Tilford v. Ramsey

• Decision Date: 31 March 1866
• Citation: 37 Mo. 563
• Parties: JOHN B. TILFORD, Appellant, v. CHARLES G. RAMSEY, Respondent.
• Court: Missouri Supreme Court

37 Mo. 563

JOHN B. TILFORD, Appellant,

v.CHARLES G. RAMSEY, Respondent.

Supreme Court of Missouri.

March Term, 1866.

Appeal from St. Louis Court of Common Pleas.

Hitckcock, for appellant.

I. That the note first given was in every sense a partnership debt will not be disputed. It was not a joint debt of the two partners, but a debt of the firm as such. The holder of that note was entitled to all the rights of a creditor of the firm not only as against the two partners individually, but as against the partnership assets eo nomine. The note being made in the name of the firm, by one partner, at the express request of the other, and with full consent to the proposed application of the proceeds, the lender also expressly requiring and taking the promise not of either partner, nor of both partners, but of the firm as such, it cannot be distinguished from any other debt contracted by the firm, no matter how strictly for the purposes of its legitimate business-- Finley v. Lynn, 6 Cranch, 238; Rogers v. Batchelor, and Livingston v. Rosevelt, 1 Am. L. C. 406-53; Hickman v. Kunkle, 27 Mo. 401, 403; Cayton v. Hardy, Id. 536; also, 10 Wend. 461; 2 Bailey, 109; 3 Conn. 194.198; 8 Greenl. 417, 420; 15 Pick. 276, 290; 6 Vt. 257; 12 Pick. 430, 436; 9 Ala. 313.

II. This being so, the question as to the second note stands precisely as if it had been given in renewal of any other debt of the firm contracted in the course and for the purposes of its legitimate business, and with the knowledge and consent of both partners. There can be no doubt whatever that Mitchell had authority to renew this first note in the firm name, and thereby bind the firm--See 3 Kent Com. 10 ed. p. 45, (41* in margin); Sto. on Part. §§ 101-3; Sto. Agency, § 124; Collyer on Part. § 195; Hickman v. Kunkle, 27 Mo. 403; Cargill v. Corby, 15 Mo. 425; see also 7 Dana, 367; 4 Shepley, 416; 18 Wend. 466; 10 Mass. 476; 12 Id. 54; 15 Id. 75, 331; 5 Pet. 529; 2 Pet. 198; Kirby, 77; I A. K. Marsh, 181; Har. & Jones, 28.

Gray, for respondent.

I. Knowledge of Bodley, plaintiff's agent, that Mitchell got the money for his own private use, was notice of that fact to plaintiff--Sto. Ag. § 140; Hill on Trus. 165.

II. The note was not made in the firm name and was therefore not binding on the firm--1 Pars. Notes, &c., 135 & note r.; 9 Mees. & Welby, 284; 11 Ad. & El. 339. The firm name was Charles G. Ramsey & Co. The note declared on is executed in the name of Chas. G. Ramsey & Co. To bind the firm a note must be in the firm name; this is not. The power of a partner to draw bills, notes, &c., is only implied, and may be rebutted, and if a third party have notice of want of authority, he cannot recover--15 Mo. 425; Hickman v. Kunkle, 27 Mo. 401, 536; Colly. Part. § 483; 3 J. J. Marsh. 527; 7 Mon. 798.

HOLMES, Judge, delivered the opinion of the court.

The note sued on was given by one partner, who signed the name of the firm thereto as makers. It was endorsed for accommodation to the plaintiff by the payee. It was drawn and given in renewal of another like note, which had been executed to the plaintiff, and signed by the name of the firm by the other partner, for a loan of money which was received by the first partner for his own individual use, unconnected with the partnership business. It appears that the plaintiff's agent was unwilling to make the loan directly to the individual partner, and to receive the signature of the firm merely as security on the note; and he required that the note should be given as a partnership note, and signed by the other partner himself. He was willing to make the loan to the firm, but not to the individual partner. It was understood by all the parties that the money was borrowed for the benefit of the individual partner; but the lender would not loan it otherwise than upon the name and credit of the firm. In such case, the loan is to be considered as made to the firm, and not to the individual partner. That the firm allowed the money to go to the individual partner for his own private use was a matter that lay wholly between the partners themselves, and did not concern the lender. It is laid down by Chancellor Kent, that if a note be given by one partner in his own name for money which is to be applied to partnership uses, he alone, and not the firm, will be bound to the lender--3 Kent's Com. 41. The borrowing partner, and not the lender, is then the creditor of the firm. So here, the borrowing firm, and not the lender, became the creditor of the individual partner. That the note given in the name of the firm, though in a matter which is not in its nature a partnership transaction, and not within the general scope of the partnership business, will bind the firm when it is done with the express assent, or under the implied sanction, of all the partners there can be no possible doubt--3 Kent's Com. 42; Dob. v. Halsey, 16 J. R. 34; Ridley v. Taylor, 13 East, 175; Hickman v. Kunkle, 27 Mo. 401. Where the note is given with the express assent of all the parties, and with the understanding that the loan is made on the credit of the firm, it becomes a partnership debt as fully as if the money were to be applied to the business of the partnership. This note, then, was given for a debt of the firm itself.

When the note became due, it was renewed by the individual partner, signing the name of the firm, without again consulting the other partner. There was some evidence tending to show that this other partner (who had signed the first note) had charge of the financial part of the business, and usually drew the notes and checks of the firm, though not always; but there was no proof of any positive restriction, by stipulation or agreement between the partners, upon the power of either partner to sign the notes in the name of the firm; nor that any such restriction was known to the...