Case Name: Dickerman vs. Bowman
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1861-12-11
Citations: 14 Wis. 388
Docket Number: 
Parties: Dickerman vs. Bowman.
Judges: 
Reporter: Wisconsin Reports
Volume: 14
Pages: 388–393

Head Matter:
Dickerman vs. Bowman.
In an action against the accommodation indorser of notes signed by L. in the firm name of L. & C. after the firm had been dissolved, the answer alleged that at the dissolution of the firm the plaintiff held notes of the firm for the same amount as those sued upon, on which the defendant was an accommodation indorser; that the firm had made an assignment of all its effects by which those notes, being in a preferred class, were fully secured, as the plaintiff knew; that on the day of the execution of the notes sued upon, the plaintiff informed the defendant that he had made an arrangement with L. & C. to extend the time of payment of the first mentioned notes upon their giving new notes, if the defendant would indorse them; that the defendant, believing the representation of the plaintiff that he had procnred the assent of both L. & C. to the arrangement, went with the plaintiff to L., who signed the notes sued upon in the name of L. & C., and the defendant indorsed them, supposing from the plaintiff’s representations, that he had procured the assent of C. that L. should sign the notes in their firm name; that C. never authorized L. to sign the notes in the firm name; that the representations of the plaintiff in that particular were untrue and the defendant was deoeived thereby; that when the new notes were made, the old ones were given up to be cancelled; that C. refuses-to recognize the authority of L. to bind him by the execution of the notes sued npon; and that the assignee of L. & C. refuses to pay them or any part of them. Held,, that the answer did not state facts sufficient to constitute a defense.
APPEAL from tbe Circuit Court for Milwaukee County. Complaint against Bowman as indorser of four notes al leged to bave been executed on tbe first of December, 1859, by J. C. Lee and Charles Cain, under tbe firm name of Lee _ & Cain. Tbe answer admitted that tbe notes were drawn by Lee, amd signed by bim in tbe partnership name, and after being indorsed by tbe defendant, were delivered to tbe plaintiff; but it alleged also that tbe firm of Lee & Cain was dissolved on tbe 13th of May, 1858, on which day tbe firm made a general assignment of all its property to one Kinney, in trust for their creditors; that tbe plaintiff was one of said creditors, and held tbe notes of Lee & Cain, upon which tbe defendant was an accommodation indorser; that tbe notes so held by tbe plaintiff were in tbe class of preferred debts, and were fully secured by tbe assignment, of which tbe plaintiff bad notice; that on tbe day of tbe execution of tbe notes sued upon, tbe defendant was informed by tbe plaintiff that be bad made an arrangement with said Lee & Cain to extend tbe time of payment of tbe notes first mentioned, for a specified period, upon their giving new notes for tbe amount, provided tbe defendant would indorse them; that tbe defendant, believing tbe representation of tbe plaintiff that be bad procured tbe assent of both Lee and Cain to said arrangement, went with tbe plaintiff to said Lee, who signed tbe notes sued upon in tbe name of the firm, and tbe defendant indorsed them supposing, from the representations of tbe plaintiff, that be bad procured tbe assent of Cain that Lee should execute tbe note in their joint names; that tbe representations of tbe plaintiff in that particular were untrue, and that he was deceived thereby; that in fact said Cain bad never assented to tbe arrangement or authorized Lee to execute tbe notes in tbe firm name; that tbe old notes were given up by tbe plaintiff to be cancelled; that Cain refuses to recognize tbe authority of Lee to bind bim by tbe execution of tbe notes sued upon; and that tbe as-signee of Lee & Cain refuses to pay them or any part of them.
On tbe trial tbe defendant proposed to prove tbe facts alleged in tbe answer, admitting at tbe same' time, “ that tbe notes sued on were given in renewal of other notes of tbe same amount given by tbe firm of Lee & Cain and indorsed ^ ¿®fendant, tbe old notes being given np at tbe same and that Lee & Cain executed on tbe 13tb of May, 1858, a general assignment for tbe benefit of creditors, in which tbe defendant was preferred to tbe full amount of said notes for tbe purpose merely of indemnifying him as sucb indorser, be having no other claim upon them.” To tbe introduction of tbe testimony, in connection with tbe admissions, the plaintiff objected, and the court excluded it, on tbe ground that tbe facts stated in the answer, with the admissions so made, would not, if proved, constitute a defense to tbe action.
Verdict and judgment for plaintiff.
Butler, Buttrich & Gotbrill, for appellant,
insisted, 1. That after the dissolution of a firm neither party has any authority to bind bis former partner by giving a promissory note in tbe name of the firm; and that this rule applied to notes given in renewal of notes made by tbe firm before its dissolution. Edw. on Bills, 111; Obitty on Bills, 52 ; National Bank vs. Norton, 1 Hill, 572; Mitchell vs. Ostrom, 2 id., 520; Vernon vs. Manhattan Go., 22 Wend., 183; Bristol vs. Sprague, 8 id., 423 ; Woodford vs. Dorwin, 8 Vt., 82; Woodworth vs. Downer, 13 id., 522; McPherson vs. Raihbone, 11 Wend., 97; Dolman vs. Orchard, 2 Carr. & Payne, 104; Whitman vs. Leonard, 3 Pick., 177 ; Yale vs. Barnes, 1 Met., 486; Parlcer vs. Macomber, 18 Pick., 505; Sanford vs. Mickies, 4 Johns., 224; Offat vs. Breedlon, 4 Miller (La.), 31. 2. If' Cain had, by parol, authorized Lee to sign tbe former firm name to tbe notes, Cain would have been liable upon them (Cbitty on Bills, 53 ; Smith vs. Winter, 4 Mees. & Wei., 454; Graves vs. Merry, 6 Cow., 701); and tbe appellant bad a right to suppose, from the representations of tbe plaintiff, that this authority had been given.
Finches, Lynde & Miller, contra,
to tbe first point cited Coll, on Part., § 546 ; 3 Kent, 5th ed., 63; Cow on Part., 231; Story on Part., §§ 324, 328; Brown vs. Higginbotham, 5 Leigh, 583; Geortner vs. Ganajoharie, 2 Barb., 625 ; Murray vs. Mumford, 6 Cow., 441; Morse vs. Bellows, 7 N. H., 568 ; Darling vs. March, 22 Me., 184. 2. If it be true that tbe assigned property was sufficient to pay all the preferred debts, and if, as admitted, Bowman was preferred to tbe full amount of tbe notes for tbe purpose of indemnifying bim as tbeir indorser, then be is amply protected. Tbe notes in suit are only renewals of bis old indebtedness.
December 11.

Opinion:
By the Court,
DixON, G. J.
Tbe questions in tbis case arise upon an exception to tbe decision of tbe county court refusing to receive any evidence on tbe part of tbe defendant, on tbe ground tbat tbe answer does not state facts sufficient to constitute a defense to tbe action. Tbe plaintiff objected for tbat reason, and tbe court sustained tbe objection. It is therefore as if tbe case stood upon a demurrer to tbe answer. We think with tbe county judge tbat tbe answer is insufficient. Tbe position assumed by tbe defendant's counsel is tbat tbe copartnership between Lee and Cain being dissolved, Lee bad no authority to bind Cain by giving tbe notes in suit in tbe name of tbe firm; tbat tbe defendant was induced to indorse tbe notes by tbe representation of tbe plaintiff tbat Cain bad assented to become liable on them as maker, which was untrue; and tbat be was thereby injured, because instead of having tbe liability of both Lee and and Cain, as be supposed, be has tbat of Lee alone so far as these notes are concerned. "Conceding tbat tbe propositions of law involved in this argument are correct, still it must fail for want of an averment-of the most material fact upon which it is predicated; It is not alleged in tbe answer tbat the plaintiff represented 'to tbe defendant that Cain bad assented to become liable on tbe notes as made by Lee, or tbat be bad authorized Lee to execute them in tbe name of tbe firm. Tbe answer contains no direct or positive averment of tbe kind. It merely avers tbat at tbe time of tbe execution of tbe notes tbe plaintiff informed tbe defendant that be bad arranged with Lee and Cain to extend tbe time for payment as specified in them, provided tbe defendant would indorse them. This is entirely consistent with tbe supposition tbat Cain intended to sign tbe notes himself, and tends not at all to tbe conclusion tbat be authorized or assented to tbeir execution by Lee in the name of tbe firm. Tbe arrangement could be made without au- tllority ^y e^er Pai'tner to tbe other to use tbe name of tbe in carrying it out; and being made, tbe inference would kg that -they contemplated tbat it would be completed in a lawful manner, that is, by each partner putting bis own signature to tbe notes. Hence tbe representation tbat Cain bad assented to tbe arrangement is by no means a representation tbat be bad assented tbat Lee should execute tbe notes in tbe former partnership name.
It is alleged tbat the plaintiff and defendant went together to tbe office formerly occupied by the firm, where they found Lee alone; tbat tbe plaintiff produced tbe notes and Lee signed them in tbe name of tbe firm, and thereupon the defendant indorsed them, " believing and supposing from tbe representations of said DicJcerman, tbat be bad procured tbe consent of said Cain thereto, and had procured said Cain to authorize said Lee to execute the same in their joint names." This is tbe only intimation contained in tbe answer tbat the plaintiff made any such representations as those relied upon in the argument. It is obviously not an averment of a material fact in any legal or proper form, but purports merely to be a statement of the defendant's belief at the time he indorsed the notes, unsupported by any fact upon which such belief could reasonably be founded. It appears that the defendant was already liable for the debt; that he was familiar with the affairs of the late firm of Lee & Cain, and knew that they had dissolved; that he was present when the notes were executed, and knew that they were signed by Lee alone. From these and all other circumstances attending the transaction, the presumption must be that he acted upon his own judgment in the premises, and not upon statements made by the plaintiff.
It is true that he subsequently says "that he is informed by said Cain and verily believes it to be true, and he therefore avers, that said Cain never assented to any such arrangement, or authorized said Lee to execute said notes in their joint names, and therefore that the representations of said plaintiff in tbat particular were untrue, and that he was deceived thereby." It might, perhaps, be urged that this, with the previous allegation, constitute a good averment that he ♦was misled by the representation that Cain had assented to the arrangement, when in truth he had not. But the previous gation is too general and uncertain to support a charge fraud. To sustain it the facts constituting the fraud should be clearly and specifically stated, and nothing should be left open to inference or doubt; and most especially should they not be consistent with a supposition of innocence on the part of the accused.
The falsehood, if any, must have consisted in the plaintiff's representing that Lee and Cain, each for himself, had assented to the arrangement, when he knew that they had dissolved and consequently that such individual assent was necessary to bind both. The fact of dissolution must have been before his mind, and the representations made with reference to it. Of these facts necessary to a fraudulent affirmation, neither the plaintiff's knowledge of the dissolu tion, nor a statement by him that Lee and Cain had individually consented, are averred. It appears that he knew that they had been partners, and that he had dealt with them as such; but there is nothing in the answer to show that he knew they had dissolved. The representation, therefore, is entirely consistent with his innocence. Believing that the partnership still continued — for the contrary cannot be assumed — he applied to Lee, who assented to the arrangement. Under such circumstances that was sufficient to authorize him to say that Lee and Cain had assented, and the statement was neither false nor fraudulent.
For these reasons the circuit court was-right in rejecting the evidence, and the judgment must be affirmed.
Ordered accordingly.