey for Mazatlan, January 1, 1825.
    Arrived at Mazatlan, January 21, 1825.
    Left Mazatlan for Lima, March 20, 1825. Arrived at Guayaquil, June 3, 1825, where the ship, being injured in a gale and decayed by age, was condemned and sold.
    On the 12th of September, 1825, Mathewson embarked at Guayaquil with goods and money for Lima, in the steamboat Tilica, which was blown up and destroyed on the passage.
    In November, 1825, being at Lima, Mathewson chartered three fourths of the ship Superior. He claimed to do this upon his sole responsibility and risk, and therefore to be entitled to all the profits,- allowing to Butler, Carrington & Co. only the interest upon such portion of the partnership funds as were invested in the adventure.
    In November, 1825, he sailed from ,Lima. to Canton, where he arrived in March, 1826. Leaving there in June, he returned to Valparaiso, where he arrived in October, and consigned all his property, individual as well as joint, to Alsop, Wetmore, & Co., who sold it at a large profit.
    In June, 1827, he arrived in Providence, having been absent nearly seven years.
    During all these voyages, Mathewson claimed to have received sums of money for himself upon various accounts; such as presents and gratuities from the persons with whom he dealt; from Spaniards for assisting in concealing their money; a deposit from a man named Martinez, to be invested in military clothing for him at Gibraltar, but who could never after-wards be found or heard of; from passengers for taking care of their money; presents from several persons for transporting specie from the shore without full duties; and profits upon all these sums, invested upon.his own account in articles of trade sold and reinvested from time to time, paying freight for the same.
    In 1830, Willard W. Wetmore, of New Haven, in Connecticut, filed a bill on the equity side of the Circuit Court' of the United States for .the District of Rhode Island against Mathewson, claiming to have been admitted by Edward Carrington & Co. as a member-of their, .firfta in June, 1821, and calling upon Mathewson to render an account of his agency as master and' supercargo of the ship Mercury, on a voyage by him prosecuted before he became part owner of said ship; and of his agency as master, supercargo, and part owner of said ship and her cargo after he became a part owner; and also of his employment of the funds of the owners of the Mercury,'after her condemnation and sale, in the ship Superior, three fourths of which he chartered at Lima in November, 1825. The bill also called for a discovery of all his transactions during the adventures.
    This bül was afterwards amended by the insertion of the following clause after the claim to- have heen admitted as a partner in June, 1821-, viz.: •— “ (amendment — and then and there became the assignee and purchaser of one fourth of nine twentieth parts of said ship Mercury and her cargo and of one fourth of nine twentieth parts of all the rights of all the rights of said Edward Carrington & Co. in and to said contract with the said Mathewson, and, as such, entitled to a discovery and relief against the. said Mathewson).”
    In September, 1830, Mathewson filed his answer, to which exceptions w§re taken, and in February, 1831, filed a further answer. In these answers he denied that the complainant ever was a partner in the house of Edward Carrington & Co., or that he ever had any interest in the ship Mercury and cargo, or in the concerns of said adventure. The answers then went into a minute detail of all the transactions which had occurred during all these voyages, and had annexed to them a hundred and seven accounts with different persons, explaining the shipments, sales, freights, purchases, remittances, &c., &c. •
    At November term, 1831, the cause was referred to Samuel Eddy, as master in chancery, “ to take and state an account between the complainant and the .defendant, Henry Mathewson, touching and concerning the concerns and business of the partnership subsisting between the parties in said cause, and all the other matters and things charged in said bill of complaint.”
    At June term, 1832, Samuel Eddy, Richard K. Randolph, and John H. Ormsbee were appointed masters under the above interlocutory decree.
    In 1834, whilst the cause was pending before the masters, Wetmore, the complainant, died, and letters of administration upon his estate were granted to John H. Clarke, a citizen of Rhode Island, the laws of that State not permitting a person residing out of the State to become the administrator of a citizen thereof. Clarke, the appellee in the case now before the court, filed a bill of revivor. Mathewson appeared, and moved to dismiss the suit on the ground of want of jurisdiction, inasmuch as the administrator and respondent were citizens of the same State. The Circuit Court dismissed the bill; but the cause being brought up to the Supreme Court, this judgment was reversed, and the cause remanded for further proceedings. The report of this case will be found in 12 Peters, 164.
    In January, 1839, Charles F. Tillinghast was appointed a third master, in the place of. Samuel Eddy, to act in conjunction with the other two.

      In November, 1840, the masters made a very elaborate report to the court, accompanied by numerous depositions, in which report they found a balance due from Mathewson to the administrator of $ 8,098.52,' To this report Mathewson filed twenty-six exceptions.
    At June term, 1841, the mastér’s report was referred back to the same masters, to reexamine and review and reconsider the same, with liberty to either party to introduce further evidence ’; the plaintiff to have leave to amend his bill, and the defendant to file his answer to the amendment within twenty days. Whether or not it was at this stage of the proceedings that the plaintiff amended his-bill by inserting the part included within brackets, as set forth in the preceding part of this statement, the record does not show. But on the 9th of. Sep-' fember, 1841, Mathewson filed a further answer, denying that Wetmore was or ever had been a copartner in the firm of Edward Carrington & Co.; denying that he, Wetmore, had ever asked an account from the defendant previously to filing th© bill, and denying that Wetmore had'ever been admitted by the defendant as a copartner in said ships and adventures in any manner whatever.
    At November term, 1841, the masters made their second report, finding a balance due by Mathewson to Clarke, as administrator, of $ 8,568.52; This report was accompanied by a great mass of additional evidence. To this report Mathewson filed twenty-four exceptions.
    At the same term, viz. November, 1841, the court ordered this report of the masters, so far as respected the matters in the sixteenth exception, to be referred back to them for further inquiry.
    In conformity with this order, the masters filed a third report correcting the preceding one by making an additional allowance, and reporting the entire balance due by Mathewson to be $> 8,685.66^.
    At June term, 1842, Mathewson filed six exceptions to this third report.
    At November term, 1842, the following decree was made by the Circuit Court, viz.: —
    “ This cause came, on to be heard upon the report of the masters made in. this cause at the November term, A.. D. 1840, of this court, and upon the exceptions filed thereto; and upon the report of the masters made in this cause at the November term, A. D. 1841, of this court, and the exceptions filed thereto; and upon- the masters’ report in this cause, filed in the clerk’s office of this court on the 11th day of April, A. D. 1842, and the exceptions .filed thereto, and counsel being heard thereon:

      “ In consideration whereof, it is ordered, adjudged, and decreed, that the exceptions to the-first-mentioned report be disallowed, and that the said réport do stand and be confirmed,' except so far ás the same is altered by the. report, aforesaid-made to the November term, A. D. 1841,. of this court, and the report aforesaid filed in the clerk’s office of this court on the 11th day of April, A. D. 1842.
    “ It is further ordered, adjudged, and decreed, that the exceptions to said report, made at the November term, A. D. 1841, of this court, be disallowed, and that said report do stand and be confirmed, except so far as the same is altered by the said report, filed in the clerk’s office of this court on the 11th day o.f April, A. D. 1842.
    “ It is further ordered, adjudged, and decreed, that the exceptions to the said report, filed in the clerk’s office of this court on the 11th day of April, A. D. 1842, be disallowed, and that said last-mentioned report do stand and be confirmed.
    “ It is further ordered, adjudged, and decreed, that the said John H. Claike, administrator on the estate of the said Willard W. Wetmore, in his said capacity of administrator, have and recover of the said Henry Mathewson the sum. of eight thousand six hundred and eighty-five dollars and sixty-six cents, said sum being the amount found due by said last-mentioned report, together with costs, and that execution issue therefor.
    “ Let this decree be filed in the clerk’s office in this cause.
    “JOSEPH STORY,
    Ass. Jus. of the £'up. Ct. of U. States.

    “ JOHN PITMAN,

      District Judge U, S. M, I. District.”
    Prom this decree an appeal brought the case up to the Supreme Court.
    Whilst the cause was pending in the Supreme Court, an order was passed, at December term, 1845, directing the masters to review their report. They accordingly made a supplemental and fourth report, addressed directly to the Supreme Court, iu which they admit an error in their preceding accounts^ from not giving ^Mathewson a sufficient credit for his commissions and his interest in the copartnership. Correcting this error, they find the amoimt due by Mathewson to Clarke, including interest up to January 1,1846, to be $ 6,241.44. This report was made a part of the record, by agreement of counsel.
    In the argument of the case in this court, the exceptions taken to the first report of the masters were not insisted upon any further than they were included in the exceptions to thé second; and the exceptions to the third were entirely waived. None being taken to the fourth, which was made to this court, the ¡argument was'confined exclusively to the exceptions to the second report, which diave been already stated to have been twenty-four in number^
    The cause was argued by Mr. Albert C. Greene and Mr. Webster, on the part of Mathewson, the appellant, and Mr. JR. W. Greene and Mr. Whipple, for the appellee.

      Mr. Albert C. Greene gave a history of the case, and of all the voyages which had taken place.' He then classified the exceptions so as to include all which related to or depended upon the same general principle of law. . And, first, with respect to the right, of the complainant to sue. This being a limited copartnership, consisting of the sum of $ 50,000 and the ship, he maintained the three following' propositions.
    1. That being a limited copartnership, no third person can be admitted without the consent of all the copartners..
    2. . That no assignment of an interest in a copartnership fund to a third person .can give to such third person any right against the rest of the partners, where the right to assign' is not provided for in the agreement.
    3.. That Wetmore, not being an original party, cannot be a party to any suit at law or equity founded on the original agreement.
    1st. The relations which exist between partners are either provided for specially by agreément, or result, by operation of law, from a union of funds. They may contract for what -they choose, — for example, that one of them shall not enter into a particular branch of business; or they may stipulate for the right to assign, in which case an assignee is in the enjoyment of full rights, flowing from the original agreement. But if the contract is silent upon thjs point, the law does not permit a third person to be introduced without the assent - of the other parties. If we were at law, it is clear that no action would be maintainable, and the same rule must prevail in equity. The relations between partners are of a confidential character, and therefore it is reasonable that no stranger should be brought in. These relations are also mutual. In case of loss, each partner has a right to look to his associates, and ought not to be compelled to rely upon a person whom he may be unwilling to trust. The only evidence of the copartnership of the complainant, Wetmore, is the entry upon the books of' Carrington & Co. There was no assignment, no letter informing Mathewson, who was then absent on one of the voyages, nor did he know any thing of it until the service of the subpoena in this case. See Collyer on Partnership, 4, 101; 14 Johns. 318; 6 Madd. 5.

      2d. No assignment can be made where it is not provided-for in the articles.
    There is no evidence here of any assignment to Wetmore which does not show him to have been also admitted as a partner, if it. is valid for any purpose. Suppose there was such evidence, what could partners assign except choses in action, which the assignee would he unable to enforce? But the claim here is, that the new partner has the same rights as the old, and has the same- right to forbid certain things to he done. If the relation of partner cannot be assigned together with choses in action, then the suit must fail, because the ground of -the complainant’s claim is that Mathewson.had no right,.under his agreement, tó do certain things which he has done. ■ But this relation cannot - be assigned. Mathewson never agreed that any one else should he his master. He had no claim for any thing against Wetmore, and therefore Wetmore- can- have none against him.
    If these two propositions can stand, the third follows - of course.
    The next general proposition arises from the second and- . third exceptions, and is this: that Mathewson has a right to the profits upon purchases which he made whilst detained'at Lima. If his partners had ratified his acts, the profits would have inured to the common benefit, and Mathewson was willing that this should he done. But we say that his partners should have decided when he asked them; whereas they always avoided saying whether they would sanction his acts or not. The reasoning of the masters is not good. They say, that, as MatKewson’s inducements- to the purchase were to hasten the settlement of his own cargo, the profits ought to belong to his owners. But they should have adopted or rejected his acts when he informed them what he had done and solicited their sanction.
    A: general proposition arises under the sixth exception. Martinez had placed- money in the hands of Mathewson to be employed for himr at Gibraltar;' The purchases were made, but Martinez could never more be heard of. To this money we say the other partners have no right whatever. (Mr. Greene here examined all the evidence on this subject-.)
    The next general proposition is, whether and how far Mathewson had a right to trade upon his own private account at the same time that he was trading upon the partnership funds. The masters say that he must not carry his own property in the sanie ship,, although they admit that he has-a right to traffic for himself; and .send his commodities in another ship to- the same market. We apprehend that ‘the true rule is this; that a partner must not place himself in such a situation that his own private interests will necessarily conflict with those of his partners. Collyer on Part. 100; 6 Madd. 369; 4 Beavan, 534; 1 Sim. & Stu. 124; found also in 1 Cond. Eng. Ch. Cases, 124.
    The ninth and eleventh exceptions raise a general question, what were the rights and duties of Mathewson after the loss of the Mercury. We contend that his contract was to take command of that ship, in which he became a part owner. After its loss, he had a right to engage in any thing new, and chartering the Supérior was a fresh adventure altogether. If his partners chose to ratify his acts, he.was willing to include them; but the evidence in the case shows that they disowned them. The profits must, therefore belong to Mathewson alone.

      Mr. R. W. Greene, for defendant in error,
    took up the exceptions in numerical order, and examined each' one in comparison with the evidence. The general scope of his argument was to show, that the voyage was a very hazardous one on the part of the shippers, who had planned the whole series until the termination; that Mathewson had no right to receive presents from his consignees; that it.is always suspicious when vendors make presents; that Mathewson was especially de-barred from all privileges by the agreement; that he had full power to .obtain payment for the arms in any mode', arid if the purchase of the Nancy was necessary to accomplish this, it -was within his.instructions; that he himself thought so, because, when about to do it, he wrote to his partners hoping not to be: censured; that, his receipts, for his own cargo were in fact in this new purchase; that it was a direct breach of duty to. receive the money of Spaniards, in thé disturbed condition of the country, and might have led to the forfeiture of the property under his control; that he risked the whole cargo for his own private advantage; that he concealed all these matters until the exceptions to his first answer compelled him to disclose them in thje second; that he had no right to carry goods on his private account to the same market with those of his partners; that their interests must necessarily clash; that he could not fairly have realized the sum of $ 57,000, which the evidence shows that he did; that he only charged himself with half freight; that the accounts show that he settled with his consignees as if the whole goods belonged to him, and therefore could easily claim, as his own, whatever part he chose; that his average when the steamboat was destroyed . was wrong; that the evidence showed that no such man as Martinez had ever existed; that with respect to the profits by the voyage in the Superior, the original voyage,, as planned, was not ended; that Mathewson had no right to trade and speculate upon the money of his partners, but if the voyage was over, he ought to have sent it home ; that in fact the partnership was not concluded, but the ship Mercury was only one instrument to carry it on; that Mathewson’s letters show this; that in the voyage of the Superior he made 100 per cent, for himself, and only 40 per cerit. for his partners.
    With respect to the right to sue, Mr. Greene drew a-distinction between the two voyages. As to the first voyage, the assignee had a right to sue in his own name. 2 Story, Eq. Jur., p. 391, $ 1055.
    The owner had a right to assign, and the present assignment is sufficient. 2 Story, Eq. Jur., p. 381, 382, $ 1047.
    . As to the right to sue on the new voyage.
    It has been said, on, the other side, that no new member can be introduced into, a firm without the consent of all. But in this case one -of the members of the partnership was itself a firm, viz.. Carrington & Co.,- with which the contract was made. The admission of Wetmore did not change the name of the firm. Besides, the contract gave to Mathewson the exclusive control over the business. There was therefore no necessity for consultation. The partners at home had nothing to do but to receive the proceeds. The reason of the rule does not apply.. But if w-' claim as assignee, we have a right to an account. All property is transferable in equity, and the bill was amended so as to include the rights of an assignee.

      Mr. Whipple, on the same side.
    With respect to the right to sue, we do not say that the complainant was a .partner in the voyage of the Mercury in any other mode than as he was a member of the firm of Carrington & Co. It has been said, that a partner cannot introduce a stranger into the firm without the consent of the rest. We admit it. But the contract here was between Butler, Carrington & Co., and Mathewson. There was no contract between Mathewson and Carrington himself, or Samuel Wetinore individually. It was with the firm. Carrington’s order alone would not have been binding, and in case of his death, the business would be wound up by his surviving partner. , The property involved was not liable for Carrington’s debts until all the partnership claims'upon it were satisfied. If Carrington had drawn an order for money upon Mathewson, he ought not to have paid it, because he knew that all their share of the property belonged to Cafrington & Co., and not to Carrington personally. A change in the component members of the firm could, make no difference in the rights of Mathewson. The power to control him was just the same after as before it. In «ase of loss, the firm of Carrington & Co. would have to contribute, and a portion of this must fall upon the new.member. He ought, therefore, to share in the profits. The only question is, whether an assignee can sue a partner. But in equity a bill for a specific performance would lie. All that would be necessary in such a case would be j;o bring in all the parties who had an interest in the subject.

      'Mr. Whipple then took up and enlarged upon the following propositions.
    1. The answer of Mathewson was overthrown and discredited by counterbalancing testimony.
    2. There was no difference in principle between Mathewson’s right to trade in the Mercury and in the Superior.
    3. He had no right to trade upon his own account in either, because. it was expressly prohibited by the contract, and because it was at war with the duties which he had undertaken to perform.
    These propositions Mr. Whipple illustrated at great length.

      Mr. Webster, in reply and conclusion,
    gave a particular narrative of the course of the suit, and the transactions between the parties. The first proposition raised by the exceptions is, that the complainant has no right to maintain this suit. ' We my that he had no interest whatever except as a partner, and that he cannot become so without our. consent. It is necessary here to make a distinction between the first and second voyage. Mathewson was not a partner during tl e first voyage of the Mercury, and after that was over, became a partner to the amount of one tenth. It may be said, that, if Mathewson was not then a partner, our objection to the complainant’s right to sue for the first voyage does not apply. But the answer to this is twofold : —
    1. Because this bill counts on’ a special agreement, to which Wetmore, the complainant, was no party. His claim as assignee does not aid him in this.
    2. Wetmore never had a particle of interest in the first voy- . age of "the Mercury. This terminated at Gibraltar, in November, 182% and in December following a new voyage was commenced. But it does not appear from the record that the Mercury and her cargo constituted any part of the $ 118,987 which was credited to the old concern when a change of the books took place, in. 1821. On the contrary, the following extract from the record shows that' the Mercury was not brought into the new partnership until the 7th of February, 1824.

      E. Carrington Co., —old concern,

    3824, 7th Feb. By ship Wm. Baker, as cash, July, 1821
    “ Nancy, “ June, 1821
    “ Trumbull, “■ ' Jan’y, 1823
    “ John Brown, “ July, 1822
    “ Fame, “ May, 1823
    “ Integrity, “ June, 1821
    “ Mercury, at Gibr., Dec’r, 1822
    “ Lion, 1821
    “ General Hamilton, 1822

      H George, 1821
    “ Panther, 1822
    By adventure ship Mercury, voyage from Gibr. Chili, $ 50,619.18, — for one half .
    Cb.
    $7,000
    3.500
    3.500
    3,612 50
    3.500
    7.500
    5,000
    14,500
    2,300
    10,000
    22,000
    $80,412 50
    to
    $25,309 59
    Consequently Wetmore never had any interest in the first voyage. The transfer at the bottom of the account is for one half of the outfit, but does not include any profits at all. He has no right to call upon Mathewson for any explanation of his proceedings.
    With respect to the subsequent voyages, the right of the complainant to sue is sustained upon two grounds : —
    1. That Carrington & Co. had admitted him as a new partner in their firm ; and,
    2. That the complainant was an assignee.
    1st. The authorities already cited, Tidd, Collyer, Johnson, and Maddock, are clear, that no new partner can be admitted without the consent of all.
    2d. It is said that he was an assignee. But he says himself in the bill that he was a pártner. The amendment to the bill, putting his claim upon the ground of being an assignee, does not vary the facts in the' case. He was just as much an assignee without putting that in. But his claim to be assignee is only an evasion of a well-settled rule of law. Every new partner can claim to be assignee. In this case he would be a very strange one. He had as much right to control the others’ shares as they had to control his. He could draw bills of exchange, settle accounts, «fcc. I had supposed that an assignment of a chose in action was recognized' upon the principle that the assignor had nothing more to do with it. But not so here. Carrington & Co. had as much power over the property as they had before. There was no transfer of any distinct and specific interest. If Carrington. & Co. had failed, what would have become of the thing assigned ? It is said that the change was of no consequence to Mathewson. But the answer is, that the rule is general. We are not bound to show any reasons. If we were bound to do so, they might be given. Who-knows whether or not Wetmore was an enemy of Mathewson ? Some unfriendly things were done afterwards,; for example, they wrote to Álsop to take the business out of Mathewson’s hands. How can we know that Willard Wetmore did not do thi£? It is said, also, that he was not a new partner, because he was only admitted to be a partner in the house of Carrington & Co., which house eo nomine was a member of the copartnership, and that therefore the copartnership remained unaltered. But this makes a commercial firm a corporation. If a contract be made with a firm composed of three persons, and then a fourth be admitted, can all four site on the contract ? Certainly not. The names of the partners must all be set forth in the declaration. They cannot- sue in their commercial name. It is only a corporation that can do this. If the complainant had no interest in the first voyage, it disposes of the 2d, 3d, 6th, and 12th exceptions.
    The 7th, 9th, and 11th relate to the right of Mathewson to trade upon his own private account. The objection to his doing so is maintained under the 7th article of the agreement, which says that he is to have no privileges. One privilege of a captain is -to carry his goods without being charged with freight. This article had nothing to <do with the subject. Mathewson carried nothing opt, and could only trade on his commissions, What he acquired in this way he could certainly. bring home by. paying freight. There are some facts in the case which are important.
    1. He had only a limited capital to trade upon for his owners, not enough to fill the ship.
    2. It was always contemplated that she should earn freight by carrying other goods.
    3. The freight thus earned was for the benefit of her owners.
    4. The ship was never full.
    5. There is no allegation that Mathewson did not load the ship properly.
    How Mathewson made his money is entirely immaterial. There is no pretence that he took it from his owners. He has accounted for the whole $ 50,000. There was no loss or damage of any kind by him. He squandered nothing. On the contrary, his owners made a very large sum of money through his care and skill. -But the opposite counsel say that he could not carry, his own goods in his own ship.. Why not ? If he paid freight to any one else, the owners would lose that much. They might then justly have complained. The sound rale of law is, that the master of a vessel must not place himself iñ a situation where his interest necessarily clashes with that of his ewaers. Such was not the case here. It is also said, that he should have attended to nothing else than the concerns of his owners. But he was detained at Lima for ten months without a possibility of expediting the business of his ship. Was he to sit down and think for his owners all this time ?
    We regard Mathewson’s latter voyages as being out of the - contract altogether. The parties probably never contemplated using any other. ship than the Mercury.. When he chartered three fourths of the Superior, he told his owners of it. They acknowledged.the receipt of his letters in which he said that it was upon partnership account, and yet they held their peace upon, the subject of sanctioning it. This they had no right to do. The rule is, that where an agent acts clearly beyond the scope of his authority, mere silence on' the part of his principal does not ratify the act. He must prove a positive assent. Suppose all this property had been lost. The owners did not ratify the proceeding until all danger was over, and the adventure had been found profitable. But it was then too late. If this chartering was beyond the contráct, and the owners claim the profits because Mathewson said he did it for the partnership, they must take the whole of his admissions together.
   Mr. Justice McLEAN

delivered the opinion of the court.

This is an appeal from the Circuit Court of Rhode Island.

Wetmore, the complainant, states in his bill, that on the 12th of October, 1820, Cyrus Butler, Edward Carrington, and Samuel Wetmore, merchants, doing business under the name of Edward Carrington & Co., of one part, and Henry Mathewson, of the other, all of Rhode Island, entered into an agreement in relation to a certain commercial adventure; that, in pursuance of the agreement, the ship Mercury was- procured, and in December, 1820, Mathewson, as master and supercargo, received her at the Texel, in Europe, with instructions under the contract; and having purchased the cargo, as directed, he sailed the 30th of March, 1821, to Valparaiso, in Chili, and to other ports and places in Chili and- Peru, as required in the agreement ; sold the cargo, and with the proceeds sailed to Gibraltar, at which place he arrived in November, 1822, and there sold' the cargo, having completed his first voyage.

The complainant further states, that at Gibraltar, in November, 1822, Mathewson commenced a new voyage or adventure in said ship, and, according to the terms of said agreement, became and was an owner in the ship and cargo of one tenth part thereof. And Butler, Carrington & Co., in pursuance of the agreement, furnished the ship with_a cargo of the value of fifty thousand dollars ■; and Mathewson sailed oil the new voyage from Gibraltar, as master and supercargo, on the 28th of December, 1822. He proceeded to the ports of Rio Janeiro, Valparaíso, and other places, .backwards and forwards, for trade, freight, and the employment of the ship, until the 10th of June, 1825, when, at the port of Guayaquil, in South America, the ship Mercury was condemned as unseaworthy,. and ordered to be sold.

The complainant further states, that, about the 1st of.'June, 1821, he entered into copartnership with Carrington & Co., and thereupon became and was interested in the ship Mercury and cargo, and in all the concerns of said adventure, according to the terms of send agreement, at and from Gibraltar, as aforesaid, in the proportion of one fourth of nine twentieth parts thereof, and then and there became a partner therein with Mathewson and the other defendants, and so continued to be until the said adventure ended, and until the dissolution of the partnership. In this part the bill was so amended as. to enable the complainant to claim as an assignee, &c.

Mathewson is further represented, in Decembér, 1825, as having chartered at the port of Chorillas, or some other place in South America, three fourth parts of the ship Superior, Captain Andrews, on account and for the concern of the ship Mercury, and shippfed on board of her a part or the whole of the proceeds of the sales of the ship Mercury ánd cargo, &c., on the terms and conditions of the agreement, and proceeded therewith to the port of Payta, and to other places backwards and forwards, until the 8th of November, 1826, at the port of Lima, where the charter-party expired, the voyages were ended, ana the. partnership dissolved.

And the complainant alleges that Mathewson had not rendered a full and fair account of his transactions and of the profits; and the bill prays that he and the other defendants may come to a full and fair account, &c.

Neme of the defendants, except Mathewson, answered the bilk. The accounts were referred to masters at different times, and various reports were made. And the case comes before this court on exceptions to the masters’ reports.

Instead of taking up the exceptions, the general principles on which they are founded will be considered.

It is first objected, that the complainant cannot sustain this suit, as he was not a member of the copartnership, and could not be without the consent of Mathewson. The general principle is admitted, that the individuals who compose the partnership cannot be changed without the consent of the whole. And it does appear that Mathewson had no knowledge that the complainant was a partner, or had any interest, in the concern, until some time after his return to the United States. The complainant, therefore, could not be considered or treated as a partner in prosecuting a partnership claim, or in any other procedure involving the rights of the original partnership.

But the complainant does not represent himself to he a partner in any other light than to show the extent of his interest. He seeks to enforce no right of th& firm; hut, alleging that the partnership was long .since dissolved, he asks that the share of the'profits to which he may be entitled shall be decreed to him. .And in the amended bill he represents himself to be the assignee of a-certain interest in the'capital, and consequently entitled to a proportionate share of the profits.

If the firm Were still in operation, the complainant, not being a member of it, could have no right or power to dissolve the partnership or to maintain this suit. His -remedy would bt against Carrington & Co., with whom he made the contract. But the partnership, or whatever it maybe styled, having been dissolved, the. complainant must be considered as having a certain interest in the fund to be distributed. On this ground he may maintain the suit, although Mathewson may never have had notice of his interest until the bill was filed. The allegation in the bill is, that the defendant. has -in his hands funds which belong to the complainant. And as it is stated and proved that the business was transacted by Mathewson, without the particular knowledge of the other parties in interest, he may be called on in the form of this bill to account for and pay over to the complainant any moneys in his hands which belong to him. The object seems'to be merely to ascertain the distributive share to which the complainant may be entitled, as the answers of the defendants, except Mathewson, have not been required.

The next inquiry is, At what time did the interest of the complainant in the ship Mercury and her cargo accrue ?

It is claimed for the complainant, that from the 1st of June, 1821, when his alleged contract of partnership was entered into, his interest in the ship and cargo attached. If this be so, he will be entitled to participate in the profits of the first voyage of the Mercury.

There is no written evidence of the contract between the complainant and Carrington & Co., and we must ascertain the commencement of the contract from the statements in the bill, the books of the company, and other evidence in the case. ■

' The complainant states that Butler and Carrington <fc Co. furnished the “ ship with specie and a cargo for the new adventure, according to the terms of said agreements, of the value of fifty thousand dollars; and the said Mathewson sailed from said port of Gibraltar on said new voyage or adventure in said ship, as master and supercargo, with said specie and cargo on board, on or about the 28th of December, . 1822.”

And in the succeeding paragraph the complainant alleges, that about the 1st of June, 1821, he entered into copartnership with the said Edward Carrington <fc Co., and thereupon became and was interested in the said ship Mercury and cargo, and in all the concerns of said adventure, according to the terms of said agreement, at and from Gibraltar as aforesaid.

This language would seem to be too explicit to be misunderstood. . The new voyage or adventure is spoken of from Gibraltar; and the complainant alleges, that, by virtue of his contract, he became interested in the said ship Mercury and cargo in all the concerns of said “ adventure,” “ at and from Gibraltar.” And this view is confirmed by a reference to the books of the company, in which the old concern is credited, — “ By adventure ship Mercury, voyage from Gibraltar to Chili,” $50,619.18; for one half, $25,309.59.

The partnership of the complainant with Carrington & Co. seems to have embraced some ten or eleven vessels.; in some, if not in all of which, except the Mercury, the interest of the complainant may have attached at the time of the contract. But, however this may be, we are satisfied that he had no interest in the Mercury, by his own showing, until the new voyage commenced from Gibraltar, in December, 1822.

It seems that Mathewson, as master and supercargo, having funds, traded on his own account, in all the voyages he made ; by which means he accumulated as profits a large sum. That trade, it is insisted, was incompatible with his duties as a partner, and was prohibited by his contract.

In the first voyage, which was ended at Gibraltar in November, 1822, Mathewson was to receive “fifty dollars per month as wages as navigator and master of the ship, and also the sum of seven hundred dollars as commission,” <fcc. And he was “ to have no privilege in the first voyage.”

In the new or second voyage, Mathewson was to have “-fifty dollars per month as wages as commander and navigator of said ship, to commence with the new voyage, and as supercargo a commission of five per cent, on the net amount of all property safely returned to the United States, Canton, or Europe, proceeding from the original stock of fifty thousand dollars, .together with one tenth of all the profits and earnings made in the voyage or voyages, freights or otherwise.” And it was “ agreed that the wages and commissions specified and agreed for,” as above, “ are to be in full of all services and privileges to Captain Mathewson, as master and supercargo, during the-voyage or voyages specified.”

Usage has given to the masters of vessels and others certain privileges of transportation and traffic, which are denied to Mathewson by the terms of the contract. He agreed that the wages and commissions should be in “ full of all services, and privileges.” The privileges here referred to cannot be limited to the mere right of the master to transport on board of his vessel árticles. of a certain weight or bulk without charge, but to all privileges whatsoever which by usage he might claim. The compensation to be paid was in full for the relinquishment of any usage or privilege of traffic, as well as for services to be rendered. This seems to be the import of the agreement. And when we consider the nature of the trust vested in Mathewson, the propriety of such an arrangement is clear.

He was to be the acting partner in the voyages contemplated, having under his control the large capital invested, with power to trade from port to port, and to buy and sell as he should deem best for the interest of the company. He was. entitled, for his part of the capital, to a ratable proportion of the profits. Now,, is it reasonable to be supposed that the merchants with whom he was associated would allow him to be engaged on his own account in a commercial enterprise in which he might secure to himself the profits of the trade,, and throw upon his partners the loss? This is not-like the case where the master, having merely the command of the ship, exercises his privilege. ■ The supercargo is the agent of the owners, and disposes of the cargo and makes purchases under their general instructions on his own responsibility.

But Mathewson was master and supercargo, exercising full powers over the vessel and cargo. He purchased and sold, where he eould do so to the best advantage; and for his entire services in this agency, and for the management of the ship, he was paid. Now, can an agent, thus acting for his principals, engage in a traffic on his own account ? He buys for himself and his principals at the same market, and sells at the same. On the one side, he is interested in a small portion of the profits, and in a commission of five per cent. On the other, he realizes the entire profits, deducting therefrom the common charge of freight. In the purchases and in the- sales, under such circumstances, the agent would be influenced, as may be reasonably, supposed, by his own interests. From the accounts rendered, it appears that a much larger profit was realized by Mathewson on his private sales than on the sales for the company. Whether this resulted from the more judicious purchases or sales in the private enterprise, it shows that the traffic was inconsistent with the general agency. It was a rival interest, hostile to the interest of the company, exercised by their agent, and without their approbation or knowledge. This the law will not sanction. It requires not only a bond fide action by an agent, but that he shall be free from those selfish motives which conflict with the interests of his principals.

After the condemnation and sale of the ship Mercury, three fourths of the Superior were chartered by Mathewson, and it is insisted, that any restrictions on his private trading, in the contract, on board of the Mercury, cannot be applied to similar transactions on the Superior, that the contract of partnership terminated on the sale of the Mercury, and that if the new adventure on board of the Superior be sanctioned, it must be taken subject to the conditions imposed by Mathewson, one of which was his private trading.

It does not appear from the contract or the correspondence of the' parties, that any other ship than the Mercury was named or referred to, in which the commercial enterprise contemplated was to be carried on. And it may be said that the condemnation of that vessel ended the adventure. But Mathewson, •without the authority or knowledge of his company, chartered another vessel, and used their capital in the enterprises in which he was subsequently engaged. Of necessity they sanctioned this procedure, as a disavowal of it would have limited their claim, at least in effect, to the personal responsibility of their agent.'

In his letter dated at Guayaquil, 16th August, 1825, to Carrington <fc Co., Mathewson says: — “ If I can get the ship ” Superior “at a fair charter, I shall return back to Canton by the way of Manilla, with the intention of returning to this coast again,” &c. And again, — “ Should I taire the ship Superior, I expect to have the same interest in the voyage as 1 had in the Mercury, and wish you to keep my property constantly insured.” A similar expectation is expressed in a letter dated Lima, 10th November, 1825.

And again, in a letter dated at Lima, 16th November, 1825, after giving an account of the loss occasioned by the explosion on board the steamboat Tilica, he says: — “I have chartered three fourths of the ship Superior, Captain Andrews, for a voyage to Canton, via Manilla, and back to this coast. Copy of the charter-party inclosed, which I hope will be satisfactory to you. I expect to have the same interest in the charter of this ship as I had on the former voyage in ship Mercury, and wish you to keep my interest insured.”

Butler and Carrington & Co. wrote a letter to Mathewson, dated Providence, July 10th, 1826, in answer to various letters received from him, in which they speak discouragingly of the adventure in' the Superior, decline sending another ship, as requested by him, and advise him to return home in the Superior, making the best disposition he can of their property, <fcc. At the date of this letter, the Superior was probably on her return voyage, as she arrived at Valparaiso on the 5th of October following. There- was no dissent from the terms proposed by Mathewson in his three letters, above referred to, and of course the law implies an acquiescence. Indeed, from the directions given by the company in regard to their property, a sanction, though a reluctant one, and somewhat indirect, was given to the proceedings of their agent, as connected with the Superior. The refusal to advance money to Mr. Mathewson, under the circumstances, does not seem to have any direct bearing on this point.

It is claimed for Mathewson, that the company purposely avoided sanctioning his acts in regard to the Superior, until the result of the'adventure should be known, when they could act as their interests might dictate.

The use Of the capital of the company, which subjected it to the hazards of trade, under the circumstances, would, on equitable principles, entitle the company to the profits of the enterprise. But looking at the declarations of Mathewson about the time the ship Superior was chartered, and the nature of the enterprise undertaken, we feel authorized to say, that the relation of the parties to each other was not changed by this adventure. The rale applied to the Mercury, in regard to the rights of the complainant and the responsibilities of the defendant, must be. applied to the Superior.

After the appeal was taken to this court, errors being discovered in tl¿ report of the masters, by consent, their report was returned to them for correction. And in their report to this court, dated the 1st of January, 1846, they say that they erred in their former report, in not making to Mathewson allowance for his commissions, and for his one tenth of the profits and earnings.

This last report finds a balance due to the complainant of two thousand nine hundred fifty-eight dollars and three cents; to which they add interest from the 1st of July, 1827, to January 2d, 1846, making three thousand two hundred eighty-three dollars and forty-one cents; which sum being added to the above balance makes the sum of six thousand two hundred forty-one dollars and forty-one cents.

From this sum must be deducted any amount charged for or against the defendant, by the masters in their reports, as the profits, of trade or otherwise on his private account during the first voyage of the Mercury. And under the views expressed in this opinion, the complainant being interested in the Mercury and her cargo in her voyage from Gibraltar, in December, 1822, the exceptions to any items charged against the défendant and allowed to the complainant, arising out of any private trading by the defendant on board the Mercury, and afterwards on board of the Superior, are overruled. The exceptions which apply to allowances made to the complainant against the defendant, growing out of the first' voyage of the Mercury, ending at Gibraltar, are sustained'.

The decree of the Circuit Court is reversed, and the cause is remanded to that court, with instructions to enter a decree in pursuance of this opinion.