17 Vt. 641 | Vt. | 1845
Lead Opinion
The opinion of the court was delivered by
The first question presented is, can the amount of the account in the name of Fuller & Shaw be recovered in this suit ? or had the plaintiffs a right to charge it over, and make it a part of their account 1 This will depend upon the contract of the parties. Without an agreement to that effect, it could not be done; and, by the agreement of the defendant, it might as well be charged as any thing else. The right to recover for every item of charge on book depends upon a contract in relation to the article, express, or implied. That the contract is special has been holden as no objection. That there is a particular agreement, as to the time and mode of payment, has been considered as forming no obstacle in the way of a charge on book; and in the recent case of Spear v. Peck, it was held, that an account stated might be charged on book, although the account, out of which the balance was ascertained, was beyond the jurisdiction of the court, to which the action was brought.
The other question depends upon the effect, that is to be given to the contract between Shaw and the defendant, in relation to receiving lumber for what there was due to Fuller & Shaw, and for such goods as he should afterwards take out of the store. It is a general principle of law, that one partner cannot divert the partnership property to his own use. It is also a principle of law, that each partner is the general agent of the firm, in relation to all business within the scope of the partnership. All these general principles are, to some extent, modified by the custom and business habits of the' community. It is usual for merchants to receive in payment all sorts of barter and articles of traffic. The case does not show that the defendant could be supposed to be influenced by any improper motive, at the time he made the contract with Shaw. The case of Strong v. Fish was for an existing indebtedness. In this case the defendant actually parted with his property, under a contract made with one of the partners. That Shaw was to use it for his own benefit could make no difference. He might do so, if the amount of the debt were paid to him in money. The principle is settled by the case of Strong v. Fish and settled to a point beyond what is contended for in this case.
Judgment affirmed.
Dissenting Opinion
dissenting. I cannot come to the conclusion, to which my brethren have arrived in this case. The plaintiffs, in my opinion, are entitled to judgment for. the whole of their account. It is very desirable, that, in all mercantile transactions, in all transactions which respect partners, and bills of exchange, the decisions in the several States should be uniform, and should be in unison with the decisions in Great Britain. The different parties to be affected by them frequently reside in different States and governments, and hence the law in relation to these subjects should
The power of one partner to bind the firm by any contract of his is restricted to transactions in relation to the business of the firm, and for the benefit of the firm; so far as this, each partner may be considered as the accredited agent of all, and any contracts he may make in the partnership business will be binding on all. The partner may exceed his authority in this particular, and yet bind his co-partner, if the business, about which he contracts, is apparently the business of the firm, and the contrary is not known to the person with whom he contracts. If the person, with whom he transacts business, is ignorant of his want of authority, and is guilty of no fraud, the firm may be bound, upon the same principle that others are sometimes bound by the acts of agents, apparently within the scope of their authority.
But when the transaction has no apparent relation to the partne'rship business, but is evidently for the private benefit of the partners and not for the benefit of the company, I apprehend the partners are not bound, unless they have assented to the transaction; and the burden of showing this is upon the person contracting with the individual partner. This principle was laid down by Eyre, Ch. J., in Ex parte Agace, 2 Cox 312. “When, from the nature of the business, it is apparent that it is for the separate account and bene-efit of the individual, it is incumbent on the person dealing to show a previous authority, or subsequent approbation.” This was laid down By, Lord Eldon, in Ex parte Bonbonus, 8 Ves. 540. If a partner attempt to bind a firm in any contract connected with his private business alone, or if he engages in a contract connected with the business, but from which he solely derives the benefit, the firm are not liable, unless from their knowledge and assent to the
Applying these principles to the facts in this case, I think judgment should be for the plaintiffs. The account in favor of Fuller & Shaw was properly charged to the defendant, as he assented thereto, after the firm of Eaton & Shaw was formed. Before any agreement was made by Shaw and the defendant, there was due the sum of $21.24, which was payable in cash. The goods, which the > defendant received from time to time, were charged, in the usual course of business, to the defendant, and stood on the books of the plaintiffs as a debt due from the defendant, and, after allowing the items which were credited by the plaintiffs upon their books, there remained an apparent balance due to the plaintiffs of $44.34. This, by the report of the auditor and the judgment of the county court, was absorbed and paid by the account of the defendant for materials found and services rendered for the benefit of Shaw, the other partner, not in any way connected with, or for the business or benefit of, the partners, but solely and exclusively for the private business and benefit of Shaw, in building a house for himself. The agreement,' made between the defendant and Shaw, was a private agreement between them, of which neither Fuller nor Eaton had any knowledge, and of which they could not be presumed to have any knowledge, as the defendant was, from time to time, made debtor on the partnership books for every thing he received. To give effect to this agreement is a fraud on Fuller and on Eaton.
Of the case of Strong v. Fish, 13 Vt. 277,1 can only say, that I had entertained a different opinion in that case in the county court, and the judgment of the county court was reversed. The general principles laid down by the court I readily accede to. The authority of Fay v. Green, 1 Aik. 71, was relied on in that case. This point was not made by the counsel, and was passed over by them sub silentio. But in both cases stress was laid upon the fact, that there was no fraud, or bad faith. There is a material distinction, in the authority of partners, between two attorneys in partnership and partners in a mercantile transaction. One attorney has no authority to bind his partner by a promissory note; Hedley v. Bainbridge, 3 Ad. & El., N. S., 316. One may be the prominent man in all business in court, and the other principally confined to office business. A contract, made with the prominent and known partner, in relation to the management of a cause, and the compensation therefor, might not be a fraud on the other partner, when it would be in a mercantile partnership. I should therefore confine the authority of the case of Strong v. Fish to cases similar to that case, and not extend it to a mercantile transaction.
In the present case, I consider the agreement between Shaw and the defendant as not binding on the plaintiffs, as, in a legal sense, a fraud on them, as made without authority and against their consent, and that the defendant must, from the nature of the transaction, have known this want of authority. I should hold him liable for the whole amount of his account, and render judgment on the report for the plaintiffs.
