Moorehead v. Gilmore

• Decision Date: 04 January 1875
• Citation: 77 Pa. 118
• Parties: Moorehead <I>et al. versus</I> Gilmore.
• Court: Pennsylvania Supreme Court

77 Pa. 118

Moorehead et al. versus Gilmore.

Supreme Court of Pennsylvania.

November 3, 1874.

January 4, 1875.

November 3d 1874.

Before AGNEW, C. J., SHARSWOOD, WILLIAMS, MERCUR and GORDON, JJ.

Error to the District Court of Allegheny county: No. 117, to October and November Term 1874.

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R. B. Carnahan and Black (with whom were M. W. Acheson and J. H. Hampton), for plaintiffs in error, cited Cooper v. McClurkan, 10 Harris 80; Ihmsen v. Negley, 1 Casey 297; Tanner v. Hall, 1 Barr 417; Ex parte Bonbonus, 8 Vesey 542; 1 Parsons on Bills 259, 260.

D. T. Watson, I. F. Slagle and T. M. Marshall (with whom were Duff & Aughinbaugh), for defendant in error.—As to power of a partner to make and endorse notes, cited Byles on Bills 31, 32. As to restrictions on the power of partners: Hoskinson v. Eliot, 12 P. F. Smith 400. They cited also Ihmsen v. Negley, 1 Casey 297; Tanner v. Hall, 1 Barr 417; Haldeman v. Bank, 4 Casey 440; Hogg v. Orgill, 10 Id. 344; Miller v. Consolidation Bank, 12 Wright 514; Sedgwick v. Lewis, 20 P. F. Smith 217; Phelan v. Moss, 17 Id 59; Parker v. Burgess, 5 R. I. 277, as to notice of fraud to a purchaser of a negotiable note.

Mr. Justice SHARSWOOD delivered the opinion of the Supreme Court, January 4th 1875.

Eleven errors are assigned, but they are all resolvable into one question. Was there anything upon the face of the note in suit, or the circumstances under which it was discounted, to give notice to the plaintiff below that the endorsement of the firm name of Moorehead, Adams & Co. was without authority? It is not disputed that if it had been offered by Whitten & Co., that circumstance of itself would have been notice that Moorehead, Adams & Co., were merely accommodation endorsers and sufficient to have put the plaintiff upon inquiry. Hence an attempt was made to fix upon Patterson, the bill-broker from whom the plaintiff received it, the character of his agent, and that he was to be affected with whatever knowledge the agent possessed. But this position cannot be sustained and was but faintly urged in the argument. Patterson was clearly the agent of Whitten & Co. to sell, not of Gilmore to buy. Though Gilmore knew he was a broker he was not bound to ask by whom he was employed, nor if he had would Patterson have been bound to inform him. Bill-brokers are a very important class of persons in commerce, and their usefulness and business would be entirely destroyed if it were to be held that persons purchasing negotiable paper from them are affected with whatever knowledge they may have of the character of the paper which they offer in the market for discount. It comes back then to the simple question, was there anything upon the face of the paper as offered to put the plaintiff upon inquiry. It is admitted that the circumstance of the endorsement being in the handwriting of Adams, the maker of the note, of itself is nothing: Miller v. The Consolidation Bank, 12 Wright 514. It has been earnestly contended, however, that this case is to be distinguished from that as well as Ihmsen v. Negley, 1 Casey 297; Haldeman v. Bank of Middletown, 4 Id. 440, and Sedgwick v. Lewis, 20 P. F. Smith 217 in this — that the note in suit was on its face a note given for the private debt of Adams, and the endorsement in his handwriting was primâ facie the unauthorized use of the firm name by him to guarantee his private debt. In those cases it did not appear on the face of the note to have been given for the individual debt of one of the partners. The firm appeared as the principal debtors — the makers of the note — and therefore it was given for a firm debt. But is not this to set up a distinction without a difference? Each partner in a commercial firm has as much right to raise money for the use of the firm by the endorsement of negotiable paper as to do so by means of paper originally issued. This is the precise point ruled...