Terry v. Platt

Lore, C. J., charging the jury : Gentlemen of the jury :—This is an action of assumpsit on two promissory notes, each note being for the sum of five hundred dollars, and alleged to have been made by John' E- V. Platt and David W. Elkinton, late trading as Platt & Elkinton, payable to the order of William H. Terry, the plaintiff. One note bears date January 31, 1892, payable at eleven months thereafter and is signed “Platt & Elkinton,” on which interest is claimed — 191 — from December 31, 1893. The other note is dated September 5, 1892, payable at one month thereafter, and is signed “Buford Mills, Platt & Elkinton,” on which interest is claimed from January 5, 1894. It is alleged that these notes represent money loaned by the plaintiff to the said Platt & Elkinton, defendants as co-partners, to be used in and about the partnership business. The defendant, Elkinton, resists recovery on several grounds; some going to both, and others to only one of the said notes. The first defense is that the notes were made and delivered by and through the fraud and collusion of the plaintiff and the said John E- V. Platt, one of the defendants. Upon this defense of fraud, the law is well stated in the case of Mears & Son vs. Waples, 3 Houst., 619, as follows : “ Fraud is never presumed to exist. On the contrary, it must be clearly established by the evidence. For where the circumstances attending the transaction are of a doubtful character merely, or raise but a bare suspicion of fraud in regard to the parties charged therewith, they will not be sufficient evidence of the fact. The circumstances relied on must be of such a nature as to raise more than a mere suspicion of fraud ; they must be of such significance and force as clearly to establish the fact in the judgment of the jury. It is not necessary, however, that the proof should be direct and positive, it will be sufficient if the circumstances disclosed by the evidence, manifestly show that fraud has been practiced by the party.” The burden of proving such fraud to the satisfaction of the jury is upon the defendant who sets it up in defense, and if not so proved, the plaintiff is entitled to recover upon that ground. It is objected again, that these notes were both made and delivered by the said Platt, in the firm name, to secure the individual indebtedness of the said Platt to the plaintiff Terry, with the knowledge of the said plaintiff. If the jury believe from the evidence that the notes were so made and delivered, the plaintiff cannot recover. The law will not permit such known perversion of partnership property to private purposes. But to defeat recovery on this ground, the jury must be satisfied from the evidence that there was such perversion of partnership property and — 192 — that it was known to the plaintiff Terry. “ The presumption of law is, that a promissory note made in the name of a partnership, is for a debt of the partnership, and is binding upon it as such.” Baxter vs. Plunkett, 4 Houst., 452. Again; recovery upon the Buford Mills, Platt & Elkinton note, dated September 5, 1892, is resisted for the reason that this suit is instituted against Platt & Elkinton, and that this note is signed and purports to have been made by Buford Mills, Platt & Elkinton. The defendant, Elkinton, alleges, that there were two distinct and independent partnerships existing between himself and the said John E. V. Platt; one known as the Platt & Elkinton partnership; the other under the name of the Buford Mills Platt & Elkinton partnership. If the jury is satisfied from the proof in this cause, that there were two distinct and independent partnerships as alleged, the plaintiff cannot recover in this action on that note dated September 5, 1892, made and signed by Buford Mills Platt & Elkinton; but as to this objection the plaintiff would be entitled to recover on the other note dated January 31, 1892, made and signed by the Platt & Elkinton partnership, the last-named being the partnership against which this suit is brought. If you should find a verdict for the amount of the last note only, on the ground that there were two distinct partnerships, you may state that fact in your verdict. If, however, you believe there was only one partnership, engaged in business as one branch thereof in merchandising, as Platt & Elkinton, and as another branch in the milling business, as Buford Mills, Platt & Elkinton, the plaintiff would be entitled to recover upon both notes, so far as this objection goes ; as the addition of Buford Mills to the firm name in such case would amount only to matter of description, in distinguishing different branches of the business of one firm. Again; it is objected by the defendant, Elkinton, that the note signed Platt & Elkinton, dated January 31, 1892, was made and delivered on that day, which was Sunday, and for that reason no action can be maintained thereon. — 193 — This Court, at the last November Term thereof, in this County, in the case of Spahn vs. Willman, ruled that a contract made on Sunday is void, and no action could be maintained to enforce it. Should you therefore be satisfied from the evidence, that the said note of January 31, 1892, was made and delivered by Platt to Terry on Sunday, the Court instruct you that the note was void, and no recovery can be had thereon. But if it was made and delivered, or if delivered on any other day than Sunday then this objection will not avail. The plaintiff, however, insists that even if the said note is void because of such delivery on Sunday, that he may still recover the amount represented by the note with interest as claimed, under his common count filed in this cause for money loaned by the plaintiff to the defendants. If the money evidenced by the note of January 31, 1892, was loaned and delivered to Platt by Terr}' on Sunday under a verbal contract then made, the plaintiff cannot recover such amount on this common count, because such verbal contract would be void, and could not be enforced. If the money was loaned on any day other than Sunday, the defendant, Elkinton, interposes as a bar to recovery in that case his plea of the statute of limitations, and claims that no recovery can be had on the said common count, because the last advance of money was the one hundred dollars by check June 22, 1892, which was more than three years before November 25, 1895, the date on which suit was brought; and because no acknowledgment has been made by him which would take the claim out of the statute. That inasmuch as the partnership of Platt & Elkinton was dissolved October 1, 1892, more than three years before this action was instituted as aforesaid, that no acknowledgment by Platt, after the dissolution of the partnership, would avail in removal of the bar of the statute in respect to the defendant, Elkinton. The Court instruct you, that if you are satisfied from the evidence that more than three years elapsed between the actual — 194 — delivery of the money to Platt and the bringing of this suit, that no recovery can be had on the common count for money loaned ; this, however, does not apply to the note against Elkinton, unless Elkinton himself has made some acknowledgment of the debt within three years, which would take it out of the statute. No admissions, or payment of interest, made by Platt alone after the dissolution of partnership, and after the bar of the statute of limitations had attached to the debt, would bind Elkinton. Upon the weight of authority, as well as upon reason, we hold that the admission of one partner, made after the dissolution of the partnership, and after the debt has been barred by the statute of limitations,, should not bind the other partners. This question is largely one of first impression in this State upon this specific point. There is also much conflict of authority thereon in adjudged cases, turning largely upon the question as to whether such acknowledgment revived the old debt or created a new obligation; but the decided weight of authority, as well as the trend of recent cases favor the view that we have announced. It seems also more consonant with reason, that the authority of one partner to bind his co-partners, which authority grows out of the formation and existence of the partnership, should cease upon the determination of the partnership. In any event, such authority should not be extended so as to permit one partner, after the dissolution of the co-partnership, to revive against his co-partners a stale claim and one barred by the act of limitation, by any admissions made after the dissolution. This view of the law, is approved to some extent, by the Court of Errors and Appeals of this State, in the case of Rice vs. Pennypacker, et. al., 5 Houst., 279 ; where the Court held, that acknowledgment by a former partner, that claims were subsisting and unpaid, was insufficient to revive them against the representatives of his deceased partners. Inasmuch as the contention in this case with regard to part- . nerships, on the one hand is that the firm of Platt & Elkinton, and Buford Mills, Platt & Elkinton, were actually one firm, and on the other hand that they constituted two separate and inde — 195 — pendent firms, it is unnecessary for us to define what constitutes a partnership; the fact of the existence of the partnership in one mode or the other not being a matter of dispute. Governing yourself by the law as the Court have just laid it down, it is for you to determine from the evidence what, if any, amount is due the plaintiff in this action. Verdict for plaintiff for $623.33.