Bank of Montreal v. Page

Mr. Justice Scholfield delivered the opinion of the Court: Appellant contends that the fifth instruction given by the circuit court, at the instance of appellees, is erroneous. That instruction is as follows: “The jury are instructed, as a matter of law, that if they believe from the evidence, that the defendants were a co-partnership under the firm name of (E. E. ICnight, Lessee,’ and that E. F. Knight was their agent merely in the manufacture of brick, but without authority to accept drafts or to.make any commercial paper, and that said Knight, as such agent, assumed the authority to accept the drafts sued on, without the knowledge or consent of said defendants Talcott, Walker and Page, or either of them, and that when the knowledge came to them of the fact that said Knight had accepted the drafts held by the plaintiff, said Talcott, Walker and Page respectively repudiated the same and refused to recognize the authority of said Knight to accept said drafts, then the jury should find for said last named defendants.” The respect in which appellant contends the error exists is this: If there was a partnership between the defendants, and one of the partners authorized the acceptances, all the .partners would be bound. As a matter of fact, Bowen, one of the partners, drew the drafts himself and procured their acceptance by Knight. Hence, Knight was clearly authorized to accept by one of the partners, and the act of acceptance was as binding on all the partners as if Bowen had himself accepted, “as he might fairly be argued to have done by the mere fact of drawing, and as he certainly did by directing the acceptances.” There are, in our opinion, two objections to this position : First—The evidence does not tend to show that Bowen, in his capacity as partner, authorized the acceptances, or, in that capacity, directed that they be made. Bowen was treasurer of the “ Bedfield, Bowen and Walworth Co.” He understood the defendants to be indebted to that company. He, assuming that Knight, as agent, was authorized to make acceptances, binding on the defendants, drew the drafts, endorsed the words “accepted payable at-” and presented them to Knight for his signature, and having obtained it, negotiated and traded them to the appellant. In all this, he was acting as treasurer and' agent of the “ Kedfield, Bowen and Walworth Co.” and collecting a debt due it from the defendants. He did not give or attempt to give authority to Knight to make the acceptances, for he assumed that ICnighfc already had such authority. He did not himself, in this transaction, act or pretend to act for the defendants, but for the “ Redfield, Bowen and Walworth Co.” And there is no evidence tending to prove any other state of facts. Second—The drafts were drawn on the 20th day of December, 1875, and the 15th day of January, 1876, respectively. On the 8th of November, .1875, there was a resolution agreed to by the defendants, whereby Bowen was authorized to take charge of the property and accounts of the defendants then held by Knight, as lessee, for the purpose of winding up the business of the defendants as associate lessees, etc. As to Knight, this took the business out of his hands and placed it in those of Bowen. It was a revocation of his agency. And, if there was a partnership between the defendants, it was a dissolution of that partnership, and Bowen’s powers, thenceforth, were precisely those of a partner after dissolution, upon whom, by the mutual agreement of the partners, was the burden of closing up the unfinished business. Kent, in his Commentaries, vol. 3 (8th ed.) 58 * 53, says: “ If a partnership be formed for a single purpose or transaction, it ceases as soon as the business is completed, and nothing can be more natural and reasonable than the rule of the civil law, that the partnership in any business should cease when there was an end put to the business itself.” See also Parsons on Partnership (1st ed.), 385. The partnership claimed here was to last for one year, but there is nothing in the character of a contract for partnership, any more than in a-ny other contract, to prevent the parties thereto subsequently modifying it and terminating it at an earlier period. They might, by mutual consent, terminate it when they pleased. Collyer on Partnership, (4th Am. Ed.) p. 108, § 119; 3 Kent’s Com. (8th ed.) 108. By this resolution, in the language of the civil law, as quoted by Kent supra, “ there was an end put to the business.” Knight was superseded, and Bowen was not to prosecute or carry on the business, but to “wind, it up,” or, in other words, close it up. His functions related exclusively to past transactions. It is true, that after dissolution, a “ kind of community of interest, of power and of liability,” as between the original partners, continues,—Parsons on Partnership, (1st ed.) 380,—but this is only for the purpose of closing or “ winding up” the affairs of the partnership. In the absence of stipulation to the contrary, in case of dissolution, every partner is left in possession of “the full power to pay and collect debts due to the partnership; to apply the partnership funds and effects to the discharge of their own debts; to adjust and settle the unliquidated debts of the partnership; to receive any property belonging to the partnership; and to make due acquittances, discharges, receipts and acknowledgments of their acts in the premises.” Story on Partnership, § 328; Collyer on Partnership, (4th Am. Ed.) § 546. See also Heartt v. Walsh, 75 Ill. 200 ; Gordon v. Freeman, 11 id. 14; Major v. Hawkes, 12 id. 298; Granger v. McGilvra, 24 id. 152. The dissolution does not revoke the authority to arrange, liquidate, settle and pay debts already created, but it operates as a revocation of all authority for making new contracts; and, since the giving of a promissory note, or the acceptance of a bill of exchange-or draft, is the making of a new contract, although it may be for a prior debt, a partner, after dissolution, can not thus bind the firm. Collyer on Partnership, (4th Am. Ed.) § 541; 3 Kent’s Com. (8th ed.) 70; Hamilton v. Seaman, 1 Ind. (Carter’s) 185; Palmer v. Dodge, 4 Ohio St. 21; Wilson v. Forden, 20 id. 89; Haddock v. Crocheron, 32 Texas, 276; Curry v. White, 51 Cal. 530; Brovm v. Broach, 52 Miss. 536; Smith v. Sheldon, 35 Mich. 42; B. K. of S. C. v. Humphreys, 1 McCord, 389; Daniel on Negotiable Instruments, vol. 1, p. 280, § 373; Perrin v. Keene, 19 Me. 355; National Bank v. Norton, 1 Hill, 572. The authority which the resolution gives to Bowen, “to wind up the business,” it is plain, is not in excess of the power he possessed as partner, after dissolution, as shown, supra. That was precisely what each partner might do without any contract; but, by contract, they might agree that a designated one—Bowen here, should alone do it—or, in other words, that Bowen should, and the others should not, exercise the powers possessed by each as partners, in regard 'to settling up the partnership business. If Bowen, of himself, could not have made the acceptances on the 20th of December, 1875, and January 15, 1876, respectively, because of the previous dissolution of the partnership, of course he could not do so by acting through Knight. Under the evidence before the jury, we do not think the instruction could have prejudiced appellant. Appellant also contends that the third instruction given by the circuit court at the instance of the appellees is erroneous. It is in these words: “ The jury are instructed, even if they find from the evidence that the defendants were co-partners, under the name and style of fE. E. Knight, Lessee,’ and that E. F. Knight was their agent merely to transact business in the manufacture of brick, and not one of the partners, but that no direct or specific authority was given him to make or accept commercial paper, then the jury should find for the defendants; unless they further find, from the evidence, that said Talcott, Walker and Page, or one of them individually, ratified the making of the paper sued upon in this suit.” The objection urged is, “if, in the instance of the acceptances sued on, one of the partners caused the same to be accepted by ‘ E. F. Knight, Lessee,’ whether by Knight or a clerk, or some one not in the employ of the partnership, but the partner intending the name so appended to be an acceptanee, then acceptances so made would be binding, and the ratification by the other partners unnecessary.” The objection to this is, as in the case of the last preceding instruction, there is no evidence tending to sustain it. There was no evidence tending to show that any one, in his capacity of partner, caused the acceptances to be made, and it clearly appears that at the date of the acceptances no one, as partner, had authority to make them, because the partnership claimed had been previously dissolved. It is also contended by appellant that the fourth instruction given by the circuit court, at the instance of the appellees, is erroneous. It is this: “ The jury are instructed that if they believe from the evidence that said defendants were co-partners as alleged in the declaration, and that said co-partnership was dissolved on the eighth day of November, 1875, by mutual consent of the defendants, and that one of said defendants, F. A. Bowen, was appointed by the others to close up the business, and that E. F. Knight’s connection therewith thereupon ceased, and that afterwards said Knight, on the 20th day of December, 1875, and the 15th day of January, 1876, respectively, accepted the drafts in.question without any authority or ratification from said Talcott, Walker and Page, or either of them, then the jury should find for the defendants Talcott, Walker and Page, unless the jury should further find that said defendants Talcott, Walker and Page, had held themselves out to said plaintiff as such partners, and that said Knight had authority to accept drafts for them, and that said plaintiff was ignorant of said dissolution.” Appellant’s position on this point is: “ If there is a partnership, the members of which are known to a party who discounts the partnership paper after a dissolution of which he is ignorant, the paper is binding on all of the partners, irrespective of the question whether some of them held themselves out as partners or not.” But the evidence here fails to show that the members of the partnership were known to appellant previous to the dissolution on the 8th of November, 1875. It shows that “ these drafts in question were given to the ‘Redfield, Bowen & Walworth Co./ either directly for goods supplied or labor performed, or in the renewal of drafts given for that purpose.” Concede that they were given as renewals of prior notes and drafts, the only evidence we have been able to find that appellant had information, at any time, of who composed “E. F. Knight, Lessee,” is that of Bowen. He was asked this question: “I want to ask this question, whether you explained to Mr. Richardson,” [the manager of appellant prior and down to January 10, 1876,] “ who constituted E. F. Knight, Lessee, when you got this paper discounted by the Bank of Montreal?” There could be no misunderstanding of the time to which this question alluded. It was not Avhen prior notes or drafts were discounted, but “when you got this paper”— i.-e., the paper here sued upon—“discounted.” The answer was: “ I think I did.” Questions and ansAvers then proceeded as follows: “ Q. Are you sure of it? A. I think I did. Q. Are you sure of it? A. I generally explained the character of the papers that I took to them. Q. Did you inform Mr. Richardson that Mr. Page, Mr. Talcott, and Mr. Walker and these other gentlemen formed the association expressed by ‘ E. F. Knight, Lessee?’ A. I could not swear to that. Q. You may have, and you may have not? A. I could not SAvear to it, but I think I did, and I have no doubt of it. I think I did not explain to Mr. Munroe” [Richardson’s successor]’ “ that Page, Talcott and Walker and these other gentlemen formed this association, from the fact that he” [Munroe] “was guided by the advice of Mr. Richardson and the officers of the bank in regard to the company’s paper. Q. Is it not a fact that the Bank of Montreal or its officers did not knoAV, and asserted that they did not know, until a late period, of this association that you speak of? A. I don’t know. Mr. Richardson knew of it. Q. Mr. Richardson knew of it? A. Yes, sir; and that was explained at the time. Q,. Did you show him the articles of the association ? A. I think not. I don’t think I showed him any documents, as he was not in the habit of doubting my word at any time.” It is impossible to say this shows that appellant knew, prior to the 8th of November, 1875, what persons constituted “ E. F. Knight, Lessee.” The evidence of notice is, at best, very unsatisfactory. The witness seems to speak more from inference or argument than from any recollection. He “ will not swear,” but he “believes—has no doubt,” etc. This is not satisfactory evidence. But, apart from' this, the only time mentioned in either question or answer,—and hence the only time it can be presumed the witness talked about,—was that at which these drafts were discounted. It is said the books of “E. F. Knight, Lessee,” afford evidence that appellant had this knowledge. We do not so understand them. They show transactions with the Redfield, Bowen & Walworth Co., discounting of drafts, etc., but they do not show that appellant knew who constituted “ E. F. Knight, Lessee,” nor does it appear that those books were, prior to Hovembev 8, 1875, submitted to the inspection of appellant’s officers so that they should thereby be charged with knowing all that they disclosed. The name in which these drafts were accepted not disclosing that the defendants were in anywise connected with the acceptance, the mere fact that a prior note or draft, accepted or indorsed in the same name, was discounted by appellant, has, of itself alone, no tendency to prove that appellant was informed of the names of the defendants as those who constituted the acceptor. Appellant may have taken the papers on the assumed liability of E. F. Knight, alone, or of him and that of the “ Redfield, Bowen & Walworth Co.” Since, by the resolution of the 8th of November, 1875, we hold that any partnership that may have previously existed between the defendants, was dissolved, it follow^ that nothing that was done or said by Bowen, at the time the drafts were discounted, could bind the other defendants. There being no evidence tending to prove the state of facts relied upon by the plaintiff as requiring the qualification contended for to the principle announced in the instruction, appellant was not prejudiced by not having that qualification stated. Here, as in reference to the other instructions which we have discussed, there was no necessity' to state_principles of law having no basis in the evidence upon which to rest. As the facts were, the instruction could not mislead. Appellant also objects that the circuit court erred in refusing to give his instructions, numbered 3, 5 and 6, as asked. Puling, as we do, that the resolution of the 8th of November, 1875, was a dissolution of any prior existing partnership between the defendants, these instructions were each properly refused, upon the ground that in each it is assumed that the acceptances might have been made after, as well as before that date, by Knight, or by one of the defendants, so as to bind all of the defendants; and neither of them is properly limited in respect of such dissolution. Although, on appeal from the Appellate Court, we are not authorized to go into questions of fact to ascertain where the preponderance is, it is, nevertheless, essential that we examine the evidence so far as to determine whether its tendency is such as to present a fair question of fact for the consideration of the jury, to which mooted points of law, embodied in or omitted from instructions, are applicable. We see no legal ground upon which the judgment below should be disturbed. It will, therefore, be affirmed. Judgment affirmed.