Court Opinion

ID: 6547156
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:20:31.165153+00
Date Added: 2024-06-11T15:55:59.986445
License: Public Domain

Hart, J. (after stating the facts). The sole question raised by the appeal is as to the correctness of the following instructions: . “If you believe from the evidence in the case that, acting within the scope of this partnership, Mr. Garrison was to furnish the money for this business to be carried on, and that Mr. Smith, who was the agent of the Bank of El Dorado, where those checks were drawn, had notice of the agreement and had notice of the terms of this contract as to the part he was to perform, and that Mr. Baskin had nothing to do with the furnishing of the money for this firm to operate on, then you will find for the defendant. To enable the plaintiff to recover, he must show this by a preponderance of the evidence.” And again: “Before you can find for the defendant, you must find that Mr. Smith, as agent of the Bank of El Dorado, knew of the terms of the contract as to Mr. Garrison furnishing the money, and knew that was Mr. Garrison’s part of the contract, and that Mr. Baskin had nothing to do with the furnishing of the money for the operation of the firm. If Mr. Baskin, as a partner of Mr. Garrison, was doing a partnership business, and there was no understanding, so far as the bank knew of, then the acts of Mr. Garrison would be binding on Mr. Baskin, and he would be bound by it.” Baskin admits that he and Garrison were equal partners, each to receive one-half of the profits of the business, and that the partnership affairs have not been settled. His contention now is that notice to the cashier of the bank that Garrison was to furnish all the money needed by the partnership restricted his liability to the bank, and that therefore he is not liable upon the note, although it was given to cover an overdraft for money that was used in the partnership business. In order to avoid liability, Baskin should have gone further and have given notice to the bank that he would not be answerable for the acts of his partner in obtaining money for the use of the partnership in violation of the private agreement of the partners! Mr. Bindley in his work on Partnership, vol. 1, p. 176,. states the rule as follows: “The writer is not acquainted with any case in which it has been decided that persons who are aware of the terms upon which partners have agreed together to carry on business are deemed to contract with them upon the basis of the agreement come to amongst the partners themselves. In all cases of this description, the real question to be determined seems to be whether there was distinct notice that the firm would not be answerable to strangers for acts which, without such notice, would clearly impose liability upon it; and whenever there is any doubt upon this point, the firm ought clearly to be liable, the onus being on it to show sufficient reason why liability should not attach to it.” Tested by this rule, it will be plainly seen that the instructions are erroneous. For the error contained in them as indicated in this opinion, the judgment must be reversed and the cause remanded for a new trial.