John McLean

“ The next general proposition is, whether and how far Mathewson had a right to trade upon his own private account at the same time that he was trading upon the partnership funds. The masters say that he must not carry his own property in the same ship, although they admit that he has a right to traffic for himself, and send his commodities in another ship to the same market. We apprehend that the true rule is this; that a partner must not place himself in such a situation that this own private interests will necessarily conflict with those of his partners. ”

“ They may contract for what they choose,-for example, that one of them shall not enter into a particular branch of business; or they may stipulate for the right to assign, in which case an assignee is in the enjoyment of full rights, flowing from the original agreement. But if the contract is silent upon this point, the law does not permit a third person to be introduced without the assent of the other parties. If we were at law, it is clear that no action would be maintainable, and the same rule must prevail in equity. ”

“ But this makes a commercial firm a corporation. If a contract be made with a firm composed of three persons, and then a fourth be admitted, can all four sue on the contract? Certainly not. The names of the partners must all be set forth in the declaration. They cannot sue in their commercial name. It is only a corporation that can do this. If the complainant had no interest in the first voyage, it disposes of the 2d, 3d, 6th, and 12th exceptions.
The 7th, 9th, and 11th relate to the right of Mathewson to trade upon his own private account. ”

“ The rule is, that where an agent acts clearly beyond the scope of his authority, mere silence on the part of his principal does not ratify the act. He must prove a positive assent. Suppose all this property had been lost. The owners did not ratify the proceeding until all danger was over, and the adventure had been found profitable. But it was then too late. If this chartering was beyond the contract, and the owners claim the profits because Mathewson said he did it for the partnership, they must take the whole of his admissions together. ”

“ But the claim here is, that the new partner has the same rights as the old, and has the same right to forbid certain things to be done. If the relation of partner cannot be assigned together with choses in action, then the suit must fail, because the ground of the complainant's claim is that Mathewson had no right, under his agreement, to do certain things which he has done. But this relation cannot be assigned. Mathewson never agreed that any one else should be his master. He had no claim for any thing against Wetmore, and therefore Wetmore can have none against him. ”

“ In case of loss, each partner has a right to look to his associates, and ought not to be compelled to rely upon a person whom he may be unwilling to trust. The only evidence of the copartnership of the complainant, Wetmore, is the entry upon the books of Carrington & Co. There was no assignment, no letter informing Mathewson, who was then absent on one of the voyages, nor did he know any thing of it until the service of the subpoena in this case. ”

“ But if we claim as assignee, we have a right to an account. All property is transferable in equity, and the bill was amended so as to include the rights of an assignee.
Mr. Whipple, on the same side.
With respect to the right to sue, we do not say that the complainant was a partner in the voyage of the Mercury in any other mode than as he was a member of the firm of Carrington & Co. It has been said, that a partner cannot introduce a stranger into the firm without the consent of the rest. We admit it. But the contract here was between Butler, Carrington & Co., and Mathewson. ”

“ The reasoning of the masters is not good. They say, that, as Mathewson's inducements to the purchase were to hasten the settlement of his own cargo, the profits ought to belong to his owners. But they should have adopted or rejected his acts when he informed them what he had done and solicited their sanction.
A general proposition arises under the sixth exception. Martinez had placed money in the hands of Mathewson to be employed for him at Gibraltar. The purchases were made, but Martinez could never more be heard of. To this money we say the other partners have no right whatever. ”

“ Mr. R. W. Greene, for defendant in error, took up the exceptions in numerical order, and examined each one in comparison with the evidence. The general scope of his argument was to show that the voyage was a very hazardous one on the part of the shippers, who had planned the whole series until the termination; that Mathewson had no right to receive presents from his consignees; that it is always suspicious when vendors make presents; that Mathewson was especially debarred from all privileges by the agreement ”

“ In order that a second deposit may be had for the property, and that a new voyage may be begun anew, without any regard to the present one, after reaching Canton you will deliver all our property to Messrs. S. Russell & Co., except the fifty thousand dollars, which you are to retain as a capital for the ship in any future operations you may think it advisable to undertake, either by trading or freighting, according as you think most profitable for all concerned; perhaps a cargo from China for Chili or Peru may be a good investment. ”

“ In his letter dated at Guayaquil, 16th August, 1825, to Carrington & Co., Mathewson says:-'If I can get the ship' Superior 'at a fair charter, I shall return back to Canton by the way of Manilla, with the intention of returning to this coast again,' &c. And again,-'Should I take the ship Superior, I expect to have the same interest in the voyage as I had in the Mercury, and wish you to keep my property constantly insured.' A similar expectation is expressed in a letter dated Lima, 10th November, 1825. ”

“ He ought, therefore, to share in the profits. The only question is, whether an assignee can sue a partner. But in equity a bill for a specific performance would lie. All that would be necessary in such a case would be to bring in all the parties who had an interest in the subject.
Mr. Whipple then took up and enlarged upon the following propositions.
1. The answer of Mathewson was overthrown and discredited by counterbalancing testimony.
2. There was no difference in principle between Mathewson's right to trade in the Mercury and in the Superior. ”

“ The objection to his doing so is maintained under the 7th article of the agreement, which says that he is to have no privileges. One privilege of a captain is to carry his goods without being charged with freight. This article had nothing to do with the subject. Mathewson carried nothing out, and could only trade on his commissions. What he acquired in this way he could certainly bring home by paying freight. There are some facts in the case which are important.
1. He had only a limited capital to trade upon for his owners, not enough to fill the ship. ”

“ It was a rival interest, hostile to the interest of the company, exercised by their agent, and without their approbation or knowledge. This the law will not sanction. It requires not only a bon a fide action by an agent, but that he shall be free from those selfish motives which conflict with the interests of his principals. ”

“ He proceeded to the ports of Rio Janeiro, Valparaiso, and other places, backwards and forwards, for trade, freight, and the employment of the ship, until the 10th of June, 1825, when, at the port of Guayaquil, in South America, the ship Mercury was condemned as unseaworthy, and ordered to be sold. ”

“ Europe, or the United States as may be considered most advantageous, and according to the instructions and recommendations of said Butler and Carrington & Co. Providing, further, that should any circumstance have occurred, or should occur, to prevent the contract being complied with on the part of the Chilian or Peruvian government, or by General San Martin or his successor, then the said Mathewson is to use his best abilities and exertions to dispose of said military stores in the most advantageous manner, and to [the] best profit ”