American Wholesale Corp. v. Cooper

BbogdeN, J. Is a deed of trust executed by one partner to a trustee for the other partner upon the partnership property and duly recorded, notice to a foreign creditor of the dissolution of the partnership? The evidence in this case discloses that the plaintiff is a Maryland corporation, and the defendant Cooper is a resident of Alamance County, North Carolina. The defendant, P. L. Cooper, and E. J. Richmond had formed a partnership under the name and style of Richmond-Cooper Company. This partnership had been purchasing goods from the plaintiff since 1921. On 28 June, 1923, E. J. Richmond purchased from plaintiff a bill of goods, giving at the time promissory note for the purchase price, signed in the name of Richmond-Cooper Company, by E. J. Richmond. The evidence of plaintiff tended to show that it had never seen the notice of dissolution published in the Mebane Enterprise and had never seen the deed of trust or had any notice of the dissolution of said partnership, and that it first learned of the dissolution in January, 1924. This Court considered the question of sufficiency of notice of dissolution of a partnership in Strauss v. Sparrow, 148 N. C., 309. The *560 rule of law governing notice of dissolution is thus stated: “It is well established that when an ostensible or known partner retires from a firm which continues the business, in order to protect him from liability for future obligations of the partnership proper notice of his retirement must be given. Ordinarily, when a creditor seeking to enforce recovery against such a partner has never had any dealings with the firm, a notice published in a local paper having a general circulation, in a full and proper manner and for a reasonable length of time, will be regarded as sufficient. Where, however, the creditor claimant has been a customer of the firm, actual notice must be shown or the existence of such facts brought home to the creditor as would put a person of reasonable business prudence on inquiry which would lead to knowledge of the dissolution of the firm or the retirement of the partner resisting the claim. In such case, and particularly when a former customer is resident in a distant community, publication of notice in a local paper is not as a rule recognized as sufficient of itself to affect the customer with notice or to carry the question to a jury, unless it can be further shown that the creditor was in the habit of reading the paper at the time a proper publication was being made, or that a copy of same containing the publication was especially sent to him.” Again, in Furniture Co. v. Bussell, 171 N. C., 474, the Court held: “It may be conceded that an outgoing member of a firm should take his name out with him, for if he leaves it behind he will be considered as still holding himself out as a partner, whatever may be his real relation to the firm, unless he gives notice of his withdrawal to those who dealt with the firm or were its customers while he was a partner.” In Bynum v. Clark, 125 N. C., 352, the partnership formed a corporation, and the corporation purchased the assets of the partnership. After the formation of the corporation one of the partners purchased goods from the plaintiffs. The plaintiffs had no actual notice of the formation of the corporation nor of the dissolution of the partnership. Fair-cloth, C. J., writing for the Court, says: “The only question is: Can the plaintiffs recover, they having had no actual notice of the dissolution of the partnership or of the formation of the corporation? We think they can. In such cases, actual notice must be given, especially to those who had previous dealings with the partnership.” Applying these principles of law to the facts in the case at bar, we are of the opinion that the deed of trust and the registration thereof in itself constituted no notice of the dissolution of the firm to a nonresident creditor. The identical question was considered by the Supreme Court of Arkansas in the case of Bluff City Lumber Co. et al. v. Bank of Clarks *561 ville et al., 95 Ark., p. 1, 128 S. W., p. 58. In tbat case tbe- court was requested by tbe defendant to instruct tbe jury as follows: “You are instructed tbat wben tbe deed of trust introduced in evidence was executed and filed for record, conveying tbe property of tbe Clarksville Lumber Company and tbe real estate of tbe defendants, D. B., A. D., and E. T. Eeynolds, to secure tbe indebtedness of tbe Bluff City Lumber Company, tbe filing of tbe said deed of trust was notice of its contents to every one, and tbe plaintiffs cannot plead ignorance of its contents.” Tbe opinion declares: “Tbe appellants contend tbat tbe trial court erred in refusing to so instruct; but it did not. Tbe record of a deed is only constructive notice of tbat for wbicb it is required. As it is not required to give notice of tbe dissolution of partnership, it does not sub-serve tbat purpose.” Tbe registration act of Arkansas provides in substance tbat “every deed or instrument in writing, wbicb is required by law to be recorded, shall be constructive notice to all persons from tbe time of record.” We conclude, and so bold, tbat tbe order of Judge Barnhill remanding tbe case for trial, for tbe reason given, was a correct ruling. Affirmed.