Beauregard v. Case
| Decision Date | 01 October 1875 |
| Parties | BEAUREGARD v. CASE |
| Court | U.S. Supreme Court |
ERROR to the Circuit Court of the United States for the District of Louisiana.
Case, as receiver of the First National Bank of New Orleans, brought an action against Beauregard, May, and Graham, to recover the sum of $237,008.39, alleging that said defendants were commercial partners engaged in carrying on the New Orleans and Carrolton Railroad; and that the partnership account, which was kept in said bank in the name of Beauregard as lessee, was largely overdrawn, and the money applied to the use of the partnership; that May, while acting as president of said bank, and to make a nominal settlement, executed a promissory note, in the name of Beauregard, as lessee, payable to the bank on demand, for $40,000; and that said May also drew a bill of exchange on A. C. Graham in New York, in favor of the bank, for $125,000, and caused it, as well as the note, to be placed to the credit of said lessee. The petition also avers that the note was not paid, and that the bill of exchange was not stamped, and never forwarded for presentation, acceptance, or collection; that both of said credits were false, fraudulent, and fictitious; and that May acted with fraudulent intent, well knowing that the note had not been discounted by the bank, and that the bill would not be paid; and further averring, that, as the money thus obtained was used for the benefit of the partnership, the partners are liable therefor in solido.
Graham was not served with process, and did not appear.
Defendants severed in their answer. May filed a general denial of the matters in the petition stated, and also averred that he was a discharged bankrupt.
Beauregard, in his answer, denied the existence of a partnership and his liability on account thereof, alleging that he was merely a salaried officer; that, under stipulations of agreement, May and Graham were exclusively responsible for the enterprise; and that the indebtedness to the bank was contracted upon that responsibility, said bank being aware of the state of facts. Beauregard denied the authority of May to execute the note for $40,000 in his name.
In a supplemental answer, he averred that on the 13th of May, 1867, the bank was indebted to May in the sum of $315,779.10; and that if there was any indebtedness by him (Beauregard), as claimed by the plaintiff, it was extinguished by the bank's indebtedness to May.
There was read in evidence an act passed before a notary public, bearing date April 12, 1866, between said Beauregard and the New Orleans and Carrolton Railroad Company, by which the latter leased its track and appurtenances to Beauregard for the term of twenty-five years from the sixteenth day of that month. It contains sundry stipulations on the part of said Beauregard. The concluding part recites,——
Said act was signed by the proper officer of said company, and by Beauregard, May, and Graham; and also a further agreement, bearing date the eighteenth day of said month, between Beauregard, May, and Graham, as follows:——
'ARTICLE 1. Gustave Toutant Beauregard shall obtain in his name, but for the joint account of the appearers, the lease of the New Orleans and Carrolton Railroad: he shall take charge, conduct, manage, and direct the undertaking, at a salary of five thousand dollars per annum, payable monthly at the rate of four hundred and sixteen dollars sixty-six cents and two-thirds per month, promising and binding himself to do his best endeavors to the utmost of his skill and ability for their mutual advantage; and also he shall have the right to select and appoint his assistants, with proper salaries.
'ART. 2. The said Thomas P. May and Augustus C. Graham shall furnish the amount of money necessary to carry out the enterprise, which amount shall not exceed one hundred and fifty thousand dollars for each of them, making an aggregate amount of three hundred thousand dollars. The said T. P. May and A. C. Graham shall be reimbursed, in capital and interest, at the rate of eight per cent per annum from the annual net profit of the enterprise.
'ART. 3. After the payment of said capital and interest as aforesaid, the annual net profits, gains, and increase as shall arise shall be equally divided between the said appearers, share and share alike; and also all losses as shall happen by bad debts or otherwise shall be paid and borne equally between them.
'ART. 4. The said T. P. May and A. C. Graham promise and bind themselves to pay the above sum of one hundred and fifty thousand dollars, each of them in manner following: to wit, twenty thousand dollars (each of them) immediately after the signing of the lease by the New Orleans and Carrolton Railroad Company; then twenty thousand dollars (each of them) per month during the next four succeeding months; then ten thousand dollars per month (should they be required by the lessee G. T. Beauregard) until final payment of the said sum of one hundred and fifty thousand dollars by each of them.
'ART. 5. There shall be kept just and true books of accounts, wherein shall be entered as well all the money received and expended in and about the said enterprise, as also all commodities and merchandises bought by reason and on account of the present copartnership between the appearers, and all other matters and things in any wise belonging or appertaining thereto, so that either of them may at any time have free access thereto.
'ART 6. On the first of each month, a statement of amounts received and expended during the preceding month shall be furnished to the said Thomas P. May and A. C. Graham by said G. T. Beauregard, who will make his deposits in the First National Bank in this city.
ART. 7. This copartnership shall continue from the date of the lease by the said New Orleans and Carrolton Railroad Company to the said G. T. Beauregard, for and during and to the full end and term of twenty-five years next ensuing.
'And the said parties hereby bind themselves, their heirs, ececutors, and administrators, for the performance of all and every of the above agreements.'
There was evidence conducing to prove the matters stated in the petition and in the supplemental answer; there being to May's credit on the books of said bank, May 13, 1867, the sum of $317,779.10, for which sum he on that day gave a check to the United States in payment of a debt due them.
Beauregard requested the court to charge the jury,——
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