Nelson J. Gates et al., Rec’rs, Resp’ts, v. William Vincent, App’lt.Filed December 22, 1890.)Headnote
Partnership—Agreement to set off individual debt of partner. .An agreement by one partner to discharge an indebtedness due his firm by setting off his individual liability against it is not binding on the firm unless made with the consent of the other partners. The mere fact that such partner gave the book-keeper a memorandum of the transaction, which was entered on the books without the knowledge of the other partners, is not sufficient to show that they consented.
Appeal from judgment in favor of plaintiffs, entered on verdict directed by the court, and from order denying motion for a. new trial.
This action is brought by receivers of an insolvent copartnership, M. J. Gaffney & Oo., to recover an alleged indebtedness due such copartnership from the-defendant.
On January 18, 1889, Michael J. Gaffney & Co. owned and held the demand set forth in the complaint.
On that day, and before the plaintiffs were appointed receivers, Gaffney, the senior partner (who owned two-thirds of the partnership business, assets and property, and was its financial manager), without the assent or knowledge of his copartners, used or canceled said demand by applying it in payment of an individual debt due from himself to the defendant, and thereupon gave in the firm’s name receipt for such payment.
Both of the other partners testified that they had no knowledge whatsoever of the transaction, and that they never assented or approved of it. Mr. Gaffney does not pretend that he had any authority to make the settlement in advance, or that he communicated what he had done to either of his partners. The only evidence in the case is, that he left a memorandum of the transaction with the book-keeper .and that some sort of an entry was made in the books.
Putney & Bishop, for resp’ts; G. L. Lyon, for app’lt.
This action was brought to recover $139.50 for coal admitted to have been sold to defendant by the firm of M. J. Gaffney & Go., composed of Gaffney, Patterson and Hobby. Defendant pleaded payment and to establish the same proved that Gaffney, one of the partners, owed him the same amount and that he and Gaffney agreed that the one claim should pay the other.
An agreement made by one partner to discharge an indebtedness due his firm by setting off his individual liability against it is not binding upon the firm unless made with the consent of the other partners. Bates on Partnership, §§ 347, 410,1046; Evernghim v. Ensworth, 7 Wend., 326 ; Geery v. Cockroft, 33 Supr. Ct., 146. • We have carefully examined the testimony in this case and are satisfied it would not sustain or justify a verdict that the other-partners of M. J. Gaffney & Oo. consented to or had knowledge of the alleged arrangement between Gaffney and this defendant.