Sternburg v. Callanan & Ingham

14 Iowa 251
CourtSupreme Court of Iowa
DecidedDecember 10, 1862
StatusPublished
Cited by16 cases

This text of 14 Iowa 251 (Sternburg v. Callanan & Ingham) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sternburg v. Callanan & Ingham, 14 Iowa 251 (iowa 1862).

Opinion

Baldwin, C. J.

The pleadings and evidence plainly show that Stevens was acting merely as the agent of Stern-[255]*255burg in loaning his money, or rather, in making time entries for Mm with land warrants. There was no contract between Sternburg and Stevens to the effect that Stevens should borrow money and pay a usurious rate of interest therefor. The parties to whom the warrants were loaned, or for whom the land was entered, may have been parties to a usurious contract, and might have interposed this plea; but the defendant Stevens, who acted only as an agent, who had neither borrowed money of plaintiff, paid nor agreed to pay any use therefor, cannot maintain this defense.

To constitute the offense of usury, there must be an agreement that he who has the use of the money shall pay to the owner of it more than lawful interest; and none but privies or parties can take any advantage of this defense.

The Court admitted in evidence upon the trial a copy of a copy of a petition filed in the District Court of Polk County, in a cause wherein A. J. Stevens was plaintiff, and Callanan, Ingham, and others were defendants. This petition is certified to by the clerk as a true copy of a copy on file in his office, and that the original was lost. To the admission of this copy in evidence the defendants objected, and its admission is assigned as error. There are several objections made to the introduction of this petition, either of which was sufficient to have excluded it from the jury. It is not certified that the copy is a true copy of the original. It is not made to appear beyond question that the original was lost, or that it could not be obtained. It does not appear that there was any notice served upon Callanan and Ingham of its pendency. It was not an action commenced until such service was made. If it was introduced for the purpose of showing an admission of a valid indebtedness upon the part of Stevens to Sternburg, this was improper, as it was not the best evidence of that fact, as Stevens proposed to admit the amount as claimed to [256]*256be due from him to plaintiff.s It was an improper way of bringing before tbe jury the copies of exhibits attached to said petition.

The appellants objected to the introduction of other testimony tending to show an express promise upon the part of Ingham, acting for the firm, to pay to Sternburg the debt of Stevens, as such promise was not binding under the Statute of Frauds, unless made in writing.

The same questions are presented under the assignments of error relative to the ruling of the Court in giving and in refusing to give certain instruct]'ous to the jury; and' also the question is thus presented as to the liability of the defendants as incoming partners.

Did the Court properly instruct the jury as to the defendants’ liability as incoming partners ? The law governing the liability of incoming partners appears to be clearly and definitely settled. In Story on Partnership, § 152, the author says: “From what has already been said it is apparent that an incoming partner (that is, a new partner coming into an existing firm) will not be liable in respect to debts contracted by the firm previously to his entering it. But although -this is the clearly established doctrine, yet it does not follow that an incoming partner may not become liable for such debts, by expressly assuming them, upon a proper consideration, or otherwise dealing with the creditor in such a manner as to create an implied obligation and duty to pay the same in common with the old firm. The presumption, of law, indeed, is against any such liability, but the presumption, like many others,‘may be removed by due and satisfactory proofs of the contrary intention and agreement. Thus, for example, if the balance due from the old firm be with the consent of the creditor and all of the new firm,carried to the debit of the new firm, the latter deriving a benefit therefrom as a credit or deposit, it is very clear that the new firm will be bound therefor as their [257]*257own debt. Indeed it may be generally stated, that in all cases of this nature the primary consideration is, not so much to ascertain between what parties the original contract was actually made, as it is to ascertain whether there has subsequently been, with the consent of all parties, any change or extinguishment of that contract. When it is established by satisfactory evidence, that upon the accession of a new partner a new promise has been made by the entire new firm, in respect of the old debt, with consent of the old partners, as well as of the creditors, it will amount to a novation of the debt, and the new partner will be chargeable.”

Mr. Collyer says: “There are unquestionably circum- . stances that produce exceptions to the general rule. It has been held that payment of interest of the old debts, length of standing in the firm, knowledge of the state of the books accompanied with the benefit derived from contracts on which they are founded, will be evidence from which the jury may infer the assent of the incoming partner to debts contracted by the firm.”

But he says: “ it seems clear that in all cases of this nature the primary consideration for the jury is, between what parties was the contract actually made ? * * *

If no new promise be proved; if, for instance, the incoming partner was a dormant partner, and joined in no act to ratify the contract, he will not be concluded by it, for neither was he a party to it originally, nor does the mere act of joining the partnership amount to a ratification.” See Coll-yer on Part., §§ 520, 525.

Recognizing the principles as thus stated to be correct, let us consider how far they are to control in this case. It is not claimed by the plaintiff that the alleged express promise was made by any one except Ingham. That Ingham ever made this promise to Sternburg is strongly denied, and the evidence introduced tending to prove that it [258]*258was made, is very weak and unsatisfactory; and strong evidence was introduced by defendants to show that no such promise was made. Conceding, however, that it was made as is alleged, does this bind the defendants? Under the rule as above stated the new promise must be made by the entire new firm, in respect to the old debt, before it is binding. The promise of Ingham alone is not the promise of the entire new firm, nor binding unless he was expressly authorized by the other members of the firm to do so, or unless such promise was ratified by them. The articles of co-partnership expressly forbid the payment by the firm of the individual debts of its members. Nor was the assumption of the old debt of A. J. Stevens a transaction within the scope of the partnership business.

Again, there must be a novation of the debt before the new firm is liable. Before this can take place there must be a new promise made by the entire new firm, and upon a valid consideration therefor. The character of the old debt must be changed or absorbed by the new promise. This new promise must not only be complete, so that the remedy thereon is effectual, but the old debt must be released, or merged in the new one. It is not claimed that Callanan ever assented to the novation of this old debt by any express promise, or by any act ratifying the promise of Ingham.

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Bluebook (online)
14 Iowa 251, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sternburg-v-callanan-ingham-iowa-1862.