Thorn v. Smith — 21 Wend. 365

Majority

p. 365

Thorn vs. Smith & Wright.

Headnote

A declaration by a partner, though made during the existence of a partnership, that a liability incurred by a third person, at his request, in the borrowing of a sum of money, was for the benefit of the firm, is not binding upon his co-partner.

Had a note been given in the partnership name, the rule would have been different; then the onus would have lain upon the co-partner to show that the note was given for the individual debt of the partner who gave it.

This was an action of assumpsit for money paid. The declaration contained the money counts only; Wright alone was brought into court. On the trial it was proved, that in September, 1835, the defendants were partners in the saddling business; which partnership has since been dissolved. Previous to the dissolution, Smith, one of the defendants, told a witness that he wanted to borrow ei(J0 for the partnership, and that he applied to the plaintiff to aid him in procuring the money; that the plaintiff told him to draw his note for $200 that he would endorse it, and take one half of the sum for his own use. That a note was accordingly drawn and endorsed, which he (Smith) procured to be discounted, and that he paid one half the sum received to the plaintiff. When the note fell due, the plaintiff took it up. This witness further testified that the business was done in Smith’s name and that Wright was not gene

p. 366

rally known in the concern. The note was proved 'to be lost, but it was shown to have been a note signed by Smith, payable to the order of the plaintiff ninety days after. date, ’ and to have born date 3d or 5th September, 1835. The plaintiff claimed to recover one half its amount, with" the interest thereof. The counsel for the defendant Wright insisted that the plaintiff was not entitled to recover; that the evidence did not sustain the declaration ; that the plaintiff should have averred the partnership, or that the note was made in' the partnership name. ; and that the declaration of Smith, ■ made subsequent to the creation of the debt, was not sufficient to charge Wright. The circuit judge overruled these objections, and the jury, under his direction, found .a verdict for the plaintiff.. The defendant asks for a new trial. .

M. T. Reynolds, for the defendant.

J. Holmes, for the plaintiff.

By the Court,

It was not competent for Smith by his declaration, even during the. existence of the partnership, to change what on the face of the transaction appeared to be an individual debt, into a debt against the firm. The plaintiff did not suppose that he was dealing with the firm when' he loaned his credit ■ but the contrary. The utmost length the cases have gone is to subject the firm, where the money has been borrowed by pne of the partners expressly "for the benefit of the partnership. 16 Wendell, 505. To sanction the principle contended for would enable ' a partner at any time to turn all his individual liabilities upon the partnership.

Had the note beén given in the partnership name, a different rule might ptevail.- Then the onus would lie upon Wright to show that it was given for Smith’s individual, debt. No such fact is shown. What the name of the firm is, no where appears. If Smith’s name alone constituted it, that fact should have 'been proved ; and even then, I apprehend, it would, have, been necessary further to - have

p. 367

shown that the note, when given, was avowedly given for the firm, and in that capacity—the signature alone not necessarily indicating such facts.

New trial granted.