Pease, Chalfant & Co. v. Rush

By the Court C. E. Elandrau, J„ Demurrer to Complaint. The Complaint shows that on the 13th day of April, 1857, [111] the Defendants made their promissory note for $1500 payable in eight months to the order of Bostwick, Pease & Co., which is the Plaintiffs’ firm name now, and was then the name of a firm composed in part of the Plaintiffs, and delivered the note to the payees. That at the time of the making of the note, the Plaintiff Jacob W. Chalfant was not a member of the firm of Bostwick Pease & Co., but it was then composed of the other Plaintiffs, and William and Reuben Bostwick. That after the making of the note and on the 12th day of February, the Plaintiff Jacob W. Chalfant purchased the interest in the firm, of Reuben and William Bostwick, and became a member of the firm, the two Bostwicks retiring. That the firm as then composed, continued the name of the old firm and are the owners and holders of the note in question. At the time of the withdrawal of the two Bostwicks from the firm, and the introduction of the new member, Jacob W. Chalfant, the old firm became dissolved and a new one was commenced, which by the ^purchase of the interest of the two old members, by the new one, succeeded to all the rights and interests of the old one. It does not appear that the note was endorsed by the old firm, to the new, but that is not at all necessary to pass the title, although the note was payable to order. A promissory note like any other personal property can be transferred by mere delivery, so as to pass the title, and the right to sue in the name of the holder, when a note is payable to order, and is found in the hands of a person not the payee, without the endorsement of the payee, the difference between such a holder and one who holds by an endorsement, is that the former is not entitled to the privileges of a bona fine holder, while the latter is: a note payable to order passed without endorsement is not taken in the regular course of business, and is subject to the same disabilities as if it had been taken after due, but the title passes sufficiently to maintain a suit in the name of the owner. The only question under our practice is, in whom is the real substantial ownership and property of the note ? in whomsoever that is found there the cause of action is also. As no endorsement was necessary to pass the note, the note as part of the property of the old firm, became under the [112] purchase, the property of the new firm, and they alone can sue it. The Defendants object to the Complaint for insufficiency, and the only ground urged that it is necessary to notice, is stated as follows: — “ The payees and original owners of the note .declared upon, were the firm of Bostwick, Pease & Co. as originally constituted, and it was not the property of the several partners composing the firm as tenants in common, but of the partnership as a whole, neither party therefore had any specific interest in said note, but each only owned his proportionate share of what might remain of the partnership property after all of the partnership debts should have been paid, he also accounting for what he might owe to the firm.” A considerable number of authorities are cited in support of this position, none of which on examination are found to sustain the conclusions contended for by the Bespondents’ counsel when applied to this case. There is nothing better settled than that on the dissolution of a partnership, the property of the concern is subject to pay, first, the partnership liabilities, then the individual liabilities of the members, and then what is left is the property of the several members, and subject to distribution among them, and that they cannot divert the property of the firm into any other channel; but it would seem to suggest itself at once, that to raise any such question there must appear to be debts due from the concern to some one, and that no one except creditors have any interest in what disposition the partnership make of their property, nor can any one else question it. It does not lie in the mouth of a debtor to the firm to say anything about it. A firm without a debt in the world, have no settlement on dissolution, to make, but to determine how much of the property belongs to each, and an action brought in the name of an assignee of a note from the several members of the firm, is well brought. The cases referred to by the counsel for the Bespondents, were all cases of conflicts-among creditors of insolvent partnerships for priority, and have no application to this case. The judgment of the Court below sustaining the demurrer to the complaint, is reversed, and judgmentordered for the Plaintiff on the demurrer.