Gibbs v. Humphrey

MaRshall, J\ The question here presented is, Can the appellant, representing the claim of his assignor, prove up such claim in competition with the other creditors who dealt with J. B. Goss as J. B. Goss & Co. ? The trial court found that, as between A. J. Goss and the creditors of J. B. Goss, the two, by reason of holding out, must be considered as partners under the name of J. B. Goss & Co.; that A. J. Goss and his assignee, by reason of the facts, are estopped from setting up to the contrary. The conclusion reached by this court in Thayer v. Goss, cunte, p. 90, is conclusive in favor of the finding of the court below on this point. The published notice of dissolution was not only not notice that A. J. Goss had retired, but from it all persons had a right to assume that he occupied the same position in the new firm of J-. B. Goss & Co. that he did in the old firm of J. I). Putnam & Co. Respondent relies upon the notice of dissolution and change of the firm name. In American L. T. Co. v. Wortendyke, 24 N. Y. 550, where the precise question was presented in respect to a similar notice, the rule was stated as follows: “ When notice of a change of firm name is relied upon to [115] exonerate one who has been a partneb, such change must show that he has withdrawn from- the business; and any change which does not indicate that does not put dealers; with the concern upon inquiry. They may safely assume,, until they have notice to the contrary, that all the former partners not apparently affected by the change of name yet-remain in the business.” Numerous authorities might be cited to sustain the rule thus stated, and we venture the assertion that no reputable authority can be found to the contrary. The general rule is that the individual partner cannot himself prove against the joint estate in competition with creditors of the firm. Collyer, Partn. § 921; Burrill, Assignm. § 119; Peters v. Bain, 133 U. S. 610. This is upon, the ground that he himself is liable to the firm creditors,, and cannot be permitted to diminish the firm assets to the-prejudice of those who are not only creditors of the firm but of himself. Bindley, Partn. 121. In case of an ostensible partnership, where there is a general holding out, as in this case, the same reasoning will necessarily apply. The-ostensible partner is liable to the firm creditors the same as. if he was a partner in fact. There is no difference. In re Rowland, 1 Ch. App. 421; Ex parte Hayman, In re Pulsford, 8 Ch. Div. 11. Therefore, neither A. J. Goss nor his. assignee can come in and prove against the ostensible firm of J. P. Goss & Co., and diminish the assets to the prejudice-of those who are not only creditors of such ostensible firm, but of A. J. Goss himself. The rule as stated is conceded by appellant’s counsel, but they urge the exception, well known to and recognized by the English courts, that, “when one or mor§ members of as firm carry on a distinct trade,- proof will be admitted between the estate of the general and the particular firm,pari passu with all the creditors, in all cases where the debt has arisen from goods furnished by one firm to the other in a [116] manner as • if they had been utterly unconnected in trade; but that, except in the-case of bankers, this rule will not be' applicable when the debt has arisen only from money advanced by one firm to the other.” Collyer, Partn. § 1004, and cases cited. The learned circuit judge found that the debt did not accrue from the loan of money by A. J. G-osS in the regular course of his separate business and in a manner as if such separate business was entirely unconnected with the business of J. B. Goss & Co., but that the whole indebtedness accrued in an effort to wind up the old business of J. D. Putnam & Co.; and this finding is fairly supported by the evidence. It follows that a discussion of the question of whether the exception to the general rule mentioned is recognized in this country would be needless, and that the order appealed from should be affirmed. By the Gourt.— The order appealed from is affirmed.