Coman v. Reese

By the court, Balcom, P. J. The defendant may be arrested, when he has been guilty of a fraud, in contracting [116] the debt, or incurring the obligation for which the action is brought. (Code, § 119, sub. 4.) The question in this case is whether the defendant Allen is liable to arrest for the fraud his partner Reese, was guilty of in purchasing the cattle. ' Reese was acting in the legitimate business of the partnership when he purchased the cattle of the plaintff on credit. The cattle came to the hands of the defendants and were slaughtered by them as partners. It is, therefore, clear ¡that the plaintiff could have avoided the contract of sale of the cattle by reason of the fraud of Reese, and maintained trover for them against both defendants. [See Hawkins agt. Appleby, 2 Sand. S. C. R., 421; 1 Hill, 311.) In Hawkins agt. Appleby, it was held, where goods are obtained for the use of a firm, by means of the fraud of one of its members, the other partner, by receiving and participating in the use of the goods, will be held to have adopted the fraudulent act of the one who obtained them, and will be placed in the same situation in reference to the rights of the vendors of the goods, as if.he had directed his partner to procure the property, or had concurred with him in the transaction. The principle is elementary that all the members of a firm are liable in a civil action for the frauds committed by one partner in the course of the transactions ’ and business of the partnership, even when the other partners had not the slightest connection with, or knowledge of, or ■ participation in the fraud. (Story on Partnership, § 108.) Allen as well as Reese contracted the debt for the cattle; and each, (for the purposes of this action,) was guilty of a fraud in contracting it. The superior court of New York city decided in Townsend agt. Bogart, (11 Abb., 355,) that in an action in the nature of an action on the case against partners for obtaining goods from the plaintiffs by fraud, a partner who did mot participate personally in the fraud, is liable to arrest as well as those who did. I approve of that decision, and think we should follow it. I ain, therefore, of the opinion that the defendant Allen must [117] be deemed guilty of a fraud in contracting the debt for the cattle as well as his partner and co-defendant Reese. It follows that the order appealed from should be affirmed with $10 costs. Decision acccordingly.