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from their obligations to the association, nor will it work a dissolution of the association. It will release the eight members from further liability to one another; but the association may compel any one of them to account to it for his earnings while working separately, the amount found due to it to be distributed to the holders of its stock pro rata, but excluding from such distribution all of the eight who refuse to account to the association.

BILL in chancery. The "association" referred to in the opinion was called the "Mohicansville Mining Association,” and was formed by the complainants and the defendant in January, 1849. The facts necessary to an understanding of the case are sufficiently stated in the opinion.

John P. Jeffries and P. B. Wilcox, for the complainants.
Levi Cox, for the defendant.

By Court, BOWEN, J. The parties interested in this cause properly denominated themselves an "association." Their organization was completed by the adoption of a constitution, to which they all subscribed. The object of thus uniting together is fully defined. It was limited to one purpose-a mining adventure to be conducted upon terms set forth and agreed upon. In the fruits of that adventure all were to participate, according to what were deemed equitable rules. To carry on the enterprise, capital was necessary to be raised and expended, and labor must be performed in a region two thousand miles or more distant from the locality of the associated body. These two points were, therefore, primarily considered and decided upon. From the members of the association, eight were to be chosen to perform the journey to the mines, and after reaching there to employ their skill and industry in procuring the golden treasure for themselves and companions in the enterprise. Within a given period they were to return and place into the treasury of the parent institution the productions of their labor, for distribution among its several members. When they separated from the association to go to their remote place of employment, they took with them, in teams, implements for mining, provisions, and money, all of its resources. These they were to retain, as well as one half of their net gains, but were to divide the other half with their fellow-associates. They must be regarded as employees, as hired men, laboring by contract for the association, whose delegates and servants they were. They might properly co-operate together, might choose a captain and other officers from their own members to direct their affairs on

the way and during their continuance abroad. This they attempted to do; and while we are free to concede that they had full power, as detached and separate members of the association, required by the nature of their undertaking, to act without its presence and advice, to regulate, by rules of their own, the duties to be observed by themselves; yet they could not, by such private regulations, dissolve the association, nor release themselves from their contract to labor and account for their earnings, or to answer in damages for a breach of it. The determination which they formed and acted upon after reaching California-of appropriating the property of the association among themselves individually, and of working separately, in disregard of their obligations to the association-was a most inexcusable and immoral violation of their written and valid obligations to their principals. That act can only be characterized as one of marked dishonesty and bad faith. As between the eight, it was a relinquishment of each to the others of all claim to their joint earnings. Each accepted the proposal to work alone, and share separately the benefits of his individual labor, without any recourse upon the others; but as to the association into whose service they had entered, and whose interests they had undertaken to promote, they could not, by this ex parte and wrongful movement, relieve themselves from liability. Whether they wrought jointly or separately, whether their earnings were large or small, they were nevertheless responsible to the association, and could be required to account to it for whatever they made during the time they were thus employed.

The principle relied on by defendant's counsel, that a partnership may be dissolved by the act of one of the partners, we do not, in the view we take of this case, intend to impugu. That is too well settled to be now questioned. But to effect that purpose, the act must be done with a view to its accomplishment. It should be communicated at once to the other members of the firm. They must be advised of the new relations created by the withdrawal of a member, or a transfer of his interest in the concern. Their future relations toward each other, and their pursuit of the particular enterprise, depend on the acquisition of such knowledge.

Now, whether the eight men intended anything more than the dissolution of their own organization, and liberty to each to work when and where it best suited him, does not seem to be very clear. Some of them said they would never pay anything

to the association. But they did not, certainly, by any expression or act signify that they intended to dissolve the original association. Their acts do not indicate that to have been their object. They were willing, doubtless, to free themselves from working together, and from reporting any account of their gains. But as we have before shown, while they might accomplish these ends as between themselves, they could not, standing as they did in the places of hired men, far removed from the observation of, and without the means of communicating with, their co-members at home-bound by their agreements to serve as such, and to give statements of their labor within the time agreed on-disconnect and discharge themselves from the association.

If the defendant was fortunate in his visit to and labors in the mines-if his hopes were more than realized by his good luck in procuring gold in large amounts-he ought to have borne in mind that the aid of the Mohicansville association rendered to him had mainly contributed to his good fortune; that in realty he owed it to the organization of that body and the employment of the means it gave him to engage in the enterprise; and that however others had fared who had gone on the same errand with himself, or however faithless they may have been to their employers, it was his duty, in the true spirit of the agreement, to share with his patrons the fruits of his toil and good management. This he declined to do, and it is in this proceeding sought to coerce him to perform that which he has, against equity and conscience, refrained from doing, and we think the appropriate relief should be granted.

The exceptions to the master's report must be sustained, and an account taken as to the amount of money earned by the defendant. One half of the sum found to be in his hands he will be allowed to retain. The other half must be distributed to the holders of the stock of the association pro rata, but excluding all of the eight who went to California, except the defendant and Philip Wertsbaugher. The stock subscribed by them to share in the distribution with the others.

Decree accordingly.

BARTLEY, C. J., and SWAN and SCOTT, JJ., concurred.

BRINKERHOFF, J., having formerly been of counsel in this case, did not sit on the hearing of it.

UNINCORPORATED SOCIETIES, ACTIONS BY AND AGAINST: See note to Phipps v. Jones, 59 Am. Dec. 711, where this subject is discussed.

ROXBOROUGH v. MESSICK.

[6 OHIO STATE, 448.]

WHERE DEBTOR VOLUNTARILY TRANSFERS NEGOTIABLE INSTRUMENT TO SECURE DEBT PREVIOUSLY INCURRED by him without any agreement for security, and the parties are left, after such transfer, in statu quo as to the debt, no new consideration, stipulation for delay, or credit being given, or right parted with by the creditor, such instrument is not received by the creditor in the usual course of trade, for value, but is taken subject to all the equities existing against it at the time of the transfer.

ERROR to the superior court of Cincinnati in general term. The action was brought by Messick & Co. against Roxborough, the maker, and Wilcox, the indorser, of a promissory note. It was proved on the trial that Roxborough made the note sued on and gave it to Wilcox, his former partner, as part payment for the latter's interest in a grocery store. The note was transferred to Messick & Co. to secure a large sum of money due to them from Wilcox. They received the notes in good faith, without any knowledge on their part that Roxborough had any equity that he could assert against their payment. The testimony of Messick repelled any presumption that Messick & Co., in receiving the notes from Wilcox, incurred any new responsibility, or gave further time, or changed in any manner their relation to Wilcox in respect to his indebtedness to them. But the judge held that the plaintiffs were indorsees for value, and protected from all the equities of the maker. Upon this ruling the jury returned a verdict for the plaintiff, and the defendant excepted. The superior court at general term affirmed the view of the law taken by the judge at the trial, and this petition was filed to reverse the judgment of affirmance.

Ball and Skinner, for the plaintiff in error.

Miner, Clark, and Oliver, for the defendants in error.

By Court, SWAN, J. The question made in this case is, whether, if a debtor transfers to his creditor a negotiable note before due, as collateral security to a pre-existing debt, without any consideration other than the mere fact of a prior indebtedness (for all other consideration in the case before us is repelled by the testimony, particularly the testimony of the plaintiffs), the creditor holds it discharged from all defenses. and equities existing between the maker and debtor.

There are many rules of law which, in their application to particular cases, do great injustice, but which are inexorably

applied, because the general benefits derived from them can only be obtained by uniform adherence to them; and the individual cases of hardship are altogether outweighed by the public benefits and public confidence derived from uniform application. Among these rules are some relating to negotiable paper. The necessities of the commercial world require that bills of exchange and promissory notes should possess some of the attributes of money and exchangeable value; and to clothe them with these attributes, and to give parties confidence in their reception, it is necessary to protect them in the hands of a holder for value from defenses growing out of the dealings of the prior parties. The rule frequently operates harshly and unjustly, and, being founded on commercial policy, is therefore applicable only where the interests of trade require it. Hence the rule that if the holder has not taken the paper for value, or in the usual course of trade, or in ignorance of the defects, he stands in no better situation than the indorser from whom he received it; commercial policy does not require such a holder to be protected against the defenses of the prior parties. But if the paper has been transferred before due, in the usual course of trade, for value, to a person who had no notice of such defects, commercial policy requires that such bona fide holder shall hold the paper discharged from such infirmities. The exceptions above stated are as fundamental as the rule itself. The question now before us, then, is whether the plaintiffs in this case took the paper for value in the usual course of trade.

The weight of authority seems to settle the principle, that where a negotiable instrument of a third person is transferred before due, in payment of a pre-existing debt, and is bona fide received by the creditor, without notice, the defense existing as between the prior parties cannot be set up against such holder: Bond v. Central Bank, 2 Ga. 106; Valette v. Mason, 1 Ind. 288; Homes v. Smyth, 16 Me. 177 [33 Am. Dec. 650]; Williams v. Little, 11 N. H. 66; Reddick v. Jones, 6 Ired. L. 107 [44 Am. Dec. 68]; Swift v. Tyson, 16 Pet. 1; Brush v. Scribner, 11 Conn. 388 [29 Am. Dec. 303], where the English cases are reviewed; Carlisle v. Wishart, 11 Ohio, 172. The payment of a debt is as much a commercial transaction as a sale of goods; and if one parts with his goods or money upon the faith of a transfer of negotiable paper as payment, and is protected from equities, there seems to be an equally good reason for holding that if one, giving credit to such paper, parts with and discharges an obligation to pay money, he has, in contemplation of law, parted with prop

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