Aultman & Taylor Co. v. Webber

Pillsbuky, P. J. These appellees were sued as partners in this case before a justice of the peace, and before they or either of them, could deny their liability as partners, it became necessary for them to put the fact of partnership in issue by filing affidavit denying its existence. Warren v. Chambers, 12 Ill. 124; Shufeldt, impl., etc., v. Seymour et al. 21 Ill. 524; McKinney v. Peck, 28 Ill. 177. If however there was a partnership existing at the time of the alleged contract, and the question is desired to be raised that Taylor used the name of the firm in a transaction where he was not authorized to bind the firm as being outside of the partnership business, or that he was using the firm name for his individual interests, they should have filed an affidavit denying a joint liability with him, or if the suit is brought upon a contract in writing, denying the execution thereof. Rev. St. 1874, Page 646, § 58; Zuel v. Bowen, 78 Ill. 234. As no such affidavit was filed in this case, the proof that the contract was made by one member of the partnership fixed the liability of the firm, and the court should have so instructed the jury. It is not contended by the appellees that the appellant had any actual notice of the alleged secret arrangement between the members of the firm, that the firm should not engage in the business of selling extras and repairs, but claim that the appellant is held to constructive notice because Taylor, one of the members of J. T. Taylor & Bro., agents of appellant, had notice of said limitation as one of the members of the new firm. This position we deem untenable. The former agents of appellant were J. T. Taylor & Bro., and upon the dissolution of that firm the agency ceased, and it appears from the record that it was so treated by appellant and the Taylors. While then they were the recognized agents of appellant they could have no notice of this agreed limitation upon the powers of the individual members of the firm of Webber, Taylor & Co., as that firm was not then in existence. When Taylor entered into the new relation of a member of the firm of Webber, Taylor & Co., his knowledge of said limitation was acquired by him as a member of that firm, and not as an agent of appellant. It was well known to the appellant that the firm of Taylor & Bro. had been dissolved, and that J. T. Taylor had taken in the other appellees as partners, and established the new firm of Webber, Taylor & Co., and that at that time these extras and repairs were still in the custody of said Taylor; they therefore open negotiations with the new firm to act as their agents in selling extras and repairs, and request Taylor to turn those in his possession over to the new firm, and have the new firm send receipt for them. We think the substance of the transaction was a proposition upon the part of appellant for Webber, Taylor & Co. to take the goods and sell them under the terms of the written contract, and an acceptance by Taylor, acting for and in behalf of his firm. Webber, Taylor & Go. were under no obligation to accept the proposition, and if Taylor had not done so, the appellant could and probably would have received them from him. In this transaction Taylor, instead of occupying the relation of agent to appellant, stood in the position of a contracting party, and therefore in antagonism to the appellant. He was therefore under no obligation, considered in the light of the rules applicable to principal and agent, to inform the appellant of the secret arrangement between him and his co-partners. We are of the opinion that under the facts of this case the doctrine of constructive notice to appellant does not apply, and that actual notice of such agreement should have been given appellant, or they would not be bound thereby. It necessarily follows, from these views, that the court should not have modified the instructions aslced by appellant bearing ■ upon this point,.and in so far as the instructions given to the jury at the instance of appellees are in conflict herewith, they are erroneous. The judgment of the court below will be reversed and the cause remanded. Judgment reversed.