Court Opinion

ID: 6231695
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:23:27.685006+00
Date Added: 2024-06-11T08:57:53.546658
License: Public Domain

Concurring opinion by
Read, J.
There was not sufficient evidence in the case to warrant the verdict of the jury, but the court were right in their view of the law. The principles involved in it are few and simple, and grow out of the partnership relation.
If a partner, who is a bailee of money intrusted to him for safe keeping, with the knowledge of the other member of the firm, applies this trust-money to the partnership business without the knowledge and consent of the bailor or cestui que trust, and contrary to instructions, the firm is liable for it, and it becomes a partnership debt. The case is only a little stronger if he was urged by his partner to commit this breach of trust.
Without entering into the question whether an express agreement to discharge a retired partner is not inoperative for want of consideration, as was ruled by the earlier English authorities, and which seems to be the law of New York, it is sufficient for the present to state the law as laid down at present in England, which is the most favourable for the plaintiff in error. The English cases are generally those of retiring partners where a creditor takes the security of the new firm. In such a case the Master of the Rolls, in Harris v. Farwell, 15 Beavan 31, says: “ The law is this — when a creditor of a firm contracts or agrees with a new firm to take their security in discharge of that of the old, the retiring partner is discharged from any liability to pay the debt: but whether such a contract or agreement has or has not taken place is a question of fact to be submitted to a jury.” “ I think Lord Cottenham clearly states the law in Winter v. Innes, 4 Mylne & C. 108, 109, and I think that all these cases will be found to resolve themselves into this: not only whether it is the fact that the creditor has accepted the separate security of the continuing partners-, but whether he has also done so in discharge of the joint debt.” And the same is the principle of the decision in Lyth v. Ault, 11 Eng. L. & Eq. 580, by the Court of Exchequer.
And Mr. Bindley in his late work on Partnership, vol. 1, p. 257, says: “ It is not unusual to represent Lodge v. Dicas and David v. Ellice as altogether overruled by Thompson v. Percival and other cases. This, however, is going too far. The three *312.cases together establish, 1. That a creditor who treats the continuing partners as his debtors does not necessarily abandon his right to resort to a retired partner for payment; 2. That whether he does or not is a mixed question of law and fact which ought to be submitted to a jury ; and, 3. That their verdict will not be disturbed by the court upon the grounds acted on in Lodge v. Dicas and David v. Ellice.
The present case is stronger, for it is that of a simple dissolution of partnership, and the taking of the note of one of the partners by the plaintiff without any proof of any contract whatever to discharge the present defendant. The first two points of the defendant were answered in the affirmative, and the third was properly negatived, as it asked the court to say the simple taking of the note from Charles is a release of the partnership, which 'we have seen is not the law.
The charge of the court, and their answers to the plaintiff’s points, are in strict conformity to the law as we have stated it, and we can discern no error in the manner in which the case was submitted to the jury..
The widow was a competent witness: Cornell v. Vanartsdalen, 4 Barr 364. Under the offer the evidence of John Jones was properly admitted, and we do not see that it was liable to objection as the evidence turned out, but, if it was, the counsel of the defendant should have requested the court to strike it out. We cannot see, however, that the defendant has suffered by its admission.