Newell v. Nixon - 71 U.S. 572 (1866)
U.S. Supreme Court
Newell v. Nixon, 71 U.S. 4 Wall. 572 572 (1866)
Newell v. Nixon
71 U.S. (4 Wall.) 572
1. Although no partnership may exist between them, yet where two persons are joint owners of a vessel against which a claim exists for nondelivery of cargo, and one gives a note in the joint name for a balance agreed on as due for such nondelivery -- the other party being aware of the making of the note and of the consideration for which it was given and making no dissent from the act of his co-owner -- such note cannot be repudiated by such other party, he having bought out the share of his co-owner in the vessel and agreed to pay her debts and liabilities.
2. Where a suit is brought against a shipowner for a sum acknowledged by the owners to be due the shipper for a breach of contract in delivering merchandise, the production of the bill of lading is not essential.
3. The plea of prescription of one year, under the Civil Code of Louisiana, cannot be set up in a case where the suit is brought in April on an acknowledgment made in September previous of a sum due on settlement.
4. A party suing not on a note but on the consideration for which the note was given -- and using the note as evidence rather than as the foundation of the claim -- may have lawful interest on the sum due him, although by note given on a settlement the party sued may have promised to pay unlawful interest and such as the law of the state where the note was given visits with a forfeiture of all interest whatever.
5. Where usury is not set up in some way as a defense below, it cannot be urged here.
By the Civil Code of Louisiana it is enacted:
1. That actions "for the delivery of merchandise or other effects shipped on board any kind of vessel . . . are prescribed by one year."
2. That conventional interest shall in no case exceed eight percent, under pain of forfeiture of the entire interest so contracted.
With these provisions in force, Nixon sued Newell, attaching as his property the steamboat Hill and setting forth by petition filed April 20, 1857:
1. That Newell was indebted to him $2,585, with interest from January 11, 1855, at the rate of eight percent, for this, to-wit, that on the said day the said Newell and one Hamilton, since deceased, being co-owners of the steamboat Hill and in such capacity, viz., as owners, made their note in his favor for the above-named sum, which would appear by reference to the note annexed and made part of the petition.
2. That independently of this, Newell was indebted in the same sum for this -- that he, Nixon, had shipped, at New Orleans, on the said steamboat, of which Newell and one Hamilton were owners, a large quantity of salt which was never delivered at its destination.
The note, which was annexed to the petition, was for the amount above stated, and was signed "Newell & Hamilton, owners," but was made payable with interest at the rate of ten percent per annum.
Newell set up as defense that he never was a member of any firm known as Newell & Hamilton and that no person had authority to bind him under any such signature, and moreover that the cause was barred by the "prescription" (or "limitation," as it is called in many states), of one year.
The court found as fact that the note was not signed by
the defendant, Newell, but by Hamilton, now dead; that these two persons had no commercial partnership; that they did not transact the business of the boat under a social name, and were not accustomed to sign notes in this form; but that they were simply part owners in the Hill -- Newell owning three-fourths and Hamilton one.
The court found further (no bill of lading being produced and the evidence being of witnesses who received the salt) that the salt was shipped as alleged, but arrived at an intermediate port in bad condition, where it was taken by the agent of the owners of the Hill, who disposed of the same with their consent and for their account, the plaintiff having refused to receive it on account of its bad condition; that the consideration of the note was the sum due by the steamboat and owners for the salt not delivered; that the defendant was aware of the making of the note and of its consideration; that there was no evidence of his dissent from the act. It was shown also that after the death of Hamilton, his administrator made a settlement with Nixon and transferred to him Hamilton's interest in the steamboat, for which Nixon had agreed to pay "the debts and liabilities of the boat." This settlement took place September 22, 1856.
The objections made below to the claim were:
1. That the defendant Newell not having been in any sense a partner of Hamilton, the note signed by Hamilton did not bind Newell.
2. That no bill of lading had been produced, and that one was necessary.
3. That the suit was barred by prescription or limitation of one year.
The court (Campbell, J), as to the first point, admitted that as Newell was not a partner in any sense of Hamilton, the note could not bind Newell, unless he was connected with it by testimony other than itself. But it thought that the special facts of the case did so connect and make him liable. The term "boat," in the contract by which Newell assumed to pay "the debts and liabilities of the boat," the learned judge considered as meaning those binding the
owners on account of their interest in the boat. The assumption had been made on an adequate consideration. The note on its face expressed an obligation affecting the boat, and it was given in recognition of such a liability.
In regard to the second point, the learned judge did not consider the production of the bill of lading essential to the support of the action. The suit had not been brought on the contract of shipment, but to collect the sum acknowledged to be due in consequence of the breach of contract.
3. To the argument of prescription the court said nothing.
Judgment having been given accordingly for the plaintiff, the same points were again presented here on exception, an additional point being made, to-wit, that the court erred in allowing eight percent interest.