Sanford v. Mickles

Yates, J. delivered the opinion of the court. 1. It has been decided in the case of Furman v. Haskin., (2 Caines, 369.) that a note payable on demand, indorsed after a lapse of eighteen months, was to be considered as dishonoured and over due, and that the indorsee took it liable to every defence which might have been made by the payee. It is, however, not decided, that a note payable on demand, and indorsed within a shorter period than eighteen months, would not be attended with the same consequences; each case ought, perhaps, to be governed by its own peculiar circumstances. In the one now before us, a number of payments have been indorsed, and the last but a few days prior to the assignment, and about five months "after its date. From the last indorsement, it may be presumed, that all antecedent payments had been noticed and entered in the same manner ; the plaintiff Had a right to consider the amount due at the time of the transfer, after deducting the payments to be the true balance ; the defendant was, therefore, properly prevented from impeaching the note, as given for too large a sum. 2. The authority which exists during the continuance of a partnership, from one partner to bind his copartner, ceases on its dissolution; and with respect to antecedent debts contracted during the partnership, the power to receive payments and give discharges, rests on the same principle with that of joint obligees or payees of a note, not otherwise connected as partners. The cases cited have been determined with a view of protecting one partner from a responsibility which might be created against him, in consequence of the negotiation of bills by the other, after the dissolution. It is impossible to separate the right to indorse a bill by one, passing the title, from the legal responsibility on all those having an interest in it. [228] The decided manner in which Lord Kenyon* denies the right of one partner, after a dissolution of the partnership, to indorse bills given before, if he even had authority to settle the partnership accounts, induces me to believe the doctrine as settled. It would be a peculiar hardship to put a partner, retired from the whole concern, so completely in the power of the other, as to charge him, by negotiating bills given during the partnership, This power being denied, it follows, that they must all join in the transfer of a bill negotiated after the dissolution, for the purpose of vesting the title in the indorsee. The court are, therefore, of opinion, that the verdict must be set aside, and a new trial be granted. New trial granted. Footnotes [*] Esp. Cas. 111.