p. 488was further shown that the plaintiff and T. D. Dole had been partners in a business carried on at Buffalo, and that they dis-[488] solved their .copartnership on the 1st day of February preceding the date of the notes. A new firm was formed consisting of said T. D. Dole, W. A. Fox and E. K. Bruce. The members of the new firm paid to Mr. Gridley, the plaintiff, an amount which was considered as the value of his interest in the assets of the former firm over and above its debts, and those assets were turned over to the new firm. The new firm was to collect the debts due to the former firm, and pay its liabilities, which were then thought to be $8,482,72, but were subsequently ascertained to be larger by $1800 or $2000. The new firm was not to guaranty the demands of the old firm turned over to them, but were to use “ due diligence and legal means” to collect them. At the time of the discount of the notes above mentioned, the creditors of the old firm were pressing for payment, and there had not then been sufficient realized to pay them ; and the motive of raising the money at the bank was to provide for those old debts. Dole and Gridley both thought that $3000 was necessary to be raised for the purpose mentioned.
The defendant'offered to show that T. D. Dole, when he obtained the discount, agreed to pay the notes out of the assets of the former copartnership, and that, in case they were not sufficient, then that Gridley was to pay three-fourths of the deficiency; but the evidence was rejected. T. D. Dole applied about $2000 of the money thus raised to the payment of debts of the old firm. Where the language of the statement of facts, is material, it will be found in the opinion of the court.
N. Hill, Jr. for appellant.
I. The suit is brought by Albert G. Gridley in his own right. Although the suit may have been intended to be that of the Kirkland Bank, yet by the pleading it is the suit of Gridley himself. (
22 Wend. 9 ; 24
id. 345 ; 25
id. 612, 613.), The court below so decided. The case as stated in this record, makes Gridley the plaintiff, not the Kirkland Bank; and this relieves the appellant of the greatest difficulty that embarrassed his defence. The referee ruled against the
p. 490or equity. The defendant ought not • to be compelled to pay what in either case the plaintiff can not recover of T. D. Dole.
Y. The proof offered, both that the plaintiff agreed the money [490] should be repaid out of the partnership assets, and that if the assets did not, he, the plaintiff, should pay three-fourths, and T. D. Dole one-fourth of the balance, was proper. It tended to show that the note in suit was used to raise money for the benefit of both, to be repaid by both according to their copartnership interest. It does not contradict the terms of the note, but admitting these, it showed how and for whose use the moneys were raised upon it.
H. Denio, for respondent.
I. The suit was prima facie the suit of the bank, and not of the plaintiff individually. He sued in his official character, which showed that the design was to enforce a demand of the corporation, and not his private demand. Ho objection having been made to the form of the declaration on the trial, it ought now to be taken for what it professed to be, a suit by the bank.
II. But if the suit is considered the suit of Albert G. Gridley, as an individual, the fact remains that the note was made to the bank, and that the bank was the first holder. The plaintiff, if he owns the note, is to be taken to have derived his title by transfer from the bank. The utmost then that can be said is, that he took it with a knowledge of the facts attending its inception. He still has all the rights that the bank had, and can recover if the bank could have recovered; (The Watervliet Bank v. White, 1 Denio, 613 ; Williams v. Mathews, 3 Cowen, 260; Chalmers v. Lanion, 1 Campb. 383;) and it is evident that the bank could not have been affected by the transactions between its president and the parties to the note.
III. But the holder of a note may sue upon it in the name of any other individual. When discounted, this was the note of the bank, and there is no evidence that it has been transferred to Mr. Gridley. The present suit, therefore, if it be deemed an action in Mr. Gridley’s individual name, should be considered as brought by the bank in Mr. Gridley’s name. In this view
p. 491of the case the transactions between Gridley and T. D. Dole would be irrelevant.
IV. But let it be considered that the note was discounted by Gridley, and the proceeds paid out of his private means, [491] still it was incompetent to the defendant to prove, as he offered to do, that the contract was different from what the note imported.
(Cases in Cowen & Hill’s Notes, p. 1460;
Eaves v. Henderson, 17 Wend. 190 ;
Mease v.
Mease, Coup. 47;
Thompson v.
Ketchum, 8
John. 190 ;
Wells v. Baldwin,18
id. 45;
Jackson v.
Jackson, 5
Cowen, 173 ;
Patchen v. Pierce, 12 Wend. 61 ;
Meads v.
Lansing, Hopk. 124.)
YI. The partnership dealings between the plaintiff and T. D. Dole, were foreign to the merits of the case and did not furnish any defence. Those dealings can only be adjusted by a suit in equity. (Rogers v. Rogers, 1 Hall’s R. 391 .)
The following facts, among others, are stated in the record as the result of the evidence. “ The plaintiff let Thomas D. Dole have three thousand dollars, less the discount, upon two printed notes of fifteen hundred dollars each, signed by said Dole as maker, and indorsed by the defendant Benjamin Dole, payable at the Kirkland Bank; one in two, the other in three months. The notes were presented for the purpose of procuring the discount.”
This is, in effect, finding that the plaintiff lent or advanced three thousand dollars to the maker, and received the notes as evidence of the loan, and as security for its repayment. If this is a correct view of the facts presented by the record, the offer made at the trial by the defendant to prove, first: “ That the plaintiff, at the time of the discount, agreed that the notes should be repaid out of the effects' of the copartnership;” and secondly : “ That if the assets of the copartnership did not pay them, then that the plaintiff would pay three-fourths of the balance, and the maker one-fourth,” were properly rejected. The written undertaking of the maker was to pay the full amount of the notes absolutely. The offers were to show him contingently liable for one-quarter only, by proof of an arrange
p. 492ment contemporaneous with the execution and delivery of the notes. This was not merely a contradiction of the only written contract between the parties, but the substitution by parol evi[492] dence of a distinct and independent agreement.
(Bank of U. S. v. Dana, 6
Peters, 59; 17
Wend. 190 ;
Cowen & Hill's Notes, 1460.)
The case then is briefly this : The plaintiff upon the application of T. D. Dole, his former partner, advanced to him three thousand dollars, with the understanding, that it was to be applied upon debts, for which they were jointly liable ; upon the express written agreement of the latter, and the defendant as his surety, that the money should be repaid, one-half in two, and the residue in three months; the assets of the old firm, the primary fund for the payment of its liabilities, being in the hands and under the control of the co-partner receiving the money. The contract was valid, and an action may be sustained upon it. It is true, if the plaintiff had paid demands against the firm, of which he and the maker of the note were members, he could not have recovered at law against his co-partner, for he must then sue upon an implied promise, and until an account of the copartnership was taken, it could not be ascertained whether the plaintiff had or had not paid more than his proportion. (Colyer, Perkins' ed. § 264; 19 Wend. 424 .) But the plaintiff, although liable to the creditors of the firm, was under no legal or moral obligation to advance money to his former partner. He owed him nothing. He had therefore a right to prescribe the conditions upon which he would part with the money, and to exact and enforce the securities given as the means of obtaining it. The authorities are full to this point. If one partner gives the other his promissory note, or separate acceptance for value received, on the partnership account, an action will lie on such note or bill. (Colyer, supra, § 269 ; 1 Anstr. 50.) In Van Ness v. Forest, ( 8 Cranch, 30 ,) it was held that a promissory note, given by one partner to another for the use of the copartnership, will maintain an action in the name of the promisee against the maker, notwithstanding the connec
p. 493tion, and
that the money when recovered would belong to the co-partnership.
Here, however, the money placed in the hands of T. D. Dole was the money of the plaintiff, and when collected would belong to him. It is said that the old firm were indebted eighteen [493] hundred or two thousand dollars, more than their estimated liabilities in February, 1849. But when this was ascertained is not stated ; nor does it appear that it was communicated to, or known by the plaintiff, prior to the making and delivery of the notes.
It is not the business of this court to draw conclusions of fact from evidence. The report is in the nature of a special verdict. ( 24 Wend. 19 .) I do not perceive that if the plaintiff was fully apprized of the condition of the former copartnership, that it could have any influence upon our decision. But it is enough that no such fact is found, and we cannot assume its existence. I think that the judgment of the supreme court should be affirmed.
Judgment affirmed.