Court Opinion

ID: 3629808
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:09:38.352264+00
Date Added: 2024-06-11T13:43:01.764928
License: Public Domain

This suit is in the name of both partners, but is prosecuted solely by Barna Robbins, and for *Page 576 
his benefit. Reuben Robbins has, clearly, no interest therein, having sold and transferred, at any rate, his moiety of the judgment, and, in so doing, assumed to act for the firm and in its name. He also assumed to sell and transfer the other moiety belonging to Barna Robbins. The question to be decided in this case is, whether one partner, after the dissolution of the partnership and the payment of the partnership debts, can sell and assign the partnership property without the knowledge or consent of the other partner. It is undeniable that he can sell his own interest, whatever it may be; but whence does he derive his authority to sell the property which undeniably belongs to his former partner? Certainly not from any rights growing out of their relation as partners, for these are terminated by the dissolution. Not, clearly, from any implied authority which one partner has, even after dissolution, to sell or transfer the partnership property for the purpose of or in payment of the partnership debts; for here there were no partnership debts to pay. It has been regarded as settled law in this State since the decision in Sanford v. Mickles (4 John., 224), in 1809, that one partner, after dissolution, has not the power to transfer the partnership property. It was distinctly ruled in that case that all the partners must join in the transfer of a bill negotiated after the dissolution for the purpose of vesting the title in the indorsee. The same principle is affirmed in Geortner v. TheTrustees of Canajoharie (2 Barb., 625). These rules are in harmony with the general law of partnership, by which the act of each partner, during the continuance of the partnership, and within the scope of its object, binds all the others. Each party acts as agent of the firm, and the acts of the agent, within the scope of his agency, are binding upon the principal. It is in this sense that the act of each and all results from a general and mutual delegation of authority. Each partner may, therefore, bind the partnership by his contract in the partnership business, but he cannot bind it by any contract beyond those limits. A dissolution, however, puts an end to the authority. By the force of its terms it operates as a revocation of all power to create new contracts; and the right of *Page 577 
partners as such can extend no further than to settle the partnership concerns already existing, and to distribute the remaining funds. The acts of a partner, beyond this, cannot bind the partnership, any more than the declarations, acts or acknowledgments of any other agent of the partnership would do, after his agency had ceased. (Story on Part., § 323.) All the power, therefore, which every partner possesses upon the dissolution is, to pay and collect debts due to the partnership; to apply the partnership funds and effects to the discharge of their own debts; to adjust and settle the unliquidated debts of the partnership; to receive any property belonging to the partnership; and to make due acquittances, discharges, receipts and acknowledgments of their acts in the premises. (Story on Part., § 328.) This enumeration does not embrace the power to sell and transfer the partnership property or securities after the payment of its debts and the settlement of its affairs. Such power must, therefore, be held to be excluded. The maxim,"expressio unius, est exclusio alterius," may be invoked as applicable here.
It follows that the judgment of the general term is correct, and should be affirmed.
ALLEN, J., also delivered an opinion for affirmance. He said, among other things: The agency of the partners only continues as to acts necessarily incident to the closing up of the partnership affairs, and the payment and receipt of the partnership debts. The disposal of the partnership assets, in payment of the liabilities of the firm, is within the power thus continued in each of the partners. But the authority to appoint an attorney to act for the firm is not a necessary incident to the power actually existing. It is not necessary to the exercise of that power, and, therefore, does not exist. E.A. Robbins was not, therefore, the agent of the firm, and had no authority, by the transfer of the judgment, to bind any one but Reuben Robbins, from whom he derived his authority to act. The defendant, having knowledge of the dissolution of the firm, cannot, on any ground of implied agency, claim to *Page 578 
hold Barna Robbins bonnd by the act of Reuben Robbins or his appointee, E.A. Robbins. He is chargeable with notice of the defects in the power of each to act for Barna.
Had Reuben Robbins executed a formal release, the question would have been different. By the technical force of the release by one of two joint obligees, or creditors, an action upon the demand released will be barred. But this is for technical reasons not affecting this action, where no release was given. If a release had been given, it could only have been set aside for fraud. The agreement to receive, and the receipt of, the small sum of one hundred dollars in full of the judgment, did not bind Barna Robbins, who did not assent to it. The judgment below was right, and should be affirmed.
Judgment reversed, and new trial ordered.