Benton v. Chamberlain, Strong & Co.

The opinion of the court was delivered by Royce, Ch. J. This was an action of book account, in which several questions have been discussed upon the facts reported by the auditors. It is evident, however, that the county court, in accepting the report and rendering judgment thereon in favor of the defendants, decided only the question of misjoinder, in suing James Warrell with the other defendants. The auditors had reported their decision, that there was a misjoinder of defendants, at the same time reporting a balance due to the plaintiff, upon his account. The judgment in favor of the defendants must, therefore, have been predicated solely upon the misjoinder. And as the court made no decision upon the other parts of the case, the question of misjoinder, with its consequences, is the only matter strictly open to revision in this court; although, should the judgment be reversed, it would be incumbent [713] upon us to proceed andrender such a judgment upon the remainder of the report, as the county court ought to have rendered. It appears, that originally James Warrell united with the other defendants, under the name of “ Chamberlain, Strong & Co.;” in a large contract for building the Rutland & Burlington Rail Road, and that for a period he acted openly in conducting the work on the east side of the mountain, but that he never so acted upon any other part of the road. It also appears, that for ten months prior to any dealings between the plaintiff and Chamberlain, Strong & Co., Warrell had ceased to be a member of the firm, though the other members continued the business under the same name. There can be no question of the general rule, that, when a known partner retires, and the business is continued without any change in the partnership name, public notice of such partial dissolution must be given, in order to protect the retiring partner from debts afterwards contracted by the remaining partners with persons ignorant of the dissolution. And in this case no such public notice was given. If the person retiring from a firm was a secret or dormant partner, his liability, except for past transactions, ceases upon his retirement. For a-'.time, the company name, with which the plaintiff contracted, included and imported that'of Warrell, as well as that of Bradley and some others, in connection with Chamberlain and Strong. But at the time of the contract) that name did not in fact import the name of Warrell, — for it was not apparent in the partnership name, and he had gone out of the firm. |- If, however, the plaintiff had previously understood the name to embrace Warrell, and was not apprised but that it did so still, he might well claim to have trusted him, with the other defendants, and should be allowed to hold him liable. Now it does not appear, what knowledge the plaintiff had, at the time of the contract, as to the individuals, besides Chamberlain and Strong, who at any time composed the firm. And it is held in the more recent decisions, that a retiring partner cannot be subjected for a subsequent debt of the firm, provided the creditor, at the time of the contract, was ignorant, that such partner had belonged to the firm. Hence it was considered in Carter v. Whally et al., 20 E. C. L. 339, (the case of a retiring partner who had given no public notice,) that the creditor was bound to show either his ex-, [714] press knowledge, at the time pf the contract, that the party sought to be charged had been a member of tire firm, or circumstances, from which such knowledge might fairly be presumed. We think, this is obviously reasonable and just, when the attempt is, to subject a party, who really had no connection with the contract. It was not sufficient for the plaintiff, after he had given the credit, to discover, for the first time, that Warrell had been a partner, but was not such, when the credit was given. It follows, that the plaintiffs should have made the proper showing on this point, before the auditors-. And having failed to do so, they were well warranted in finding a misjoinder of defendants. The objection, that the misjoinder should have been pleaded in abatement, is not well founded. It has been settled, ever since the case of Loomis v. Barrett, 4 Vt., 450, that even non-joinder of defendants, in the book action, was proper matter of defence before auditors. And in every case of contract a misjoinder is fatal to the action, with certain exceptions, not applicable to the present case. Judgment of the county court affirmed.