Waller v. Keyes

When a partnership is limited by the articles to a particular business, if one of tho partners executes a note in the name of the firm, for the purchase of property for other purposes than those for which the partnership was first formed, it is incumbent on the person sueing on such note to prove affirmatively that the other partners consented to the enlargement of their business, or to the purchase. It is not competent for the other membeis to show that they disclaimed the purchase to the person making tho same, or to any one except to the person who made the sale. The previous assent to the purchase may be proved by the subsequent conduct of the partners.

This was an action on a note against Elias Keyes & Co. Service was made on Elias Keyes only. Plea, non-assumpsit. The plaintiff, after proving the signature of the note herein-after mentioned to be in the hand writing of Ephraim W. Bisbee, offered in evidence, in support of his declaration, a note in writing, in the words and figures following, to wit: “On fhe 8th day of December, 1830, we promise to pay Frederick Cushman, Jr. or bearer two hundred thirty-three and 30-100 dollars, with interest. This note is given in part payment for a village lot in Norfolk, this day deeded to us by said Cushman. Norfolk, Dec. 8, 1826. E. Keyes & Co. To the admission of this note the defendant objected, but the court overruled the objection; to which decision the defendant excepted. The defendant then offered testimony tending to show that said note, with several others of the same date, was given by said Bisbee in the purchase of a certain distillery and lot in Norfolk, New York, in the absence of said Keyes- and without his knowledge; and also to show that said Cushman, before and at the time of making the contract with Bisbee, and taking the notes, well knew that the same was done contrary to the, will of Keyes; and that Cushman, both before and after the sale, stated that he did not expect Keyes to pay for the distillery, that he relied wholly on Bisbee. To this evidence the plaintiff objected, but the court admitted the same. The defendant thereupon introduced depositions, and also a witness, who testified that he had frequent conversation with Cushman in the summer of 1826, before purchase, who asked him what Keyes said about the purchase; that witness told Cushman that Keyes said he would have nothing to do with it. Cushman then said he did not expect Keyes to pay for the distillery, he relied wholly on Bisbee — that Keyes did not come to Norfolk until the January after the sale. Witness also had conversation with Cushman after the sale, who said that he did not expect Keyes to pay, but expected Bisbee would pay for the same. The defendant here closed his testimony. The plaintiff then read in evidence several depositions. The defendant offered testimony tending to prove that the said Elias Keyes, whenever he was at Norfolk, where said business was carried on, and where the furnace and works of said firm were situated, after said purchase of said distillery by said Bisbee as aforesaid, disclaimed participating or any interest therein, and refused to settle for the property therein used; all Which was objected to by the plaintiff. The court decided that this testimony was inadmissible, except where the same wras for the purpose of contradicting a statement made by the plaintiff’s witnesses, and therefore excluded the testimony, except the depositions of Copeland and Strong; to which decision the defendant excepted. The defendant then read in evidence the depositions of Rufus Copeland, George W. Strong and others, and also introduced testimony tending to prove that many hogs were purchased with hollow ware, the property of said company, and put into said distillery by said Bisbee. No evidence was given as to the assent or dissent of the other partners, nor was any question made to the court as to them. The defendant requested the court to charge the jury as follows : . 1. That the written articles of partnership did not authorize Bisbee to make purchase of the distillery and give the copart-nership notes, and by so doing he bound himself only, and not his copartner, Keyes. 2. As this was the debt of Bisbee only, and not the debt of Keyes in its inception, Keyes cannot be bound by any subsequent acknowledgment, unless by some engagement or promise in writing. 3. That any carrying on the distillery, or any mingling of the same with the furnace business, by the partners of Keyes, would not bind him. Nor would his taking the control of property, which was the avails of both concerns, bind him to the payment of these notes. 4. If the jury find that Keyes declined to be interested in the distillery purchase, and Cushman wras so informed at the time, he then sold entirely on the credit of Bisbee; and if so, Keyes cannot be bound but by express engagement in writing, and although the jury should believe that he so afterwards conducted as to give the community to understand he was a partner in the distilling business, yet that would not bind him to this past purchase. 5. Keyes is in no way to be prejudiced by the acts of his partners which he could not control. Any acts or concessions to bind him qaust have been voluntarily and understandingly his own. 6. That the plaintiff has produced no testimony to prove that Mr. Hall, deceased, was ever the owner of this note, and therefore the plaintiff is not entitled to recover. The court charged the jury, that articles of partnership referred to extended only to the manufacturing of iron, and do not extend to the business of distilling, and would not of itself authorize the agent of the company, or one of the partners, without the knowledge or consent of the others, to purchase a distillery and give the notes of tlie company therefor — that in this case the burden of proof was on the plaintiff, who, in order to recover, must prove that, the defendant consented that the business of the company should be extended to distilling, and consented to the purchase made by the agent of the company, or the defendant would not be liable on the note. That this consent might be proved by the conduct of the members of the company after the purchase, as well as by their previous declarations to that effect; and if the defendant, after the purchase, assented to the extending the business of the company to distilling and the purchase of the distillery, the jury might infer his previous assent thereto. If the jury believed from the acts and subsequent conduct of the defendant, that he agreed to the purchase and carrying on the distillery by the agent of the company for their use and benefit, it was adopting the acts of the agent, and binding upon him as a member of the company. The jury were further charged, that on a note payable to bearer, a suit may be brought by any one who possesses the same; and if an administrator brings the note into court as evidence of his claim, he may maintain an action oil such note without any other proof that his intestate was the possessor of the note. That if the defendant took the control of property which was the avails of both the furnace and distillery, it would not of itself bind him to the payment of the note, and would afford but very slight, if any, evidence of his assent. And further, that if the defendant did assent at any time to the purchase of the distillery, to charge him with the payment of the note, such assent must have been given understandingly, and when he was in possession of his reasoning faculties; and that any acts or concessions made by him when he did not understand what he was about, from whatever cause it arose, would be no evidence of his assent to the purchase of the distillery. Exceptions to this charge were taken by the defendant and allowed, and are now certified to this court for their consideration. contended, 1. The written articles of partnership did not authorize Bisbee to make purchase of the distillery and give company notes. So the court charged. 2. If, then, he did not bind Keyes by this purchase,-he bound himself; and the distillery became his, and he alone was bound to pay for it. 3. If Bisbee had bound himself, and himself only, the subsequent acts and sayings of Keyes could not bind him at law to pay these distillery notes, for the payment of which he, Keyes, was not principally liable. For, it is the debt of a third person, and the statute renders void his sayings or doings, unless evidenced by writing. That the commingling of the distillery business with that of the furnace by Bisbee, after the purchase, or by any of Keyes’ partners, would not bind Keyes to pay the notes which were given by Bisbee for the distillery; nor would Keyes’ controlling that mixed property afterwards make him liable to pay them, especially as Keyes disclaimed the purchase at the time, and all the time after and before, or as soon as he knew of the purchase. Wat. 135, 184. If, therefore, our reasoning be correct upon these points, did the charge of the court sustain them ? 1. It is contended that the charge of the court in the second sentence, as the case makes it, is erroneous in this — that the word consent is used in so indefinite a sense, that the jury might have construed it to mean that any assent or corasent would bind him; which, it is believed, is not law. 2. The charge is objectionable in the next sentence, to wit: that this consent might be proved by the conduct of the members of the company after the purchase. It is believed that the conduct of the members of this furnace company, either befóte or after the distillery purchase, could not charge Keyes on these notes, unless there was a primary liability. Neither could their sayings bind him at any rate, and hence the jury might well have been and probably were misled. Again, the court say, if the defendant assented to extending the business of the company to distilling after purchase, the jury might infer his previous assent thereto. This does not follow, because he might have entered into partnership with them in distilling after the purchase, as well as any third person ; and hence it is believed previous assent cannot be either logically or legally inferred. Again, the court charge, that if the jury believe from the acts and subsequent conduct of defendant, that he agreed to the purchase and carrying on of the distillery, he is bound. Here then acts and conduct are made the foundation of Keyes’ liability on these notes. But the hind of acts or conduct is not mentioned or specified by the court in the charge. |3uch acts and conduct, if binding at all in this case, make a mixed question of law and fact, which should have been separated by the judge, and not left to the mere caprice of the jury. But again, we deny that acts or conduct can bind in this case. See Watson, 135. 4 T. Rep. 720. Again, the latter part of the charge conflicts with the forego-* ing part of the charge. It is there said, “ acts and conduct will bind him to the primitive contractbut it is here said, “ acts, or control, (meaning the same thing) furnish but slight, if any, evidence of assent. These two positions virtually contradict each other, and are peculiarly well calculated to mislead the j™7* — A promissory note need not be set forth in the very words in which it was made; it is sufficient to describe it according to its legal effect; and a variance that does not interfere with its legal operation is immaterial. 1 Chitty’s Plead. 297,307. Fergusonvs. Harwood, 7 Cranch’s Rep. 408. 7 John. Rep. 321 — 8 do. 26 — 9 do. 82. 2 Dewey’s Rep. 528 — 3 do 159. Chitty on Bills, 365. 2 Camp, Rep. 306. “ If, in an action on a promissory note, the plaintiff unnecessarily specifies wherein the value received consists, he must prove it as laid.” — Jerome vs. Whitney, 7 John. Rep. 321. If, after the formation of a partnership, a purchase be made by one partner on company account, beyond the limits of their regular business, subsequent assent, whether verbal or written, will bind the other partners. So if they silently acquiesce in such purchase after it comes to their knowledge, it is equivalent to express assent, and such purchase will be regarded as a company purchase in the beginning. 2 B. & A. 673' — Sandilands vs. Marsh & Curd. Gow on Part. 56. The plaintiff may give in evidence the defendant’s declarations that make'against his interest, and such evidence can only be rebutted by evidence to contradict it other than that of the defendant’s oion declarations. Possession is prima facie evidence of negotiable paper, payable to bearer, or endorsed in blank, and he need not account for his possession unless suspicion be raised. — 3 Kent’s Com. 51. The administrator may maintain an action in his capacity of administrator on such note, as the legal representative of the intestate, and invested with the same legal rights.