Case ID: monaghan_2/html/0166-01.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

National State Bank of Camden v. Pennock et al.
    A testator directed by his will that his interest in a partnership, with which he was connected, should be continued by his executors. After his death, a notice was issued, signed with the firm name, announcing the death of the decedent and stating that, in accordance with the directions of the will of the deceased partner, his estate and interest in the firm and its property would remain as before, and the business be conducted under the same firm name by the surviving partners and the executors of the deceased partner. One of the executors, who was the deceased partner’s widow, knew nothing of the notice, nor did she take part in the conduct of the business ; but she received from the firm the same weekly allowance which her husband had received. In an action against the surviving partners and the executors individually, in order to fix an ■individual liability on the part of the executors, the court entered a non-suit on the ground that the parties had not been proved to constitute a partnership. Held, not to be error.
    Feb. 15, 1889.
    Error, No. 66, Jan. T. 1889, to C. P. Chester Co., to review a judgment of non-suit in an action of assumpsit by the National State Bank of Camden, against Charles E. Pennock, Wm. Pennock, John S. Pennock, Annie E. Pennock, and John C. Bradley, lately trading as C. E. Pennock & Co., at Jan. T. 1888, No. 106. Green and Clark, JJ., absent.
    The evidence was to the following effect, on the trial, before Futhey, P. J.:
    The firm of C. E. Pennock & Co., immediately prior to July 11, 1887, was composed of Chas. E. Pennock, Joseph L. Pennock, William Pennock and John S. Pennock. On that date, Joseph L. Pennock died, leaving a will, in which he provided as follows: “ I direct my executors to continue my interest in the firm of C. E. Pennock & Co. for five years from the 1st of January next succeeding my decease, and for such further period as my executors, or a majority of them, may deem proper.” Of Mr. Pennock’s will, Annie E. Pennock, Charles E. Pennock and John C. Bradley were executors, and were duly qualified and assumed the duties incident to their office.
    The business of the firm was continued under the old firm name until August 29, 1887, when an assignment for the benefit of creditors was made. On July 22, 1887, the following circular, signed with the firm -name, was sent to the firm’s customers and to banks with which they had had dealings :
    “ It becomes our painful duty to announce the death of Mr. Joseph L. Pennock, a member of our firm. In accordance with the directions of the will of the deceased, his estate and interest in the firm and its property will remain as heretofore, and the business be conducted under the same firm name by the surviving partners and the executors of deceased.”
    The notes in suit were discounted with the bank plaintiff by Robert Hare Powel & Co., of Phila. The firm of C. E. Pennock & Co., since about 1854, was a customer, each year, to a large amount, with Robert Hare Powel & Company. The firms of Robert Hare Powel & Co. and C. E. Pennock & Co. were accustomed to exchange their negotiable ‘paper for their mutual accommodation. It was admitted by Charles E. Pennock, one of the .defendants, who was called by way of cross-examination, that a copy of the notice of July 22, 1887, was sent by them to Robert Hare Powel & Co. Mr. Bradley, one of the executors, was a member of the firm of Robert Hare Powel & Co. The notes in suit were dated July 11, July 18, July 23 and Aug. 5, 1887.
    It did not appear that Mrs. Annie E. Pennock knew of the notice of Sept. 22, 1887. Nor did it appear that she or Mr. Bradley took any part in the management of the business of the firm.
    The division of the profits of the business was the same after as before Joseph L. Pennock’s death, his widow, Annie E. Pennock, one of the executors, receiving the share received by her husband before his death.
    At the conclusion of the plaintiff’s case, counsel for defendant moved for the entry of a non-suit, on the ground that there was not sufficient evidence to submit to the jury, from which they would be justified in finding that the’surviving partners and the executors of the deceased partner were liable as a firm on the notes in suit. The court entered the non-suit, and subsequently refused to take it off.
    
      The assignments of error specified the action of the court, 1, in entering the non-suit; and, 2, in refusing to take it off.
    
      R. Jones Monaghan, with him John Sparhazvk, Jr., H. T. Fair-lamb, and J. Frank E. Flause, for plaintiff in error.
    Not only the facts, but the fair inferences which might be drawn from them, are for the jury. That other inferences might be drawn, is unimportant. Johnson v. Bruner, 61 Pa. 61; Wenrich v. Heffner, 38 Pa. 207; Maynard v. Lumberman’s Bank, 9 Cent. 766; Neslie v. Railway Co., 113 Pa. 301.
    An obligation or contract, made in a representative capacity, is, nevertheless, a personal liability. I Parsons, Notes and Bills, 161; Pinney^. Johnson, 8 Wend. 500; Schmittler v. Simon, N. Y., 2 Cent. 497; Forsterv. Fuller,6Mass. 58; Aughinbaugh». Roberts,4W.N. C. 181; Markley v. Quay, 8 W. N. C. 145 ; Manley v. Hickman, 1 Ches. Co. 557; Ulam v. Boyd, 87 Pa. 477.
    A trustee under a will, carrying on a trade, pledges the trust property given to him for that purpose, and also his own property. Ex parte Richardson, 3 Madd. 156. And this, although in compliance with directions in the testator’s will, or in comformity with articles of partnership to which the testator was a party. Wight-man v. Townroe,' 1 M. & S. 412; Laboucherew. Tupper, u Moore, P. C. 198; Ex parte Holdsworth, 1 M., D. & D. 475; 2 Lindley, Partnership, 1,060, 1,061; Story, Partnership, § 70; Ex parte Garland, ioVes. Jr. 111; Ex parte Richardson, 3 Madd. 156; Laible v. Ferry, 5 Stew., N. J., 791.
    The general rule undoubtedly is that he who takes the general profits of a partnership must, of necessity, be liable to the losses. Waugh v. Carver, 2 H. Bl. 235 ; s. c. 1 Sm. L. C. *978-982, and n.; Grace v. Smith, 2 W. Black. 998; Pond v. Pittard, 3 M. & W. 357; Berthold v. Goldsmith, 24 How. 536; Collier, Partnership, Wood’s Ed., § 52, n.
    Participation in the profits at least indicates a partnership, and, from it alone, a jury would be justified in finding a partnership.
    There is not a suggestion in the will that the deceased partner’s share of the assets was to be loaned to the surviving members. The expression is by the significant word, “ to continue.” The expression is, not my share of the assets, but “my interest in the firm.”
    
      R. T. Cornwell, and A. P. Reid, for defendants in error,
    not heard. — In all the cases cited by plaintiff in error, the personal liability of executors was based upon their own expressed contracts.
    In the absence of any expressed agreement here, between the executors and surviving partners, no inferences from the will are permissible, except such duties as the obligations resting upon the executors required them to perform. Under the will, the executors were bound to leave their testator’s interest in the firm, without any control on their part, and the old firm would continue as before.
    Articles of partnership which simply provide that, on the death of one partner, his capital shall be left in the business until the end of the partnership term, do not require the admission of the executor of a deceased partner in the management or control of the business, and if he does not personally engage in the business he will not be personally liable for debts, though he leaves the testator’s capital in the business. In- such cases, creditors becoming such after the death of one of the partners, have only the liability of the surviving partner by whom the business is carried on, and the security of the capital of the deceased partner which is left in the business. Wild v. Davenport; 48 N. J. L. 129; Holme v. Hammond, L. R., 7 Ex. 218; Gratz v. Bayard, 11 S. & R. 41; Bates, Partnership, § 52; Owens v. Mackall, 33 Md. 382.
    The receipt by Mrs. Pennock of $20 per week from the firm is entirely in accordance with the view that the old firm continued. Her husband received that sum weekly, and on that account it was paid her. It was not received by her under any ageeement to receive it as profits, which is the essence of liability by virtue of a receipt of profits. It was not paid her on account of profits, and no inference can be drawn from it prejudicial to her without it is shown that she knew it was on that account and received it as such.
    Mrs. Pennock was not consulted about the issuance of the circular dated July 22, 1887, and never knew of it until after the failure. She cannot be visited with any of the consequences that might flow ■ from its publication. It does not prove a partnership. It purported to be issued by the late firm, and necessarily bound no one but the surviving partners. Schull’s Appeal, 115 Pa. 141.
    
      Feb. 15, 1889.
    The only effect it can have is by way of estoppel. As she had no knowledge of it and had no part in its circulation, she is not estopped.
    It is difficult to perceive how any knowledge the payees of the notes had of the circular could avail the plaintiff, to whom they passed the notes, and no reason is suggested for the position. If it were otherwise, however, Mr. Bradley, as a member of the firm of Robert Hare Powell & Co., to whom the notes were given, knew that no new firm had been formed, and that neither Mrs. Pennock nor himself were personally engaged in the management. His knowledge was that of his firm, and there consequently was no misleading as to them. And, if the payees were suing, they could not recover.
    The only inference from the notice would be that the executors would take part in the conduct of the business to the extent directed in the will, and all parties in interest would be bound to look to the terms of the will to see the extent of their power in so conducting the business.
    Parties who deal with an executor, exercising his power of disposition of the personal assets of the estate in his hands, to raise money, not for the estate or the settlement of its affairs, but for the business of a commercial firm, are bound to look into his authority, and are held to a knowledge of all the limitations which the will, as well as the law, puts thereon. Smith v. Ayer, 101 U. S. 320; Bur-well v. Mandeville’s Ex’rs, 2 How. 573.
   Per Curiam,

Judgment affirmed.