4 Johns. 251 | N.Y. Sup. Ct. | 1809
Whether the plaintiff knew that the debt for which he received the partnership security, was the private debt of Cornelius I. Roosevelt, is a question of fact, and we are called upon to decide whether, if that question had been submitted to the jury, they ought not to have found for the defendant. The partnership was special, being limited to the sugar refining business in the city of New-York, where all the parties resided. At the time the partnership was formed, notice was given for two weeks, successively, of the nature and extent of it, in two daily-papers, published here, both of which the plaintiff took during that period. The house where the business was to be transacted was designated in the notice, and “ Sugar-House,” in large letters, was painted upon it. The defendant, Cornelius C. Roosevelt, at no time consented, or was privy to any extension of the connection, beyond the particular object for which it was originally formed. The article sold, and which was the consideration of the note in question, had no relation to the business of sugar refining, and it would, therefore, never have occurred to any one, that Cornelius I. Roosevelt purchased it on the partnership
On a critical examination of his evidence, it will, I think, be found to operate against the plaintiff. He says, in the first instance, that he understood the sale of the brandy to be “ to and for the partnership but he adds-immediately afterwards, “ that nothing was said on whose account the purchase was made but “ that the partnership security was to be given for it.” He goes on to state, “ that the sale was not completed until he had satisfied himself, by inquiries, that the defendants were partners.” Now the fact stated by Bogert, that the partnership engagement was to be given, is the only one from which it can be inferred, (for he no where says so in express terms) that he even supposed the sale was made to the company ; and when we see how that was in fact given and received, without objection, and take into view the other facts in the case, the fair conclusion is, that he, considered the contract as made
But there is another equally fatal objection against the plaintiff’s right to recover.
The distinction between general and special partnerships, is probably coeval with their existence. A general rule applicable to both is, that in transactions relating to the joint concern, one of several partners may bind the rest. He may sign notes, indorse or accept bills for the common benefit, &c. without applying to the rest in every particular case. But this authority of a single partner has its limitation. Formerly, as appears by the case of Parkney v. Hall, (1 Salk. 126. and S. C. 1 Ld. Raym. 175.) it was probably less extensive than at this" day. One partner of the concern has no authority to pledge the partnership goods, for his own debt, nor can he bind the firm to any
There is no collision between what I have said, and the cases ex parte Bonbonus, (8 Ves. 540.) and Swan v. Steele, (7 East, 210. As I understand these cases, they were decided upon the very principles which I have attempted to establish. To borrow money, and to negotiate bills and notes, are as incidental to, andáis usual and necessary in, a special, as a
My opinion is, that there ought to be a new trial, with costs, to abide the event of the suit.
Thompson, J. and Yates, J. were of the same opinion.
It cannot, I think, be pretended, that in point of fact, the plaintiff knew, when the brandy was sold, that it was on the private account of Cornelius I. Roosevelt. Mr. Bogert is explicit in his testimony, that the sale was on the credit of the partnership; that he knew of no limitation of the partnership, but, after inquiry, believed it to be general.
1 he circumstances which are supposed sufficient to render the plaintiff chargeable with notice of the limitation of the partnership, appear to me to be susceptible of easy explanation. From the evidence, in relation to the publication in the gazette, considering the lapse of time from the insertion of the notice, and the fact that the plaintiff was not engaged in commerce, with the further fact, that merchants who took both the papers, were ignorant that the partnership was special, and had not attended to the notice, my mind is decisively impressed, that the plaintiff cannot be supposed ever to have retained it in his-recollection. The
As it regarded the United States, it was perfectly immaterial whether the affidavit stated a sale to one or all the vendees; the object was to identify the goods, and obtain a debenture. I cannot but consider, for the reasons which I have given, that it would be contrary to the facts in the case, to suppose the plaintiff knew that there was a special limited partnership when the brandy was sold, and, with this knowledge, is making an attempt to charge one of the firm for articles sold to the other ; it would be neither more nor less than presuming a fraud, without a fact to support it.
The case ought to be tested by other principles, and if on those principles the defendant, Cornelius C. Roosevelt, is not responsible, then the plaintiff must submit to his loss.
I recognise the authority of the cases of Livingston v. Hastie & Patrick, and Lansing v. Gaine & Ten Eyck, and fully assent to the law, that where a person takes a partnership security from one of a firm, knowing it to be for his private concerns, and disconnected with the objects off; the partnership, the other partner is not chargeable, and ho is not responsible, in consequence of the collusion and fraud. I hold it to be equally xvell settled, that if a person, in the course of trade, bona jide takes a bill, uninformed that it xvas given without the knowledge of the other partner, and not in relation to the partnership concerns, whether the partnership be a limited one or general, the whole firm will be
The defendants, from the commencement of the partnership, kept accounts at two of the banks in the, city, and had there been considered as general partners ; the entry of the partnership firm was in the hand-writing of C. I. Roosevelt, in the name of the firm; credit was given to the partnership on the responsibility of C. C. Roosevelt, and nothing was known, at either of the banks, of a limitation of the partnership business, until after its dissolution!. In addition to this, the presidents and cashiers of the two banks, several merchants of extensive business, and brokers, testified, that they knew of the partnership, but never heard of any limitation, until after the dissolution. It cannot be denied, that a special partnership may become general, from the acts of the parties in the conducting of their business, as well as from their specific arrangements. It is impossible to believe, that C. C. Roosevelt did not know of the mode adopted in carrying on business with the banks, and that he was there regarded as a general partner; and if he did, then it seems to me to follow, that he aided and assented to his being consied a general partner, it is probable that the reputation of a general partnership proved so fully, and not attempted to be contradicted, had its origin in the mode the defendants adopted, in carrying on their business at the banks ; and certainly the authority devolved on C. I. Roosevelt to negotiate
One of two innocent men must suffer j I cannot hesitate in saying, that the person who has been so incautious in adopting a partner, deficient in prudence or funds, who has given to that partner the management of the concerns, who has stood by, and permitted him to raise money unlimitedly on his credit, by pledging the name of the firm, and who has thus given his aid to the reputation which certainly existed, and on which the credit in this case was given, must be responsible.
The plaintiff cannot succeed in this case, if the facts warrant the conclusion, that he took a partnership security for a debt which he actually knew, at the time, was the private debt of the particular partner. Nor can he succeed, if this actual knowledge be not made out, provided the subject matter of the contract, and the nature and circumstances of the copartnership, were sufficient to charge ' him with constructive or legal notice of the fact. Believing these propositions to be correct, I shall examine the case to see if, according to them, the plaintiff can be permitted to retain the verdict.
1. The law is well settled, that if a person takes a partnership security from one of the partners, for what is known, at the time, to be the particular debt of the partner who gives such security, the copartnership is not holden. The cases in this court of Livingston v. Hastie & Patrick, and of Lansing v. Gaine & Ten Eyck, (2 Caines, 246. 2
The note in question was given for 20 pipes of brandy, sold to C. I. Roosevelt, and there is no evidence in the case, drat Cornelius C. Roosevelt & Co. ever dealt in the article of brandy, or carried on any business in the grocery line, or were concerned generally in trade. There was no evidence that the firm ever held themselves out to the world, as being engaged in any other concern than the sugar-refining business, nor that they ever did in fact step beyond that limited concern. The plaintiff was then unauthorised to conclude, that this purchase was upon a partnership account. Prima facie, it certainly was not, and.it lay with him to show what colour he had for a contrary inference, and if he has shown none that is reasonable, he is not well founded in his attempt to charge this debt upon the firm.
The intrinsic circumstances of the transaction are sufficient to show, that the plaintiff knowingly dealt with C. I. Roosevelt, in his private capacity, and there can be no doubt but that, as a matter of fact, the purchase of the brandies was on the separate account of C. I. R. and that the partnership was not interested in the purchase. The brandy was not only purchased by C. I. Roosevelt, but shipped by him.
There are other facts which go to prove that the brandies were understood to be sold to C. I. Roosevelt, and not to the company. The note was called for and given at the dwelling-house of C. I. Roosevelt, not at the counting-house of the firm; the bill of parcels was made üut in the name of C. I. Roosevelt only ; the brandy was entered at the custom-house in his name, and the plain
The written testimony, from which this conclusion is drawn, weighs much more in the scale of evidence, than the parol testimony (even if opposed to it) of the agents of the plaintiff, given two years and a half after the transaction took place. John Cross says, that the bill of parcels was made out as C. L Roosevelt directed, and that he received no directions from the plaintiff, “ nor does he recollect” receiving any from John G. Bogert, his agent, to make out the bill; that Bogert directed him to call for the note, “ but gave him no directions relative to the form of it," and when it was delivered, neither Bogert, nor the plaintiffs, made any objection to the form of it. This negative testimony then proves nothing. Bogert was the principal agent of the plaintiff in the transaction, and he says that he understood the purchase was on a partnership account, although he declares that “ nothing was said relative to whose account the purchase was made." It was then a latent inference which he had no authority to draw; and it is a little remarkable.
There is one circumstance in the case not well explained. It states, that the sale of the brandies was made by Bogert, as agent of the plaintiff. This fact appears to be conceded throughout the case, and Bogert himself testifies, that he acted as the plaintiff’s agent; and yet it is further stated, that the brandies were in the hands of Bogert, as administrator of one Anthony Carroll, deceased, by whom the brandies were imported, and that they were sold in part satisfaction of a debt due from that estate to the plaintiff. It is possible, that Carroll, and the plaintiff, had been concerned together as partners in importing the brandies, or that Carroll acted nominally as owner, and really as agent of the plaintiff on whose capital the business was conducted, for the affidavit of the plaintiff at the custom-house (and which was made to obtain the usual debenture) must have been in the character of purchaser from Carroll. But without being able to solve this fact, it is sufficient to observe, that upon this case, the court must consider the plaintiff as the real vendor of the brandies, whatever may have been the form which the title had previously assumed. He was considered by all parties, both at the trial, and upon the argument, as the vendor, and he took the note, as principal, for a debt due to him from Roosevelt. The question of notice, therefore, applies to him as an original party to the sale, and though he may have chiefly effected the sale, and took the-note, by means of Bogert, his agent, yet in ail such cases nptise to the agent is notice to the principal.
2. But if the plaintiff did not in fact know that the purchase was made by C. I. Roosevelt upon his own account, and acted under the mistaken impression, that it was a partnership purchase, still the firm were not bound by the indorsement, because the facts disclosed amounted to constructive notice, or notice in law. The partnership between the defendants was confined to the sugar-refining business. It had nothing to do with the purchase or sale of brandies. The partners had given timely and due notice in the public gazettes, of their limited engagement, and had designated the place where their business was to be carried on. Every precaution was taken, which the nature of the case admitted, to guard the public against misapprehension. If persons were, afterwards, under a mistake as to the confined nature of the partnership, it must have been owing to some dealings of the copartnership, inconsistent with its declared object, or to gross negligence in those persons, in not seeking information at the proper sources. The understanding of particular merchants, that the defendants were general partners, was of no avail, without showing that the house had done some act to mislead, or given some reasonable cause for that impression. But there is no evidence before us, according to my view of the case, that the partnership ever misled the public, by a single act, or transacted any business which had not an immediate connection with its limited concern.
The habit of keeping partnership accounts with the banks, I do not consider as forming an exception to this Conduct. That habit was perfectly consistent with their
There are, however, qualifications, as to the extent of this doctrine, and some instances occur to me which explain and define its application, and which it may not be amiss to mention.
If negotiable paper of a firm be given by one partner, on Ms private account, and that paper should pass into the hands of an innocent and bona fide holder, as in the case of paper negotiated or discounted at the banks ; or if one partner should purchase, on his private account, an article in which the firm dealt, or which had an immediate and direct connection with the business of the firm, in these cases I should think that a different rule ought to be adopted, and one requiring the actual knowledge of its being a private, and not a partnership dealing, to be brought home to the... claimant. The circumstances of these cases would take away the intendment of knowledge in the creditor. The indorsee, for instance, of such a note, takes it upon the credit of the partnership, and he has no means of knowing, from the paper itself, on what account it was created, and he has a right to presume it was a fair partnership engagement. This is the English rule (2 Esp. Rep. 524. 731.) in those particular cases. But the present case cannot be taken out of the operation of the general rule. The plaintiff had no just ground to infer, that, when he was selling brandy to C. I. Roosevelt, he was dealing with the sugar-refining company; considering the circumstances under which the partnership was announced and conducted, he was
I am accordingly of opinion, that the verdict is against law and evidence, and that it ought to be set aside, and a new trial awarded, with costs to abide the event.
New trial granted.
The court thought that case so precisely similar in principle to that of Livingston v. Hastie & Patrick, that it was not deemed important to report it; but since it has been referred to, it is thought proper to subjoin the following account of the case:
Dubois against C. C. Roosevelt & C. I. Roosevelt.
THIS was an action of assumpsit. The plaintiff declared on a promissory note, dated the 27th April, 1805, drawn by the defendant, C. I. Roosevelt., payable to Cornelius C. Roosevelt & Co. and indorsed by C. I. R. with the name of C. C. R. & Co. A judgment by default was entered against C. I. Roosevelt, and the other defendant pleaded non assumpsit. The cause was tried at the New-York sittings, in June, 1807, and a verdict was taken for the plaintiff, by consent, subject to the opinion of the court, on a case, containing the following facts:
On the 3d of February, 1803, the defendants entered into a copartnership in the sugar refining business, in the city of New-York, where the plaintiff also resided, and the following advertisement was inserted in the "Evening Post, and the "American Citizen,” two newspapers published in the city. "Copartnership. Cornelius C. Roosevelt and Cornelius I. Roosevelt, have entered into partnership, in the sugar refining business, under the firm of Cornelius C. Roosevelt & Co. Have ready for sale, loaf and lump sugar of a good quality; also molasses, at their sugar-house in Thames-street, in the rear of the City Hotel.”
The copartnership was dissolved in June, 1805, and public notice of the dissolution given.
In April, 1805, the plaintiff sold to C. I. Roosevelt, a quantity of beef, the bill of which was made out in the name of C. I. Roosevelt, and his own note, without any indorser, was received for the amount. A short time afterwards, the plaintiff sold to C. I. Roosevelt, a quantity of cloves, for which, by agreement, he was to give his note, with a good indorser. The cloves were purchased by C. I. Roosevelt, on his own account, and the bill of parcels was madd out in his own name only. The note in question was drawn by C. I. Roosevelt, and indorsed by him, in the name of the firm, and given for the cloves to the plaintiff. The note was protested for non-payment, and due notice thereof given to the defendants.
The defendant, Cornelius C. Roosevelt, was in no manner interested in the purchase of the cloves, which were purchased for an adventure, in which he had no concern. They were exported in the name of C. I. Roosevelt, and in order to obtain the usual debenture, the plaintiff made oath at the custom-house, that the sale was to him.
It appeared that the business of the partnership was principally transacted by C. I. Roosevelt, and that he made notes issued for the sugar refining business, and signed the name of the copartnership. The plaintiff sent a clerk
It was admitted that there was no fraud or collusion on the part of the plaintiff; but that his intentions were fair, and his conduct bona fide.
Brinkerhoff, for the plaintiff; attempted to distinguish this case from those of Livingston v. Hastie & Patrick,
Griffin and Harison, contra, relied on the case of Livingston v. Hastie & Patrick, and that of Lansing v. Gaine & Ten Eyck, as precisely in point. They contended, that the case of Swan and others v. Steele, was in favour of the defendant, as Lord Ellenborough recognised the principle, that where a person takes the copartnership firm, as security for the individual debt of one partner, knowing that it was without the consent of the other, it is fraudulent and void. Knowledge of the fact of its being out of the copartnership business, or not, made all the difference. They cited, l Salk. 126. Cowper, 814. 6 Vesey, jun. 604. 1 Caines, 184. Watson on Partnership. 2 ed. 180.
- Hoffman, in reply, was stopped by the court, who seemed to think, that there was no difference between this case and that of Livingston v. Uasiie Patrick. Hoffman said he should decline arguing the cause; for unless the court thought the distinctions taken Ly j3'rinkevhoff' were well* founded, the plaintiff could not prevail.
Per Curiam. We are of opinion, that this cause is clearly within the principle decided in that of Livingston v. Hastie & Patrick, and that the plaintiff must be nonsuited.
Judgment of nonsuit.
2 Caines, 246.
2Johns. Pep.
7 East, 210.
7 East, 210
8 Ves. 540.