Newcomet v. Brotzman

The opinion the court was delivered by Agnew, J. This is a peculiar case, and was decided on its own circumstances. Ordinarily, when partners sell out to an entire stranger, no notice of the dissolution would’ be necessary to a person dealing with the purchaser. The very fact that he had not been a partner, and is doing business for himself, would be notice of the dissolution even to a former dealer with the firm. But in this case Samuel Newcomet, the party sued, was a member of the company. He had never transacted its business in person, but had placed his son, William W. Newcomet, there, giving him his own share of the profits; and when he bought out his partners and gave the business to his son, the latter continued transacting business apparently as before, retaining one Lutz, who had been a partner, as his clerk. No new sign was put up, and there was no visible change. The plaintiff, unaware of the change in the ownership, dealt with W. W. Newcomet, as he had been accustomed, and charged his goods to the firm of Samuel Newcomet & Co., under a belief that the firm continued. The court below held that under these circumstances the plaintiff was not affected by the change in the ownership of the store without actual notice, or the proof of such facts as warranted the belief [189] of knowledge. We cannot say this was an error. But the case rests rather on the principles of equitable estoppel, than upon the special rule as to the dissolution of a partnership. When a dissolution takes place- and the creditor continues to deal with one who has been a member of the firm, he is apparently dealing with the partnership, if not informed of the withdrawal of the retiring partner; for he deals with one having had authority to act for all the partners.- But here the person with whom he dealt was no partner, and in that respect it cannot he said that the authority which a member has to bind his partners is brought into play; and therefore it cannot be said he was apparently acting for the firm. Hence, this case must be rested on facts w-hich equitably estop Samuel Newcomet from settling up the sale or gift of the store to his son. The relation of Samuel Newcomet to W. W. Newcomet was such as to induce persons to believe that the son, who had been the agent of the firm, continued acting in that relation. Not only was there the relationship of consanguinity to produce this belief, hut that entire trust which led the father not to act himself in the business, but to delegate it wholly to his son. Without being informed, no one could distinguish between the business as done by the son before the sale and as done afterward. Those who had dealt with .the firm through him, could not know that a different relation had been assumed by him. The father clearly owed them a duty to speak out, and to inform them of the change, if he would cast responsibility off himself. His silence was calculated to mislead, he must have known it, and if the testimony of the plaintiff be believed, it did mislead him. Had the plaintiff not dealt with the firm before, he could not claim notice of the change as a duty to him. But when Samuel Newcomet gave the store to W. W. Newcomet he knew that those who had dealt with the firm would be likely to return, and might give credit to his son as the agent of the firm, unless informed that his authority had ceased. His silence, therefore, when he ought to speak out, was likely to mislead, and he cannot now complain of a liability begotten by his own negligence. After W. W. Newcomet commenced business-on his own account, he made payments to the plaintiff in his own checks. The plaintiff swears that he did not observe the change in the checks, and continued to deal, as he supposed, with the late firm. The court instructed the jury that this change in the form of the checks was strong and cogent evidence of notice of the change in the business, but declined to say it was conclusive. To have taken the question of notice from the jury by instructing them that notice was a conclusive legal presumption, from the form of the check, would have been an error. The surrounding circumstances made it clearly a question for the jury, and not for the court. We must not forget, at this point in the case, that in the [190] absence of actual notice, or knowledge, the estoppel bad been made out. When the plaintiff took the cheeks, he took them as payment of a debt of the firm of Samuel Newcomet, as he believed, and not of W. W. Newcomet. Why the latter gave his own checks did not concern him very much. He was just as likely as not to suppose it was attributable to some arrangement for the convenience of the firm, which had intrhsted the business to W. W. Newcomet. Hence, it would not do to hold that the fbrm of the check created a conclusive legal presumption of knowledge. The court gave it its full effect in saying that it was strong and cogent evidence of notice. It was still a question for the jury, in view of the surrounding circumstances, which had misled the plaintiff. Being under their influence, his thoughts were likely to be diverted from the mere form of the payment. The court gave sufficient force to the evidence, and we find no error in it. Judgment affirmed.