Case Name: Thomas Person v. Alexander Carter and James Porter
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1819-05
Citations: 3 Mur. 321
Docket Number: 
Parties: Thomas Person v. Alexander Carter and James Porter.
Judges: 
Reporter: North Carolina Reports
Volume: 7
Pages: 321–326

Head Matter:
Thomas Person v. Alexander Carter and James Porter.
1 v From Wayne, J
Case for money laid out and expended, &c. The firm of “ Carter ft Porter” were indebted to the Bank of Newbern. Carter was the active partner, and purchased of Fletcher a bond on Everitt, for the amount of which he executed to Fletcher an obligation under seal, in the name of the firm “ Carter & Porter,” and Person sealed and delivered the said obligation, as their security. Upon Carter’s application, Everitt took up his bond, and gave in lieu thereof to “ Carter & Porter” a note, which was discounted at the Bank of Newbern, and the proceeds applied to the discharge of “ Carter & Porter’s” note due to the Bank. Person paid to Fletcher the amount due on the bond which he had executed as security for “ Carter & Porter,” and brought this action to be reimbursed.
Porter was not present when Carter executed the bond to Fletcher, and a question was made whether, as this was a bond in which one partner could not bind another, Person had not made Porter his debtor without his, Porter’s, consent, and therefore not entitled to recover of him in this action. There was no evidence that Porter was privy to the contract with Fletcher, or had recognized it as a contract of the firm, except what was furnished by an order drawn by Porter on one Isaac I-Iill in favor of Person, in which he directed Hill to let Person have “ any amount of notes or judgments to the amount of a note of Carter & Porter, given to Joshua Fletcher.” Held that this was evidence of a recognition of a subsisting contract of Carter & Porter, and bound Porter, although, he was not present when the bond was executed.
One partner cannot bind another partner by deed, by virtue of the mere contract of partnership: to do so, he must either have express powers under seal, or the other must be present and assent to the act.
If this case then stood on the bond alone, although the money arising from the contract was applied to Porter’s use, or to the joint use of Porter Sc Carter, without the assent of Porter, he would not be liable in this action; for no man can make another his debtor without his consent, express or implied. But this assent may be implied from circumstances, and, when implied, it has the same effect as the most express assent.
Although Carter had no power to sign the bond, so as to bind Porter, yet the bond may be used to shew in -whai capacity Carter professed to act. He professed to act for the firm of “ Carter & Porter,” as their agent. The money raised by the contract was applied to the use of the partnership ; Porter recognized the bond as the bond of the firm, and gave directions for its payment. It was Porter’s bond only through Carter’s agency for tile partnership; and his recognition of it as a bond of the firm cannot be true, otherwise than by a recognition of Carter’s agency.
Porter not only recognizes the bond as the bond of the firm, hut takes benefit of the effect of the contract, and assents to the extinguishment of his own debt; and having bnoinngly received the benefit, he shall also take the burthen, and do the same tiling as if he had personally transacted the business.
This was an action of assumpsit, in which the Plaintiff declared for money laid out and expended, for money lent, for money had and received, &c. The Defendants were partners in trade in the sale of merchandize, at a store in Wayne county, which was conducted by Carter, Porter residing in an adjoining county. In the year 1812, the firm of Carter & Porter were indebted to the Bank of Newbern,- and Carter, for the purpose of discharging said debt, purchased of one Joshua Fletcher a promissory note on Joseph Everitt, which was payable to said Fletcher, and gave an obligation to Fletcher for the amount, payable in other notes, which obligation was signed by Carter, in the name of the firm, u Carter & Porter,” and a seal was annexed thereto $ and the same was signed and sealed by Thomas Person, and two other persons, as securities. James Porter was not present at the giving of the obligation, nor ivas there any evidence produced, except the circumstances hereinafter stated, to shew that he was privy to the contract with Fletcher.
Everitt, upon the application of Carter, toot up his note, made originally payable to Fletcher, and by him delivered to Carter, and gave a new note, payable to Carter & Porter; which note was subsequently discounted at the Bank of Newbern, and the proceeds applied to tlie discharge of Carter & Porter’s note then due the saul Bank. Person paid Fletcher the amount due on the note given Mm by Carter, and brought this action to be reimbursed.
On the tidal, the Plaintiff produced an order which was in the following words, to-wit:
“ Mr. Isaac Hill, be so good as to let Mr. Thomas Person have any “ amount of notes or judgments to the amount-of a note of Carter & Por- “ ter, given to Joshua Fletcher, &c. April 22, 1815.
'<■ JAMES PORTER.”
Which order bore date prior to the bringing of this action. The Judge, in his charge, instructed the Jury that one partner cannot, by deed, hind his copartner, unless the copartner he present, assenting to the execution of the deed as the deed of the firm •, or unless he had previously requested or consented that he might so execute it; in which case, the partner so executing it, would ho considered as the agent of the party so assenting, and the one so assenting would be bound by the deed. That the Jury, if satisfied from the circumstances disclosed by the testimony that such was the fact, should find for the Plaintiff. That if the Defendant, Cartel’, in signing the obligation in the name of the firm, acted without any legal authority from Porter, yet, if Porter subsequently promised to pay the Plaintiff the money so by Mm paid for the firm, such promise would be binding j and that the order drawn by Porter on Hill was a fact from which the Jury might infer such promise.
The Jury found for the Plaintiff. A rule for a new trial was obtained on the ground of misdirection by the Court, and on argument was discharged. The Defendants appealed, and

Opinion:
Henderson, Judge,
delivered the opinion of the Court:
A contract of partnership is a contract of agency, and it differs from a pure agency only in this, that, in a puro agency, the agent binds liis principal only; in a partnership all the principals or partners are bound, which, of course, includes the actor. On this principle is bottomed the powers of one partner to bind the partnership, when he acts within the scope of his powers. How far those powers extend, is generally ascertained by the nature and objects of the copartnership j and this depends on the agreement of the parties evidenced between themselves, generally by an express contract, and as to the world, in addition thereto, by overt acts or visible signs. (I speak not of what makes a man a secret partner.) These visi-hie signs may be exhibited after a transaction of agency, as well as he concomitant with or before it. For technical reasons, the contract of partnership does not give one partner a right to bind the partnership by deed. To do so, he must have express powers, (under seal as I apprehend,) or he must be actually present and assent to the agency. But he that as it may, the power does not flow from the hare contract of partnership: it rests on some other basis; either one of those before mentioned, or some other.
' H tins case then stood on the bond alone, which Carter signed for himself and Porter, and which Person joined in as security, although the money arising from the contract was applied to Porter's use, or the joint use of Porter and Cartel», without the assent of Porter, he would not probably be liable in this action : for no man can make another his debtor without his consent express or implied. But this assent may, from circumstances, be implied, and when implied it has the same effect as the most express assent. Now, although Carter had no power to sign the bond, so as to hind Porter, yet the bond may be used to shew in -what capacity Carter professed to act. In this case he professed to act for the concern of Porter and Carter, as their' agent, to bind thorn by their deed. The money raised by the contract was applied to the use of the partnership, and (which is the key-stone of the case) Porter recognizes it as the bond of Porter and Carter, and gives direction for its payment, describing it as the bond of Porter and Carter» It was not otherwise Porter's bond, than through Carter's agency for the partnership. How pan Porter's recognition he true, otherwise than by a recognition of Carter's agency ? He not only by words recognizes the agency, but takes benefit of the effect of the contract 3 assents to the extinguishment of his own debt, hut refuses to take on himself those obligations which his situation as principal or partner imposes. His conduct is, in effect, this ; I will recognise the acts of Carter so far as they benefit me, but will not take on myself the liabilities arising from the same transaction. The refutation or exposure is plain. If Carter had not an express binding power from Porter to bind the partnership in this transaction, Porter had his election of disavowing the contract; and it was not required of him to make an express disavowal, a refusal or omission to take any benefit under it would have been sufficient. But having knowingly received the benefits resulting therefrom, he shall also take the burthen, and he shall do the same thing as if he had personally irans- acted the business. He shall assume ail the intrinsic obligations of the actor. In this we do him no injustice, and. in this he cannot complain. We impose on him only the intrinsic obligations arising out of his situation, which he voluntai'ily assumed, and the beneficial effects of which he is now enjoying. Cases may be found, in which, under circumstances somewhat similar to this, recoveries have not been effected 5 but in which all the principles of law contended for in this case are admitted, and the mistake, if there be any, is in their application. The case in 2 John. 213, is somewhat like this ; but wanting an essential part, and that is, the recognition of the bond as a partnership bond. I feel myself imperiously bound by precedents settling or recognising the rules or principles of law. Knowingly to run counter to them when well settled, would be contrary to the duty which I owe to the state, and contrary to the duty which I owe to myself. But as to those cases which only apply principles, which do not profess to establish or investigate what the principles are, I confess, I do not feci myself bound by them, if I cannot perceive the propriety of the application. In fact, they are looked into as mere exercises, as practising lessons, to enable the Judge the more easily to apply the rules of law ; but it was never intended that we should look to the result to ascertain what the rule is. When there is no controversy about the rule on either side, the only question being about the application, the rule is not to be found in the result. Such cases are mere practising lessons ; if right, there will be the like decisions again, (I will not say they will be followed,) if wrong, they will be disregarded, as cases where the rule is misapplied. — The rule for a new trial must be discharged.