Opinion
Argued March 6, 1873
Decided June term, 1873
Luther R. Marsh for the respondent. John K. Porter for the appellant.
The indorsements upon which this action is brought were made on the 27th or 28th of March, 1861, at New Orleans, and therefore at a period earlier than the breaking out of hostilities in the late civil war. They were made by the defendant Matthews, then present in New Orleans, in the name of Brander, Chambliss Co., and he therefore cannot be allowed to dispute either the existence of that firm or his responsibility as a member of it. It actually proceeded to transact business for a considerable period. By the writing under which it was constituted it was to commence on the 27th of March, 1861, and it did so. The writing provided that a copy should be immediately transmitted to Brander, Senior, for his approval; and that, in case of his refusal, it should become null and void. This, in my opinion, looks to an affirmative act of dissent on his part, until the happening of which the affairs of the firm would go on with the effect, at least, to bind the other and assenting partners. To this effect are the decisions of the Court of Appeals, in Bank of New Orleans v. Matthews ( 49 N Y, 12) and McStea v. Matthews ( 50 N.Y., 166), in each of which the court had before it the instrument above referred to.
The indorsements were made to transfer the notes to the plaintiff and to give him recourse against the firm of Brander, Chambliss Co., in case of their non-payment. They had formed part of the assets of Brander Hubbard, which firm, by agreement, was dissolved on the day of the formation of the firm of Brander, Chambliss Co. For the interest of the plaintiff Hubbard in the firm of Brander Hubbard, Matthews, to whom that interest was sold, was to pay Hubbard $35,000. In part payment of this sum, Matthews indorsed, in the name of Brander, Chambliss Co., the notes in question to Hubbard, in order to give to him the responsibility of the new firm upon these notes in place of cash. If it be conceded that any difficulty might stand in the way of the plaintiff, were he now seeking to charge the other members of the firm of Brander, Chambliss Co., Matthews can interpose no objection; for he was the actor in the whole matter and cannot be permitted to deny his own authority in order to protect himself from liability. Nor, since the case of Moore v. Cross ( 19 N.Y., 227), can there be any difficulty in Hubbard, the indorser of Brander Chambliss Co., recovering against them, growing out of the fact that the firm name of Brander Hubbard appears upon the paper before them. The intent of the parties in this respect can be carried out by the courts. ( Bacon v. Burnham, 37 N.Y., 614.)
The more important question in the case is, whether Matthews was charged as indorser. All the notes were payable at the counting-house of Brander Hubbard, in New Orleans. Upon its dissolution the new firm of Brander, Chambliss Co. carried on its business at the same place, and continued to do so until after the maturity of the notes. On the 26th of April, 1861, Matthews, in New Orleans, constituted one Glendy Burke attorney in fact for himself, and also for the firm of Brander, Chambliss Co., among other things, to receive and acknowledge all notices of protest for the firm or for himself. Burke, who had been and continued the chief clerk of the defendants, remained in New Orleans in attendance on the business of the defendants, his place of business being their counting-house. Matthews, whose residence was in New York, returned to that place soon after the execution of the powers of attorney. Before the maturity of any of the notes the civil war broke out and was flagrant between the United States and the so-called Confederate States. During its continuance all the notes matured and were duly presented for payment, and notice of their dishonor was given in due time at the office of the defendants, addressed to the firm. The question is, were these notices sufficient to charge Matthews, who was then in New York? He in New York and the other members of the firm in New Orleans by the mere fact of war, had become enemies to each other, their relation of partners had been dissolved, and all commercial intercourse between them had become unlawful. ( Griswold v. Waddington, 16 J.R., 438; Woods v. Wilder, 43 N.Y., 164; The William Bagley, 5 Wal., 377; Kershaw v. Kelsey, 100 Mass., 561.) But neither had undergone, by the mere fact of war, a forfeiture of any existing rights of property, nor been exonerated from any existing liabilities. Neither could maintain an action in the courts of the other party to the war while it should last, but the disability would terminate with the war itself. ( Levy v. Stewart, 11 Wal., 244, 255.) In the language of Chancellor KENT, in Griswold v. Waddington, above cited, "the parties were still partners as to those goods which had been actually purchased by them before the war; and the parties, as partners, were bound to account to each other for the proceeds of these goods, and equally bound as partners to pay for them, if not already paid for. A dissolution of partnership only has respect to the future. The parties remain bound for all antecedent engagements. The partnership may be said to continue as to everything that is past and until all pre-existing matters are wound up and settled."
The notes in question were held in New Orleans, were payable there; and being unpaid there by the makers, might be paid by the indorsers who were there carrying on business; and such payment, if made, could have been brought into account with Matthews, after the close of the war, in conformity with the case above cited; for it obviously could be no defence to the other partners domiciled in New Orleans if sued by the holders in the courts of the locality during the war, to say that an enemy domiciled in New York was an indorser with them as partners. Nor is there any authority or reason for holding that any different notice to the firm in New Orleans was necessary by reason of the dissolution by force of the war, in order to charge the members of the firm domiciled there. If the case of parties so situated be likened to that of persons not partners who jointly indorse, the result would be that neither could be charged, because, as to them, each must have separate notice, and neither is liable without the other is also charged. ( Willis v. Green, 5 Hill, 232; Shepard v. Hawley, 1 Conn., 367.) That rule would require, in order to charge the members of the indorsing firm resident in the territory of one belligerent, a communication, or an attempt to communicate, with an enemy resident in the territory of the other belligerent, which would fall under the prohibition of all commercial intercourse between the citizens of belligerents. It results then from necessity if the liability of the absent partner in a firm dissolved by the event of war is to be continued at all in respect to engagements existing at the time when war breaks out, that he must be deemed to be represented by the representative of the firm remaining within the jurisdiction of the belligerent whose authority extends over the place of business of the firm, and that, as in respect to property and rights there existing, so in respect to obligations and liabilities created before the war, he must share the fortunes of the firm. Such a rule does not seem to conflict with any public interests, nor with any determinations to which we have been referred. It agrees with the decisions in respect to the effect of dissolutions of partnership by consent of parties. Thus, in Brown v. Turner (15 Ala. [N.S.], 832), it was held that a demand of payment of one was a demand of all; and it was said that a dissolution of partnership, before a bill falls due, cannot vary the rule, nor render it necessary that a separate demand should be made of each. In Coster v. Thomason (19 Ala. [N.S.], 717) the court says: "We believe the law to be well established that where a bill indorsed by a partnership is dishonored, notice to either of the late partners is sufficient to bind all." So, in Slocomb v. Lizardi (21 La. An., 355), it was held that notice to one member of a firm, indorsers of a note, is notice to all. In that case the dissolution was by death, and notice to the survivor was held to bind the estate of the deceased partner. In White v. Kearney (2 La. An., 639) goods had been contracted for by a firm, and after its dissolution were offered to be delivered to one of the former partners, and it was held sufficient to put the firm in fault, he refusing to receive and pay for them. The only case to which we have been referred suggesting a doubt upon the generality of the rule is that of Nott v. Douming ( 6 La., 684), in which the circumstance existed and is remarked that the notice of dishonor was given to one partner before notice of dissolution had been received by the creditor. All these cases, by their reason, tend to illustrate the ground of and to sustain the rule well stated in Edwards on Bills and Promissory notes (page 632, note 3), that the dissolution cannot retroact on the contract of indorsement, under which notice to one of the partners affects all.
The same conclusion would result from the agency of Burke constituted by the defendants, then in New Orleans, and before the breaking out of the war and the general legal interruption of commercial intercourse, as defined in McStea v. Matthews, before referred to. To receive and acknowledge notices of protest was a power specially conferred upon him; and all the notices were delivered at his place of business in due time, and some to him personally.
The doctrine that an agent constituted before a war may continue to represent his principal in transactions not contrary to the policy or interests of the government of the agent's residence, though the principal be an enemy resident under the hostile government, seems to have been often affirmed; several times acted upon by the courts, and never, that I have found, denied. In United States v. Grossmayer (9 Wal., 72) Mr. Justice DAVIS, delivering the opinion of the Supreme Court of the United States, says: "We are not disposed to deny the doctrine that a resident in the territory of one of the belligerents may have, in time of war, an agent residing in the territory of the other, to whom his debtor could pay his debt in money, or deliver to him property in discharge of it; but in such a case the agency must have been created before the war began, for there is no power to appoint an agent for any purpose, after hostilities have actually commenced; and to this effect are all the authorities.
The same principle is recognized in Ward v. Smith (7 Wal., 452); Conn v. Penn (1 Peters' Cir. C., 496, 524); Denniston v. Imbrie (3 Wn. C.C., 396, 403); Paul v. Christie (4 Harris McH., 161); Robinson v. International Life Ins. Co. ( 42 N.Y., 54, 62); and also in the earlier cases in this State of Buchanan v. Curry (19 J.R., 137, 141); Griswold v. Waddington (16 id, 484); Clarke v. Morey (10 id., 69, 73). Moneys received by such an agent are lawfully paid and lawfully received though a remittance by him to his enemy principal, would be unlawful. If such an agency can exist at all for any purpose, it is not perceived why, being lawfully constituted in its beginning, it may not subsist for any purpose not hostile, and especially for such a purpose as to receive notices of dishonor upon notes in order to charge an absent indorser.
The judgment should be affirmed.
All concur.
Judgment affirmed.