Coursey v. Baker , 7 H. & J. 28 ( 1826 )

Archer, J.

delivered the opinion of the court. The prayer to the court below, the rejection of which gave rise to the present appeal, presupposes, and is bottomed upon, the existence of the partnership between Spencer & Coursey, at the time ,the promissory note was drawn, upon which this suit was instituted. This note was drawn by Spencer, in the name of the firm, for a debt due from the firm to William Baker & Son.

It is a settled principle, that where there are joint traders, and one draw a note, give a letter of credit, or guarantee in the name of all the partners, it binds all. The act of every single partner, in a transaction relating to the partnership, binds all the others. No exception is known to this general rule, except what may grow out oí covin, or such gross negligence as may be equivalent to covin. Now in this case no fraud is imputable to Baker & Son; the note was drawn for and on account of a debt due from Spencer & Co. and appears to have been in the usual course of mercantile transactions. The power of one partner to bind another by bills and notes drawn in the name of the firm, it is true, is only an implied power, and Spencer & Co. might have stipulated to the contrary; and if a third person, having notice of such a stipulation, had in defiance of such notice and stipulation, accepted a security so drawn, the right of such person to a recovery might well be questioned. Gallway v. Matthew & Smithson, 10 East, 264. But here there is no pretence for questioning the validity of this instrument upon such grounds. The note is executed by one of the firm, in the name of the firm, in the course of their business, according to the custom of merchants, and pursuant to the implied power which he had, from the nature of the case, to contract for, and bind the company. No express assent or approbation was necessary to make it obligatory upon both.

This note was then binding on the firm, unless its having been given to William Baker alone, instead of being drawn payable to Baker & Son, can exonerate the firm from liability. Authorities need not be adduced to shew that Baker could have given a release which would have discharged the firm of Spencer & Co. A payment to him would have been equivalent to a payment to him and his copartner. This being the case, can it be dóubted but that a recovery in this action would enure to the benefit of Baker & Son, and that Spencer Co. would, by Such recovery, be discharged from all liability upon the original cause of action? It is certainly true that the note given does not extinguish or merge the original cause of action of Baker Son, unless it had been received in satisfaction of the debt; but they could not recover on such original cause of action until this note, taken by one of the firm, should be proved to have been lost, or produced and cancelled at the trial. The Patapsco Insurance Company vs. Smith, et al. 6 Harr. & Johns. 170. Yet a suit is certainly sustainable upon the note in the name of the payee, in whom the legal title is alone vested, and he recovers as a Trustee for Baker & Son. Van Ness vs. Forrest, 8 Cranch, 34.

As to the question which has been raised relative to a variance between the date of the note offered in evidence, and that declared upon, it is only necessary to observe, that the promissory note was properly given in evidence under the count for money had and received.

We concur with the court below.

JUDGMENT AFFIRMED*