Holmes v. Small

• Decision Date: 20 October 1892
• Citation: Holmes v. Small, 157 Mass. 221, 32 N. E. 3 (Mass. 1892)
• Parties: HOLMES et al. v. SMALL.
• Court: Supreme Judicial Court of Massachusetts

157 Mass. 221

32 N.E. 3

HOLMES et al. v. SMALL.

Supreme Judicial Court of Massachusetts, Franklin.

October 20, 1892

COUNSEL

Dana Malone, for plaintiffs.

Edward L. Hill, for defendant.

OPINION

BARKER J.

Copartners may sue for the price of partnership goods sold by one copartner in his own name, (Halliday v. Doggett, 6 Pick. 359; Gage v. Rollins, 10 Metc. [ [Mass.] 348, 355; Huntington v. Knox, 7 Cush. 371; Railroad Co. v. Benedick, 5 Gray, 561; Garrett v. Handley, 4 Barn. & C. 664; Alexander v. Barker, 2 Tyrw. 140; Railroad Co. v. Walsh, 85 Ill. 58;) and it was, at least, a question for the jury whether the defendant did not undertake to be primarily liable for goods delivered to Mitchell, (Mountstephen v Lakeman, L.R. 7 Q.B. 196.) But it was shown at the trial that, whether the defendant's undertaking was one of guaranty, or was that he should be primarily liable, it was made long before the existence of the plaintiffs' copartnership, and with Wright acting for himself only; and that until after the sale to Mitchell, and after Mitchell had absconded, the defendant had no notice that the firm had been formed, or that Wright was a member of it, or that the lumber did not belong to Wright individually. Whether, therefore the presiding justice might properly order a verdict for the defendant depends upon the question whether the firm can recover upon the strength of an arrangement made between the defendant and Wright individually, while the latter was in business alone, and before the existence of the copartnership, to the effect that Wright might sell lumber to Mitchell on the defendant's credit, until he gave him notice to the contrary. In Wright v. Russell, 3 Wils. 532, 2 W.Bl. 934, it was decided that when a sole trader, who held a bond for the faithful performance of duty by a clerk, took a partner into his business, the sureties were no longer responsible on the bond; and, although a seemingly inconsistent doctrine was held in Barclay v. Lucas, 1 Term R. 291, note, that case was put by Lord MANSFIELD upon the ground that the intention of the parties at the time of the making of the bond was that the sureties should be answerable in case of a change of the firm, and the case has been repeatedly questioned. See Barker v. Parker, 1 Term R. 287. The doctrine of Wright v. Russell rests upon sound precedents, and has been followed in numerous decisions. See Arlington v. Merricke, 2 Wms.Saund. 414; Bellairs v. Ebsworth, 3 Camp. 53; Walton v. Dodson, 3 Car. & P. 162; Lloyd v. Blackburn, 9 Mees. & W. 363; Rex v. St. Martin, 2 Adol. & E. 655; Robson v. Drummond, 2 Barn. & Adol. 303; Stevens v. Benning, 1 Kay & J. 168; Hole v. Bradbury, 12 Ch.Div. 886; Starrs v. Brewing Co., 12 Can.Sup.Ct. 571. The case of Waggon Co. v. Lea, 5 Q.B.Div. 149, is clearly distinguishable, for the reason that the assignees were acting for the original company in making the repairs which it had agreed to make.

The case differs from those where the person with whom the contract is made is, at the time, a member of a firm, for whom he in fact contracts, although acting ostensibly as an individual, or where he is agent of an undisclosed principal and also from those where the explicit undertaking is to be answerable to a firm, whatever change may happen in its membership. The case of Garrett v. Handley, 4 Barn. & C. 664, 666, is authority for the doctrine that a guaranty made in terms to one partner may be sued upon by his firm; but the decision was upon the ground that it appeared from the correspondence, of which the guaranty was a part, that it was intended for the benefit of the firm, and not for the individual partner alone. Without regard to precedents, there are sound reasons why the defendant's undertaking should not be held to inure to a copartnership subsequently formed. The defendant may be presumed to have known the situation of Wright, the extent of his business, and his methods of conducting it, and to have been willing to become his debtor, and to incur such risks as were involved in becoming primarily responsible for sales from him to Mitchell. But he did not agree that, if Wright should become associated as a partner with others, he would be liable to them also for sales of the new firm. The defendant...