Case ID: vt_3/html/0104-01.html
Source: Caselaw Access Project
Author: {"author": "Williams, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Scott & Raymond vs. Zebulon R. Shipherd & Amos W. Barnum.
    Addison
    January, 1830.
    One partner, after the dissolution of the partnership, cannot charge the firm with any debt which they did not owe before the dissolution.
    Nor can one by his own oath transfer to another a debt due from himself.
    Where an agent of a company was authorized by one of the members to purchase goods for the purpose of carrying on the business of the company, and also such as might be wanted for the agent’s private use; and the agent accordingly purchased goods for the use of his family, with the understanding of himself and the vendors that the goods were taken on the credit of the company, but were to be eharged to the agent for his own convenience, and that the account was afterwards tobe transferred to the company ; and after the dissolution of the partnership the member, who gave the said authority to the agent, directed the agent’s said account to be transferred to the company; it was held—
    1. That all the partners were liable for the account thus transferred to the company.
    2. That, in an action brought by the creditors against the company to recover for these goods, the agent was an admissible witness for the plaintiffs to prove the liability of the firm, and that, if he were a partner, he would not be incompetent.
    This case came before the Court on exceptions made to a report of auditors in an action on booh account. The report stated,
    
      “ That the defendants assented to the plaintiffs’ charges made directly against them as partners from the 20th day of May, 1824, to the 25th day of November, 1824, but objected to all charges subsequent to that time, and also to the charges made against John J. Shipherd, $ 167,17, and the interest on the same. It appeared that the defendants were, during the time the said account accrued, carrying on the business of manufacturing marble at Vergennes : — That on the 16th day of November, 1824, an act was passed by the legislature of this state, incorporating the defendants and John J. Shipherd, and their associates, by the name of “ The Vergennes marble manufacturing company ;” —That on the 26th day of November, aforesaid, there appeared in the Vermont Aurora, a newspaper printed at Vergennes, an advertisement in the name of “ The Vergennes marble manufacturing company,” among other things, offering for sale certain manufactured articles of marble; — that the said Scott & Raymond, as subscribers, took the said newspaper at the time. And it was further shown, that on the second Tuesday of January, 1825, the day appointed by the act of incorporation for the first meeting, said corporation was organized by the choice of officers ; — That said business of manufacturing marble continued to be carried on, as it had been previously ; and it was not shown, that the plaintiffs had any notice of the organization of said corporation, otherwise than as above named, until about the 9th day of February, 1825, when they were notified by John J. Shipherd, that the account thereafter must be charged to “ The Vergennes marble manufacturing company.”
    “ And it further appeared, that during the time the said account in favor of the plaintiffs against the defendants accrued, the said John J. Shipherd was the agent of the defendants for carrying on said business, and boarded the hands belonging to the es-tafolishment : — That at the commencement of the account, John J. Shipherd was authorized and directed by Zebulon R. Shipherd, one of the defendants, (and not by Barnum,) to purchase at the store of the plaintiffs, as well as other stores, such goods as might be wanted for carrying on the business of manufacturing marble, as well as such goods as he might want for the use of his family. The said John J. accordingly took up a considerable amount of goods for the use of his family, with the understanding and agreement between him and Scott & Raymond, that they were taken on the credit of, and to be paid by, the said Shipherd & Barnum, the defendants -, but the charges of such goods, as were for the use of the said John J. Shipherd, were made to him, for his convenience in keeping his accounts with the defendants, with the understanding that the amount was afterwards to be transferred to the account of Shipherd & Barnum,
    
    On the 9th day of February, 1825, the balance of said account, charged JohnJ. Shipherd, was $ 108,40, the sum allowed by the auditors : after this the account was still continued by Scott & Raymond against the said John J. so that the balance against him on the 4th day of January, 1826, when the account was charged to Shipherd & Barnmn, was $,'167,17, the sum charged them by the plaintiffs. On the 4th day of January, 1826, the said account by the direction of the said John J. Shipherd and Zebulon R. Shipherd was transferred to the account of the defendants. On the trial, John J. Shipherd was offered as a witness on the part of the plaintiffs, and objected to by the defendants ; but admitted by the auditors. In addition to,the accompanying certificate, it appeared by the testimony of John J. Shipherd, that although h@ had been before that time desirous of becoming a partner in the concern, he had made no request, nor expressed a desire to become so at that time ; — that he never advanced any expences, or complied with any terms for that purpose : — that the said certificate was made by the said Zebulon R. & Amos W. on the urgent request of the said John J. expressed to the said Zebulon R. to have a more definite understanding of his authority, and to have the sole agency in managing the concern, or to he discharged altogether from the agency. Said certificate was handed to and has been kept by the said JohnJ. who continued in the said business, in connexion with the defendants, until the fall of 1825.
    Amount of account for goods delivered defendants from
    May 20, 1824, to January 29, 1825, - $218,60
    Interest on the same to this time, 51,64
    
      John J. Shipherd’s act. allowed at #108,40 270,24
    Interest on the same to this time, 32,50 — 140,90
    411,14
    
      And we allowed-to the defendants-the following claim,-21 barrels at 5s. $17,50
    ■ Interest on the same to this time 4,55-22,0'B
    
    - Heaving abalance due to plaintiffs of - $389,09"
    The following is a copy of the certificate alluded to :
    ** We hereby engage that John J. Shipherd shall be equally " concerned with us in the marble manufacturing establishment “ form the commencement, he paying one third of all the exppnses : and we also appoint him our sole agent to manage the concern with such salary as is reasonable for his personal services.
    “ Vergennes, 16th Oct. 1824. Z. R. Shipherd,
    
    
      A. W. Barnum.”
    
    The defendants’ counsel filed exceptions to the report, but the exceptions were overruled by the county court, and the report accepted. The defendants excepted to the decision of the court,, and the case was thereupon reserved for the opinion of this Court.
    
      Mr. Hawley, for the defendants. — It is conceded that if J. J. Shipherd during the partnership, after being licenced by Z. R. Shipherd, one of the partners, had taken goods of the plaintiffs on the credit of the firm, the defendants would be liable. But, it is contended, that such licence would not authorize John J. to take up goods in his own name with a secret understanding with the plaintiffs that the account should afterwards be transferred to the account of the firm. Nor would it be binding on the firm without notice of such course having been taken, and the assent of one or both members of the firm during the partnership, that the firm notwithstanding should- be liable.
    The credit being given to John J. by the charges on book, and at his request for the time being, the plaintiffs could hold him accountable for the goods if they saw fit, and particularly on a refusal of the firm to, pay, or have the account transferred.
    The act of Z. R. Shipherd, after the dissolution of the firm, directing the transfer to be made, without the knowledge or assent of the defendant,Barman, creates no liability on him. 3 Esp. C. 108. — Lansing vs. Gaine, 2 Johns. R. 300. — Sanford vs. Mickle, 4 Johns. 22<i.-Mant vs. Mainwaring etal. 8 Taunt. 139.
    From the facts set forth in the report of the auditors, it does not appear that the auditors decided whether John J. was a partner or not: therefore, it is contended, that, from the evidence set forth in the report,-the said John J. as between the said Zelulon R. and Barnum and himself, was a partner, and standing in that delation, he ought not to have been admitted as a witness in tire o case to charge the other partners for the debt he had contracted, and for which he was equally liable with them, if the firm is regarded liable. — Birt vs. Wood, 1 Esp. €. 20. — Young Baimer, 1 Esp. C¡ 103. — 3 Sta?-k.Ev. 1083.
    
      Mr. Tucker, for the plaintiffs. — The plaintiffs contend, that it appears from the report itself,the goods delivered to JohnJ. Ship-herd, and which constitute a part of the plaintiffs5 claim,were delivered to him on the credit of the defendants alone, as understood at the time of their delivery, between the plaintiffs and Zebulon R. Shipherd, then a partner of the firm of Shipherd & Barnum; and that the circumstance of their being charged on the plaintiffs5 books to John J. Shipherd, was for his convenience, and at his request, and had no reference whatever, to any charge of credit from defendants to said John J.
    
    The plaintiffs contend they had a perfect light in law to transfer so much of John 3. Shipherd's account as accrued solely upon the credit of the defendants, (and which had been separately entered on plaintiffs’ books merely to enable the said John J. to have his family expenses appear unconnected with the disbursements of defendants’ marble factory,) to their account, without any directions from them, and at any time, whether during the existence or after the termination of the partnership ; that by keeping the account in question in this particular manner, for the accommodation of John J. Shipherd, they have divested themselves of no right, to which in law they were entitled by the original agreement with defendants for the purchase of the goods 5 and that the transfer of the amount of John J. Shipherd’s account to that of Shipherd & Barnum, on the 4th day of January 1826, was not the creation of any new legal liability, or charge upon defendants, but was simply a business of convenience, altering no existing credit and conferring no new right; that Zebulon R. Shipherd, one of the defendants, directed the transfer, which, it is admitted, would be altogether nugatory, if the said defendants were not liable for the goods at the time of thew- delivery, inasmuch as it is not contended that, after the dissolution of a partnership, any new partnership-liability could be created fay the act of one partner alone.
    The auditors’ report does not show that John J. Shipherd was proven ever to have been a partner with these defendants, but the reverse. It is shown that an offer was made him to become a Partner uPon d)e performance of certain conditions, which hé entirely failed to perform. But if the said John J. had been' a partner with the defendants, the statute which makes parties irr book actions competent to testify in their own cases, was sufficient authority for his admissioft by the Auditors. And when the law has conferred a right* by constituting a man a competent witness, the effect of his testimony upon his own interest furnishes in no case a ground for his rejection, but simply goes to his credibility-
   Williams, J.

pronounced the opinion of the Court. — The exceptions which have been taken to the report of the auditors assumed as a fact that the auditors have charged the defendants with a demand which was due from John J. Shipherd to the plaintiffs, and that this was done either on the testimony of said John, or in consequence of the directions of one of the partners after the dissolution of the partnership. If either of these facts appeared from the report, the objections to it Would be fatal. A man cannot by his own oath transfer a debt due from himself to another. Nor can a partner, after the dissolution of the partnership, charge the firm with any debts which they did not owe before the dissolution. But it is expressly found that no credit was given to John J. Shipherd for any part of the account found due to the plaintiffs, and that the articles taken by him, and which Were charged cm the plaintiffs books to him were delivered to him solely on the Credit of the defendants and by their authority. One of the defendants directed the said John to take such articles as he might Want for the Use of his family, while he was boarding the hands employed by the defendants. As this was for the benefit of the firm, and was undoubtedly considered as paying John J. for boarding their hands, it might well be considered by the plaintiffs as having relation to the business of the firm. One partner may bind another by a contract when the subject matter of the contract is consistent with the business of the partnership.

There is nothing in the manner in which this account Was kept that will either legally or equitably discharge the defendants. The manner was directed, not by the plaintiffs alone, or for their benefit, but by the agent of the defendants, and for his and their benefit. It does not appear that the defendants were deceived or defrauded in consequence of these charges being made in this Way. The manner in which the charges were made was evidence to be considered by the auditors, and tended to prove that the credit was given to John J. Shipherd alone, but it was not con-(elusive, and the auditors have expressly found that the credit was not given to him, but to the defendants. From this finding of the auditors it is apparent that John J. Skipherd never was liable to these plaintiffs for the articles charged to him by the plaintiffs, but that the defendants alone were accountable.

Tucker, for plaintiffs.

Hawley, for defendants.

The direction given by Zebulon R. Shipherd, after the dissolution, would not have bound the other partner, if they were not originally liable, and was not otherwise relevant to the cause except as it was evidence of the original contract.

John J. Shipherd was properly admitted as a witness. If he was a partner he was in interest with the defendants, and it was not an objection to be made by them : and if he was only an agent, there could be no objection to him. We are inclined to the opinion that he was a partner : but it was not necessary to decide upon that point, as he was clearly an admissible witness. It does not appear what facts the auditors found from his testimony, or that any other objections were made except that he was a partner with the defendants. If he was originally accountable for the goods delivered to him, or for any part of the account found due from the defendants, or, in other words, if it was ever his debt, he could not, by his own oath, discharge himself and charge the company ; and this would be equally true whether he was a partner or whether he was not. But the auditors have found that he was never accountable for any part of this demand; that the goods charged to him were delivered solely on the credit of the defendants, and that the charge to him was in the nature of a memorandum to distinguish that part of the account, for which he was individually liable to the defendants, from the other part. From the facts reported by the auditors, the plaintiffs were entitled to judgment.

The judgment of the county court is, therefore, affirmed.