ing port. Negotiations by cable and otherwise, as to substituting Galveston for Savannah, continued until nearly the end of the month, the respondent offering the then prevailing freight rates for a voyage via Galveston, and the libelant insisting upon the fulfillment of the first charter, or a freight rate which would requite the loss arising from the breach. October 31st the parties made a new charter for a voyage via Galveston upon such terms as had been previously offered by the charterer and refused by the libelant; but this was made upon the understanding that the libelant was not to waive any claim of damage arising from the nonfulfillment of the first charter. Under the second charter the vessel was employed 64 days, beginning November 2d and ending January 5th, and her earnings above the expenses of her navigation and other disbursements, which were to be borne by the libelant, averaged £42 5s. 10d per day.

The court below, approving a very careful and thorough report made by the commissioner to whom the question of damages had been referred, found that under the first charter the vessel would have been employed 55 days, beginning October 24th and ending December 18th, and that her earnings above the expenses and disbursements which the libelant would have incurred would have averaged about £59 per day. Damages were awarded by the court below upon the basis of the difference between the net earnings for the period of 55 days actually realized under the second charter, and those which would have been realized under the first charter. This was equivalent to allowing the whole of the average daily net earnings under the first charter between October 24th and November 2d, the period during which the vessel was out of employment, and the partial loss of daily net earnings from that time until December 18th, when she should have completed her employment under the first charter.

The appellant insists that the court below erred in several particulars in reaching its conclusions of fact in respect to the probable duration of the employment of the vessel if the first charter had been fulfilled, and in respect to the net earnings she would have made. We have carefully examined the proofs in order to ascertain whether the award was excessive. We are satisfied that the findings of the commissioner in respect to the first charter are fairly sanctioned by the proofs in all important particulars. We see no reason why the average daily time made by the vessel on the voyage to Galveston and thence to Bremen should not be accepted as the average daily time she would have made in proceeding to Savannah and thence to Bremen, or why the time occupied in loading and unloading at Galveston and Bremen should not be accepted as sufficient data for showing what time would probably have been occupied in loading at Savannah and unloading at Bremen. Upon the other facts that enter into the question of duration and expense, although doubtless as to some of them there is room for a difference of opinion, we cannot find that any mistake has been made, except in a minor particular. That error arose in treating October as a month of 30 days instead of 31. Criticism is made of the item of brokerage on freight which enters into the estimate of expenses. But this item was not specifically challenged in the 25 exceptions to the commissioner's report, or in the 30 assignments of error in this court;

and, in view of the number of errors assigned which have no other support than the ingenious arguments of counsel, we are not disposed to search for errors not assigned.

Inasmuch as under either charter the vessel would have been at Bremen at the expiration of her term of employment, we are unable to appreciate the contention based upon the difference in freight earnings upon eastward and westward voyages across the Atlantic. The contention that the libelant's damages are in some way limited by the offers made by the charterer during the negotiations preceding the new charter is without any merit. If on the 24th of October, or any later day, the charterer had offered to enter into a new charter, leaving the rights of the parties under the existing charter untouched, and the libelant had refused such an offer, it would be unjust to charge the charterer with the difference between the daily net earnings from that time until the vessel entered upon her new employment. In that case the libelant would have refused an opportunity to mitigate the damages. But the libelant was within its legal rights so long as it did not refuse an offer which it ought to have accepted in order to mitigate the loss. If the libelant had accepted these offers, it would in effect have consented to substitute a new charter, and thereby would have waived its right to enforce the earlier one. The freight rate offered by the respondent, although it was the prevailing rate at the time, was a lower rate than the libelant was entitled to receive under the earlier charter, as rates on cotton cargoes had fallen materially since the making of that charter. The result proves that the offers made by the charterer would not, if they had been accepted, have covered libelant's loss.

Criticism has been made of the allowance by the court below of the cable messages between the libelant and its agents, Wright & Son, the brokers who negotiated the charter for the libelant. It is apparent that the messages from Wright & Son were sent in the interests of the charterer, and upon his application to have them intercede with the libelant for a modification of the original charter or for the acceptance of offers for its cancellation; and the messages from the libelant were in response to those from Wright & Son.

The decree should be modified by deducting the daily loss in net earnings for a single day, with interest thereon, and, as thus modified, is affirmed, with interest and costs of this appeal.

GOLDSMITH v. KOOPMAN.

REIZENSTEIN v. SAME.

(Circuit Court of Appeals, Second Circuit. January 7, 1907. On Rehearing February 28, 1907.)

Nos. 51, 52.

1. PARTNERSHIP-RELATION BETWEEN PARTNERS-PURCHASE OF INTEREST OF CO

PARTNER.

A purchase by one partner of the interest of a copartner in the partnership will be sustained only when it is made for a fair consideration and upon a full disclosure of all important information as to value. [Ed. Note.-For cases in point, see Cent. Dig. vol. 38, Partnership, § 142.

Purchase of copartner's interest, see note to Towle v. Hammond, 40 C. C. A. 508.]

2. SAME-FRAUD-CONCEALMENT OF FACTS.

Complainant obtained United States and foreign patents for an invention, and a partnership was formed between complainant, defendants, and others to handle the patent and the invention abroad; a fund being contributed for the purpose by the partners, all of whom were to share in the profits. One of the defendants went to England, and there made license contracts, from which he received considerable sums in cash and was to receive more. He cabled information of such transactions to a codefendant, who, by withholding the same from complainant and another partner, owning together a half interest, and by representing that the partnership was in debt and that more money would have to be contributed, secured from them an assignment of all their interest in the partnership and patents for a consideration much less than their share of the profits already made. Held, that such assignment was voidable for fraud, and complainant was entitled to its cancellation, and to recover his share of the profits realized by the assignees.

[Ed. Note. For cases in point, see Cent. Dig. vol. 38, Partnership, § 142.]

3. FRAUD-LIABILITY-RATIFICATION OF FRAUD OF ANOTHER.

One who knowingly accepts the benefit of a contract procured by another by fraud, in part in his interest, ratifies the transaction, and is equally liable for the fraud.

4. PARTNERSHIP-BREACH OF TRUST BY PARTNERS-JOINT AND SEVERAL LIA

BILITY.

The right of action against quasi trustees, as partners, who have been guilty of a fraudulent breach of their duty toward copartners, is ex delicto, and the tort may be treated as several or joint, and the defendants have no right of contribution as between themselves.

5. APPEAL-PRESENTATION OF OBJECTION BELOW-EQUITY-JURISDICTION. The objection to the jurisdiction of a court of equity on the ground that complainant has an adequate remedy at law cannot be raised for the first time on appeal.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 2, Appeal and Error, § 1180.]

Appeal from the Circuit Court of the United States for the Southern District of New York.

For opinion below, see 140 Fed. 616.

F. T. Hovey and Herman Aaron, for appellant.

Eugene Treadwell, Isaac Hassler, and Harrison B. Weil, for appellees.

Before WALLACE, LACOMBE, and TOWNSEND, Circuit Judges.

WALLACE, Circuit Judge. This is an appeal from a decree canceling, as obtained by fraud, an assignment executed by complainant October 2, 1891, by which complainant and one Reizenstein transferred to the defendant and others all their interest in certain patented inventions and in the profits arising from a license agreement which they had made with John H. Brigham.

The undisputed facts of the case as disclosed by the proofs are these: Prior to April, 1891, the complainant Goldsmith had made an, invention relating to coin holders or pocket banks, for which he had obtained letters patent in England and other foreign countries, and had transferred a half interest therein to one Reizenstein. April 14, 1891, Goldsmith and Reizenstein made an agreement with the defendant, Willard Upton, Henry M. Brigham, and John H. Brigham, whereby the parties thereto agreed to become copartners in manufacturing and selling the patented invention abroad, and to contribute $2,000 as capital; each advancing his ratable proportion, and each to share ratably in the profits. By this agreement the partnership shares of the complainant, Reizenstein, and the defendant were to be one-fourth part each, Henry M. Brigham's share was to be one-eighth part, and the shares of John H. Brigham and Upton were to be one-sixteenth part each. This agreement also provided that all matters relating to the partnership were to be "determined by a majority vote of all the parties interested," and that each party "should be entitled to one vote for each one-sixteenth interest in the copartnership." The capital was duly contributed, and Reizenstein and John H. Brigham went to England to negotiate licenses and sales. Subsequently all the parties comprising the copartnership entered into an agreement, bearing date May 5, 1891, by which John H. Brigham was made the sole licensee of the foreign patents, with the exclusive right to grant sublicenses and make and sell the patented articles during the life of the patents. By this agreement Brigham undertook to pay half-yearly a royalty of one cent each on all of the patented articles sold, and guarantied that no less than $4,000 should be paid over by him upon sales to be made within three years from the date of the agreement. This agreement had been prepared by Reizenstein and Brigham in England, and was not signed by the other parties thereto until they had returned from England, which was about June 1st, when all the parties met at New York City. While Brigham was in England he had negotiated a sublicense agreement with Wright & Butler, of Birmingham, and had begun negotiations for a similar agreement with Rollins & Co., of London. After the agreement dated May 5, 1891, making Brigham sole licensee, had been signed by all the parties, in August, 1891, the defendant Koopman went to England in the interests of a pool or subpartnership, called in the evidence "Pool No. 2," which had been formed between Koopman, Upton, and the two Brighams. Under this pool these four associates were to share all profits which might result from the license to Brigham. Neither Reizenstein nor the complainant were taken into this pool. After the defendant reached England he succeeded in making new arrangements with

GOLDSMITH V. KOOPMAN.

Wright & Butler and with Rollins & Co., culminating in formal contracts by which these concerns undertook to pay John H. Brigham large sums by way of royalties as sublicensees, including payments in hand from one of them alone for sales of 1,200,000 of the patented articles. When these arrangements had been definitely agreed to, Koopman advised Upton of their purport by cable, and thereupon Upton promptly proceeded to procure from the complainant and Reizenstein the assignment of October 2d.

The principal controversy in the court below was whether this assignment was induced by fraud, and whether the defendant was a party to the fraud; and the principal assignments of error present the question whether the proofs justified the court below in finding against the defendant upon these issues.

We shall not undertake to recapitulate the evidence contained in the record bearing upon these questions, as the facts established by documentary evidence and by the testimony of the defendant and his own witnesses supply, with but little assistance from the other testimony, enough to call for the cancellation of the assignment. The proofs satisfactorily support the findings of the court below to the effect that the assignment was obtained from complainant and Reizenstein upon false statements made to them by Upton; that these statements were that the copartnership was in debt, that little or no business had been done abroad, and that $5,000 of new capital was needed to pay the debts and keep up the foreign business; and that when these representations were made Upton knew of the successful negotiations of Koopman in England, and that large sums of money were about to be realized for the benefit of the partnership. The assignment was induced, not only by these untrue representations, but by the concealment. from the complainant and Reizenstein by Koopman and Upton of all that had lately occurred in England. Its consideration was the sum of $1,750, and for this sum the complainant and Reizenstein parted with all their interests in the partnership property at a time when these interests were worth at least five times that sum, and were worth prospectively much more.

Koopman insists that he was innocent of participation in this fraud, and that he had no knowledge of the assignment until he returned from England, shortly after it had been procured. If Upton had been the sole perpetrator of the fraud, it is unlikely that he would have spontaneously divided the benefits of it with the defendant. The assignment ran by its terms to Koopman and Upton. Both of them signed it, though Koopman signed by Kronheimer, as his attorney. In fact it was procured for the benefit of the associates in pool No. 2, and Kronheimer was a silent partner with Koopman in that pool. Defendant had advised Upton of the altered situation in England, whereby large payments would be derived from Wright & Butler and Rollins & Co. The day of his arrival he was informed about the transaction by Kronheimer. When he learned the small consideration which had been paid, he was put upon inquiry as to the honesty of the transaction. Instead of interviewing the victims he preferred to share the fruits of the purchase. He was a party to the transaction by ratification, if not originally by a previous understanding with Upton.