Majority
p. 405R. Lyle against Clason, and Clason against R. and J. Lyle.
Headnote
If cross suits be referred to the same referees, and they make up their report in each, under the idea tnat one shall be a set-off to the other, tlie court will set aside both, if the suiu be for demands which cannot legally be set off. An agent’s agreement tu give part of the profits arising from merchandise intrusted to him, in order to sell under the contract of another person, is obligatory on his principal.These were cross suits, brought under the following circumstances :
On the first of September, 1793, Robert Lyle engaged with Clason to go to Europe as his agent, and transact his business at a salary of 1507 per annum, New York ^currency, besides his expenses. In consequence [*324] of this arrangment, Robert Lyle embarked on board a vessel of Olason’s called the Hare, destined to Hamburgh, with a cargo of sugar and coffee. In an account made out by Robert Lyle against Clason, he charges his salary for six months, at 427 3s. 4c7 ending in March, 1794. No evidence appeared that Clason, either then, or at any after time, discharged Lyle from his service ; and in an account rendered by him to Robert Lyle, he gives Lyle credit for one year’s salary, at the above rate.
In March, 1794, at which time John Lyle was employed in the loan office of the United States, Robert was in Paris, and while there, entered into a contract with the French government, ostensibly in his own name, but in fact for the house, and through the influence, of Delard, Swan & Co. of Paris, for the delivery of from ten to fifteen hundred tons of pot and péarl ashes, in any port of France, at 537 sterling per ton, (payable as soon as delivered,) two fifths in bills on Hamburgh, and three fifths in louis d’ors, with a license of exportation for the specie.
On the nineteenth of the same month, Robert Lyle wrote
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to Clason an account of the contract, urging him to embark in it, and enclosing a more particular letter from Swan, offering Clason an interest in the contract, by the terms of which the profits were to be thus divided': one third to Delard, Swan & Co. and two thirds to Clason, giving to Lyle for the use of his name, a fifth of the whole; one third of which was to be paid by Delard, Swan & Co. the remaining two thirds by Clason. Eoberfc Lyle, in his letter, cautions Clason against being too explicit in what he may ■ write, for fear of capture, and advises him to let the language he might use accord with the appearance the business might be obliged to assume.
In consequence of this letter, and without any other in formation of the contract than what the letter of Eobert Lyle contained, Clason, in July, 1794, despatched to France, under the command of one Gideon Gardner, a vessel named the Joseph, laden with pot and pearl ashes, giving [*325] *to Gardner, at the same time, the following letter of instructions:
New York, 26th July, 1794.
Capt. Gideon Gardner,
Dear Sir, — You will please to take charge of the ship Joseph, and proceed as fast as possible to France.. I shall not confine you to any one port, but by all means endeavor to get into any port, the first that you can make, which, if you are fortunate enough in arriving safe, you will immediately apply to one of our American consuls for instructions respecting the customs of the place, and there make sale of your cargo to the best advantage for my account ; perhaps you will be able to malee a sale of the whole to the Republic of France, at á good profit, by taking part in brandy; which, if so, and the brandy should appear to you of a good quality, and at such a price as you might judge would answer to bring here, you will do it j if not, you will endeavor to sell for cash, and if times should appear favorable. in England, yon will remit the greater part of your avails to
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Messrs. Bird, Savage & Bird, merchants, in London; and ii you don’t find freight from France, or any other article that will answer, you may run to any port in England, and either load there with salt, or get freight, whichsoever you may judge will be most to my interest. However, it is impossible for me to give you any positive instructions, from the precariousness of the times; much will depend on your good judgment on your arrival. I think likely you may see or hear from Bobert Lyle, if so, he will give you very essential assistance in your negotiating your business in that country.
I am, sir, &o.
(Signed) Isaac Clason.
Gardner set sail with the Joseph, and, on the 4th September, 1794, arrived at Cherbourg. From thence he addressed himself to Delard, Swan & Co. and on the 9th of October, 1794, wrote them thus:
• *Cherbourg, 9th October, 1794. [*326]
Messrs. Delabd, Swan & Co,
Gentlemen, — I received yours this morning of the 15th ■ Vendemaire. I wrote you yesterday and enclosed you a receipt from the garde magazin for my cargo. The cost of my cargo I sent you in my letter yours now mentions of receiving; but agreeable to your request, you have it here enclosed. The pot and pearl ashes, as per invoice, cost 12,012?. 3s. . £12,012 3 0
One barrel ashes delivered more than the invoice, which I received as a barrel of beef¡ average 350 wt at 46s. 8 1
Hew York currency, £12,020 4 0
Charges here — paid charterage, 1,000
do. weighing, 25
-1,025
I know of no other charges here; if any to be paid to the commission of commerce, you will please to charge them
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in the account. If you recollect, you took off the foots of the invoice, when I was at Paris, on the letter I left with you. The letter I wrote- you about my owner you mention of having found it, and say it was enclosed in yours I received this morning, but I expect you omitted it, as it has not come to hand. Please to forward it as soon as possible, as it may make some alteration in my affairs. You mention of the uncertainty of receiving cash or bills for any article from America. I would thank you, in your last to me, to mention whether WE may place full confidence in their paying me in good bills, or cash, agreeable to the contract FOR THE QUANTITY OF ASHES SPECIFIED, AS THAT WAS MY PARTICULAR orders from Mr. Clason. " You have once mentioned it, but your two last letters leave it dotibtful in my mind. • I would thank you to acquaint Mr. Lyle of my proceedings as soon as the bills are obtained. I am only waiting for the bills, and beg you to make all despatch in your power, and am yours.
(Signed) Gideon Gardner.
On the 7th of December following, Gardner addressed a letter to Lyle in these terms:
Cherbourg, 7th December, 1794,
Dear Sir: I received yours of 15th November. I arrived here 4th September, and proceeded to Paris and delivered the cargo ON THE contract OF 53; and as Mr. 0. was in advance for the whole, I arranged it for D. S. to have one-third, agreeable to the account annexed. They are to settle WITH YOU FOR ONE-THIRD OF WHAT YOU ARE ENTITLED to, and Mr. 0. to settle with you two-thirds, after delivering the cargo, and the receipt presented for payment. There was a suspension of all .payments in bills or money. I returned to Paris, and, after a long and tedious detention, I obtained bills on Hamburgh, though not at the rate agreed for. They are at 90 days, and the exchange 185 livres for 100-marcs banco; which bills I forwarded by post, to Lubert & Dumas, who, I understood, did your business there.
p. 409
I was fearful you were in England by what I had heard, or I would have sent them to you. My orders to them were, to negotiate the bills, and remit the money to B., S. & B., London, on Mr. C.’s account, except there should be an, appearance of war. In that case they are to consult you. (1 was cautioned by Mr. C. in respect to that) I presented "a petition for demurrage, &c., to the amount of 250Z. sterling, which has passed two or three offices, which I wish you to press hard for. I sent two bills by different posts, and wrote you. I have two-thirds of a cargo of prize salt on freight; about 400Z. sterl. freight. It is almost half on board, and am taking in the rest; shall sail in a few days for Mew York, and expect to return as fast as possible with the remainder of the contract. Swan is gone to America. Mr. C. shipped by Captain S. Armour about two hundred tons; Major Conolly is the supercargo. They have sold to individuals for specie. I have wrote B., S. & B. since I sent the bills, and also informed them of this other cargo.
In the month of March, 1801, Robert Lyle arri ved in Mew York. Olason refusing to pay the two-thirds of the fifth of the emoluments arising from the contract with tho
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French Republic, Robert, in April, 1801, brought the pre sent action against him, shortly, after which, Clason arrested Robert and John Lyle in the cross suit, for a very consider able sum of money.
In December, 1801, both causes were, by order of court, referred.
On the 10th of March following, the attorney for Robert Lyle submitted the following proposition to the attorney of Clason.
“ As the suit instituted by Mr. Clason against Mr. Lyle, does not include any claim for damages, arising from the misconduct of the latter, and more particularly for damages like those claimed on the business of the Hare, it would be proper (lest these should be made the subject of a future suit on the part of Mr. Clason, on the ground of an objection to the report on the part of Mr. Lyle) that all claims and controversies of this nature be included in the submission already made, which, in a legal point of view, extends only to the subject matter in difference, in the particular suits referred.
(Signed) “ Thos. L. Ogden, for Lyles.”
*To this the attorney of Clason subjoined the following memorandum:
“It is understood that the demands for damages above mentioned, and all claims and demands on both sides, founded on contract, express or implied, are submitted.' To this addition the attorneys of both parties added their signatures, and the consents of the litigants themselves were given in these words: “We agree to the above, and that all the accounts, as already exhibited, shall be reported on by the referees in these causes.
. (Signed) “I. Clason,
“ Robt. Lyle.”
On the 30th December, the deposition of Gardner was taken in behalf of Clason; in which, among other things, Gardner swore that his letter of instructions contained the
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only orders he had from Clason; that Delard & Co. informed him of their contract with the French government, and he contracted with them ; that they informed him the contract was in Lyle’s name, he being a neuter; that they informed him Lyle was to have a gratification; but what it was, he, Gardiner, never knew ; thinking, and being fully assured in his own mind, that it would apply to the benefit of Clason, Lyle being his salaried agent, which consideration induced him, Gardner, to consent to Clason’s being accountable to Lyle for two-thirds of the said gratification, which he expected would be paid by the salary at which Lyle was retained.
On the 22d of June, the referees made their report in both causes, and in each reported in favor of the defendants.
On the 20th of July, the report in the cross suit by Clason, was, on motion in court, duly confirmed. Immediately after which, on the 23d of the same month, Eobert Lyle, in order to set aside the report in favor of Clason, made an affidavit, which stated, that the suit instituted by him in April, 1801, was to recover money had and received by Clason to the deponent’s use; that it was referred, and at the meeting of the referees, the deponent, as the basis of his claim, did prove, and make ^appear, [*330] &c., (mentioning the contract and circumstances, and letters detailed in the beginning of the case,) that the net profits on the sales made by Gardner under the contract, were 4,8001 11s. 8d sterling; that the fifth, to which the deponent was entitled, in pursuance of the engagements made with him, was 9601. 2s. 4d. of which, by an original account of Delard, Swan & Co. produced to the referees, it was proved Delard, Swan & Co. had paid their one-third,' according to the agreement with Gardner; but no payment was shown, or pretended to have been made, of the other two-thirds of the fifth, nor was there before the referees any set-off, or counter claim, established against the defendant; that the deposition of Gardner (before shortly stated) was shown to the referees, and Gardner himself personally ex
p. 412
amined; that he then testified he was, previously to his depart turc from America, with the said cargo in the ship Joseph, made acquainted with the existence of the said contract, BY THE DEPENDANT, and with the terms or price therein stipulated; that he did not consider himself bound by the instructions of the defendant, to deliver his cargo under the contract, nor restricted from doing so, but at liberty to act according to his discretion; that his motives for inquiring from Delard & Co. respecting the reliance to be placed on punctual payment, and also for alleging this to be done at the desire of the defendant, was to hold out the idea of future shipments, and so insure the payment of what had béen delivered, but not settled for; that it was made to appear without any denial, that the defendant had only received his two-thirds of the profit on the contract aforesaid; that the report had, notwithstanding, been made in favor of the plaintiff, under an idea that Gardner had no authority to bind Clason to the payment of anything to the deponent; and that Clason had altered the deposition of Gardner, after it was made, and before presented to the referees, without communicating the alteration to them. On the 6th of October, 1802, Clason made an affidavit to vacate the report in favor of the Lyles, in which he set forth the instituting the two [*331] suits, their being referred; the reports *made in favor of the respective defendants, and that they were duly filed, on the first day of July term last past, so that judgment would, according to the usual course of the court, be absolute the then term; that the reports, according to his information and belief, were drawn up by agreement between the counsel in both suits, that each should draw the report in favor of his own client; that the deponent’s attorney was, on the 23d of July last, served with a copy of an affidavit, accompanied with a notice of moving upon it to set aside the report in favor of the deponent; that the- matters contained in the affidavit went to the merits of the case, respecting which, on account of sickness in the deponent’s family, and absence from [New York, the depo
p. 413
nent could not make any explanations to his counsel; that he acquiesced in the report against himself, from a conviction that nothing could be obtained from Lyle, and, therefore, no report could operate more favorably to the interest of the defendant; that the known inability of Lyle to pay, was one reason why the referees were less particular in examining the deponent’s claims against him, than they otherwise would have been, deeming it unimportant; that the two reports were made, and intended by the referees, as set-offs the one against th$ other, and to this end, they instructed counsel to prepare them accordingly: that among other charges against Lyle, the deponent gave in evidence an account rendered by Lyle, in which he acknowledged having in his hands a balance of 244,246 livres in assignats, amounting, at the then rate of exchange, to 4,477 dollars, and that assignats were then never kept on hand, but always converted into property, to avoid depreciation; that since the account so rendered, the deponent never had any further money or mercantile transactions with the Lyles, and that Lyle neither accounted for, nor made any set-off against, the said assignats, but the same were totally unaccounted for ; that the deponent, as soon as the sickness of his family permitted, consulted respecting measures to be taken about opposing the motion, to set aside the report in Lyle’s favor, but there was not time enough left in the term to do it; that but for the application of Lyle to set aside the "’’"report in favor of the defendant, he [*332] should not have applied to set aside that in favor of Lyle, for the insolvency of Lyle made it of no consequence.
The notice of motion with which this affidavit was accompanied, was repeated qn the. 7th of January, 1803.
To oppose this Eobert Lyle made, on the 14th of January, 1803, an affidavit, stating, that he and his brother John, the other defendant, acted, in the year 1795, as agents for Clason, in which capacity they had received various large sums of money, the whole of which had been
p. 414
faithfully accounted for; that the suit against Clason was for money due individually to the defendant, on another concern, and for damages for libellous letters and slanders published against him by Clason; that he and his brother were arrested, as before mentioned, and the two causes referred ; that in the suit against the deponent and his brother, (the declaration on which was for goods sold with the usual money counts only,) Clason produced an account, with charges against the deponent and his brother, for breach of orders and neglect of dujfcy, to a very large amount; that on asking for some evidence, by which it might appear those charges were included in the submission, the agreement of the 10th March, 1802, was produced; that the same was intended merely to extend the powers of the referees to claims of the nature of those mentioned in, and warranted by, the declarations to which the deponent had confined himself; that his and his brother’s faithful agency, and due accounting for all sums of money, were fully proved; that in the cross suit against the deponent and his brother, the referees made their report on a conviction nothing was due to Clason, and not from any regard to the deponent’s insolvency or circumstances,- as he was, by the referees themselves, personally informed; that the deponent proved, to the satisfaction of the referees, that the value of the assignats mentioned in Clason’s affidavit, was at the time lie specified, only 2781. 2s. 9d., and not 4,477 dollars; that they were not then usually converted into property, but held by many persons in hopes of their rising, and that the said assignats were not only [*333] not made use of by the *deponent, or kept in his hands, but had, from the time of their first RECEPTION, BEEN PAID OVER BY. HIM TO THE CORRESPONDENTS OF Olason, Bubbert, Freres & Fils, OF Bordeaux, BY WHOM THEY WERE CONVERTED INTO SPECIE, FOR THE USE OF Olason, AND ACCOUNTED FOR WITH GARDNER, WHEN acting AS Clason’s AGENT; that so far from the acquiescence of Clason in the report against him, for the reasons
p. 415for Lyle, after stating the circumstances, and commenting on them, and the affidavits of Clason and Gardner, observed that it was very singular Gardner, without any knowledge of the contract of Delard, Swan & Co., with the French Eepublic, or of Lyle’s intent, should deliver exactly under that contract, and write a letter acknowledging the very interest Lyle claimed under it, and that' Clason should pay him what he was thus entitled to. Gardner, without knowing the contract, goes further; he asks Delard & Co. if the French government will be punctual in paying, and this, he adds, Clason desired him to inquire about. Clason, too, ratifies the engagement of Delard & Co., and Gardner, with Lyle, by adjusting the account with Delard & Co. and receiving under that account the two thirds, by the very express terms of it, charged with the payment of the two thirds of Lyle’s fifth. To argue on the assertions of Gardner would be really superfluous. The referees must have thought Gardner had no right to bind Clason. This idea is clearly repugnant to every principle of law. He that intrusts another with general powers, must abide the result of his agent’s conduct. Therefore, though the report *in favor of Lyle may, and ought to stand, [*334] that in favor of Clason ought to be set aside. In making the reports i-n these causes, the referees were actuated by a wish to make the parties even, and leave them just as they were found.
he had assigned, he had, after it was made, purchased protested bills, on which the deponent’s name was as an endorser, and had commenced suits against, the deponent upon them, in order, as he believed, to create a set-off against the verdict the deponent might ultimately obtain.
After some struggle by Hamilton, on the part of Lyle, to discriminate the two suits, the court was pleased to order the arguments to set aside the several reports to come on together.
Hamilton,
Hopkins and Troup, contra.
p. 416For this purpose, the report in our cause was intended as a set-off to the other, and to effect this object, counsel were desired to frame the reports in such a manner as might best obtain the desired end. The various facts appear in the affidavits before the court; but it is material to state, that the party who first made the application to disturb these reports, has not presented any original agreement on which his suit is founded. Delard, Swan & Co., made a contract with the French government, for a certain quantity of pot and pearl ashes: as these articles enter into the composition of gunpowder, it was necessary to have a neutral name in the business. It is difficult to say what ought to be the true relative compensation for the protection a neutral character would afford; but it is to be observed, that Delard & Co. were the real contractors; Lyle a mere nominis umbra: for this, however, he says he is to have one full fifth, one third of it to be paid by Delard, §wan & Co., the other two thirds by Clason. These terms, it is alleged, were stipulated by a formal contract, yet this contract, which Lyle must have had, is never produced; on the contrary, instead of relying upon it, he rests on a letter received from Gardner. In addition to.the inference to be drawn from this fact, it appears that at the very time when this pretended contract was made, Lyle was in Europe, under an annual allowance from Clason, and actually his salaried agent, receiving wages for every service performed. A doubt has been entertained, how far the court can, under the existing circumstances, with propriety set aside the report in favor of Clason; but, surely, whenever they clearly perceive that the referees have proceeded on a mistake, either of law or fact, this tribunal will always interfere. If the court will set aside an award, they will, on the same principles, vacate a report: and whatever argument [*335] will *induce them to do it in one of the now causes, will have equal force in the other; for if the referees have been mistaken in their endeavors to create mutual set-offs, both reports will be set aside; or, on the other
p. 417hand, if they have acted properly, both will be confirmed, for the court will not, unnecessarily, do away what the referees have done. In making their determination, they considered that the power to sell, and the power to give away profits, were two things: to this latter, it cannot be contended that the authority of an agent or a factor can extend. There is no question about an agent’s right over the property passed to him, but he cannot enter into collateral engagements: he may sell and warrant a title; but not give away the property. If he may, in any degree, do this, he may go on indefinitely, and make away with the whole. He may go on making contracts ruinous to his employer, and contrary to the purposes of his delegation. 'Under a power to sell, if he should be allowed even to exchange, can he be authorized to pay a difference ? The boundary of his power to bind, must be connected with that of his, authority to sell; it must be confined to that, and will not warrant him to give away profits; to pay another sum of money on another account than that of the sale. The point turns on whether Gardner had a competent authority to bind Olason, to pay two thirds of a fifth of the profits. It was derived from the letter of instructions. That letter delegates only a general power. From the exercise of such a power, the claim cannot be supported. That a factor may sell by a broker, and give a commission, if customary, is not contested; but it is contested, that a factor or agent, having only a general authority to sell, can give away a substantive part of the merchandise when it is sold; that he can do so, there is not a dictum in the books. It would be, in fact, to enable him to dispose of a portion of the property he is intrusted to vend. It would give rise to the most serious consequences; a fraudulent collusion would completely destroy the interests of the principal, by-enabling to constitute a sale regular in its form, the precise mode *of which could not be easily [*336] foreseen. The intention of Clason’s agent must be taken' into consideration, and the motives on which he
p. 418proceeded permitted to explain how he meant to bind liis principal. Gardner never knew what the gratification to be paid Lyle actually was. The inducement he had to consent to any was, that he deemed the amount immaterial; for.as Lyle was in the service of Clason, at a fixed salary, Gardner naturally concluded all Lyle’s labor would accrue to Clason. On the principles of natural justice, the demand cannot be substantiated. He lends his name to Delard, it being necessary to make use of a neuter. The douceur must certainly be according to the situation of the party. The letter to Clason, containing the terms of the contract, does not state the sum to be paid. It is obvious, therefore, that this was never intended. It was considered as too trifling to specify. Gardner knew, when he left America, that Lyle was a salaried agent. This is not a case of good faith between an agent and a person totally a stranger, and, therefore, the principal called on to pay ; but we are called upon, on the strength of a little memorandum touched into the foot of an account. It is not to be forgotten that the referees were merchants, and well knew the course of trade and business when the transactions took place, as well as the rights of an agent at a fixed annual allowance. The claim, too, goes by the express name of a gratification; and who ever heard of a partnership share (which this in fact is) ever being known by the appellation of. a gratification ? When was 6007 sterling ever considered as a gratification for a person at a salary of 1807 per annum, New York currency? The referees might, therefore, have justly rejected the claim. No inference can be drawn from Gardner’s letter, speaking of a contract: he might have sailed on one very different. But it was not the mere matter of the contract that was referred; subsequent matters were added, not included in the two causes: this was by agreement of the parties, and how can the court say the full claim on the contract [*337] has not been allowed, when it might *have been counterbalanced by damages and misconduct in the
p. 419matter of the Hare? This, therefore, being an application to the equitable jurisdiction of the court, they will so mould and blend the two causes as will best answer the ends of justice; and if, in the suit by Lyle, the report be set aside, the court will do it on terms, and vacate the report in that against him. Glason declares he never heard what Lyle’s compensation was, till after the suit was brought. But can the court say this particular e]/iim ought not to be disallowed ? After the rules to refer, other matters were added and blended; all contracts, “ express or implied,” were submitted. It cannot be said there were not other claims to extinguish this demand of two thirds of the fifth. It might have been admitted and liquidated by a counter claim. Referees and arbitrators may so consider the subject matter before them, as will best answer the ends of justice: they may take into view matters both of law and of fact; perform the offices of judges and jurors, and are entitled to found their decision either on .law, or principles of general equity, lhe whole of this was delegated to them, and they have determined, on apview of all matters in controversy blended together in one mass, all the objects in these two causes, even in that against both the Lyles, as consolidated before them. Whether they have been perfectly accurate in thus beholding them is immaterial, provided they did so consider them, have acted under that idea, and have attained the real ends of justice, though perhaps by extraordinary means. It was evidently the wish of the parties to set all controversies between them fully at rest, and this has been accomplished. The court therefore, will never say that one report shall be confirmed, and the other set aside. The consideration of the report in the suit by Glason, might have influenced in the making up that in the action against him. That it did so is evident, because the reports were intended as mutual set-offs. Whether this could be supported on strict legal reasoning, has been doubted; but the spirit of
p. 420[*388] *the case in 3 D. & E.[1] might perhaps, fully warrant the conduct of the referees. It may be a question also, how far Gardner could give such an interest, as might, perhaps, create a partnership between Lyle and Clason. If, in cases of full and fair investigation before juries, this court will interpose, when a verdict has been rendered on an evident mistake of the law, they certainly will do so in the case of a report made by referees, however appointed. That this reasoning applies to the suit of Lyle v. Clason, is manifest, and it will, therefore, be sent for further examination. With respect to the contract made between Lyle and Gardner, the agent of Clasqn, it is for the court to determine whether it be obligatory or not. The affidavits on the part of Clason do not state that he was ignorant of the contract with the French government, but of the'claim of Lyle. It appears from Lyle’s deposition, and is not controverted, that in March, 1794, letters were written by Lyle and Swan, informing Clason of the contract; of Lyle’s right, and that he (Clason) might share if he thought proper. The letters were produced, and that they were received Clason’s conscience would not let him negative. There was a stipulation to compensate, with a share of the actual profits, for the use of the neutral name of Lyle; when these profits were ascertained, the right of Lyle attached. There is, to be sure, no express recognition by Clason of the contract, but in the September following the date of Lyle’s letter, Gardner arrives in France with exactly such a cargo as the contract demanded. Are there not circumstances enough to think he went there for the purpose of acting under it ? But even allowing there are not, does not the letter of instructions substitute Gardner as owner of the property he carried, and invest him with all Clason’s power over it ?
Harison and Hamilton, in reply'.
p. 421He is to exercise his judgment; do his best; sell for French brandy; sell to the French government, &c.; he had, .herefore, a right to make any contract under the words of the letter. He arrives in France with a power to dispose ; lie finds Delard possessed of a contract in the name of Lyle, under which the power to dispose may be ^exercised with great advantage. He does exercise [*339] it, receives the emolument, settles with Delard & Co., but refuses to do so with us. The inquiry then is, had Gardner a power, and has he exercised it ? That he had, and has, no doubt can be entertained; and as little that it was under our contract; for the affidavit subsequently made by Gardner does not deny, but admits the fact. He says, however, that he knew not what the gratification was. This is extraordinary ; he seems to have forgotten his own letter after a very few months; and though that does not specify the exact sum, the two thirds for which he mentions Clason is to settle, it affords an internal evidence that he did know it much stronger than his own assertion to the contrary. Gardner’s letter of the 7th December, 1794, particularizes two thirds, and gives an account of the sales. Allowing, however, Gardner not to be apprised of the exact sum, as Lyle’s right was ascertained and perfected under the contract to which Gardner consented, acceding to the payment of two thirds by Clason, it follows Clason must be bound. The rule is, that he who places confidence shall suffer by the abuse of that confidence; Clason, therefore, and not Lyle, is to be the loser by Gardner’s actions. It is extraordinary that Clason should have remained ignorant of the amount of Lyle’s claim, four years after Gardner’s return and rendering an account of his transactions. If Gardner, then, having an authority to bind Clason, did so, and Clason has received the benefit of that transaction, Lyle’s right is perfect. The assertion of his being a salaried agent does not affect the claim. His time of service expired in September. Beyond that, Clason himself allows no salary, and Gardner’s letter is dated in December. Gard
p. 422
ner himself acknowledges Lyle’s right, by telling Delard to pay one third of it. Had it been otherwise, Gardner would have said “You are not to pay the third of the fifth to Lyle, but to Clason, for whose benefit Lyle is acting.’ There is a further proof in the letter to Lyle. Gardner there says, “ Mr. Olason is to settle with you for two thirds.’ Here, then; is a clear established right in Lyle to receive from Clason two thirds of .the fifth of the [*340] * whole profits. If so, the arbitrators have been guilty of a mistake in point of law, in considering Gardner unauthorized to bind Clason, and this the court will assuredly set right. There is also another ground on which they have clearly erred; for if they have blended the reports in the two causes, or made one enter into the composition of the other, they are manifestly wrong. There is no evidence of anything against Lyle’s right, but the demands in the cause against him and his brother. Though both- causes were referred, the referees have not any right to blend matter extraneous to the respective suits. Eobert Lyle’s action is for his own separate account. That of Clason against Eobert and John Lyle is against the partnership, and the one cannot be set off against the other, being in different rights. This is very wide from the case of a surviving partner, where the rights and duties centre in one person. The agreement does not alter this, for it was merely to allow of such matters as were admissible against the same parties, though not specifically proceeded for; to settle all disputes for which actions might be instituted against the respective defendants ; to allow of damages arising from breach of contracts, express or implied, by the Lyles, to be settled under the reference of the suit against them, in which counts were used not applicable to actions for damages, but never to permit one suit to be set off against the other, or make Eobert Lyle give up the benefit of bis claim against Clason. They did not even take it into consideration, as they considered it not due; the report therefore, in favor of Eobert and John Lyle may well be
p. 423suffered to remain, and that in favor of Clason be set aside, for the amount of the profits claimed from him not being taken into consideration in the accounts by the referees, now remain unsettled. If, therefore, without including this demand, Clason has not any demand against Robert & John Lyle, the report doespiot prevent Robert from having a demand against Clason. Besides, it is evident the contract must have been known to Clason and Gardner, by the latter’s expressing an intention of returning with the residue. The not mentioning it in the letter *of [*34l] instructions was to avoid the risk of capture and condemnation: fates that were sure to attend a cargo of a contraband nature, going under an avowed contract with the French government. The receipt by Clason, of the proceeds of the cargo, is a ratification of every contract under which it was made, and no disavowal of Gardner’s authority can be permitted. Clason enjoys the benefit, and if any charges do accompany the agreement, it is to be taken cum onere. The allowance of the account by Delard, Swan & Co. is conclusive on the terms.
delivered the judgment of the court. These actions were referred under rules of court to three referees, who have reported in each against the respective plaintiffs, declaring nothing due on either side. Motions are now made to set aside the several awards.
In the first cause, in which Lyle is plaintiff, the application is founded on a presumption that the referees have been mistaken in point of law. That *hey have either rejected a contract entered into by the defendant’s shipmaster and consignee, as not obligatory on his principal, or have set off the balances found for the plaintiffs, in the respective causes against each other.
To this the defendant answers, that he was not bound by the engagement of his shipmaster, who was also his consignee, and that if the referees have.made such offset, they
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were justified on principles of law, and by an agreement entered into between the respective attorneys.
*Oaptain Gardner’s powers being discretionary, he was perfectly justifiable in making the disjDOsition he did of the cargo intrusted to him, and even if he was not, it does not appear that Mr. Clason ever denied that transaction his sanction, but that, on the contrary, he has received, by remittances to Bird, Savage & Bird, of London, the proceeds of the cargo, including his proportion of the profits. Under these circumstances there can be no doubt that Captain Gardner, having turned in his cargo under the contract, bound Mr. Clason to the fulfilment of the terms of that contract; and the latter, having received the full two-thirds of the profits of the adventure, under the stipulation made by his agent, that he should account to Lyle for two-thirds of his douceur, or whatever else it may be called, (for names will not alter the essential quality of the thing,) he is bound to perform such stipulation.
If, therefore, the referees have not admitted this claim, they have erred as to the law, and the award ought to be set aside.
If, on the contrary, they have admitted it, then they must have allowed a balance found due to Clason in the' other suit, as a set-off against it. This also is incorrect; for the suits are not between the same parties and the [*843] *partnership funds should have been first appropriated to the discharge of the partnership debts. The agreement between the attorneys does not authorize such set-off. Its only object is the admission of certain demands which would not fall within any of the counts in the respective declarations, in order to avoid further litigation.
The report, therefore, in each suit, ought, in my opinion, to be set aside. The one against Clason, for the reason above mentioned, and the one in which he is plaintiff, because there is a probability that the referees found a balance there due to him, which he would otherwise lose the benefit
p. 425
of. The judgment of the court is, that both reports be set aside.[1]
Both reports set aside.
(a) (a) See Combs v. Wyckoff, ante, 147, and the notes.