Fanning v. Consequa — 17 Johns. 511

Majority

p. 400

*Edmund Fanning, Henry Fanning, and Willet Coles, appellants, against Consequa, respondent.

Headnote

interest ⅛ pay-?o>le theC°riawf of the country tractCistbmade; hut if, by the oTthe contract^ it appears that it is to be executed in another country, or that the parties had reference to the laws of another country, then the place in which it was made is, in this respect, immaterial, and it is to be governed by the laws of tlie country in which it is to be performed.

Where a Chinese merchant, residing at Canton, consigned goods to a merchant in New-York, and which were delivered to his agent in Canton, to be sold by liim, and the nett proceeds to be remitted to the consignor at Canton ; Held, that the consignor was entitled to recover interest only according to the Saw of Ñew-York, and not according to the law or custom of Canton.

Though in questions arising between subjects or citizens of different states, each is to be considered a party to the laws of his own government j yet, whether this principle applies to a question between principal and agent, as of a foreign merchant consigning goods to his factor here for sale, and the latter is prevented by an embargo from remitting the proceeds to his principal. Quo&rg ?

APPEAL from the Court of Chancery. The respondent, a native merchant of* Canton, in China, in January, 1813, filed his bill in the Court of Chancery, stating, particularly, various shipments and consignments of goods by the respondent, to the appellants, (ship owners and commission merchants,) residing ⅛ Neic- York, for sale, &c., and other transactions between them,

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between the years 1805 and 1813 ; that the appellants, by Obed Chase, their authorized agent, on the 19th of January, 1811, gave the plaintiff’ a promissory note dated at Canton, for 35,777 dollars and 50 cents, twelve months after date, with interest at 12 per cent., which is the lawful and customary rate of interest at Canton, and which note was given for goods sold and delivered to the appellants, and remained unpaid. That in December, 1809, J. S. Crary and William Nexsen, as lawful attorneys or agents of the appellants, gave to the respondent, at Canton, a promissory note for 39,690 dollars and 63 cents, payable 15 months after date, with interest, after the same should become clue, at 12 per cent.; which note was unpaid, and seven months interest due thereon, when the said Crary, as agent of the appellants, gave to the respondent a promissory note for 2,910 dollars and 64 cents, for the amount of interest so due, payable in twelve months, with interest, at 12 per cent., which note was unpaid. That on the 25th of November, 1810, the respondent shipped on #board the Chinese, teas and cassia, to the value of 61,828 dollars and 65 cents, consigned to the appellants to be sold, and the proceeds remitted to him, &c. &c. The respondent charged that the appellants received all the goods so shipped, and sold them, and received the proceeds, and have retained them or wasted them, at least part of them, by their negligence, and have refused to render any account, and remit the proceeds, &c. That on the 12th of November, 1807, the respondent delivered to the appellant, E. F., at Canton, a promissory note of Acors Sheffield, dated February 6th, 1816, for 4,080 dollars and 81 cents, payable in 15 months, with interest, afterwards, at 12 per cent., for collection, and to account to the respondent for the same; that E. F. received the note in behalf of the appellants, who have either collected the money, or lost it by their gross negligence, and have refused to account for it, &c. The respondent prayed, that the appellants be decreed to come to a full account with the respondent, concerning the premises, and to pay him what should be found due, &c.

The appellants put in their answer, stating various matters in defence, and various counter claims by way of deduction and set-off, &c.

The cause having been brought to a hearing, on the pleadings and proofs, the court, on the 30th of September, 1817, made the following decretal order: That it be referred to a master to take an account between the plaintiff and defendants, touching the matters in the pleadings mentioned; and that, in taking such account, the master charge the defendants with the goods in the pleadings mentioned, shipped by the plaintiff on the 22d of December, 1807, in the ship John and James, amounting, according to the invoice, to 19,837 dollars 77 cents, consigned by the plaintiff to the defendants, and by them received to sell and dispose of for the plaintiff; and, also, charge the defendants with the goods, in the pleadings mentioned, shipped by

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the plaintiff, on the 24th of December, 1607, in the ship Hope, and in the ship Atahualpa, amounting, according to the invoice price, to 29,135 dollars and 63 cents, as for goods consigned by the plaintiff to the defendants to sell for the plaintiff; and, also, charge the defendants with 35,711 dollars and *50 cents, upon the foot of a promissory note, in the pleadings mentioned, dated the 19th of January, 1811, given to the plaintiff by Obed Chase, as the authorized agent of the defendants, payable sixteen months after date; or, if the master should be of opinion that Obed Chase was not duly authorized to give it, that then the master charge the defendants with that sum, as for goods sold and delivered by the plaintiff to the defendants, on the 19th of January, 1811, at a credit of sixteen months; and, also, charge the defendants with 36,690 dollars 63 cents, upon the foot of a promissory note, in the pleadings mentioned, given the 9th of December, 1809, to the plaintiff, by John Smith Crary and William E. Nexsen, as the authorized agents of the defendants, payable fifteen months after date; and, also, charge the defendants with only so much of the goods in the pleadings mentioned, and shipped by the plaintiff, on the 25th of November, 1810, in the ship Chinese, amounting to 64,828 dollars and 65 cents, according to the invoice price, after deducting 43,025 dollars and 87 cents, being so much of the shipment as the plaintiff appears to have assigned to William Baring and others, in the pleadings mentioned, and that the sum of 21,798 dollars 78 cents, being the residue of the last shipment, after deducting the assignment to Baring fyCo., be charged as for goods consigned by the plaintiff to the defendants, and by them received to sell for the plaintiff; and, also, charge the defendants with the goods, in the pleadings mentioned, shipped by the plaintiff, on the 29th of November, 1810, in the ship Hope, amounting, according to the invoice price, to 6,370 dollars and 21 cents, as for goods consigned by the plaintiff to the defendants, and by them received, to sell for the plaintiff; and, also, charge the defendants with interest, at the rate of twelve per cent., upon all the items before mentioned, from such times as the said sums ought to have been paid, that is to say, in case of goods sold, from the expiration of the term of credit; and in case of goods consigned, from the times the proceeds ought to have been remitted, having regard to the course of such deáüngs; and in case of promissory notes, from the time of payment therein specified. And, also, charge the defendants with 900 dollars, being so much of the amount of the promissory note, in the pleadings mentioned, given by Acors Sheffield to the plaintiff, and by him placed in the hands of the defendants to collect, as was received by the defendants ; and, also, such further sum, as it shall satisfactorily appear to the master,the defendants might have received, if they had used due diligence in collecting it, with lawful interest, from the time the same was received, or might have been received, as aforesaid. And that the plaintiff

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be allowed, in such account, all such further sums as shall appear that the defendants ought to account for and pay, by reason of any dealings and matters in the bill mentioned, with such interest as the nature of the case, and the course of the dealings between the parties, shall render just. And that the master make all proper allowances to the defendants for all remittances and payments made by them to the plaintiff, or to others for his use, and by his authority; and that the master be at liberty to examine the parties, under oath, on interrogatories, and such other witnesses, not already examined, as either party may produce.

The master, on the 31st of January, 1818, made a report, in which he stated, that he had charged the appellants with the nett proceeds of the different consignments particularly mentioned in the decree, and with the goods sold, and with the amount of the notes; and that he had charged 12 per cent. interest on the items, except the last, in which the remittance was made in due time ; and that he had credited the appellants for all remittances and payments by them made, on account of the said consignments and sales, and with all just allowances, and had calculated interest at 12 per cent, on the credits ; leaving a balance due to the respondent, for principal and interest, at the date of the report, of 104,457 dollars and 91 cents. On the filing of the report, the appellants presented to the chancellor a petition for a rehearing, stating their objections particularly to the report.

1. Because it does not direct a general account to be taken between the parties:

2. Because the decretal order limits and circumscribes the charges to be made by the defendants against the plaintiff, #to remittances and payments by them to the plaintiff, and to others, for his use, and by his authority; and the master has decided, that the defendants cannot be allowed for any charge or matter of account, unless it be shown to be a remittance or payment, specially and specifically applied to one or other of the matters with whieh the defendants are charged and made ac • countable by the decree ; by reason whereof, matters of account to a very large amount, and, as the defendants believe, to a sum not less than 86,000 dollars, are wholly excluded from the said account; and the defendants are barred from the benefit thereof:

3. Because the defendants are charged with a promissory note, given by Obed, Chase to the plaintiff, for 35,711 dollars and 50 cents, or with goods sold and delivered, to the defendant. to that amount, which, by the terms of the decree, as it relates to the defendants, is substantially the same thing; whereas, by the pleadings and proofs, the defendants are not justly liable to be charged with the same in either shape; but only as for goods consigned to the defendants, by the plaintiff, to be sold for his account, and in this way they are willing to account.

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4. Because the defendants are charged with interest at twelve Per cent- per annum, upon the items in the decree mentioned, or notes, or goods sold by the plaintiff to the defendants, and consigned to the defendants to be sold, from the expiration of the credits, in the case of notes and goods sold ; and in the case 0f g00C|s consigned, from the time when the proceeds ought to have been remitted ; whereas, the defendants ought not to be charged with any greater interest in the case of consignments, where the contract was made here, than is allowed' by the law of this state.

5. Because the defendants are charged with so much of the goods in the pleadings mentioned, and shipped by the plaintiff to the defendants on the 25th of November, 1810, on board the ship Chinese, as would amount to 21,798 dollars and 78 cents, invoice price, being part of the invoice of 64,818 dollars and 65 cents, whereof 43,025 dollars and 87 cents appeared to have been assigned to Baring & Co.; which is erroneous, because no part of the said cargo was specifically assigned to Baring & Co.; but another and different #shipment made by the plaintiff to the defendants, in a former voyage of the ship Chinese; and the shipment to Baring & Co. was, in 1809, the amount of the invoice of which was the sums last mentioned, and which shipment is not stated in the plaintiffs bill; but the facts are set forth at large in the answer.

6. Because the defendants are directed to account for the proceeds of the said invoice of 64,828 dollars and 25 cents, deducting only 43,025 dollars and 87 cents, part thereof; whereas, the defendants are bound to account to Baring &f Co., or their representatives, for the full sum of 43,025 dollars and 87 cents, whether the invoice would amount to that sum or not; and the defendants are sued in the Circuit Court of the United States; and there is reason to apprehend that they will be compelled to account for the full sum, provided there should be a balance in their hands to that amount due to the plaintiff, including the invoice assigned.

The cause was, accordingly, reheard, upon all the parts of it complained of in the petition of rehearing; and on the 3d of December, 1818, the chancellor made a decretal order, affirming the order of the 30th of September, 1817, and that the report of the master made pursuant thereto, be confirmed, unless cause to the contrary be shown by the appellants in eight days. From these decrees, the appellants, on the 11th of December, 1818, filed their appeal to this court.

As the decree of the Court of Chancery was reversed in part only, it is deemed unnecessary to make a more full statement of the facts here, as they may be seen in the report of the case in that court.

The Chancellor assigned his reasons for the decrees, which

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wore the same as stated in the report of the case. (3 Johns, Cii. Rep. 587—612.)

The cause was argued by T. A. Emmet for the appellants, and N. Jones, jun. for the respondent.

#For the appellants, the following points were stated :

1. That a general account should be taken between the respondent and the appellants of all transactions between the 1st of September, 1805, until the time of filing the respondent’s bill in the Court of Chancery.

2. That the appellants should not be charged with the promissory note for ¡$35,711 and 50 cents, given by Obed Chase, to the respondent, nor should the same be received as evidence of the value of the goods and merchandize for which it was executed ; but that if the appellants are to be charged for them as goods sold and delivered, they should be at liberty to establish the value thereof by other competent testimony. But that the said goods ought to be charged to the appellants as a consignment, and not as a sale to them.

3. That the note given in December, 1809, by Crary and \ exsen, for ⅛$39,690 and 63 cents, should not be received as evidence of a debt or settlement between the parties; but that the respondent be at liberty to establish the debt for which it is alleged to have been given, or any part thereof, by competent evidence :‘But,-on such debt, no interest should be allowed, exceeding t n per cent, per annum.

4. That the note given by Crary, on the 15th of October, 1811, as for interest on the note last mentioned, should not be considered as a settlement, or binding on the appellants ; but that tiie interest on the debt purporting to have been secured by the note last, mentioned, be calculated to the time of taking the note, at simple interest.

5. That no interest exceeding the legal rate of interest of this state should be allowed on any goods or merchandize sold on credit, by the respondent to the appellants, nor on the proceeds of goods consigned by him to them, for the purpose of being sold.

6. That the sum of $43,025 and 87 cents, and the interest thereon from the date of the assignment of that sum to Messrs. J hiring and Co.., should be deducted in favor of the appellants, from the general balance in favor of the respondent, (if any,) and not from the proceeds of any particular shipment; and that in every event, the appellants #should be allowed the whole of that sum, and the interest thereon,

The chancellor has justly considered the written contract of the 1st of November, 1807, signed by Consequa and Edmund Fanning, as virtually waived and abandoned, by mutual consent of the parties.

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I also fully concur with him in opinion, that the cargo of goods shipped in the “ Chinese,” and for which Ohed Chase gave a note, as agent for the appellants, must be deemed as goods sold and delivered by Consequa to them at Canton. Even admitting that Chase had no previous authority to make such a purchase, or to give such a note, on account of the appellants, yet as they actually received and converted the goods, with full notice that the cargo was sent by Consequa, as goods sold, their subsequent ratification and adoption were equivalent to a previous authorization. The appellants were, therefore, justly charged with the amount of that shipment, according to the invoice price ; and with interest according to the rate allowed in China; the contract of purchase having been made there, and the price being payable there.

The other cargoes have been properly considered by the chancellor, as consigned to the appellants, as general commission merchants, under a contract on their part, to sell the goods for account of the consignor, and to remit the nett proceeds.

But in allowing interest according to the law of China, on such nett proceeds, it seems to me, his honor the chancellor, has erred in his application of the rule of the lex loci con-tractus.

According to Huberus, (de conjiictu legum, vol. 2. book 1. tit. 3.) the general rule is, that contracts are to be interpreted according to the laws of the country where they are made. But if by the terms or nature of the contract, it appears that it was to be executed in a foreign country, or that the parties had respect to the laws of another country, then the place of making the contract becomes immaterial; and the obligation must be tested by the laws of the country where the duty was to be performed. Or, in the words of * Huberus, “ verum tamen non ita prcecise respiciendus est locus in quo contractus est initus, ut si partes alium in contrahendo hewn respexerint, Ule non potius sit considerandus. JVam contraxisse unusquisque in 60 loco intelligitur, in quo ut solveret, se obligavit.”

In Champant v. Lord Ranelagh, (Pr. Ch. 128.) it was decided, that a bond executed in England, and made payable in Ireland, carries Irish interest; where no interest was mentioned.

In Robinson v. Bland, (2 Burr. 1077.) a bill of exchange drawn in France for money lent there, and made payable in England, was deemed a contract subject to the laws of England, ; and to bear English interest.

In Thompson v. Ketchum, ( 4 Johns. Rep. 285 .) a note was drawn in Jamaica, and made payable in New-York; and the Supreme Court of this state followed the same rule. In Smith v. Smith, ( 2 Johns. Rep. 235 .) Ruggl.es v. Keeler, ( 3 Johns. Rep. 263 .) Emory v. Grenough, ( 3 Dal. Rep. 369 .) and Van Schaick v. Edwards, ( 2 Johns. Cas. 355 .) the same doctrine was maintained.

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In the case of Ekins v. East India Company, (1 P. Wms. 395.) cited by the chancellor, it was decided, that for a tor-tious sale of the plaintiffs ship in India (by his agent there) to the defendants, they should account for the value in India, with 12 per cent, interest, according to the laws of that country, deducting only the charge of remittance to England, where the remedy was sought. But that case bears a marked distinction from the one now before us; because, in that case, the whole transaction took place, and the entire cause of action arose in India.

There is no doubt of the rule laid down by the chancellor, “ that interest must be paid according to the law' of the country where the debt was contracted, and to be paid.” He says, in this case, “the plaintiff consigns a shipment to the defendants, and the cargo is received at Canton, by the agent of the defendants on their behalf; Canton is then the place where the contract is made, and Canton is the place where the debt is to be paid.”

With great respect, it seems to me, that his honor the chancellor did not advert to the important consideration, #that by the terms of the contract so made at Canton, the goods were to be brought to Nevo-York, not for the account and at the risk of the consignees, but to be sold Aere, by them, as factors or commission merchants, who were to remit the nett proceeds to the consignor at Canton.

the words of Huber us apply : “ contraxisse unusquisque in eo loco intelligitur, in quo ut solveret, se obligavit.”

I apprehend it is not the case of “ a debt contracted and to be paid at Canton.'’ The contract was made there, but it was to be executed here. It was of that species of bailment. called in the civil law, do ut facies. The parties had express reference to this country, as the theatre of operation under the contract. If the consignees had sold the goods in China, or had carried them immediately to Russia, and sold them there, it would have been a violation of the contract, and a tortious conversion.

The delivery of the goods to the agent of the consignees at Canton cannot, in my judgment, affect the present question ; because they were delivered for the special purpose of being brought to this country, to be sold for the benefit and account of Consequa. While on the voyage to New- York, the cargoes were at his risk, as owner. If the goods had been burnt in a warehouse at New- York, or sunk in the harbor there, without blame imputable to the consignees, the loss must have fallen on the consignor. So, if the nett proceeds had been regularly shipped at New- York, in the usual course,¿Tor remittance to Canton, the obligation and duty of the consignees would have been discharged, and the money, on its voyage to Canton, would have been at the sole risk of Consequa.

By “ remitting,” I understand no more than a delivery of the

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money on board a proper vessel at New-Tork, to a suitable agent, for the purpose of being transported to Canton, by the usual route, and duly consigned to Consequa. Such agent, so employed, is to be deemed the agent of Consequa, for receiving and transporting money ; and such delivery by the consignees, js equivalent to payment to the consignor. The duty of making such remittance was to be performed here, and the failure in the performance of that duty is the only gravamen of the plaintiff’s claim.

* Consequa had a right (and he exercised it in part) of drawing for, and receiving the nett proceeds at New- York, at any time before they were remitted; or, he had a right to direct the mode or channel of remittance, provided it was not unlawful.

Hence, I infer, that the contract did not oblige the consignees to pay the avails of the cargoes to Consequa at Canton. On the contrary, this country was the only sphere of their duties; the res gesta was here, and they were not bound to do any thing but with a reference to our own laws.

The contract is silent as to the rate of commissions, and also, as to the risk of the property, while in charge of the consignees. Suppose that, by the laws of China, a commission merchant would be entitled to ten per cent, for his services, and would be responsible to his principal against all risks ■: would it be contended, in the case of goods sold here on commission, although sent from China for that purpose, that oui laws, which establish different rules as to the rate of commissions, and the responsibilities of such agents, must give place to the laws of China l If not, why is not our law of interest equally incident to this contract ? Why not allow Chinese commissions in this case, as well as Chinese interest 1

The rule as stated in lluberus, and as it is exemplified in the cases before cited, seems to me, in its just application, to establish the point, that the laws of New-York must govern these consignments.

The case of Ellis v. Lloyd, (1 Eq. Cas. Abr. 289.) is also a strong authority in favor of the appellants, on the question of interest. There, a merchant in England employed his agent in the island of Nevis, to receive a quantity of sugar due to him there on bond, with directions to the agent to remit the sugar to England. The agent received the sugar, and converted it to his own use; and he was held to account for the value of it, with interest according to the law of Nevis, and not according to the law of England.

In this case, Consequa sent to the appellants Acors Sheffield’s note, to be collected by them; and directed the avails to be remitted to him, and he also sent goods to them *to be converted into money, and directed the nett proceeds to be remitted to him in Canton. Now, I can see no reason why the laws of this country should not govern in the one case as

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well as the other; and certainly Chinese interest is not reeov-erable on the avails of the noté.

Whether the American embargo furnishes any excuse for not remitting the nett proceeds of the consigned cargoes, or the amount collected on Sheffield’s note, so as to bar the claim for interest, during the time in which it was unlawful to make such remittances, is a question, which, I think, does not arise in the case. The appellants have laid no foundation for such exemption ; because, for aught that appears, they had the use of the money during the embargo; and, therefore, ought to pay interest for it. If they had kept that money distinctly as a deposit for Consequa, during the embargo, and had after-wards duly remitted it, then the question would have arisen, upon which I forbear to express any decided opinion.

In regard to the debt due for goods sold to the appellants, I have no doubt the law is as stated by the chancellor, to wit: “ that in questions arising between the subjects of different states, each is a party to the public authoritative acts of his own government; and he is as much incapacitated from making the consequences of an act of his own state, the foundation of a claim to indemnity upon a foreign subject, as he would be, if such act had been done immediately and individually by himself ” (Conway v. Gray, 10 East, 536.) But I am not prepared to say, that an omission to perform the office of an agent or commission merchant, where the law forbids his acting in that capacity, would subject the factor to the same hard rule. The absolute debtor contracts in his own right, for his own exclusive benefit, and at his own risk; but the consignee is the mere agent or servant of the consignor, acting here, chiefly for the benefit, and at the risk of his principal, and as his representative. It, therefore, seems to me very questionable, whether the acts of his government ought to be personally imputed to the agent, in a question between him and his principal.

*Upon the whole case, therefore, my opinion is, that the decree ought to be reversed, to the end, that in restating the account between these parties, the appellants be charged with interest at the rate of 7 per cent, instead of 12 per cent, per annum, on the nett proceeds of the goods consigned to them, to be sold for the account of the respondent,^[1]

This being the unanimous opinion of the court, it was thereupon “ ordered, adjudged and decreed, that the decretal order made in the Court of Chancery, in this cause, wherein the said respondent is complainant, and the appellants defendants, and bearing date the 30th of September, 1817, be reversed, so far as the same orders and directs that the master, in taking the account thereby directed, should charge the ap pellants with interest, at the rate of twelve per cent, per annum, upon all goods and merchandize consigned by the respondent

(a) (a) Vide Boyce and Henry v. Edwards, 4 Peters’s Rep. 111. 123.

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to the appellants, to be sold for the respondent’s aecount, from the times the respective proceeds thereof ought to have been remitted to the respondent, having regard to the course of such dealings, and the situation of the parties; and so far as the same decree directs the sum of forty-three thousand and twenty-five dollars and eighty-seven cents, to be deducted from the amount of the shipment made by the respondent, on the 25th of November, 1810, in the ship or vessel called the Chinese, in the pleadings mentioned, as being so much of the said shipment assigned by the respondent to William Baring and others, by the description of Baring & Co., and the sum of twenty-one thousand seven hundred and ninety-eight dollars and seventy-eight cents, being the residue of the said last mentioned shipment, after such deduction as aforesaid, to be charged for goods and merchandize to that amount, consigned by the respondent to the appellants, and by them received to sell and dispose of, for account of the appellant; but that the said de-cretal order be, in all other things, affirmed; and it is further ORDERED, adjudged and decreed, that the decretal order made in the said Court of Chancery in this cause, on the 3d of December, 1818, be reversed, so far as the same confirms the report of the master *made in this cause, as relates to the parts of the aforesaid order and report hereby reversed or varied; but that the same be, in all other respects, affirmed ; and it is further ordered, adjudged and decreed, that the report of the said master be varied so far as relates to the interest on the said consignments, and so far as relates to the charge in respect to the shipment made on or about the 26th of November, 1810, in the said ship or vessel called the Chinese; and that the master, in taking the said account, be directed to charge the appellants in the said account with the goods and merchandize in the pleadings mentioned, shipped by the respondent, on or about the 25th of November, 1810, in the ship or vessel called the Chinese, amounting to forty-four thousand, eight hundred and seventy-eight dollars and sixty-five cents, according to the invoice price thereof, as stated in the pleadings, as for goods and merchandize consigned by the respondent to the appellants, and by them received to, sell and dispose of on account of the respondent; and that the master be also directed to charge the appellants with interest at the rate of seven per cent, per annum, and no more, in cases of goods and merchandize consigned by the respondent to the appellants, to be sold for the respondent’s account, from the time the respective proceeds thereof ought to have been remitted to the respondent, having regard to the course of such dealing, and the situation of the parties ; and, also, to charge the respondent with interest at the rate of seven per cent, per annum, on remittances, on account of the consignments; and it is further ordered, adjudged and decreed, that the record and proceedings in this cause be remitted,” &c.

Cases cited

Van Schaick v. Edwards 2 Johns. Cas. 355 N.Y. Sup. Ct. p. 406