Schmertz v. Shreeve

The opinion of the court was delivered, by Sharswood, J. It is admitted in the printed argument of the plaintiffs in error that the first four assignments of error raise but a single question for decision, and this dispenses with the necessity of considering them separately. That question as stated in the plaintiffs’ 1st point which the learned- judge below answered in the negative is, whether when a partner signs with a seal the firm name to a contract to the validity of which a seal is not essential, it binds the firm. This question, of course, has reference to the particular instrument which formed the ground work of the action. It was a contract to deliver merchandise at a future time for a certain price to be paid by the plaintiffs, and the — 460 — suit was to recover damages for the failure of the defendants to fulfil that engagement. It was therefore an executory contract imposing a new and original liability on the firm. It is certainly true that a seal was not essential to its validity. But that is not the test. It rather is, did it change its nature ? This is unquestionable. A seal imports consideration, and a contract under seal requires no consideration to support it. Moreover there is no limitation prescribed by law to an action on a specialty or a covenant under seal. The law is too well settled to be now disturbed that the general implied power of a partner does not extend to binding the firm by instruments under seal. There are some exceptions to this rule, none of which however impair the rule itself; for it is true in this instance as in all others that exceptio probat regulam. The terms indeed in which the rule is stated exclude all cases of express authority to make the contract, and of subsequent ratification. Still the authorities in thus holding confirm the general doctrine: for where is the necessity of proving either prior assent or subsequent ratification if the power is implied? Fichthorn v. Boyer, 5 Watts 159; Bond v. Aitkin, 6 W. & S. 165, and Johns v. Battin, 6 Casey 84, are therefore determinations in point. These were all cases of contracts to the validity of which a seal was not essential. Bond v. Aitken indeed was a simple promissory note. But they were executory contracts. Executed contracts, such as assignments, stand on another ground. They form but the evidence of the act. The sale and delivery of merchandise for example is within the implied power of a partner. That he superadds a transfer or bill of sale under seal is but evidence of the act of disposition, and does not change its nature. When the property has been delivered it matters not whether the instrument of transfer be under seal or not: Deckard v. Case, 5 Watts 22. By the execution of the contract consummated by delivery, the property is transferred to the assignees, which cannot be avoided by the fact that the instrument which' is the evidence of the agreement is under the seal of one of the partners only: Hennessy v. The Western Bank, 6 W. & S. 300. In Dubois’s Appeal, 2 Wright 236, Strong, J., takes the distinction between an executed and an executory contract. “ The partnership relation,” said he, “ will not authorize one partner to execute an instrument under seal, whereby a new and original obligation is imposed on the firm.” See also Bewley v. Tams, 5 Harris 485, and Snyder v. May, 7 Id. 235. The cases of Baum v. Dubois, 7 Wright 260, and Jones v. Horner, 10 P. F. Smith 214, do not, as supposed, conflict with this doctrine. All that they determine is that a parol authority to an agent to make a contract may be executed by him under seal; the seal being beyond his authority may be rejected as surplusage. It never has been decided and probably never will be, that where one partner expressly authorizes his co-partner to — 461 — make a certain contract bis affixing a seal would vitiate it. Tbe rule in question accurately stated extends only to tbe implied not to tbe express power of one partner to bind tbe firm. There was no error, therefore, in tbe answers and charge of tbe learned judge below, which form tbe subjects of complaint in tbe first four assignments of error. But the judgment must be reversed, for tbe verdict is bad. This was expressly decided by this court in Miller v. Hower, 2 Rawle 53, that a verdict in án action of debt finding no specific sum is void, and tbe judgment was reversed on that ground alone; and this is again recognised and approved in Whitesides v. Russell, 8 W. & S. 47. ' Judgment reversed and venire facias de novo awarded.