Camp v. Southern Banking & Trust Co. , 97 Ga. 582 ( 1896 )

Xumpkin, Justice.

The Southern Banking & Trust Company brought an notion against Hudgins, as drawer and indorser, and J. A. ■Clarke and H. P. Camp, partners under the firm name of Clarke & Camp, as acceptors, upon a draft dated June 5th, 1893, drawn by Hudgins, payable to his order and indorsed hy him to the plaintiff, and purporting to have been accepted by Clarke & Camp on June 6th, 1893.

The action was defended by Camp1, who alleged in his pleas that the firm of Clarke & Camp was dissolved Hay 22, 1893, and proper notice of the dissolution published. Also, that the draft upon which the action was brought had never been accepted by himself; that neither Clarke, nor any one else, was authorized to accept the same in the firm name; and that he (Camp) had never ratified the act of acceptance. At the conclusion of the evidence, the judge directed a verdict for the plaintiff. Camp moved for a new trial; and his motion being overruled, excepted. The facts of the case are about as follows:

It appears that while the firm was yet in existence, Hudgins had drawn numerous drafts upon it, payable to his order and duly accepted, most, if not all, of which he had discounted with the plaintiff at its bank. At the time the firm was dissolved, the plaintiff — certainly within the knowledge of Clarke-, and most probably that also of Camp —held a number of these drafts which had been previously drawn and accepted as stated. The draft involved in the* present case, though drawn after the dissolution of the-partnership, was in part renewal of a former one which it-had accepted. The acceptance upon the renewal draft was-executed by Clarke in the name of the partnership. This-was an unauthorized act on his part; but at the time it was-done, the bank itself had no actual knowledge of the dissolution. Before this acceptance was signed by Clarke, a messenger of the bank had presented to Camp for payment, a draft upon which the partnership was confessedly liable, and of which the draft now in controversy was, in part, a renewal. This seems to have occurred some time before the dissolution actually took place; but, nevertheless, Camp-informed the messenger that the firm had dissolved, and. directed him to take the paper to Clarke, who had assumed all its debts. After this, Camp heard no- more of the matter until the acceptance now sued on was presented to him. A newspaper published in the city of Atlanta, May 22d, 1893, contained a notice of the dissolution of the partnership, but it does not appear that the same was ever read or seen by any one notice to whom would be imputable to the-bank.

Creditors of a partnership are entitled to actual notice of' its dissolution. This doctrine is well settled, and was distinctly recognized in Askew v. Silman, 95 Ga. 678. (See remarks of Simmons, C. J., in this connection, on. pages 680--681, and authorities there cited.) It seems clear that this rule is applicable in the present case. At-the time of the dissolution of the firm of Clarke & Camp, it was actually indebted to- the plaintiff upon its own acceptances, and this fact was well known to the firm. We are at a loss to perceive why the plaintiff should not at that time have been regarded as a creditor and entitled to all its rights as such. So far, therefore, as it was concerned, mere publication in a newspaper of tbe notice of dissolution — of wbicb it had no knowledge, actual or constructive — would not be sufficient. In tbe absence of any notice of tbe dissolution, tbe bank bad tbe right to treat tbe partnership as still existing, and to assume that tbe act of either partner, within tbe scope of tbe partnership business, would be binding upon tbe firm. Certainly, it was justified in believing that Clarke could properly accept a new draft given partly in renewal of one for wbicb tbe partnership was confessedly liable.

Tbe only remaining question is: Did the statement made by Camp to tbe bank’s collecting messenger amount to notice to tbe bank itself of tbe fact of dissolution? "We think not. In tbe first place, it seems from Camp’s testimony that be stated to this messenger that tbe dissolution bad taken place before this event really happened. But without attaching special importance to this apparent incongruity, we will simply remark it is manifest that, in tbe very nature of things, this messenger’s agency was of a special and limited character.' ■ It cannot, with any sort of fairness, be asserted that be was a general agent of tbe bank. It affirmatively appeared that it was not within tbe scope of bis business or duty either to report tbe responses of persons who refused to pay papers presented, or to arrange for a renewal of papers in bis bands for collection. While Camp may not have been aware of tbe limited sphere within wbicb this agent was authorized to act, be certainly must have known that tbe collector was in no sense a general agent of tbe bank. Under these circumstances, could be rightly assume that this collector bad authority to receive for tbe bank notice of tbe fact of dissolution? Unless be could thus assume, then he was bound to inquire into tbe extent of tbe agent’s authority. Under tbe facts appearing, we think this duty devolved upon Camp, and that be acted at bis peril in assuming that what be told tbe collector would be actually communicated to tbe bank. It was not so communicated, and therefore Camp cannot be said to have complied with the legal obligation resting upon him to see to it that the bank was really informed of the fact that the dissolution had taken place. ¥e avail ourselves of this, our first opportunity to make a citation from the new edition of the American and English Encyclopaedia of Law, the first volume of which far exceeds in merit its predecessor, though the latter, at the time of its issue, was so well prepared and so thoroughly full and comprehensive that improvement seemed scarcely within the reach of human attainment. It is there said that “the principal is bound to the extent of the apparent authority he has conferred upon the agent, and not by the actual or express authority, where that differs from the apparent authority; and in either case, if the agent exceeds the authority conferred, his acts will not bind his principal.” And again: “Third parties dealing with an agent are put upon their guard by the very fact, and do so at their own risk. They cannot rely upon the agent’s assumption of authority, but are to be regarded as dealing with the power before them, and must, at their peril, observe that the act done by the agent is legally identical with the act authorized by the power.” See pages 986 and 987. In the notes referred to in the above text the rule is stated to be that: “It is the duty of all having transactions with an agent in his representative character to inquire into the extent of his authority;” citing Vanada v. Hopkins, 1 J. J. Marsh. (Ky.) 287, 19 Am. Dec. 92; Tidrick v. Rice, 13 Iowa, 214. “Especially is this the case with one dealing with an agent whose authority he knows to be special;” citing Michael v. Eley, 61 Hun (N. Y.), 180; Nestor v. Craig, 69 Hun (N. Y.), 543.

As no duty devolved upon the bank to make any effort to ascertain that the firm of Clarke & Camp had dissolved, and Camp utterly failed to take reasonable and proper steps to meet the obligation resting upon him of giving due notice of this fact, the rule above announced operates very justly in the present case. Judgmmt affirmed.