Patterson v. Camden

Ryland, Judge, delivered the opinion of the court. The record and proceedings in the court below show nothing which is relied on in this court for reversing the judgment until we come to the instructions asked and refused, as well as given and excepted to. The points then which have received our consideration arise on these instructions. It will be seen by the statement of the case that the court gave the third instruction asked for by the plaintiff and refused the others, and also that the court gave the six instructions asked for by the defendant. Without minutely noticing each one of these instructions prayed for by the plaintiffs and refused, it is the opinion of this court that there is no error in refusing those not given ; nor do we consider that the court erred in giving for the defendant the first, third and fourth instructions asked for by defendant. As to the second instruction we think it unnecessary to give any opinion in regard to the meaning of the words used by the parties in the notice of dissolution as they appear on the face of the instrument. We need not say what in law is the meaning of the terms employed in the notice, nor is it necessary for us to declare the meaning or extent of the power given by the notice considered as a mere instrument itself. The practical construction of the notice given by the parties themselves, or the acts of the parties in regard to the subject matter under the notice, may be properly looked to — properly taken into consideration, in order to ascertain what meaning the parties intended to attach to the instrument, and what power was intended by the partners to be used by T. T. Leavel. From all the acts done, and all the circumstances surrounding or attendant on the acts done, in regard to the dissolution and settling or winding up of the old firm, inferences may be drawn showing the meaning practically which the partners had when the notice was given, and what was their intention when the notice was thus drawn. This practical construction given by the parties themselves is a proper guide to its meaning, and is of more importance than [22] wbat is the abstract meaning which this court may attach to its mere phraseology. (1 Stohb. 479.) “ The business of a court and jury is to ascertain the meaning and intention of the parties in making an agreement, and to carry that into effect if it is consistent with law. I know of no better mode of ascertaining this meaning than is shown if all parties acted on a particular meaning.” (2 Watts & Serg. 175.) We consider that the fifth instruction is calculated to mislead the jury. The proposition of law contained in it we do not controvert, but we consider it not warranted by the facts of the case preserved in proof. The instruction is in these words: “ If the firm of T. T. Leavel & Co. was dissolved and an arrangement made by which the new firm of T. T. & H. Leavel took all the assets of the old firm, and assumed the payment of all its debts, and after notice of such dissolution and arrangement the plaintiffs took for their debt against the old firm the acceptances of the new firm on bills drawn by T. T. Leavel, then the plaintiffs are not entitled to recover of the defendant in respect to such debt.” This may well be so, but here the bills are drawn in the name of the old firm — T. T. Leavel & Co,.pin liquidation ; now, although T. T. Leavel may himself have drawn these bills, yet when the bills in the name' of the firm of T. T. Leavel & Co., in liquidation, are received by the plaintiffs, we can not say but that they may have been so received in good faith, the plaintiffs really supposing that T. T. Leavel had the power to sign the same. Then this instruction may have misled the jury, the bill not being in the name of T. T. Leavel, but of T. T. Leavel & Co., in liquidation, yet made and drawn by T. T. Leavel. The plaintiffs may have thought that he had the power to use the name, and by receiving the bills in the name of the old firm they did not intend thereby to rely alone on the new and discharge the old. The expression “ took the bills for their debt” is too loose. This may likewise have had a bad effect on the jury. (Story on Part. § 155 and note 2.) If the bills had been signed by T. T. Leavel alone, drawn by him in his own name on the new firm of T. T. & H. Leavel, and the [23] plaintiffs had taken and accepted them in payment or satisfaction of the debt of T. T. Leavel & Co. to them, then the old firm may have been discharged from such debt; and if the bills were drawn by T. T. Leavel, and he, without any authority, signed the name of the old firm to the bills, and this was known to the plaintiffs, and they accepted such bills in payment of the debt of the old firm, then the instruction might have been proper. But as it is, we consider it may have misled the jury to the plaintiffs’ injury, and in this the court below committed error. The sixth instruction is improper for the same reasons as the fifth, and should not have been given. The doctrine of extension of time is not considered by us as properly arising on the bills as they have been drawn in the case, and therefore is not passed upon by the court. So much for the points arising on the instructions. As the case has to go back, it may be well to refer to some general principles of law which may be considered applicable to a proper determination of the controversy. (.Story on Contracts, § 244, 246 ; Story on Partnership, § 156, 328 ; 1 Mc-Mullan’s Rep. 209; 1 Strob. 499.) “It is clear that the mutual agency of the partners which is created by the partnership ceases when it is dissolved, and that after dissolution neither can make a note or any other contract binding on the other partners unless he is authorized by them so to do. It is not necessary that this authority should be created by a special power of attorney or other instrument, but may be conferred by parol. The transactions of trade by their daily frequency and necessary promptness do not admit of formal and precise stipulations. Usage and custom of merchants to a great extent determine the import and effect of brief expressions ; and good faith, the necessary element of trade, must supply, from the character and objects of the agreement, the intention of the parties.” (Myers v. Huggins & Stein, 1 Strobh. 477.) There is no doubt that the law is well settled that if one partner goes out of a firm and another comes in, the debts of the old firm may, by consent of all three parties — the credi [24] tors, the old firm and the new — be transferred to the new. (Hart v. Alexander, 2 Mees & Weis. 484.) If in this case the Pattersons, after notice of dissolution of the firm of T. T. Leavel & Co., continued to deal with and extend credit to T. T. & H. Leavel, then they have no right to look to the old firm of T. T. Leavel & Co. for such indebtedness created after notice of the dissolution of the old firm; and if upon notice of the dissolution they afterwards accepted drafts drawn by T. T. Leavel, in the name of the old firm, on the new firm of T. T. .& H. Leavel, for the indebtedness to them of the old firm, and from time to time continued to give credit to the new firm by a renewal of the drafts, they can not be after-wards allowed, upon the failure of the new firm, to call upon the old firm for payment, unless such drafts and such renewals were shown to be made with the consent of the old firm. If upon the new trial it shall appear that the drafts in suit were for indebtedness created by the new firm after the plaintiffs knew that the old firm had dissolved partnership, then, unless these drafts were drawn by the consent and authority of the old firm, they can not be bound by it. Let the judgment below be reversed and the cause remanded for further trial; Judge Scott concurring ; Judge Leonard absent.