#### Weaver v. Tapscott.

July, 1838.

Lewisburg-.

Partnership — What Constitutes — For What Contracts, Firm Liable. — What constitutes a partnership, and for what contracts made by a partner the firm Is liable.

Same — Bond of One Partner for Partnership Debt— Rights of Surety against Other Partners.* — A member of a firm hires slaves, and the nature of the partnership and circumstances of the hiring are such, that all the partners would be held at law bound lor the hire, if the contract of hiring rested in parol; but a specialty is executed for the hire, by one of the firm in his individual character, with another person as surety ; and judgment is obtained on the bond against the surety, who satisfies the same. On a bill in equity by the surety against all the partners, it appears that the one who executed the bond is a nonresident of the commonwealth, and insolyent. Held, the complainant is entitled to a decree against the other partners, for the amount paid by him.

James Tapscott, on the 23d of November 1830, commenced a suit in equity, in the circuit court of Augusta, against William Weaver and Rlihu Trimble.

The bill alleged, that in 182Sthe defendants were associated together as copartners in the boating business *upon James River, between Rockbridge and Richmond ; that some time after the copartnership was formed, Trimble was deputed to the county of Buckingham, to hire slaves to aid in the navigation of the boats ; that he hired slaves from three several persons of the name of Bondurant, for the year 1826, and being unable to procure the slaves without securing the hire, applied to the complainant to become surety for the same; that at the time of so applying, he stated the fact of Weaver being a partner with him, and that the slaves were to be employed by the concern in the boating business ; and that the complainant, confiding in these representations, and others made at the time, became surety in the bonds given to secure the hires. Copies of the obligations were exhibited with the bill. They were all under the hands and seals of Rlihu Trimble and James Tapscott. One dated the 16th of December 1825, for 120 dollars, was payable *156nine months after date, to Samuel Bondurant. Another of the same date, for 149 dollars, was payable at the same time, to Thomas Bondurant. And a third, dated the 13th of December 1825, for 160 dollars, was payable on the 1st of January 1827, to Darby Bondurant.

The bill, after describing the obligations that were given, set forth, that the same not being punctually paid, suits were brought thereupon by the assignees, and judgments obtained against the complainant for the amount of the bonds, which he had been compelled to discharge. It stated that Trimble had become embarrassed in his circumstances, and had removed from the state ; and prayed that Weaver might be decreed to pay the complainant the amount which he had been compelled to pay as surety.

Weaver answered, that in 1825 he employed Trimble in the boating business, on the following terms: He furnished the boats and the loading ; Trimble furnished the hands, and superintended the business ; and the profits *were divided. The respondent denied that Trimble was, in December 1825, or at any other time, deputed to Buckingham to hire hands for 1826. He stated that he discharged Trimble from his employment in the latter part of 1825, or the beginning of 1826, and that Trimble after-wards continued the boating business on his own account.

By the exhibits it appeared, that the judgments on the first two mentioned bonds were satisfied by the complainant on the 24th of July 1828 ; and that the judgment on the other bond was satisfied by him on the 2nd of February 1829. Depositions were taken by parties: the purport of which, so far as material, appears in the opinions of the judges.

The cause was removed to the circuit court of Rockbridge, and after being proceeded in as to Trimble by publication, came on there to be heard, when the circuit court declared, that it was satisfied a partnership existed, as charged in the bill, and that Trimble being nonresident and insolvent, the defendant Weaver was responsible to the complainant for the amount paid by him. A decree was entered in conformity with this opinion ; and upon the petition of Weaver, an appeal was allowed him.

The attorney general for the appellant.

Peyton for the appellee.

*

Partnership — Specialty of One Partner for Partnership Debt — Effect.—Where one partner executes a specialty for a partnership debt, such specialty merges the partnership debt at law, and discharges the other partners from liability therefor ; but, in equity, the liability of the other partners is not thus extinguished unless there is a clear intention of the creditor to take the specialty in entire discharge of the partnership debt. As upholding this proposition, the principal case was cited in Ward v. Motter, 2 Rob. 552, 567 ; Brooke v. Washington, 8 Gratt. 252, 255, 257; Niday v. Harvey, 9 Gratt. 470 ; Baylor v. Dejarnette, 13 Gratt. 172; McArthur v. Chase. 13 Gratt. 704 ; Jordan v. Miller, 75 Va. 453; Black v. Campbell, 6 W. Va. 64. See also, Sale v. Dishman. 3 Leigh 548 ; Galt v. Calland, 7 Leigh 594; Parker v. Cousins, 2 Gratt. 389, 390 ; Morris v. Morris, 4 Gratt. 327.

In Brooke v. Washington, 8 Gratt. 255, Judge Moncuke, after quoting at some length from the opinions in the principal case, said : ” These copious extracts are made from the opinions of the judges in *Weaver v.*Tapscott, because, *nomine mutato,*they are as applicable to this case as they were to that, and because they leave little or nothing more to be said in this case. It seems to be difficult to find a distinction between that case and this, unless it be in the fact that in that case the bonds were given foi negro hire, and in this they were given for the purchase money of land ; and that is a distinction without a difference, at least in principle.”

In Niday v. Harvey, 9 Gratt. 454, it was held that, whether a bond and deed of trust to secure it, given by a partner after the dissolution of the partnership, for a simple contract debt of the partnership, releases the other partner in equity, depends upon the intention of the parties in giving and taking them ; and that this intention may be ascertained from the attendant circumstances. In this case, it was held that there had been such a dealing on the part of the creditor with the partner executing the bond, etc., and such a relying on tbe individual liability of that partner as showed that his obligation and the means provided for its payment were alone looked to for the satisfaction of the debt, and that, therefore, the other partner was released in equity as well as at law, according to the real intention and understanding of the parties concerned. The court, citing the principal case, Williams v. Donaghe, 1 Rand. 300, Sale v. Dishman, 3 Leigh 548, and Galt v. Calland, 7 Leigh 594, said that, though in each of these cases it was held that the giving by one of the partners of his individual promise or obligation for a debt of his firm, and its acceptance by the creditor, did not, under the circumstances, release the other party In equity, yet, in neither of these cases, were the circumstances attending the transaction similar to those found in the case under consid eration ; and there was nothing in either of them which militated at all with the conclusion to which the court had arrived in the case at bar.

PARKFR, J.

Tapscott, the complainant in the court below, had a clear right to be substituted to all the remedies of the Bondurants, the obligees in the bonds, and for this reason, as well as because the remedies against the partners on the original contract of hiring had been extinguished at law by Trimble’s having given a higher security (Williams v. Donaghe’s ex’or, 1 Rand. 300 ; Sale v. Dishman’s ex’ors, 3 Leigh 548,) he is entitled to come into a court of' equity. This has scarcely been questioned, *and the only serious point raised is whether Weaver was liable to the Bondurants, who hired the slaves to Trimble, or to Tapscott, his surety in the bonds.

I think that a partnership in the boating business between Weaver and Trimble is clearly established by the evidence, ánd indeed admitted in the answer of Weaver;- and that this partnership existed when the slaves were hired, and for some time after. The slaves were hired by Trimble to be employed in the boating business, and were actually so employed during a portion of the time that the partnership continued. Weaver says, the partnership was dissolved about the last of the year 1825, or early in 1826; but , there are several circumstances inducing me to fix the period of dissolution as late, at least, as April 1826. According to him, by the terms of the partnership, he was to furnish the boats and loading, and Trimble to superintend the business and furnish the hands ; whilst the profits were to be equally divided. Taking his own statement, it is enough to fix his responsibility to third persons. A participation in the profits and losses made them general partners in that concern, and subjected each one to all the liabilities of such general partnership, whatever may have been the stipulations and arrangements inter se.

The reason why the partner taking a part of the profits is liable to creditors, is this, that he takes part of the fund on which they rely for payment. A dormant partner, to whom a vendor gives no credit, and whose responsibility constituted no part of the consideration moving him to sell, is liable to the whole extent of engagement, in matters which, according to the usual course of dealing, have reference to the business transacted by the firm. Robinson v. Wilkinson, 3 Price 538 ; Saville v. Robertson, 4 T. R. 720.

There can be no doubt, that the hiring of hands to be employed in the boating business had immediate reference *to the nature of the dealings between Trimble and. Weaver. The trade in which they were engaged could not be carried on without hands, any more than without boats.

It made no difference, that Weaver gave no express authority to Trimble to hire. If he had been dealing in matters without the scope of the partnership, that circumstance would have been material; but not in contracts relating to the' partnership. Gow on Partnership 67.

Nor was it more material, if Trimble hired on his own account, without expressly naming the partnerships ; or that Tapscott became his surety in ignorance of its existence. How these facts were, does not clearly appear. The probability is, that as the partnership was one of some notoriety, Trimble, when he went to Buckingham to hire hands, and asked strangers to become his sureties, would speak of the business in which he was concerned, and refer the persons with whom he was dealing to the ultimate responsibility of the firm. But it is not necessary to establish that fact. If Tapscott was ignorant of Weaver’s being a partner, it brings this case within the influence of those upon secret partnerships. Gow 176.' If he knew it, but dealt with Trimble alone, without intending to release the partnership, it must be governed by the cases of Bond v. Gibson & *157Jephson, 1 Camp. 185, and Gouthwaite v. Duckworth, 12 East 421.

It is only, I think, in cases where a separate credit is clearly given to one of the partners, to the exclusion of the rest, that the latter are absolved. This observation will explain the cases of Emly v. Lye, 15 East 7, and Bevan v. Lewis, 1 Simons 376, 2 Cond. Eng. Ch. Rep. 189, cited by appellant’s counsel. In both of them, the partnership was known to the creditors, and the circumstances shew that they looked only to the individual partner with whom they dealt, and not at all to the others. These cases, properly understood, do not ^controvert the principle, that in purchases or bargains relating to the partnership, the act of one is considered the act of all, and that each may contract as if he were the authorized agent of the rest, and bind all by dealings within the scope and nature of their business. Gow 71 ; Willet v. Chambers, Cowp. 814; Walden v. Sherburne, 15 Johns. 422.

When one deals with a partner in matters relating to the partnership business, it ought to be inferred that he deals on the credit of the partnership, unless the circumstances prove, that though apprized of the partnership, he meant to give individual credit. It would be hard to hold him bound to prove, that he knew of the partnership, and dealt on its credit. One of a firm dealing in produce goes into the country, and purchases from the farmer, without naming his partners ; or he gets another to become his surety for the purchase money. Is the vendor or surety bound to prove that he knew of the partnership, and dealt on its credit ? The presumption is in the affirmative; and to discharge the firm, it ought to appear clearly that he gave credit to the individual alone, and intended to absolve the other partners. See the observation of chief baron Macdonald, in Barton v. Hanson, 2 Camp. 99.

So far from this appearing, in the case under consideration, I am persuaded that Tapscott never intended to become the surety of Trimble alone, in exclusion of his partner, and that his delay in applying to the latter proceeded only from his doubts about his legal rights, or the difficulty of procuring evidence to prove the partnership, now so clearly established.

I am therefore for affirming the decree.

CABELE, J.

It is sufficiently manifest, even from the answer of Weaver, that a pa rtr ership existed between him and Trimble, in the boating business, at the time when the slaves in the bill mentioned were hired by *Trimble, and that the profits of the business were to be equally shared by the parties. It is also manifest from the testimony, that the slaves were hired for the partnership, and were applied to the uses thereof. Under these circumstances, it is perfectly clear that Weaver was equally liable with Trimble, even if Tapscott, at the time of the contract, were ignorant of the fact that Weaver was a partner. And if the fact of the partnership were known to Tapscott, Weaver is a fortiori liable; unless, indeed, it can be shewn that Tapscott, with this knowledge, contracted on the individual credit of Trimble, in exclusion of that of Weaver. Nothing of the kind is attempted to be proved, and it cannot be presumed without proof. Weaver, therefore, was clearly liable on the hiring; and the cases of Sale v. Dishman’s ex’ors, 3 Leigh 548, and M’Cullough et al. v. Sommerville, not yet reported,* shew that this obligation was not extinguished by the execution of a bond by his partner.

I am therefore of opinion to affirm the decree.

BROCKENBROUGH, J., concurred in the opinion of judge Cabell.

TUCKER, P. In this case I think it sufficiently appears, without a resort to the answer of Weaver, that there was a partnership in the boating business, commencing in 1825 and running into the year 1826. During that year, it was dissolved. In preparation for the business of that year, the slaves in question were hired by Trimble the partner of Weaver. It matters not, therefore, whether there was a subsequent dissolution or not. The transaction was during the partnership, and for its purposes. If it had been made in the name of the partners, and not under seal, it could not have been questioned that Weaver was responsible. He alleges, indeed, *that the partnership was a limited one; that he was to find the boats, and Trimble the hands. But this is not proved, and the imperfect character of Weaver’s recollections (proceeding from the circumstance that the transactions of this concern were entrusted to his clerks and agents, or from some other cause) forbids implicit confidence in the answer. I rely rather upon the testimony of the witnesses,, which goes to establish a general partnership. Yet it is perhaps of little moment how this fact may be. Eor even if the alleged arrangement was made between the partners, that Weaver should find the boats and Trimble the hands, yet the public had nothing to do with that arrangement, and as Weaver was to get half the profits, he was responsible for the hires, since that interest in the profits, ipso facto, constituted him a partner. In Dry v. Boswell, 1 Camp. 329, where in a boating partnership, one party was to furnish boats, the other nevertheless was held responsible for the repairs, upon the general principles of partnership. So here, though Trimble was to furnish hands, yet Weaver, as a partner who was to receive one half of their profits, was responsible for their hires.

Conceiving it then to be clear, that if the hiring had been by contract not under seal, and expressly upon the credit of the firm, Weaver’s responsibility would have been undoubted, I will next remark, that as I interpret the testimony, Tapscott did understand from Trimble that there was a partnership between himself and Weaver, and accordingly contracted upon the faith of Weaver’s liability. But if I am mistaken in this construction, then the ordinary case is presented, of a contract for a firm by the ostensible partner, there being a secret part*158ner unknown at the time, who receives the benefit of the contract. If, as it appears to me, there was a partnership throughout the year 1825, and running into the year 1826 till the boating season was over or far advanced, and these slaves were employed in boating, then .they *clearly came into the use of the concern, and contributed in no small degree to the handsome profits admitted to have been received: and if so, upon the general principles of partnership, those who were to share the profits were bound for their hires.

If, then, Weaver would have been clearly responsible had these contracts been without seal, it only remains to enquire whether that will make a difference here. And I think it will not. At law, indeed, the partner who does not join in a bond is not bound by the sealing of his copartner. But equity looks into the character of the transaction. It looks not to the form of the thing, but to the substance. The seal cannot hide from its searching eye the real nature of the case, or the consideration or intention of the contract. It respects, indeed, that intention, if fair and upright, as much as a court of law. If, therefore, it appears that the bond of an individual partner is taken with a view to his distinct responsibility, a court of equity would not thwart that intention by disregarding his individuality. But if, on the other hand, it appears, that though the contract is under seal, it is for the firm; if the firm is looked to on the one part, and intended to be contracted for on the other; or if the contract is for matters germane to the business of the concern, and the benefit of it goes to the copartnery; then the partners are bound, notwithstanding the form of the transaction. The case of Sale v. Dishman’s ex’ors was decided on these principles.

Booking, then, to the real character of the transaction, let us see whether there is any thing from which it can be inferred that the individual responsibility of Trimble, a poor boatman, wás looked to. The bond is the only ground of inference, and that loses all force, when we consider that it was most probably adopted in conformity with general usage in the hire of slaves, and in compliance with the notions and requisitions of the owner. On the other hand, if Tapscott was informed of *the partnership, as he alleges, every presumption of law is in favour of the intention to look to the firm rather than the individual partner. “It is possible,” says chief baron Macdonald, (2 Camp. 99,) “that separate credit may be given to one of two partners individually, but the presumption of law is otherwise, and that presumption must be rebutted by very clear evidence.” And this is reasonable ; for why should the partner desire to bind himself and absolve the concern 7 or why should the dealer with him prefer to bind him individually, when, if bound as a partner,, he is personally not less bound, and there is the additional security of his partner ? r In this case, it is absurd to suppose that Tapscott took Trimble’s individual responsibility, if he knew of Weaver’s connexion with him ; and if he did not know of it, then the execution of a sealed instrument could not have been with a view to indicate his individual responsibility, in contradistinction to that of the concern. In every view of the case, then, I am for affirming the decree.

I have said nothing of the cases from East and from Simons, because they have been already commented on by one of my brethren. I do not think they can have any influence upon this case.

BROOKE, J., concurred in opinion to affirm the decree.

Decree affirmed.

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This case has been since reported in 8 Leigh., p. 415.