In a case of warranty and indemnity, a judgment against the
person to be indemnified, if fairly obtained, especially if
obtained on notice to the warrantor, is admissible evidence in a
suit against him on his contract of indemnity.
A person who, upon receiving an assignment of a share of
property as security for a debt, agrees to comply with the contract
of the assignor with a joint owner of the property, is bound to
fulfill that contract although it exceed in amount the value of the
share of the property transferred to him.
Error to the Circuit Court for the District of Rhode Island in
an action of assumpsit brought by Carrington against Clark in his
lifetime and prosecuted against his executors after his decease to
recover from them five-ninths of the amount of a judgment recovered
by Smith & Co. of Hamburgh, against Carrington upon a claim
against him jointly with Greene & Barker, and J. C.
Nightingale; Carrington having paid the whole.
The declaration contained the usual money counts, and several
counts upon a special undertaking by Clark to comply with the
contract between Greene & Barker and Carrington, which contract
was averred to be to pay all debts contracted by Carrington with
Smith & Co. on account of the owners of the ship
Abigail in the proportion in which they are interested
therein, the owners being Greene & Barker for five-ninths. J.
C. Nightingale for two and an half-ninths, and Carrington for one
and an half ninths, Clark having received from Greene & Barker,
who had become insolvent, an assignment of their share in the ship
and cargo and Carrington having paid over to Clark five-ninths of
the proceeds thereof.
A bill of exceptions was taken to the opinion of the court
below, and to the admission in evidence of a letter from Clark to
Smith & Co. of 30 June, 1800, and of a letter from Greene &
Barker, to Smith & Co. of 12 July, 1800, and of the writ,
proceedings, and judgment in the suit of Smith & Co. against
Greene & Barker, J. C. Nightingale, and Carrington.
The letter of 30 June, 1800, from Clark to Smith & Co.
says
"This will be handed to you by Mr. Edward Carrington, who goes
supercargo of the ship
Abigail, of which he is a part
owner in company with Messrs. Greene & Barker and John C.
Nightingale.
Page 11 U. S. 309
They have concluded to send their ship on freight to your city,
where, having no correspondent, I do myself the pleasure of
recommending them to your notice. Mr. Carrington proposes
continuing in the ship, and it is probable will require your advice
and assistance in the voyage which he intends carrying into
execution. I have ever found these gentlemen persons of strict
integrity, and I doubt not will punctually fulfill any engagements
they may enter into with you."
The letter of 12 July, 1800, from Greene & Barker to Smith
& Co. is as follows:
"New York, 12 July, 1800"
"Messrs. George Smith & Co."
Gentlemen -- By the recommendation of our mutual friend, Mr.
John Innes Clark, of Providence, we are induced to make an
acquaintance with your house, and we have accordingly recommended
Mr. Edward Carrington, supercargo of the ship
Abigail (of
which he, together with Mr. John C. Nightingale and ourselves are
owners), to call on you for the necessary aid he may require while
in your city. We have opened our plans of a voyage for the
Abigail to your Mr. Adamson, which he doubts not you will
readily coincide with, and render Mr. Carrington the necessary aid
he may require. We shall consider ourselves responsible for all
contracts which Mr. Carrington may make in the business of this
ship, and anticipate the pleasure of your being well satisfied with
his strict fulfillment of them. We have handed your Mr. Adamson
bills of lading for a parcel of dye wood, shipped in the
Abigail with an order to get one thousand pounds sterling
insured on her cargo and freight, and shall draw on you in
consequence for seven hundred and fifty pounds sterling.
"We are, your most obedient servants,"
GREENE & BARKER
"Please effect the above insurance, if not already done."
"WM. ADAMSON "
Page 11 U. S. 310
The record of the proceedings in the suit of
Smith & Co.
v. Carrington was objected to because Clark was not a party to
it. But it was proved that Clark had a power of attorney from
Carrington, who was in Canton and conducted the defense of that
suit in his behalf.
The evidence principally relied on by the plaintiff in support
of his action was a letter from Clark to him of 16 March, 1801,
written at Providence. That part of the letter which relates to the
subject is as follows:
"Mr. Edward Carrington,"
"DEAR SIR,"
"Since your departure from hence, our friends Messrs. Greene
& Barker have been so unfortunate as to reduce them to the
necessity of compromising with their creditors. In order to secure
me for the endorsements I have made in their behalf, they have
conveyed to me two-thirds of the ship
Abigail, with her
appurtenances also five sixths of two-thirds of the cargo. Situated
as this business is, I have to recommend your making the utmost
dispatch in your sales and proceeding immediately for this place,
with such articles as you shall receive in return for the sales of
your outward cargo, submitting the articles entirely to your
judgment; but I recommend that you leave no part of the property
behind you if it can possibly be avoided. With respect to the ship,
notwithstanding I have a bill of sale from Greene & Barker of
two-thirds, I shall view you (if you return here with her) as the
owner of such proportion as agreed upon between you and them, and I
give you my word that you shall receive from me every aid and
support in settling the business to mutual satisfaction, that is in
my power. Mr. John Corlis, who has undertaken to conduct the
business for Mr. John C. Nightingale, writes you by this
opportunity, and will assure you in his behalf of one-sixth of
one-third from him -- that is to say, to make you an owner in the
whole ship
Abigail and appurtenances of one complete
sixth, and the same proportion in the cargo, and Greene &
Barker's contract with you, shall in every respect be fully
complied
Page 11 U. S. 311
with, the same as it would have been done with them, had they
continued owners."
The answer of Carrington to this letter was as follows:
"Havana, April 22d 1801"
"John Innes Clark, Esq."
"SIR,"
"Triplicate your letter of 16 March was handed me this day,
original and duplicate having not appeared. Your letter gives me
the first advice of our friends Messrs. Greene & Barker's
misfortunes by the fire, and am very sorry that they have been
obliged to dispose of the
Abigail and her cargo under
their present situation of a bottomry to Messrs. Geo. Smith &
Co. at Hamburg. But I presume and doubt not Messrs. Greene &
Barker have acquainted you with the exact situation of them, and
have only disposed to you of that part of the ship and cargo that
may remain after the bottomry bond is settled and discharged."
"In consequence of the capture and detention of part of the
cargo and bad condition of the ship, I have been unable to return
direct to Hamburg, and obliged to make up a voyage for Providence,
and have advised Messrs. Greene & Barker with particulars and
desired them to cause insurance to be made thereon. I shall leave
here this day and join the ship and hope to be at sea in a day or
two. Should the voyage meet no other further disappointment, I
flatter myself that after settling the accounts of the adventure,
it will turn to some advantage and leave a considerable balance due
Messrs. G. and B. and beg to assure you that everything that is
consistent and within my duty in this business I shall give the
strictest attention and consult you therein."
"I am, with esteem and respect,"
"Your obedient servant,"
"EDW. CARRINGTON"
Carrington, while at Hamburg in order to procure a cargo for the
ship, had obtained credit with Smith
Page 11 U. S. 312
and Co. to a large amount upon the hypothecation of the ship by
a bottomry bond, and upon agreeing to return to Hamburg with a
cargo, for which purpose he engaged Smith & Co. to procure
insurance to be made in a large sum upon his return voyage. The
premium on this insurance constituted a considerable part of the
debt due to Smith & Co. upon which they recovered judgment
against Carrington as before stated. One of the grounds of defense
taken by Clark's executors was that Carrington had neglected to
give notice to Smith & Co. of the dereliction of the return
voyage in due time to save that premium of insurance, and therefore
he alone ought to suffer by it. The judge, in the court below, in
charging the jury (as the manner is in Rhode Island), said
"Great blame is attempted to be thrown on Mr. Carrington for not
giving notice to George Smith & Co. that he had changed his
voyage so as to prevent the insurance being made from Havana to
Hamburg, and the defendants say that for his neglect in not giving
such timely notice, he ought alone to pay the whole of that premium
-- of this you will judge."
The judge also said
"I conceive the case to be clear that as Greene & Barker
were interested five-ninths in the voyage, they were bound to
indemnify Mr. Carrington in the same proportion for the damage he
should sustain by the contract with George Smith & Co."
And again he says
"If Mr. Clark received from Mr. Carrington more than five-ninths
of the surplus after paying the company's debts, and Mr. Carrington
has since been obliged to pay those debts, Mr. Clark is bound to
refund his proportion."
The judge finally concludes his charge in this manner:
"Having gone through the case at great length and conceiving it
on the whole to rest principally on questions of law, I will give
you my opinion explicitly upon them, so that if your verdict should
be against the defendants, they may have an opportunity to bring
the cause before the supreme court."
"I conceive that Mr. Clark's letter bearing date March 16, 1801,
at Providence, and directed to Mr. Carrington at Havana and
received by him 22
Page 11 U. S. 313
April, 1801, taken in connection with the other evidence in the
case, ought to be considered as a letter of guarantee, and binding
Mr. Clark to pay five ninth parts of the debt due to George Smith
& Co. as ascertained by the judgment in their favor against Mr.
Carrington."
"I am also of opinion that Mr. Clark, having received of Mr.
Carrington a large sum of money under and by virtue of the
assignment from Greene & Barker of their interest in the ship
Abigail and cargo, was bound, under the circumstances of
this case as made out and established by the evidence, to refund
the same or so much thereof as would amount to five ninth parts of
the debt due to George Smith & Co. What sum Mr. Clark received
is a question of fact proper for you to decide."
The verdict and judgment being against the defendants, they sued
out their writ of error.
Page 11 U. S. 320
MR. CHIEF JUSTICE MARSHALL delivered the opinion of the Court as
follows:
This cause comes on now to be heard 1st, on exceptions to the
opinion of the circuit court permitting certain exhibits produced
by the defendants in error, to go to the jury; 2d, on exceptions to
the charge delivered by the judge, to the jury.
Page 11 U. S. 321
The first exhibit to which the plaintiffs in error objected was
a letter written by their testator to George Smith & Co. of
Hamburg, which respects the transaction on which the present suit
is founded. This letter is said to be irrelevant.
The second is a letter written by Greene & Barker (whose
interest the testator of the plaintiffs held as assignee) to George
Smith & Co. making themselves responsible for the contract of
Carrington.
This letter is said to be inadmissible because it is between
other parties and relates to a contract between Carrington and
George Smith & Co.
The third is a judgment obtained by George Smith & Co.
against Edward Carrington, the defendant in error, on his
transactions as a co-partner with Greene & Barker, which were
guaranteed by them. The objection to this exhibit also is that it
is the record of proceedings in a suit between other parties.
The Court is unanimous and clear in the opinion that neither of
these exceptions is sustained.
The letter of John J. Clarke to George Smith & Co. is
admissible, because it is part of the correspondence relative to
the transactions out of which the present suit has grown and
because it affords a strong implication that the writer was
acquainted with the obligation of Greene & Barker, whose
interest he claims, to comply with the engagements of Carrington,
their co-partner and supercargo. It cannot, therefore, be deemed
irrelevant.
The letter of Greene & Barker to George Smith & Co. is
admissible because it tends to show the obligation of Greene &
Barker (whose interest in the
Abigail and her cargo is
claimed by John Innes Clarke) to perform the engagements of
Carrington, and is a proper link in that chain of testimony which
was adduced to prove that those engagements passed, with the
interest of Greene & Barker in the
Abigail and her
cargo, to John Innes Clarke.
Page 11 U. S. 322
The judgment obtained by George Smith & Co. was admissible
because it was founded on the contracts of Carrington with George
Smith & Co., for which Greene & Barker were liable. It was
a material document to ascertain the amount to which George Smith
& Co. were entitled, as against Carrington, and was therefore a
part of the testimony which would be required to show for how much
Greene & Barker were responsible when they assigned to John
Innes Clarke. It was certainly admissible for these purposes,
because Greene & Barker were in truth co-partners with
Carrington, and because, if they were not, it is a case of warranty
and indemnity, and in such case a judgment against the person to be
indemnified, if fairly obtained, especially if obtained on notice
to the warrantor, is admissible in a suit against him on his
contract of indemnity. Whether it was admissible against John Innes
Clarke depends on the degree of his liability for the money for
which that judgment was rendered. If the obligation to indemnify
passed to him with the interest of Greene & Barker, either on
his express undertaking contained in his letter of March 1801 or in
consequence of any equitable lien on the vessel and cargo or on the
money produced by them which attached while the property of Greene
& Barker, and was not affected by the assignment, then these
proceedings were admissible in a suit against him.
If no such liability existed, then the action could not be
sustained, and the judgment would be reversed on the charge of the
judge. This point therefore will be considered in that part of the
case.
In his charge, after summing up the testimony offered by both
parties, the judge proceeds to say
"I conceive that Mr. Clarke's letter bearing date March 16,
1801, at Providence and directed to Mr. Carrington at Havana and
received by him 22 April, 1801, taken in connection with the other
evidence in the case, ought to be considered as a letter of
guarantee, and binding Mr. Clarke to pay 5/9th parts of the debt
due to George Smith & Co. as ascertained by the judgment in
their favor against Mr. Carrington. I am also of opinion that Mr.
Clarke, having received of Mr. Carrington a large sum of money
under and by virtue of the assignment from Greene & Barker of
their interest
Page 11 U. S. 323
in the ship
Abigail and cargo, was bound under the
circumstances of this case as made out and established by the
evidence to refund the same or so much thereof as would amount to
5/9th parts of the debt due to George Smith & Co. What sum Mr.
Clarke received is a question of fact proper for you to
decide."
The declaration in this cause contains five general counts and
three special counts founded on the letter of March 16, 1801, which
the judge considered as a letter of guarantee binding John Innes
Clarke to pay 5/9th parts of the debt due to George Smith &
Co.
The first part of the charge is supposed by a part of the court
to apply to the special counts and to determine the right of the
plaintiff below to recover under them, the latter part of the
charge to the general counts and to determine his right to recover
under them.
If the letter of 16 March, 1801, bound John Innes Clarke to
perform the contract of Greene & Barker, then he was liable to
the extent of Greene & Barker's liability, and was bound to pay
whatever they were bound to pay, although it might exceed the
proceeds of the
Abigail and cargo.
If that letter did not support the special counts, if with the
other circumstances of the case it did not amount to such a
contract as was stated in the declaration, then Carrington could
only recover on his general counts, and could obtain a judgment for
no more than had been received by Clarke.
Others of the Court are of opinion that the charge does not
import that in any state of the accounts Clarke was bound to pay
more than he had received.
A decision of this point is rendered unnecessary by the opinion
of the Court on the letter of 16 March, 1801.
The important part of that letter is in these words.
"With respect to the ship, notwithstanding I have a bill of sale
from Greene & Barker of two-thirds, I
Page 11 U. S. 324
shall view you (if you return here with her) as the owner of
such proportion as agreed upon between you and them, and I give you
my word that you shall receive from me any aid and support in
settling the business to mutual satisfaction, that is in my power.
Mr. John Corlis, who has undertaken to conduct the business for Mr.
John C. Nightingale, writes you by this opportunity, and will
assure you in his behalf of one-sixth of one-third from him -- that
is to say, to make you an owner in the whole ship
Abigail,
and appurtenances of one complete sixth, and the same proportion in
the cargo, and Greene & Barker's contract with you shall in
every respect be fully complied with, the same as it would have
been done with them, had they continued owners."
What was Greene & Barker's contract with Carrington?
It is observable that neither in this letter nor in any other
part of the proceedings is there any evidence that Greene &
Barker had made with Carrington more than one contract respecting
this voyage.
A part of this contract, as is apparent from the letter of Mr.
Clarke, entitled Carrington to one sixth part of the
Abigail and of the cargo to be taken on board at Hamburg.
The letter of 12 July, 1800, addressed by Greene & Barker to
George Smith & Co., states Carrington to be a part owner of the
vessel which was sent to Hamburg on freight, wishes them to render
Carrington the necessary aid he may require, and adds
"we shall consider ourselves responsible for all contracts Mr.
Carrington may make in the business of this ship, and anticipate
the pleasure of your being well satisfied with his strict
fulfillment of them."
It seems a necessary inference from the condition and object of
the parties that this letter was written in pursuance of and
conformity with the contract between Greene & Barker and
Carrington, and that their responsibility, "for all contracts Mr.
Carrington might make in the business of the ship" was as much a
part of their engagement with him as the agreement that he should
be interested one-sixth in the vessel and cargo.
Page 11 U. S. 325
This undertaking was known to Mr. Clarke. His letter of 30 June,
1800, introducing Carrington to George Smith & Co. recommends
Greene & Barker and Nightingale as the persons on whom G. Smith
& Co. were to rely for the fulfillment of the engagements made
by Carrington. "I have ever found these gentlemen," says he,
"persons of strict integrity, and I doubt not will punctually
fulfill any engagements they may enter into with you." Clarke knew
then that Greene & Barker had bound themselves to be
responsible for the contracts of Carrington with George Smith &
Co., and alluded to this residue of their contract with Carrington
when, after saying that he should consider Carrington as the owner
of such proportion of the ship as was agreed on between him and
them and that Mr. Corlis, who represented Nightingale, would do the
same, he adds "and Greene & Barker's contract with you shall in
every respect be complied with."
The subsequent conduct of Clarke certainly proves that he never
understood himself to be entitled to more, by the assignment of the
Abigail and her cargo, than would remain after discharging
the contracts entered into by Carrington.
The record abounds with proofs of this position, which have been
much pressed at the bar, of which the Court will select only one.
It is the letter from Carrington to Clarke, dated Havana, April 22,
1801, in which he acknowledges the receipt of Clarke's letter of 16
March of the same year. He states the lien upon the ship and cargo
and adds,
"but I presume and doubt not Messrs. Greene & Barker have
acquainted you with the exact situation of them, and have only
disposed to you that part of the ship and cargo that may remain
after the bottomry bond is settled and discharged."
At this information Mr. Clarke expresses no surprise, nor does
he manifest any dissatisfaction at the conclusion Carrington had
drawn respecting the terms on which he had succeeded to the rights
of Greene & Barker. This is considered as further explaining
his meaning in using the terms "and Greene & Barker's contract
with you shall in every respect be complied with."
Page 11 U. S. 326
Upon these grounds it is the opinion of the majority of the
Court that the letter of 16 March, 1801, contains a contract,
binding John Innes Clarke to perform the whole contract of Greene
& Barker with Carrington, a part of which was to pay five ninth
parts of the debt contracted on account of the
Abigail and
her cargo, with George Smith & Co; consequently the plaintiffs
in error were responsible to Carrington as far as Greene &
Barker were responsible.
It has been contended, for the plaintiffs in error, that a
considerable part of the debt to George Smith & Co. (the
premium of insurance on a return voyage to Hamburg) was incurred in
consequence of the gross negligence of Carrington in not
countermanding the order for insurance as soon as he determined to
change the voyage. For this sum, it is contended, Greene &
Barker could not have been liable to Carrington, and consequently
it cannot be recovered from John Innes Clarke.
One of the judges is of opinion, that the question of negligence
is, in this case, a point of law, Carrington having been a
co-partner with Greene & Barker, and therefore proper for the
decision of the court; others think that the judge has left that
question with the jury.
In summing up the evidence, the judge says
"the defendants say, that for his [Carrington's] neglect in not
giving such timely notice [of the change of the voyage], he ought
himself to pay the whole of the premium. Of this you will
judge."
This explicit declaration is considered as not being overruled
by the concluding part of the charge.
If the fact of negligence was left to the jury, it has decided
it in the negative, and the question whether a partner would in
such a case be responsible to his co-partners for negligence in
failing to countermand an order for insurance does not arise in the
cause.
On that part of the charge which states John Innes Clarke to be
responsible to Carrington to the amount of the money he had
received, there is no difference of
Page 11 U. S. 327
opinion in the Court. It is however, unnecessary to state the
reasoning on which this opinion is founded, since the construction
given to the letter of 16 March, 1801, decides the cause.
It is the opinion of the Court that there is no error and that
the judgment be
Affirmed.
