Moale v. Hollins

Dorsey, J., delivered the opinion of this court. There does not, in this case, arise any question, whether the contract, for the enforcement of which this action was instituted, was in its inception binding upon both the partners, it being explicitly admitted in the case stated, that the purchase was made for the business purposes “of the partnership, and that the article purchased was so applied.” It is unnecessary for us therefore to examine the numerous authorities, which have been cited to show, that in a suit against a firm, where' one of the defendants is a dormant partner, and the business has been transacted solely, in the name of the ostensible partner, it is incumbent on the plaintiff to prove, that the contract sought to be enforced, was entered into on account of the partnership. In truth there are but two questions which this court are called on to decide; the one, a matter of fact, to be disposed of by an inspection of the case stated; the other a question of law, as to the extinguishment of the original contract,, by the rendition of the judgment against the ostensible partner, should the court find the facts to be as asserted by the appellee.The fact in dispute in this case is, whether the promissory notes-given by Robert S. Hollins, and on which the judgment was rendered, were given by him as the notes of the firm, under the partnership signature, or were given as his individual notes, by way of collateral security for the payment of a partnership liability. A determination of this controversy, can only be made by an examination of the facts in the case stated. It states, that Robert S. Hollins and John S. Hollins the defendant, were partners in the business of manufacturers of cotton goods, and that they carried on their said business in the name solely of Robert S. Hollins; that while said John and Robert, [14] were partners as aforesaid, “the said Robert purchased for the business purposes and uses in fact of said partnership,” a quantity of cotton for the sum of three thousand one hundred and sixty-one dollars and ninety-seven cents, which cotton was delivered to said Robert, and used in the business aforesaid, and that said cotton was sold on a credit of six months, and the said Robert accordingly made and delivered to said plaintiff for said purchase, his (said Robert’s) three promissory notes amounting to the said sum of $3,161.97 payable six months after this date. The legal construction of these facts is, that the notes were given in the partnership name for a partnership debt. There is not a fact in the statement which could suggest for a moment, a different interpretation to the acts of the contracting parties. If in a suit on these notes against both partners, the facts in the case stated had been in evidence before the jury, it would have been competent for the court, if applied to for the purpose, to have directed the jury, that if they believed those facts, the plaintiff was entitled to recover. Thus determining, that there was no inference of any other fact left open for the finding of the jury. Upon this assumption of the facts in the case, does the judgment recovered against the ostensible partner, interpose any obstacle to a recovery against the present defendant, is the question of law we are called on to consider? That the substitution of a debtor’s obligation of a higher nature, for a debt due by him of inferior degree, works an extinguishment of his original liability, has not been, and upon authority could not be controverted. And that the same extinguishment takes place when the substituted obligation of a higher nature, is executed by one of two partners, or other persons jointly bound, is now well settled. See the cases of Williams vs. Hodgson, 2 Harr. & John. 474. U. S. vs. Astley & others, 3 Wash. C. C. Rep. 518, and Tom vs. Goodrich, 2 Johns. 213. If the reduction of a simple contract debt to a specialty in such cases, works its extinction, it is difficult to conceive a reason why a judgment obtained thereon, (a security of a still higher nature) should not produce the same result. Tis true the doctrine of [15] extinguishment or merger, when applied to matters of this sort, is purely technical, and may on some occasions be productive of inconvenience and injustice. But we sit here not to make or amend, but to expound, the law. Such as we find it we must declare it. We regard the case before us, therefore, not-only as falling within the principle established in the cases above referred to; but as fully settled by decisions on the very point now at issue. See the cases of Smith & al. vs. Black, 9 Serg. & Rawle, 142. Robertson vs. Smith, 18 Johns. 459, and Willings & Francis et al. vs. Consequa, 1 Peters’ C. C. Rep. 301. Concurring with the county court we affirm their judgment. judgment affirmed.