Court Opinion

ID: 6667888
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:07:24.576267+00
Date Added: 2024-06-11T16:00:18.763077
License: Public Domain

By the Court.
Leavis, J.
The appellant takes this appeal from a judgment rendered against him for fifteen hundred dollars, upon an indebtedness of a mercantile firm of Avhich the defendant is the surviving partner.
That the questions of laAv discussed upon this appeal may be fully understood, Ave will state generally the facts out of which the action arose, and about which there seems to be no controversy in this Court. It appears that in the year 1865 the appellant Buck-land and one Henry Bethel Avere copartners in the mercantile business in the county of Lyon. That in the month of October of that year Bethel obtained from the respondent three, seven-thirty bonds of the United States, which Avere made payable to bearer,- and in the aggregate worth the sum of fifteen hundred dollars. The plaintiff testifying on his own behalf stated that these notes Avere delivered to Bethel to be used by the firm, but to be returned to him upon his request; that Bethel, who was on his way to San Francisco to purchase a stock of goods at the time the bonds Avere delivered to him, proposed pledging, or in some other Avay raising money upon them, and to use the money so obtained in the purchase of goods for the firm. The plaintiff also testified, and the jury by their verdict found, that the bonds were delivered for the benefit of the firm.
Bethel lost his life by the wreck of the steamer upon Avhich he had taken passage, before -reaching San Francisco, and as nothing Avas afterwards heard of the bonds, it is supposed they Avere lost in the wreck. The verdict being for the plaintiff the defendant appeals, and asks a reversal of the judgment for the following reasons:
1st. Because the transaction with Bethel, as shoAvn by the evidence, was a mere bailment, not a loan; that it was therefore *53simply a personal matter between Bethel and the plaintiff, and not a partnership transaction, the respective partners not having the power to bind the firm in such transactions; and 2d. It is claimed that the plaintiff was not a competent witness to prove the transaction between himself and Bethel, the latter not being alive at the time of the trial. These two propositions1 constitute the foundation of the argument on behalf of the appellant, and present the only questions necessary to be discussed by this Court.
It must be conceded in the outset that the power to bind the firm in transactions of the character in question existed, if at all, as incidental to or included in the power to borrow money for the benefit of the firm; for there is nothing in the articles of copartnership beyond that which could perhaps authorize it. If it be demonstrated that Bethel possessed the power to bind the firm of which he was a member by such a transaction, that -will dispose of the first proposition of counsel, for the jury have found that he did in fact act on behalf of the copartnership, and upon the record as it comes before us that fact cannot be questioned; hence, Did he possess the power to act for the firm in the transaction ? is the question now necessary to be considered.
This wras a general partnership in mercantile business, and consequently the powers and liabilities of the respective partners must be determined by the rules generally governing such copartner-ships.
Mr. Collyer thus epitomizes the powers of each member of a commercial copartnership :
“ He may buy, sell, or pledge partnership effects; he may borrow, receive, or pay money; he may draw, indorse, or accept bills, notes, checks, and other negotiable instruments; and he may procure insurance for the firm, and do any other acts, and enter into any contracts in reference to the business of the firm, which are incident or appropriate to such business, according to the ordinary course or usage thereof.” (Collyer on Partnership, 348.)
Among all the powers with which he is invested none is more universally recognized, or acknowledged, than that of borrowing money for the benefit of the firm, and binding it by contract for its payment — a power which, whilst it may perhaps be the most *54dangerous, is moreover the most essential with which a partner in a mercantile firm can be clothed, for it greatly enhances the credit of a firm in mercantile business, and a vast facility is thereby given to all its dealings, insomuch that the partners may reside in different parts of the country, or even of the world.
The power of each member of such a partnership to bind his associates for the payment of money borrowed by him for the benefit of the concern, is limited only by actual notice being brought to the creditor that the articles of copartnership deprived each member of the general power of borrowing money for the firm.
“ It may be laid down as a general rule,” says Mr. Collyer, <£ that partners are bound universally by what is done by each other in the course of the partnership business.’1’
“ One partner may pledge the credit of the other to any amount,” is the strong language employed by Lord Kenyon. (Collyer on Partnership, 349.) If each partner may thus borrow money for the benefit of the firm, and pledge the credit of his associates for that purpose, can it be claimed that he may, not resort to any of the usual means employed for that purpose ? It is wrnll settled that a partner may obtain the indorsement of a stranger to the firm note, and if such endorser be compelled to pay such note there is certainly no doubt but he might recover from the firm.
Had the plaintiff in this case given his own note to Bethel for the purpose of aiding him in borrowing money for the firm, or indorsed the firm paper and been compelled to pay it, there can hardly be a-doubt of Bethel’s right to obtain such security, or of the plaintiff’s right to recover from the firm should he be compelled to pay it. Such transactions are of daily occurrence among mercantile men, and are perfectly legitimate.
If in such case Bethel could bind the firm, why might he not also obtain other security for the same purpose ? The character of the security should certainly not affect the rights of the creditor, especially if it appear that it was a bona fide transaction for the purpose of raising money for the benefit of the partnership. The Government securities obtained from the plaintiff have a defi*55nite market value, usually being at par and easily converted into money. Indeed, they may be readily used as money although not a legal tender. If to obtain the plaintiff’s own note or an accommodation indorsement from him would have been a proper transaction on the part of the plaintiff and within his legitimate authority as a member of a mercantile firm, we can see no possible reason why it was not fully as legitimate and as completely within his power to obtain other securities to aid the firm in borrowing money. The borrowing of money for the benefit of the partnership was the ultimate object of the transaction with the plaintiff.
That w'as legitimately within the power of the deceased partner, and the only objection which seems to be made now is to the means which Bethel took to accomplish that object. The object wras legitimate. The means adopted were not very unusual; hence we see no reason why the firm should not be holden for the value of the securities obtained from the plaintiff precisely the same as if he had advanced the amount in money to the concern. As this question will necessarily be involved in another trial of this cause we have deemed it expedient to dispose of it at this time, although we reverse the judgment upon the other point argued by counsel for appellant.
Whether the plaintiff could properly be examined as a witness on his own behalf as to the transaction between himself and Bethel is a question depending entirely upon the construction to be placed upon Section 340 of the Practice Act as amended in the year 1864, (Laws of 1864, page 77) which declares that “All persons without exception including parties to, or those interested in, the suit, except where the adverse party is dead or where the opposite party shall be the administrator, executor, or legal representative of a deceased person, may be witnesses in any action or proceeding, except as otherwise provided in this chapter of this Act.” The old rule, as generally stated, was that no person who was interested in the result of a suit was a competent witness.
But this section of the Practice Act abrogates the old rule and renders even the parties to an action competent in all cases, except -when the “ adverse party ” is dead or the opposite party is the legal representative of a deceased person.
*56To render the plaintiff incompetent as a witness on his own behalf in this action therefore, it must appear that the “ adverse party ” is dead, or that the defendant “ is the legal representative of a deceased person,” otherwise he would be fully competent under the Practice Act. But who is to be understood' as the adverse party is the question upon which counsel differ in opinion — attorneys for appellant arguing that by the words “ adverse party ” is meant the party actually engaged in the transaction out of which the action arose, whilst, on the other hand, it is claimed that the other party thus referred to is the person legally bound or principally interested in such transaction, whether he have any personal knowledge of the matter himself or not. Assuming such to be the construction to be placed upon these words, counsel for respondent ai’gues that as Bethel represented the firm of Buckland & Bethel in obtaining the securities in question, the defendant Buckland was legally a party to the transaction, and he being the surviving partner of that firm and the proper defendant in this suit, must be deemed the “ adverse party.” The crude condition of the section under consideration, and the evident failure on the part of the Legislature to give full expression to the object which it had in view, involves this question in grave doubts, and probably makes a perfectly satisfactory solution of it altogether impossible.
But notwithstanding its crudity, the chief or ultimate object which the Legislature had in view is quite apparent, and in the conclusion at which we have arrived, we have as far as possible endeavored to carry out what we understand to have been that object. The imperfection of human language renders the complete and exact expression of thought in all cases utterly impossible. To give expression at all times to exactly what is intended, to employ words which are neither too comprehensive nor too limited, is a power which no proficiency in philology can bestow upon man. The positive definition of words is 'often modified by the context, and by the peculiar ideas or notions which each person entertains of the subject or thing spoken of; a phrase or sentence taken by itself, therefore, will no.t always convey the precise idea intended to be expressed. Added to this imperfection and inappropriate use of language which so often renders the intention of the Legislature *57uncertain, is the further difficulty of producing an Act entirely harmonious in all its parts and details. It is not- unfrequently the case that the general object or purpose is perfectly clear, whilst the details and means prescribed for carrying such purpose into execution are’crude and contradictory. Hence, in the interpretation of any phrase, sentence or section of a law, the first thing to be ascertained is the ultimate and general purpose of the Legislature in the enactment of the law. ■ When that is known or ascertained, then every sentence 'and section of the entire law should be interpreted with reference to such general object, and with a view to giving it full and complete effect, extending it to all its logical and legitimate results. That object must, of course,- be ascertained from the Act itself. But the whole Act must bo taken together, and when the general object is apparent, any fugitive expression, or any sentence which it is impossible so to interpret as to make it accord with, and further such general object, must be ignored entirely.
- Now, the ultimate and general object which the Legislature had in view in the enactment of the section under consideration, was to make even the parties to actions competent witnesses on their own behalf, in all cases ’except where an undue advantage might be gained thereby. - That one person to a transaction should not be-allowed to testify in his own behalf as to the character of such-transaction, when the-other-party or parties to it cannot be produced to testify, is dictated by the most obvious considerations of prudence and the clearest principles of justice. The common law, fully recognizing the weakness of human nature and the natural inclination of man to color everything to Suit his own interest or desire, made all persons having any direct interest in the result of an action incompetent as witnesses. Our statute, however, which bears the marks of the progressive and innovating genius of the age, sweeps away ’all-the barriers which the cautious wisdom of the-common law threw around litigants; and with few exceptions admits all persons ’into the witness box regardless of the interest which they may have in the action. But there are circumstances, it seems, under which the Legislature considered itself justified in denying this right; that is when the “ adverse party is dead,” or where -the opposite -party is the legal representative of a ’deceased *58person. But why should the fact that one of the parties sues or is sued in the character of executor or administrator deprive the other party to the suit of the right to testify ? The answer is obvious : because the Legislature, doubtless, deemed it injudicious and unjust to allow a person to testify on his own behalf .about a transaction when the other person actually engaged in it is unable to appear by reason of death. Although actions might often arise upon transactions had with the executor or administrator personally, and no exception is made in such cases, yet that the motive of the Legislature was as we have stated it can hardly admit of a doubt. What other possible object could there have been for the exception to the general right given to all persons in the section ? When both parties to a transaction or contract can be brought before the Court and examined, it cannot he said to be unfair for either. The right is equal and natural, and if there be any conflict in their testimony the Judge or jury is to decide between them. As a general rule, no undue advantage could be taken in such case, but the danger of admitting one party to a transaction to testify when the testimony of the other cannot be obtained, is too apparent to need comment-
If the general object of the Legislature was to allow all persons to testify when both sides of the transaction could be presented to the Court and not otherwise, (and if such were not its object, we can see no reason why any exception whatever should be made to the general right granted in the first part of the section) we discover at once that by the “ adverse party” is meant the actual party to the transaction, he who can himself testify as to such transaction. No other construction will give effect to what we understand to have been the purpose of the Legislature.
Buckland, it is true, was legally a party to the transaction, but he knew nothing about it, Bethel alone being engaged in it. By the spirit of the statute, therefore, the plaintiff is as incompetent a witness on his own behalf as if Buckland were not even legally a party to the business. He cannot be confronted by the other party actually engaged in the transaction upon which this suit is brought.
This rule will undoubtedly operate harshly in many cases, as all general rules do. Such may be the effect in this case, for the plaintiff’s truth and correctness of recollection is impressed upon *59every word of his testimony, and without it he may lose the case ; but we cannot construe the law so as to obviate all hardship in every case.
The plaintiff was not, therefore, in our opinion, a competent witr ness on his own behalf, and the Court erred in admitting his evidence.
Judgment reversed and a new trial ordered.