Whitlock v. McKechnie — 14 N.Y. Super. Ct. 427

Majority

p. 427

Thomas Whitlock, Philip L. Freneau and William L. Anderson v. John McKechnie.

Headnote

The consideration of the three notes, on which this suit was brought, was a purchase of goods made by the defendant from the firm of Whitlock, Ereneau, Anderson & Co., the payees in the notes, and the sole defence was that when the goods were purchased, one Vose was a partner in the firm, and ought, therefore, to have been made a plaintiff in the action. It appeared, however, that the notes in suit were a renewal of those first given for the goods, and that before this renewal Vose had ceased to be a partner.

Held, that as the complaint averred that, the plaintiffs are the payees in the notes mentioned, and that they are the lawful holders and owners thereof) and these allegations are not denied in the answer; the fact that Vose was a partner when the goods were purchased was wholly immaterial, and that upon this ground alone the plaintiffs were entitled to judgment.

Held further, that it was competent to the plaintiffs to show that before the notes in suit were given, Vose had retired from the firm, and had assigned to the plaintiffs all his interest in the debt which the notes represented, since the necessary effect of the evidence was to prove that the plaintiffs, as the sole owners of the debt, were the sole owners of the notes, thus effectually disproving the allegation that Vose (who, it was thus shown, never had any interest in the notes) was a necessary party to the action.

The objection that this evidence ought not to have been received, as it tended to show that the plaintiffs were suing, in part, as the assignees of Vose, although no such assignment was stated in the complaint, was certainly groundless. The evidence, on the contrary, proved that as the notes, when delivered, belonged wholly to the plaintiffs, no assignment from Vose was necessary or could have been made; although, under-the statute, when the words, “& Co. ” are added to the name of a mercantile firm, they raise a presumption that there is a partner not named, yet this presumption may be overcome by positive proof) and in the opinion of the Court was so overcome, on the trial of this action. It was proved, that although

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the notes were given to the firm of Whitlock, Breneau, Anderson & Co., yet the plaintiffs were in fact the sole payees.

Judgment for plaintiffs upon the verdict.

(Before Bosworth & Woodruff, J.J.)

Heard, June 3;

decided, June 27, 1857.

Oh the trial of this action, a verdict was ordered for the plaintiff, subject to the opinion of the Court, at General Term. It was tried before Chief Justice Oaklet and a jury, in March, 1857.

The action is brought upon three several promissory notes made by the defendant, payable to the order of Whitlock, Freneau, Anderson, & Co., and dated May 13th, 1856.

The complaint avers, that the plaintiffs are the payees in the said notes mentioned, and are now the lawful holders and owners of the same.

The only defence set up in the answer is, that the notes were given for goods purchased by the defendant, from the firm of Whitlock, Freneau, Anderson, & Co., which firm consisted of the plaintiffs in this action, with one Charles L. Yose, who, at and prior to the time aforesaid, was an active general co-partner with the plaintiffs, doing business under the name and style aforesaid, and the defendant thereupon insists that there is a defect of parties, plaintiffs.

Upon the trial the plaintiffs produced and read the notes in evidence and rested.

The defendant then proved that he purchased goods from the firm of Whitlock, Freneau, Anderson, & Co., in the year 1855; that Yose was then a partner with the plaintiffs in "that firm that he gave notes for such merchandise; that Yose ceased to be a partner on the 31st of December, 1855 (or 1st of January, 1856); that he then went out of the firm, assigned all his interest in the partnership effects to the plaintiffs, and had no interest there afterwards; that the notes now in suit were given in renewal of the said original notes; that they were made payable to Whit-lock, Freneau, Anderson, & Co., to designate the plaintiffs, who, at the date thereof, were the only persons then interested in the previous notes, and then also the persons composing the firm.

The defendant objected to any proof that Yose had, previously to the making of these notes, assigned his interest to

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the plaintiffs, because there was no such allegation in the complaint.

The defendant still insisting that Yose should have been made a party plaintiff, the Chief Justice directed a verdict for the plaintiffs for §329,22 (the amount of the notes with interest), subject to the opinion of the Court. The defendant excepted to the decision. The questions of law, arising at the trial, were directed to be heard at the General Term, in the first instance, and the entry of judgment to be suspended in the mean time.

J. R. Hills, for plaintiffs.

F. C. Cantine, for defendant.

The complaint avers, that the plaintiffs are the payees in the notes mentioned, and that they are the lawful holders and owners of the notes.

These allegations are not denied, and upon this ground alone, we think the plaintiffs were entitled to judgment for the amount of the notes. The fact set up in the answer, that the consideration of the notes was a purchase of goods by the defendant from the plaintiffs and Yose, at that time a partner with the plaintiffs, was wholly immaterial, if in truth the notes themselves were made payable to the plaintiffs, and they were the holders and owners thereof. The answer does not even state that Yose was a partner at the time the notes were given, nor that he has any interest therein.

But if the answer could be deemed to raise any material issue, the proof was uncontradicted and decisive in favor of the plaintiffs. It showed that before the giving of these notes Yose had retired from the firm; that the plaintiffs had become the owners of the claim, and that, in fact, these notes were given and made payable to the plaintiffs by their then firm name. The circumstance that Yose was once interested in the claim was wholly immaterial; his interest had ceased; the debt was due to the plaintiffs, and the defendant’s promise was to them.

The exception taken to the admission of evidence that Yose assigned his interest in the effects of the previous copartnership is groundless. That evidence was strictly responsive to the case

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sought to be made by the defendant’s answer, and Ms proof that Vose was once a member of the firm. It was not offered for the purpose of showing, and it did not show that Vose assigned the notes in srnt to the plaintiffs; but it showed that he never had any interest in these notes, and that the consideration and the legal title was in the plaintiffs, at the very giving of the notes. Thus it disproved the claim that Vose should have been made a party plaintiff; and although the defendant’s evidence had- done that pretty effectually already, the plaintiffs had a right to add farther evidence to the same pomt if they thought proper.

The defendant’s counsel on his pomts submitted to us, refers to § 3, of the act concerning limited partnersMps, (1 Rev. Stat. 765,) and insists that the use of the word, “and company,” by the plamtiffs, is primé facie evidence, that the firm was composed of more persons than those whose names appear in the firm name. Although the statute relating to limited partnerships, does not appear to have any bearing upon the subject, since here is no pretence that there was any limited partnersMp, we, nevertheless, tMnk that the defendant is right in saying that the use of the term referred .to is, as against the plaintiffs, primé fade evidence, that there is a partner not named. Our general statute requiring that where the designation, “ and company,” or “ & Co.” is used, it shall represent an actual partner or partners, creates such a presumption. But it can be overcome by positive proof, and was most effectually overcome on the present trial.

Ko other question in reference to, or wMch might arise under the Statute, was raised on the trial, or on the argument of the appeal. The debt for which the action is brought, was due by the defendant. The form of the indebtedness, originally was to the firm of Whitlock, Anderson, Freneau & Co., of which Vose was a member. He having made a transfer to the plaintiffs, they were the real parties in interest, and could recover in their own names therefor.. It was natural, and we have no doubt, legal, in taking a note for the debt, to continue for the mere purpose of the extension of credit, the same payees in form as had before designated the creditors to whom the debt was due; and there seems no very good reason why the note should not have been so treated. Taking such a note for a previous debt could hardly b.e

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deemed carrying on business under a firm name, which was forbidden. In this mode the debt might be discriminated from the business of the new firm.' The plaintiffs’ counsel, and the witness appear, however, to regard the firm, described as payees, as under the circumstances of the case indicating only the plaintiffs, who, in truth, had the sole interest.

" The right to recover would have been equally clear, had Yose’s original interest been averred, and his transfer stated.

The plaintiffs should have judgment upon the verdict with costs.