Summary
In City Bank of Brooklyn v. McChesney, 20 N.Y. 240, the bank having had previous knowledge of the existence of the firm of Dearborn Co., of which the defendant, McChesney, was a member, discounted a note made in the firm name, but after the partnership was in fact dissolved, without knowledge or information on the part of the bank; it was held, there being no publication of dissolution, that the retiring partner was liable.
Summary of this case from LOVEJOY v. SPAFFORD ET ALOpinion
September Term, 1859
John Graham, for the appellants.
John N. Taylor, for the respondent.
The defendants' first point is that the note in suit should not have been received in evidence because a witness had testified that one of the three persons sued as makers had said in the presence of another of the alleged makers to one of the indorsers, that he, the speaker, had never signed the words " Co." to the note, and that the indorser addressed did not deny his statement. It had previously been shown that the note had been discounted by the plaintiffs in the ordinary course of their business, and was in their hands as holders at the time of this conversation. Under these circumstances it was not in the power of the parties to the conversation by any statements or omissions to make evidence against the plaintiffs.
The next point presented is that an error was committed in rejecting a question put to Dwinell, a clerk of the indorsers, whether he knew any alterations to have been made in the entries of notes in the bill-book of Ketchum Co., by the addition of " Co." to such entries. The rejection was clearly proper, as the plaintiffs were in no way parties to what was done in the books of Ketchum Co., and could not therefore be affected by such entries.
The next question relates to the exclusion of Alexander Dearborn as a witness on behalf of McChesney, sued as a partner with him, to prove that when he parted with the note the words " Co." were not upon it. That proof if given would have operated to establish a defence equally available to the witness and to the party on whose behalf it was offered. It was not a case of personal defence to one party, but a general defence to the makers that a fraudulent alteration in the note had taken place. It falls within the principle of Dean v. Thornton (3 Kern., 266), and the ruling was correct.
The only other question relates to the effect of the dissolution of the partnership, which appears to have occurred on the 17th October, 1853, while the note bears date December 20th, in the same year. The mere fact that the plaintiffs had discounted several notes bearing the names of the firm does not constitute the firm dealers with the plaintiffs in such a sense as to require actual notice of the dissolution to be brought home to them in order to exonerate the retiring partner from liability. This was substantially held in Vernon v. Manhattan Company (22 Wend., 183), where the liability of the dissolved firm was sustained on the ground that a series of notes had been discounted by the bank for the accommodation of the firm; which the court thought involved a knowledge on their part that the bank was dealing on their firm credit, and therefore entitled the bank to actual notice of dissolution. In the case before us there was no notice of dissolution given in the ordinary way through the newspapers, and no notice in fact was brought home to the plaintiffs. The grounds on which publication of a dissolution of a partnership in a newspaper has always been deemed requisite to protect the retiring partner, in the absence of other notice, are well stated in the opinion of Senator VERPLANCK in the case cited above.
No error has therefore been committed in the judgment of the court, and it must be affirmed unless a mis-trial has taken place as suggested by the defendants' counsel, and he has been or may have been prejudiced thereby. In the cases of Cobb v. Cornish (16 N.Y., 602), and Gilbert v. Beach ( id., 606), the verdict was for one party and the judgment for the other. This could only regularly happen in cases situated as those were, on verdicts subject to the opinion of the court under the Code; otherwise the party obtaining the verdict in the first instance might be deprived of his exceptions and be without remedy. This case is not so situated; the defendants were beaten at the trial and also at the general term, and they have their exceptions here. The language of the case is not entirely clear, but looking at the situation of the cause and at what was really done rather than to the words used to describe it, a verdict was directed for the plaintiffs subject to exceptions to be heard at general term in the first instance. The defendants have had all their rights in every stage of the cause. Had judgment been given the other way at general term, the case would then have been like Cobb v. Cornish and Gilbert v. Beach, for it would then have been proceeded in as in cases of verdicts subject to the opinion of the court, and could not have been sustained.
SELDEN, J., was absent; all the other judges concurring,
Judgment affirmed.