Jaquith v. Hudson

• Decision Date: 26 May 1858
• Citation: 5 Mich. 123
• Court: Michigan Supreme Court
• Parties: Austin E. Jaquith v. Jonathan Hudson

5 Mich. 123

Austin E. Jaquith v. Jonathan Hudson

Supreme Court of Michigan

May 26, 1858

Heard May 11, 1858; May 12, 1858 [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material]

Error to Wayne Circuit Court.

The action was by Jaquith against Hudson, upon a promissory note for one thousand dollars, given by the latter to the former, April 15th, 1855, and payable twelve months after date. Defendant pleaded the general issue, and gave notice that, on the trial he would prove that, previous to said 15th day of April, 1855, plaintiff and defendant had been and were partners in trade, at Trenton, in said county of Wayne, under the name of Hudson & Jaquith; that, on that day the copartnership was dissolved, and the parties then entered into an agreement, of which the following is a copy:

"This article of agreement, made and entered into between Austin E. Jaquith, of Trenton, Wayne county, and state of Michigan, of the first part, and Jonathan Hudson, of Trenton, county of Wayne, and state of Michigan, of the second part, Witnesseth, That the said Austin E. Jaquith agrees to sell, and by these presents does sell and convey unto the said Jonathan Hudson, his heirs and assigns, all his right, title, and interest in the stock of goods now owned by the firm of Hudson and Jaquith, together with all the notes, books, book accounts, moneys, deposits, debts, dues, and demands, as well as all assets that in anywise belong to the said firm of Hudson & Jaquith; and that the copartnership that has existed between the said firm of Hudson & Jaquith is hereby dissolved; and that the said Austin E. Jaquith, by these presents, agrees that he will not engage in the mercantile business, in Trenton, for himself, or in connection with any other one, for the space of three years from this date, upon the forfeiture of the sum of one thousand dollars, to be collected by the said Hudson as his damages. In consideration whereof, the said Jonathan Hudson, of the second part, agrees, for himself, his heirs and administrators, to pay unto the said Austin E. Jaquith the sum of nine hundred dollars, for his services in the firm of Hudson & Jaquith, together with all the money that he (the said Austin E. Jaquith) paid into said firm, deducting therefrom the amount which he (the said Austin E. Jaquith) has drawn from said firm; the remainder the said Hudson agrees to pay to the said Jaquith, his heirs or assigns, at a time and in a manner as shall be specified in a note bearing even date with these presents. And the said Hudson, for himself, his heirs and assigns, agrees to pay all the debts, notes, and liabilities of the firm of Hudson & Jaquith, and to execute unto the said Jaquith a good and sufficient bond of indemnification against all claims, debts, or liabilities of the firm of Hudson & Jaquith.

"Trenton, April, 1855.

"Austin E. Jaquith. [l. s.]

"Jonathan Hudson. [l. s.]

"Witness: Arthur Edwards.

Arthur Edwards, Jr."

And defendant further gave notice, among other things, that he would show, on the trial, that, after the execution of said agreement in writing, and the giving of said note in pursuance thereof, on or about the 15th day of July, 1855, plaintiff, in violation of said agreement, entered into the mercantile business at Trenton, and had continued to carry on the same ever since; by means whereof the consideration of said note had failed. And he further gave notice, that he (the defendant) continued to carry on the mercantile business at Trenton, after the dissolution of said copartnership; and by means of the breach of said articles by plaintiff, defendant had sustained damages to the sum of one thousand dollars, liquidated by said articles for a breach thereof, which sum he would claim to have deducted from the amount of said note, on the trial.

On the trial, the plaintiff having introduced the note in evidence, rested his case.

Defendant then proved by Arthur Edwards the due execution of said agreement. The defendant also proved, by the said witness, that the plaintiff resumed mercantile business in July, 1855, in the village of Trenton, within eighty rods of the old stand of Hudson & Jaquith, and had ever since continued in such business.

On cross-examination, Capt. Edwards testified that the above agreement was made in duplicate, and signed by the parties about the middle of April, 1855, which duplicates were placed in his hands, to be kept till the bond of indemnity and note mentioned in the agreement were executed; that the duplicates were not to be delivered till both parties came and demanded them. Hudson at once took exclusive possession of the store, goods, books, and papers of the old firm of Hudson & Jaquith, where the duplicate agreements were signed, and they were left in witness's hands until the other papers mentioned in them were executed. Witness did not recollect whether it was said by the parties that the agreement was not to take effect till both parties came for the duplicates. Witness never delivered to the defendant the agreement now produced by him, and can not tell how it came into his possession. The plaintiff and defendant never came and jointly demanded the duplicates of him; he has no recollection that either of the parties ever notified him not to deliver over the papers.

On re-examination, witness said he lived at Trenton in 1855. and his papers were for the most part kept there. Witness can not remember delivering this duplicate to defendant; it might have been delivered by him to defendant, but witness has no recollection of it.

The defendant then, by another witness, gave evidence tending to show that, not long after the date of said agreement, the bond of indemnity mentioned in the agreement was executed by defendant and delivered to the plaintiff.

No evidence was given to show any damage sustained by the defendant, by reason of plaintiff's again engaging in business in Trenton.

The plaintiff then called as a witness Arthur Edwards, Jr., who testified that he was one of the subscribing witnesses to said agreement. The duplicate agreements were to go into Capt. Edwards's hands, and to be delivered only when plaintiff and defendant came together for and demanded them. When they were ready for signing, plaintiff hesitated about signing the duplicates, but witness thinks that Capt. Edwards then said that plaintiff could sign them safely, as he (the said Capt. Edwards) would hold them until they were jointly demanded; can not remember whether Hudson or Edwards made the remark, but one of them made some remark which gave witness the impression that these duplicate papers were to be null until they should be both simultaneously delivered to the parties. Witness was in and out of the room, and did not hear the whole conversation, and can not say positively whether Hudson was there when this remark was made. There was something said about some other papers, but witness could not recollect it distinctly.

The court was then asked by plaintiff's counsel to charge the jury, as follows:

"1. That a delivery to both parties, at the same time, of the agreement in duplicate, by Capt. Arthur Edwards, was essential to give it effect, and render it operative between the said plaintiff and defendant; and before the defendant can claim the full benefit of it, he must show either such a delivery as was agreed upon, or a willful refusal, on the part of the plaintiff, that such delivery should be made.

"2. That, even if the agreement set up was, in the opinion of the jury, properly delivered, as between the parties, the defendant can not recoup any damages against the plaintiff, except upon evidence showing that some damage was actually sustained by him; that the clause in the agreement as to damages, can not, of itself, and in the absence of evidence, operate to the reduction of the claim of the plaintiff, as the sum fixed in the agreement is in the the nature of a penalty, and not liquidated damages; and no damages can be recovered under it except such as are proven."

The court refused so to charge; and plaintiff excepted.

The court then charged the jury in substance as follows:

"That if the jury were satisfied that the duplicate agreements were placed in Capt. Edwards's hands under the agreement between the parties that the same were not to become operative until both parties called on him to deliver them, that then they must be satisfied that such a delivery had taken place, or the agreement had never taken effect. But if, on the other hand, they should be satisfied that the real nature of the transaction was, that the said duplicate agreements were to be placed in Capt. Edwards's hands solely to await the future execution and delivery of the bond, note, etc., mentioned in the agreement, and were thereupon to become operative, that then no formal delivery of said duplicates was necessary--the agreement in such case would take effect as soon as the bond, note, etc., mentioned, were made and delivered to plaintiff.

The court further charged the jury, that it was not necessary for the defendant to prove any actual damage under the plaintiff's breach of the said agreement, as the damages therein fixed were liquidated damages, and not a penalty.

The issue was then submitted to the jury on the evidence, who found a verdict for the plaintiff, in the sum of eighteen dollars and eight cents, allowing the defendant the sum of one thousand dollars mentioned in the agreement.

Plaintiff brought the case to this court, by writ of error, accompanied by bill of exceptions.

Judgment of the Circuit Court for the county of Wayne affirmed.

D. Bethune Duffield, for plaintiff in error:

1. The evidence showed delivery of the contract...