Case ID: scl_26/html/0194-01.html
Source: Caselaw Access Project
Author: {"author": "Butler, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Jane Steele vs. Jennings & Beaty.
    
    A promise by one co-partner, after dissolution of partnership, cannot create a new liability against the other partners on a simple contract, barred by the Statute of Limitations before the dissolution.
    A defendant is not precluded from availing himself of the Statute of Limitations, by the remark of his counsel, in argument, “that his client would scorn to take advantage of the statute, if it could be made to appear that the money had been applied to the business of the firm. ”
    Before Butler J., at York, Spring Term, 1841.
    This was an action of debt, nominally against both defendants, the real object of which, however, was to make Beaty liable for money borrowed by Jennings alone, but borrowed in the name of the firm of Jennings & Beaty, whilst they were partners in trade. Defence — general issue and statute of limitations. In 1828, Jennings borrowed of plaintiff $100, in the name of Jennings & Beaty, and gave a sealed note for the amount, signed Jennings & Beaty. In the latter part of the year 1832, the co-partnership was dissolved, the sign taken down, and the goods divided. In 1837, for the first time, demand was made on Jennings for payment of the note. He said then, and frequently afterwards, that the money was justly due, and should be paid when he made collections. He became insolvent and unable to pay, and this action was brought against Beaty in 1839 or ’40. He resisted judgment, in the first instance on the ground that he was neither liable on the sealed note, nor for money borrowed, as it had been borrowed by Jennings, without his consent, and not for the use of the firm. I was entirely satisfied that Jennings had borrowed the money on the credit of Beaty’s name, but had applied it exclusively to his own use. This action, so far as Beaty is concerned, must be regarded as brought on the demand for money lent, and the question is, has the demand been barred by the statute of limitations. The statutory bar was complete some time in 1832, and more than four years had elapsed from that time till the demand on Jennings, when he promised to pay the debt. The question is, can one partner be made liable on an assumpsit of another, made more than four years after the dissolution of a co-partnership. I held not, and the jury found for the defendants.
    *The plaintiff appeals, on the following grounds :
    1. Because his Honor, Judge Earle, erred in granting leave, at Chester, to the defendants, to plead the statute of limitations.
    2. Because his Honor, Judge Butler, erred in charging the jury that the acknowledgment and promise by the defendant, Jennings, to pay the debt, was not binding upon the defendant, Beaty.
    3. Because his Honor erred in charging the jury that the defendant’s, (Beaty,) solemn promise, made at the time, not to plead the statute of limitations, was not binding upon him.
    
      A. W. Thomson, for the motion,
    contended that the co-partnership, (as ho understood the law,) was still in existence, so far as this plaintiff was concerned, and the declarations of Jennings, down to this day, are binding upon Beatty. The plaintiff must have notice of the dissolution, and it must be proved that she had notice of such dissolution. Cited 1 Salk. Rep. 29; 2 Doug. Rep. 622. A promise of one partner, after dissolution, may bind the other, by a promise concerning a partnership debt. 3 Johnson, 536; 6 id. 267; 10 id. 35; 15 id. 409; 2 Const. Rep. 111; 2 Tread. Const. 685; 2 Bay Rep. 523; 1 M'Cord, 541; 3 id. 278.
    
      G. Williams, contra,
    submitted the case.
    
      See 4 Strob. 220; 6 Rich. 219-29; 9 Rich. 44. An.
    
    
      
       S. C. before Chev. 183.
    
   Curia per

Butler, J.

So far as it regarded Beaty, this was originally a simple contract, and was barred by the statute of limitations in 1832, or at furthest, in 1833. During the existence of the co-partnership, Jennings was, to some extent, confining himself to the business of the firm, the agent of Beaty, and might subject him to liability for contracts made on the credit of his name. After their partnership connection had ceased, as it did, by a notorions dissolution in 1832, Jennings had no power to create a new liability against Beaty. Now, what is the state of the case ? Nine years after a right of action had accrued, and four years after it was completely barred by the statute of limitation, and when in effect it was paid, and five years after the dissolutian of the co-partnership, *an attempt is made to make Beaty liable on the acknowledgment of Jennings. In effect, the proposition contended for, is to perpetuate the agency of one partner, to create new debts against another. In 1833, this demand against Beaty might be regarded as entirely extinguished ; and at that time, Jennings had no control over his former partner’s contracts, which were not then subsisting. His acknowledgment, therefore, made in 1837, can have no effect on the liability of Beaty, who, it would seem, had no notice of this demand until a short time before this action was brought.

It was contended, however, that the plaintiff had no notice of the dissolution. After such a lapse of time, where the parties live in the same neighborhood, as they did here, all concerned may be very well presumed to have notice of the fact of dissolution.

The last ground of appeal, perhaps, requires some explanation. On the former trial of this case, the counsel of Beaty, in his argument to the jury, remarked, that his client would scorn to take advantage of the statute, if it could be made appear that the money borrowed had been applied to the business of the firm. This was the extent of Beaty’s pledge not to plead the statute, and there is certainly nothing in it to preclude him from availing himself of it now. It was not made by himself, and he is not satisfied that Jennings applied the money to the firm. Judge Earle’s order being sufficient authority for filing the plea, the motion is dismissed.

The whole Court concurred.