Page images
PDF
EPUB

be raised upon the joint liability of himself and Silliman. It only establishes the fact that Patterson refused to pay Silliman's claim, or to make further individual advances for firm purposes, and this, under the agreement, was no cause of forfeiture.

It is alleged in the answer that Patterson failed to give his attention to the business of the firm, and also that he used the name of the firm to raise money for his own private purposes; but neither allegation is sustained by proof. The answer further alleges that the complainant declined taking the respondent's machinery and property mentioned in the articles of copartnership, and for proof of this reference is made to the note of 1st November, 1852, signed "Fred." The note reads: "DEAR SIR:

"I have concluded to decline having anything to do with your engine, or any of the rest of the old truck you had, on the ground of its not being suitable for the purpose. Yours respectfully, "FRED."

If the engine and other property could be advantageously used at the Tuscarora colliery, Silliman had the right to furnish it under the agreement; if it could not, he had no such right. In any event, the note referred to could not prejudice Silliman's legal right; and even if Patterson was mistaken in his allegation that the engine and other property was not fit for use he did not thereby forfeit his right as a partner.

Again, it is alleged by the respondent that the moneys absolutely necessary for the prosecution of the business could not be raised upon the joint responsibility of the firm. Conceding this to be so, it was not, either under the agreement of the parties or by the law of the land, a reason why one partner should declare the interest of the other forfeited.

Upon the whole case, our opinion is that the act of Silliman in declaring the partnership dissolved, and in denying the right of Patterson to participate in the business or in the possession of the property of the firm, and in ejecting him therefrom, was unauthorized and illegal. What, then, is the remedy? To order him simply to be re-instated as a partner would not be an adequate remedy, and would be injurious to the interests of both parties; for it is very clear that they can not act harmoniously, and therefore the relation of partners

[graphic]

ought to be dissolved. The dissolution of the copartnership involves the necessity of an account and the appointment of a receiver to take charge of the partnership effects, pay the debts, and dispose of the partnership property.

Two objections are made by the respondent to a sale of the leasehold interest in the coal mines.

1st. That it is not partnership property, but belongs to the complainant and respondent as tenants in common.

2d. That a sale would forfeit the interest acquired under the lease made by the Kentucky Bank to the parties. litigant. To the first objection it is sufficient to say that the articles of copartnership clearly embrace the interest acquired under the lease, which was thereof converted into partnership assets, and became the property of the firin.

As the Kentucky Bank is not a party to this bill, we can not give an opinion which will conclusively settle the question of the effect of a sale, under an order of the court, of the interest of Patterson & Silliman in the coal lease. But as the point is presented, and as it is necessary to pass upon it between these parties, it is proper to say that our present opinion is, that to decree a sale under the prayer in this bill, will not give to the Kentucky Bank the right to declare the lease at an end.

Upon the whole case, we are of opinion that the complainant is entitled to the relief prayed for in this bill.

Reversed and decree in favor of complainant ordered.

SEDGWICK V. DANIELL.

(2 Hurlstone & Norman, 319. Exchequer of Pleas, 1857.)

1 Note of sundry partners for benefit of all-Contribution. Three of the partners in a mining company borrow money on their joint note and the money is used for the benefit of the concern. Two of them paid the note and one of them, who had advanced the share of the third maker, sued such third maker for contribution. Held, 2 that it was a transaction independent of the mining partnership, and that the action at law was maintainable.

1 Dickinson v. Granger, 18 Pick. 315.

2 Another defense was that defendant had lent his name to the note on promise that he should not be called upon to pay it; and at a subsequent trial a jury found for defendant on this question of fact.

VOL. XI-22

Declaration for money paid by the plaintiff for the use of the defendant. Plea, never indebted.

At the trial before WATSON, B., at the London sittings in last Easter term, the following facts appeared: The plaintiff and defendant were shareholders in a joint stock mining company, called "The Camborne Consols Mining Company." Money being required for working the mine, one Tindal, who was also a shareholder in the company, applied to the Royal British Bank for an advance of £500. The bank consented to advance the money on condition that they had, as a security, a promissory note with three makers. The plaintiff and Tindal agreed to sign the note, and they applied to the defendant to become the third maker, promising him, as the defendant alleged, that he should not be called upon to pay it. A joint and several promissory note was accordingly given with three names, and the money received from the bank was applied to the purpose of the mine. It was arranged that the note should be paid, when due, out of the produce of the mine; but it proved unproductive. The note was renewed, and the plaintiff and Tindal subsequently paid the amount, and this action was brought by the plaintiff to recover what he had paid above his share.

It was submitted on behalf of the defendant that this was a partnership transaction in respect of which no action at law could be maintained. The learned judge-left it to the jury to say whether the defendant became a party to the note on the understanding that he was not to be liable, and the jury found that question in the negative. His lordship then directed a verdict for the plaintiff, reserving leave to the defendant to move to enter a verdict for him, if the court should be of opinion that the action was not maintainable.

STAMMERS, in the same term, May 6th, obtained a rule nisi accordingly, and also for a new trial on the ground that the verdict was against the evidence.

CREASY now showed cause.-The action is maintainable. This was an independent transaction not connected with the profit and loss of the company. The three persons executed an instrument by which each and all became liable to pay a

certain sum of money, and one having paid the whole amount, he has a right of action against the others for contribution. In Edgar v. Knapp, 6 Scott N. R. 707, 712, four persons who had acted as directors of a proposed railway company, being sued for the debts contracted on account of the concern, jointly retained an attorney to defend them on their personal responsibility; and it was held that one of the four who had paid the attorney's bill was entitled to sue the others for contribution. There Cresswell, J., in the course of the argument said: “If four individuals make a contract which in its results necessarily involves a liability on each and all of them to pay money, does not each of them give the other authority to pay it on his behalf?" On the same principle it has been held that a part owner of a ship, who, as ship's husband, incurs the expense of the outfit, may sue the other part owners separately for their respective shares of the expense: Helme v. Smith, 7 Bing. 709. There Park, J., said: "Even in an ordinary partnership, if one of five or six were to advance to each of the others his share of the capital as a loan, he would be entitled to sue him separately; and why not the plaintiff for money he has laid out on his ship?" So here, the money borrowed on the security of the promissory note never became an item in the partnership account, but was a distinct loan by the three shareholders to the company. He also agreed that the verdict was not against the evidence.

STAMMERS, in support of the rule. The plaintiff and the defendant were partners in a mining company, and such a company is subject to all the incidents of an ordinary trading partnership: Crawshay v. Maule, 1 Swans. 523; Jefferys v. Smith, 1 Jac. & W. 298. One of those incidents is, that one partner can not sue another at law for a matter relating to the partnership.

In Story on Partnership, Sec. 219, p. 319, it is said, "It is sometimes laid down by elementary writers, that during the continuance of the partnership an action at law will lie by one partner against the others for moneys advanced, or paid, or contributed, on account of the partnership, or of the debts and obligations incurred thereby. But this doctrine, in the general terms in which it is laid down, is utterly untenable and inconsistent with the rights and duties and relations of

the partners with each other." Also in Collyer on Partner. ship, p. 190, 2d Ed., it is said: "Upon the whole, it may now be considered to be the better opinion, that in cases of general trading partnership one partner can not, at law, enforce contribution from his copartner for moneys laid out on the partnership account." Holmes v. Iliggins, 1 B. & C. 74, and Bovill v. Hammond, 6 B. & C. 149, are authorities to the same effect. In Robson v. Curtis, 1 Stark. 78, the plaintiff had indorsed to the defendant a bill of exchange, which the former received from the drawer in payment for some cattle sold to him by the plaintiff and defendant, who were in the habit of jointly purchasing lots of cattle from the breeders, and selling them in smaller parcels. The defendant indorsed over the bill, and it having been dishonored, he promised that if the plaintiff would take it up, he, the defendant, would pay him half the amount. The defendant having failed to do so, the plaintiff sued him for money paid; but Lord Ellenborough ruled, that as some of the cattle remained unsold, and no account had been settled between the plaintiff and defendant, this transaction was not taken out of the partnership account, and he nonsuited the plaintiff. That was a stronger case than the present, inasmuch as there was an express promise to pay. [MAR. TIN, B.-That decision is not approved of in Collyer on Partnership, p. 181, 2d Ed.] The reasons for the rule are given by Lord Cottenham in Richardson v. The Bank of England, 4 Myl. & C. 165, 172. But, indeed, the rule is founded upon a maxim as ancient as any part of the common law, "Frustra peteret quod mox restiturus esset," a maxim which was acted on in a case where a villein sought to recover damages against his lord: Jenk. Cent. p. 256, Pl. 49. The rule of law applies, a fortiori, where one partner sues another for contribution: Sadler v. Nixon, 5 B. & Adol. 936. He also argued that the verdict was against evidence.

POLLOCK, C. B.-Two questions have been argued; one of law and the other of fact. The question of law is, whether under the circumstances this claim can be considered as a partnership debt, for if so no action at law can be maintained in respect of it. I am of opinion that the instrument not being signed by all the members of the company, but by three only. this must be considered as a transaction separate and apart from

1

ཚ།

« PreviousContinue »