Clapp v. Upson

By the Court, PAINE, J. We think the court below erred in applying to this case the general rule, that where a person known as a partner retires from the firm, he, notwithstanding that, remains liable to those who, having previously dealt with the firm, continue to deal with it without actual notice that he has left it. That rule is founded on the fact that those persons who continue to deal with the firm, do so upon the faith and credit of those whom they had known to constitute it, and that they have the right to assume that it remains the same, until they have some information to the contrary. Now it seems to us that the entire reason of this rule fails in this case, the facts of which are certainly of an extraordinary character. Strickland & Co. did business as booksellers at Mobile in Alabama. The defendant Upson was at that time a membef of the firm. Their business was broken up by violence, and they were compelled to leave the state. These facts were notorious, and were known to the person selling the goods to recover for which this suit was brought. The firm actually dissolved at 'the time, and Upson ceased to be a member of it, though notice of that fact was not brought home to Allen, who sold these goods. Subsequently Strickland came to Milwaukee, and it seems a new firm was established under the old style of!i Strickland & Go., of which, however, Upsón was not a member. Then these goods were sold to Strickland for the establishment in Milwaukee, and he gavre a note in the firm name. Allen, the vendor, had previously dealt with Strickland & Go., in Alabama, and testified that he supposed it was composed of the same persons in Milwaukee. But the question is, had he a right to suppose so ? Had he the same right to assume that to be the case, that one dealing with a firm under ordinary circumstances has, to assume that it remains composed of the same persons, until notified to the contrary ? It seems to us not. Ordinarily there is nothing to suggest an-inquiry to the dealer. Nothing has happened to indicate the probability that a change has taken place. Therefore the law gives [498] bitfi the right to assume that no change has taken place, and holds those responsible to him on whose credit he thus continues fairly to deal, until they notify him that they are no longer members. But here the whole ease is different. The facts suggest at once to every mind the probability that the firm in Milwaukee may not be composed of the same persons as the firm in Mobile. It is not reasonable, therefore, for the dealer to assume that it is, and if he chooses to assume it, it should be at his own risk. Suppose Mobile had been destroyed' by an earthquake, or by war, and Strickland had subsequently been found in California, or in London, in partnership with somebody, but with nothing in the firm name to indicate whom — could it be said that any previous dealer could, without inquiry, reasonably sell him goods on the credit of those who were members of the firm in Mobile? We think not. It would be unreasonable for him to do so. The facts before him woidd show that it was at least quite as probable that they were not members, as that they were. And if he then deals it should be at his own risk. We do not intend here to establish a rule applicable to any case where there may be slight circumstances tending perhaps to excite suspicion or suggest inquiry, or to any ordinary change in the place of doing business by a firm. But we do think that when, as in this case, the entire business of a partnership at its established location is broken up by violence, and one of the partners is found in a distant part of the world, doing business afterwards, under the same firm name it is true, but one which indicates none of the old members except himself, the presumption that it is the same firm ceases to be the natural and ordinary jnesumption, and those who deal with it as such without inquiry, ought not to bind men who do not belong to it. The judgment, as against the appellant Upson, must be reversed, with costs, and a new trial awarded.