84 Va. 478 | Va. | 1888
delivered the opinion of the court.
This is a writ of error to a judgment of the circuit court of Prince Edward county, rendered at the March term, 1885. The case is as follows: The mercantile firm of Palmores & Woodson, doing business at Caira,in Cumberland county, on the 14th of October, 1871, was dissolved by .mutual consent, and notices thereof published in “ The New Commonwealth,” a newspaper published in Earmville, a town in the vicinity, as follows:
“Notice. The business heretofore existing under the firm and style of Palmores & Woodson is this day dissolved by mutual consent. Either of the partners is authorized to use the name of the firm in liquidation.
PALMORES & WOODSON.”
Ca Ira, Cumberland, October 11, 1871.
“Dr. C. R. Palmore and John R. Palmore, Jr., will continue the business at Ca Ira, under the firm and style of C. R. Pal-more & Brother.”
“ Octo. 19-2w.”
Subsequently, on the 18th day of April, 1872, George William Palmore, a brother of C. R. and J. R. Palmore, made his note, payable .to “Palmores & Woodson in liquidation,” for $711 60, at ninety days, payable at the Commercial Savings Bank, at Earmville, Virginia, which note was indorsed by the Palmores, “Palmores & Woodson in liquidation,” and negotiated. In April, 1876, the defendant in error, Richard Wood,
The first assignment of error to be considered here is the action of the court in giving the said instruction, and in refusing to set aside the verdict for error appearing in the said instruction. Nothing is better settled than that the power of a partner ceases upon the dissolution of the firm, and the surviving partners or ex-partners can enter into no contract which will bind the estate of the deceased (in case of a surviving partner) or the other members of the firm in the case of ex-partners, except such as is necessary or appropriate in settling the affairs of the concern. “ Dissolution operates as a revocation of all authority for making new contracts. It does not revoke the authority to arrange, liquidate, settle, and pay those created.” “ The power of a surviving partner does not extend to giving a note, drawing a cheek, or accepting a bill in the
Where a note is issued by a partner after dissolution, it will not bind the other partners, even though given for a debt due by the firm. 1 Daniel, Keg. Inst., § 371; Whitman v. Leonard, 3 Pick., 177; Bank v. Humphreys, 1 McCord, 388; Haddock v. Crocheron, 32 Tex., 276. If authorized verbally or in writing one ex-partner may bind the firm, after dissolution, as a party to a bill or note, but authority to settle or close up the business of the firm cfoes not imply authority to one partner after dissolution to give a note in the name of the firm for the firm’s debt, or to renew one given before the dissolution. Kor will authority to give or renew a note be implied by authority “to settle business of the firm and sign its name for that purpose; ” “to use the name of the" firm in liquidation of past business; ” “to settle all demands in favor of or against the firm;” or by the use of any similar expression. 1 Daniel, Neg. Inst., § 373; Martin v. Kirk, 2 Humph., 529; Lockwood v. Comstock, 4 McLean, 383. The ease of Haddock v. Crocheron, supra, decided in the supreme court of Texas, in 1869, is a case much in point. In that case Justice Lindsay, speaking for a unanimous court, said: “There is really but a single question presented for our consideration by this record, and that is, can one partner, * * * after a dissolution * * * of the partnership, by a novation general, or by a new engagement with his creditor, in consideration of being discharged and released from a liability contracted during the existence of the firm, bind the retired partner by such new engagement or new obligation? This is not. now an open question in this State.” In Speake v. White, 14 Tex., 368, it was decided that “the acknowledgment of an antecedent indebtedness by one partner, after dissolution, did not bind the firm.”
In White v. Tudor, 24 Tex., 641, it is even held that a general authority to one partner, after dissolution, to settle the
In the case of Abel v. Sutton, 3 Esp., 110, which is cited as the leading case on this subject in England, a promissory note due to the linn at the time of the dissolution, was afterwards indorsed in the name of the firm by a partner who had authority to settle and liquidate the partnership effects, of which notice had been given in the Gazette, suit was brought by the endorsee to charge all the members of the firm as indorsers of the note. Eor the plaintiff it was insisted—First, that if the note existed before the dissolution, a partner, .having authority to settle and liquidate the partnership accounts, had a right to put the partnership name upon it, and that a bona fide holder might resort to all the partners; second, that if the partner indorsing raised money by the sale of the note, and applied it in payment of the partnership debts, it was money had and received to the use of the partners, and 'all would be liable.” Lord Kenyon most emphatically denied both of these propositions, and held that .a recovery could not be had on the indorsement or on the money counts against any but the indorsing partner. He says: “ To contend that this liability to Be bound by the apts of his partner extends to time subsequent to the dissolution, is in my mind a most monstrous proposition.’ A man in that case can never know when he is to be at peace and retired from all the concerns of the partnership.” In that country, from that day to this, there has been a constant and most decided leaning against giving effect to new contracts, notes, or other instruments made by the partner for the firm, after dissolution, as will be seen by the cases of Pindar v. Wilks, 1 Marsh., 248; Kilgore v. Finleyson, 1 H. Bl., 155. See Hackley v. Patrick, 3 Johns., 536; Martin v. Walton, 1 McCord, 16; Sandford v. Nickles, 4 Johns., 227; Bank v. Norton, 1 Hill, 572. In that case the court, after reviewing the cases of Abel v. Sutton, Martin v. Walton, and Hackley v.
In the case of Sandford v. Mekles, supra, the court said, per Tates, J.: “The decided manner in which Lord Kenyon (in Abel v. Sutton, supra) denies the right of one partner, after dissolution of the partnership, to indorse bills given before, if he even had authority to settle the partnership accounts, induces me to believe the doctrine is settled. It would be a peculiar hardship to put a partner retired from the whole concern so completely in the power of the other as to charge him by negotiating bills given during the partnership. This power being denied, it follows that they must all join in the transfer of a bill negotiated after the dissolution for the purpose of vesting the title in the indorsee.” In the case of Fellows v. Wyman, 33 N. H., 355, Chief Justice Perley said: “ One partner, after dissolution, may sell and dispose of the partnership property for the benefit of the partnership, and to wind up its. concerns, but, as a general rule, he cannot create any new contracts qr obligation binding on the partnership, and the indorsement of securities belonging to the firm falls under this general rule. The cases which hold that one partner, after dissolution, cannot indorse a note or bill, have been determined with a view of protecting one partner from a responsibility which might be created against him in consequence of the negotiation of the bill or note, and an authority to settle the partnership business does not authorize a partner, after dissolution, to indorse the negotiable paper of the firm, though, with such an authority, he may transfer a note payable to bearer by delivery.” In the case of Myatts v. Bell, 41 Ala., 231, Justice Byrd said: “By that law (thelaw of partnerships) one partner, after the dissolution of the firm, has no authority in law to renew a promissory note made by the partnership by signing the partnership name, and thereby bind the partners; but it would be the note of the partner executing it, and binding on
The instruction given by the circuit court and excepted to is in direct opposition to these well settled principles. The jury were instructed that the words “in liquidation” put the burden of proof upon the defendant to show that the note was not used for partnership purposes, and that, unless they believed that it was not used for partnership purposes, they must find for the plaintiff. The note showed that it was given after the dissolution of the firm. It was dated long afterwards, and the indorsement thereon, “to liquidation” has been often held to give notice of the dissolution of the partnership, and, that being so, it is settled law that no recovery could be had thereon against the other partner, and the jury should have been so instructed, and a verdict and judgment rendered for the defendant Woodson and the said suit as to him dismissed.
The judgment of the said circuit court will therefore be reversed and annulled.
JlJD AMENT REVERSED.