Davison v. Sherburne

Mitchell, J. We are inclined to the opinion that the question whether the note in suit was executed during the existence of the •copartnership between defendants, and for partnership purposes, was for the jury; although it must be admitted that the evidence tended very strongly to show that the partnership was dissolved the previous June, when it sold out its mercantile business, and that thereafter it existed only for the purpose of winding up, by collecting and •distributing its assets and paying its debts. The' fact that the note was signed by defendants in their individual names, and not in the firm name, although an item of evidence of some weight, was not controlling or conclusive. There was, however, ample evidence to justify, if not to require, [359] a finding that the partnership was dissolved prior to 1886, the date of the first payment on the note relied on to prevent the bar of the statute of limitations. The note is confessedly barred as to Sherburne, unless taken out of the statute by payments made by Harmon; and there is evidence that plaintiff had no notice or knowledge of the dissolution of the partnership when these payments were received, and but for them the note would have been barred. This state of facts presents the principal legal question in the case, viz. whether a partial payment by one of the firm that contracted the debt, made after dissolution of the partnership, will prevent the bar of the statute as to the other partners, in favor of a creditor who has had dealings with the firm, and has had no notice of its dissolution. It is the settled law of this state that one of. several joint debtors cannot, from the mere fact of the existence of a joint liability, by his own several act or agreement, extend or renew the liability as against his co-obligors. Willoughby v. Irish, 35 Minn. 63, (27 N. W. 379.) The power of one partner to bind the others rests upon the principle that each partner is, in contemplation of law, the general and accredited agent of the whole firm in all matters within the scope of the partnership business; and it follows that this power terminates with the dissolution of the copartnership. And many cases can be found which contain the general and unqualified statement that an acknowledgment of a partnership debt by one partner after dissolution will not prevent the statute from running as to the other partners. These statements are usually based on the want of authority, which terminates with dissolution. In most of these cases it will be found that the creditor had notice of the dissolution, and, as applied to such a state of facts, the statement is undoubtedly correct. But in some instances it would seem that the court had not presently in mind the important fact that, under some circumstances, notice of dissolution is necessary to terminate the partnership as to third parties, or, more accurately speaking, to terminate the power of one partner to bind the others. This is frequently illustrated by cases where those who have had previous dealings with the firm give new credits to the firm without notice of its dissolution. It is said [360] in such cases that the person has parted with something of value on the credit of the firm, whereas in the case of a part payment of an existing partnership debt the creditor parts with nothing, but in fact receives something. It seems to us that this is more plausible than sound. We cannot see that the equity of one who sells goods on the credit of a firm which he supposes still to exist is any stronger than that of a creditor who, having no knowledge of the dissolution, has refrained from reducing his claim to judgment, in reliance on part payments as a protection from the statute. We think that, upon principle as well as 'thority, the corree c rules are as follows: As between themselves, neither partner after dissolution has any power to act for or bind the other. Neither are they capable of doing so with respect to others with whom the firm had previous dealings, who had received notice of the dissolution; nor with respect to those with whom they had not previously dealt as partners at least after public notice of dissolution, if at all. But with respect to those with whom they had previosuly dealt as partners, and who had not notice or knowledge of the dissolution, they are still, in the eye of the law, partners, capable of binding one another in matters within the scope of the partnership business. Within the principle of this last proposition, a partial payment by a partner after dissolution of the firm will prevent the bar of the statute as to the other partners, in favor of a creditor who has had dealings with the firm, and has had no notice of its dissolution. Kenniston v. Avery, 16 N. H. 117; Tappan v. Kimball, 30 N. H. 136; Sage v. Ensign, 2 Allen, 245; Buxton v. Edwards, 134 Mass. 567; Gates v. Fisk, 45 Mich. 522, (8 N. W. 558;) Clement v. Clement, 69 Wis. 599, (35 N. W. 17.) See, also, Leithauser v. Baumeister, 47 Minn. 151, (49 N. W. 660.) Counsel for appellant is in error in saying that these authorities are from jurisdictions committed to the doctrine of Whitcomb v. Whiting, 2 Doug. 652, that a payment of one joint debtor will prevent the bar of the statute as to the others. Most, if not all, of them are from states where, either by statute or by judicial decision, the law is the same as laid down in Willoughby v. Irish, supra. We have found no case to the contrary, except Tate v. Clements, 16 Fla. 339, where the question was directly involved, and presently in the mind [361] of the court. We are therefore of opinion that the charge of the court was a correct exposition of the law. But, according to the doctrine of Atkinson v. Nash, 56 Minn. 472, (58 N. W. 39,) the court erred in admitting the deposition of Harmon, taken pursuant to 1878 G. S. ch. 73, § 36, as amended by Laws 1885, ch. 53, there being no showing that a cause existed and still exists for taking and using the same. - We do not think the record justifies the contention of respondent’s counsel that appellant’s counsel accepted his statement on the trial that Harmon was “not in the city” as a sufficient showing. For this error, the order denying a new trial is reversed. Buck and Canty, JX, took no part. (Opinion published 59 N. W. 316.)