Mayberry, Pollard & Co. v. Bainton & Bancroft

2 Del. 24

• Court: Superior Court of Delaware
• Decided: July 5, 1835
• Status: Published

Opinion

By the Court.

Each partner has the power to charge the firm in all transactions within the scope and in the course of their business. This results from their partnership relation and the necessities of trade; for it is but reasonable, that the confidence reposed in each other as partners, should be followed by mutual responsibilities for each other in all matters relating to their trade or business, and in which the public, when trading with them, rest on the common security of the firm. Thus one partner may bind the firm by drawing, accepting or indorsing bills or notes in the course of their business; for these are transactions common to almost every business or trade, and necessary to carry it on. But the guarantying the debts of others is not a necessary or common partnership transaction; it is altogether out of the course of the defendants business in this case, and must have been known to be so by the plaintiffs when they accepted from Bainton a guarantee on behalf of the firm. In a transaction out of the scope of their business, and known to be so by the plaintiffs, is it not more reasonable that the other members of a firm should be bound by the act of one partner beyond his authority, without their knowledge or consent, or that the person guaranteed should be bound.to see that the guarantee was known and assented to by all the partners who are to be bound by it? We apprehend the law to. be now settled, that one partner cannot charge the firm by his guarantee of the debt of a third person without the assent of the others; but this assent may be shown as well by subsequent ratification as by previous command, or may be inferred from the conduct of the party, previous transactions oí the same nature, or other circumstances tending to show a knowledge of, and acquiescence in, the transaction.

2d. As to the evidence of dissent, it is for the jury. It seems that Bainton and Bancroft refused to endorse Ross’ note; and there is some evidence of Bancroft’s telling Maberry that he would not guarantee ; but this conversation appears to have happened at a distance from their respective homes, and in the meantime Bainton forwarded to Pollard the guarantee in question.

J. A. Bayard for plaintiffs. Wales for defendants.

8d. As to the notice: supposing that the guarantee bound all the partners, what was its nature. It was not an original undertaking to pay the debt of Ross, but only to see that Ross paid. In an undertaking of this character, the guarantor is entitled to prompt information of the default of his principal, in order that he may secure himself by withholding funds or otherwise providing against loss. Notice, therefore, of the non-payment by Ross of this note at maturity, and of its protest, should have been given to the defendants, and the failure to give such notice would remove their liability. If, however, the jury are satisfied from the evidence that Ross was insolvent, such notice would not be necessary, for in such case it could not be of any advantage to the defendants.

The plaintiffs took a nonsuit