Case ID: how-pr_21/html/0114-01.html
Source: Caselaw Access Project
Author: {"author": "By the court, Balcom, P. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

SUPREME COURT.
    Ziba Coman agt. Jacob S. Reese and William F. Allen.
    Where one of the members of a copartnership fraudulently contracts a debt in the purchase of property for the use of the firm, for which he is liable to arrest, all the members of the copartnership are also liable to arrest for the same fraud, although they were ignorant of it.
    
      Broome General Term, May, 1861.
    
      Present, Balcom, Campbell and Parker, Justices.
    
    
      This was an appeal from an order made at the December special term of this court, held in Onondaga county in 1860, denying the motion of the defendant, Allen, to vacate the order of arrest as to him, with $10 costs.
    The order of arrest was granted by the county judge of Madison county, in October, 1860. It required the sheriff of that county to arrest the defendants and hold them to bail in the sum of $300.
    The ‘affidavits, on which the order was obtained, showed that the plaintiff had a cause of action against the defendants, for the price of some cattle he had sold and delivered to them.
    The affidavits also showed that the defendants were partners in the butchering business in the county of Madison; that the defendant Reese, purchased the cattle of the plaintiff, in the absence of the defendant Allen; that Reese fraudulently represented to the plaintiff at the time he purchased the cattle, that the defendants were the owners and possessed of property, and were perfectly good and able to pay for the cattle at any time; that Reese knew such representations were false, but that the plaintiff did not know they were false, but believed they were true, and relied upon them in selling and delivering the cattle to the defendants on credit.
    The affidavits showed that Reese was guilty of a fraud in purchasing the cattle; and as he purchased them on credit for the. defendants, and as they had the cattle and butchered them as partners, the question was presented, whether Allen as well as Reese, was liable to arrest for the fraud practiced by Reese in the purchase of the cattle.
    L. T. Bentley, for plaintiff.
    
    J. Sterling Smith, for defendant Allen.
    
   By the court, Balcom, P. J.

The defendant may be arrested, when he has been guilty of a fraud, in contracting the debt, or incurring the obligation for which the action is brought. (Code, § 119, sub. 4.) The question in this case is whether the defendant Allen is liable to arrest for the fraud his partner Reese, was guilty of in purchasing the cattle. ' Reese was acting in the legitimate business of the partnership when he purchased the cattle of the plaintff on credit. The cattle came to the hands of the defendants and were slaughtered by them as partners. It is, therefore, clear ¡that the plaintiff could have avoided the contract of sale of the cattle by reason of the fraud of Reese, and maintained trover for them against both defendants. [See Hawkins agt. Appleby, 2 Sand. S. C. R., 421; 1 Hill, 311.) In Hawkins agt. Appleby, it was held, where goods are obtained for the use of a firm, by means of the fraud of one of its members, the other partner, by receiving and participating in the use of the goods, will be held to have adopted the fraudulent act of the one who obtained them, and will be placed in the same situation in reference to the rights of the vendors of the goods, as if.he had directed his partner to procure the property, or had concurred with him in the transaction. The principle is elementary that all the members of a firm are liable in a civil action for the frauds committed by one partner in the course of the transactions ’ and business of the partnership, even when the other partners had not the slightest connection with, or knowledge of, or ■ participation in the fraud. (Story on Partnership, § 108.) Allen as well as Reese contracted the debt for the cattle; and each, (for the purposes of this action,) was guilty of a fraud in contracting it. The superior court of New York city decided in Townsend agt. Bogart, (11 Abb., 355,) that in an action in the nature of an action on the case against partners for obtaining goods from the plaintiffs by fraud, a partner who did mot participate personally in the fraud, is liable to arrest as well as those who did. I approve of that decision, and think we should follow it. I ain, therefore, of the opinion that the defendant Allen must be deemed guilty of a fraud in contracting the debt for the cattle as well as his partner and co-defendant Reese. It follows that the order appealed from should be affirmed with $10 costs.

Decision acccordingly.