Hotchin v. Kent

• Decision Date: 13 October 1860
• Citation: Hotchin v. Kent, 8 Mich. 526 (Mich. 1860)
• Court: Michigan Supreme Court
• Parties: John Hotchin and others v. Henry A. Kent and others

8 Mich. 526

John Hotchin and others v. Henry A. Kent and others

Supreme Court of Michigan

October 13, 1860

Heard October 4, 1860

Error to St. Joseph circuit. The case is sufficiently stated in the opinion.

Judgment reversed, with costs, and a new trial granted.

W Saivers, and C. Upson, for plaintiffs in error:

The acts of a partner in violation of his duty to the firm do not bind the firm where the other party to the transaction is cognizant of and co-operates in such breach of duty: Story on Agency, § 125; Story on Part., §§ 117, 123; 7 T. R., 207; 2 Mich. 102; 2 B. & Ald., 673; 4 Johns. 278; 1 Lloyd & Wels., 6; 1 Campb. 403; 10 East, 264; 3 Conn 124; 1 Stark. 164; 5 Watts & S., 564.

The fact that the property came to the possession of the association is not of itself sufficient to make them liable 1 Sim. 376; 1 Mo. 121; 17 Wend. 47. There should be proof that the association voluntarily enjoyed the benefit of the purchase, with full knowledge of the circumstances, with a manifest intention of recognizing the purchase as binding upon them.

H. H. Riley, for defendants in error.

OPINION

Campbell J.:

The defendants below (the plaintiffs in error) were sued as partners, for goods sold on credit, which were purchased by William B. May, secretary of the White Pigeon Farmers & Mechanics' mercantile association," of which they were members and partners. May, as secretary, had charge of the store belonging to the defendants, and of buying and selling goods. The association was a voluntary joint stock company, for mercantile purposes, intended chiefly to secure to the members the privilege of buying goods at a moderate advance on cost prices, besides giving them any profits accruing beyond expenses. It was one of the articles of association that no goods should be bought on credit. The business was to be conducted through the usual officers of joint stock companies.

The defendants in error (the plaintiffs below) sold goods to May, after receiving from him a written copy of the articles of association, containing the prohibition against credit purchases. There was no evidence of ratification by any of the defendants beyond what is claimed to have been legally deducible from the forwarding of the goods through the channel pointed out by May, and some evidence that packages were seen in the store. The court held that delivery to the forwarding company in New York, by May's orders, was a sufficient delivery to the defendants to bind them all, and to hold them for goods bought on credit.

While in an ordinary commercial partnership, any act of one of the partners, with innocent parties, within the scope of the partnership business, will usually bind the firm, yet any contract made without the scope of the business, with a person who knows or is bound to know that it is beyond that scope, can never be held binding on the firm of its own force, or without some express or implied adoption. A promissory note, for example, given for a private debt by one partner, can not, in the hands of the original holder, be enforced against the partnership. And the principle applies to any similar excess of authority. A partner binds his firm only on the theory of an...