Midland Nat. Bank v. Schoen

• Decision Date: 09 July 1894
• Citation: 27 S.W. 547
• Parties: MIDLAND NAT. BANK v. SCHOEN.
• Court: Missouri Supreme Court

27 S.W. 547

MIDLAND NAT. BANK v. SCHOEN.

Supreme Court of Missouri, Division No. 1.

July 9, 1894.

AUTHORITY OF PARTNER — SIGNING NOTES FOR INDIVIDUAL PURPOSES.

1. The authority of one partner to bind the firm is governed by the law of agency. Within the range of the firm business, one may act for all, as to persons having no notice of any limitations on the implied authority. Beyond the scope of the partnership, one partner may bind the other, where the latter would be bound under the general law of principal and agent.

2. One partner invested the other with a general authority to use the firm name upon notes for his individual purposes. A third person advanced money for such notes on the faith of that authority, and the first partner was held liable on the notes.

3. On the facts just mentioned it is not essential to a recovery on such notes to show that the signing partner was authorized to use the firm name on the particular notes sued upon. If they were given pursuant to a general authority, unrevoked, the liability would be the same.

4. Where a note is given by a firm for the debt of one partner, it may lawfully be renewed by any one of the partners without altering the firm's liability.

5. The course of business between members of a firm may tend to show the authority of one partner to act for and charge the partnership.

(Syllabus by the Judge.)

Appeal from circuit court, Clay county; James M. Sandusky, Judge.

Action by the Midland National Bank against George J. Schoen. Judgment for defendant, and plaintiff appeals. Reversed.

Lathrop, Morrow, Fox & Moore, for appellant. Gates & Wallace, for respondent.

BARCLAY, J.

This is an action upon two promissory notes, — the first dated September 8, 1890; the second, September 28, 1890, — each payable at 90 days. The notes were ostensibly executed by Louis A. Schoen, Bertha Schoen, and Schoen Bros. to plaintiff. The action was begun in Jackson county against all the makers, including George J. Schoen, who was charged to be liable as a member of the firm of Schoen Bros. But he denied liability, and caused the removal of the case to another county, by change of venue, where the issues, as to him, were tried. His answer denied under oath the facts charged in the petition, except the incorporation of plaintiff, and the partnership of George J. and Louis A. Schoen. He positively denied that he executed the paper sued upon, or authorized its execution. The reply put in issue the new matter of the answer. The cause was tried with the aid of a jury. There was a verdict for defendant. Plaintiff moved for a new trial without success, and then, after judgment, brought the case to the supreme court by appeal, after the usual exceptions, preserving the points now relied upon. The evidence of plaintiff tended to prove the following facts: The Armour Bros. Banking Company began dealing with Louis A. Schoen as early as 1886. In 1887 the president of that company had an interview with defendant at the time his brother, Louis, wished to renew a note then under discount. The brothers Schoen were partners in the drug trade at Kansas City, but Louis informed the bank that the money to be raised on the paper was not on account of the regular requirements of the drug store. The president of the bank then sent for defendant, George J. Schoen, and the interviews which followed are thus described by the former, as a witness in this cause: "When the first note became due he [Louis] came in, and wanted to renew that note. I said to him that I wanted to know from George if he felt and acknowledged the responsibility, before I would renew the note; and he went, and brought Mr. George Schoen, and I had a talk with George about it; and I told him that Louis was making `Schoen Bros.' on that kind of a note, and I wanted to know from him whether he recognized his responsibility on that class of notes, and he said he did; and I said `All right,' and the note was made. Q. You will tell the jury whether, on the faith of what Geo. Schoen told you at that time, Armour Bros. Banking Company, up to the time of its sale to the Midland National Bank, continued to discount paper for Louis Schoen, with Schoen Bros. on it as makers and indorsers. A. They did. Q. Do you remember when any notes came due, of this character, after the time of this conversation with George Schoen relative to the payment of any of these notes on which the names of the firm brothers appeared? A. I did. Q. Tell the jury what the conversation was. A. I could not exactly repeat word for word, but when these different notes came due I wanted to see about it. I would go over to their store, and sometimes Louis would not be there, and I would talk to George. Q. When you would go over to the store to see about these notes that were due and were unpaid, and you would find Louis there and find George there, state what conversation passed between you about them. A. I would tell them I wanted the notes fixed up and put in shape, and he would tell me that they would be fixed as soon as he could see Louis. Q. About how many times did you probably have a conversation of that nature with George? A. I could not tell about that. Q. Several times? A. When I went, I went expecting to see Louis, but a great many times he would be out. Q. Tell the jury whether George Schoen repudiated the authority he had given Louis Schoen to sign the name of Schoen Bros. on his individual paper. A. Not at all." Armour Bros. Banking Company transferred its business and good will to the Midland National Bank January 1, 1889. After that transfer the former president of the Armour Banking Company became vice president of the plaintiff. The paper which the Armour Banking Company had on hand (made by ...