Ketcham v. Clark — 6 Johns. 144

Majority

p. 144

Ketcham and Black against Clark.

NEW-YORK,

May, 1810.

Headnote

Where a part-right, &cJn the •¿rtuyy tow, auu tiriuyy iou/, auu on the 22d .Time, tedian" Assign-on the copartnership, in the name was held, that both partners were bound by the acceptance; there being no evidence of any public notice of the dissolution of the partnership, nor any special notice of its dissolution to the party dealing with the firm.

THIS cause came before the court, on a writ of error, insimul computassent. , , _ fendant m error, m the court below, for goods sold and delivered, money paid, &c. money lent, &c.; and on an

The defendant pleaded non assumpsit, with notice of

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‘The plaintiffs proved their demand for goods sold and delivered, to the, amount of 2.56 dollars and 81 cents. The defendant offered in evidence, by way of set-off, a draft on Israel Ketcham and Co. signed by Kellog MolIan, dated 27th June, 1807, in favour of the defendant, for 190 dollars and 41 cents, on which there was a written acceptance, as follows :

“ Kingston, 3 l-s¿ June, 1807,-,

" Accepted to be set off against John G. Clark's private account.

(Signed) e< David Black.

" For Israel Ketcham and Co."

nership between the plaintiffs, were signed the 3d November, 1806, by which the duration of the partnership was limited to the 1st May, 1807 ; and it was agreed, that, if on the 1st May, 1807, the parties concluded to continue the business, each partner was to add to the stock, in cash, 2,500 dollars ; but if it was thought best to close the concern, the goods on hand were to be sold, ike. During the spring of 1807, no money was advanced by either partner, and they continued selling the stock, and collecting the outstanding debts,- until the 22d June, 18071 on which day Israel Ketcham, one of the plaintiffs, executed an assignment to G. and I Ketcham of all his right in the partnership property and debts, as 1 collateral security for the demand they had against him ■■ and, at the same time, he also assigned to them a bond of Black, as further security; and a judgment having been entered up on the bond, the partnership property was taken in execution, on the 26th June, 1807, but the property was left in the possession of the plaintiffs, by the sheriff, and not removed; arid on the 30th June the order above mentioned was presented and accepted. It appeared in evidence, that the articles of copart-

The plaintiffs3 counsel objected to the evidence of the set-off of the acceptance; but the court overruled the objection, and gave judgment for the plaintiff, for 7

p. 146

dollars and 86 cents, after allowing the amount of the acceptance, and 59 dollars and 50 cents, admitted by the plaintiff. A bill of exceptions was tendered and signed, on which the writ of error was brought.

Hawkins,

for the plaintiffs in error, contended, that there was a dissolution of the partnership of Ketcham and Black, on the 1st May, 1807, by express limitation ; or, at least, that an end was put to the partnership by the assignment of the 22dof June, 1807. And that if the partnership was dissolved, then the acceptance afterwards, on the 30th June, could not bind the partnership. He cited Cozvp. 449. 3 Johns. Rep. 536 . 4 Johns. Rep. 224 .

S.udam,

contra, insisted, that the acceptance was special, and. that the amount was to be passed to the credit of Clark. It was not an acceptance that could be transferred or appropriated to any other purpose than the one expressed. It was no more than a receipt for so much money on account; which Black was competent to give, and which was binding on the partners. He did not deny the principles of the law of partnership, but he contended that they did not affect this case. The defendant had a right to insist on the entry to his credit, of the amount of the acceptance, in the books of Ketch-am and Black. The sheriff could not, under the execution, seize the books of account of the copartnership.

delivered the opinion of the court. The question is, whether Black had not authority to, bind his copartner, when he accepted the order of the 30th of June. That acceptance was binding, if Clark, who took it, was not chargeable with notice, either express or constructive, of the dissolution of the partnership. The order was drawn upon the firm by a house which had formerly sold goqds to the firm, and it was.

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drawn in favour of a person who had also previously dealt with it. By the terms of the articles of copartnership, the partnership had ceased on the 1st of May preceding; but no notice of this dissolution appears to. have been given, either to the public at large, or, particularly, to either of the parties to the order in question. The order was accepted by Black, for and in behalf of the house of Ketcham and Co. and "though this acceptance was a new contract; yet, until notice of the dissolution was given, each partner was still competent to hind the firm to all persons not chargeable with notice of such dissolution.

In the present case, there was not only the want of notice, but the partners continued to carry on business, in a manner calculated to induce the public to believe the partnership was still subsisting. They continued together, selling the stock on hand, and collecting the outstanding debts, between the 1st of May and the 22d of Jnnef 1 SO-/, On that day one of the copartners assigned over all his share of the partnership stock to third persons ; and this act was, of itself, a termination of the partnership. But there is no evidence that the knowledge of this act, between that day and the 30th of yunc, went beyond the persons concerned in it, or that jt reached the parties to the order in question., who had formerly been dealers with the firm.

It has not been settled, by any decision in this court, when a partnership is to be dissolved, so as to bind the copartnership by a new contract. In the case of Lansing v. Gaine and Ten Eyck, ( 2 Johns. Rep. 304 .) it was intimated that notice must be given according to the rule- in the English law; but this was not a turning point in that case. In England, it seems to be necessary, that the notice should be given in a particular newspaper, viz. The London Gazette; but we have no such usage or rule here. I think, however, we ought, at least, to go so far as to say, that public notice must be given in a newspaper of the city or county where the

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partnership business was carried on; or in some other way public notice of the dissolution must be given. The reasonableness of it may, perhaps, become a question of fact in the particular case; but public notice, in some reasonable and sufficient manner, must be given, and that will conclude all persons who have had no previous dealings with the firm; or if actual knowledge of the dissolution is, without such notice, brought home to the person dealing with the firm, such knowledge may be sufficient to conclude him. But as to persons in the habit of dealing with the firm, public notice is not sufficient by the English law. The notice must be specially communicated to such individuals. These rules have been frequently and solemnly laid down, as part of the mercantile law of England,, on this subject. (Graham v. Thompson, Peake, 42. Godfrey v. Turnbull and Macau ley, 1 Esp. Cas. 371. Graham v. Hope, Peake, 154. Parkin v. Carruthers, 3 Esp. Cas. 248. Minnit v. Whitney, 16 Vin. 244. pl. 12.) The necessity and justice of these rules call loudly for their sanction by this court, for, as Lord Kenyon observes, in one of the cases, “ It would be the hardest measure imaginable upon the creditor, were the law otherwise ; for while he supposed he was giving credit to a man having sufficient to satisfy the whole of his demand, he might be trusting a beggar.”

Upon these principles there can be no doubt but that both the copartners were bound by the acceptance. Here does not appear to have been any public notice given of the termination of the partnership ; and much less any special notice to the defendant, who had before dealt with the firm, and who, no doubt, took the acceptance as a valid and bona fide contract, binding upon both the plaintiffs.

We are, therefore, of opinion, that the judgment below ought to be affirmed.

Judgment affirmed,