Marsh, Merwin & Lemmon v. Wheeler

• Decision Date: 16 December 1904
• Citation: 59 A. 410
• Court: Connecticut Supreme Court
• Parties: MARSH, MERWIN & LEMMON v. WHEELER et ux.

59 A. 410

MARSH, MERWIN & LEMMON

v. WHEELER et ux.

Supreme Court of Errors of Connecticut.

Dec. 16, 1904.

Case Reserved from Superior Court, Pairfield County; Howard J. Curtis, Judge.

Action by Francis W. Marsh and others against Charles B. Wheeler and another. Case reserved from superior court. Judgment for plaintiffs.

Action to recover upon a note, and, by way of equitable relief, to have certain conveyances set aside, brought to the court of common pleas in Fairfield county. Facts found and case reserved (Curtis, J.) for the advice of this court.

The copartnership of C. B. Wheeler & Co. was organized in 1896, and dissolved May 31, 1900. Its members were Charles B. Wheeler, Charles B. Marsh, and Edward H. Marsh. The two latter comprised another copartnership, known as Marsh Bros., engaged in the building trade. The purpose of the partnership of C. B. Wheeler & Co. was described in the partnership articles as "carrying on the plumbing business." It "conducted a busines of taking plumbing contracts, and used a shop in Bridgeport for its work, while its bookkeeping and the financial part of the business was done in the office of Marsh Bros. It had no store, and purchased only goods as it needed to fulfill its plumbing contracts. It did not buy and resell plumbing goods or any goods." The partnership articles made it the duty of Marsh Bros, "to attend to the general business of the concern, such as making all purchases, collecting bills, and any work in connection with the office work." Marsh Bros. were also required to give the new firm all their plumbing work, if market prices thereon were net, and to give the use of their office free of rent for the office work of the business. It was made the duty of Wheeler to superintend the practical work of the firm. The articles contain no express provisions as to the utterance or indorsement of commercial paper. September 8, 1898, Charles B. Marsh signed the name of Wheeler & Co. to a negotiable note for $650, payable to Marsh Bros. one month after date at the plaintiffs' banking house. He indorsed said note in the name of Marsh Bros., and took it to the plaintiffs, who are bankers, for discount to the credit of Marsh Bros. The plaintiffs discounted the note, and placed the proceeds to the credit of Marsh Bros. on their account. This note was thereafter renewed monthly until October 24, 1900, save that the amount was from time to time reduced by payments made by Charles B. Marsh, leaving the amount due thereon at that date $230. On November 10, 1899, another note of like tenor, but for $350, was similarly executed, indorsed, presented, and discounted. This note was renewed monthly like the former until said October 24, 1900, when, partial payments having been made by Marsh, $190 was due thereon. On October 24, 1900, Marsh paid $10 on the notes, and renewed both by one note for $410, being the amount then due on said two notes. This note was on November 26, 1900, renewed for $400, $10 being then paid. This last note is the one in suit. All the notes in these series were of similar tenor, except as to the amount, and the amount in the case of each renewal was the amount of the note taken up, less the amount of payments thereon. All were executed, indorsed, brought to the plaintiffs' bank, discounted, and the proceeds applied in precisely the same way; and all payments thereon were made by Charles B. Marsh, who alone came in contact with the plaintiffs in the matter. At the time each note was given and discounted, Wheeler & Co. owed Marsh Bros. on book account sums in excess of the amount of the notes, and that indebtedness still continues. No credit was given on this account for the sums received from the discount of said notes. Wheeler was ignorant of the existence of the notes and the transactions relating to them until shortly before suit was brought He gave Marsh no express authority to execute the notes, beyond such as might be claimed from the partnership agreement; neither did he ratify Marsh's acts in relation thereto. No course of business on the part of the partnership was proven, from which authority to Marsh to sign the notes could be implied. May 31, 1900, the firm of C. B. Wheeler & Co. was dissolved by mutual consent. No formal notice of the dissolution was sent to the plaintiffs, and the plaintiffs had no knowledge or notice of such dissolution, except such as can be inferred from the fact that on August 1, 1900, Wheeler, having formed another partnership relation for the conduct of the plumbing business, called at the plaintiffs' banking house, and, having stated to an employé that he wished to open an account, one Judson, an employé of the plaintiffs, met and made certain inquiries of him. Wheeler told him that he wished to open an account in the name of Wheeler & Ball. Judson asked if he was the same Wheeler who was with Marsh Bros, as C. B. Wheeler & Co., to which Wheeler replied affirmatively, and added that they had dissolved partnership, and he was going into business with Ball. Thereupon an account was opened in the name of the new firm of Wheeler & Ball, which account continued for 10 months. All the facts relating to the nature of the business of C. B. Wheeler & Co. not appearing in the copartnership articles were testified to by Wheeler, against the plaintiffs' objection that the only evidence admissible to show the nature of the partnership business was the articles of agreement. It is agreed by counsel that, if the objection was well taken, such facts as are founded upon the inadmissible testimony should be disregarded. The action is brought against Wheeler and his wife. The complaint alleges that certain conveyances of real estate formerly standing in the name of Wheeler, and now in the name of his wife, were fraudulent as to the plaintiffs, and the court was asked to set the same aside. Upon the trial this prayer for relief was abandoned.

John C. Chamberlain, for plaintiffs.

Bacon Wakeman, for defendants.

PRENTICE, J. (after stating the facts). The question which naturally first presents itself in this case is as to whether or not the two notes bearing the name of C. B. Wheeler & Co., which the plaintiffs held at the time of the dissolution of said partnership, May 31, 1900, were, in the plaintiffs' hands, paper upon which it was obligated. It is conceded by both parties that any such obligation is, under the facts found, solely dependent upon authority in Charles B. Marsh to make and utter negotiable promissory notes in the name of the firm. The plaintiffs contend that the articles of copartnership gave him express authority to that end. This the defendants deny. This claim, which rests upon a very slender foundation, may be disregarded. Upon the question of implied authority, the defendants rely upon the distinction recognized in Pease v. Cole, 53 Conn. 53, 22 Atl. 681, 55 Am. Rep. 53, between commercial or trading and non-trading partnerships, and the further...