Court Opinion

ID: 6602411
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:08:55.273749+00
Date Added: 2024-06-11T15:58:03.753587
License: Public Domain

Lyon, J.
Without the assent, either express or implied, of bis copartner, Bradley bad no legal authority to apply a debt due from the defendants to the firm in payment of bis individual debt to the defendants. If authorities are required to support a rule which is an elementary one in the law of partnership, they will be found cited in the opinion by Mr. Justice Cole in Viles v. Bangs, 36 Wis., 131.
But it is argued that the agreeement between Bradley and the defendants was entered into by the former for the purpose of retaining the custom of the latter, which custom was valuable to Brockhaus & Bradley, and could be retained in no other way ; *216and that Bradley bad authority to make the agreement because it was manifestly for the best interests of the firm. We thinlt the position unsound. A similar reason might be given in almost any case where a partner has appropriated the assets of the firm to his own use, and thus the rule above stated would become practically inoperative. The true principle is, that the firm, and not the debtor partner alone, must be allowed to decide whether it will pay the debt of such partner out of its assets.
It is not claimed that Brockhaus ever expressly assented to the agreement between Bradley and the defendants, but it is claimed that his assent thereto must be implied if bills were rendered to the firm by the defendants in which the sums indorsed on Bradley’s note were charged to the firm, unless reasonable objection was made thereto. The charge of the learned judge on this branch of the case seems unexceptionable. It is to the effect that if Brockhaus was made aware of the agreement by the charges in the bills thus rendered, and neglected to repudiate the transaction within a reasonable time thereafter, the firm is bound by the agreement; otherwise not. This is undoubtedly the law. The verdict for the plaintiff is, necessarily, a finding by the jury that Brockhaus did not delay unreasonably to repudiate the agreement between his partner and the defendants after he was informed of it. Upon that question the verdict is conclusive.
The learned counsel for the defendants contend that, had the demand in suit not been assigned, an action at law could not be maintained upon it by the firm of Brockhaus & Bradley, for the reason that the recovery would enure to the benefit of Bradley as well as Brockhaus, and thus the former would be permitted to rescind his own act on the ground that it was a fraud on his partner. It is said that a suit in equity against Bradley and the defendants is the* only remedy left to Brockhaus.
It must be conceded that the plaintiff is in no better position *217in respect to the demand in suit than was the firm before the demand was assigned to him. If the firm could not have maintained an action upon it before it was assigned, the plaintiff cannot maintain this action.
To sustain the position that this action cannot be maintained, counsel cite Calkins v. Smith, 48 N. Y., 614. That case was decided by the commission of appeals — two of the five commissioners dissenting, — and the majority opinion sustains the position of counsel. No cases are referred to in the opinion, and the earlier decisions of the courts of that state (hereinafter cited), bolding the opposite doctrine, seem to bave been entirely overlooked There are also cases in other courts holding the doctrine of Calkins v. Smith. Some of these are cited in Viles v. Bangs, supra.
But that question is not an open one in this state. It was settled in Viles v. Bangs, which in all essential particulars was a case like this. It was there held that the assignee of a demand due to the firm may maintain an action at law upon it, although before the assignment one of the partners had, without authority, assumed to apply such demand in payment of bis individual debt to the defendant. The reasoning which led to that result is equally applicable here.
It may be remarked, however, that the grounds of the judgment in that case, as stated in the opinion, are somewhat special; but we think the judgment may also rest on the general principle that the act of a partner who, without authority, assumes to discharge a debt due his firm by applying the amount of it in payment of his individual debt (his creditor knowing the circumstances), if not absolutely null and void, is void unless the other partner or partners assent to or in some way ratify the act. In the absence of such assent or. ratification, such act of the debtor partner cannot affect the firm or its assignee. The debt thus attempted to be discharged remains a debt as well after as before the attempted discharge; and the individual debt of the partner remains a debt owing by him, *218unaffected by bis unauthorized attempt to apply the assets of the firm to its payment. This seems to be the result of the best considered cases on the subject. Evernghim v. Ensworth, 7 Wend., 326; Dob v. Halsey, 16 Johns., 34; Gram v. Cadwell, 5 Cow., 489. See also Collyer on Part., § 501; Story on Part., § 132.
But whatever grounds may be assigned therefor, the judgment in Viles v. Bangs rules this ease, and establishes the right of the plain tiff to maintain this action.
By the Court. — The judgment of the circuit court is affirmed.