Opinion
(December Term, 1842.)
One partner cannot bind his copartner by any contract, unless it is in some way connected with the partnership business or unless the act be adopted and recognized by the copartner, or unless it be a bill or the endorsement of a note, which the party taking it had good reason to believe was authorized by the firm.
APPEAL from Battle, J., Spring Term, 1842, of BEAUFORT.
This was an action of assumpsit brought upon two notes, of one of which the following is a copy, viz.:
Six months after date, with interest from date, we promise to pay John C. Blachford, or order, the sum of two hundred and seventy dollars, for value received; this 10 November, 1838. (239)
JUSTIN MARTINDALE. CARTER LAMB.
The other note was an exact copy of this, except that it was payable twelve months after date. The defendant Cater was sued alone, and pleaded the "general issue." On the trial it was admitted that at the time when the notes in question were given, one Lamb and the defendant Carter were engaged in business as merchants in the city of Raleigh, under the name of Carter and Lamb, and that the notes were signed by Lamb in the name of the firm. The defense relied upon was, that the notes were given by Martindale as principal, and were signed by Lamb, in the name of Carter and Lamb, only as surety, and that this was done without authority from the defendant, and that it had never been assented to by him. For the purpose of proving this, Mr. Jones was called as a witness and testified, that when the notes were given he was clerk for Carter and Lamb — that Martindale, who was a carpenter in the city of Raleigh, had purchased a parcel of brick of Blachford, and gave these notes therefor — that the notes were executed in the counting-room of the store of Carter and Lamb, and were signed by Lamb in the absence of Carter, who was at that time in the county of Hyde — that Martindale was a customer of Carter and Lamb, and as such was indebted to them for a store account, but that they did not owe him anything. Upon cross-examination the witness stated that he was present when the notes were given, that he knew of the purchase of brick by Martindale from Blachford — that he does not recollect that anything was said, at the time the notes were given, about the consideration of them, but he thinks he heard afterwards from Lamb that they were given for the brick, and Carter and Lamb were only sureties. The witness stated further, that Carter and Lamb dealt only in dry goods. The plaintiff introduced as a witness Mr. Blackwell, who stated that on one occasion he was speaking to the defendant about these notes, when the (240) latter said "he had once signed a note for Martindale, which he expected to have to pay, but as for these Blachford notes, he knew nothing of them and would not pay them."
The plaintiffs contended, 1st, That there was no evidence that Carter and Lamb were only sureties on the notes or that Blachford knew or had any reason to believe they were such, but if he had and the jury should be satisfied that they were only sureties, then, secondly, The defendant was liable, unless he could show that he had given no authority to his partner to sign the notes in the name of the firm; and, that at all events, as Martindale was a customer of Carter and Lamb, it must be presumed that each partner had authority to sign the name of the firm as surety for him. And thirdly, That the declaration by the defendant that he had signed a note for Martindale, was evidence from which an authority to the other partner to sign the name of the firm might be inferred.
His Honor instructed the jury that one partner had a right to bind the other by any act within the scope of his authority, but that, if in this case the jury believed that the notes were given for Martindale's own debt, and Carter and Lamb were only his sureties, then the plaintiff could not recover unless they could show that Carter had authorized his partner to bind the firm as surety, or had subsequently assented to the transaction; and that in this case there was no evidence of either an assent or authority given by the defendant.
The jury returned a verdict for the defendant, and judgment having been rendered accordingly, the plaintiffs appealed.
Badger for the plaintiffs.
J. H. Bryan for the defendant.
It is a general rule of law, that each partner is the accredited agent of the rest, whether they be active, dormant or nominal, and has authority as such to bind them, either by simple contracts (241) respecting the goods or business of the firm, or negotiable instruments circulated in its behalf to any person dealing bona fide. Bond v. Gibson, 1 Camp., 185; Vere v. Ashley, 10 Barn. and Cress., 296; Smith on Merc. Law, 19. Thus we see that the contract must be respecting the partnership business. Then both partners are authorized to treat for each other in everything that concerns or properly belongs to the joint trade. On the other hand, when the transaction has no apparent relation to the partnership, then the presumption is the other way; and the partnership will not be bound by the act of one of the parties without special circumstances. 2 Cox, 312. In a matter wholly unconnected with the partnership one partner cannot bind the other. Sandiland v. Marsh, 2 Barn. and Ald., 673. One partner has no right to guarantee a separate transaction in the name of the rest, unless they afterwards adopt and recognize his acts. Ex parte Nolte, 2 Glyn. and Jam., 306; Crawford v. Sterling, 4 Esp., 207; Payne v. Ives, 3 Dow. and Ry., 664; Smith on Merc. Law, 23; Ex parte Bonboners, 8 Ves., 540. Martindale, the principal debtor to the plaintiff's intestate for bricks sold, had no connection with the firm of Carter and Lamb — his debt was in no sense of the word a partnership debt or a partnership transaction of the said firm. And Carter's subsequent statement, so far from adopting or confirming the act of Lamb in the business, expressly repudiates it. The circumstance that Martindale had, before the date of this note, been a purchaser of goods at the store of the firm, cannot, we think, take this case out of the general rule. This decision steers clear of Cotton v. Evans, 21 N.C. 284. In that case the Court said that a partnership security received from one of the partners simpliciter, in this charge of a separate claim against himself, is a badge of fraud, or such palpable negligence as amounts to fraud, which it would be incumbent on the party, who so took the security, to remove, by showing either that the partner from whom he received it acted under authority of the rest, or at least that he himself had reason to believe so. In deciding that cause, the majority of the (242) Court were of opinion that the evidence proved, that Van Bokkelin had good reason to believe, that William Ellison had the authority of the firm to draw the bill in the name of the firm. In the case now before us, there was no circumstance to warrant a belief in Blachford, that Lamb had the authority of the defendant to sign the name of the firm as surety for Martindale. It was manifest from the form of this security, that it was a mere guaranty by the firm of the debt of another person, with which the firm had no connection. It is not like the case of a note endorsed by a firm and put into circulation and taken in the course of business; for in that there is an apparent benefit or interest in the partnership.
PER CURIAM. No error.
Cited: Hartness v. Wallace, 106 N.C. 431; Powell v. Flowers, 151 N.C. 143; Sladen v. Lance, Ib., 494.
(243)