Court Opinion

ID: 6509546
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:21:09.81409+00
Date Added: 2024-06-11T15:54:50.190017
License: Public Domain

STONE, J.
When goods were consigned by Hall & Long to Hannon, Brown & Jones, and received by them as commission merchants, this constituted a contract, binding on each of the partners composing the latter firm, to account for the goods, or their proceeds. Such liability could not be cancelled by any act of the latter firm alone, or by any agreement its different members might make among themselves, in which Hall & Long did not concur. It requires the same mutuality to vary or modify a contract, as it does to create it in the first instance; for modification is only a species of contract. The mutual agreement of the parties, a promise for a promise, is sufficient to uphold such modified contract, without other new consideration.- — Thomason v. Dill, 30 Ala. 455-6, and authorities cited.
Failure to demand payment of Mr. J ones, unless for a sufficient length of time to create a bar by limitation, did not, per se, cancel his liability. Neither would the demand of payment from the succeeding firm, or even the receipt of interest or part payment, or all these combined, necessarily lead to such result. The true inquiry is, was there an agreement to discharge the older partnership, and to substitute the new one as the debtor. Unless this be shown, the liability of the older firm remains.
Speaking on this question, Mr. Parsons, in Ms work on Partnership, page 425, says : “ Frequently, the new firm goes on in its regular business; the accounts of the customers are transferred from the old to the new; and the customers, knowing the retirement and change of parties and transfer of accounts, say nothing, but continue their dealings with the new firm; perhaps depositing and drawing, or buying and selling, or receiving interest and settling accounts, all just as before, taking no particular notice of the change. The question then occurs, what is the legal significance and effect of such conduct; and it seems to be well settled, that the mere receiving of interest‘from- the new firm will not discharge the old; and although the transferring the old account to the new firm is not necessarily an adoption by the creditor of the new firm, as Ms sole debtors, yet this fact, together with the other circumstances of the case, may be evidence from which a jury would be authorized to find that *498the creditor had impliedly assented to a discharge of the old firm.” He adds, “that when the liability at a given time of all the partners is proved, the burden is on those of them who seek to. escape continued liability, to show a cessation.”
In the case of Gough v. Davies, 4 Price, 200, Gough had deposited with a banking firm a sum of money, to be repaid by the bankers, and interest to be paid on the deposit. The partnership was changed by the retirement of Davies, and by the addition of two new members. Gough knew of the change. He subsequently made other deposits, on the same terms, with the new firm; and received interest on the entire deposit from the new firm. He continued thus to deal with the new firm for four years, giving no notice of intention to hold the old firm liable for the deposit made during its existence. Tbe new firm then became bankrupt; and the question was, whether Davies, the retired member of the old firm, was liable for the deposit made while he was a member. Baron Graham said: “ There is no evidence to show that Mr. Gough adopted the new firm. What more has he done, than to say, I am perfectly willing to take your security for the new debt, but I don’t release the old firm.” Baron Wood said: “There is not any evidence that the plaintiff .agreed to release the old, and receive the new firm as his debtors. The only evidence is, that the new firm paid interest upon both debts; one of the new having been a partner in the old firm.” Baron Garrow said : “ I can not agree that there was no evidence to be left to the jury; I think there was important evidence to be left to the jury, and that the judge [Parke] was so far right.”
The case of Blew v. Wyatt, 5 Car. & Payne, 397, was a very strong case. Blew had lent money to a firm, for which they agreed in writing to pay him five per cent, interest. Yarious changes took place in the house, in the course of which one of the partners who signed the agreement retired from it. The interest was paid, from time to time, by the different firms, until the last firm became bankrupt. Blew served all the different firms as clerk, and had knowledge of the different changes. The question was, whether Wyatt, who had retired, was still liable. Lord Lyndhurst, C. B., delivering his opinion, said: “ I am of opinion, that the instrument is still binding upon both defendants, .unless an agreement was made between the parties, by which the plaintiff agreed to discharge the first firm, and substitute others. I think that the mere knowledge of the changes will not be sufficient; there must be some agreement shown between the parties.” See, also, the following cases, strongly in point: Harris v. Lindsay, 4 Wash. Cir. Ct. 271; Heberton v. Jepherson, 10 Penn. *499State, 124; Payne v. Slate, 39 Barbour, 634; Offutt v. Scott, 47 Ala. 104.
It is not necessary, nor do we feel inclined, to adopt some of the extreme views advanced above. Still we hold, that to discharge a retiring partner, from a liability once incurred, the facts and circumstances must satisfy the jury that the plaintiff agreed to release the old, and look to the new firm. Proof, if made, that the accounts against the old firm were re-stated against' the new, would be strong evidence from which an agreement might be inferred; but it is not for us to declare what will be sufficient evidence to satisfy the minds of the jurors. We agree with Baron Garrow, that whenever there is any evidence, from which such agreement could be inferred, then the question of agreement vel non should be submitted to the jury, in a charge appropriate to the testimony in the cause.
Applying the principles stated above to the case made by the present record, we think the City Court erred, in permitting the defendant to prove that no demand for the goods or money was made on him for eighteen months after he retired from the firm. The fact was immaterial. Neither was the fact that Hannon, Brown & Co. had closed doors, or ceased to do business, material. We hold, also, that “the practice of Hannon, Brown & Jones to make monthly reports or returns to persons consigning goods to them,” does not legitimately tend to show that Hannon, Brown & Co., or Brown, Blount & Co., or B. F. Blount & Co., notified plaintiffs of the changes in the firm. The question presented by this testimony, even if it related to the practice of Hannon, Brown & Co., Brown, Blount & Go., or B. F. Blount & Co., is very different from that considered and decided in the case of Wright v. Bolling, 27 Ala. 264. That was simply a case of aiding recollection, by a memorandum made by the witness, and known by him to be correct. This is an attempt to prove the existence of a particular fact, by proof of the habit of the house. There was no error in receiving the letters in evidence.
The first charge to the jury was rightly given. If, after Hall & Long were notified that the goods, or a part of them, were turned over to Brown, Blount & Go., they instructed them to sell the goods and remit the proceeds, this was such a taking of direction and control as, unexplained, would absolve the original consignees from further liability for goods thus turned over. It could not extend to goods not turned over. The second and third charges should not have been given. They ignore the material inquiry of agreement by *500plaintiffs to release tbe old firm, and to accept tbe new one in its stead.
Reversed and remanded.