Shelton v. Cocke, Crawford, & Co.
| Decision Date | 23 March 1811 |
| Citation | 17 Va. 191 |
| Parties | Shelton v. Cocke, Crawford, & Co. [++] |
| Court | Virginia Supreme Court |
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At the trial of an action of assumpsit, upon an insimul computassent, by Cocke, Crawford, & Co. against Lanier, Skelton, and Cocke, merchants and partners; the plea being the general issue; the defendants, by their counsel, moved the Court to instruct the jury, that " after the dissolution of a mercantile firm, and that dissolution properly published, the acknowledgment by a partner, or partners, of a debt due from the firm prior to the dissolution, (the person to whom such acknowledgment is made knowing of such dissolution,) is not such evidence of the existence of a debt, as will charge a partner, not present at such acknowledgment, nor consenting thereto, in an action against the firm; " which instruction the Court refused to give, " being of opinion that such acknowledgment was evidence in such action; " to which opinion a bill of exceptions was filed. Verdict and judgment for the plaintiffs for 2821. 17s. 7d. damages and costs: to which judgment a writ of supersedeas was awarded by a judge of this Court.
Wickham, for the plaintiff in error. I understand it settled, that the acknowledgment of a person, formerly a partner with another, will not bind that other person, being no longer a partner; if it relate to the existence of the debt. The case of Whitcomb v. Whiting, [a] which is the leading authority on this subject, goes only to prove, that where a debt is first established by other testimony, such acknowledgment will prevent the operation of the Act of limitations. And a similar point is decided in Jackson v. Fairbank. [b] But in Abel and another v. Sutton, [c] it was ruled by Lord Kenyon that, after the dissolution of the partnership, one of the persons who composed the firm cannot put the partnership name on any negotiable security; even though such existed prior to the dissolution, or was for the purpose of liquidating the partnership debts; and notwithstanding such partner may have had an authority given him to settle the partnership affairs. The case of Bland v. Hasselrig [d] is, also, in opposition to that of Whitcomb v. Whiting.
In Evans v. Beattie, [e] it was ruled by Lord Ellenborough, that, on a guarantee to pay for goods sold and delivered to a third person, what such third person has said, respecting the goods sold to him, is not evidence to charge the person giving the guarantee; but the delivery of them must be proved; because " there might be collusion between such third person and the plaintiffs." The same reason strongly applies in this case. So, in Helyear v. Hawke, [f] where a principal employed an agent, or servant, to sell for him, what such agent said as a warranty or representation, at the time of the sale, respecting the thing sold, was determined to be evidence against the principal; but not what he had said at another time; and Peto v. Hague [g] is to the same effect. In Gray v. Palmer & Hodgson, [h] the admission of one of the defendants, that he signed a note, (though such admission was made by his plea,) was held not to bind the co-defendants. A confession of judgment by one would not bind the others. A fortiori, then, a confession in pays will not. If one partner cannot, after the dissolution of the partnership, bind the others by his act, he cannot bind him by his evidence, so as to establish the existence of a debt, which is denied.
Wirt, contra. The acknowledgment of a partner, after dissolution of the partnership, that a debt was contracted by the firm prior to its dissolution, will bind the other partners; because his acknowledgment binds himself at the same time; and therefore his own interest would prevent his making such an acknowledgment if it were not true. The cases cited by Mr. Wickham do not apply. Copper, the acknowledging person in 5 Esp. 26, had no joint interest with the rest, and did not bind his own interest. The same observation applies to Helyear v. Hawke, ibid. 72, and Peto v. Hague, ibid. 134. The case in 1 Esp. Cases, 135, is not a case of partnership, but of a sham plea by a co-defendant, by which plea the others were not bound, as they had pleaded severally. Abel and another v. Sutton, 3 Esp. 108, contains a principle which we cheerfully admit; but it is the case of the creation of a new debt by the partner, not of the acknowledgment of a pre-existing debt. I grant, that after dissolution, none of the partners can create a new debt against the firm. If they could it would abrogate the dissolution. Bland v. Haselrig has, unquestionably been overruled by Whitcomb v. Whiting, and subsequent authorities.
Notwithstanding the dissolution of a partnership, there remains a privity among the partners as to certain purposes. It is not total, retrospectively, as well as prospectively. They are still existing partners as to past transactions, to recover and pay existing debts, & c.; though not to create new ones. In Whitcomb v. Whiting, the acknowledgment of the partner as effectually bound the partnership by reviving a debt, which by the act of limitations was defunct, as it could have been done by proving the existence of the debt in the first instance. In Jackson v. Fairbank, 2 H. B1. 340, the partnership had been dissolved by an act of bankruptcy of one of the partners; [i] yet an admission by the assignees of the bankrupt was received as sufficient evidence to bind the other partner, by taking the case out of the act of limitations. In Grant v. Jackson, [k] the acknowledgment of a partner, made after he had become a bankrupt, (of course, after the partnership had been dissolved,) but before he had obtained his certificate, was received as evidence against the other partners, in consideration of the interest remaining in him, small as it was. It follows then, a fortiori, that, where all are able to pay, one who binds himself at the same time, may bind the rest. [l] Brockenbrough v. Hackley, [m] in this Court is also a strong case. It is true, that there the only plea was the act of limitations; but that makes no difference; because the only evidence was the written acknowledgment, at the foot of the account, by one of the partners, long after the dissolution of the partnership.
Wickham in reply. The position, that participation of interest is sufficient to enable one to bind himself and others, goes too far: it would prove that a man might, in all cases, bind other persons, by confessing a judgment against himself and them; or that he could bind them by his note or bond, without their signatures. What cannot be done, directly, by giving a note or bond, or bond, or confessing a judgment, cannot be done, indirectly, by acknowledging the existence of a debt. Suppose the debt was due from himself in his individual capacity, would he not be interested to fix it on the partnership instead of himself alone? The argument that his acknowledgment is only evidence of a pre-existing debt, begs the question; for the question is, whether the debt existed or not? It does not follow, because such an acknowledgment is sufficient to take a case out of the act of limitations, that it ought to be sufficient to prove the existence of the debt in the absence of other testimony. The power to create a debt is very different from that of reviving a debt; for the act of limitations is governed by an equity; and after legal proof that the debt originally existed, any acknowledgment, however slight, is sufficient to prevent its recovery from being barred by the act. [a...
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