Rolston v. Click , 1 Stew. 526 ( 1828 )

JUDGE WHITE

delivered the opinion of the Court.

It is contended that the Court below erred in refusing the charge requested. By entering into partnership, each partner reposes confidence-in the other, and constitutes him his genera] agent as to all the partnership concerns. This, in the ordinary transactions of trade, the public good, and the facilities of commerce require to be under-. stood. The English books have gone so far as to say, that even where a note is made, or a bill drawn in the name of the firm, for the payment of the individual debt of a partner', that it will prima facie bind the firm, unless there be evidence of collusion or fraud between the creditor an(l partner giving such note or bill. ^a This doctrine, however,' seems to be varied by other decisions, which hold that the presumption in such a case is in favor of the firm, unless where the bill or note pass into the hands of an innocent holder without notice.- The same principle *s als0 sustained by the New-York cases.^b The latter doctrine we believe to be the most reasonable and salu-tary_ For the payment of the debt of an individual partner out of the joint funds, is not within the ordinary scope of partnership transactions; and when the question arises whether the other partners have expressly, or by implication, assented to be bound, it must, in the nature of things, be easier for the payee of such a note" or bill to prove that assent than for the other members ■ of the firm to shew negatively that they did not consent. So, by analogy, I would say, that when the name of a firm is signed as security to a note, this method of subjecting the firm is not in the common course of partnership transactions; and as the person who takes such note must know that it is to receive the debt of a third person, and more especially as it would be more convenient apd consonant with the rules of evidence, for him to shew affirmatively that the other partners consented, than for them to prove negatively that they did not, the case would be prima facie in. favor of the firm, and the onusprobandi rest on the holder of the note, to subject those who did not sign. Then in the present case, Morgan was not bound until his consent, express or implied, was shewn to have been given to the signature affixed by his partner John Click. How far this principle might apply to the endorsement of bills of exchange by one partner in the name of the firm, as indirect security for third persons, it is unnecessary now to inquire, nor do we intend to say. The latter acts are evidently more mercantile in their character than that which, we have now under consideration, and this perhaps might induce to a different conclusion in such a case. But be this as it may, we think that the doctrine as now laid down, applies to cases such as this, with all its meaning, and that one partner cannot bind his cd-partners by signing the name of the firm as security for a third person to a note, unless the consent of the other partners can be fairly inferred, or positively proven by the holder of such a note; and moreover, that in such a case the onus lies upon the holder. The English books do not controvert this principle, except (hat some of them hold that the burden of proof rests on the other side. But the Néw-York cases, and especially that of Dob and Dob against Halsey, ^a go the full length of the doctrine here contended for.

We further think, and, indeed, it was conceded at the bar, that the defendant in error, though an assignee, stands, by virtue of the equity of our statute of 1812, in the same situation with respect to this question, as the original holder of the note would have stood. We are, therefore, of opinion, that the Court erred in refusing the charge n quested below, and that for this the judgement must be reversed. This makes so entire a disposition of the case, that it is useless to notice.the other assignments of error.

The Chief Justice and Judge Perry not sitting.

a . Chitty on Bills 45, 2 Cowp. 561.

b 5 'aítneff ■es3in aridtin'iiuíhnri-acs them cued.

a «isjoim.