Jacobs & Co. v. Shorey & Mathes

To maintain this action, it becomes necessary for the plaintiffs to establish the fact that Mathes shared in the profits of the sale of the goods from them to Shorey, or that Mathes and Shorey were partners in that transaction, upon the ground that where goods are obtained for the use of a firm by means of the fraud of one its members/ the other partner, by receiving and participating in the use or sale of the goods, will be held to have adopted the fraudulent act of him who obtained them, and will be placed in the same situation in reference to' the rights of the vendors of the goods, as if he had directed his partner, to procure the property, or had originally concurred with him in the transaction.

In this way, partnerships may grow out of transactions or relations in which the word partnership has not been uttered. If there be such a joinder or union of interest and action as the law considers as the equivalent of partnership, or as constituting it, it will give to the persons engaged in it all the rights, and lay upon them all the responsibilities, and also give to third parties dealing with them, all the remedies which belong to a partnership. Parsons on Partnership, 9; Hawkins v. Appleby, 2 Sanford, 421.

In general, conversations, assertions, or admissions,'and acts tending to show that parties are partners, and have that joint interest in the particular business which makes them liable as partners, will often have that effect, although such evidence might be quité insufficient to prove a partnership, as between themselves, when no third'persons are interested in the question. Parsons on Part. 122. Where there is doubt, whether a party purchasing goods bought them for himself alone, or for the benefit of another as partner, to prove the latter point, evidence may be offered of acts and declarations, subsequent to the sale and delivery of the property. Hilliard on Sales,.82.

So evidence as to the character of the goods purchased, the ability or insolvency of the purchaser at the time, or whether an inordinately large quantity of goods was purchased in proportion to the party’s apparent means of payment, or the credit given, or whether forced sales are made at inadequate prices, before the expiration of the credit given, or whether there may have been any secret or fraudulent transfer of the goods, are all open and legitimate subjects of inquiry, as bearing upon the sale, and the probable intent of the parties thereto. State v. Johnson, 33 N. H. 457; Parsons on Part. 128.

Upon the question, whether a purchase was fraudulently made by a vendee in anticipation of his insolvency, evidence tending to show that he fraudulently purchased other and similar goods, about the same time, by means of similar false pretences, may be admitted, having the tendency to show the fraudulent intent or conspiracy in the case under consideration. Acts and declarations, showing a fraudulent purpose, if connected in point of time, are admissible, as throwing light upon the general object of the party, though they do not relate to the property or transaction in question. Hills v. Hart, 18 N. H. 605; Lee v. Lamprey, 43 N. H. 15; Blake v. White, 13 N. H. 267; Angier v. Ash, 26 N. H. 109.

In this case, the main question is, whether the acts of Shorey were within the scoj)e of a general design to share the profits of the enterprise with Mathes, or whether the goods were obtained on his own credit, or for his own private use or purposes, and we think the jury might properly weigh the fact, whether the letter of credit to Townsend and others might pot have been designed as means in obtaining money from the plaintiffs in prosecution of their general fraudulent purposes. The false pretence alluded to in Lee v. Lamprey, was a letter addressed by one of the partners to another, tending to show fraud and collusion in the parties. Upon the aforesaid legal principles, the facts stated in the case appear to be sufficient, with or without the letter, to show a fraudulent purpose in both Mathes and Shorey, in procuring the goods in question, so as to render them liable as partners. Bradley v. Obear, 10 N. H. 477; Allison v. Matthew, 3 Johnson, 235. The letter in question may also be properly used as evidence before the jury, as an act or declaration of one member of a firm, and properly within the scope of the partnership business, and to charge the firm whether honestly or dishonestly transacted or said. Peirce v. Wood, 23 N. H. 519; Webster v. Stearns, 44 N. H. 502. Such evidence maybe received as one of a series of acts, which all together indicate a fraudulent design to obtain the goods without paying for them. 2. The plaintiffs having introduced evidence tending to show that some of the goods in Shorey’s store passed into the hands of Mathes, and that, in being removed from one store to another, they were conveyed by and through a long and circuitous route, the defendants were not permitted by the court to show the existence of a usage or custom among the merchants of Portsmouth and Manchester, or elsewhere, to have their goods sent to their stores by long and circuitous routes, when purchased at the stores of near neighbors. We think the court properly rejected this kind of testimony. The general presumption of law on this subject would naturally be that merchants, in the transportation of their goods, will be governed by their true and essential pecuniary interests. That route will be preferred, other things being equal, which is the shortest and cheapest, requiring the least expenditure of money.

In general, a custom of merchants must be reasonable in itself, well known, and so well established, and uniformly acted upon, and so well settled, as to raise a fair presumption, that it is generally known by all contracting under its operation. 1 Greenleaf’s Evid. secs. 292, 293, and notes; Foye v. Leighton, 22 N. H. 75; Rogers v. Allen, 47 N. H.; Homer v. Dorr, 10 Mass. 29; Shorey v. Bliss, 6 Met. 393.

The law will not permit us to presume that the honest, merchants and business men of any city in our State would prefer to transport their goods by a long and circuitous route, when they had an opportunity to use one more direct, of equal fitness for travel, and requiring a less outlay for freight. We think it would be suspicious, absurd, and unreasonable to assume the existence of such a usage, and it would be in violation of the common experience of mankind, as well as the familiar maxim of law, “ Ad vana et impossibilia lex non cogit.”

The defendants were rightfully permitted by the court otherwise to explain the reasons for their proceedings, and the jury would be able to determine whether their conduct was influenced by honest motives or not.

The cross-examination of Mitch, the witness for defendants, was admissible, within the discretion of the judge who tried the cause, for the purpose of testing the character and bias of the witness, although the matter by him disclosed was not material to the issue of the parties. The relation of a witness to a party in a cause, whether of peculiar1 friendship or hostility, is a fact material to the issue, and may be shown, either by the testimony of the witness himself, or by other evidence. Drew v. Wood, 26 N. H. 363; Martin v. Farnham, 25 N. H. 195.

It has been held, that where goods are obtained by fraud, the vendor may treat the sale as a nullity, and reclaim them at once, while they are in the possession of the vendee, though the term of credit has not expired. Hilliard on Sales, 309; Seaver v. Dingley, 4 Greenleaf’s Rep. 306. But whether he can sue for the price until the agreed time of credit has expired, is a point upon which there is some conflict of authority. Dodge v. Waterman, 36 N. H. 188.

In the case before us, the plaintiffs have elected to affirm the original contract, so far as to bring their action on both notes, against both defendants, as partners, both being found by the jury, joint conspirators, and implicated in the attempt to defraud them. The plaintiffs, in this way, obtain a legal remedy against both defendants, they having been found chargeable as partners in the fraudulent transaction. It appears to us, that the plaintiffs, under the prevailing practice, as established in this State, having commenced their action upon thé contract, must be bound to adhere to its terms, so far as to give the credit,. originally given by the partners. Therefore the plaintiffs can have judgment only upon the note which was due at the commencement of their action. Weeks v. Robie, 42 N. H. 313; Coolidge v. Bridgman, 1 Met. 551. Plaintiffs may enter a remittitur for the amount of the second note which is now embraced in their verdict. Sanborn v. Emerson, 12 N. H. 58.

Plaintiffs took judgment for the amount of their first note.