The stock exchange seats were the individual property of Hodges at the time the partnership was formed. The precise question, as we have said, is whether he parted with his ownership of the seats, and contributed their value to the partnership assets. There is nothing in the articles of copartnership or in the evidence as to the conduct of the parties by way of practical construction of the particular paragraph relating to the stock exchange seats, or in the circumstances of this case, viewing it in all its aspects, of sufficient potency to establish the proposition and justify a finding that Hodges parted with his title. by contributing the seats in the various stock exchanges to the partnership capital. The partnership was for the limited period of six months. There is a paragraph in the agreement which provides that the New York and Boston seats standing in the name of Hodges shall draw interest up to the amount of $50,000, which shall be charged to the general expense account. The Chicago seat was not referred to at all. The seats in the various stock exchanges were of a substantial value, considerably more than $50,000. It is contended that Swift, as an equivalent, contributed $50,000 to the partnership capital, but this turns out to be a loan negotiated by him upon the responsibility of the partnership. The seats were never credited to Hodges, nor were they entered upon the books as partnership assets. The fact that Hodges was to be paid interest on the arbitrary sum of $50,000 is more consistent with the idea that it was in the nature of compensation for the use than with the idea of an outright contribution of his individual property to the partnership capital. There is no occasion, and we have no right, to enter the field of supposed presumption and inference resulting from a community of interests, based upon the fact of contribution to the partnership property. It is highly improbable that Hodges, without provision for pecuniary return for their value, intended to pass title to these seats to a partnership with these young men without capital, formed with reference to the profits of the business for a term of six months. We look upon the provision in the copartnership articles as to interest on $50,000 as an expression adopted by the parties for fixing the value of the use of the seats in the stock exchanges to the partnership business. We do not get much aid in the solution of a question like the one with which we are now confronted from reported decisions. Each case must necessarily stand upon its own merits. In Grecean v. Bell (C. C.) 115 Fed. 553, where it was determined that the individual title to a trade-mark owned by one of the partners, used in the partnership business, did not pass without an express agreement, the question is reasoned as though it were to be governed by a rule or by a doctrine, and a quotation from Brown on Trade-Marks, where it is said that what the partnership takes over as its own depends entirely upon the terms of the partnership agreement, is referred to as a doctrine stated by the textbook writer. In our view, the determination of such a question is not controlled by a rule of law, but is in each case to be determined as a question of fact, and that fact must be ascertained upon the evidence which describes and illustrates the situation of that particular case. Of course, how a question of fact will be determined depends largely upon the character of the question, and rules of law have to do with the kind and measure of proofs, and, under all conditions, the proofs must be sufficiently definite and of sufficient substance to fairly and reasonably establish the proposition asserted. We reach the conclusion that there is nothing in the record to justify a finding of fact that the stock exchange and board of trade seats which were the individual property of Hodges were contributed to the joint assets of the partnership. The Wheelman assets were not mentioned in the articles of agreement, so far as we have discovered were only referred to in the evidence of Hodges, and his undisputed statements must be received as establishing the fact that such as were prior to January 1, 1899, were his individual property, and were not transferred to the partnership. These assets, therefore, so far as they existed prior to January 1, 1899, stand the same as the Boston and New York Stock Exchange seats and the Chicago Board of Trade seat, and the general observations with reference to that phase of the case apply with equal force to such as existed prior to the time to which we have referred. The Wheelman transactions, subsequent to the formation of the partnership, stand differently; and while the proofs as to the status of such assets existing subsequent to January 1, 1899, are very meager and unsatisfactory, we think it is established as a fact that such as were acquired subsequent to January 1, 1899, were based upon partnership transactions and related to partnership business, and should therefore be treated as partnership assets. The decree of the District Court is reversed so far as it relates to the seat in the Boston Stock Exchange, the seat in the New York Stock Exchange, and the seat in the Chicago Board of Trade, and the decree is modified so far as it relates to the Wheelman assets so as to exclude from partnership assets such as existed prior to January 1, 1899; the case is remanded to the District Court for further proceedings not inconsistent with this opinion; and the appellants recover costs in this court. MCRAE v. LONSBY et al. (Circuit Court of Appeals, Sixth Circuit. May 14, 1904.) No. 1,271. 1. FRAUDULENT REPRESENTATIONS-QUESTIONS FOR JURY. Where, in an action on a note given for the machinery and the sunken hull of a vessel, defendants by special plea alleged that the note was given by reason of false representations as to the condition of the hull, on which defendants relied, and there was evidence that when defendants attempted to ascertain the condition of the hull the water over and about it was so disturbed and roily that the hull could not be seen, and that defendants relied on the representations, which were warranted to be true, it was proper for the court to submit to the jury whether the facts could have been readily ascertained by inspection, and whether defendants in fact relied on the truth of such representations. Where defendants claimed the right to rescind a contract by reason of the falsity of representations made by plaintiff concerning the property 130 F.-2 purchased, it was immaterial whether defendants relied on the representations per se, or on an express warranty of their truth. 3. SAME-SPECIAL DEFENSE-STATE PRACTICE-NOTICE. Under the law of Michigan that a notice of special defense to be attached to a plea of the general issue is sufficient if it informs the plaintiff of the substance of the matter proposed to be shown under it, a notice of special defense to an action on a note given for the price of the machinery and sunken hull of a vessel, alleging that at the time of the purchase the hull was submerged, and that plaintiff induced defendants to make the purchase by representations detailed with regard to the condition of the hull, its value, etc., as of his own knowledge, and warranted such representations to be true, but that the same were false, and that it was thereafter discovered that the hull was worthless, whereupon defendants demanded their note and their expenses incurred in endeavoring to raise the hull, for which judgment was demanded in favor of defendants with the cancellation of the note, was sufficient to raise the issue of defendants' right to a cancellation of the note for fraud. 4. SAME-DAMAGES. Where defendants were induced to enter into a contract for the purchase of the machinery and sunken hull of a vessel by reason of plaintiff's false representations, and on attempting to raise the hull it was found to be worthless, defendants, in addition to a rescission of the contract, were entitled to recover the reasonable expense incurred by them in endeavoring to raise the hull before its true condition was discovered. 5. SAME-Evidence. Where a contract for the sale of the machinery and the sunken hull of a vessel was in writing, the hull and machinery being both sold for a lump sum, and the seller claimed that the hull was not included in fixing the price, but was thrown in as a gift, expert evidence was admissible to show that the machinery without the hull was of much less value than the purchase price named in the contract. In Error to the Circuit Court of the United States for the Eastern District of Michigan. Tarsney & Fitzpatrick, for plaintiff in error. Before LURTON, SEVERENS, and RICHARDS, Circuit Judges. SEVERENS, Circuit Judge, delivered the opinion of the court. This is an action brought to recover the contents of a promissory note given by the defendants, Lonsby, to McRae, November 8, 1899, for $3,300, with interest. The defendants pleaded the general issue, and added a notice of a special defense in the form prescribed by a statute of Michigan relating to pleadings in actions at law. The special defense set up was, in substance, this: That the note was given for the purchase price of the parts of the dismantled steamboat called the Byron Trerice, consisting of the hull, the boiler, the engine, and machinery; that at the time of the purchase all except the hull had been removed and was stored on land; that the hull was lying submerged in Lake Erie, near Leamington, Ontario, where she had suffered the loss of her upper parts by fire and was sunk; that the plaintiff induced the defendants to make the purchase by representations, which are detailed at length, in regard to the condition of the hull and its value, as of his own knowledge, and warranted his representations to be true, declaring that if they were not true the defendants need not pay for the articles sold; that the defendants relied upon these representations, believing them to be true, and made the purchase and gave the note upon the faith of them; that they set about raising the hull, and in doing so found that the representations of the plaintiff above mentioned were false, and that the hull was in fact worthless; that on making this discovery they notified the plaintiff that they would have no more to do with the articles purchased or claim any interest in them, and demanded back their note; and that they expended about $500 in trying to get the hull afloat, for which they prayed judgment against the plaintiff. It appears that the boiler, engine, and machinery were never taken by the defendants, but remained where the plaintiff had stored them before the sale. The hull fell apart in the attempt to raise it, and was left where it was. Upon the trial, the parties offered evidence bearing upon the issues. made by the pleadings. The jury rendered a verdict in favor of the defendants for $450. This verdict plainly imports, in the light of the charge of the court, that the jury found that the representations were made as charged, that they were false, that the defendants had on that account repudiated the purchase, and were therefore entitled to have their note surrendered; and, further, that the defendants, in reliance upon the false representations, had expended $450 in endeavoring to get the hull afloat before they discovered the fraud. The plaintiff took several exceptions to the rulings of the court upon the trial, which we proceed to consider. Most of them may, however, be generalized and considered together. It is contended that, in order to create a liability for representations which are untrue, it must appear that the facts could not readily be known by inspection; and, further, that it must appear that the party complaining relied upon the truth of the representations and acted upon them; and, subordinate to this last proposition, that, if it appears that the party relied upon a warranty that the representations were true, he must depend upon the warranty as a contract of indemnity, and cannot ground his complaint upon the false representations per se. And it is claimed that the facts were open to inspection; that the defendants did not rely upon the representations, but relied solely upon the warranty. The first two of the propositions above stated may be admitted to be correct. But the facts to which it is proposed to apply them were matters to be determined by the jury. And it is sufficient to say that there was some evidence from which they might have determined them in favor of the defendants. There was evidence that, when the defendants tried to find out the condition of the hull, the water over and about it was so disturbed and roily that the hull could not be seen. There was also evidence tending to show that the defendants relied upon the representations, for the representations were what was warranted. It is useless to argue that the weight of the evidence was the other way. The court was not authorized on that account to take the questions from the jury. With respect to the other proposition, it is to be observed that the question whether the defendants relied upon the representations which proved to be false, or relied upon a warranty of their truth, was one which concerned the sufficiency of the ground on which the defendants reiied as a justification of their rescission of the contract, and the dis tinction contended for was wholly immaterial. For whether the false representations or a false warranty of their truth were relied upon in either case, on discovery of their falsity the purchaser might rescind. Thornton v. Wynn, 12 Wheat. 183, 6 L. Ed. 595; Rubin v. Sturtevant, 80 Fed. 930, 26 C. C. A. 259; Voorhees v. Earl, 2 Hill, 288, 38 Am. Dec. 588; Dorr v. Fisher, 1 Cush. 271. The distinction is for most purposes rather shadowy. It will be understood that when we speak of a false warranty we are referring to a warranty superimposed upon false representations, and not a mere warranty unaccompanied by fraud. In the former case it has long been settled that an action of tort will lie, the law regarding the warranty as being a continuation of the fraudulent representations. In this case the court put the case to the jury in such form as would require the defendants to prove that the representations of the plaintiff were false and fraudulent, and not that a bare warranty would be sufficient. By the law of Michigan, the notice of special matter to be attached to the general issue is not required to conform to the rules of special pleading, and it is enough if it informs the plaintiff of the substance of the matter proposed to be shown under it. Tested by this rule, it cannot be doubted that this notice informed the plaintiff fully of the matters which were upon the trial attempted to be proved. If acute criticism can be turned upon it in respect to its noncompliance with matters of form, it is such criticism that the statute abolishing special pleading and substituting a mere notice was designed to thwart. Rosenbury v. Angell, 6 Mich. 508; McHardy v. Wadsworth, 8 Mich. 349; Farmers' Mutual Ins. Co. v. Crampton, 43 Mich. 421, 5 N. W. 447. It is objected that the court erred in giving such instructions as would permit the jury to find a verdict in favor of the defendants for the expenses they were put to in trying to get the hull up out of the water. But we think that, if such expenses were reasonable in amount, they might be recovered as damages produced by the plaintiff's fraudulent representations. Whether they were reasonable or not was a question for the jury. It is true that the court told the jury that, if they found that the contract was brought about by the fraud of the plaintiff, they might allow the sum of $450 to the defendants, there being some evidence that that was the amount of expenses incurred. The plaintiff's exception was "to that part of the charge wherein the court says, if they should find for the defendant on the ground of false representations, that they may allow him what he has expended in the attempt to raise the vessel." This exception seems to be founded on the objection to allowing such a recovery at all, and not to point to any error of the court in submitting the sum of $450 as the amount which they might find. If the plaintiff desired the question of the reasonableness of an expenditure to that amount to be submitted, he should have drawn the court's attention to that subject. As we have indicated, we think the exception to any recovery for such expenses cannot be sustained. The rescission of the contract by the defendants did not prevent their recovery for the damages they were brought to suffer by relying on the false representations which induced it. Not having got what they bought, they were not obliged to go on and keep and pay for a thing they had not bought and did not want. Nor would the |