Maxey v. Strong

Campbell, J., delivered the opinion of the court. Passing by the refusal of the court to quash the summons, and the denial of a continuance, as to both of which, we think, the court did right, we proceed to examine more important questions. This is an action on two promissory notes, signed “ D. B. McKee & Co.,” dated “ Boston, Mass., Aug. 23,1875,” and payable, respectively, four and five months after date. The action is against D. B. McKee and W. H. Maxey, as makers of said notes. Both pleaded non est factum, or the equivalent plea appropriate to the action. On the trial of the issue upon this plea the plaintiffs offered in evidence the notes sued on, and, having read them to the jury, called the defendant Maxey as a witness, and proved by him that, prior to May 1, 1875, there was, doing mercantile business at Jackson, Tenn., a firm under the name and style of “D. B. McKee & Co.,” composed of the defendants to this action and J. S. Chiles; that said partnership was dissolved on the 1st of May, 1875, and Chiles agreed to assume all liabilities of said firm, and was empowered to wind up the business of said partnership ; that witness did not execute said notes, and knew nothing of them until presented to him after they were due ; that he was not aware that the firm of D. B. McKee & Co. was indebted to the plaintiffs; and that the signatures to the notes were in the handwriting of Chiles. This is the substance of the testimony of Maxey, and the plaintiffs’ counsel then asked [284] him if, after tire presentation to him of the notes for payment, he had not written to Chiles about them, and if, in reply, Chiles had not advised him that said notes were given by Chiles in settlement of an old debt contracted by D. B. McKee & Co. before the dissolution of said firm. The defendants’ counsel objected to this question, because the letter was not produced, and, if produced, the admission of Chiles, after the dissolution of the partnership, was not binding on the defendants, and would not charge them on the notes. This objection was disregarded, and the witness required to answer the question; and he answered that he had received such a letter, containing such statement, and that the letter was written in April, 1876. The admission of this evidence was excepted to at the time, and is made a ground of complaint here. We are aware that, in Curry v. Kurtz, 83 Miss. 24, it was ruled that an admission by one partner, after the dissolution of the partnership, about transactions of the firm during the existence of the partnership, was admissible against other members of the former partnership ; but it is observable that in that case the member whose declaration was offered in evidence was a party defendant ; and stress was laid upon that fact by 'the learned judge who delivered the opinion. In this case, Chiles is not a defendant; and the question is, whether it was the right of the plaintiffs in the action to charge the defendants by reason of the declaration of their former partner, Chiles, made some year after the dissolution of the partnership, that the notes he had executed were for a debt due from the partnership. This is not a suit on an account against the partnership, and an offer to prove the correctness of the account or demand by an admission of one of the former partners, made after dissolution; but the admission of Chiles was introduced to prove that the notes he had given in the name of the firm were for such accounts. The execution of the notes is a fact quite distinct from the indebtedness of the firm; and even if an admission by one of the former partners, after the dissolution of the partnership, as to a transaction occurring during the partnership, be admissible against the other members, in a suit upon such transaction, it is quite clear that hearsay testimony of what one partner, after dissolution, said of an act of his about the mat [285] ters of the former partnership, is not competent as evidence against the others. To illustrate : If it be true that in an action by the plaintiffs against the defendants, on the claim against D. B. McKee & Co., supposing one to have existed, for which the notes sued on were given, the admission of Chiles that the claim was just and due from the partnership, made after the dissolution, would have been competent evidence against the defendants, it does not follow that, in the action upon certain notes, his declaration as to what they were given, for is competent evidence against the defendants, who had denied the execution of the notes, and were not liable to have their denial disproved by the unsworn statement of Chiles, simply because he was once their partner. We might content ourselves with what has been said, but cannot forbear to say that, both upon principle and the decided weight of American authority, after dissolution of the partnership, the power of one of the members to make admissions about transactions of the partnership to affect any but himself is at an end. Story on Partnership, §§ 828, 324, and notes; Parsons on Partnership, 191, note p. The objection to the evidence should have been sustained. D. B. McKee was introduced by the plaintiffs as a witness, and produced a written agreement between him and Chiles, by which it was stipulated between them that the style of the firm should remain the same as before, until Nov. 1, 1875. Whatever effect this contract had as to McKee, it is not shown that Maxey was a party to such contract; and without authorization from the former partners, or some act of theirs from which the law would imply authority in Chiles to execute notes in the partnership name for the indebtedness of the partnership incurred before the dissolution, such notes are not obligatory on the other members of the late partnership. Dissolution puts an end to the power of any of the members of the partnership to execute a note in the partnership name for a partnership debt, so as to bind the other members of the partnership ; and this being true, a fortiori cannot the mere declaration of one partner after dissolution about partnership transactions affect others. The action of the court below in its admission of evidence, [286] and instructions to the jury for the plaintiffs, proceeded on the idea that, if the notes were given by Chiles in settlement of an indebtedness of D. B. McKee & Co. existing before the dissolution of the partnership, they were the notes of the defendants, and a recovery should be had by the plaintiffs. This is an erroneous view of the law ; and we will reverse the judgment, and grant a new trial, and remand the cause. Judgment reversed.