Pennoyer v. David

• Decision Date: 09 July 1860
• Court: Michigan Supreme Court
• Parties: Vincent Y. Pennoyer v. James I. David and another

8 Mich. 407

Vincent Y. Pennoyer v. James I. David and another

Supreme Court of Michigan

July 9, 1860

Heard April 11, 1860

Questions reserved from Wayne circuit.

The action was brought against James I. David and James Campbell as survivors, etc., of Daniel C. Vreeland, who together during the summer of 1855, constituted a partnership, which was dissolved by the death of Vreeland, in November of that year.

The declaration was upon an account stated, to prove which "plaintiff offered evidence that in December, 1855 after the dissolution of the firm by the death of Vreeland, defendant Campbell accounted with plaintiff, and admitted that there was a final balance of $ 507 due the plaintiff. Various items entered into this account on both sides, spreading over the time from May to December; some of them, on both sides, being items that accrued after the death of Vreeland. The defendant objected to the evidence," and thereupon the circuit judge reserved for the opinion of this court the following questions:

1st. Can one partner, after the dissolution of the copartnership, bind his surviving copartner by his admissions?

2d. Is the admission, by a surviving partner, of a balance in an account, of which some items accrued after the dissolution, evidence of an account stated against a surviving copartner, who has neither before nor since such settlement authorized or confirmed the same.

J. M. Howard, for plaintiff, cited:

6 Cow. 442; 11 Ves. 5; 16 Ves. 57; Story Part., § 328, and note 2; 1 Taunt. 104; 2 Bay 533; 11 Wend. 96, 99; 11 N. H., 246; 11 Pick. 400, 487; 16 Pick. 401, 406; 1 Gall. 635; 6 Greenl. 41; 7 Gill 85; 2 Comst. 525.

Hand & Hall, for defendants, cited:

2 Mich. 102; Coll. Part., §§ 118, 121, 545; Story Part., § 324; 11 Wend. 95; 8 Md. 399; 1 Pet. 367; 3 Johns. 537; 15 Johns. 401; 2 Comst. 523; 2 Jones 185; 1 A. K. Marsh., 189; 3 Munf. 194; 1 Nott. & McC., 561; 5 H. & J., 60; 2 Blackf. 372; 2 McLean 87; 2 Doug. Mich., 206; 2 Greenl. Ev., §§ 126, et seq.; 1 Johns. 34; 2 Ry. & M., 239.

OPINION

Christiancy J.:

In reply to the first question propounded, we think it is well settled, both upon principle and authority, that one partner, after dissolution of the firm, can not, by his admission or contract, create a new partnership liability; nor, for a like reason, can he, by his admission, revive a claim against the firm which has been barred by the statute of limitations, since this is equivalent to a new contract.

On the other hand, with the exception of claims barred by the statute of limitations, and others coming within a similar reason, we think it equally clear in principle, that the admission of one partner, made after such dissolution having reference to previous actual partnership dealings or transactions, stands upon the same ground, and is evidence against the firm in like manner, as if made before such dissolution. The dissolution can not destroy the joint liability of the partners, nor alter their relations to third persons in respect to contracts made or transactions which occurred before the dissolution. The dissolution operates upon future, not upon past, transactions. As to persons whose claims have been contracted on the credit of the firm, the partnership, for all substantial purposes, continues till such claims have been satisfied. And persons who have had dealings with the firm during its continuance, are, as to all matters touching such dealings, entitled to the same benefit from the admissions of a single partner, whether made before or after the dissolution, unless shown to be false or fraudulent in fact. See Wood v. Braddick, 1 Taunt. 103; Lacy v. McNeale, 4 D. & R., 7; Cady v. Shepherd, 11 Pick. 400; Vinal v. Burrill, 16 Pick. 401; Col. on Part. (Perkins Ed. of 1848), § 546, and cases cited; Story on Part., § 328. See also Mann v. Locke, 11 N.H. 246, where the principles upon which such admissions are receivable are very clearly and ably presented.

But it is objected that the power of a single partner, in such case, to make an admission of a previously existing liability, involves the power of creating a new liability where there had been no previous dealings with the firm, and no such prior liability existed in fact. It was doubtless this supposed difficulty which led the courts of New York, and a few others which have followed their authority, to take the broad ground excluding such admissions altogether. But the rule which entirely excludes such admissions leads to another inconsistency, no less obvious than that which is sought to be avoided by it. Thus, the same courts which deny all power of one partner, after dissolution, to bind his former partners by the admission of a previous liability, yet hold that he may liquidate a previous account (McPherson v. Rathbone, 11 Wend. 96, 99), and that "if there be no agreement to the contrary, it may be presumed that each partner still has authority to dispose of the partnership property, to collect, adjust and pay debts, and to give proper acquittances:" (Per Bronson J., in Van Keuren v. Parmelee, 2 Comst. 525.)

Now the power to liquidate...