Opinion
Argued June 14th, 1871
Decided September 5th, 1871
D.F. Clark, for appellant.
J. Ganson, for respondent.
The defendants in this case were partners, as cattle brokers, in the city of New York, at the time of giving the check in suit, the advance of money thereon, and also at the time of giving the draft described in the complaint, doing business in the firm name of "Colwell Dimmick." The check in suit for $6,800 was drawn in the name of "O.B. Dimmick." The check was upon a bank in New York city, and the money was advanced thereon, deducting seventeen dollars or twenty dollars therefrom, for alleged exchange by the plaintiff in Buffalo.
I think there was sufficient evidence to carry the case to the jury, upon the question whether the firm did not do business in the name of "O.B. Dimmick," in giving checks. They had been in business nearly a year as a firm; and during all that time, the financial part of their business had been transacted by Dimmick alone. He had kept the moneys of the firm in the bank in his own name; had uniformly paid the bills and accounts of the firm in checks signed by himself, and as he said, with his copartner's knowledge and assent; that checks so signed, with the like knowledge and consent, had been delivered to one or more persons, to buy cattle for the firm, assented to by Colwell substantially as binding the firm; that the firm had been in the habit of making advances for the purchase of cattle, and always by checks in the name of Dimmick. The firm's money was always thus disbursed. Colwell attended to another branch of the business, viz., selling the cattle. A large part of the business of the firm, consisted in selling cattle purchased by one Holmes, and sometimes by others. This was done on joint account as to profit and loss by the firm and Holmes, and so as to some other parties at other times.
The firm of Colwell Dimmick continued to do business, a little more than a month after Colwell became aware of the giving of this check, and was then dissolved.
Two checks in blank were given by Dimmick to Holmes, at the same time. From the testimony of Holmes and Dimmick, I should infer that these checks were given, to enable Holmes to purchase stock, to be shipped to the firm of Colwell Dimmick, in New York, and sold by them on joint account for the three. One check was filled up for $4,000; was cashed by this plaintiff; and the stock therewith purchased by Holmes was shipped to New York, and was sold by Colwell Dimmick on joint account of themselves and Holmes.
The doctrine seems to be settled, that where one of two partners draws bills of exchange in his own name, and procures their discount, and carries the proceeds to the partnership account, the firm are not liable to the discounter, the money being advanced solely on the security of the parties to the bills by way of discount, and not by way of loan to the partnership. ( Emly v. Lye, 15 East, 7; and see Coll. on Part., Perk. ed., § 478, and cases cited in note 3.)
A partner of a firm has a right to contract in his own name, and to obtain credit upon his individual responsibility, although he may appropriate the proceeds to the partnership, and the persons with whom he may thus deal, have the right to trust him individually, and not the firm. In such cases the firm is not bound. But this rule does not apply to secret and dormant partnerships. (Same note and cases cited.)
In the case at bar, the firm kept no other bank account than that in the name of Dimmick. They drew no checks (as they thus could draw none) except in his name. This course of business was known to both partners, as one testified from the beginning, and the other, that he did not know of it until some six months had expired. But for months it had been known to him prior to this transaction. This is not like the case of Faith v. Richmond (11 Ad. E., 339, in 39 Com. L.R., 113).
It cannot be denied that if the partners had expressly agreed, that the firm should draw all checks in the name of Dimmick, and kept all their money in his name in bank, that the firm would be liable on a check thus drawn in their business. Yet where the facts as here authorize such an agreement to be implied, the liability is the same. In such case it is their partnership name for that purpose.
It is objected, that the court erred in admitting evidence of what was stated to the plaintiff, when he advanced the money on the check. If the evidence be not admissible, it is wholly immaterial. I think it pertinent to show affirmatively, that the plaintiff did not trust Dimmick alone, or advance the money upon his individual security, although perhaps in this case the evidence was unnecessary.
There is no usury in this case. There can be no such question under the facts. Here was no "loan or forbearance of money," for any time whatever. There was, therefore, no usury. Had there been a loan for any time I should have had no difficulty in seeing usury under facts like these, unless the statute on that subject be regarded as repealed.
Here it was shown that checks on New York were generally above, but never below par. It is not then, very important, to inquire what it will cost to send the check by express to New York and bring back the proceeds. The testimony is harmless here. The charge of the court was correct in the points assailed.
The request to charge, that the issuing of a blank check to a third person by a partner, is a fraud upon the other partner, does not apply to this case. Holmes can scarcely be considered a third person; that is, a stranger here. He was, in fact, a partner, and had been for months, in purchasing and selling cattle with these defendants. There was, positive testimony to that effect. The request when again presented, as applicable to the facts in this case, cannot be sustained as matter of law. Partners have great powers over partnership matters. They may easily ruin their copartners if they choose to be villains. They may do it in various ways. Greater reliance must always be placed upon the integrity of a copartner, than upon legal remedies to make him honest, though there is no evidence in this case of a lack of integrity in Dimmick.
All concur. Judgment affirmed.