Case Name: Magill vs Merrie & Bullin
Court: Kentucky Court of Appeals
Jurisdiction: Kentucky
Decision Date: 1844-10-14
Citations: 5 B. Mon 168
Docket Number: 
Parties: Magill vs Merrie & Bullin.
Judges: 
Reporter: Kentucky Reports
Volume: 44
Pages: 168–171

Head Matter:
Magill vs Merrie & Bullin.
Oct. 14.
Error to the Anderson Circuit.
Dormant partners. Dissolution of Partnership..
The ease stated,

Opinion:
Chief Justice Ewing
delivered the opinion of the Court.
Merrie & Bullin, a mercantile firm, of Louisville, sued Magill, Stagg & Sharp, as a late mercantile firm, doing business as such in the town of Franklin, Indiana, by the name of John R. Stagg & Co. The suit was abated as to Sharp, upon the suggestion of his death, and Stagg made default, Magill appeared and pleaded non est factum, relying upon the fact, that he had withdrawn from the firm before the date of the note sued on, which was executed by Stagg, in the name of the late firm, without his authority.
It appeared in proof, that Stagg, Sharp & Magill had been the avowed and known partners of the firm, prior to the date of the note. That in October, 1836, the firm bad dealings with the firm of Merrie & Bullin, under the name of John R. Stagg & Co., and executed their note to them, in that name, for an amount over $1000, payable in six months, which had been in part paid, and a judgment recovered for the residue, and collected. 'That in April, 1837, another purchase was made from the same firm, and the note in question executed by Stagg, the active partner in the same firm name. That in November, 1836, after the first purchase, the following article was-executed by Sharp, Stagg and Magill: "Itis agreed by the firm of J. R. Stagg & Co., that said firm be this day dissolved, as follows, viz: that J. A. Magill relinquishes his interest therein, and the survivors thereof agree to pay him $712 50 cents, the amount of his capital stock therein, - months, after date, and one third of the proceeds of the store from its commencement until the time of making the estimate, Ike." No estimate was made before the note sued on was executed, nor afterwards, that was. known to their Clerk, whose evidence was taken, and who testified that the dissolution was as w'ell known about the town, of Franklin, as was their copartnership, tie further proved, that no publication was ever made in any paper, or set up any where, within his knowledge, of the dissolution, nor was notice given of the same to Merrie & Bullin, or any other firm in Louisville, to his knowledge, nor did he know that they were apprised of it.
Upon this evidence the counsel for both plaintiffs and defendant asked numerous, instructions, all. of which were rejected, and the following instruction given, by the Court. "If the jury believe, from the evidence, that the defendant, Magill, was an ostensible partner of .the firm of Stagg & Co., and that said firm had dealings vvith the plaintiffs as a firm, prior to the execution of the note in contest, and that the note in contest was executed by one of the firm, in the name of the firm, they should find for the plaintiffs, unless they should further find, that prior to the execution of the note in contest, the firm of Stagg & Co. .was dissolved, and that fact made Known to the plaintiffs."
-Judgment of the Circuit Court.
Notice of the withdrawal of a dormant partner from a partnership, is not necessary ; otherwise as to an ostensible partner.
A note signed with the partner ship name is prima facie a note of the firm, and the contrary must be shown if relied on..
The jury having found for the plaintiffs, and a judgment rendered thereon, Magill has prosecuted a writ of error to this Court.
The instruction given was a full and fair exposition of the law, as applicable to the facts of the case, and those asked by MagilTs counsel and refused, were calculated to embarrass, rather than to enlighten the jury.
Magill was not a dormant partner, nor were the jury authorized, from the proof, to regard him as such. A dormant partner is one whose name is purposely concealed from the public. And being so:'concealed and unknown, persons who deal with the firm do not look to him as a partner, or deal upon the faith of his responsibility, and therefore are not 'entitled to notice of his withdrawal from the firm. { But Magill was an ostensible and avowed partner, and known to the public as such. And as an ostensible and avowed partner, whose name was not intended to be concealed, the presumption is, that when Stagg, the active partner first opened an account with the plaintiffs, in the name of Stagg & Co., that they inquired into, and Stagg gave all the names of the firm, as giving strength and credit to the association. And having once the names of the firm, when Stagg presented himself again, and offered to open another account in the same firm name, at the expiration of only about six months from the former dealings, the plaintiffs having no premonition of a change, would not be induced to suspect any, and would not therefore be required to make further inquiry to ascertain who were then the member^ of the firm, much less would they be required to inquire of the residents of a distant village, to ascertain the fact of a a dissolution or change in the firm. But they had a right to have actual notice of the change, and it was the duty of Magill, if he wished'to escape from further responsibility, to have given it. The credit having been given -upon the presumed continuance, and consequently, upon the faith of the entire firm, all -are as responsible as if it bad in fact continued.
- Nor can we sanction the principle contended for by Ma-gill's 'Counsel, that it was the duty of the plaintiffs to yffóve that the note was given in the transaction of the firm business, and for a copartnership consideration.
A writing between the members of a firm, stipulates that one is to withdraw, and to be paid a proportion of the profits when the estimates are made, he is a partner until the estimates are made.
Turner and Robertson for plaintiff: Harlan Craddock for defendant.
The members of a firm are presumed to have confidence in each other, and that neither will abuse the implied power confided to each. A note executed in the firm name by either, is therefore prima facie evidence that it was properly executed, and for a valid consideration to the firm. And if it was not so executed, it lies upon the defendant to impeach it, and show that it was executed upon and for a different consideration and purpose. And we know of no rule of law, which places a retiring partner, who has failed to give notice, upon other or different ground, in this, respect, than the regular con-! tinuing members of the firm. He is still a partner as to-'' the public, and trusted as such, and is subject to those rules of law applicable to partners.
But if it were necessary for the plaintiffs to prove the-consideration of the note, or that it was given in the firm-business and for firm purposes, it might fairly have been-•implied by the jury, from the fact, that goods were purchased about the time that the note bears date, and were brought to the store and intermingled with the old goods of the firm.
Moreover, according to our interpretation of the article of dissolution, Magill, if .not a partner inter se, at the date of the note, was unquestionably a partner as to the public. He was to be a recipient of one third of the profits, until an "estimate" was-made, and by the proof, no- estimate or settlement had then been made, nor 'inventory taken of the stock on hand, but the new purchases were intermingled with the old, and the business went on as it had done. Magill was, therefore, as a participant of the profits, a partner in fact, as to the public at least.
The judgment of the Circuit Court is affirmed, with costs, &c.