Heenan v. Nash , 8 Minn. 407 ( 1863 )

By the Court

FlandrAu,

Action on bill of exchange against acceptor. On the 18th day of September, 1858, the Defendant, Patrick Nash, and one William B. McGrorty were partners, under the name, firm and style of “Nash & Mc-Grorty.” On that day Patrick Murnane drew the bill in question on the said firm, in favor of William Devine, and to his.order, payable in one month from date. William Devine endorsed the bill to the Plaintiff, who, on the 25th day of July, 1859, presented the same to Patrick Nash, who accepted it by writing on its face the following words : — “ Accepted this 25 July, 1859.”

The statute of this State, on the subject of acceptances, is as follows:

“No person within this Territory shall be charged as an acceptor on a bill of exchange, unless his acceptance shall be in writing, signed by himself or his lawful agent.” Comp. /Stats., 375, see. 7.

We will have tb consider, in deciding this case, two questions. P’irst, Whether the acceptance by Nash was good as a partnership acceptance, and binding on the firm; and seeond, whether it was competent for him to accept the bill as an individual, and incur a liability against himself alone. If the acceptance was binding upon the firm, the action is well brought against one of the-members. The Comp. Stats., 536, see- 38, provides that “ any one of the joint associates may also be sued for the obligations of all.” If the liability was individual, the acceptor was, of course, the proper Defendant.

In the case of Mason vs. Rumsay, 1 Camp., 384, it was held that an acceptance by one member of a firm in his own name would bind the firm when the bill was drawn on the firm. The sanie was again held in Wells vs. Masterman, 2 JEsp., p. 731. This doctrine seems to have been adopted in Collyer on Partnership, see. 410, and in Byles on Bills, 144, on the authority of these cases, and --some others there collected. In the case of Pougal vs. Cowles, 5 Pay’s Connecticut Reports, 511, the same is again laid down, on the authority of the case of Mason vs. Rumsay. There are other cases that hold an acceptance by a member of a firm in a name other than the firm name, to raise a question of fact, to be loft to the jury, whether the name used substantially describes the firm, or whether it so far varies that the acceptor must be taken to have made it on his own account. See Faith vs. Richmond, 11 Adolph. & Ellis. 338-30; Eng. Com. Law Rep., 113; Drake vs. Elwyn, 1 Caine's Rep., 184.

Acceptances could formerly be made by parol, which was tiie law in Connecticut at the time of the decision cited from 5 Ray, and that point is expressly made by the Court in deciding- the case. The same may bo said of the case of Mason vs. Rumsay, which was decided before the statute of 1 & 2 Geo.A, chap. 78, sec. 2, which provided that acceptances to be valid, must be in writing-. Even after this statute the English courts have held that the word u accepted,” written on the bill by one having authority, is sufficient to bind the drawees. The only principle upon which the courts have held that an acceptance by one partner in his own name will bind the firm, is the implied authority which each member has to act tor the whole, and when the bill is drawn upon the firm and accepted by one, they hold that he intended to accept it as drawn.

I find one English case decided in the Court of Exchequer in 1841, which holds a doctrine much more in accordance with our views of the principles which should govern the question. In Kirk vs. Blurton, 3 Meeson & Welsiy’s beep., 283, the Defendants wTere partners under the name of “ John Blurton.” One of the firm drew a bill in the name of “ John Blurton 6 Co.” The firm was sued upon it, and the partner who did not draw the bill defended. Faith vs. Richmond, Mason vs. Rumsay, and other cases, were cited. AbdkesoN, B., in delivering the opinion, says, “ The Court do not entertain any doubt as to the principles of law applicable, to this case. One partner can bind his co-partner only to the extent of the authority which is given to partners generally, to enable them to carry on the partnership business,” which authority he says, in another part of the opinion, is “ to bind the firm in the name of the partnership and in that only."

Since the passage of our statute on the subject of acceptances, no inferences can be indulged in. To make an acceptance valid, it must be in writing, signed by the acceptor or bis lawful agent. Mr. Nash, as a partnerof the firm of Nash & McGrorty, bad a right to accept the bill for the firm by virtue of bis general powers as a partner, but this power of a partner is to bind the firm by the use of the firm name, and in no other' way. This he did not do, and we are clear that the acceptance cannot be held to bind the-firm.

We are next to consider whether the Defendant can be held as acceptor individually. It is a well settled rule of commercial law, that no one can accept a bill but the person upon whom it is drawn, except for honor. Polhill vs. Walter, 3 Barn, & Adolph, 114; Davis vs. Clark, 1 Carrington & Kirwin, 117; May vs. Kelly & Frazier, 27 Alabama, 497. If a bill is drawn upon A., and B. accepts it, the act is merely voluntary, without any consideration, and creates no liability whatever in the law. It is allowed for the convenience of commerce, that a person, other than the drawee, may, after presentation, refusal and protest, accept, for the honor of the drawer, or any of the endorsers, or of all the parties as he may see fit; but this is a well understood transaction, and is done supra protest, and under certain well settled forms and ceremonies. There is no pretence that Mr. Nash was such an acceptor of the bill in question.

Where a bill is drawn upon several individuals, an acceptance by any one of them is binding upon him, although the bill may be treated, and should be, as dishonored, if not accepted by all the drawees, '"because the holder is entitled to the acceptance of them all, but in such case a liability accrues against the party accepting, because he is a drawee, as much as if the bill had been drawn upon him alone. Where, however, the bill is drawn upon a firm, any member of the partnership, in his individual capacity, is quite as much a stranger to the same as a third person. He is only connected with the bill through his membership of the firm, which is drawee, and in virtue of such membership he has power to use the firm name in accepting it. If he accepts it in his. individual name he does not bind the firm, and there is no consideration for his act. It is the case of a bill drawn on one party and accepted by another.

The Court, in deciding the case below, after stating that “ if one of several parties to whom a bill is addressed, accepts the same, such acceptance will bind him,” adds in another part of the opinion, “ It can hardly be said that one of two or more partners, upon whom a bill is drawn, is so far a stranger to the bill that an acceptance will not bind him. If one of several persons between whom' no business relations exist, can bind himself, by accepting a bill drawn on all, it is not perceived why any one of several partners may not do the like.” We have endeavored to show the error of this position above. In the case of a bill drawn upon several individuals “ between whom no business relations exist,” each is a drawee in his invidual capacity, and competent as such to accept ; but in the case of a bill drawn upon a firm, the association and not the individual members thereof, is the drawee, and on acceptance by one member in his own name, is not an acceptance by the drawee.

The complaint is demurrable, and the demurrer should have been sustained.

Order overruling demurrer reversed.