#### Rootes v. Wellford and Co.

Argued Monday, Dec. 13th, 1813.

1. Partnership — Dissolution—Powers Thereafter* — Allowing Credits. — After the dissolution of a mercantile firm, one of the partners cannot hind the rest without their consent, hy settling accounts with, or allowing credits to, customers of the firm.

2. Set-Off Part inadmissible — Effect.—If a discount or set-off he claimed in such manner, that part only can with propriety he allowed; it is incumbent upon the claimant to separate the admissible from the objectionable parts : otherwise the whole should he rejected.

In an action of assumpsit in behalf of John S. Wellford &Co. against Thomas R. Rootes, the declaration containing several counts, for goods sold and delivered by the plaintiffs to the defendant, for money had and received by the defendant for the use of the plaintiff, and for a balance of 3991. 18s. 8J¿d. upon an account settled, the defendant pleaded non assumpsit. Upon the trial of the cause, he proved that the co-partnery of the plaintiffs was formed about September 1803 ; that, previous thereto, a co-partnery under the firm of Winchester, Howard & Co. of which Richard and Stephen Winchester were partners, had been carried on under the same roof under which the business of the plaintiffs was conducted, and so continued till about December 1804; that then the partnership of Winchester, Howard & Co. was dissolved, and another formed by Richard and Stephen Winchester, in the same manner and place ; that the funds on which the plaintiffs traded were furnished by Winchester, Howard & Co. *and Richard and Stephen Winchester ; that, after the formation of the firm of Richard and Stephen Winchester, the whole stock of-Winchester, Howard & Co. amounting to about $51,000, was transferred to Richard and Stephen Winchester; that they undertook the payment of the debts óf Winchester, Howard & Co. and the collection of the debts due them, and transferred the balances on the books of Winchester, Howard & Co. to their books ; that is, the balances against them to the credit of their creditors, and the balances in their favour to the debit of their debtors: that in this way, the said Richard and Stephen Winchester charged against the defendant in their account against him, the sum of one dollar and thirteen cents as the balance due by him to Winchester, Howard & Co. but did not give him credit for certain fees for professional services due to him from Stephen Winchester, or Winchester, Howard & Co. ; and the said balance of $1 13 was afterwards credited to the said Rootes in the account of R. and S. Winchester, settled by Stephen Winchester after the dissolution of the partnership. It was also proved that, from the formation of the said firm of R. and S. Winchester, (they conducting one branch of business, and the plaintiffs conducting another,) it was the usual course of business between them and the plaintiffs, and their respective customers, well understood by both and their customers, that the accounts of .those firms respectively, with any customer of both firms, arising from the transactions of each, when settled with such customer, should reciprocally be discounted one against the other, as the balances might appear on such settlement. The defendant farther gave in evidence an account stated between himself and R. and S. Winchester, in which credits were given him in the following words : “by fees from the year 1799 to 1806 inclusive, for S. Winchester, Winchester, Howard & Co. and R. and S. Winchester, $603 30. Balance of Winchester, Howard & Co.’s account $1 13 — 604 46;” and a balance was struck in his favour of $928 59 cents; which account had been settled by the defendant and the said Stephen Winchester, after the dissolution of both the partnerships ; (no settlement thereof having been before *made ;) all the words and figures on that account in red ink (which consisted of those credits, and of so much thereof as stated the said balance of $928 59) being written by the said Winchester, and not being found in the books of R. and S. Winchester. It. was also proved that, in the previous accounts between Winchester, Howard & Co. and the defendant, from the year 1801 to 1803, the defendant was charged upwards of $1400 as the balance of an account due Stephen Winchester, and had not been credited in that account with S. Winchester, for the fees against S. Winchester, mentioned in the said entry in red ink. He further proved that, after the formation of the said firm of R. and S. Winchester, and their assumption of the debts of Winchester, Howard & Co. they carried on their account against him without crediting his claim against Winchester, Howard & Co. aforesaid for fees. It was not proved how much of the account for fees was due from the respective firms. The defendant further proved that at the time certain notes and money, credited in the said account between R. and S. Winchester and *89him, were paid by the defendant, it was understood that shey should be applied to the discharge of the accounts of R. and S. Winchester, and the plaintiffs, against him ; and he claimed the balance appearing on the said account with R. and S. Winchester, (settled as aforesaid by S. Winchester,) as a discount or set off against the claim of the plaintiffs. Whereupon, the plaintiffs moved the court to instruct the jury that no part of the balance of that account, which arose from the credit for fees, could be used as a discount against the plaintiffs’ demand, except that part which was for fees against Richard and Stephen Winchester ; and unless the defendant proved what part of the fees mentioned in that credit arose from business done for R. and S. Winchester, he was not entitled to any part of the credit; — which instruction was accordingly given : — to which opinion of the court the defendant excepted.

A verdict was found, and judgment rendered for the plaintiffs for 1591. 10s. lid. with interest from the 1st day of November *1806, and costs. The defendant appealed to this court.

Stanard for the appellant.

Green for the appellees.

Tuesday, March 15th, 1814.

*

Partnership — Dissolution—Admissions of One Partner Thereafter — Effect as Evidence. — The admissions of partners are no evidence against each other after the dissolution of the partnership, though all are bound, and all were conj unct and principals in the partnership transactions. To this effect the principal case is cited in Munford v. Overseers of Poor, 2 Rand. 319; Henrico v. Turner, 6 Leigh 127. And in Davis v. Poland, 92 Va. 226, 23 S. E. Rep. 292, Judge Riely delivering the opinion of the court, said: "One partner by his own act, after the dissolution of the partnership cannot bind his copartner against the consent of the latter, so as to impose on him a fresh liability. He cannot, as against him, create a new obligation, nor revive an old one, barred by the statute of limitations. Woodson v. Wood, 84 Va. 478, 5 S. E. Rep. 277; Daniel on Negotiable Instruments, § 370, and 3 Minor’s Inst. 734. His admission or declaration cannot be received as the only evidence of the existence of a debt against the partnership. It must be first proved or established by other testi mony, or admitted by the pleadings. Shelton v. Cocke, 3 Munf. 191; *Rootes v. Wellford,*4 *Munf.*215; Brockenbrough v. Hackley. 6 Call 51. But where the debt was created during the continuance of the partnership, and there is other evidence of its existence, or its existence is admitted by the pleadings, the admission or declaration of one partner as to the transaction, though made after the dissolution, is admissible as evidence in an action against the firm, with the limitation that such admission or declaration cannot impose a new obligation on his copartner, or revive against him one that is barred.”

See generally, monographic *note*on “Partnership” appended to Scott v. Trent, 1 Wash. 77.

JUDGE) ROANE)

pronounced the following opinion of the court.

The court, (not deciding upon the extent of the custom in the second bill of exceptions mentioned, that is, whether it should extend to the proper transactions of each of the firms of Welford & Co. and Richard and Stephen Winchester, with their customers, respectively, only, or to embrace, also, any debits assumed by them for the firm of Winchester, Howard & Co.) is of opinion, that no debits could be set up on account of either of the said firms, in the present action, unless the same were duly admitted by those having competent authority ; and the fees, claimed in the present case, having only been admitted to have been due from Stephen Winchester, from Winchester, Howard & Co. and from Richard and Stephen Winchester, to the appellant, by Stephen Winchester, after both the last mentioned firms were dissolved, and when he, consequently, had no authority to bind the said firms by such settlement. The court is of opinion that the instruction of the court below, rejecting his claim to the fees in question, is correct; although, the appellee having waved the objection as to those alleged to be due to the appellant from Richard and Stephen Winchester, they should have been brought into the cause, if they had been separated from the others. On the ground, therefore, of the want of authority in Stephen Winchester to charge the firm of Winchester, Howard & Co. at the time of the settlement of the fees in question, and that they could never be rendered liable to the appellees, for the money so claimed to be discounted, under that settlement, the court is of opinion that it formed no proper subject of discount against the appellees, and that the judgment should be affirmed.