Anderson v. Levan

The acceptance of a specialty from one partner, or obtaining a judgment against one partner for the debt of the firm, -whether the other be a known or dormant partner, is an- extinguishment of the claim against him. In an action against partners, the declarations of any one of them, respecting the existence of the partnership, may be given in evidence to establish it. If a joint suit against two be referred to arbitrators, and an award made against both, from which one appeals, the judgment remains against him who does not appeal, and the cause is tried as to the other alone.

ERROR to the Common Pleas of Berks county. Abraham Levan against Joseph Frahn and Edward Anderson. This was an action of assumpsit, in which the plaintiff declared against the defendants jointly: for goods sold and delivered: the same with a quantum valebant.- and for money had and received. The cause was referred to arbitrators, who made a report in favour of the plaintiff, and from which Anderson, one of the defendants, appealed: the other did not. The cause being at issue, and the jury sworn as to Anderson alone, the plaintiff offered in evidence the following agreement: Reading, December 3d, 1836. “ Agreement between Edward Anderson and Joseph Frahn, to buy wheat. Mr Frahn will go to Philadelphia and purchase wheat with money furnished by Anderson. Mr Frahn will have it brought from Philadelphia and grind it into flour and sell it to the best advantage; the expenses are to be deducted from the proceeds, and the balance equally divided for profit or loss. It is understood that Mr Frahn is not to charge for grinding over what he may have to pay hire.” The defendant objected- to the evidence, and the court overruled the objection, and sealed a bill of exception. The plaintiff then offered to prove the repeated declarations of Frahn that he and Anderson were partners. This the defendant objected to, but the court overruled the objection, and sealed a bill of exception. The evidence was then given. The plaintiff then gave in evidence the following paper:— May the \2th, 1837. Due to Mr Abraham Levan for wheat to the amount of four hundred and forty-one dollars and eighty-seven and a half cents. Received by me, Joseph Frahn. Plaintiff here closed his evidence. The defendant then gave in evidence note under seal, produced by plaintiff on notice, as follows:— " I promise to pay unto Abraham Levan, or order, the sum of four hundred and forty-one dollars and eighty-seven and a half cents on demand, with interest till paid, for value received. Witness my hand this 4th of July, one thousand eight hundred and thirty-seven. “ Joseph Frahn. [seal].” With the following payments endorsed thereon. “ November the 17th day 1837, received on the within, two hundred dollars.” “ January-the 29th day 1838, received on the within note, one hundred dollars.” It is admitted that the note under seal is for the same money for the wheat claimed in this suit. The defendant then gave in evidence articles of co-partnership between Joseph Frahn and Edward Anderson, dated 1st of January 1838, name of the firm to be Joseph Frahn & Company, to carry on the milling business for the period of five years. Also a written agreement, dated 14th of May 1838, signed by Joseph Frahn and Edward Anderson, that said partnership was dissolved by mutual consent, &c. Defendant closed. After the counsel on both sides had concluded their arguments and address to the jury, and the charge of the court was about to be delivered to the jury, the plaintiff moved to amend his declaration by inserting two new counts, to which defendant objected; the court allowed the amendment, and defendant excepted. Of these two counts the first charged the defendants, as partners, Edward Anderson being a secret partner, with grain sold and delivered. The second charged them, as partners generally, for grain sold and delivered, with a quantum valebat. The court below thus charged the jury: “ That Frahn purchased the wheat from the plaintiff is not denied, nor is the quantity or price controverted, indeed the amount due the plaintiff is not a matter of dispute. Anderson denies that he was a partner at the time the wheat was purchased; that there was a partnership formed between Anderson and Frahn on the 1st of January 1838, is proved by their written agreement. This wheat was purchased and note given before this date; was Anderson a partner at the time of the purchase 1 This you will determine from the evidence. There is proof that about the time this purchase was made, Anderson frequently visited the mill, and examined the books, and gave directions how and what to do. That he at different times received money. Why was this done ? How was it? Had he an interest in the business ? Was he to have a share of the profits ? If he was, he would be a partner and liable for this debt. You will therefore determine whether Anderson was a partner at the time of the purchases; if he was not then a partner, he would be entitled to a verdict, for that would end the case. Was he a dormant partner? A, dormant partner is one who is not seen or known in the business, but who is a participant in the profits. This, as to creditors, makes him liable, inasmuch as he takes from them part of the fund, which is the security for the payment of their demands. In this case it matters not whether Anderson was a generally known, or a dormant partner, provided the business was not transacted in his name, and the plaintiff did not know that he was a partner: that others knew the fact will not affect him; Anderson’s name did not appear in the transaction, nor in the books. To entitle the plaintiff to recover, you must be satisfied that Anderson was a partner at the time of the purchase, and that the plaintiff did not know it, either then, or at the time he took Frahn’s note, under seal, for the amount due. If Anderson was a partner, and that was known to the plaintiff at the time he took the sealed note, this would be a satisfaction of the original indebtedness; the presumption would be, that it was intended to be an extinguishment of the debt; you could not well account for his taking the note on any other principle; it is not pretended that it was taken as a collateral security. There is no proof that the plaintiff did know that Anderson was a partner, either at the time of the sale, or giving the note. The plaintiff did not see Anderson, or transact any business with him. His name was not disclosed as a partner, or even named to the plaintiff. If Anderson was not known as a partner, at the time the note was taken by the plaintiff, you cannot suppose that he intended to release him. This would not be a rational inference: that he should be discharged from his liability under such circumstances would be unjust. If Anderson was a partner at the time of the purchase, and the fact was not then known to the plaintiff, nor known at the time the note was taken, then the plaintiff would be entitled to a verdict ; and unless you are satisfied that such was the fact, the defendant would be entitled to your verdict. You will determine the facts, as to them you will decide for yourselves without being in any way influenced by what I have said as to them.” To this charge defendant excepted. Errors assigned: 1. The action is assumpsit on a joint contract against two defendants, both of whom were summoned and appeared; and a final judgment was taken against one only, Edward Anderson. 2. The court erred in admitting in evidence the agreement between Edward Anderson and Joseph Frahn, dated 3d of December 1836, mentioned in the first bill of exceptions. 3. The court erred in admitting in evidence the testimony mentioned in the second bill of exceptions. 4. The court erred in allowing the declaration to be amended by filing the two additional counts. 5. The court erred in leaving it to the jury to say whether Anderson was a partner, and if he was, in saying that he was liable to pay this debt. 6. The court erred in charging the jury that it mattered not whether Anderson was a known partner, or dormant partner, provided his name did not appear in the transaction, and the plaintiff did not know that he was a partner, although others did know it. 7. The court erred in charging the jury that if Anderson was a partner at the time of the purchase, and the fact was not then known to the plaintiff, nor known at the time the note was taken, then the plaintiff would be entitled to recover.