Clark's Executors v. Carrington - 11 U.S. 308 (1813)
U.S. Supreme Court
Clark's Executors v. Carrington, 11 U.S. 7 Cranch 308 308 (1813)
Clark's Executors v. Carrington
11 U.S. (7 Cranch) 308
In a case of warranty and indemnity, a judgment against the person to be indemnified, if fairly obtained, especially if obtained on notice to the warrantor, is admissible evidence in a suit against him on his contract of indemnity.
A person who, upon receiving an assignment of a share of property as security for a debt, agrees to comply with the contract of the assignor with a joint owner of the property, is bound to fulfill that contract although it exceed in amount the value of the share of the property transferred to him.
Error to the Circuit Court for the District of Rhode Island in an action of assumpsit brought by Carrington against Clark in his lifetime and prosecuted against his executors after his decease to recover from them five-ninths of the amount of a judgment recovered by Smith & Co. of Hamburgh, against Carrington upon a claim against him jointly with Greene & Barker, and J. C. Nightingale; Carrington having paid the whole.
The declaration contained the usual money counts, and several counts upon a special undertaking by Clark to comply with the contract between Greene & Barker and Carrington, which contract was averred to be to pay all debts contracted by Carrington with Smith & Co. on account of the owners of the ship Abigail in the proportion in which they are interested therein, the owners being Greene & Barker for five-ninths. J. C. Nightingale for two and an half-ninths, and Carrington for one and an half ninths, Clark having received from Greene & Barker, who had become insolvent, an assignment of their share in the ship and cargo and Carrington having paid over to Clark five-ninths of the proceeds thereof.
A bill of exceptions was taken to the opinion of the court below, and to the admission in evidence of a letter from Clark to Smith & Co. of 30 June, 1800, and of a letter from Greene & Barker, to Smith & Co. of 12 July, 1800, and of the writ, proceedings, and judgment in the suit of Smith & Co. against Greene & Barker, J. C. Nightingale, and Carrington.
The letter of 30 June, 1800, from Clark to Smith & Co. says
"This will be handed to you by Mr. Edward Carrington, who goes supercargo of the ship Abigail, of which he is a part owner in company with Messrs. Greene & Barker and John C. Nightingale.
They have concluded to send their ship on freight to your city, where, having no correspondent, I do myself the pleasure of recommending them to your notice. Mr. Carrington proposes continuing in the ship, and it is probable will require your advice and assistance in the voyage which he intends carrying into execution. I have ever found these gentlemen persons of strict integrity, and I doubt not will punctually fulfill any engagements they may enter into with you."
The letter of 12 July, 1800, from Greene & Barker to Smith & Co. is as follows:
"New York, 12 July, 1800"
"Messrs. George Smith & Co."
Gentlemen -- By the recommendation of our mutual friend, Mr. John Innes Clark, of Providence, we are induced to make an acquaintance with your house, and we have accordingly recommended Mr. Edward Carrington, supercargo of the ship Abigail (of which he, together with Mr. John C. Nightingale and ourselves are owners), to call on you for the necessary aid he may require while in your city. We have opened our plans of a voyage for the Abigail to your Mr. Adamson, which he doubts not you will readily coincide with, and render Mr. Carrington the necessary aid he may require. We shall consider ourselves responsible for all contracts which Mr. Carrington may make in the business of this ship, and anticipate the pleasure of your being well satisfied with his strict fulfillment of them. We have handed your Mr. Adamson bills of lading for a parcel of dye wood, shipped in the Abigail with an order to get one thousand pounds sterling insured on her cargo and freight, and shall draw on you in consequence for seven hundred and fifty pounds sterling.
"We are, your most obedient servants,"
GREENE & BARKER
"Please effect the above insurance, if not already done."
"WM. ADAMSON "
The record of the proceedings in the suit of Smith & Co. v. Carrington was objected to because Clark was not a party to it. But it was proved that Clark had a power of attorney from Carrington, who was in Canton and conducted the defense of that suit in his behalf.
The evidence principally relied on by the plaintiff in support of his action was a letter from Clark to him of 16 March, 1801, written at Providence. That part of the letter which relates to the subject is as follows:
"Mr. Edward Carrington,"
"Since your departure from hence, our friends Messrs. Greene & Barker have been so unfortunate as to reduce them to the necessity of compromising with their creditors. In order to secure me for the endorsements I have made in their behalf, they have conveyed to me two-thirds of the ship Abigail, with her appurtenances also five sixths of two-thirds of the cargo. Situated as this business is, I have to recommend your making the utmost dispatch in your sales and proceeding immediately for this place, with such articles as you shall receive in return for the sales of your outward cargo, submitting the articles entirely to your judgment; but I recommend that you leave no part of the property behind you if it can possibly be avoided. With respect to the ship, notwithstanding I have a bill of sale from Greene & Barker of two-thirds, I shall view you (if you return here with her) as the owner of such proportion as agreed upon between you and them, and I give you my word that you shall receive from me every aid and support in settling the business to mutual satisfaction, that is in my power. Mr. John Corlis, who has undertaken to conduct the business for Mr. John C. Nightingale, writes you by this opportunity, and will assure you in his behalf of one-sixth of one-third from him -- that is to say, to make you an owner in the whole ship Abigail and appurtenances of one complete sixth, and the same proportion in the cargo, and Greene & Barker's contract with you, shall in every respect be fully complied
with, the same as it would have been done with them, had they continued owners."
The answer of Carrington to this letter was as follows:
"Havana, April 22d 1801"
"John Innes Clark, Esq."
"Triplicate your letter of 16 March was handed me this day, original and duplicate having not appeared. Your letter gives me the first advice of our friends Messrs. Greene & Barker's misfortunes by the fire, and am very sorry that they have been obliged to dispose of the Abigail and her cargo under their present situation of a bottomry to Messrs. Geo. Smith & Co. at Hamburg. But I presume and doubt not Messrs. Greene & Barker have acquainted you with the exact situation of them, and have only disposed to you of that part of the ship and cargo that may remain after the bottomry bond is settled and discharged."
"In consequence of the capture and detention of part of the cargo and bad condition of the ship, I have been unable to return direct to Hamburg, and obliged to make up a voyage for Providence, and have advised Messrs. Greene & Barker with particulars and desired them to cause insurance to be made thereon. I shall leave here this day and join the ship and hope to be at sea in a day or two. Should the voyage meet no other further disappointment, I flatter myself that after settling the accounts of the adventure, it will turn to some advantage and leave a considerable balance due Messrs. G. and B. and beg to assure you that everything that is consistent and within my duty in this business I shall give the strictest attention and consult you therein."
"I am, with esteem and respect,"
"Your obedient servant,"
Carrington, while at Hamburg in order to procure a cargo for the ship, had obtained credit with Smith
and Co. to a large amount upon the hypothecation of the ship by a bottomry bond, and upon agreeing to return to Hamburg with a cargo, for which purpose he engaged Smith & Co. to procure insurance to be made in a large sum upon his return voyage. The premium on this insurance constituted a considerable part of the debt due to Smith & Co. upon which they recovered judgment against Carrington as before stated. One of the grounds of defense taken by Clark's executors was that Carrington had neglected to give notice to Smith & Co. of the dereliction of the return voyage in due time to save that premium of insurance, and therefore he alone ought to suffer by it. The judge, in the court below, in charging the jury (as the manner is in Rhode Island), said
"Great blame is attempted to be thrown on Mr. Carrington for not giving notice to George Smith & Co. that he had changed his voyage so as to prevent the insurance being made from Havana to Hamburg, and the defendants say that for his neglect in not giving such timely notice, he ought alone to pay the whole of that premium -- of this you will judge."
The judge also said
"I conceive the case to be clear that as Greene & Barker were interested five-ninths in the voyage, they were bound to indemnify Mr. Carrington in the same proportion for the damage he should sustain by the contract with George Smith & Co."
And again he says
"If Mr. Clark received from Mr. Carrington more than five-ninths of the surplus after paying the company's debts, and Mr. Carrington has since been obliged to pay those debts, Mr. Clark is bound to refund his proportion."
The judge finally concludes his charge in this manner:
"Having gone through the case at great length and conceiving it on the whole to rest principally on questions of law, I will give you my opinion explicitly upon them, so that if your verdict should be against the defendants, they may have an opportunity to bring the cause before the supreme court."
"I conceive that Mr. Clark's letter bearing date March 16, 1801, at Providence, and directed to Mr. Carrington at Havana and received by him 22
April, 1801, taken in connection with the other evidence in the case, ought to be considered as a letter of guarantee, and binding Mr. Clark to pay five ninth parts of the debt due to George Smith & Co. as ascertained by the judgment in their favor against Mr. Carrington."
"I am also of opinion that Mr. Clark, having received of Mr. Carrington a large sum of money under and by virtue of the assignment from Greene & Barker of their interest in the ship Abigail and cargo, was bound, under the circumstances of this case as made out and established by the evidence, to refund the same or so much thereof as would amount to five ninth parts of the debt due to George Smith & Co. What sum Mr. Clark received is a question of fact proper for you to decide."
The verdict and judgment being against the defendants, they sued out their writ of error.