Case ID: ohio-st_36/html/0135-01.html
Source: Caselaw Access Project
Author: {"author": "White, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Cook v. Penrhyn Slate Company.
    1. In an action liy a creditor of a firm to charge the defendant as a member of such firm, neither the reports from a mercantile agency, nor the declarations of other third parties, are competent evidence to establish such liability.
    2. When an issue of fact is tried to the court, the admission of incompetent evidence will be ground for reversal, if it appears that upon the competent evidence in the case, the finding ought not to have been made.
    3. Where the conduct of a party is relied upon to charge him as a member of a firm of which he Is not in fact a member, it should appear that the creditor relied on such conduct, and trusted the firm on the faith of such party being a member.
    Error to the Superior Court of Ciucinuati.
    The original action was brought by the defendant in error, a New York corporation, against J. W. D. Hall and Carter Cook, partners, under the firm name of Hall & Cook, on a promissory note, of which the following is a copy:
    “ $1,165.98. Cincinnati, Nov. 1, 1812.
    “ Ninety days after date we promise to pay to the order of A. F. Waters, agent, eleven hundred and sixty-five 98-100 dollars at Fourth National Bank, Cincinnati, Ohio. Value received.
    “Hall & Cook.”
    The petition averred that A. F. Waters, the payee, was the agent of the corporation in taking the note.
    Carter Cook alone answered. He denied the execution of the note on his behalf.
    ■ The issue was submitted to the court for trial, a jury being waived. It appeared on the trial that Carter Cook was a member of the firm of Hall & Cook, in Cincinnati, from April 1, 1871, to February 1, 1872; that at the date last named the firm was dissolved, and a firm of the same name was formed by L. B. Cook, a son of Carter, and said Hall. All the customers of the old firm were notified of the dissolution, and of the formation of the new firm ; but there was no publication in any of the newspapers of notice of such dissolution. The sign over the door of “ Hall & Cook,” in ten or twelve inch letters, was allowed to remain; birtthe names of the members of the firm, which were painted on the side of the door in one and a half inch letters, were changed, the name of L. B. Cook being substituted for Carter Cook. After the change in the firm, Carter Cook had nothing to do with its business; but he engaged in business in Cincinnati for himself, carrying on the roofing, stove and tinning business.
    It appears from the testimony of George H. Waters, a witness for the plaintiffs, that he was their traveling agent, and took the order for the goods for which the note was given, and also the note after the delivery of the goods. He states that ho took the order from Hall at the store, on the 11th of September, 1872, and that neither Carter Cook or L. B. Cook was present. He also testified as follows:
    “ After I got the order, on same day, I inquired at store of Dunn & Witt, who were the partners in Hall & Cook ? and Mr. Brown, the book-keeper of Dunn & Witt, told me Carter Cook was one of the partners; I did not notice names of individual partners on the order / I learned that Carter Cook was one of the partners at store of Dunn & Witt, and thereupon had the order filled ; I noticed nothing on sign hut Hall & Cook; did not notice names of individual partners on door; the note was signed by L. J3. Cook; I supposed he had authority to sign the firm name; he gave it to me; Hall was not there; I never saw Carter Cook before this suit was brought; I never personally inquired of mercantile agency about Hall & Cook, but my brother did.”
    The order was written under one of the printed letter heads prepared by Hall & Cook while Carter Cook was a member of the firm, and in which the names of J. W. D. Hall and Carter Cook 'were printed as constituting the firm. These letter heads were left in the drawer at the dissolution of the old firm, and they were used by the new firm without the knowledge of Carter Cook.
    The plaintiffs offered in evidence the following reports from a mercantile agency:
    “ Hall & Cook, Cincinnati, O. Roofers. New firm. ‘ C.’ is capitalist, and is estimated worth 60 to 70 M $. Hall has no means; the business will be well managed, and they will in all probability be good for what they buy.”
    
      “ Hall & Cook, 259 ~W. 3d St., Cincinnati, O. Tin and slate roofing.
    “ Sept. 18, N2. — Are amply responsible for all they buy, and in excellent credit; safe customers. Estimated worth ail the way from 60 to 100,000 $.”
    The introduction of this evidence was objected to by the defendant, but his objection was overruled and. the evidence admitted, to which he excepted:
    Goods were subsequently furnished by the plaintiffs to Hall & Cook, amounting to the sum of $211.19; but it is not sought to charge Carter Cook with this amount.
    Afterwards, Hall & Cook became insolvent, and made an assignment for the benefit of creditors to Carter Cook. The plaintiffs presented their account against Hall & Cook, including the note sued on, to Carter Cook, as assignee, for allowance.
    
      Subsequently to the giving of the-first order, several letters were written to the plaintiffs by Hall & Cook, under the printed letter heads of the old firm ; but in the view taken by the court of the case, they need not here bo particularly noticed.
    The court found the issue in favor of the plaintiffs, and gave them judgment for the amount due on the note.
    On error, this judgment was affirmed by the court in general term. The present proceeding in error is prosecuted to reverse these judgments.
    
      J. U. <& J. A. Olemmer, for plaintiff in error:
    Notice, by publication in newspaper, of dissolution of firm, is not necessary to protect outgoing partners against persons not having previous dealings with the firm. Every new creditor is bound to inquire who are the parties really interested at the time in the firm. Story on Partn. § 160 ; Parsons on Partn. 413.
    An advertisement is not indispensable. Its place may be supplied by something else. Lindley on Partn. 420; Wardell v. Haight, 2 Barb. 549; Lovejoy v. Spofford, 3 Otto, 430.
    
      JR,. O. Púgh and Wm. II. Pugh, for defendants in error :
    Notice of dissolution of partnership should be published in a newspaper. 28 Conn. 43; 24 Vt. 642; 2 Starkie on Ev. 811, 813. Proof of notice'necessary. Lindley on Partn. 45, 355 ; 3 Kent Comm. 66 ; 2 McLean, 458 ; 8 Wend. 423 ; 22 Wend. 193; 20 N. Y. 240 ; 24 N. Y. 550 ; 3 Pick. 177; 2 Pet. 199.
    As to liability of Cook as partner, see 12 Ohio St. 179; 1 Smith L. C. 968; 3 Camp. 310; 1 Brod. & Bing. 9; 6 Smedes & M. 335; 17 Vt. 449; 2 McLean, 347; 2 Starkie on Ev. 804.
   White, J.

The court erred in the admission in evidence of the reports of the mercantile agency. The question in issue was whether Carter Cook was a member of the firm at the time the goods were ordered and the note was given; or, if ho was not a partner in fact, whether his conduct was such in regard to tlie transaction that the plaintiffs were authorized to charge him as such partner. There is nothing in the evidence to show that the defendant authorized these reports or was in an}7 wTay connected with them. They cannot, therefore, be used to charge him with liability. So, also, is the testimony of the witness, "Waters, incompetent, that on the same day he got the order ho inquired at the store of Dunn & Witt, who were the partners in the firm of Rail & Cook, and was informed by the book-keeper that Carter Cook was one of the partners. R ho was ignorant of whom the firm was composed his duty was to make inquiry of those he was about to credit, and not of strangers.

The case was tried to the court, and if the finding ought to have been for the plaintiffs, upon the competent evidence in the case, the defendant would not have been prejudiced by the admission of the incompetent evidence. But from an examination of the record, we cannot say that such is the case. It seems to us that the court took an erroneous view of the case, and was influenced in reaching its conclusion by the incompetent evidence.

The plaintiffs never dealt with the old firm ; nor does it appeal-, as wo understand the record, that they knew of what persons it was composed until long after its dissolution.

Whether Carter Cook was guilty of such negligence by leaving the printed letter heads of the old firm in the possession of the new, as would charge him as a partner where credit was obtained by their use, wo need not now inquire, for it does not appear that they operated to obtain such credit. Waters, who took the order and had it filled, as he states, says that he did not notice the individual names on the order; and, ■ consequently, he could not have given credit to Carter Cook by reason of his name being printed thereon.

Judgment reversed and cause remmdedfor a new trial.