Rice v. Doane

Morton, J. When Rice called on Dresser for payment of the balance of five hundred dollars, the latter told him that the firm was short, and that if he would lend the firm one thousand dollars for sixty days, he would pay the bill. Thereupon Rice gave his check.for five hundred dollars to the firm, and gave Dresser a receipt for five hundred dollars, and Dresser gave him the firm’s note for one thousand dollars, payable in sixty days. This transaction was, in substance, paying the private debt of Dresser to the extent of five hundred dollars with the .firm’s note. Its real character is not affected by the fact that neither Rice nor Dresser intended any fraud, or went through the form of lending and borrowing a thousand dollars for the firm; they adopted the form which they did only as a convenient mode of adjusting the balance. Although each partner had authority to draw checks on the firm deposit in payment of private debts, and Dresser had done that once with Rice, and although Dresser had authority to borrow money for the firm and give its notes therefor, there was nothing in their dealings with each other, or in Dresser’s with Rice or other parties, which expressly or impliedly authorized him to give the firm’s note in payment of his own private indebtedness. The note was taken by Rice with knowledge of the fact that it was given in part for the private indebtedness of Dresser, and it would have been good in his hands as against the firm only to the extent of the money actually furnished to the firm, unless assented to by the other partner. Daniels v. Hammond, 154 Mass. 165. But the court expressly found that “ the partner Winkley had no knowledge of the transaction, and never assented to it in any [139] way; neither had he knowledge that the firm note had in any case been given to pay a private debt of either partner, nor had he ever assented that it should be given for such purpose.” We think that the ruling of the learned Chief Justice of the Superior Court was right. Order allowing the claim of Wilbur P. Rice only for five hundred dollars, with interest, affirmed.