Wardwell v. Haight

By the Court, Edmonds, J. The only question presented by this casé is as to the liability of F. M. Haight. He was confessedly a partner, and liable for the contracts of the firm of S. [552] W. Haight & Co. in May and June, 1841, when their first purchase was made of the plaintiff. He was not a member of the firm, when the purchase out of which this suit has grown was made; and his liability therefor depends upon the questions whether he was bound to give notice of the dissolution, and if so, whether he had given the proper notice. He was not a dormant partner, and therefore had no right to retire without giving notice. So far as dealers with, or customers of, the house were concerned, the notice must be an actual one. As to all the rest of the world it might be by a publication in a newspaper at the place where the business of the firm was carried on, No actual notice having been given to the plaintiff, the liability of F. M. Haight to him would depend upon the question whether he was a dealer or customer of the firm ; or, if he was not such, whether the notice published in a newspaper at Rochester was sufficient. Upon the latter point I have my doubts, even if the plaintiff is not to be regarded as a customer or dealer of the firm, in the sense in which those words are used in this connexion. The notice was published in Rochester only six days before most of the goods were purchased in New-York. In the case of Bristol v. Sprague, (8 Wend. 423,) one of the defendants sought to relieve himself from liability on a note given in the partnership name, the next day after a dissolution, on the ground that there had not been time to publish the notice. But his objection was overruled, because the partnership obligation continues until notice is given, and the responsibility of the good faith of the partners rests upon the members of the firm until notice; and innocent parties cannot be affected by an abuse of confidence by either member of the firm. The notice must be a reasonable one. It need not be in a newspaper; it may be in some other public or notorious manner. But whether in a newspaper or otherwise, it must, so far as strangers and persons who are not dealers with the firm are concerned, be public and notorious, so as to put the public on its guard, f In this case, the fact of the dissolution was concealed from i the public some fifteen months. In the mean time, and more ( than a year after the dissolution, the remaining member of the [553] firm, in seeking to obtain a reference in New-York writes to his correspondent that F. M. Haight is the partner. Immediately upon the publication at Rochester of the notice of the dissolution, so long withheld, and before that notice would be likely to obtain any publicity at New-York, he hurried to the city, and made purchases, without notifying those he dealt with that the member of the firm, on whose responsibility alone it seemed to have obtained credit, had long since retired. ' The referee may well have doubted whether this was such a notorious and public notice as good faith demanded. And for aught that we can see, he may have rested his report on that consideration, in connexion with the principle that he who by his own act enables another to abuse the confidence reposed in him ought to be the person to suffer from such abuse, rather than innocent parties. If he has done so, I am not prepared to say that his decision in that respect ought to be disturbed. But I arn inclined to think that the plaintiff was entitled to actual notice, and that he properly comes within the class of “ dealers or customers” who have a right to exact that. In / this case there were only two transactions between the parties, before the purchase in question. And we have not been referred to any case in which so small a number of trans-ad ions have been held to create the character of a dealer or customer ; yet the principle on which the rule is founded justly embraces such a case. That principle is that credit already raised on the faith of the partnership is presumed to be continued on the same footing, unless special notice of a change be given. (2 Bell’s Com. 640.) And the cases requiring actual notice apply it to those who have had dealings with the firm; (Graves v. Merry, 6 Cowen, 705 ;) who have given them credit; (Vernon v. Manhattan Company, 17 Wend. 527;) who have had business relations with them by which a credit is raised on the faith of the partnership. (S. C. in error, 22 Wend. 191.) And notice by advertisement has generally been held to serve in respect to all persons who had no previous dealings with the firm. (2 Phil. Ev. Cowen & Hill’s Notes, No. 780.) All others must have special notice. (Martin v. Watson, 1 McCord, 16. [554] Ketcham v. Clark, 6 John. 144. Graham v. Hope, Peake’s N. P. Cas. 254. National Bank v. Norton, 1 Hill’s Rep. 578, note.) In the case in 17 Wend. 526, Cowen, J. remarks that the doctrine that actual dealing by a firm with its creditors requires actual notice of dissolution, is well settled by authority, and the chancellor, in 22 Wend. 191, in commenting on the word, dealing, within the meaning of the rule which requires, actual notice, says it is to convey the idea of one who has had business relations with the firm by which a credit is raised on the faith of the copartnership. Senator Verplanck, in the same case, p. 196, speaks of dealers as those who were known to have relied on the united credit and might be induced to rely upon it again, if left in ignorance of the change. In every aspect of the rule thus stated, the plaintiff was entitled to actual notice of the dissolution. He had had dealings with the firm; he had given them credit; he had had business relations with them by which a credit was raised on the faith of the partnership : and he had relied on the united credit. And being left in ignorance of the change, had been induced to rely upon it again, even after the responsible member had, without his knowledge, withdrawn from the firm. The referee was therefore right; and the motion to set aside his report must be denied.