Brown v. Clark

• Decision Date: 01 January 1853
• Citation: 14 Pa. 469
• Parties: Brown versus Clark.
• Court: Pennsylvania Supreme Court

14 Pa. 469

Brown versus Clark.

Supreme Court of Pennsylvania.

THIS case was from the Nisi Prius, Philadelphia.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

The case was argued by Gerhard, for plaintiff in error; and by Badger and Mallery, for defendant.

The opinion of the court was delivered by BELL, J.

The note here in suit was made on the 10th of October, 1836. But it was a continuation, by way of renewal, of a series of notes, first discounted by the Exchange Bank of Portland, on the 10th of May, 1834. Under the evidence, it is not to be doubted these renewals were effected by Mudge, as liquidating partner of the firm of Mudge & Clarke, and which, according to Davis and Dusaque, 5 Whar. 534; Houser v. Irvine, 3 W. & Ser. 347, and kindred cases, bound his former associates, provided the first note of the series was properly made in the name of the firm. The former existence of this partnership being conceded, and necessarily, with it, the authority of one partner thus to bind his fellow in the ordinary course of business, it becomes essential to the defence to show a dissolution of the association, at some time prior to the date of the first note. In recognition of this principle, the jury was properly instructed that "the right of the plaintiff is, in all respects, the same as that which the Exchange Bank would have had to recover on the note of May 8, 1834." But, in answer to the second point submitted, to the effect that to exonerate the defendant, the jury must not only find a dissolution, but that notice of it was in possession of the bank prior to the last-mentioned date, the court answered, that if the "bank knew of it before the note in question was discounted, it would affect the bank, if it were plaintiff in this suit." The inaccuracy of this answer, in directing the inquiry on this point, to the date of the note in suit, instead of the prior date, is, probably, ascribable rather to carelessness of expression than to misconception of the principle imbodied in the plaintiff's proposition; yet this inaccuracy may have misled the jury to the conclusion that knowledge of a dissolution of the partnership, at any time before acceptance of the last note, the immediate subject of this action, was sufficient to defeat the plaintiff. It is not enough to suggest that, probably, the jury understood the court as intending to affirm the point as submitted. The answer is, the language inadvertently used might have led them into error. Such a possibility is sufficient to found a valid exception.

This, however, is perhaps of minor consequence. Upon the trial, the leading inquiry was as to the fact of dissolution, and whether, if that fact existed, notice of it was traced to the holders of the first note discounted? The plaintiff submitted there was no evidence of dissolution, and, of course, no notice thereof, at least before the 10th of May, 1834. To this the court answered, "There is evidence that the store was transferred, and that the firm ceased to do new business." No direct response was then given to the latter portion of the point relating to notice. But in a previous part of the charge, the jury was, in effect, told that an inference of dissolution might be drawn from the sale and transfer, in January, 1834, of Mudge & Clarke's store to Mudge & Varnum, who continued the business of the former firm, and that notice of the dissolution might be imputed to Dr. Cummings from his residence in the same town at the time of these transactions. The only additional circumstance connected with this point of the case, is that the books of the older firm were placed in the hands of the younger, who collected the sums due to the former, for which a credit was given, and paid debts due from them, and with which they were charged. Ought the circumstances to which reference has been made, be accepted as establishing the fact of a dissolution? If so, it must be because they tend to prove an agreement between the partners to put an end to their prior relationship. This is one of the recognised modes by which partnerships may be destroyed, and, as between the partners alone, the most secret understanding is sufficient. It is enough that they have assented. But were this contest between them alone, how could it be asserted, without hazard of error, that in May, 1834, a dissolution had taken place? The facts upon which the idea is predicated, are entirely consistent with continued partnership, if for no other purpose than, finally to close the business of the firm. For this purpose new obligations may be assumed, and new securities put in circulation, though the partners may cease to prosecute their former general business. Nay, it is not, perhaps, very unusual for commercial associations to sell out their stock of merchandise, and relinquish their place of business for a season, with a view to a change of pursuit. Certainly, such an arrangement is not incompatible with the idea of a continued association, even though the books of account be left for settlement with a new firm which includes a member of the old. In this very instance, it is in proof that an account was kept in the books of Mudge & Varnum, with the firm of Mudge & Clark, and under that title, up to May, 1836; and their clerk, Patten, swears he never knew of any formal dissolution of the latter partnership. At the important moment of time to which attention is to be directed, it would, then, be impossible to assert, with certainty, that the partnership was at an end, even for the determination of a controversy between the partners themselves; and so we think the jury ought to have been instructed. If this be so, the facts relied on must be wholly insufficient to implicate third persons. To...