Court Opinion

ID: 6961144
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:45:47.437944+00
Date Added: 2024-06-11T16:08:26.602557
License: Public Domain

Mr. Justice Scholfield, dissenting: I am unable to concur in the opinion of the court. So long as, by our law, a scroll is held to be a seal, and a distinction is preserved between sealed and unsealed instruments, I feel that we are bound to give to instruments like that in evidence in the present suit, the legal effect that was attributed to sealed instruments by the common law. I concede that the use of the scroll and the distinction between sealed and unsealed instruments, for most purposes, might well be abolished ; but the duty of doing this, as I conceive, rests upon the legislature and not upon the judiciary. The proof, in this case was: jFirst—That Bobert Walsh and Thomas Walsh, at the date of the instrument in evidence, were partners, in Joliet, in the dry goods business. Second— That Thomas Walsh executed that instrument. Third—The instrument, itself. Fourth—A computation of the amount due upon the instrument. There was no other evidence before the jury. There is, therefore, no pretense that Bobert Walsh was present ratifying the act of Thomas Walsh in signing the firm name to the instrument, nor that he, by any subsequent act, ratified such act. So, also, the only evidence of the original consideration of the instrument is found in its own recitals. This court, in Eames, impleaded, v. Preston et al. 20 Ill. 389, held that a promissory note executed by one of a firm, in the firm name, with a scroll, is a sealed instrument as to the party who signed it, and that an action of assumpsit could not be maintained upon it. By necessary implication, the ruling was, also, that the seal was the seal alone of the party who affixed the scroll. The common law rule was that a sealed instrument, executed in the name of a firm by one of its members, Avithout express authority of the other members of the firm or their ratification of the act of execution, is the deed of the member executing it, only, and he alone is bound by it. This is shoAvn by the authorities cited in the opinion,—but they also show that the rule is subject to this qualification—that the instrument shall be one to the validity of Avhich a seal is necessary. And so they hold, in bills of sale of personal property, in deeds of assignment of personal property, and in chattel mortgages, and in all kindred cases where the addition of a seal neither adds to nor detracts from the legal effect of the instruments, the fact that one partner in making and signing the firm name to the instruments, superadds a scroll, does not render them inadmissible in evidence against the non-executing partners. But this is upon the principle that, as to such instruments the seal in nowise affects the legal nature or character of the instruments. As to them, not being required or recognized by law, it is an unmeaning symbol. The law has prescribed that the instruments shall be executed by the simple signature of the names of the parties to be bound, and any formula beyond and in addition to this is outside of the law, and hence to be regarded as of no legal significance. But that is not the effect of adding a seal to an instrument, which, without the seal, would be but a promissory note. In such case, what was before a promissory note, becomes, by the addition of the seal, a deed, thus entirely changing the legal character and effect of the instrument, as was held in Eames Impl’d v. Preston et al. supra. It is clear, upon authority, that, in the present case, the action can not be maintained on the instrument, as against Robert Walsh. Collyer on Partnership, (6 ed.) 478; Gerrard v. Basset et al. 1 Dallas, 119; Montgomery v. Bard et al. 2 Ben Monroe, 244; Trimble v. Smith, 2 A. K. Marshall, 375; Button et al. v. Hampson et al. Wright (Ohio) 93 ; McDonald & Mills v. Eggleson et al. 26 Vermont, 154; Story on Partnership, § 119; 1 Am. Leading Cases (4 ed.) 450-1. This is conceded in the opinion of the court, but it holds that, nevertheless, there may be a recovery under the common counts on the evidence alone afforded by this instrument. The general principle has been recognized by this court, that if a bond be given for a simple contract debt, the latter is lost in the former, the specialty being of a higher security. Wann et al. v. McNulty, 2 Gilman, 358; and if this, as applicable to the present case, may be accepted as the law, it must follow that an action could only be maintained against Thomas Walsh, upon the deed, and not upon the original consideration. In Clement v. Brush, 3 Johnson’s Cases, 188, the question was, whether a partner whose name was signed to a promissory note under seal, (given for goods sold and delivered to the firm,) by his co-partner, without express authority, was bound. The court said: “One partner cannot bind his co-partner by seal. The defendant Brush, who executed it, is alone bound by the specialty, and, it being a debt of a higher nature, it extinguished the simple contract or partnership debt.” In Morris v. Jones & Spence, 4 Harrington (N. J.) 428, suit was brought on a sealed instrument executed by John Spence in the name of Jones & Spence, for money borrowed by the firm. The court held, First—That there could be no recovery on the sealed instrument, because, being under seal, it was obligatory on Spence alone, and was not the deed of Jones, as Spence had no authority to bind him by such an instrument. Second—That there could be no recovery on the count for money lent, because the taking of the obligation of Spence for the money so lent, extinguished the remedy on the simple contract against the partners, and the remedy was against Spence alone, on the instrument. In Nunnely v. Doherty, 1 Yerger, 26, the question was, first, whether the partner could bind the firm by a sealed instrument or deed, executed in consideration of a partnership debt, where the partnership agreement was under seal, but contained no such power; and, secondly, if he could not, whether an action could be sustained against the partnership upon the original simple contract debt. The court answered both questions in the negative, and observed, in.respect of the latter: “ This point forms the gravamen of the case on the part of the plaintiff, and, though having very little doubt, we were willing to take an advisari, to see if there was any possible way of getting over it; but, on looking into the books within reach, the hope of finding any such way is extinguished, and we are, with reluctance, constrained to say that the plaintiff can not maintain an action on the simple contract, for by taking and accepting the sealed note for the simple contract, it is merged and gone.” This is the doctrine laid down in Higgins’ case (4 Coke’s Rep. 45), and it has been followed ever since. It is there said : “ He who has a debt by simple contract, and takes a bond for the same debt, or any part of it, the simple contract is determined.” In Waugh & Finley v. Carrigen (id. 31) there was like ruling. McBride v. Hogan, 1 Wend. 326, recognizes the same doctrine. In Bond v. Aitkin, 6 Watts & Sergeant, 165, one of the questions was whether the bond of one partner, taken at the time money is loaned to the firm, and as the consideration for such loan, is an extinguishment of the debt, and it was held that it was. The court said : “Where the bond of one of the partners is taken for an antecedent partnership debt, it may be considered either as a payment and extinguishment of such debt, or only a collateral security, according to the nature of the transaction and the circumstances attending it. Wallace v. Fairman, 4 Watts, 378. But where there is no antecedent debt, but the bond of one partner is taken at the time money is loaned to the partnership, and as the consideration for loaning the money, it can hardly be treated as collateral security. It must be considered as all one transaction, and the bond as the only security contemplated ; unless, perhaps, there were strong and positive evidence to show an express agreement to the contrary by all parties. If so, then in this case the bond was the only debt; the plaintiff, if he recovered at all, must recover on it, and not on the money-counts. And as there was no implied contract by both, so the express promise proved was only by one.” I am aware that it has been held by some courts that, as a bond is not an extinguishment of a simple contract debt, where it is intended that it should not be, a bond by one partner, in the name of the firm, for a simple contract debt, will not discharge the firm, because it is apparent on the face of the instrument that it was not intended to accept the liability of a single partner in lieu of. the firm, and, consequently, that the firm .may be sued upon the original simple contract. But this ruling, in my opinion, is well shown by the learned editors of the American Leading Cases, in their notes to Livingston v. Roosevelt, etc., Rogers v. Bachelor, vol. 1 (4th ed.), 451, to proceed upon a misapprehension of the extent to which intention can control the principle of extinguishment. They say: “ The only case in which a bond will not be an extinguishment in law of a simple contract, is where it is intended to be a collateral security, and not an absolute liability; but if a partner give an absolute liability, under seal, it .will extinguish his liability upon the parol contract, and if the parol liability is extinguished as to one, it is extinguished as to all, because a part can not be sued alone; and where an absolute liability by deed is thus given, intention can not prevent either the extinction of the parol liability of the one giving it, or the discharge of all from the parol liability as a legal consequence of the discharge of one.” But, they say, “ where such a bond has been taken under a misapprehension of its effect in discharging the firm, equity may relieve against extinguishment, and keep alive the liability of the firm.” See, also, 2 Daniels on Negotiable Instruments, § 1293; Story on Partnership, § 155. Whether, therefore, the suit here is to be regarded as on the instrument itself, or on the original consideration, the judgment below is wrong, because unsustained by legal evidence, and should be reversed. The suit is not maintainable, against Robert Walsh on the instrument, and the original simple contract being merged in the instrument, there can be no recovery except on" the instrument, and that must be against Thomas Walsh alone. I am authorized to say that Mr. Justice Mullet, who joins with me in dissenting from the opinion of the Court, concurs in the foregoing views.