Cocke v. Branch Bank at Mobile , 3 Ala. 175 ( 1841 )

GOLDTHWAITE, J.

1. The first and most important question to be determined here is, whether Woodson Cocke is bound to the payment of the note, executed in the partnership name by his partner.

It is not denied that a copartnership may be formed with respect to any legal business, and the acts of one, with reference to any matter connected with the joint business, will bind the others; but it is insisted that the liability of a partner to pay a note executed by his co-partner, when it is has been put in circulation without any consideration connected with the partnership business, only extends to cases of mercantile partnerships. When the subject is examined, it will be found that the rule is adopted into the eommon law, from the usages and customs of merchants, and applies only to partnerships in trade. In such partnerships, each partner is presumed to have the authority to make and indorse promissory notes and bills of exchange ; and if a bill or note is issued in the name of the firm, it will bind all the members of it, when in the hands of a bona fide holder, although one of the partners may have put it in circulation in fraud of the others. Chitty on Bills, 45, note M. and cases there cited.

The citation of one or two authorities, will make it sufficiently obvious that there are partnerships to which the rule of the law merchant does not apply. Thus, in the case of Williams v. Thomas, 6 Esp. 18, Lord Ellenborough held, at nisi prins, that a bona fide holder could not maintain an action, on a bill of exchange, excepted by one of several joint owners of a ship, in the names of all on whom the bill was drawn. The bill on ■its face, purported to be drawn for goods furnishsd to the ship, but in fact, was drawn for an account unconnected with it. And in the case of Dickinson v. Valpy, 10 B. & C. 128, the action was also by a bona fide holder, and the defendant was sought to be charged as one of the members of a mining company on a bill drawn and accepted by order of the directors of the company. It was held to be incumbent on the plaintiffs to prove that the directors of the company had authority to bind the other members, by drawing or accepting bills ; and that the plaintiff not having produced the deed of copartnership, nor given any evidence to show that it was necessary for the purpose of carrying on the business of that mining company, or usual for other mining companies to draw or accept bills, there was no authority shewn to draw or accept bills; and still less to accept bills in this form, which in effect, were promissory notes.

From these cases, it seems to be questionable whether, partners not in the trade of merchandise, can bind their co-partners by a bill or note; but conceding that they may do so for all matters connected with the partnership business, these decisions are conclusive to show, that beyond this, one partner cannot be bound by another, unless an authority is expressly given, or can be inferred from the circumstances attending the transaction.

In this case, it is stated that the defendants purchased spiri-tous liquors for the purpose of selling and using in their tavern. This certainly cannot have the effect to make the business of tavern keeping a mercantile trade, so as to bring it within the influence of the custom of merchants.

It is difficult to conceive of any partnership business which does not require some purchases to be made in the usual course of it, and this fact is conclusive to show that the mercantile law does not attach to partnerships for such a cause merely; for otherwise, the case of the ship owners, and of the mining company, would have been within it.

The law presumes that the Bank, if it inquired at all into the partnership of the defendants, must have received information, that they were not partners in a mercantile trade, but only in the business of tavern keeping. This ascertained, it took the note at its peri], and must have relied on the faith of the indor-sers. We are constrained to declare that Woodson Cocke, is not bound to the payment of this note, under the circumstances disclosed.

With respect to the question, how far the Bank could acquire an interest in this note, under the indorsement of Lea, after the dissolution, we think the case is not sufficiently presented on the facts, to enable us to enter upon it without some risk of deciding a point no't involved. We may remark, however, that it is difficult to conceive how Lea, could have been authorised to sign the name of Lea & Langdon in liquidation, unless some effect is given to such an authority. Whether his indorsement, under such an authority, would transfer the title or bind the firm, may not be necessary to decide in this case, under the view we have taken. We therefore decline now to consider it.

Let the judgment be reversed, and the case remanded.