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Johnstown Cheese Manufacturing Company v. Veghte.

It was proved in the present case that, after the conveyance to the plaintiffs, the defendant made excavations and constructions from time to time on his remaining lands, which had the effect of materially diminishing the supply of water from the springs and of depriving the cheese factory of the quantity of water which was conducted to it from the springs at the time of the grant, and that these acts were persisted in by the defendant after their effect had become apparent. It is found by the referee that these acts of the defendant were unnecessarily done by him, and were of no use to him for any purpose. That the effect of such acts was to draw the water from the main spring from which the factory derived its supply, to such an extent that, at times, the plaintiffs had not sufficient water to operate the factory, and the plaintiff was thereby deprived of the use of such water and had sustained damages in consequence thereof.

We are of opinion that these acts of the defendant were in derogation of his grant and in violation of his covenant, and that the judgment of the court below was justified by the facts. The case of Bliss v. Greeley, 45 N. Y. 671; s. C., 6 Am. Rep. 157, is cited on the part of the defendant as in conflict with this judgment; but the facts of that case were very different. In that case there was simply a grant of a right to dig and stone up a certain spring and to conduct the water therefrom through the grantor's land, with a covenant of warranty; and the court held that this did not preclude the grantor from sinking another spring on his land at some distance from the one granted, although the effect of it was to render the latter useless, provided such act was not done unnecessarily or maliciously. In that case the parties were regarded in the same light as adjacent owners, and the rule was applied that the defendant might lawfully dig on her own land, though the effect was to cut off the water from the plaintiff's spring by percolation. But there was no grant in that case of any particular supply of water from the spring, or from the defendant's lands. The grant was merely of the right to the spring, and secured the plaintiff no greater rights than such as he would have had if he had owned the land on which it was situated.

In this case the grant was of the use of the water which, at the time of the grant, was being conducted from the spring, and the intent was to secure the continuance of that supply of water, it being essential to the operation of the cheese factory conveyed.

King v. Sarria.

We have examined the other points made by the appellant, but do not find in them any sufficient ground for reversing the judg. ment.

The judgment should be affirmed, with costs.
All concur.

Judgment afirmod.


(69 N. Y. 24.)

Special partnership in foreign State.

A contract, made in a foreign State, valid under its laws and not repugnant to

the law and policy of this State, is enforceable in the courts in this State. The defendant S. resided in Cuba, and was a special partner of a firm organ:

ized and doing business there. The provisions of the Spanish law relative to limited partnerships had been so far complied with as to limit his liability to the amount of capital which he had contributed. The firm became indebted to the plaintiffs, citizens of this State. 8. had no personal connection with the transactions. In an action upon such indebtedness, held that the con. tract of partnership was to be interpreted and regulated by the laws of Spain ; that the liability of S. and the authority of the acting partner to bind him were to be determined by those laws; and that he was entitled to set up his limited liability as a defense.

CTION against defendants as members of a firm in Cuba, to

recover a balance for advances. Defendant Sarria alone answered, alleging that he was a limited partner, and therefore not liable. Judgment by a referee in favor of defendant affirmed by the Supreme Court at General Term, and plaintiffs appeal. The facts appear in the opinion.

S. P. Nash, for plaintiffs.

F. R. Coudert and A. P. Whitehead, for defendant.


FOLGER, J. The plaintiffs seek to recover a sum of money from the defendant Sarria, upon contract. They do not show that he in person made with them the contract which they allege. It is, indeed, one of the conceded facts in the case, that the contract was

King v. Sarria.

made, as matter of fact, by persons other than Sarria. To succeed, then, in their action, they must show that those persons in some way represented Sarria, and had authority to bind him thereto, to the full extent to which the plaintiffs seek to hold him. To show such authority, proof is made that Sarria was a partner with Grau and Lopez, and that the latter two, under the firm name of Grau, Lopez & Co., made the contract. If nothing more appeared in the case, this would suffice for the plaintiffs; for, by virtue of the relation of partnership, one partner becomes the general agent for the other, as to all matters within the scope of the partnership dealings, and has thereby given to him all authority needful for carrying on the partnership, and which is usually exercised by partners in that business. Hawken v. Bourne, 8 M. & W.703. Indeed, it is as agent that the power of one partner to bind his copartner is obtained and exercised. The law of partnership is a branch of the law of principal and agent. Cox v. Hickman, 8 H. of L. Cas. 268; Baring v. Lyman, 1 Story, 396; Worrall v. Munn, 5 N. Y. 229. In the case first above cited (8 M. & W., supra), it is added: that any restriction which by agreement amongst the partners is attempted to be imposed upon the authority which one partner possesses as the general agent of the other, is operative only between the partners themselves, and does not limit the authority as to third persons, who acquire rights by its exercise, unless they know that such restriction has been made. It is manifest, however, that this remark is to be qualified, when taken in connection with any statute law, which has provided for the formation of limited partnerships, where that statute law is operative. A due observance of such statutory provisions limits the liability of the special partner. It limits, too, the authority of the general partner, as the agent of the special partner, and fixes beforehand the extent to which, as agent, he may bind the special partner. It is hardly necessary to say that when a limited partnership is duly formed and carried on under our statute, though the general partner is the agent for all the partners, with powers full enough to transact all the business of the firm, and to bind it to all contracts within the scope of that business, he gets no authority from his relation as partner and agent of the special member of the firm, to fix upon him any greater liability than that which has been stipulated for. These principles are stated here, not as new or forgotten by any one, but as the basis upon which the determination of this case will rest.

VOL. XXV. - 17

King v. Sarria.

It turned out that the partnership of Grau, Lopez & Co. was created by a formal instrument in writing, and that, by its terms, the liability of Sarria was special and limited in extent to a fixed amount. That instrument (it is found as fact by the learned referee), and all the doings of the three partners under it, bave been in due accord with the commercial code of Spain, of which nation they were citizens, and under whose government and laws they were living and acting when they executed the instrument, and formed and carried on the partnership. And it is proven and found as fact in the case, that when, in due pursuance of the Spanish law, a person has, as did Sarria, entered into such a partnership with others, and has, as did Sarria and his partners, duly observed and carried out the provisions of the law and the terms of their agreement, the liability of the special partner, as was Sarria, is limited to the amount of funds which he has contributed according to his agreement. It is well to observe here, that the learned referee has found that Sarria never had any partnership connection with Grau and Lopez, other than that of a limited partner; that he did not use, nor permit to be used, his name in the firm name; that he did not, by any representation, act or omission, hold himself out, or render himself liable, as a general partner. We have then, Sarria himself making, in person, no contract with the plaintiffs, and giving a special and express authority only to Grau and Lopez to make on, which authority was in exact pursuance of law. Those who deal with one as agent do so at their peril, if it turns out that he had no authority from a principal; and where they rely upon his delegated authority as that of a partner, and know that the partnership was created in another country, must they not look to it, to see how far that law, and the partnership under it, give power to the acting partner ? As then the power of Grau and Lopez to bind Sarria by contract was that of partners, that is, of agents; and as their anthority was lawfully restricted, so that they could not bind him in a liability greater than that named in the contract of partnership, it seems to follow that the plaintiffs have no contract which can be enforced against Sarria, otherwise or further than is provided for by the terms of that cuthority. Nor did Grau and Lopez make the contract with the plaintiffs in the name of Sarria, nor with any special claim of right to represent him. They made it in the name of Grau, Lopez & Co., and claiming only to

King v. Sarria. represent that partnership. As to Sarria, the unnamed partner, they were agents, acting under an authority special, express, limi. ted, and could give to the plaintiffs no more claim upon Sarria than such an authority empowered them. The plaintiffs were subject, in these dealings with Sarria, to the limitations which he had lawfully put upon the powers of his agents. Again, to state a familiar doctrine, no one, in dealing with an agent, may hold the principal to a contract which was not within the authority of the agent to make; nor where there is an express written authority, is it to be enlarged by parol, or added to by implication. It is to be construed, as to its nature and extent, according to the force of the terms used, and the objects to be accomplished.

But it is claimed by the learned counsel for the plaintiffs that the Commercial Code of Spain cannot have an extra-territorial effect; and that one dealing in this State, in which that law does not rule, cannot avail himself of its effect. If this be so, it must be because the law of this State forbids a foreigner, in such a case as this, from invoking the aid of any law of his domicile. But one country recognizes and admits the operation within its own jurisdiction of the laws of another, when not contrary to its own public policy, nor to abstract justice, nor pure morals. It does this on the principle of comity. It has been so long practiced that it is stated as a principle of private international jurisprudence ; that rights which have once well accrued by the law of the appropriate sovereign are treated as valid everywhere. Westlake on Priv. Int. Law, art. 58.

The principle from which originates the influence exercised by the law of a foreign State, in determining the status or rights of its subjects in another country, is thus well stated. It is the necessary intercourse of the subjects of independent governments, which gives rise to a sort of compact, that their municipal institations shall receive a degree of reciprocal efficacy and sanction within their respective dominions. It is not the statutes of one community which extend their controlling power into the territories of another; it is the sovereign of each who adopts the foreign rule, and applies it to those particular cases in which it is found necessary to protect and cherish the mntual intercourse of his subjects, with those of the country whose laws he adopts. Per Sir Saul. ROMILLY, arguendo, Shedden v. Patrick, 1 Macqueen's H. of L. Cas. 554.

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