Campbell v. . Huffines

65 S.E. 1000, 151 N.C. 262, 1909 N.C. LEXIS 244

• Court: Supreme Court of North Carolina
• Decided: November 11, 1909
• Status: Published

Opinion

MANNING, J.

We think tbe judgment of tbe court below is sustainable by tbe application of a few well-settled principles. Tbe first headnote (which tbe opinion sustains) of Cotton v. Evans, 21 N. C., 284, declares: “A mercantile instrument, given in tbe partnership name, binds all tbe partners, unless tbe person who took it knew or bad reason to believe tbat tbe partner who made it was improperly u'sing bis authority for bis own benefit, to tbe prejudice, or in a way tbat might bo to the prejudice, of bis associates.” Again, it is declared in that ojfinion: “In such a case there is a loss to fall on one of two innocent persons; and tbe question is, which of them ought to bear it? Manifestly he who entrusted tbe power. It was susceptible of abuse, and be knew that when be conferred it. It is not, in point of form, exceeded; and if it has been employed for a different purpose than tbat for- which it was created, tbat is a risk that must have been seen and undertaken from the beginning.” ' This case has been, at this term, cited with approval in Powell v. Flowers, in which other cases are cited sustaining the same principle. The defendant signed the articles of partner-, ship; gave Iiarp, his copartner, a duplicate original; permitted him to keep it; Harp took it out of the iron safe in the place of business, showed it to plaintiff, and plaintiff, knowing the defendant’s signature, loaned the money on the faith of it. The date of the loan was within the time stipulated for the duration of the 'partnership. The defendant put it in the power of his associate, Harp, to mislead the plaintiff and to defraud himself. The question simply is, which should suffer the loss, the plaintiff or the defendant? It is well settled by many adjudications, here and elsewhere, that the party putting it within the apparent power of another to commit a fraud should suffer a loss, rather than a stranger who has innocently and in good faith acted upon this apparent power. Ellison v. Sexton, 105 N. C., 356. By the written contract the defendant was an actual partner, not simply an apparent partner. What the partner, Harp, did was strictly within his power, under the written agreement and within the time stipulated for the duration of the jpartnership. “Where a man holds himself out as a partner, or allows others to do so, he is properly estopped from denying the character he has assumed, and upon the faith of which creditors may be presumed to have acted.” 22 Am. & Eng. Enc., 55; Thompson v. Bank, 111 U. S., 529. The defendant could easily have seen that the duplicate original held by Harp was destroyed, and the protection of himself from liability would clearly seem to have demanded it. We have carefully examined the exceptions taken by the defendant at the trial, both in the taking of the evidence and to the charge of his Honor, and the authorities cited in the able brief of his attorney, and we find no error. The judgment is therefore

Affirmed.