The star of the north. [volume] (Bloomsburg, Pa.) 1849-1866, 1857-06-24
Important Law Decision.

The following extracts we clip from an opin.
ion recently made by The Supreme Court in
Banc at Harrisburg. AS the decision involves
imporan. principles Of commercial law, par.
.icularly when applied to partnerships, and
the individual ac,s Of partners. We publish
il as a matter of general interest
The BANK OF MIDDLrrows, In Common
PETER HALDrmAs and E. B. caster co. Yer.
GRUDD. dict for Ppf.
Writ Of Error to the Supreme Court, May
Term, 1857.
OPINION OF THE SUPREME COURT.
KNOX, Justice Peter Haldeman and Ed.
ward Grubb were partners in manufacturing
iron at the Henry Clay Furnace in Lancaster
County, from June, 1853, 10 November, 1854.
On the 2ISt Of October, 1856, Peter Halde.
man in his own name and that of his partner,
E. b. Grubb, made draft for six thousand
dollars, for sixty days, directed 10 Haldeman
Brothers, Philadelphia, payable 10 the order
of Peter Haldeman, and by him endorsed
The draft was discounted by the Bank of
Middletown, and the proceeds paid TO Peter
Haldeman. 1t was protested for non-pay-
ment, and this suit was brought by the Bank
against Haldeman & Grubb, 10 recover The
amount due and unpaid upon the draft.
Edward B. Grubb defends upon the ground
that the draft, although in the name of Peter
Haldeman aud himself, was really made by
Haldeman for his own use, and that the pro.
ceeds were not used in The business of Hal
deman & Grubb, but were appropriated oy
HNsaemsr 10 his individual, purposes. The
case depends upon the question, whether the
Bank was bound TO enquire as TO the author
ity OF Haldeman, 10 draw the draft in the
firms name. 1t is not pretended tha. the
Bank had actual notice that the discount was
for Halderman's separate use but il is alleg-
ed that the form o. the draft was sufficien, 10
put Inc bank upon inquiry. The draft was
made payable 10 Peter HaIdeman's ORDER
Was this an indication that it was not drawn
by the firm in The usual course of its bust.
ness? Certainly it was not for, although it
may not be the ordinary form in which bills
are drawn, il is by no means an unusual
transaction where the object of drawing a
draft is to raise money for firm, that it
should be made payable to the order and en-
dorsed BY one of the members of the firm
The law merchant, founded as it is upon the
usage and custom Of merchants, should con.
form 10 The business habits oil the people
where 1t is to be applied, rather than 10 COM
pei the business community 10 follow arbnra.
ry rules not in conformity with the common
understanding of business men. Where a
draft or bill is drawn IN The name Of firm
by one of The partners, is offered for discount,
the presumption is, that drawing the draft
was partnership transaction, even although
il was made payable 10 the order OF one of
the members OF the firm.
Actual knowledge that bill o. note pur-
porting 10 be drawn or made by firm was
given wirhou, The consent of some of the
partners, but the presumption that the
paper is what 1t purports TO be, cannot be
overlhrown by mere matter OF form, in in-
sering the name of one of the members Of
q partnership as payee. Where firm note
is given for an individual debt, the person TO
whom the debt was due is effected with no.
lice that the note was no, given 10 partner.
ship transaction, ard therefore bis right to re-
cover from The firm will depend upon the as
sent Of the partner or partners, other than the
original debtor But such note would clearly
be good against the firm in the hands OF =
bona fde holder.
The free circulatioR of mercantile paper is
essentially necessary 10 ,he prosperity of the
business public, and all defence made asains;
ii, which is no, clearly founded upon prinei-
plies Of substantial justice should be disre-
sarded. If the paper is fraudulently Put into
circulation, let him who has actual krowl-
edge Of the fraud, or who has been gra<Sly
negligent in obtaining such knove~tss ee
affected BY the fraud. But ii notice IS 10 BE
implied from the name OF the psyse OF The
bill or note, o,ast implications OF equal @
greater weigh, will be made IRON o'ssr eau
sss, and the rule weuh be tha, no ecs would
dare take q no,s OF bia without hfs, ,akins
,hs advice Of counsel leaned il shs iaw
merchant.