Grady v. Robinson

RICE, J.

Individuals who would not be held partners inter sese, may become liable as partners quoad third persons. Hesketh v. Blanchard, 4 East, 144; Hazard v. Hazard, 1 Story’s C. C. Rep. 311; Story on Partn. § 60; Collyer on Partn. §§ 78-86.

The first question for consideration in the present case, is, whether, upon what appears in the record, the complainants have the right to treat the defendant as a partner in the company of James C. Watson & Co.

The bill states, among other things, that said company was formed “for the purpose of speculating in Indian lands, which were to be disposed of by the government of the *295 United States, under the treaty made by the said government with the Creek Indians in 1832”; that on the 27th December, 1842, the time when the agreements shown in exhibits A and C, attached to the bill, were executed, said company was composed of James C. Watson, Alexander J. Robinson, the defendant, and a number of other persons whose names are stated; that at the time said agreements were executed, the said Robinson “was a member of said trading firm”, and “ was bound by his connection with the said company, and by the said agreements, made by the said company with the said Grigg and Hardin, whenever a patent was obtained for the lands” mentioned in said agreements, “ to aid said company in carrying out the conditional contracts therein set forth”, &c., &c.; that the said Hardin, for the benefit of complainants, agreed with the defendant, that he “ should actively engage himself in obtaining a patent from the government of the United States to James 0. Watson & Co., for the lands mentioned in exhibits A and C, for which service he, the said Hardin, was to pay said Alexander J. Robinson the sum of fifty dollars.”

The defendant, in his answer, “ admits that the said James 0. Watson &.Co. was a company formed for the purposes alleged in said bill”, but “ denies that, at the time said contracts of purchase with James C. Watson & Co. are alleged to have been made, this defendant was a member of said company; and for answer states the following facts, upon information and belief: On the 28th August, 1'836, a contract of purchase was made and entered into by James 0. Watson, Edward Hanrick, Peter C. Harris, John Peabody, and William Walker, on the one part, and certain chiefs of the Creek Indians, aided by Gen. Jessup, for the purchase of certain lands known as' reverse contracts, in what was called Dr. McHen-ry’s District, for the sum of seventy:five thousand dollars. On the 28th day of April, 1837, the said James 0. Watson, Edward Hanrick, Peter C. Harris, John Peabody, and Wm. Walker, by his executor, Edward Hanrick, held a meeting at Columbus, Georgia, and adopted rules and regulations for said company ; at which Alfred Iverson was admitted as an original contractor, and was present. The fourth, fifth, seventh and eighth of said rules and regulations arenas follows: ‘ 4th. *296 The shares of said company shall be twenty, to be divided and assigned as follows, viz.: James C. Watson, Edward Hanrick, John Peabody, Peter C. Harris, Alfred Iverson, and William Walker’s estate, shall each have one full share; Joseph Fitzpatrick, Dozier Thornton, jr., Nat Macon Thornton, Thomas S. Woodward, John A. Hudson, Columbus Mills, Luther Blake, Daniel McDougald, Edward Carey, Alexander J. Robinson, John & N. F. Collins, L. B. Strange, John J. McCrary, George Stone, and William Yann, shall have each one-half share; James Wadsworth and Paddy Carr shall have one-fourth of a fujl share; and the remaining four and a half shares shall be reserved for future distribution and appointments by the company.’ 15th. The sum of six thousand dollars upon each full share, and the like proportion for each part of one, shall be paid, within twenty days from this date, to the treasurer, who is authorized to give receipts for the same.’ ‘7th. The persons heretofore designated as shareholders, and any others that may be hereafter admitted, shall be compelled to pay promptly all installments or sums which which may be voted by the company, and shall also make and execute relinquishments to the company, of all interest, right, title, or claim, in and to any land which has been or may be embraced in said contract; and further, it shall be the duty of every shareholder to do and perform any service in the furtherance and completion of the business of the company, for which they may be called upon by a resolution of the company. And that, upon failure to comply with the requisitions aforesaid, or upon any violation of good faith to the interest of the company, the claim or above interest of such person shall be held and claimed as forfeited to the company.’ ‘8th. The control of the company, or the adoption of all rules or regulations, and other business of the company, shall be holden exclusively in the hands of the original contracting parties and Alfred Iverson, who is hereby admitted as an original contractor.’ This defendant understood that he was to have and be entitled to one half share. But this defendant states, further, that he was not present at said meeting held in Columbus on the 28th April, 1837, has never paid any thing by way of installment, or otherwise, into the treasury of said company, has never paid any thing *297 upon said half share, and has never received any thing from said company as a co-partner, or on account of said half share. This defendant was; at one time, the agent of said company, in paying off the Indians and closing said contract, and received compensation for Ms services as said agent; but has never received any thing from said company in any other capacity. This defendant, further answering, states that, previous to the year 1842, and to the execution of said agreements with the said G-rigg and Hardin, and, as well as this defendant now recollects, in the year 1889, this defendant relinquished in writing all the interest which he then had in said James 0. Watson & Co. to the said James C. Watson, and without any consideration being paid to this defendant by the said James C. Watson. This defendant, further answering, saith, that he denies that at any time the said Adam Hardin, for the benefit of complainants, agreed with this defendant that this defendant should actively engage himself in obtaining a patent from the government of the United States to James C. Watson & Co., for said land mentioned in exhibits A and C, and for which service the said Hardin was to pay this defendant the sum of fifty dollars. This defendant states that, on the contrary, in the latter part of the year 1844, and before any of the complainants had acquired any interest in said lands, the said Hardin called to see this defendant, at his residence in Columbus, Georgia, where he was confined by sickness, stated to this defendant his purchase of said lands, and asked the assistance of this defendant to procure a patent for the same. This defendant expressed a willingness to said Hardin to assist him, and offered to do any thing he could to assist him. The said Hardin probably said that he would pay fifty dollars to - procure a patent, but this defendant denies that he' ever agreed to accept said sum, and referred the.said Hardin to Alfred Iversón as a competent and proper person to procure said patent.”

The defendant does not pretend that he was, at any time, a dormant partner. He makes no defence. of that kind, nor does he plead or .rely on the statute of frauds. If, therefore, his. answer, when construed according to established rules, in connection with the bill, amounts virtually to an admission, either that the half share assigned to him by the aforesaid *298 rules and regulations adopted by the original partners on the 28th April, 1837, was thus assigned to him according to his previous request, or that within a reasonable time after it was thus assigned he assented to take it as so assigned to him, he thereupon became a partner in said company, at least as to third persons who afterwards dealt with the company, although he was not present when said rules and regulations were adopted, and although he has never paid nor received any thing on account of said half share. An agreement to take and pay for the fixed half share in the partnership, assigned to him as aforesaid, in accordance with the provisions of said rules and regulations, would amount to a contract of partnership, and make him a partner, at. least as' to third persons afterwards dealing with the company. The provision, that the shareholders should pay promptly all installments or sums voted by the company, and execute such relinquishments as are specified in the seventh of said regulations, and perform such service as therein mentioned, has neither the form nor force of a condition precedent, or of a limitation of time, at which the contract of partnership should take effect between the original partners and the several persons who are “ designated as shareholders ” in said rules, and who in any manner agreed to take the shares or fractions of shares as assigned to them respectively by said regulations. The failure to pay the installments, or to execute the relinquishments, or to perform the services as provided for therein, might have given to the company the privilege or election to claim the share or interest of the partner so in default, “ as forfeited to the company”; but the company was not bound to assert such claim, and it is not pretended that it has done so, either as to the defendant or any other designated shareholder. — Goddard v. Pratt, 16 Pick. Rep. 412 ; Herbert v. Hanrick, 16 Ala. R. 581; Patterson v. Ware, 10 ib. 444; Collyer on Partn. §§ 86, 467.

The defendant does not, in his answer, say that he was not a partner in said company at some period prior to the 27th December, 1842, the time when the agreements with Grigg and Hardin were made. He does not even venture a plain and positive denial of the allegation that he was at that time a partner. His seeming denial of that allegation is carefully *299 linked with a statement of “ facts”, which destroy its force as a real denial. Among the “ facts ” thus stated in his answer, is, that the “ defendant understood that he was to have and he entitled to one half share”, and that by the rules and regulations adopted by the original partners “ one half share” was assigned to him! True, he asserts “ he was not present” at the meeting by which these rules and regulations were adopted, although his answer shows it was held in the city where he resided. True, he asserts that he never paid or received any thing on account of said half share. And there is an elaboration in his assertions upon this point, which contrasts strikingly with his unbroken silence upon other points fully as important, and fully as much within his knowledge or belief. Although he says “ he was not present at said meeting”; yet he does not say he was ignorant of its proceedings, even whilst they were going on; Although he says he did not pay or receive any thing on account of said one half share; yet he does not say he did not authorize, assent to, and ratify the proceedings of said meeting whereby said one half share was assigned to him. Although he says that, in 1839, he relinquished in writing, without any consideration, all the interest which “ he then had in said James C. Watson & Co.” (not to the company, but) to James C. Watson; yet he does not say it was some interest other than the said “ one half share”, nor does he explain why he relinquished his interest in a company owning so large a quantity of land, without any consideration. Although he says he “understood he was to have and be entitled to one half share”, he does not tell why, nor when, this understanding had its origin, nor does he say that he objected to having the one half share assigned to him, or that he had never sanctioned the setting apart of that half share to him.

If in his answer he had contented himself with a plain denial that he was a partner on the 27th December, 1842, it may be conceded that the complainants would then have been bound to overcome that denial by the testimony of two witnesses, or of one witness and some circumstance of corroboration. But the “ facts” with which he has accompanied and linked his seeming denial, and upon which he' has evidently based it, not only deprive it of all force as a real *300 denial, but amount virtually to an admission, that from April, 1837, until his relinquishment to James 0. Watson in 1839, he vas a partner in said company, and that he still continues to be responsible as such partner, unless the legal effect of his said relinquishment to Watson terminated his connection with the company as one of the partners and his responsibilities as such partner.

We are constrained to put this construction on this answer, by well-settled rules. Where material matters are stated in the bill, which, prima facie, are within the knowledge, information, or belief of the defendant, if in his-answer he fails to deny them, or to express his belief of their falsity, and does not state that he cannot fo.rm any belief respecting their truth, they must be considered as admitted, without any order taking them for confessed. — McClain v. Waters, 9 Dana, 55 ; Bailey v. Wilson, 1 Dev. and Batt. Eq. Rep. 187. A vague manner of denial of such matters, is always received unfavorably. A defendant is not at liberty thus to put in issue allegations, which he may know, or fully believe, to be true. If he expresses himself obscurely, and leaves to the court the task of divining his meaning, the court adopts that construction of his language which is strongest against him. He cannot be allowed to shelter himself behind equivocal, evasive, or doubtful terms, and thus mislead the complainant; nor behind a literal denial which amounts to no more than a negative pregnant, or an evasion of the point of substance.— Hill v. Lackey, 9 Dana, 83 ; McClain v. Waters, and Bailey v. Wilson, supra; Brooks v. Byam, 1 Story’s Rep. 296; Deveraux v. Copper, 11 Vermont Rep. 104; Morris v. Parker, 3 Johns. Ch. Rep. 297 ; Smith v. Lasher, 5 Johns. Ch. Rep. 247 ; Talbot v. Sebree, 1 Dana, 56 ; Story’s Eq. Pl. §§ 854, 855; Bissel v. Bozman, 2 Dev. Eq. Rep. 163 . Particular charges must be answered particularly and precisely. A general answer, even when it includes an answer to all the particular charges, is insufficient. — Wharton v. Wharton, 2 Sim. & Stuart, 235.

As the answer* does not pretend that the defendant was a dormant partner, nor that notice of any dissolution of the partnership was ever given, we hold it to be clear, that no dissolution of the partnership was effected by the relinquish *301 ment mailin'-1839, by the defendant to Watson, as it respects third 'persons1 who- had no notice of such relinquishment; and that " the -'partnership continued after such relinquishment as before, as it respects all such third persons.— Lucas v. Bank of Darien, 2 Stew. Rep. 280 ; Mauldin v. Br. B’k at Mobile, 2 Ala. 502 ; Goddard v. Pratt, 16 Pick. R. 412.

Our opinion is, that from a proper construction of the bill and answer, the fair conclusion is, that the complainants have the right to treat the defendant as a partner in said company, and to hold him to the responsibilities of such partner.

The bill states (among other things), “ that at the time the said agreements A and 0 were entered into between the said company and the said Grigg and Hardin, the said company held a claim on the said lands mentioned in said exhibits A and 0, by virtue of a contract made with the chiefs of the said Creek Indians, known and generally called- the Big Contract”; * * * “ that because of said agreements, the said company, under the circumstances, were botind in equity to obtain, if they could, with reasonable diligence, a patent for the lands named in said agreements, and to so arrange it that the same should enure to the benefit of your orators and oratrix, sub-purchasers under the said Grigg and Hardin as aforesaid.” The bill also states, that the defendant procured the patent to be issued to himself, and that he has sued the complainants for the lands.

The defendant, in his answer, admits “that it may be true that, by virtue of the ‘Big Contract’, the said James C. Watson & Co. had a claim upon said lands mentioned in said exhibits A and 0; but this defendant, not having access to a'list of the lands embraced in the said ‘Big Contract’, cannot now remember whether the said lands mentioned in said exhibits A and C are included in said list or not, and therefore cannot state what claim, if any, the said James C. Watson & Co. held upon said lands at the time the said agreements were entered into.. This defendant’s best recollection, however, is, that the said James C. Watson & Co. did, at one time, assert a claim to said lands, but that said claim was never established and approved, as required by the treaty ■ of 1832.”

There is nothing else in the answer which amounts even to *302 an intimation, that the lands mentioned in-ezhibits A and C were not embraced in the ‘Big Contract’; and the question is, whether the part of the answer last above copied puts the plaintiffs upon proof that said lands were embraced in that contract.

We must bear in mind, that we have already ascertained that the defendant must be regarded as a partner in said company, for all the purposes of this case. Regarding him as a partner, it must be presumed, in the absence of his statement to the contrary, that he had a belief either that the said lands were included in the ‘Big Contract’, or that they were not included therein; and that, if he had made any attempt to obtain access to the list of the lands embraced in the ‘Big Contract’, referred to in his answer, he could have obtained such access. He does not say that he has made any attempt to obtain such access, nor does he say that he does not believe the lands in controversy were not embraced by the ‘Big Contract.’ He says “ it may be true” they were embraced in it, but, unot having access to a list of the lands embraced” in it, “ he cannot now remember” whether they were “ included in said list or not, and therefore cannot state what claim, if any”, the company held on said lands. His best recollection, however, is, that the company did, at one time, assert a claim to said lands; and he seems careful not to say that the company ever asserted any claim other than under the ‘Big Contract.’ It was his duty, as a partner, to examine the list alluded to, before answering, or, at least, to have attempted to obtain access to it; and, if he failed to obtain it, to state the failure in his answer. — Earl of Glengall v. Frazer, 2 Hare, 99; Story’s Eq. Pl. § 855 a. It was his duty, if he did not believe the said lands were included in the ‘Big Contract’, to say he he did not believe they were included in it. He has not done so; and we feel bound to interpret his answer, in this respect, as an admission on his part that he did not mean to put in issue, as a matter of controversy in this cause, whether said company claimed said lands under the ‘Big Contract’, nor to ask for proof of the truth of the allegation of the bill, that the company, at the time the agreements A and 0 were executed, claimed said lands under the ‘Big Contract.’ — Brooks v. Byam, 1 Story’s Rep. 296; Story’s Eq. Pl. § 868 b, note 2.

*303 Under the bill and answer, as we understand them, the defendant cannot be permitted to prove, in bar of the relief sought by complainants, that the lands in pontroversy were not in fact embraced in the ‘Big Contract;’ because in his answer he has failed to set up such defence, or to put such matter in issue, and has also failed to deny that the company, at the time the agreements show in exhibits A and G were executed, claimed the lands under the ‘Big Contract’, and by such claim induced Grigg and Hardin to enter into those agreements. — McFerren v. Taylor, 3 Cranch, 270 .

Upon the case as presented by the bill and answer, the defendant must be regarded as a partner in said company at the time the agreements A and 0 attached as exhibits to the bill were made, and the lands mentioned in said agreements must bo regarded as embraced in the ‘Big Contract.’

The defendant attaches, as exhibit A to his answer, a copy of an agreement executed on the 20th January, 1840, by the original partners in said company, appointing James C. Watson trustee for said company, and conferring upon him certain authority as therein shown; and thereupon the defendant states, that he “ is advised and believes that the said James 0. Watson had no power and authority to sell, dispose of, or convey any land, so as to bind the members of said company, except those lands which might be patented to the said James C. Watson & Co., or to the said James C. Watson as trustee of said company; and that the contracts of purchase made with the said Grigg and Hardin are-not binding upon the members of said company;” and “ that the said James C. Watson was not authorized to sell the land specified in said agreements” A and C attached to the bill.

It is unnecessary now to decide, whether or not, in this particular, the defendant was correctly “ advised”, or whether his belief, founded on such advice, is correct. For, conceding that the agreement of the 20th January, 1840, did not authorize Watson to sell the lands in controversy, nor any land, until a patent for it had issued, nor to enter into the agreements with Grigg and Hardin shown in exhibits A and G attached to the bill; yet, as the defendant is to be treated as a partner in said company, and the lands in controversy are to be treated as embraced in the ‘Big Contract’, and as *304 Watson entered into said agreements A and C attached to the bill in the name of the company, and signed the firm name to them, it is sufficient to establish those agreements as •the agreements of the company, and binding upon it as such, to prove that Watson had a prior verbal authority to execute them, or that they had been subsequently verbally ratified by the members of the company. — Herbert v. Hanrick, 16 Ala. Rep. 581 ; Worrall v. Mann, 1 Selden’s Rep. 240; Collyer on Partn. § 46?. The legal and unexceptionable evidence in the cause-convinces us that he had such prior verbal authority, and that there has been such subsequent verbal ratification.

There is no ground for suppressing the depositions of Peter C. Harris and Littleberry Strange. The exception taken by defendant to the answers of said Harris and Strange, to the 4th and 6th direct interrogatories, is founded on the assumption that Watson had no authority except such as was in writing, and shown in the agreement of the 20th January, 1840. This assumption is not proved nor warranted by the evidence. And, as a previous verbal authority was sufficient, it certainly was competent for the complainants to prove by Harris and Strange, who were partners in said company, that Watson had authority to enter into the agreements on which complainants rely. The chancellor erred in sustaining the exceptions relating to these answers of Harris and Strange.

We have now noticed what we consider the most material questions decided .by the chancellor; andas to them we think he has erred. We will not extend this opinion by noticing the other questions decided by him; but, out of abundant caution, shall leave them as open if they had not been decided at all. For the errors committed on the points hereinabove considered, and on which the conclusions of the chancellor are in conflict with those above expressed by us, his decree is reversed, and the cause remanded, at the costs, of the appellee.