Knapp v. McBride

| Ala. | Jun 15, 1844

COLLIER, C. J.

— -We have considered this case very attentively and are satisfied, that several of the points made at the argument are not presented by the record. The questions assigned for error, arise upon the bill of exceptions, and are 1st. Was the power of attorney and the note on which the action is founded properly received in evidence? 2d. Is the charge of the Judge to the jury erroneous, as stated in the bill of exceptions'.? -

1. Where a defendant by plea, regularly pleaded, denies that he made a promissory note the foundation of an action, it is incumbent on the plaintiff before he can read the note to the jury, to show prima facie that it was made by the defendant, or that he authorized it, or adopted it as his own. When the plaintiff does this, he throws upon the defendant the burthen of making good his defence.^* In the preliminary inquiry before the Court, it would be irregular to extend the examination so far as to show that in point of law, there is no obligation upon the defendant, if the plaintiff has first proved that in fact the note was made by him or one having authority from him; after the paper has been read to the jury, upon proof making out a prima facie case for the plaintiff, then the defendant’s proof is'to be heard — the plea addresses itself to the jury, and it would not of course be permissible to contest the facts before the Court. In the case before us it was proved that the deceased partner, made a power of attorney subscribed in the name and style of the firm, with the usual attestation and seal, and deposited it in the Branch of the Bank of the State of Ala-' bama at Mobile, by which H. Dunning was authorized to .draw or indorse promissory notes, &c. for and in the name of Dunning & Knapp.

It was then shown that the attorney named in the-power made the note in question. In Lucas v. The Bank of Darien, [2 Stewart, R. 320.] it was decided that “The right of one partner to appoint an agent to conduct the business of the concern results unquestionably from the genuine authority of partners,” and that the use of a seal by one partner in giving an authority to make promissory notes in the name of the firm, did not invalidate a note made by the agent — that the seal affixed to the power, did not in any degree enhance the dignity of the note as a security for money, but should be treated as an unessential part of the power. Taking the letter of attorney to have been unexceptionable in point of lato, and the note to have been made by the attorney it designates, we can conceive of no objection to the admission of the note and power in evidence to the jury.

2. It was not essential to the validity of the note, that it should have been negotiated at the Branch Bank in order to have made it binding on the plaintiff. The power does not restrict the attorney to the making of notes to be sold or discounted there. It invests Henry Dunning “with full power and authority for us (Dunning & Knapp) and in our names to draw or indorse promissory notes, to accept, draw, or indorse bills of exchange, and to sign any check or checks, order or orders, for any money or effects which we now have, or hereafter may have, deposited in the Branch of the Bank of the State of Alabama at Mobile,” &c. Here is a clear authority to make or indorse notes or bills on account of the firm, without any direction as to form and amount, or place where, and to whom payable. The limitation extends only to cheeks or orders — these must be addressed to the Branch Bank. So that if Dunning & Knapp had money or other valuables deposited in any other Bank, or elsewhere, they could not have been withdrawn by their attorney.

It may be laid down generally, that one partner has the tight to bind the firm by contracts relating to the partnership. [Collyer on Part. 212.] And if one partner give a promissory note in the name of th® firm, it would according to the law merchant be binding on the firm jointly in the hands of any bona fide holder. [Collyer on Part. 219,] So in Church vs. Sparrow, [5 Wend. R. 223] it was decided that where a general partnership exists, and money is borrowed by one of the firm in the name of the concern, all parties are liable, although the money obtained be appropriated by the partner borrowing it to his own use. And notwithstanding our statute of 1812, in regard to the assignability of bonds, &c., it is clear, that if there is no fraud in the concoction of a promissory note, on the part of the party in whose favor it is made, (or his agent,) it would be a valid security against the partnership. [Collyer on Part. 240, et. post.; Aik. Dig. §6, page 328.]

If one partner give a security in the name of the firm for a debt, known to the person taking the security to be his individual debt, if done without the consent of his copartners it is not binding upon them. [Livingston vs. Hastie, 2 Caine’s R. 246 ; Livingston vs. Roosevelt, 4 Johns. R. 262 ; n. Lansing vs. Gaird, 2 Johns. R. 300; Hagas, et. al. vs. Mounts, 3 Blackf. R. 57; Taylor, et. al. vs. Hillyer, 3 Blackf. R. 433.] Nor can one partner bind his copartner without his assent by subscribing or indorsing a promissory note with the partnership name as security for the debt of a third person with the knowledge of the creditor. [Rolston vs. Click, et. al. 1 Stewart R. 526 ; Laverty v. Burr, 1 Wend. R. 529.]

And where a note made by one partner in the name of the firm is put in suit, it is not incumbent on the plaintiff in the first instance to show that the note was given for a partnership transaction. It will be intended to have been made in the course of partnership dealings ; and if it was given for the individual debt of the partner making it, with the knowledge of the party to whom it was given, these facts must be shown in the defence by the party taking advantage of them. [Doty vs. Bates, 11 Johns. R. 544; Vallett vs. Parker, 6 Wend, R. 615.]

The principles we have stated in regard to the power of individual partners are either essential to the credit of the firm or to commercial prosperity, or else result from the settled rule, that whenever one of two innocent persons must suffer by the acts of a third, he who has enabled such third person to occasion the loss, must himself sustain it. [Collyer on Part. 241; 2 T. R. 70; 6 Wend. R. 620.J

From the record it appears, “that the said note was executed in order to raise money to take up a note which had been executed in the name of Dunning & Knapp to certain vendors of certain real estate, and which said real estate had been purchased by Edward Dunning and one William D. Primrose for their own account.” William D, Primrose is made the payee of the note, and if he be the same who was concerned with Edward Dunning in the purchase of real estate he must have been aware that the consideration of the note did not go to the account and benefit of the plaintiff. Yet conceding all this, and the plaintiff in error cannot insist upon a fraud on his rights as against the defendants. The note is “negotiable and payable at the Branch of the Bank of the State of Alabama at Mobile,” and to some extent is governed by the rules of the law merchant. [Aik. Dig. § 11, page 329.] Apart however from this consideration, the note is prima facie binding on its apparent makers, and by being expressly made negotiable and payable at the Branch Bank, the right of set off or other kindred defence must be taken to have been waived, not only as against the Bank, but against any one who might advance on the note without a knowledge of the unfairness of its origin. [Mandeville vs. Union Bank of Georgetown; 9 Cranch’s R. 11, &c.]

To defeat a recovery on the ground that the proceeds of the note were applied to the benefit of Edward Dunning alone, and not to Dunning & Knapp, the plaintiff should have traced a knowledge of that fact to the defendants. So far from this having been done, the record does not discover even an effort to fix upon the defendants any participation in the fraud prac-tised upon the plaintiff.

There can be no dorrbtbut that the death of either party, however numerous the association, operates a dissolution of the partnership, unless such an event is provided for by an express stipulation to the contrary. [3 Kent's Com. 39; Collyer on Part., 60, 62, 113; Gow. on Part. 240; Cranshaw vs. Collins, 15 Ves. R. 228; Gillespie vs. Hamilton, 3 Madd. 251.] So the death of a party in general revokes all authorities given by him, whether expressed or implied. Yet in Usher & another vs. Dauncey & another, (4 Camp. R. 97,) it appeared that a member of a partnership, consisting of several individuals, drew a bill of exchange in blank in the partnership name, and delivered it to a clerk to be filled up for the use of the partnership as the exigencies of business might require, according to a course of dealing in other instances, and after the death of the partner who drew and indorsed the bill, and the surviving partners had assumed a new firm, the clerk filled up the bill, inserting a date prior to his death, and sent it into circulation ; it was held that the surviving partners were liable as drawers of the bill to a bona fide holder for value, although no part of the value came to their hands.

Lord Ellenborough said that the case came within the principle of Russell vs. Langstaff, (Doug. R. 513,) that the power must be considered to emanate from the partnership — not from the individual partner, and that therefore after his death, the bill might still be filled up so as to bind the survivors.

The case at bar strikingly resembles that cited from 4th Campbell — in that case the note had no legal existence until it was negotiated after the death of the partner. Its delivery to the clerk with power to negotiate it, did not convey an authority higher or more conclusive than did the power in the present case. In the former case, so in this, the partner giving the power had died before it was executed; in both, the notes were antedated, and a collection sought of the surviving partners who had had no direct agency in the transaction, and derived no benefit from it. The instructions to the jury state the law as follows : “ That although the said' promissory note had not been sold to the said Branch Bank, and had not been discounted by, or at any time belonged to the Bank, yet the said power was sufficient evidence. of authority in H. Dunning to make the said note unless it had been revoked, (a fact for the jury to ascertain from the evidence before them,) before the' said note was executed.” The Judge did not refer to the jury the question of lato, whether upon the facts the authority was revoked — they were merely to inquire if the evidence establish the fact of a revocation.

The bill of exceptions does not inform us what were the instructions on this point, and we might, therefore, in obedience to a rule recognized in all appellate Courts, to intend every thing consistent with the record, in favor of the judgments of subordinate jurisdictions, infer either that the Judge gave no instructions on the point, or that he gave such as conformed to the law.

It has been decided by this Court, that the party excepting is required to show affirmatively the existence of the error of which he complains, and that the Court cannot aid him by making presumptions beyond what the record discovers. — • [Johnson vs. Ballew, 2 Porter’s R. 29; to same effect, Richardson vs. Dennison, 1 Aik. R. 210.] In Adams vs. Ellis, (1 Aik. R. 24) it was held, that if a bill of exceptions be so drawn up that it cannot be learned from the record, whether error had intervened or not, though there was some reason to believe that it probably had, under such circumstances the Court was bound to affirm the judgment. [See Eaton vs. Houghton, 1 Aikin R. 380.]

There can be no question but a party has the right to require ' the opinion of the Court upon any point of law that is pertinent to the issue, and the refusal of the Court to give such opinion would be available on error. But the mere neglect or omission of the Judge to instruct the jury on some material point, though it might sometimes furnish just ground for a new trial, will not warrant a reversal of the judgment. [Smith, et. al. vs. Carrington, et. al. 4 Cranch R. 71 ; Church vs. Hubbard 2 Cranch’s R. 239, and Aik. Ala. Dig, § 5, 254.]

It is the conclusion of the Court that the bill of exceptions does not discover any error in the charge of the Judge to the jury.

The judgment is consequently affirmed.

* The conclusion upon this point conforms to what seemed to be the practice in this State at the time the case was decided, and previously, but according to later decisions, the note is admissible without first making out a prima facie case, by parol proof to the Court, and the evidence is adduced to the jury to show its genuineness, or that it imposes a legal duty.