37 Cal. 113 | Cal. | 1869
Defendants Ney and Berkowitz were partners in the business of manufacturing and selling women’s cloaks and mantillas, under the name and style of J. L. Ney & Co. The business did not extend to other matters. On the 17th of September, 1866, George W. Ward, for the purpose of raising money for his own use, executed a promissory note for
This action is brought on the said note against Ward, as maker, and Hey and Berkowitz, as indorsers. Ward made no defense at the trial, and Hey, although present as a witness for plaintiff, was not served, and did not appear in the action. Plaintiff had a verdict and judgment against Ward and Berkowitz, and his motion for new trial having been denied, Berkowitz appeals from the order denying the motion, and from the judgment.
The act of indorsing the note for the accommodation of Ward, was, clearly, neither within the scope of the ordinary business of the partnership, nor in accordance with any habit of dealing of the partnership, known or unknown; for this is the only transaction of the kind had in the name of the firm. Ho authority in Hey, therefore, can be inferred or implied on either of these grounds, to make an accommodation indorsement in the firm name, and either an express authority or consent on the part of Berkowitz, at the time, or a subsequent ratification of the act of Hey by him, must be shown in order to charge Berkowitz in favor of a party having notice that the indorsement was made in the character of surety for Ward. When one of two partners subscribes the copartnership name to a note as surety for a third person, without the authority or consent of the other partner, the latter is not bound, as to any party taking the security with notice; and the burden of proving the authority or consent of the other partner lies on the creditor or holder
Under the law as thus stated, and as the same was substantially given to the jury in the charge of the Court, the jury must have found, either that Mey had authority to indorse in the firm name as surety for Ward, or that Berkowitz subsequently ratified the act, or that plaintiff took the note without notice that the indorsement was for the accommodation of Ward, otherwise the verdict must have been for the appellant. Berkowitz specifies as grounds for a new trial that the evidence is insufficient to justify the jury in finding in favor of plaintiff on either of these points, and we are of opinion that his position is sustained by the evidence as it appears in the record.
It is very clear, as we have before stated, that there was nothing in the nature of the business, or in the known habits of dealing of the firm, from which Ney’s authority could be inferred, and it was necessary for the plaintiff to show affirmatively, express authority, or the assent of Berkowitz to the act, or a ratification of the act after it was done. No express authority or assent before, or at the time of the act is even attempted to be shown. On the contrary, it appears that by their contract in writing Ney was not permitted to sign notes at all in the name of the firm. Berkowitz was not present at the time of the indorsement, and it is not pretended that he knew anything about it till after it was done. The only testimony that can be claimed to have a shadow of tendency to show that Berkowitz ratified the indorsement, is that of , Ney himself. He says that, after the indorsement—“I really do not recollect” when, the same day or the next, he informed Berkowitz of it, saying, at the time that he, Ney, “ thought Ward was good, and might do us a similar favor in future. He [Berkowitz] did not say anything particular
It only remains to inquii'e whether, on the evidence, the jury were justified in finding that plaintiff had no notice of
“If, therefore, it appears upon the face of the paper that the partnership name is signed as surety for some other person, the party who takes the note from such person has actual notice of the fact that it is not signed in the ordinary course of*120 partnership business. He must, therefore, at his peril, make the necessary inquiries and ascertain that there is some special authority for one partner to sign the partnership name as such surety, either express or implied. So, if the drawer of a note carries it to the bank to get it discounted on his own account, or transfers it to a third person, with the name of the firm indorsed thereon, the transaction, on its face, shows that it is a mere accommodation indorsement, or the note would not be in the hands of the drawer; and the bank or person who receives it from the drawer being thus chargeable with notice that the firm are mere sureties of the draioer, and that it has not passed through their hands in the ordinary course of the partnership business, the members of the firm, zoho have been made sureties without their consent, are not liable to such holder of the note.”
So, in Bank of Rochester v. Bowen et al., 7 Wend. 159, a case very similar to this as to the state of the testimony bearing on the point now under consideration, the Court, by Mr. Justice Helson, say: “The cashier of the bank, who must be considered the agent of the plaintiff, states expressly that the loan was negotiated by Bowen, one of the defendants [one of the makers]; that he procured the note, and that the money was placed to his credit in the bank, which was after-wards drawn out by him upon his own checks; that he considered the note Bowen’s at the time of the negotiation of the loan. This testimony, unexplained and uncontradicted, was undoubtedly sufficient to repel the prima facie inference that the firm of ‘Aldrich Searle ’ were principals to the note, and imposed upon the plaintiffs the burden of proving affirmatively either that Aldrich & Searle are interested in the loan, or that Searle consented to become security for the same.” The same principle is recognized in Austin v. Vandermark, 4 Hill, 262; Gansevoort v. Williams, 14 Wend. 133; N. Y. F. Ins. Co. v. Bennett, 5 Conn. 580.
How, in this case, the plaintiff, according to his own uncontradicted testimony, knew, or at least supposed, he was discounting the note for the maker, Ward, and not for the payees and indorsers, and, in the language of Mr. Chancellor
The evidence, as presented in the record, clearly does not justify the jury in finding that plaintiff took the note without notice of the character in which the indorsement was made. He took the note under such circumstances that he was bound, under the law, to inquire into the character of the indorsement, and as to the authority of Hey in the premises, or take it at his peril.
Judgment and order reversed and a new trial granted, and remittitur directed to issue forthwith.
Mr. Justice Crockett, having been of counsel, did not sit in the case.