Majority
p. 544Doty against Bates and Handy. NEW YORK, October, 1814.
Headnote
Anote made byone partner, in which he says, “ 1 promise to pay” &c. but subscribes the partnership name, “A.B. Co.” is binding on the firm, and not on the partner alone, who executed it.A note made by one partner in the name of the firm, will be intended to have been made in the course of partnership dealings; and that it was given for the individual ieht of one of the partners, is matter of defence, which must be proved by the party taking advantage of it.
THIS was an action of assumpsit upon three promissory notes, made by the defendants, who carried on the business of tanning, currying, and shoemaking, under the firm of Samuel Handy 8c Co. payable to the plaintiff, and was tried at the Ontario circuit, in 1814.
The declaration averred the defendants to have been partners in the business of tanning, &c. and that the said Samuel Handy, for himself and the defendant Bates, made and signed, by the name and description of Samuel Handy Sr Co. a certain note in writing, and thereby, for himself and his said partner, for value received, promised to pay the said plaintiff, &c. In all the notes, the promise was stated in the first person singular, “ I promise to pay,” Stc. but they were subscribed with the name of the firm, “ Samuel Handy S' Co.” and were proved to have been signed by Handy, who was the acting partner in the business of the firm.
The defendant’s counsel, at the trial, objected to the-notes being read in evidence, because, on the face of them, they purported to have been made by Handy, in his individual capacity; which being overruled, he moved for a nonsuit, on the ground that the plaintiff having averred a special and limited partnership, he was bound to prove that the notes were given in the course of the partnership business: but the judge refused the nonsuit.
The defendant produced a witness to prove that one of the notes had been given for money lent by the plaintiff to Handy, .but the witness knew nothing of the loan, except from the conversation of the parties, in which conversation nothing was said respecting the partnership, and the plaintiff had never dealt in any article appertaining to the business of the partnership : but the witness was busy at the time of the conversation, and did not pay particular attention to it, and was in a different part of the room. The defendant proved that there was no entry in the books of the firm of any transaction with the plaintiff: and it was stated by a witness, who had been in the employ of the firm, and was in a situation to know the fact, that
p. 545There was a special and limited partnership between the defendants, and that fact was known to the plaintiff. The no.te begins in the singular number, and is signed by one, though with the name of the firm. The legal presumption, however, is, that it was given for the individual debt of the partner who made the note. It is true, that in Marsh v. Ward,[3] where a note began in the same manner, but was signed by two persons, the court held it to be a joint and several note 5 but that decision is not applicable to a case of partnership. Where a bill is drawn on two joint traders, and is accepted by one of them, it binds both, if it concerns the joint trade, but not otherwise.[2] The defendants have shown, prima facie, and as far as they could, that the money never was applied to, nor came to the use of the partnership. If the position of the defendants® counsel, that because this was a limited partnership, the plaintiff
ite did not believe that the firm had received any consideration from the plaintiff. The witness stated, that in one instance Handy purchased beef without the knowledge of Bates, who disapproved of it as soon as he heard it; and that, in the summer of 1813, about the time when the notes were given, the defendants were very much in want of money.
The plaintiff produced a witness, who testified that he, the witness, had sold two yoke of oxen to Handy on the copartnership account, and took a note from Handy in the name of the firm * which note was paid, part by Handy, and the residue by Bates; but Bates, at the time of paying his part, told the witness that he had taken one yoke of the cattle from Handy, for himself, for which he was willing to pay, but for no more.
Handy absconded before the suit was commenced, and Bates alone was arrested. The plaintiff had not given any notice to Bates of the existence of the notes, before the commencement of the action.
The jury found a verdict for the plaintiff, for the amount of the notes, with interest. The defendants moved to set aside the verdict on the ground of misdirection, and that it was contrary to evidence.
I. Hamilton, for the defendants.
II. BleecTcer, contra.
p. 546is bound to show that the note was given for a copartnership COncern, or that the money came to the use of the copartner» ship, is the law, then this burden of proof would lie upon the plaintiff in every action against a partnership; for there is no parti nership, however general, but what has some limitad on. No partnership concerns all sorts of business. The rule is, that where a note is signed with the partnership name or firm, the law intends it was given for the use of the partnership. The plaintiff need only prove a partnership, and the making of the note, in order to support his declaration; and it lies on the defendant to show that it was, in fact, given for the private purpose of one of the partners, and not for the copartnership business. All inference arising from the note being in the singular number, is repelled by the fact that it is signed with the name of the firm. In all the cases in which it has been held that the partnership was not liable, some knowledge of the creí ditor of its being for the use of the individual partner, or some circumstance of fraud, has been shown by the defendants. Unless that is done, the note, given in the name of the firm, is, prima facie, binding on the partnership.[3]
delivered the opinion of the court. The only points in this case are, 1. Whether the declaration set forth the notes according to their legal import and effect.
2. Whether, under such a partnership, it was incumbent on the plaintiff to prove the particular consideration of the notes,
I think the law is clearly against the defendants, on both points.
1. A note made by Handy, wherein he says “ I promise,” &c. and signs the copartnership name, means, J, one of the partners, promise, on behalf of the firm, Sec.
2. The partnership being admitted, the presumption of law is, that a note made by one partner in the name of the firm, was given in the regular course of partnership dealings, until the contrary is shown on the part of the defendants.
There is no question as to the rule, “ that if a person takes a partnership security from one of the partners, for what is known, at the time, to be a particular debt of the partner who gives, such security, the partnership is not holden;” (Livingston v. Hastie, 2 Caines’ Rep. 246 . Lansing v. Gaine and Ten Eyck,
p. 547
2 Johns. Rep. 300 . Livingston v. Roosevelt, 4 Johns. Rep. 251 .) But this is matter of defence, and must be proved by the party who wishes to take advantage of it. The motion for a new trial must be denied.
Motion denied,