Court Opinion

ID: 6277710
Source: CourtListenerOpinion
Date Created: 2022-02-18 16:06:04.124053+00
Date Added: 2024-06-11T09:00:06.768087
License: Public Domain

Per Curiam,
The general rule is, that, if a partner borrow money and give his individual note for it, it does not become a partnership debt by reason of the application of the money to partnership purposes. But if there be a dormant partner, the law is otherwise, and the firm is chargeable with the debt if the money was applied to the business of the partnership. The reason for the distinction is thus stated in Graeff v. Hitchman, 5 Watts, 454: “A dormant partner is liable, not because credit is given to the firm, for the firm is not here known to exist; but because he is a participant in the profits, and takes from the creditors a part of the fund which is the proper security to them, for the satisfaction of their debts, and upon which they have a right to rely for payment: Grace v. Smith, 2 Bl. R. 998. No inference can be drawn, as in the case of a known and ostensible partnership, that the advances were alone made on the credit of the persons whose names are on the bill, nor can it be intended, that the holder agreed to forego his right of action against others who secretly partook of the profits. When there is a dormant partnership, consisting of two persons, it becomes the debt of the firm, although the bill is necessarily signed by one only. Where it is intended for partnership purposes, and is so applied, it is substantially a loan to the company, which super-induces their liability.” Applying this principle to the facts of the present case, as found by the jury upon sufficient evidence, there is no room for doubt that the firm, of which Weidner was dormant partner, was liable for the money which was borrowed for the use of the firm and was used for firm purposes. Hence, when, upon ascertaining that Weidner was a partner and . as such was liable for the debt, the plaintiff obtained from Rohrbach, *461the other partner, a partnership note for the debt, signed with the firm name, no fraud was committed on Weidner. It was not as if Rohrbach had given a firm note for his individual debt, and, therefore, the cases cited by appellant’s counsel do not apply. This feature of the case, as well as the questions of merger and pleading, is so . satisfactorily treated in the opinion of the learned trial judge overruling the motion for a new trial and for judgment n. o. v., as to render further discussion unnecessary.
The assignments of error are overruled and the judgment is affirmed.