Harry Holmes v. William S. Burton, Franklin Olds, & Elias Lyman, 9 Vt. 252

The opinion of the court was delivered by Phelps, J. We are of opinion, that the plaintiff cannot recover upon either count in his declaration. Not upon the first eount, for the note is, on the face of it, the individual note of Blood, and not of the partners. Here is an open, notorious partnership, and the paper does not profess to bind them. Had the defendants been dormant partners, the case would have been different. The signature might then be understood to be that of the firm, and, with proper averments and proof, the plaintiff might recover against them.

But here there is a partnership, open and notorious, and, upon the face of the note, the presumption is, that the plaintiff relied upon the responsibility of Blood alone. Under the second count, the question is, whether the plaintiff can resort to the consideration of the note and recover as for goods sold. The first difficulty in this course is, that the note itself is evidence that the horse was not sold to the firm, nor upon their credit. It has been held, that if money be advanced to a firm, upon the individual security of one partner, the firm are not liable.

This rule holds, where the partnership is public, although it may not apply to the case of a dormant partnership. It goes upon the ground that the creditor elects to take the individual security. Secondly. This not being the case of a dormant partnership, the plaintiff cannot recover upon his general count, unless he is at liberty to repudiate the note, and can also recover upon the sale, as if no note had been given. He can not repudiate the note, because there was no fraud nor concealment; and further, it is not a. case, where the presumption would arise, that the purchase was made in behalf of the partnership.

The purchase of horses is -not within the legal scope of the partnership, and one partner has no authority to bind the other in this way. It is said, it is customary for mercantile firms in the country to deal in horses. This will not vary the case. If a particular firm have dealt in this way, it will afford evidence, in such case, of an authority in one partner to bind the other. But although the practice is common, it does not follow that it is a legal consequence of the connexion.

Here, then, is a case, where a contract is made, not within the scope of the partnership, and where the partner has not pledged the credit of the partnership, but his own. He had neither authority to bind his fellows, nor did he attempt to do so. How, then, can the plaintiff recover ? The cases, cited by thei'plaintiff, are cases, where the purchase was within the scope and for the benefit of the partnership. It is said, also, that the defendants may be considered, quoad this purchase, as dormant partners. Such a precedent would be dangerous in the extreme.

It would obliterate the distinction between partnership debts and the individual debts of the partner, and it would be at variance with the settled law on the subject. The defendants may, indeed, have had the ultimate proceeds of the transaction. But this is not enough. Property may go t0 ^ie ultimate benefit of a firm, and still the partners may not liable. If there be any case, in which one partner can purc[lase property, or loan money, to be put into a partnership, on own account} the'argument fails.

But there is no satisfactory evidence that the defendants had the benefit of this purchase. - The money, for which the horse was sold, went into the concern, but upon what conditions, does not appear. For aught we know, Blood credited himself with the money. As to the supposed adoption of the proceeding by the defendants, it is sufficient to say, that it does not appear that they ever adopted it, or recognized the debt as their own. The entering it, as a debt of the concern, was the act of Blood, and it does not appear that the defendants then knew how the note was signed.

They could not be bound by any adoption of the act, unless with full knowledge of all the circumstances. Judgment reversed, and cause remanded.