Pace v. H. B. Claflin & Co.

8 Ky. Op. 706, 1876 Ky. LEXIS 214
CourtCourt of Appeals of Kentucky
DecidedMay 12, 1876
StatusPublished

This text of 8 Ky. Op. 706 (Pace v. H. B. Claflin & Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pace v. H. B. Claflin & Co., 8 Ky. Op. 706, 1876 Ky. LEXIS 214 (Ky. Ct. App. 1876).

Opinion

Opinion by

Judge Cofer :

These suits were brought upon promissory notes signed by R. E. Cross & Co., and payable to H. B. Claflin & Co. It was stated in the petitions that H. B. Claflin, E. E. Eames and E. W. Bankroft composed the plaintiff firm at the dates of the notes sued upon, and that R. E. Cross, R. H. Baker, O. C. Pace and W. F. Alexander, at said times composed the defendant firm.

Pace answered and denied that he was a member of the firm of R. E. Cross & Co. at the dates of the several notes, and denied that said notes, or any of them, were his acts and deeds. Pie further averred that he was formerly a member of said firm, but had withdrawn therefrom on a day anterior to the date of said notes, of which withdrawal and dissolution due notice was given in the Courier Journal, a daily newspaper published and extensively circulated in the city of Louisville, the place of business of said firm, so that at the time of the creation of the supposed indebtedness sued on this defendant was not a member of said firm of R. E. Cross & Co.; and of this plaintiffs had legal and sufficient notice.

Further answering, he said that the plaintiffs and others, creditors of R. E. Cross & Co., had compromised, compounded, and settled with R. E. Cross, and had agreed to release him from further liability on account of the notes sued upon, so that the said Cross was no longer bound for said indebtedness or any part of it, whereby he, Pace, if ever liable therefor, was released. In his answer in one of the cases, Pace averred that he did not know, and had not knowledge or information sufficient to form a belief whether the persons named [708]*708as plaintiffs were at the times stated, partners under the firm name of H. B. Claflin & Co.

The plaintiffs afterwards amended both petitions, and alleged that at the dates when the notes sued on were executed the firm of H. B. Claflin & Co. consisted of H. B. Claflin, E. E. Eames, H. J. Fairchild, Dexter N. Force, Daniel Robinson, John Claflin and W. S. Dunn. By consent the allegations of the amended petitions were to be “taken as specifically controverted upon the record without any answer thereto being filed.”

As respects the plea of non est factum, the evidence showed that in the spring of 1873 Pace was a member of the firm of R. E. Cross & Co., doing business in Louisville; that between that time and the date of the dissolution of the firm of R. E. Cross & Co., and the withdrawal of Pace from said firm, the firm repeatedly bought goods of H. B. Claflin & Co., wholesale merchants in the city of New York, for portions of which the firm of R. E. Cross & Co. gave notes from time to time; that the goods for which the notes sued on were given were all, save one, small bills purchased prior to May 24, 1874; that early in that year the firm of R. E. Cross & Co. was dissolved, but that Pace continued in the store as a salesman until May 24 when notice of the dissolution was published in the daily Courier Journal, a newspaper published in Louisville; but there was no evidence that the plaintiffs had received notice, or had any knowledge of the dissolution until after the 10th of August, 1874. The notes all bear date in July, 1874, and were probably not delivered to the payees until August 10 of that year. They were signed with the firm name by R. E. Cross, and there was no evidence that any special authority had been given him by Pace to execute the notes.

The firm of R. E. Cross & Co. having been dissolved before the notes were executed, it is earnestly argued by counsel for Pace that R. E. Cross had no authority as partner to execute the notes in the firm name, that as lie is not shown to have had any special authority, the plea of non est factum is not overcome by the evidence, and that the court erred in not so adjudging. “The doctrine is well settled that after a partnership had been dissolved, and legal notice of the dissolution has been given, one partner cannot bind his co-partners by the execution of a note, or any other instrument of writing which creates a new cause of action, even for the renewal of a partnership note or the settlement or liquidation of a partnership account.” Merrit v. Pollys, et al., 16 B. Mon. 355.

These notes were certainty executed by one partner after the dis[709]*709solution of tire partnership and without any new authority to do so, or indeed any authority at all, unless he had such authority because of the late partnership. But this is not enough to avoid the notes on the plea of non est factum. To do this there must have been previous legal notice of the dissolution. Pace admitted in his answers that he had been a member of the firm, but sought to avoid liability on notes executed by one of the partners in the firm name on the ground that the partnership had been dissolved before the notes were executed; and in order to do so he did not stop when he had averred that the partnership was dissolved before the execution of the notes, but he went on and averred in addition that they were executed after the “plaintiffs had legal and sufficient notice” of the dissolution. Without this latter averment the answer would not have been sufficient.

In regard to dealings with them by the firm of R. ÍE. Cross & Co., while Pace was a member of that firm, what sort of notice would, as to the plaintiffs, be legal and sufficient to avoid the notes executed after the dissolution? Upon this subject the authorities are clear and decisive.

The rule is thus stated in Story on Partnerships, Sec. 161: “Public notice given in some such reasonable way (by publication in local newspapers), will not be deemed actual and express notice; but it will be good presumptive evidence, and sufficient for a jury to conclude all persons, who have not had previous dealings with the firm. As to persons who have been previously in the habit of dealing with the firm, it is requisite that actual notice should be brought home to the creditor, or at least, that the credit should be given under circumstances, from which actual notice may be inferred.” See also Kennedy v. Bohannon, 11 B. Mon. 118; Merritt v. Polly, et al., 16 B. Mon. 355; Montague v. J. & C. Reakert, 6 Bush 393.

The plaintiffs were entitled to actual notice of the dissolution. The only notice given prior to the execution and delivery of the notes was by a newspaper publication not shown to have come to their knowledge. Such publication, we have seen, is not actual notice. Wherefore the plaintiffs did not have “legal and sufficient notice,” and Cross had authority to bind Pace by the execution of the notes in the firm name. Lindley on Partnerships, 294.

The evidence wholly failed to sustain the allegation in the answers in respect to the compromise and compounding with Cross. No agreement to release Cross is proved. The plaintiffs were not present at the time when it is attempted to prove that the composition was [710]*710made. They were represented by attorneys, but the attorneys made no agreement to release Cross; and if they had done so, no authority from their clients to so agree had been shown; and it is clear that such authority is not incident to the ordinary employment of attorneys at law.

It is next insisted that the allegations in the petitions that the persons named therein as plaintiffs composed the firm of H. B. Claflin & Co. at the time the notes were executed, having been specifically denied, were not proved, and that the actions should have been dismissed on that ground.

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Related

Vanbuskirk v. Levy
60 Ky. 133 (Court of Appeals of Kentucky, 1860)
Kennedy v. Bohannon
50 Ky. 118 (Court of Appeals of Kentucky, 1850)
Merrit v. Pollys
55 Ky. 355 (Court of Appeals of Kentucky, 1855)
Montague v. Reakert
69 Ky. 393 (Court of Appeals of Kentucky, 1869)

Cite This Page — Counsel Stack

Bluebook (online)
8 Ky. Op. 706, 1876 Ky. LEXIS 214, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pace-v-h-b-claflin-co-kyctapp-1876.