Case Name: Richard P. Hart, surviving partner of Hart and French, vs. Abel Tomlinson
Court: Vermont Supreme Court
Jurisdiction: Vermont
Decision Date: 1829-01
Citations: 2 Vt. 101
Docket Number: 
Parties: Richard P. Hart, surviving partner of Hart and French, vs. Abel Tomlinson.
Judges: 
Reporter: Vermont Reports
Volume: 2
Pages: 101–105

Head Matter:
Richard P. Hart, surviving partner of Hart and French, vs. Abel Tomlinson.
Addison,
January, 1829.
That, when the name of a firm continues the same, but the individuals composing it change, the new partners are not liable for the prior debts against the company.
Nor will tire decease ofdie new partners, pending the suit, vary the rights of the parties, or the testimony, by which the respective claims must be supported.
That, when the books of the firm appear balanced, the new partner has a right tono» tice of the claim against the firm, rather than that the person dealing should have no. tice of thechangein the firm.
Hart and French brought their action on book account against Tomlinson, claiming to recover about $30, on account, the items of which bore date from February, 1816, to June, 1817. The action was brought before a Justice of the Peace, and appealed to the County Court, where judgment was rendered to account, and auditors appointed to take the accounts. The defendant exhibited before the auditors, a claim on book against Richard P. Hart, fy Co. of about $61. The auditors reported the allowance of both claims, leaving a balance in favor of the defendant. They, also, reported the facts, to the Court, as well as most of the testimony, in affidavits. Upon a hearing before the County Court, the claim of the defendant was rejected, and judgment rendered for Richard P. Hart to recover the demand sued for; French having died since the report of the auditors was returned to Court, and his death suggested upon the record. The defendant excepted to the decision of the County Court, and brought the case up that this Court might revise their decision.
The defendant’s claim arose in the following manner. In the year 1814, the defendant bad dealings with the firm oí Richard P. Hart, Co. then consisting of said Richard P. Hart and Philip Hart, Jun. and sent them a draft in his favor, drawn by Thomas McDonough, upon J. Bullus, Navy agent at JYew-York, for $122 9, for said firm to receive the payment and pay out the same according to his directions from time to time given. They discharged the draft on receiving of Bullus its amount in Treasu ry notes; that being then the customary mode of payment of suds drafts. They then charged the defendant with five per cent, discount upon the Treasury notes, amounting to the $61,00. The der fendant now contended' that this charge was wrong, and that he ought to have the same allowed him in this action, and recover the balance, according to the report of the auditors. It appeared, by the report of the facts, that, after said draft was 'sent by the’ defendant, but the exact time did not appear, Richard P, Hart purchased the interest of Philip Hart, Jun. and, on the 8th of March 1815, said Richard was the only person interested in the firm, the name of which still continued — That, on said 8th of March, the avails of the draft had been received, and credited, but at what exact date did not appear — That, on the first of April, 1815, French became a partner with Richard P. Hart, under the same name of firm ; and a notice of a dissolution of the partnership with Philip Hart, Jun. and that formed with French, was published, forthwith, in the Troy Post, then published in said Troy — That, on the 29th of said April, the books of the said former Company with the defendant were balanced; and the $61, appeared a charge, while the avails of the draft stood as a credit. It further appeared, that the defendant testified before the auditors, that he had no notice of the dissolution of the old firm, or formation of the new, till after the present claim of the plaintiff accrued —That he was in the store of Richard P. Hart, & Co. in the fall of 1815, saw French there, as he used to be, while a clerk in said store — That he was then informed either by seeing the account, qr a transcript of it, that the Treasury notes were credited at a discount of five per cent; and that he then objected to the allowance of it.
The defendant had expressly waived the benefit of the statute of limitations, and contended ihatthe plaintiff had done the same. ■This was denied ; and some affidavits were read upon the sub-' ject. But that branch of the case became immaterial, and no decision was made upon it.
Jj.rgment for the defendant. — The defendant insists, that, the whole account is to be taken together. That the new partner coming in necessarily obligated himself, so far as respects the continued dealings with the old customers of this firm, and that, upon the adjustment of a running account, no break can be made in consequence of a secret change among the actual partners. The case is analogous to cases which are common in England, where a firm often continues the same during successive generations. In such cases the party, who seeks to recover on an insulated transaction, must look to the real partners at the time; but, as respects a running account, the balance of the whole account is to be taken with the house, without reference to secret changes in the firm.
Argument for the Plaintiff. — Thedefendant’s claim on account of the discount charged on the treasury notes, (if any,) was against the old firm of R. P. Hart, & Co. and not against the plaintiffs, R. P. Hart and J. F. French, who cannot be made chargeable for this claim on any ground. It could not have been pleaded in offset against the plaintiffs’ claim in any form of action, it being a claim against other parties; nor can the plaintiffs be made accountable for it, in this action on book against the defendant. Nor could R. P. Hart by his voluntary agreement, or acceptance of a draft in the name of Richard P. Hart, & Co. for the amount of this claim, have bound the new firm to the payment of it. — 1 Swiffs Dig. 342,343, 345. — Could the action for money had and received, to his use, have been maintained by the defendant against these plaintiffs ? By no means. Nor can the plaintiffs be made chargeable for this claim on account of any defect of notice of the dissolution of the old firm, of R. P. Hart & Co. The consequence of a defect of notice of the dissolution of a partnership is, in some cases, to subject the old partnership to liability on contracts made with a new firm, or an individual partner of the old firm, subsequent to such dissolution. But, in no case, does such defect of notice subject the new firm to the contracts of the old. Nor can R. P. Hart and T. F. French be made chargeable for the debts of the old firm of R. P. Hart & Co. See 1 Swiff s Dig. 350.
The death of T. F. French, since the report of the auditors was returned to the court, cannot alter the cas#, or change the rights of the parties, with respect to this claim. If the defendant at the commencement of this suit, could not enforce his claim against the plaintiffs, he cannot avail himself of it by reason of the death of French. The rights of the parties, in'this suit, are to be determined as they stood at the commencement of the suit, or at the trial before the auditors ; and are not changed by a subsequent event.

Opinion:
Hutchisson, J.
pronounced the opinion of the Court.
If the defendant ever had any claim against the firm of Richard P. Hart & Co. for his present demand of $61, it was before French became a member of the firm. Had he commenced an action for the same, he must have sued Richard alone, ox Richard and Philip, Jr. He could not have recovered against Hart and French, for French ms never his debtor. He says he knew noth" ing of the change of partners in the firm, when he contracted the debt sued for: but nothing appears but that he might have known, had he inquired. He might have seen it in the Gazette, had he examined in the most probable place, to wit, the residence of the firm. He does not say that he made any search or inquiry. Had he desired to take up the goods in payment of his old demand at the store, he might have contracted so to receive them, and might have refused to receive on other terms. If he received them, in the ordinary course of trading upon credit, without then claiming them in satisfaction of an old debt, and without inquiry for the names of the firm, it authorised a charge against him in the name of those who then constituted the firm, and leaves himno just claim to have the same applied in satisfaction of an older claim against other partners of the same firm.
This demand was so far from being a debt against French, that any attempt of Hart and Tomlinson to make it a debt against French, by putting it into a note or otherwise, would have been a fraud upon French, and unavailing in law and equity. When French became a partner on the 1st ol April, the deal of the old firm with this defendant was on the books of the old firm, which were balanced on the 29th of the same month. After this, if French saw those books at all (and it seems he had no interest to see them) he must have seen the account balanced. The defendant was there in the fall, and learnt how the books stood, and says he objected to the allowance of the discount, but does not say that French then knew of his objections, nor that he obtained any assurance of relief from any persons ; nor, in fact, that he sought any. The next winter, after all this, the account now in suit was begun. We discover no reason why French should be considered a debtor to the'tiefendant in this matter. If he was no debtor,and liable to no suit for the same, he is no more liable to have it come in upon the rendition of accounts; which, to be allowed, must be mutual.
But, it is suggested, that this demand of the defendant, being against Richard P. Hart, and French being dead, and Hart pursuing this action as survivor, the demands have become mutual. The facts do not support the reasoning. It is very probable, and indeed almost certain, that the demand of the defendant is against Richard P. Hart and Philip Hart, Jr. They constituted the firm when the draft was received. That, prima facie, shows them jointly accountable for the avails. And nothing appears in the case to alter that liability. Hence it does not appear that the defendant could pursue Richard P. Hart as his sole debtor. If hot, his kécóming sole plaintiff in this case, by survivorship, creates • no mutuality, not even in the form of action. Furthermore, all 'questions about the mutuality of claims and all the evidence of the several claims must be the game now as if French were alive: and the decisión must be the same. His heirs are entitled to his estate, now he is dead, without diminution, occasioned by the payment of the debts of the former partners.
Peter Starr, for plaintiff.
S. S. Phelps, for defendant.
The judgment of the County Court is affirmed;