Smith & Lougee v. Smith & Bannister

Eastman, J. Upon the principles laid down in Wolsey Sf Bailey Sf al., decided at the present term, (ante, p. 217,) the sale of the liquors, which go to make up the principal part of the plaintiffs’ claim, took place in Boston. The facts disclosed by the auditor show that, notwithstanding the negotiations which took place in this State, between the defendants and Brown, and also with one of the plain [252] tiffs, the goods were not delivered until they were sent to the depot, in Boston, and the sale was not complete till then. No contract had been made between the parties which the defendants could enforce, and nothing had been done by which they could legally claim and hold the goods until after the delivery at the depot. The quantity contained in the orders had never been separated from the general stock, and the defendants had in no way obtained the possession or the right of possession to the property. Austin v. Craven, 4 Taunt. 644; White v. Wilks, 5 Taunt. 176; Wallace v. Breeds, 13 East. 522; Lagura v. Furnell, 2 Camp. 240; Shepley v. Davis, 5 Taunt. 617; Busk v. Davis, 2 M. & S. 397; McDonald v. Herrett, 15 Johns. 349; Barret v. Goddard, 3 Mason 112; Outwater v. Dodge, 7 Cowen 85. When the goods were delivered at the depot the sale was complete, and the property immediately vested in the defendants, but not until then. Danes v. Peck, 8 Term Rep. 330; Dutton v. Solomonson, 3 Bos. & Pull. 582; Griffith v. Ingledew, 6 Serg. & Rawle 429; Ludlows v. Bowne & Eddy, 1 Johns. 15. As, then, the sale was in Massachusetts, and by the laws of that State was legal there, the price of the goods can be recovered in our courts, upon showing by competent evidence that the defendants were the purchasers. The fact of the partnership between the defendants appears to be sufficiently found by the auditor. Some of the circumstances and evidence reported, tend to show that they were not in partnership; still the auditor finds that they occupied the same store, selling groceries and liquors, and held themselves out as partners. This finding fixes the fact c-f partnership. If individuals hold themselves out to the world as joint traders, they will be held responsible as partners to third persons, whatever may be the real nature of their connexion, or the agreement under which they act. 3 Kent’s Com. 27; Dob v. Halsey, 16 Johns. 40; Purriance [253] v. Mc Clintee, 6 Serg. & Rawle 259; Grace v. Smith, 2 W. Black. 998; Smith v. Watson, 2 Barn. & Cress. 401; Cheap v. Cramond, 4 Barn. & Adol. 663. In Atkins v. Hunt, 14 N. H. Rep. 209, this language is used: “ It is not necessary that persons should hold themselves out to the world as partners in order to become liable in that capacity. That is only one mode of charging them, and when that is done, it dispenses with the necessity of proving that they actually signed the articles of partnership.” As the defendants were partners, they were both liable to the plaintiffs, notwithstanding at the time of the sale the plantiffs supposed that they were giving credit to Smith only. In purchasing the goods he was the authorized agent of the copartnership. After the purchase the goods were taken to their store in Manchester, and were there sold. They went for the use and benefit of the firm, and the plaintiffs being ignorant of the existence of the partnership may well sustain an action against those who were in truth the purchasers, and who had the property and its avails. Reynolds v. Cleveland, 4 Cowen 282; Griffith v. Buffum, 7 Wash. 181; Raymond v. Crown and Eagle Mills, 2 Met. 319; Everitt v. Chapman, 6 Cowen 347. The fact that Smith’s note was taken for a large part of the claim does not change or lessen the liability of both the defendants upon the original account. The note was taken before the existence of the partnership was known to the plaintiffs, and at the time it was given there was no agreement that it should be received in discharge of the account. It also appears that it has never been paid. Upon such a state of facts it is entirely clear that the taking -of the note could form no defence to the action. A promissory note is not a payment of a preexisting debt, unless there be an agreement to that effect when the note is given. Muldon v. Whittock, 1 Cow. 290; Brown v. Kewley, 2 B. & P. 518; Schermerhorn v. Loines, 7 Johns. [254] 311; Reed v. White, 5 Esp. 122; Thompson v. Percival, 5 B. & Ad. 925. In Johnson v. Cleaves, 15 N. H. Rep. 332, it was held that to make a note payment of a preexisting debt, there must either be an express agreement to receive it in payment, or there must be circumstances from which an agreement might be inferred. Neither can the defendants’ liability be affected by the presentation of the note to the commissioner on Smith’s estate. Until the original debt should be paid, the plaintiffs had the right to pursue all the legal remedies within their power to secure it. The partnership property of the firm was liable in the first instance for the payment of the partnership debts, and the individual property for the individual debts. After the individual debts should, be satisfied, the separate property would be liable for the partnership debts, should any remain unsatisfied by the partnership property. Jarvis v. Brooks, 3 Foster’s Rep. 136. And as the law requires that all claims against an estate where a commissioner has been appointed, shall be presented to him at the times appointed, otherwise the claims shall be barred, except under certain circumstances, it was proper that the note or account, or both, should be presented to the commissioner for allowance, so that in the event of the partnership property being insufficient to satisfy the claims against the firm, the separate property might become liable, should it not be consumed by the individual debts. This disposes of the questions which go to the foundation of the action. But there are one or two others raised by the case which we will briefly examine. Bannister, the surviving defendant, was offered as a witness in chief, but excluded by the auditor. The ground for his exclusion is stated to be, that it appeared that Smith, the other defendant, who was dead, had made most of the purchases; that Frederick Smith, one of the plaintiffs, who had had most to do with directing the sales on the part of [255] the plaintiffs, was at the south on account of his health, and by reason of his absence the parties would not stand on equal grounds; and that from the circumstances of the case it appeared to the auditor that the witness was under more than ordinary inducements to testify in a particular manner. We think this decision of the auditor was correct, and in accordance with our statute and the practice under it. The testimony of the party is admissible in the discretion of the auditor, subject to the' supervision of the court. And a report will not be set aside either for the admission or rejection of the party, unless it shall appear that injustice has been done. If one party be ill and unable to testify at the hearing, a refusal by the auditor to permit the other party to testify, will be a proper exercise of his discretionary power, and will not be cause for recommitting or rejecting the report. These views are directly sustained by our cases, and fully justify the auditor in his decision. The plaintiff. Smith, who had transacted most of the business for the plaintiffs, was sick and unable to attend, and to have admitted Bannister to testify in his absence, would have been giving the defendants an advantage which our decisions do not warrant. Fuller v. Little, 7 N. H. Rep. 535; Mann v. Locke, 11 N. H. Rep. 246; Lovering v. Lovering, 13 N. H. Rep. 513. An exception was taken to the evidence tending to show that the agent, Brown, had not authority to sell the goods, but merely to receive orders and transmit them to the plaintiffs ; but, as the evidence is not reported, we cannot see that it was illegal, and the report cannot be set aside on that account. Our conclusion, of course, is, that there must be judgment on the report for the amount found due by the auditor.