Case Name: Robert M. Myers, v. George Huggins, and James N. Stein
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1847-05
Citations: 1 Strob. 473
Docket Number: 
Parties: Robert M. Myers, v. George Huggins, and James N. Stein.
Judges: Richardson J., Wardlaw J., and Withers J., concurred.
Reporter: South Carolina Law Reports
Volume: 32
Pages: 473–479

Head Matter:
Robert M. Myers, v. George Huggins, and James N. Stein.
When, in the advertisement of the dissolution of copartnership, power is given to the continuing partner, to settle the business of the firm, and for that purpose to use the partnership name, the jury may infer, from the transactions of trade, and the usage and custom of merchants, as well as from the advertisement itself, whether this power extends to the signing of the partnership name, to renewals oí a note which had been discounted in bank previous to the dissolution.
The Act of renewing a discounted note by one partner, after dissolution, would conform to the previous course of business, and could not prejudice the others being in effect only the substitution of a new security for an undisputed debt; and the objection to the liability of all the partners would ho in most cases, sirictijuris.
It is not necessary that the authority to malic a contract binding on the other partners, after dissolution of the partnership, should be given to the partner authorized to settle the business of the firm, by a special power of attorney, or other written instrument.
Tried before Mr. Justice Wardlaw, at Columbia, Spring Term, 1847.
Assumpsit by indorser, who had taken up a note of $800, against the makers. Counts on the note, and money counts. Defence, that the note had, after the dissolution of the partnership which had subsisted between the defendants, under the name of Huggins & Stein, been made by Huggins in the partnership name, without the authority of Stein.
On 19th June, 1844, Huggins & Stein, being then partners in trade, borrowed $2500 from the Commercial Bank of Columbia, for which their note was given, with the plaintiff, II. M. Myers, and James Boatwright, accommodation indorsers. About that time, the defendants made arrangements to dissolve their partnership. Their stock in trade, amounting to between three and four thousand dollars, was sold at auction by M’AI-pin, auctioneer, on a credit of sixty and a hundred and twenty days, except small sums, for which cash was required; and they agreed that Huggins should collect the assets and settle the affairs of the firm, paying from the proceeds of the auction, and the notes and accounts of the firm, first this note in bank, (the only accommodation debt,) and then the other debts of the firm. Stein gave a power of attorney authorizing M’Alpin to attend to bis share of the concern, referred persons who applied to him on the partnership business to Huggins, and soon after went to New York. Huggins remained at the old stand, and was engaged in adjusting the affairs of the firm. On the 3d day of July, 1844, public notice in a newspaper was given of the dissolution of the partnership, and in the advertisement signed by both partners, is said, “the name of the firm to be used only in the settlement of their business.”
Myers, the plaintiff, was at the auction, and the dissolution was then spoken of; but there was no evidence of distinct information given to him, earlier or more explicit than that contained in the advertisement.
After the dissolution, Huggins, without consulting M’Alpin, and in the absence of Stein, repeatedly renewed the note in bank, in the name of the firm, witn the same indorsers, at intervals of sixty days—gradually reducing it, until the note sued on was given 14th January, 1846, for the remainder then due, and not having been paid at maturity by the makers, was taken up by the first indorser. The original note and intermediate renewals remained in the possession of the bank, with writings upon them, shewing what had been accepted in their stead. The progress of reduction was thus: note for $2500, renewed August, 1844; $2000, October, ’44; $1500, 5th .March, ’45; $1200, 12th November, ’45; $800, 14th January, ’46. In December, ’44, there was a protest, but after a week, a reinstatement of the note in bank.
The presiding Judge refused the motion for non-suit, thinking that some evidence of Huggins’ authority to make the renewals might be collected from the terms of the advertisement and the conduct of the defendants, which was strengthened by the matters which appeared in the defence—the arrangement made for payment of the note out of assets, which the partners could not have contemplated as likely to be in hands when the original note fell due.
He submitted the facts to the jury, and they found for the plaintiff the principal and interest of the note sued on.
The defendant gave notice that he would renew his motion for a non-suit, and failing that, for a new trial, upon the following grounds:
1. That after the dissolution of a co-partnership, one member of a firm cannot bind it by a note given in the co-partnership name, and that the terms of dissolution did not confer authority on either partner to sign such note.
2. That there was no evidence offered by plaintiff from which such authority could be legally inferred.
3. That the plaintiff could not recover upon the money count, for these among other reasons: because the last renewal note bound Huggins alone, and was accepted by the bank with the concurrence of the plaintiff, in satisfaction of the prior note, and as an extinguishment thereof; and because the firm owed no debt to Myers prior to the dissolution.
Grounds for new trial, the above and following:
1. Because the assets of the firm were all placed in the hands of Huggins, with an express agreement that they should be first applied to pay this note, instead of which Huggins applied them otherwise, and continued to renew this note in bank without authority for a year and a half.
2. Because the plaintiff, Myers, paid the note at the request of Huggins, and not of Huggins and Stein, as he continued his indorsement after he knew of the dissolution, and the want of authority to use the name of the firm.
W. F. DeSaussure.
One partner cannot bind the firm after dissolution, by note or renewal, but by a. power from the firm express. 1 Henry Blackstone, 155; Kilgore v. Finlandson, 1st Starkie’s Hep., 376; 3d Espevnass’ Hep., 108; Watson on Partnership, 209; Wild, ads Henderson, 2 Campbell’s Rep.» 561; Ivonius v. Pearson, Harp., 470; Martin v. Wharton, 1 M’Cord, 16. To settle the affairs, &c., does not give any such power; Bank v. Humphrey, 1 M’Cord, 388: without power to renew a note, he cannot do it; Galliott & Lefevre, ads the Bank, 1 M’Mullin, 209. If there was an equity in favor of Myers, so there was a counter equity in favor of Stein, who was the defended party. Myers made (as it were) new contracts for and with Huggins, after Stein had withdrawn from him; shall he do it at Stein’s expense, (every renewal is a contract;) one cannot bind the party whose name he has no right to use.
Arthur, contra.
The law is as stated, but we deny that this case comes under it. The case of Martin & Walter involved the question of notice of co-partnership. We contend, that Aere Huggins had the power which makes the exception-In all these cases (that of the Bank, &c.,) there was no authority to renew; M’Pherson v. --•, 11 Wend., 96; one partner after dissolution, can, by his acknowledgement, bind the other partner; 1 Bailey, 522; 2 Bay., 533; 6 Cowan, 701. Circumstances may exist from which assent may be inferred; -v. Tenike, 2 Johns., 307. Authority is to be inferred from cir cumstances. The terms of the sale were such as to render it impossible that the bank debt could be paid from its proceeds. Even if the jury found wrong, why should we not recover on the money count? Allen & Montgomery, v. Owens, et al, 2 Speer, 177; Fleming, Hill & Co., v. Howe & Co., Dudley, 300; Jacobs, v. Alexander, 2 M’Mullin, 348; the bond did, in this case, extinguish the debt of the partnership, but the note of Huggins could not, and the partnership still, therefore, owes Myers the money, and we ought to have recovered on the money count.

Opinion:
Frost J.
delivered the opinion of the Court.
The evidence shows that Huggins was authorized to settle the business of the firm, and for that purpose to use the partnership name; and the principal question presented by the appeal is, whether, from this agreement, the jury might infer an authority to Huggins to sign the partnership name to renewals of a note which had been discounted in bank, before the dissolution. It is clear, that the mutual agency of the partners, which is created by the partnership, ceases when it is dissolved; and that, after the dissolution, neither can make a note or any other-contract, binding on the other partners, unless he is authorized by them to do so. It is not necessary that this authority should be created by a special power of attorney, or other written instrument, but may be conferred by parol. The transactions of trade by their daily frequency and necessary promptness, do not admit of formal and precise stipulations. Usage and the custom of merchants, to a great extent, determine the import and effect of brief expressions; and good faith, the necessary element of trade, must supply, from the character and objects of the agreement, the intention of the parties. To give to the agreement between Stein & Huggins no other meaning than that Huggins might use the partnership name, for the collection of the assets and payment of the debts of the firm, would in effect make it senseless, since the law conferred those powers, without the consent of the parties: and to construe the notice, that the partnership name might be used only in the settlement of the business, to be merely restrictive of its use for any other purpose, would be equally unmeaning, since the law and the very nature of the power imposed that restriction. It is not to be presumed that the parties were unapprised of the law so nearly affecting their interests, nor that, with sucli knowledge, they made so unmeaning an agreement.
What acts, then, might Huggins do under the authority to use the name of the partnership, in the settlement of its affairs? It seldom happens that the affairs of a partnership can be closed by the collection of its assets, with sufficient promptness to pay its debts as they become due. The arrangements necessary to meet this state of their affairs must necessarily be considered by the partners when providing for a settlement of them. Most traders depend on the banks for pecuniary means; and the short periods of credit they give would present large demands against a partnership, payable within a short period after its dissolution. Notes and bills are the securities on which loans are made. If the name of the partnership was intended to be used for any other purpose than collection and payment, it must have been the design of the parties that it should be employed to promote an advantageous settlement of its business. The most obvious measure would be, to procure the forbearance of creditors from suit and its ruinous consequences, until the assets could be collected. This forbearance can be obtained from banks, only, or at least most readily, by the renewal of the notes. The act of renewing a discounted note by one partner, after dissolution, would conform to the previous course of business, and could not prejudice the others, being, in effect, only the subst tution of a new security for an undisputed debt; and the objection to the liability of all the partners, would be, in most cases, as it is in this, stricti juris.
This view of the case is supported by authority. When the retired partner stated that he had left the assets of the firm in the hands of the continuing partner, for the purpose of winding up the concern, and that he had no objection to his using the partnership name; it was held, that the jury were warranted in finding that the continuing partner had authority to indorse promissory notes, so left in his hands, in the partnership name. Smith v. Winter, 4 Muson & Welsby, Exch. Rep., 453. And in Barton v. Issett, 5 Barn. & Ald., 267, by the deed of dissolution, power was given to the remaining partners to use the name of the outgoing partner in the prosecution of all suits, brought and to be brought for the recovery of partnership property; it was held, that the authority given warranted them in signing a note for the maintenance, in jail, of a debtor who was in custody at their suit. If Huggins had authority to sign the note, the plaintiff's right to recover cannot be affected by his neglect to apply the assets in the manner which had been agreed.
The motion is refused.
Richardson J., Wardlaw J., and Withers J., concurred.