Sinclair v. Hollister

By the admission in his answer it was established that the appellant, Hollister, was a partner in the firm of William J. Merritt & Co., in the year 1877, when they gave, according to the plaintiffs’ evidence, the order for the work which formed the consideration of the notes sued upon. Payment of the notes is resisted on the ground that, although in the firm name, they were made by Merritt, one of the partners, after dissolution of the firm, and without authority of the appellant. It was not shown that the plaintiffs had notice of the dissolution at the time they received the notes. As dealers with the copartnership, they were entitled to notice, and, in the absence of it, the extension of a new credit to the firm by accepting notes for the firm debt entitled them to recover. While the general rule is that one partner cannot bind theother after dissolution, even by the renewal of the partnership note, an exception is made in favor of one having dealings with the firm, and taking the new note without actual notice of the dissolution. The holder of the renewed paper is a dealer with the firm. Bank v. Horton, 1 Hill, 572 . “In case of the dissolution of a copartnership, actual notice of the disolution must be brought home to all persons with whom the firm has had dealings, to protect, as to such persons, one partner from the acts of another in the uses of the copartnership name after the dissolution. Where a note was made by the firm in the copartnership name, which was discounted by a bank for the accommodation of the payee, and was repeatedly renewed, it was held that the firm must be considered as having had dealings with the bank, within the meaning of the rule reqniring actual notice of the dissolution.” Vernon v. Manhattan Co., 22 Wend. 188 . It was held in Morrison v. Perry, 11 Hun, 33 , that a note given after the dissolution of th% firm by one partner, without the authority of

The exceptions to rulings upon evidence remain to be considered. The defendant offered in evidence the agreement of dissolution, but, as it was ineffectual to discharge him unless actual notice of it to the plaintiffs .was shown, and as defendant did nqt offer to show notice the agreement was properly rejected. The defendant attempted to show that some of the work by plaintiffs was ordered after the dissolution of the firm, but, as the copartners would have been liable therefor unless plaintiffs had notice of dissolution, this evidence was properly rejected. It is now urged that the evidence should have been admitted, as it was intended to elicit proof that the materials which plaintiffs had testified were ordered before dissolution, were not, in fact, ordered or furnished until afterwards. The form of the question put to the witness gave no indication of the intention to bring out such evidence. Its plain scope was to show that some of the goods, not all, were ordered after the dissolution. It was as follows: “Q. How, turn to plaintiffs’ Exhibit D, which has been- offered in evidence in this case, being a bill dated May 29, 1888, to William J. Merritt &

Exception was taken to the exclusion of a certain judgment-roll in this action in favor of the plaintiffs against two of the defendants, Merritt and Tilton only, for the amount sued on. It is claimed that this judgment was a bar to the action. The record was objected to on the ground that the judgment had not been pleaded as a defense; that application for leave to plead it had been denied, and the order therein affirmed, by the general .term of the city court and by this court on appeal; and, further, that the judgment had been vacated. The judgment in question was entered after the first trial of the case, upon the direction of the trial court of a verdict in favor of plaintiffs against the defendant Merritt, who signed the firm name to the notes, and the defendant Tilton, who did not defend the action, while the cause was dismissed as to the appellant, Hollister. The judgment of dismissal in favor of Hollister was reversed by the city court, and the judgment against the other two defendants was vacated. The appellant’s contention is that the entry of that judgment against two of the partners was fatal to a recovery against the other. The effect of the judgment in question, and of the order vacating it, and of the order denying the motion of appellant, Hollister, to set up as a defense to this action, was fully considered by this court on the appeal from the latter order. Sinclair v. Hollister, 41 St. Rep. 349 . We held that the entry of judgment against two only of the joint contractors was a mere irregularity, the correction of which, by the court below, was not the subject of review by us; and we held that defendant’s motion for leave to set it up as a defense by supplemental answer was denied in the exercise of a discretion in the city court, which also was not the subject of review. The judgment was not permitted to be pleaded as a defense, and, not being pleaded, was not admissible as a bar or estoppel (Krekeler v. Ritter, 62 N. Y. 372 ), and was properly rejected. The evidence in the case was ample to sustain the plaintiffs’ claim that the work was all ordered at one time, and while appellant was a member of the firm, according to his own admission. The copartnership thus' admitted continued, as to all persons dealing with the firm on the faith of the copartnership, until notice of dissolution was shown; and so the complaint in its full scope was proved when the case was closed. The defendant expressly waived the right to go to the jury upon any question of

Judgment and order affirmed, with costs.

All concur.