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.
Page 71 U. S. 573
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
Page 71 U. S. 574
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
Page 71 U. S. 575
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.
Page 71 U. S. 579
MR. JUSTICE CLIFFORD delivered the opinion of the Court.
Judgment was rendered for the plaintiff in the court below, and
the defendant in that court excepted and sued out this writ of
error. Cause of action, as stated by the plaintiff in his original
petition, was that the defendant, Thomas H. Newell, was justly
indebted to him in the full sum of two thousand five hundred and
eighty-seven dollars and eighty-five cents, with interest thereon
from the eleventh day of January, 1855, until paid, at the rate of
eight percent per annum. He also alleged that the defendant,
together with one Thomas Hamilton, deceased, as the owners of a
certain steamboat engaged in carrying freight and passengers
for
Page 71 U. S. 580
hire on the same eleventh day of January, made and executed to
him their note for that sum, payable one day after date, with
interest thereon at the rate of ten percent per annum from the date
of the note, which was annexed to and made part of the petition. In
his supplemental petition the plaintiff alleged that during the
month of June, 1854, he shipped on board the steamer aforesaid, of
which the defendant and the said Thomas Hamilton were the owners,
four thousand seven hundred and sixteen sacks of salt, to be
transported to Nashville, and there to be delivered to certain
consignees, and that a large part of the shipment, to-wit, two
thousand four hundred and six sacks of the salt, were never so
transported and delivered, and he averred that he was entitled to
recover for the value of the deficit and that the note annexed to
the original petition and signed "Newell and Hamilton, owners," was
given by them for that consideration.
Service was made by attachment, as the defendant resided
permanently out of the state, and the writ of attachment was duly
served on the aforesaid steamboat, then lying in the port of New
Orleans. Due return having been made by the sheriff, the defendant
appeared in the case, and on his motion the property attached was
discharged, he having given bond to satisfy such judgment as might
be rendered against him in the suit. All these proceedings took
place in the Fifth District Court of New Orleans, but the cause was
shortly afterwards, on motion of the defendant, removed into the
circuit court of the United States for that district under the
twelfth section of the Judiciary Act.
Principal defenses, as pleaded in the original and supplemental
answers of the defendant, were:
1. A general denial of all the allegations of the petition.
2. That the defendant never was a member of a firm or
partnership called Newell & Hamilton, and that no person ever
had power or authority to bind him by note or otherwise under that
name or style.
3. That the supposed cause of action accrued more than one year
prior to the institution of the suit, and that the same was barred
by the prescription of one year.
Page 71 U. S. 581
1. Testimony was taken and the cause was submitted to the court
without the intervention of a jury. Although there was no jury
trial, still the rulings of the court, under the peculiar practice
in the Louisiana district, may be examined in this Court upon writ
of error and the judgment reversed or affirmed by a bill of
exceptions in the same manner as if there had been a jury trial.
They may also be revised here upon a state of facts found by the
court, but the question presented in the court below and decided by
the court must be clearly stated.
*
Applying that rule to the present case, it is clear that no
questions are properly before the Court in this case except such as
are distinctly presented in the bill of exceptions. Recurring to
that source, it appears that the court found from the evidence that
the steamer which carried the freight was commanded by the and that
he owned three-fourths part of her, and that Thomas Hamilton (since
deceased), owned the remaining one-fourth; that they were not
partners, and never had any partnership name for transacting the
business of their steamboat, and were not accustomed to sign bills
or notes for each other, but that each signed for himself whenever
it was necessary to give securities concerning the business of the
boat, and that the note annexed to the original petition was not in
the handwriting of the defendant. Full proof, however, was
introduced that the consideration of the note was the balance due
by the steamboat and owners for the salt not delivered to the
plaintiff, and that the defendant was aware of the making of the
note and of the consideration for which it was given.
2. Second objection of the defendant under the general issue was
that the plaintiff could not recover upon the consideration stated
in the petition, because the bill of lading was not produced; but
the court ruled that the suit was not brought on that instrument;
that it was a suit to collect the sum acknowledged to be due to the
plaintiff in consequence of the breach of the contract. Undoubtedly
that ruling was
Page 71 U. S. 582
correct, as is obvious from the allegations of both petitions.
They allege the consideration of the note as the cause of action,
rather than the note itself, and the judgment of the court very
properly followed the declaration or petition. Reference is made in
the bill of exceptions to the note and the testimony in support of
it rather as evidence of the amount due to the plaintiff than as
the foundation of the suit.
3. But the plaintiff in error still relies upon the plea of
prescription, and insists that the action was barred by that
limitation. Nothing is said upon that subject in the opinion of the
court, but inasmuch as that defense was set up in the answer and is
mentioned in the bill of exceptions as one of the objections taken
by the defendant to the right of the plaintiff to recover, we think
the point is properly open to review in this Court. Hamilton gave
the note in liquidation of the demand of the plaintiff, and the
bill of exceptions states that the defendant had notice of it
before the death of Hamilton, who died in August, 1855. After the
death of Hamilton, his administrator made a settlement with the
defendant and transferred to him the one-fourth of the steamboat
which belonged to his intestate, and in consideration of that
transfer the defendant assumed and agreed to pay all the debts due
by the boat. Express statement of the bill of exceptions is that
that settlement took place on the twenty-second day of September,
1856, and that the cause of action in this case was included in
that settlement. Viewing the matter in that light, the court held
that the promise of the defendant to the administrator of the
deceased part owner enured to the benefit of the plaintiff, and
inasmuch as it was within the year next preceding the commencement
of the suit, it was doubtless the conclusion of the court that the
plea of prescription was not maintained. Suggestion of the
defendant, however, is that there was no satisfactory proof of the
acknowledgment of the specific amount stated in the petition, but
the statement in the bill of exceptions is substantially otherwise,
and we think the statement was fully warranted by the pleadings and
evidence.
Page 71 U. S. 583
Assuming the facts to be so, then it is clear that the plea of
prescription is not maintained, as the petition was filed on the
twentieth day of April, 1857, less than one year after the
settlement was made.
4. Remaining objection of the present plaintiff, the defendant
below, is that the court erred in allowing eight percent interest.
Legal interest in Louisiana is fixed at five percent, and the
legislature has provided that "conventional interest shall in no
case exceed eight percent, under pain of forfeiture of the entire
interest so contracted." Theory of the plaintiff in error is that
the judgment was rendered upon the note, and that inasmuch as the
note stipulated for the payment of ten percent, the entire interest
was forfeited. Present defendant denies that theory, and we think
it cannot be sustained for the reasons already given. Judgment was
rendered on the cause of action stated in the petition, as before
explained, and not on the note, as assumed by the present
plaintiff. Conventional interest might be eight percent, and as the
petition claimed no more, and no more was allowed by the court, the
presumption, in the absence of proof to the contrary and of any
exception to the decision of the court, is that the judgment is
correct. Such a question might have been presented in the finding
of the court, or it might have been presented in the bill of
exceptions on objection to the ruling of the court. But usury was
not set up either in the original or supplemental answers, and it
does not appear that any such objection was made in the court
below. Parties might lawfully agree that the rate of interest
should be eight percent, and inasmuch as that rate was demanded in
the petition and was allowed by the court, and no objection was
taken to the ruling of the court, it must be presumed in this
Court, under the state of the pleadings exhibited in the record,
that the court decided correctly.
The decree of the circuit court is therefore
Affirmed with costs.
*
Arthurs v.
Hart, 17 How. 15.
