Court Opinion

ID: 5460168
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:33:19.523627+00
Date Added: 2024-06-11T08:32:50.716315
License: Public Domain

Hogeboom, J.
The object of this suit is to charge the defendant, as a former partner of Henry M. Penoyer, deceased, with $200 borrowed by the latter and claimed to have been appropriated to the use of the firm.
1. The money was originally borrowed by the plaintiff and Henry M. Penoyer, in their individual names and on their individual note, of Abram Coon, the assignor of the plaintiff. There is no pretense that this would make the defendant liable, or tend to do so.
2. The borrowers, Tallmadge and H. M. Penoyer, having procured "the money for a friend, who before it was received by him had no occasion for it, they debated among themselves what to do with it. H. M. Penoyer said Tie should like to use it for a short time himself. The plaintiff told him to do so. Thus far there is nothing to hold the defendant liable to any person, but only the plaintiff and H. M. Penoyer to Coon; and as between the plaintiff and H. M. Penoyer, the latter became the principal debtor.
3. H. M. Penoyer having thus procured possession of the money, probably applied it to the use of the firm of R. S. & H. M. Penoyer; at least there is, I think, sufficient evidence to go to the jury on that point. But that alone is not, I think, sufficient to charge the firm (or the defendant as a member of it) as debtors to Coon, or to Tallmadge; for otie partner may borrow money of whom he pleases, and devote it to what purpose he pleases, without making the firm liable. If indeed he borrow money avowedly for the benefit of the *129firm, and in addition appropriate it to the-ir use, the other partners are liable upon the principle of agency, upon the score of his authority, as a member of the firm, to borrow money for their benefit. And this is so, in some cases, where the money being borrowed upon such a representation—that it is for the use of the firm—and loaned in reliance upon the truth of that representation, is in fact misapplied by the borrowing partner, and not devoted to the use of the firm.- For it is not always necessary that the lender should trace the money into the hands or business of the 'firm, to make the firm liable.
But I am not aware of any case, or any principle, whereby money originally borrowed by one partner (and a third person) in his individual capacity and subsequently by the consent of his co-borrower, agreed to be appropriated to that partner’s individual use, can be subsequently collected of the firm or the other partners, from the simple fact that they have had the benefit of it in their business, or that the account of it is entered on their books.
If these, therefore, are the only facts on which the plaintiff relies, I regard them as insufficient to enable the plaintiff, either in his own right, or as assignee of Coon, to sustain the action against the defendant.
4. But the plaintiff claims that on the books of the firm, in a list of “ Sundry notes given by R. S. & H. M. Penoyer,” is this entry: “No note; Abram Coon, May 15, 1854, $200;” and that the defendant as a member of the firm is chargeable with a knowledge of this entry in the handwriting of H. M. Penoyer; and that its legal effect is to charge the defendant with this loan.
But this is not its necessary effect; and the only question is, whether the evidence is sufficient to go to the -jury. It is to be observed, 1. That it is not the entry of the defendant himself. 2. That it does not necessarily show that the money went to the use of the firm; or if it did, that the firm were liable for it as original debtors, to the lender of the money. *130For it would be a proper entry as between the Penoyers themselves, if H. M. Penoyer had borrowed the money solely on his individual account, and subsequently loaned it to the firm. 3. That it therefore fails to connect the firm with Coon in the relation of borrowers^ and lender, except only in an indirect, indefinite and inferential way.
5. But it is further claimed that the defendant has otherwise admitted his liability to pay this debt, and treated and recognized it as one of the debts of the firm. To two witnesses (Coon and Mesick) he showed the book containing the entry just discussed and other entries, sought an explanation himself in regard to it, and to one of the witnesses (Mesick) said that he Tcnew nothing about it. To another witness, (Rogers,) the administrator of his deceased brother, and partner H. M. Penoyer, he also, upon request, exhibited the book containing this entry and other entries, the object of the administrator being to ascertain the condition of the estate of the deceased, and the book being exhibited to him for such purpose.
6. This is the substance of the evidence on which the plaintiff claimed to go to the jury to recover of the defendant. And I incline to think, after much consideration, that it is insufficient to justify the jury in rendering a verdict for the plaintiff, and therefore that the judge might in his discretion properly withhold it from their final consideration: 1. Because in itself it is slight, unsatisfactory and inconclusive. 2. Because the residue of the evidence pretty distinctly shows that neither the loan from Coon nor from Tallmadge (if the latter can be said to have made a loan) was made upon the credit or for the benefit of the partnership ; nor did they become the debtors of the lender.
7. .The offers of evidence were, I think, properly rejected. 1. Evidence to show that H. M. Penoyer, with the knowledge of the defendant, was in the habit of negotiating for loans of money individually, and giving therefor the notes of the co-partnership, did not present a case parallel to the present *131one, and would leave it still a matter of dispute whether the partnership would he liable for loans thus obtained. 2. Evidence to show that shortly after the entry of the Coon transaction, Henry M. Penoyer applied to another person for a loan of money avowedly to pay a partnership debt, which loan was made and the partnership note taken therefor from Henry, presented a case not connected with the present transaction, and not very nearly akin to it, and was, I think, properly rejected.
On the whole, I think the nonsuit was justifiable, and that the judgment of the circuit court should be affirmed.
Gould, J.
The exceptions to the exclusion of two or three pieces of evidence, offered by the plaintiff, do not seem to be well taken. It certainly was not pertinent to the issue, whether or not H. M. Penoyer was in the habit of borrowing money for the use of the firm, and giving the notes of the firm therefor. Since, in the case before us, the note given was not the note of the firm; and to make the firm liable, it was necessary to show either a borrowing on the credit of the firm, or that the money did in fact actually go to the benefit of the firm.
The offer to show that, about the time this money was borrowed of Coon, Henry Penoyer applied to Mesick to borrow money to pay on a $3000 mortgage of the firm, and borrowed of Mesick $400 for that purpose, for which money he gave the note of the firm, certainly was not an offer of testimony material to the matter of a borrowing proved to be for a different purpose, and on a different description of note.
Indeed there is no pretense or question that the original contract of borrowing money was actually, as well as apparently, on a particular note, and for a specific purpose, with which the firm had nothing to do. And, after the loan was completely made, for that purposej and on that note, Coon certainly could not be made a partnership creditor, without *132any change in the security, or in the contract, and without his own knowledge or consent. And if Coon was not a partnership creditor, his assignee cannot be. There is no proof in this case to support a finding for either him, or his assignee. Should it be supposed that the plaintiff himself lent the money to the firm, and so has a right to recover in this action, it would be answered that, on his own testimony, the using of the money was by Henry Benoyer for his individual benefit, as the plaintiff must be presumed to have understood ; and that to overcome that testimony, the plaintiff had, at least, the burden of showing, affirmatively, that the money did go to the use of the firm. And in the case there is not proof on this point sufficient to sustain a verdict, even had one been found for the plaintiff. The proof tending that way is of the faintest sort; and the entry that $200 was borrowed by the firm, of Coon, on. no note, is proved untrue. Whatever else was true, that was not. And such an entry cannot be sufficient to establish a totally different liability, to a different person.
[Albany General Term,
September 2, 1861.
The judgment of the circuit should be affirmed.
Wright, J. concurred.
Judgment affirmed.
Wright, Gould and Hogeboom, Justices.]