Case Name: MIFFLIN against SMITH and another
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1828-01
Citations: 17 Serg. & Rawle 165
Docket Number: 
Parties: MIFFLIN against SMITH and another.
Judges: 
Reporter: Reports of cases adjudged in the Supreme Court of Pennsylvania (Sergeant & Rawle)
Volume: 17
Pages: 165–170

Head Matter:
[Philadelphia,
January, 1828.]
MIFFLIN against SMITH and another.
During the continuance of a partnership, the ostensible partner carried on the business of the partners in the same name as that in which he transacted his private business, and in that name contracted a debt for money borrowed; ■but it did not appear whether the money was borrowed for the partnership, or his private use: held, that in the absence of evidence the presumption of law is, that the loan was made on the credit of the partnership business.
Of general and limitéd partnerships.
Though a co-partnership is by the articles to terminate at a certain period, it may be continued by express or tacit consent; and, in such case, the stipulations of the original articles would be considered as those of the continuing partnership. ' ' .
Where two partners, one ostensible the other dormant, agreed, by private articles'of,co-partnership, to transact business in the name of the ostensible partner, Nathan Smith, but the business was carried on in the name of N Smith: held, in an action against the partners,- on a contract made in the name of N Smith, that, to avail themselves of this objection, the defendants must . plead it in abatement.
This cause was tried at Nisi Prius held before Rogers, J., at Philadelphia, where a verdict passed in favour of the plaintiff for three thousand, one hundred, and eighty-one dollars, and twenty-two, cents, and the defendants now moved for a new trial.
The suit was brought by Lloyd Mifflin against Newberry Smith and Nathan Smith, trading under the name and firm of N. Smith, to recover the amount of several sums of money, loaned, as was alleged.by the plaintiff, to the defendants, as partners;
The history of the transaction, as reported by Judge Rogers, appeared from the 'evidfence to be .this. On the 13th of «dugust, 1818, N Smith drew a check, on the Camden Bank, for one hundred and fifty dollars, payable the 20th of 1818. On the same day there was a similar check for the same amount, payable the 26th of August, 181,8. August 3d, 1816, — ;a note for six hundred dollars, payable sixty days after date; Nathan A. Smith drawer, and N Smith endorser, payable to N. Smith, dated the 3d of August, 1818. • A note for eleven hundred and fifty dollars, payable also sixty, days after date; N. Smith the drawer, and endorsed by N A. Smith, dated the 4th of August, 1818. ,
This Nathan A. Smith, it appeared, was the father of one of the parties, and the person whom they resorted to when they wished to raise money for the concern.'
N. Smith, being desirous of borrowing money for the concern, as was alleged by the plaintiffs,, deposited these notes and checks as a collateral security, and sometime, but when did not clearly appear, borrowed the sum of fifteen hundred dollars, from the ■plaintiff. He, at the same time, drew a .check on the Mechanics’ Bank for fifteen hundred dollars, payable to himself or bearer, dated September 3d, 1818.
After this, being desirous of borrowing more money on the same account, as was alleged, he drew a check on the Mechanics’ Bank for two thousand dollars, payable to bearer, dated the 14th of September,'ISIS. On this .check Mr. Mifflin loaned him fifteen hundred dollars; and'on this check two successive payments were endorsed; which reduced the amount due to two hundred and eighty-,, eight dollars, and thirty-five cents.
■ From this statement, it appeared how the claim of the plaintiffs was made up. It consisted, first, of-r-
Three checks, amounting to - - - @300,00
Second, the first check for - .@1500,00
The balance due upon the second check for @1500, . @2.88,35 ‘
@2088,35
The defendant did not dispute but that the plaintiff was indebted to that amqunt, but they contended that they were not liable to pay it as partner^; and the following facts were then shown:—
On the 1st of January, 1813, there were articles of co-partnership entered into between Nathan Smith and Newberry Smith, for five years and eight months, to carry on the business of lumber merchants. It was to be carried on in the name of Nathan Smith.
This partnership expired, by its own limitation, on the 1st of September,, 1818.
That this, was a partnership, appeared as well from the articles as from the books, which were produced. It also appeared, from every transaction of which evidence was given, that Nathan Smith’s business, whether for himself or for the concern indivit dually, had been done under the name of N. Smith.
It was also-admitted that Newberry Smith'was a dorm'ant partner in the lumber business. • .
His Honour held, that, for enabling the plaintiff to recover, he must show, 1st, That'there was a partnership at the time the transaction took place. 2d'. That this was a partnership transaction.
This was positively asserted on the one side, and as positively denied on the other. ■
The first point to which he drew the attention of the jury, in his charge, was, what was the nature of this partnership, and how long it continued. Before doing this, he noticed an objection which had been made, — that the firm was Nathan Smith, and not N. Smith; and that they have declared against a .firm called and known by. the ñamé of N. Smith. That this was a point of law for the eourt, on which the defendants were entitled to an- opinion. This was the case of a dormant partner. The articles call the name of the .firm Nathan Smith; but, in practice, they baptize it by the name of N. Smith. ■ Nathan,Smith and N. Smith were'acknowledged to bé one and the same person. It was obviously a mere matter of form. In such a case he could not turn a plaintiff out of .court, unless, it was a- very plain case. It would be an injury to a .defendant himself,.when he had more defences than one, particularly if hé had one oil the merits of the cause1.
But what is there in the objection ? The defendants keep their articles in their pocket, carry on their-business by the name of N. Smith, lie by fro,m December, ,1823, until 1827, plead the general issue, and'want us to turn the pláintiff out of court.
If they- wished to avail themselves of this, they should ■ have done it by a plea in abatement, and should have taken the earliest opportunity of doing so. They would then have given the plaintiff a better writ, and would have told the world who they weré. The distinction between parties plaintiff and defendant has been often and well taken. I shall not enlarge on this point, but shall conclude by saying that there is nothing in this objection.
He then called the attention of the jury to what',was the nature of the partnership, if any existed; and the time it'continued.
' There was no doubt it was a dormant partnership; and it was contended, also, that, it was a limited one. In one sense, at least, it was, for it was limited in time. It is difficult to define what is ■ a general and what'is a limited partnership, for all partnerships are more or less limited. Some partnerships are more general than others; that is to say, they comprehend a greater variety of particulars. A partnership may. be limited, to, a particular branch of business, without'extending to all the concerns in which any member of the firm may be engaged. So, also, if two who are not partners in trade draw a bill of exchange, they-are. partners as to the transaction of the bill. So, also, there may be a general partnership among several, and one may be a partner as respects a particular article. It did not, however, appear that this partnership was.a limited one. It was a partnership to carry on the lumber .business, which every body knows to consist of a variety ofparticulars, — shingles, planks, boards, &c. It was as much a general partnership as the- case' -of a retail merchant, acknowledged to be so: more general, to be sure, but still a general partnership for that particular business. Nor did he consider that question as very material in this cause. - -
When-did this partnership end?- - The defendants say it. ended the 1st of'September, 1818. The plaintiff denies that it ended until the 25th of November, ISIS. There can be no doubt, that if this question depended solely upon the' article, that the partnership ended the lst of September, 1818. But it was equally clear, that it may have been continued after the-1st of September, 1818, by tacit pr express' consent; and, in such case, they wou.ld be considered as continuing'business under the same stipulations and restrictions as were contained in the original written articles. THe experience of thó jury would satisfy them-of the propriety-of this, and doubtless théy had known instances of the kind. Did they, then, close their concerns on the 1st of September, 1818, in conformity with the articles; or did they, continue -business- after that period. In determining this question, the jury would give due', weight to an account of stock having been taken, according to the articles; and balancing their books, and to the article.s- lherhselves. On the other hand, they would consider the papers of -the 25th of November, which have been relied on, there being ,no ostensible change in the man ner of doing business,-and all other circumstances connected with the Case.,
He was bound, however, to say, that the writings of the 25th of November would not, o.f’themselves'show a continuance of the partnership-after the 10th of September.. .
Connected with this part of the case, it was necessary for the jury to inquire when this contract was made,; for, if made before the 1st of-September, there is no doubt it was made during the existence of the,partnership.
They would likewise remember that this .suit w&s brought to recover the amount of two checks; one dated the 13th of Ailgust, and payable the 20th of August, the other dated the 14th of August, and payable the 26th of August.- When-did this transaction take place? before or after the 1st of September7
There were also two notes; one dated the 3d of August, 1818, the other the 4th of- August, 1818.
This was before the 1st of September. ■
The checks were dated the one on the 3d of September, and the other on the 14th.of September. • .
It did not distinctly appear from the evidence when the transaction took place. It appeared strange that the time was not reduced to a certainty either by the plaintiff or defendants. The jury were acquainted with the manner in which business of this kind is done; for. it seemed to have been done by themselves, without witnesses; and carelessly enough.
This was referred to the jury as a matter of fact. If before the 1st of September, it was during the continuance of the partnership. If after, and before the 25th of November, it was, or was not, as they determined the question, whether the partnership continued until that time. ■ .
In the n.ext place, was this a partnership transaction?
It would be necessary for the jury to consider this question, only in the event that they should believe the contract was made during the partnership. If they believed this, it became a very important question in the determination of .this cause.
Newberry Smith was a dormant partner. The business of the concern was carried on in the name of N Smith, and with the knowledge of Newberry Smith. That-being the case, during the ^■continuance of the partnership, (if such should be the opinion of the.jury,) he applies to the plaintiff for aid, and obtains a loan of a sum of money. Then the question is, is that loan, in presumption of law, made on the faith of the regular business, viz. the lumber business or the credit of any speculations, in which he, (Nathan Smith,) may be engaged in his own account.
It is the opinion of the .court, that it is to be considered as made on the faith and credit of the regular lumber business in which he was engaged, and not on account of any speculation in which he may have been concerned on his own account.. If a retail merchant gets a note discounted, is it not presumed to be in the regular prosecution of his business? If a neighbour who is in trade borrows money of another, what is the presumption? Can it be presumed that he intends to buy a house?
The difficulty arises from the name of the individual and the name of the firm being the same. That is the presumption, liable however to be rebutted, if the jury believe from the evidence that was not the state of the fact. It is open to them to show it was for the individual concern of Nathan Smith. This they say they have done: that it was intended for the purchase of houses. Was this a partnership matter, or a mere mode of selling his lumber?
The question is hot whether the credit was given to Newberry Smith, but whether it was given to the partnership concern in the lumber business. If it were, although Newberry Smith was a dormant partner, yet he is liable. In.a partnership all the partners are liable, whether dormant or known.
If the jury should be of opinion that this was an individual concern, and not a partnership, although the money went to the partnership, they would not be liable. Thus, where two persons are partners, and known as such, and one borrows in his own name, there is no room for presumption. If he carries it to the partnership, he becomes the creditor of the partnership.
The defendants filed the following reasons for a new trial:—
The verdict was against the evidence in this, 1. On the whole of the evidence it appeared that the loans of money for which the action was brought, were made to Nathan Smith, one of the defendants, on his own credit, and for his own separate use, and were not made to the two defendants, nor upon the credit of both.
2. It also clearly appeared, that no part of the said monies loaned came in any shape or way whatever to the use or benefit of the defendant, Newberry Smith, either in his joint or separate capacity.
3. The fact of such monies being loaned, was unknown to the defendant, Newberry Smith, until the institution of the suit brought by the plaintiff in the District Court to ■-- term, or shortly before the same.
4. The partnership between the two defendants expired on the 1st of September, 1818, which was before the loans, on which alone the plaintiff sought to recover, were made.
The court erred in charging the jury,—
1. That the objection made to the name was not valid, but should have been pleaded in abatement.
2. In confining the limited character of the partnership to a limit in point of time. The argument of the defendants being that it was limited as to the nature of the business, and that the defendant, Newberry Smith, could not be bound, except for responsibilities incurred in that business.
3. In saying that it was a general partnership in the lumber business.
4. In instructing the jury that the real question was, when the money was borrowed, not when the notes and checks were given.
5. In instructing the jury that the presumption of law was, that the loan was made upon the faith of the regular lumber business, and not upon the faith of any other business; and, if the former, that Newberry Smith was liable. And that the burden of proving that the papers were executed and the money lent upon the faith of Nathan Smith alone, and for other purposes than partnership purposes, was upon the defendants.
6. In instructing them, that the question was not whether the credit was given to Newberry Smith, but whether it was given upon the credit acquired by Nathan Smith, in virtue of his concern in the lumber business, no matter whether the parties were known or not.
The motion for a new trial was argued by Scott and Rawle, in support of it, and by Hopkins and' J. R. Ingersoll, contra.

Opinion:
By the Court.
-Motion refused.