Case ID: scl_29/html/0170-01.html
Source: Caselaw Access Project
Author: {"author": "O’Neall, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Allen & Montgomery vs. Henry Owens, Robert Cathcart, James Cathcart and Richard Cathcart.
    
    1. Where partners were sued within the summary jurisdiction and one of them was examined by the plaintiffs on interrogatories for the purpose of proving their demand, if his co-defendants choose to examine him as a witness, and neither he nor the plaintiffs object to it — it makes him, to all intents and purposes, a witness, and his answers would then be as other testimony.
    2. The admission of the witness so examined after dissolution that the articles were purchased for the firm, was enough to bind it, and it does not diminish its effect that it was made on oath voluntarily by him.
    3. Where there was prima facie as well as Conclusive evidence of a" partnership shewn from the articles exhibited to One of the members of the firm examined upon interrogatories by plaintiffs as a witness, and also by his co-defendants, it was held, under the rule that where there was prima facie evidence of a partnership, declarations by one of the members is evidence to bind the firm, that the proof made by the witness was sufficient for this purpose,
    
      4. There is no objection to a witness thus examined on the score of interest, for as a partner he is liable to the whole debt as well as his'share of it.
    5. Each partner is of course liable on his contract made by him, and his individual liability may be perfect to the creditor and yet his declarations will bind the firm. Where articles are delivered to the acting partner of a firm during the partnership, all are liable, whether regarded as ostensible or dormant partners. Yide Collyer on partnership, 3.
    6. No restriction of liability, except by charter, is permitted to any of the partners; all are liable not only to the extent of their interest in the joint stock, but also to the extent of their separate property. Collyer on partnership, 212.
    7. Accepting the note of one, or even of all the co-partners, is no discharge of the original contract.
    8. Had the defendants pleaded a recovery on the individual note of one of the partners given for the demand on which the action was brought, or relied upon it, or given it in evidence, it seems it might have protected them.
    
      Before O’Neall, J. at Fairfield, Extra Term, January, 1843.
    
      Report of the presiding Judge.
    
    This was a Summary Process, for the recovery against the defendants, as partners, of the balance due on the sale of 5,000 segars, at $18 per thousand, $90, on which sale $30 had been paid, leaving $60 due.
    Henry Owens, one of the defendants, was served with interrogatories to prove the plaintiffs’s demand; he;)was willing to give the testimony, either as a party or as a witness. The other defendants objected to his testimony. I thought I was bound to receive his answers to the interrogatories ; it might be, that they might not charge the other defendants. He stated in his examination, that he and the other defendants were partnersjj; that during partnership, he bought the segars, and that they were for the concern. The other defendants produced, and showed to this defendant, when he was on the stand, the articles of co-partnership, and asked him if the paper shown him was the partnership agreement; he said it was. This paper was given in evidence; it was executed 27th of August, 1837, and provided that the defendants should be partners, under the name and style of Henry Owens & Co., the Cathcarts to furnish capital, to the amount of $4000, in such goods as their stock in Winnsboro’ can furnish ; the groceries — say sugar, coffee, molasses and wine, to be furnished by the store kept by James Cathcart, Columbia; a regular invoice of the goods to be kept, and Owens to give his note to the other partners. The agreement further provides that the defendant Henry Owens, was to pay the Cathcarts interest on one half of the capital furnished by them, to attend to the business personally, keep the books, make regular entries of all sales, keep an invoice and cash book, use his best endeavours to make the business profitable, and to be responsible for the faithful transaction of the firm entrusted to his management; to consult with and advise with his co-partners in all matters relating to the business of the firm, and to enter into no engagement in the name of the firm, without their consent: whenever the defendant Henry was in funds to take on his own account one half of the capital, he was to pay that amount to his co-partners, and the interest which he had by this instrument engaged to pay, was to cease. The co-partnership was to continue four years. The partnership was dissolved on the- 4th of March 1840, the Cathcarts got their capital, and 10 per ct. by way of profits. The goods on hand at the dissolution, and the book accounts, the defendant Henry Owens got.
    The books of Allen & Montgomery, in which the segars were charged, were, under the requisition of the defendants, produced. The entry was, Henry Owens, due to 5000 segars, at $18 per thousand, $90. The account was credited by note, the note was produced. It was the note of Henry Owens, for $90, credited with $30 paid. — It appeared from the entry in the books of Allen & Montgomery, that the segars were delivered during the partnership, and to the acting partner, Henry Owens. I thought, whether the defendants were regarded as ostensible or dormant partners, they were liable. In Collyer on Partnership, 3, it is said “persons become liable to third persons, either by contracting the legal relation of partners inter se, or holding themselves out to the world as partners. For by the law of England, not only he who is actually a partner, but he who lends his name and credit to the firm, is liable for the debts and engagements of the body. No restriction of liability, except by charter, is permitted to any of the partners; all are liable not only to the extent of their interest in the joint stock, but also to the extent of their separate property.” In Collyer on Partnership, book 3, chap. 1, page 212, it is said, “for notwithstanding some few dicta, which tend to a contrary doctrine, it is now an undoubted and universal proposition, that a dormant partner is in all cases liable for the contracts of the firm', during the time that he is actually a partner.” In a note to the same page, the following principle is extracted from Reynolds vs. Cleveland, 4 Cowen, 282: “Partners are all liable for articles furnished for the outfit of the partnership, though the vendor did not know the existence of the partnership, and supposed himself dealing with the individual partner to whom he gave credit, by charging him alone in his books.”
    These authorities sufficiently establish the liability of the defendants on the sale of the segars. That accepting the note of one, and even of all the co-partners, is no discharge of the original contract, is so plain a legal proposition, that it is unnecessary to cite authority to support it. If the defendants had pleaded the recovery upon that note, by Allen Montgomery, or had relied upon it, or given it in evidence, it may be that it might have protected them. As it is, I only know that there was such a recovery, from some loose conversation at the Bar, and from observing that it is incidentally mentioned in one of the grounds of appeal.
    I decreed for the plaintiffs, $60.
    The defendants, Robert Cathcart, James Cathcart, and Richard Cathcart, appealed from the decree pronounced in the above case, on the following grounds.
    1. That Henry Owens, one of the defendants, was incompetent as a witness, to prove the plaintiffs’s demand, on the ground of interest, inasmuch as the plaintiffs held a judgment against Owens, unsatisfied, obtained on his individual note, given to plaintiff for the demand on which this action was brought; and because said Owens, and the other defendants, had dissolved co-partnership, and by the terms of dissolution, Owens was to pay all the debts of the firm.
    2nd. That the contract for the sale of the goods, was made with Henry Owens, in his individual character, and not with the firm, and the original entry in plaintiffs’s books, charged Henry Owens only, and not the firm.
    3d. That if Henry Owens was the only ostensible dealer, and the other defendants were dormant partners, as alleged by plaintiffs in the record, then the plaintiffs were bound by the terms of the co-partnership, which prohibited Owens from contracting any debts, unless by consent of the other partners.
    4th. That the defendants, the Cathcarts, derived no benefit or interest whatever from the articles purchased by Owens from the plaintiffs, and, as dormant co-partners, were not bound to pay for any part of said articles.
    
      Clarke Buchanan, for the appeal.
    
      M'Dowell, contra.
   Curia, per

O’Neall, J.

This case, it must be kept constantly in mind, is in the summary jurisdiction, where the plaintiffs have the right to call upon one or all of the defendants to answer, as if the case was in equity, touching the subject matter in litigation. The right to call for a defendant’s answer on interrogatories, is one thing, and the effect of them another. Generally, the answers could affect no one but himself. But if when a party is thus put upon the stand to answer interrogatories, and his co-defendants choose to examine him as a witness, and neither he nor the plaintiffs object to it, there can be no doubt it makes him to all intents and purposes a witness, and his answers would then be as other testimony. That was the course pursued here.

Owens’s answers to the interrogatories would not have given to the plaintiffs a decree; but waiving that ground, the defendants examined him generally, and thereby made him their witness. If he is considered as a witness, then he proved every thing necessary to charge the other defendants.

But if he was not a witness after the defendants shewed the articles of co-partnérship, and thus proved that he and they were partners, his declaration that the articles were purchased for the firm, would make them all liable. According to Kendrick vs. Campbell & Clark, 1st. Bail, 522, the admission of Owens made after dissolution will bind the firm. It cannot diminish the effect of it, that it was made on oath voluntarily by him. Montague, in his 1st. vol. 95, says “It has been ruled that after prima facie evidence of a partnership, the declarations by one of the members is evidence to bind the firm.” This is full to the very point before us. The articles were not only prima facie, but also conclusive evidence of the partnership, and after they were out, Owens’s proof, put upon the mere ground of his declarations, made the defendants liable. There can be no valid objection on the score of his interest. For as a partner, he is liable to the whole debt, as well as his share of it. But no such objections ever can apply to the declarations of a partner. For if it was allowed, it would destroy the very rule by which they are admitted. Each partner is of course liable on his contract made by him, and his individual liability may be perfect to the creditor, and yet his declarations will bind the firm. Montague on Part. 48; Kendrick vs. Campbell, & Clark, 1st Bail. 522. The rest of the case is fully met and disposed of by the reasons assigned in the report, with which this Court is satisfied-. The motion is dismissed.

Richardson, Evans, Butler and Wardlaw, JJ. concurred.