Gansevoort v. Kennnedy & McClagan

30 Barb. 279

• Court: New York Supreme Court
• Decided: December 5, 1859
• Status: Published

Opinion

By the Court, Johnson, J.

The learned judge was clearly in error, in his charge to the jury, and also in his ruling on the motion for a nonsuit. The proposition in both cases is, that if the defendant Kennedy promised Dales, the retiring partner, after he had left the copartnership, to pay him what he had put in, it was binding upon both defendants, although one of them had no knowledge of any such promise, and never, in any manner, assented to it. This cannot be maintained upon any principle known to the law of partnerships. Dales was an equal partner, and of course was to share in all losses, as well as profits. As the partnership was not to continue for any definite length of time, he had the right to withdraw, and thus dissolve the partnership, at any time he chose. At the time of such withdrawal and dissolution, his rights would be fixed by law. He would be liable to contribute his share to all losses, and could not take out what he had contributed to the partnership funds, until after the account of profits and losses had been adjusted and settled, and all the debts of the copartnership had been fully paid and satisfied, or provided for, by agreement between all the partners. This each partner would have the right to insist upon, and the agreement of two of the partners to the contrary could not possibly bind a third, who was not a party to the agreement. The agreement might, perhaps, be binding upon the parties to it, but the partner not consulted, and who did .not become a party to the arrangement, might still insist upon his legal rights, under the partnership agreement. It is quite clear that the agreement of two partners cannot affect the rights of a third, in- respect to the partnership agreement, without the assent of the latter. There is nothing to show what the state of the partnership accounts was, at the time of the withdrawal of Dales. It does not appear-whether the concern had sustained losses, or accumulated profits, nor whether the property on hand, at a fair valuation, was worth what it had cost. The case seems to have turned wholly upon the right of two partners to bind a third by an agreement for the dissolution of the partnership, and repayment of the funds advanced by one, to which such third partner was not a party. The fact that the promise was made after Dales had withdrawn could not, obviously, affect the principle. Kennedy could not then affect the fixed legal-rights existing between Dales and Mrs. McOlagan, any more than he could before. He could not deprive her of a right to a settlement of the affairs of the partnership, by his agreement. The promise was in no respect binding upon her, unless made with her knowledge and assent; and the recovery against both defendants is therefore erroneous.

[Monroe General Term, December 5, 1859.

The order granting a new trial should therefore be affirmed.

T. R. Strong, Smith and Johnson, Justices.]