Case ID: ky_75/html/0455-01.html
Source: Caselaw Access Project
Author: {"author": "JUDGE GOFER", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Case 56 — PETITION ORDINARY
    Dec. 13.
    Turnbow v. Broach.
    APPEAL PROM GRAVES CIRCUIT COURT.
    1. A EIRM DEBT WAS NOT MERGED IN THIS CASE. After dissolution one partner executed a new note in the firm name for the balance due on an old note of the firm. The old note was surrendered and the new accepted by the creditor as the note of the firm. This did not merge the debt of the firm into a demand against the partner who executed the new note.
    2. Although the other partner was not bound by the new note, he was still bound for the original debt.
    3. A PARTNER WHO HAS PLEADED NON EST EACTUM to a note executed in the firm name by his co-partner without authority, for a firm debt, is thereby estopped, when sued on the original demand, from relying upon the execution of the new note as a merger of the original debt. (Doniphan, &c. v. Gill, 1 B. Mon. 199.)
    W. M. Smith,..........For Appellant,
    CITED
    Smith’s Mercantile Law by H. G., 95.
    1 B. Mon. 199, Doniphan v. Gill.
    6 Bush, 401, Maeklin’s ex’r v. Crutcher.
    9 Bush, 417, Smith v. Turner’s adm’r.
    3 B. Mon. 178, J. & J. Brozee v. W. & N. Poyntz.
    2 B. Mon. 420, Calk v. Orear.
    16 B. Mon. 355, Merrit v. bollys.
    W. H. Miller,..........For Appellee,
    CITED
    1 B. Mon. 199. 2 B. Mon. 420.
    3 B. Mon. 179. 2 Mete. 523.
    9 Bush, 417.
    A. Williams & Co., composed of A. Williams and B. R. Turnbow, executed a note to Broach, in 1860 or 1861, for $100 money borrowed for the use of the firm, and soon thereafter the firm dissolved. In 1866 Williams made a payment on the note and took it up and destroyed it, and for the balance due thereon executed a note in the name of A. Williams & Co. for $86.56, due one day after date. Broach knew the firm had been dissolved before he surrendered the old and accepted the new note. Turnbow did not authorize or have any knowledge of the execution of the new note.
    Broach instituted this action on the new note against Williams and Turnbow. Turnbow answered and pleaded non eat factum, and thereupon Broach filed an amended petition, in which, after setting out the above facts, “he says that he supposes that at the time said new note was executed, the firm of A. Williams & Co. had been dissolved; but he says that he is entitled to recover on the original note against both defendants, as the said original note was executed while defendants were partners, and that the money was used in the partnership business. He says he thought at the time the new note was executed by A. Williams, one of the defendants and a late partner of the firm of A. Williams & Co., that said A. Williams had a right to sign the firm name, and that he never intended to surrender any of his rights against the defendants or either of them. That he has not much experience in such matters, and did not know but what Williams had the same power to bind his co-partner after the dissolution of the partnership that he had before. Wherefore he prays judgment,” etc.
    Turnbow demurred to, the amended petition; Broach demurred to the answer, pleading non est factum. The court below overruled the demurrer to the petition, and sustained that to the answer; and the case being submitted on the face of the papers, judgment was rendered for the plaintiff against both defendants. On Tumbow’s appeal that judgment is affirmed.
   JUDGE GOFER

delivered the opinion oe the court.

The case of Doniphan, &c. v. Gill (1 B. Mon. 199) seems to be conclusive of this case. Doniphan & Smoot were partners. Smoot borrowed money for the firm of Mrs. Gill, and delivered to her a sealed obligation for payment signed “Doniphan & Smoot.” One partner had no authority to bind his co-partners by an instrument under seal, and when sued on the note Doniphan pleaded non est factum; and there being no evidence of express authority to bind him by a writing under seal, the action was dismissed and an action of assumpsit was brought against both for the money borrowed, and judgment was recovered in that action on account of the original consideration. The court held that the bond, although obligatory on Smoot, did not extinguish the antecedent joint assumpsit implied by law from borrowing the money, and gave as a reason for the decision that Mrs. Gill accepted the bond, not as the obligation of Smoot, but, according to its apparent import, as the joint undertaking of Doniphan & Smoot, and upon the credit of Doniphan as well as Smoot.

In this case the appellee accepted the new note, not as the note of Williams alone, but as the note of Williams & Co., the obligors in the old note, and upon the credit of the appellant as well as of Williams. That the appellee took the note signed with the name of the late firm instead of the note of Williams alone showed that he did not design to merge his demand against both into a demand against one only of the members of the firm, and rebuts the prima fade case that would have existed against him if he had taken the note of Williams alone, or, to speak more accurately, shows that no such prima fade case exists.

Counsel argues, however, that as the firm was dissolved before the new note was given, and that fact was known to the appellee, he merely made a mistake as to the law in supposing that Williams had authority to sign the firm name, and that as every person must be presumed to know the law, he is to be taken as having accepted the note as the note of Williams alone, because he must be taken to have known that in law it was only the obligation of the latter, and that this case is to be distinguished from the case supra where, as he argues, the mistake was one of fact.

There is nothing in that case to justify the conclusion that Mrs. Gill supposed that as matter of fact Smoot had authority to bind his co-partner by an instrument under seal. The only conclusion which can be drawn from the case is that the bond was executed on the assumption that one partner had implied authority to bind another by such an instrument. The misapprehension was simply as to the powers resulting from the relation of partners. Smoot might have had express authority, and if it had been supposed that he had, and the bond had been accepted on that supposition, and it had turned out as matter of fact that he did not have it, then there might be some force in the argument; but the mistake there, as here, was as to the extent of the authority of a partner as such. There the parties seem to have supposed that Smoot had authority to execute a sealed instrument in the names of Doniphan & Smoot because they were partners, and in this case the parties seem to have supposed that Williams had authority to sign the name of the late firm because he had been a member of that firm and the debt for which he gave the note was a firm debt. In both cases the parties simply mistook the powers resulting from the partnership relation, and there is no more in this case than in that to warrant the conclusion that the creditor intended to accept the obligation of one partner in discharge of the liability of both.

It seems to us therefore that upon the pleadings the appellee was entitled to the judgment rendered, and it is affirmed.