85 Mass. 287 | Mass. | 1861
It is certainly somewhat remarkable that no case can be found either in this country or in England in which the question has arisen and been adjudicated whether, in case a copartnership is dissolved by death, the surviving partners are bound to give notice of such dissolution, in order to avoid a liability occasioned by the subsequent misuse of the copartnership name by one of the firm. The adjudged cases have gone no further than to hold that neither the estate of the deceased partner nor his heirs or personal representatives can
Starting then with the admitted proposition that death works an immediate dissolution of a firm, and that thereby the estate of the deceased partner and his personal representatives, as well as his share of the assets of the firm, are absolutely relieved and absolved from any new contracts or subsequent transactions of the surviving partners, which are not necessary to the settlement of the joint business, the inquiry at once arises as to the effect of such a dissolution occasioned by the act of God on the relative rights and duties of the surviving copartners. One of the essential elements of a contract of copartnership consists in the right which each member has to the continuance of all his associates as members of the firm. If one withdraws, the copartnership is at an end. The delectus personarum lies at the foundation of the agreement of the parties, and is one of the main considerations on which it rests. The personal qualities of each
On what principle, then, can it be maintained that the law fastens on persons an obligation to answer for contracts en tered into in the name of a principal who has ceased to exist by one whose authority to act is absolutely terminated ? The only answer that can be made to this question by those who seek to sustain the obligation of such contracts on the surviving members of the firm is, that a duty is devolved on them to give
To parties thus situated, the more just and reasonable role would seem to be applicable, that where two parties stand toward each other in cequali jure, and neither has been guilty of any negligence or want of good faith, their respective rights must be settled by the application of the strict rule of law, without reference to any supposed equities arising from the occurrence of an event, which neither party anticipated or could prevent. Certain it is, that the reason of the rule which requires in cases of the dissolution of a firm caused by the voluntary act of the parties, or by circumstances which would necessarily come within the knowledge of the copartners but might be unknown to third persons, that notice of it should be given in order to relieve the members from future responsibility, does not apply where the copartnership is terminated by death. The true, doctrine on this point is well stated by Mr. Bell, in his learned Commentaries on the Laws of Scotland. “ The opinion has certainly prevailed very generally that no notice is necessary; that the partnership, according to the common course of the law, is dissolved by death ; that those who deal with the company are held to know the state of their debtor; and that the publication of all deaths, according to the common custom of the world, places this sort of information within the reach of ordinary care and diligence.” 2 Bell Com. (4th ed.) § 1234. The same principle is stated in a case adjudicated by the court of session in Scotland subsequently to the publication of Mr. Bell’s learned treatise. “ Death operates a dissolution of itself; and, being a public "fact, all men are bound to know it.” Christie v. Royal Bank, 1 Cases in Court of Sess. (1839,) 745, 765. In this respect, the consequences of a dissolution by death are the same as one occasioned by war between two countries of which copartners are respectively citizens. No notice is required to be given when a fact is of a public nature
The doctrine which we have stated is the only one which is consistent with the law of agency, of which the rules regulating the acts of copartners form an important branch. So far as a copartner acts for the firm in transactions with third persons, he is only an agent; and his rights, duties and obligations are governed by the same principles as those which are applicable to ordinary agents who have no interest in common with their principals. By the well settled rule of the common law, the authority of an agent is determined by the death of his principal, whether the fact of death is known or not; and no notice s necessary to relieve the estate of the principal of all responsibility, even on contracts into which the agent had entered with third persons who were ignorant of the death of the principal. Those who deal with agents are held to assume the risk that his
Nor are we able to see any good reason for imposing a duty of giving notice of the dissolution of a firm on surviving co-partners which is not applicable to the representatives of the deceased partner. But the rule is well settled that no notice need be given by the latter to relieve his estate from liability on future contracts. If it be said that the surviving copartners are in possession of the books and papers of the firm, and therefore have access to means of ascertaining the names of persons with whom the firm have dealt, which áre not within the reach of the heirs or representatives of the deceased copartner, the answer is, that this does not afford any ground for exempting the latter from the duty of giving public notice of the dissolution of a firm by death by advertisement in a gazette, nor of informing the surviving copartners, whom they must be supposed to know, of the fact. It would seem to be quite as reasonable that notice of the death of one of the copartners should be given to th surviving members of the firm by the heirs or personal represen tatives of the deceased, before his estate is discharged from all claim for contribution or aid in performing contracts entered Into by the surviving copartners before they received notice of his death, as that they should be required to give notice to third persons before they can be exempted from liability. But no
The case of Pitcher v. Barrows, 17 Pick. 361, cited for the plaintiff, has no bearing on the question at issue in this case. The dissolution in that case was effected by the conveyance by one copartner of his shaje and interest in the firm to his copartners. It was a private transaction, known only to the members of the firm, of which third parties could have no notice until it was made public by those who were alone cognizant of it. The true distinction is not that no notice is requisite when the dissolution takes place by operation of law, but only when it is effected by circumstances or an event of a public or notorious nature, of which all men in the exercise of due diligence are required to take notice.
The rule of the civil law which was referred to by the counsel for the plaintiff is essentially different from that of the common law. The effect of the death of a principal under the civil law is not to revoke the authority of the agent. He can bind the estate of his deceased principal until notice of the death is given. Following out this analogy in cases of the death of a copartner, the rule of the civil law is that the heirs of the deceased copartner are liable on contracts made in the name of the firm by the surviving copartners, if they had no knowledge of the death of their associate, or if the persons with whom they dealt were ignorant of the dissolution. Pothier, Soc. §§ 156, 157.
It is not necessary in the present case to determine whether a surviving copartner who enters into a contract in the name of he firm after its dissolution by death can be held liable in any arm to the person who in good faith and in ignorance of the fact that the copartnership is at an end has acted and dealt on the credit of the firm. That is not the question which was raised at the trial. But we do decide, for the reasons we. have given, that a surviving copartner cannot be held responsible on contracts made without his assent or knowledge by
The objection made to the sufficiency of the answer is untenable. The plaintiff averred that the defendants had signed a note on which they were liable as copartners. This was the substantive fact alleged in the writ and declaration. The answer denied it in clear and distinct terms. The plaintiff was bound to prove the existence of the firm, or the liability of the defendants as members of it at the time the note was given. Therefore the allegation in the answer that the firm was dissolved when the note was given was not matter in avoidance or discharge of the cause of action, but in the nature of a special traverse of an averment in the declaration. The mode of the dissolution was matter of proof only. The defendants were not bound to aver it.
The question whether the note declared on was a contract which bound the defendants, as being given in the proper exercise of the power and authority of a surviving copartner in closing the business of the firm, does not appear to have been raised at the trial. No ruling appears to have been made on this point, and it is not properly before us on the exceptions.
New trial granted.