Court Opinion

ID: 6236772
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:34:23.306401+00
Date Added: 2024-06-11T08:58:04.388119
License: Public Domain

Mr. Justice Sterkett
delivered the opinion of the court, January 3d 1881.
It may be regarded as well settled that when an ostensible or known member of a co-partnership retires therefrom, and wishes to shield himself from liability for future debts of the firm, it is necessary that personal notice of his withdrawal be given to all who have had dealings with the firm, and that notice be given, by publication or otherwise, to all others. The general principle, as broadly stated, in Watkinson et al. v. The Bank of Pennsylvania, 4 Whart. 482, is that publication of the dissolution in one or more newspapers printed in the city or county where the partnership business is carried on is, per se, notice to all persons who have not had previous dealings with the partnership; but, as to those who had such dealings, it is not sufficient. Partners who are strictly dormant, and unknown to those who transact business with the firm, and who therefore lend no credit to the partnership, form an exception to the general rule. While they are of course responsible for liabilities of the firm incurred during their connection with it, they are not liable for debts contracted after they have withdrawn from the partnership, although notice of such dissolution may not have been given to the public or those with whom the firm has had previous dealings: Deford & Co. v. Reynolds, 12 Casey 325; Shamburg v. Ruggles, 2 Norris 148. In the first of these cases, Mr. Justice Strong says: “ The rule doubtless is that an unknown dormant partner may retire from the firm without giving notice of his retirement, and thenceforth be no longer liable for debts which the firm may incur. Having ceased to be a partner in fact, he is *419not a party to the contract which creates the debt; and, being unknown, he has not encouraged the creditor to rely upon his responsibility.” The distinction between a dormant or silent partner, as he is sometimes called, and-an ostensible or known partner, and the reason why notice of the withdrawal of the latter and not of the former is essential in order to shield the retiring member from liability for future debts of the firm are clearly pointed out and explained in the two cases last cited. When a co-partnership is formed and an artificial name, such as is usually employed to designate a corporation, is adopted, it must be regarded as an invitation to give credit, not to the empty name, but to’ the individuals who compose the. association thus designated, and hence none of the partners can properly claim to be dormant. They are all, presumptively at least, known partners and liable as such. But, in the present case, it is unnecessary to invoke this principle, for the reason that during several months prior to the transfer of his stock, and bis alleged withdrawal from the firm, the defendant was not only an ostensible but an active member of the partnership. His name was published as a director of the Titusville Savings Bank — the name by which the partnership was designated — and this fact -was known to the plaintiff before he commenced depositing in the bank. Being then a shareholder and partner in the bank, actively participating as a director in its management, and these facts being not only published to the community, but personally known at the time to the plaintiff, how can the defendant, upon any recognised principle, expect to escape liability for debts of the partnership contracted after his withdrawal therefrom, w-ithout showing that due notice thereof was given ? It is not pretended, that express notice of his withdrawal was given, but it is claimed that it might be inferred from the fact that his name was dropped from the published list of directors. This, however, was insufficient, for while the dropping of his name from the board of directors might justify the inference that he had ceased to take an active part in the management of the partnership business, it would by no means follow that he had ceased to be a shareholder and partner. Having been- published to the community as an active partner, and having been known as such to the plaintiff before he commenced dealing with the bank, it was incumbent on the -defendant to produce more satisfactory evidence of notice than the mere dropping of his name from the published list of directors. In Brown v. Clark, 2 Harris 469, Mr. Justice Bell says: “ To visit the community at large with the consequences of a dissolution by assent of the parties the evidence of it should be clear, distinct and unambiguous. It is not to be left to mere conjecture or the hazard of possible inferences. The nature of the notice required to charge strangers with knowledge shows this. It must be shown that notice was communicated in some way or other. To reach those who have before dealt with the firm, direct *420and express notice of the fact is essential. To those before unconnected with the association, it may be communicated by publication in the proper newspapers. The 'latter species of notice is only tolerated from necessity, but yet like the other it is bottomed upon an open avowal, by the parties themselves, of their agreement to dissolve.”
It follows from what has been said that the learned judge erred in excluding the plaintiff’s offer to prove the amount of money deposited by him in the bank, and in charging the jury as complained of in the third and fourth specifications of error.
Judgment reversed and a venire facias de novo awarded.