Sewall v. Rodewald — 1 N.Y. Super. Ct. 348

Majority

p. 348

Henry D. Sewall versus Henry Rodewald.

Dec. Term, 1828.

Headnote

Although the general rule is, that demands growing out of partnership dealings, cannot be set off against individual demands on one of the partners, yet a special agreement for that purpose may of course be made which will be binding on the parties, and entitle the defendant to the set off claimed.

This was an action of indebitatus assumpsit, brought by the plaintiff as the surviving partner of the firm of H. D. <$- C. B. Sewall, to recover a balance of account, due that firm from the defendant, or the amount of certain advances made by his order. The declaration contained the common Counts, for money paid, money lent and advanced, for goods sold, &c., and a count upon an insimul computassent. Plea the general issue.

The cause was tried before Mr. Justice Oakley, on the 9'th day of October, 1828. At the trial it appeared, that the plaintiffs were merchants, residing in New-York, that the defendant was a merchant in Baltimore, and that he had a brother residing in Bremen, (Frederick Rodewald,) who was a commission merchant there, and with whom, both the plaintiffs and

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the defendant had extensive connexions of business. There was no general partnership existing between these parties, several shipments had been made by Frederick Rodewald from Bremen on the joint account of himself, his brother and the plaintiffs; and in the course of this business, the plaintiffs always gave credit to the defendant, for the net proceeds of the shipments made from Bremen on the joint account of all the parties.

Frederick Rodewald was the owner of a ship called the Louise, and during the summer of the year 1826, he shipped a cargo, consisting-of sheep, rags, glass &c., on joint account, which was received by the plaintiffs at New-York: and one John C. Dunte, an agent of Frederick Rodewald, applied to the plaintiffs to make a return shipment to him by that vessel. This they did, and charged the amount of their advance for that purpose to the defendant.

On the 26th of august 1826, the plaintiffs wrote to the defendant, and enclosed a copy of their account exhibiting a balance of $5,497. 79 due to them; on the 30th of the same month they drew upon him for $3000, and their bill was duly accepted. The defendant in reply, and in his letter of advice concerning the bill, desired the plaintiffs to send him “a statement of the account of the ship Louise, so as to enable him to make the necessary entries.” On the 6th and 8th of September following the plaintiffs drew, two bills on the defendant, one for $1240. and the other for $12 57, 99, the two together amounting to the exact balance of their, account.

These bills the defendant refused to accept, but stated that he had written them on the 28th of August 1826, “in words which could not be misunderstood” that he “ would make provision to pay” the “ plaintiffs the whole amount of their purchases for the Louise at maturity in New-York.” He also added, that he had the more right to claim indulgence from the fact; that the plaintiffs had in their hands,” “ the goods per Louise, the proceeds of the sheep sold and those on hand as an additional security.” As to the drafts, he promised, “ that due payment should be made” to the plaintiffs “for them at maturity.”

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In reply to this letter, the plaintiffs stated, that “ the balance due on sheep, &c. by the Louise, after deducting expenses, would pe but triflingbut that as to the defendant’s claim, “ be'it what it might,” they “ were ready to make it good.” It appeared, during the progress of the trial, that on the 7th day of July, 1826, the plaintiffs and Dunte had settled their accounts with Frederick Rodewald by an agreement in writing, and that a balance of 4,499, 33-100 was admitted by the agreement to be due to the latter from the former. Dunte testified that he was induced to make this settlement in expectation of receiving the balance, and for fear that the plaintiffs would fail. He also testified, that some time before this, the plaintiffs had insisted that they were not interested jointly with the defendant and his brother, in the sheep, &c. by the Louise, and that he (the witness) had discharged them from all liability on account of that adventure.

Upon this state of facts, the plaintiffs brought the present action. The defendant did not deny his liability to pay the whole amount of the plaintiff’s advances to purchase the return cargo of the Louise, but claimed that he was to be credited with the nett proceeds of the shipment of sheep, &c. which Frederick Rodewald had made by that vessel for the joint account of all the parties.

The plaintiffs resisted this claim, upon the ground that their demand upon the defendant was for his own individual debt, founded upon his promise to pay the amount of their advances to purchase the return cargo of the Louise: that the adventure by that vessel was upon joint account, and being a partnership concern, could not be set off against the defendant’s individual debt. A number of letters, accounts, and statements were spread before the jury by the plaintiff and by the defendant, and several witnesses were called to substantiate the positions assumed by the respective parties. But the facts stated are supposed to be sufficient to a correct understanding of the points of law.

The Judge charged the jury,

I. That they could not set off the proceeds of the adventure by the Louise, against the claim of the plaintiffs, unless they found

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that they had made an express promise to credit the defendant with the amount of such proceeds. That they ought to be satisfied that there was an agreement to separate the cargo of the Louise from the general partnership accounts, or it could not be done.

Secondly, that they were to consider whether such agreement, if made, was not altered or modified by any thing done subsequently by Henry Rodewald. If he had authorized the agreement made by Dunte, or afterwards assented to it, that then such offset could not be made.

Thirdly, that if the set-off should be made, the account must be settled, for the purpose of ascertaining the amount of such set-off, in the same manner as if settled with the defendant, and Frederick Rodewald.

The jury found a verdict for the plaintiff for six hundred and six dollars and forty-five cents.

Mr. J. Blunt, and Mr. R. Sedgwick on behalf of the plaintiffs, now moved for a new trial and contended,

I. That the defendant was bound by his express promise to pay the balance of the plaintiff’s account, as exhibited on the 25th of August, 1826.

II. The supposed agreement or promise of the plaintiff’s mentioned in the charge of the Judge, to credit Henry Rodewald with the proceeds of the cargo of the Louise, was without consideration and not binding.

III. There never was any agreement on the part of the plaintiffs, to separate the cargo of the Louise from the general partnership concern, and the verdict was, in this respect, without evidence.

IV. In order to authorize the set-off claimed, it ought, at all events, to have been shown that there was an express or unqualified agreement that the same should be made, whatever might

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prove to be the state of the accounts to which Frederick Rodewald was a party or in which he was concerned.

V. If any agreement was made it was waived.

VI. After the agreement made with Frederick Rodewald, Henry R. had no right to interfere with the same, and he was bound by it, so far at least as F. R. was concerned.

VIL After that agreement, Henry R. could not claim any thing on account of the partnership transactions, except in a Court of Equity.

VIII. The debt claimed to be set-off was due if at all to Frederick R. and Henry R., it was not therefore a subject of set-off between the parties to this suit.

Mr. J. Boyd for the defendants contra, contended,

that the Judge’s charge was unexceptionable in point of law, and that the finding of the jury under the charge was fully justified by the evidence.

The plaintiffs in this case were merchants residing in New-York; the defendant, a merchant at Baltimore; and Frederick Rodewald, a brother of the defendant, was a merchant residing at Bremen. F. R. owned the ship Louise, and several shipments had been made from Bremen by that and other vessels, on the joint account of the plaintiffs, the defendant, and F. R. There was no general partnership existing between them, but they were jointly interested in the particular cargoes shipped. In the general course of the business, the plaintiffs always gave credit to the defendant, for the nett proceeds of the shipments made by F. R. his brother, on the joint account of the then houses. In the summer of 1826, a cargo of sheep, rags, &c. by the Louise, was received at New-York by the plaintiffs, shipped by F. R. on joint account. One Dunte, the agent of F. R., applied to the

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plaintiffs to procure and ship a return cargo by the Louise to F. R., which they did, and charged the amount of their on that account to the defendant, and drew on him for the same at Baltimore. The first,draft was accepted; but a subsequent one was not. The defendant, however, promised to pay it at maturity, and not having done so, this action was brought on that promise, or for the monies expended by the plaintiffs in making the shipments to Bremen, they claiming to have made the same by the order of the defendant. The defendant admitted his liability to pay the amount of the draft, but claimed to be allowed, by way of set-off, the nett proceeds of the shipment made by the Louise from Bremen, then in the hands of the plaintiffs. The plaintiffs resist this set-off, on the ground that this demand on the defendant was for his individual debt due to them; and that the proceeds of the cargo from Bremen being on joint account, could not be set off against it.

The Judge at the trial ruled that such set-off could not be allowed, unless an express agreement was proved to have been made by the plaintiffs, to credit the defendant with the amount of the said cargo shipped from Bremen. The defendant offered evidence to establish such an agreement, and the jury found a verdict for the plaintiffs, for the balance due them, after allowing the set-off. The plaintiffs now move for a new trial. There appears to me no ground to question the correctness of the decision of the Judge. Though the general rule is, that demands growing out of partnership dealings, cannot be set off against individual demands on one of the partners, yet it was never doubted, that a special agreement might be made for such set-off.

In the present case, the jury have found, as I think upon sufficient evidence, that such agreement was made by the plaintiffs. The assent of F. R. to the arrangement for crediting to the defendant the entire nett proceeds of the cargo, may well be implied from the fact, that it had been the constant course of the business for the plaintiffs to credit to the defendant individually, the proceeds of all shipments made on joint account by F. R. The plaintiffs, after agreeing to give the credit to the defendant,

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could not retract it, without showing that F. R. had interfered to disaffirm such credit, of which there is no evidence in the case.

The jury, in framing their verdict, appear, by a reference to the accounts annexed to the case, to have given the plaintiffs credit for the balance of their account-current with the defendant» as stated by themselves, and to have charged them with the nett proceeds of the shipment from Bremen by the Louise. This was in accordance with the justice of the case, and the agreement of the parties, as the jury must have found it, on the evidence, and I therefore see no reason for disturbing their verdict.

Motion for a new trial denied>

[D.