Juliand v. . Watson

Rapallo, J.

We concur with the Supreme Court in the opinion that William Watson was a general partner with his co-defendants in the business of banking, under the name of the Unadilla Bank. By being interested in the securities pledged by the bank, for its circulating notes, and by signing the certificate prescribed by section 6 of the act of 1854 (chap. 242), he must be deemed to have consented to assume the responsibilities of a general partner, in respect to third persons. That section declares that such certificate shall be evidence in all courts and places that the person signing and acknowledging the same is a general partner with the original banker in the business of banking, and as such is liable with him individually for all debts and obligations created by him in such business. The party signing such certificate certainly makes himself a ostensible partner, if. not a partner in fact. The certificate signed by the defendant in this case, contained an acknowledgment that he was interested in the circulating notes and in the benefits and advantages of circulating the same; and we think that the intent of the act was to impose'on every person so certifying the liabilities of a general partner.

The continuation of the business of the bank, after the death . ot the other William Watson, with the securities in which the defendant was interested, is admitted by the answer and found by the referee, and for that reason the partnership must be deemed to have been continued by the survivors. Either of them might have treated the partnership as dissolved by the death of one of its members, and insisted upon its affairs being wound up. But if they chose to continue the business, they were liable as copartners for their subsequent transactions.

The admission in evidence of the quarterly reports signed by A. B. Watson and G. J. Hayes, even if erroneous, was not material, as upon the other evidence in the case, in connection with the pleadings, the referee would have been obliged to find that the partnership continued.

We are also of opinion that the court below was right in its conclusion that the payments made to Mrs. Juliand, and to her executors, did not extinguish the liability of the bank for the money actually deposited, although we arrive at that result by a somewhat different process.

The credit to Mrs. Juliand in her pass-book was. of an entire sum of about $6,000, the whole of which was apparently an indebtedness of the Unadilla Bank to her.

The referee has decided that in reality only $947.48 of this sum was a debt of the bank, or in other words, of Wm. Watson, A. B. Watson and C. J. Hayes as copartners, and that the residue was the private debt of A. B. Watson and 0. J. Hayes.

Payments rvere made generally on the amount contained in the pass-book, to Mrs. Juliand in her lifetime, and to her executors after her death, amounting in the aggregate to $2,198.

But the referee has not found that any of these payments were made by the partnership or the bank or out of its funds or by A. B. Watson, as banker. On the contrary, the finding is that they were made by A. B. Watson and O. J. Hayes, or one of them. The payments were entered in the pass-book, and in the books of the bank, against Mrs. Juliand’s credit therein. But in that credit, the money due her from A. B. Watson and C. J. Hayes, as individuals, was included.

If these payments had been made by the bank, in the course of its banking business, and out of its funds, they would have extinguished the debt due from the bank, for which the appellant, as a partner in the banking business, was liable; and they could not be applied to the private debt of the individual partners. But if they were made by A. B. Watson and C. J. Hayes, or either of them individually, or out of their individual funds, they reduced their individual debt, and did not affect the indebtedness of the partnership or the bank for the $947.48 actually deposited.

The question is not one of law as to the equitable rule for the application of payments in the case of several debts of the same debtor, but one of fact. The debtors were different, and the question is by whom were the payments made, by the bank or partnership or by the individual debtors ? If by the latter, the partnership is not entitled to the benefit of them. If by the former, the individual debtors are not entitled to the credit. The referee has found simply that the payments were made by A. B. Watson and C. J. Hayes, or one of them, and he has given the credit to them on their individual debt. In the absence of any controlling evidence on the point, the general rule that the burden is upon the appellant to show that the judgment is erroneous, and that when an intendment can be made, it must be made in support of the judgment, requires us to assume that the referee found that the payments were made by Watson and Hayes, individually, and not on behalf of the bank or out of its funds. The liability of the defendant having been established, the burden of discharging himself by proof of payment rested upon him, and there is no finding, or controlling evidence establishing that the referee should have found that such payment was made.

The judgment should be affirmed with costs.

All the judges concurring, except Peckham, J., who did not sit.

Judgment affirmed.