Hoskinson v. Eliot

• Decision Date: 07 July 1870
• Citation: 62 Pa. 393
• Parties: Hoskinson <I>et al. versus</I> Eliot <I>et al.</I>
• Court: Pennsylvania Supreme Court

Page 393

62 Pa. 393

Hoskinson et al. versus Eliot et al.

Supreme Court of Pennsylvania.

October 19, 1869.

July 7, 1870.

October 19th 1869.

Before THOMPSON, C. J., READ, AGNEW, SHARSWOOD and WILLIAMS, JJ.

Error to the Court of Common Pleas of Erie county: No. 59, to October and November Term 1869.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

J. R. Thompson and J. C. Marshall, for plaintiffs in error.— The administrators of a joint contractor cannot be joined with the survivors: Seip v. Drach, 2 Harris 355, 2 Williams on Exrs. 1191. All Winn's powers were given by the articles and were limited by them; he therefore had no power to borrow money: Story on Agency, sect. 126; Schimmelpennich v. Bayard, 1 Peters 289; Allen v. Ogden, 1 Wash. C. C. R. 174. A partner cannot bind his firm by deed: Snyder v. May, 7 Harris 235; Bewley v. Tams, 5 Id. 485. The court is to construe a writing and therefore erred in leaving to the jury to determine the intention of the parties when the note was given: Jones v. Johnson, 3 W. & S. 277. The note merged the debt or is a satisfaction of the account: Wallace v. Fairman, 4 Watts 378; Anderson v. Levan, 1 W. & S. 334; Lewis v. Williams, 6 Wharton 264; Tom v. Goodrich, 2 Johns. R. 213; Harris v. Lindsey, 4 Wash. C. C. R. 274; Evans v. Drummond, 4 Espinasse 89. Winn could not bind his partners by the note and it could not be enlarged by parol evidence: Story on Agency 76-81; Gold v. Norfolk L. Co., 9 Cush. R. 343.

J. W. Walker, for defendants in error.—Winn had power to give the note as agent under the articles: 1 Parsons on Cont. 38; Story on Cont. sect. 134; Seiple v. Irwin, 6 Casey 513; The Loudon Savings Fund Society v. Hagerstown Bank, 12 Casey 498; Williams v. Getty, 7 Casey 461. As to merger: Jones v. Johnson, 3 W. & S. 279; Barbour on Parties 235.

The opinion of the court was delivered, July 7th 1870, by WILLIAMS, J.

The main question presented by the assignments of error in this case — though not the first in numerical order — is whether Charles A. Winn, under the articles of partnership, constituting the Excelsior Steam Press Brick Company, had authority, either as agent or partner, to borrow money on the credit and for the use of the firm in carrying on its business; and whether the partnership is liable for the amount lent or advanced for its use, by the plaintiffs below, at his request.

It is contended by the plaintiffs in error that Winn had no authority to borrow money on the credit of the firm because, by the articles of association, it was a limited partnership for carrying on the art and trade of manufacturing and vending bricks, with the capital agreed to be contributed by the parties, under the agency and supervision of Winn, whose power and authority did not exceed that given by the articles of copartnership. As these do not, in terms, give him power to borrow money, it is insisted that the partnership is not liable for the money which he borrowed of the plaintiffs. It is true that the partnership was not a general partnership for carrying on all the trade and business of the parties composing the firm, but was a special or limited partnership for carrying on the particular business of manufacturing and selling bricks. But though a partnership may be special or limited to a particular branch of business, it does not follow that a partner has less power to bind such a firm, in the scope of its business, than he would, if it were a general partnership. Nor does it necessarily follow, because a partner is constituted the agent of the firm, and the general supervision of its business is committed to him by the articles of copartnership, that he has no other or greater power than that which is expressly or impliedly given to him as such agent. If the articles of association do not limit or restrict his authority, he has the same general power to bind the firm that he would have, if he had not been constituted sole agent for the supervision and management of its business. As in this case the articles of copartnership do not impose any limitation or restraint upon the authority of Winn, he must be regarded as having all the general power of a partner to bind the firm in the scope of its business. And if the articles had imposed restrictions on his power, such restraints would not affect parties to whom they were unknown, and who, in their dealings with the firm, trusted to the general and well established principles of the commercial law. What then is the general power and authority of a partner? He may, as is well settled, enter into any contracts or engagements on behalf of the firm in its ordinary trade and business. He may buy, sell or pledge goods; draw, negotiate, endorse or accept bills, notes, checks or other negotiable securities; or do any other acts which are incident or appropriate to such trade or business, according to the common course or usages thereof: Story's Part. p. 102. As said by Mr. Chief Justice Marshall in Winship v. Bank U. S., 5 Peters 561: "A partner — certainly the acting partner — has power to transact the whole business of the firm, whatever that may be, and consequently to bind his partners in such transactions, as entirely as himself. This is a general power, essential to the well conducting of business; which is implied in the existence of a partnership. When then a partnership is formed for a particular purpose, it is understood to be in itself a grant of power to the acting members of the company to transact its business in the usual way. * * * * This is a general authority held out to the world, to which the world has a right to trust. The articles of copartnership are perhaps never published. They are rarely, if ever, seen, except by the partners themselves. The stipulations they may contain, are to regulate the conduct and rights of the parties, as between themselves. The trading world with whom the company is in perpetual intercourse, cannot individually examine these articles, but must trust to the general powers contained in all partnerships. The acting partners are identified with the company and have power to transact its business in the usual way." In all contracts concerning negotiable paper, the act of one partner binds all; and there is no distinction in principle upon this point between general and special partnerships. One partner may borrow money for the partnership, and give notes and other negotiable securities therefor in the name of the firm; and the partnership is liable for money borrowed by one of its members on the credit of the firm within the general scope of its authority and according to the usual course of its business.

But, while it is conceded that this is the law as applicable to commercial partnerships, it is insisted that it does not apply to partnerships formed for mechanical or manufacturing purposes. But no such distinction is suggested or recognised in any of the adjudicated cases or text-books, and there is no foundation for it in the necessities or usages of these partnerships. The necessity for borrowing money to carry on the business of a manufacturing partnership may be as great as it is in order to carry on the business of one that is strictly commercial; and common observation and experience show that it is equally the custom and usage of manufacturing, as of commercial...