Court Opinion

ID: 6572469
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:31:09.103539+00
Date Added: 2024-06-11T15:56:57.210215
License: Public Domain

The opinion of the court was delivered by
Bennett, J.
The act, or agreement, of one partner, with reference to, and in the course of, the partnership business, and in the management thereof, is, in point of law, the act or agreement of the firm, and binding upon them, although it may violate some private arrangement between them. If, however, the matter is wholly disconnected from the business of the firm, the rule is otherwise. But the present is not a case where one partner has pledged the credit of the firm for the payment of a debt, contracted in a matter beyond the scope of the partnership. It is incidental to a partnership that each partner has the power of selling the partnership property, of releasing the partnership debts, and of receiving payment thereof in .such manner as he shall see fit, provided there is no fraud upon the partnership. It appears that Royce agreed with the defendant that payment for all the services rendered should be made in a particular way, and those which were rendered subsequent to the agreement, were received by the defendant, relying upon this agreement. The rendition of such subsequent services did not create a subsisting debt against the defendant; but the partner, whose private debt became thereby extinguished, became, pro rata, a debtor to the firm. He had, in effect, received pay of the defendant, though to his private use. There is no pretence that the defendant was guilty of any improper motive in attempting to save a private debt against an insolvent partner, or that Royce was ever reputed to be insolvent. Had this been the case, and the defendant acted in bad faith, as it respects the partnership, we might have come to a different result. The case of Fay et al. v. Green, 1 Aik. Rep. 71, is much like the present. Burt, one of the partners, agreed with the defendant, who was a physician, to pay him his bill for professional services, which he then had against Burt’s sister, in goods from the *279store of the company. The goods were taken up by the defendant, under this agreement with Burt, but charged to the defendant on the books of the firm. There had never been an application made, or any credit given to Green for his account against the sister of Burt, and, in a suit by the firm against Green for the goods,'it was held that this agreement of Burt, as to the mode of payment, though unknown to the other members of the firm, was binding upon them and constituted a good defence for Green to the amount of his account.
As to the services which were rendered by Royce and Strong before the agreement, they stand on different ground. The defendant became debtor to the firm for those services when rendered. The agreement, as to them, was executory and without consideration, and can confer upon the defend- and no legal rights.
The judgment of the county court must, then, be reversed and a new trial granted.