Persons v. Oldfield

McLean, J., delivered the opinion of the court. The authority of one partner to bind his copartner is placed solely upon the ground of agency, and hence one can bind the other only within the scope of the agency. A partnership is organized to conduct the business for the benefit of its members, and it is foreign to its business to become surety for the members of the firm (unless this is the business in which the firm is engaged), or responsible for the debts of the individual [116] members of tbe firm. This is elementary. It is doubtless true that, when tbe firm’s name is found upon commercial paper, prima facie tbe firm is bound. Faler v. Jordan, 44 Miss. 288. But this casts upon the party attempting to escape liability only the burden of showing that the party signing the name of the firm had no power so to do. It was held at an early date in this state that where one of two persons subscribes the partnership name to a note as surety for a third person, without the authority or consent of the other partnes, the latter is not bound, and- it lies upon the plaintiff to prove the authority or consent of the other partner. Andrews v. Planters’ Bank, 7 Smedes & M. 192, 45 Am. Dec. 300. And the rule has never been departed from. Bloom v. Helm, 53 Miss. 21. The same is true in Alabama, wherein it is held that one partner cannot bind his copartner by signing their names as sureties in a note, nor can he draw, indorse, guarantee, or accept in the firm name a note or bill of exchange for the benefit of a third person ; and where it appears that he has thus used the partnership name, it devolves upon the party who seeks to enforce such a security to show that tho transaction was sanctioned by the inactive partner. Lang v. Waring, 17 Ala. 145. And it may be said that this is the law in all other states. The suit in this case is not upon a piece of commercial paper; but the defendant is sought to be bound upon a letter, written by Buggies on behalf of Buggies & Co., of Mobile, Ala.; and the correspondence shows that Buggies & Co., became the mere surety of Adams Bros., without the knowledge or consent of Persons. Therefore, prima facie, the nonconsenting partner is not liable. It is sought to evade this by showing, first, that Oldfield was ignorant of the want of authority upon the part of Buggies & Co:, to bind the absent partner; and, second, that there was a consideration moving between Adams [117] Bros, and Rnggles & Co., whereby the latter agreed to-guarantee the payment of the debt. There are two answers to the first contention, to-wit: It .was Oldfield’s duty to ascertain whether Rnggles & Co. had the authority to bind the individual members of the firm; and, second, Oldfield’s good faith cannot supply the want of power of Rnggles & Co. to bind Persons. As to the second proposition, it is sufficient to say that counsel have not cited ns to, and we have been unable to •find, any authority which holds that it is sufficient to bind the nonconsenting member of a partnership to show that the partnership, in consideration of becoming surety, expected to reap some benefit from the transaction. It is unnecessary for us to go to the length this court went in Pickels v. McPherson, 59 Miss. 216, to show that appellant is not liable. The partnership of Rnggles & Co. received no benefit whatever from this transaction, and becoming the surety of Adams Bros, was entirely foreign to the business in which Rnggles & Co. were engaged, and beyond the scope of the authority of Ruggles, either real or apparent, to bind the noneonsenting member of the firm. We do not consider it at all material to decide whether the contract in this case is to be governed by the laws of this state or of Alabama, as the law of both jurisdictions is the same. It is manifest that the judgment recovered in Alabama against Rnggles & Co. only bound the individual member of the firm upon whom service of process was had and the partnership property of the firm in Alabama. Reversed and remanded. Suggestion of error filed and overruled.