Thomas v. Stetson
| Decision Date | 14 December 1883 |
| Parties | THOMAS, ASSIGNEE, v. STETSON. |
| Court | Iowa Supreme Court |
Appeal from Buena Vista district court.
Action upon an account for goods sold and delivered. The defendant for answer averred certain facts as constituting payment. The plaintiff demurred to the answer upon the ground that the facts averred did not constitute payment. The court sustained the demurrer, and the defendant electing to stand upon his answer judgment was rendered for the plaintiff. The defendant appeals.Gregory & Bailie, for appellant.
Lot Thomas, per se.
The facts, as shown by the answer, are that the goods in question were purchased by the defendant of one J. F. Doty & Co., the plaintiff's assignor; that this firm consisted of J. F. Doty and James R. Day, and was engaged in selling lumber and coal at Storm Lake; that Doty resided at Storm Lake, and was the active member of the firm, and had the ene and exclusive management and control of the business; that Day resided in Dubuque; that the sale by J. F. Doty & Co. to the defendant of the goods in question was made through Doty as a member of the firm; that the defendant was a merchant at Storm Lake, engaged in a different line of trade, and sold the goods in his line on credit to Doty for his individual use, and afterwards Doty and the defendant made a settlement, whereby it was agreed that the indebtedness due to J. F. Doty & Co. from the defendant should be deemed paid by the release of the indebtedness due from J. F. Doty individually to the defendant. This alleged settlement constitutes the payment upon which the defendant relies. For the purpose of showing that J. F. Doty had authority to accept in payment of indebtedness due his firm, the release of certain indebtedness due individually from himself, the defendants made certain averments which are in substance that for two years or more he had bought goods on credit of J. F. Doty & Co., and had sold goods on credit to J. F. Doty for his individual use, and that he and Doty had afterwards applied one account against the other, and J. F. Doty had charged himself accordingly on the firm books of J. F. Doty & Co., and that Day did not object thereto. He further averred in substance that it was the uniform practice and usage of the firm of Doty & Co. at all times to receive accounts against Doty individually in payment of their partnership demands, which was well known throughout the community, so that this defendant knew such to be their uniform practice prior to the time that he dealt with the firm, and that in dealing with it and making settlements with Doty as set out he relied upon such practice.
These are in substance the averments upon which the defendant relies as showing payment; but, in our opinion, they do not have that effect. A partner has authority to bind the firm in all matters pertaining to the partnership business. But it is not properly partnership business to release indebtedness due to it in consideration of the release of indebtedness due to its debtor from one of its members. The precise question arose in McNair v. Platt, 46 Ill. 211. In that case the court said: “The rule is firmly established, and not to be controverted, that where a member of a copartnership is indebted to a person owing the firm, he cannot apply the indebtedness due to the firm for the purpose of canceling his indebtedness, nor can he apply the funds or property of the firm for such purpose without the consent of his copartner, or at least his subsequent ratification;” citing Brewster v....
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