Le Roy, Bayard & Co. v. Johnson
27 U.S. 186

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U.S. Supreme Court

Le Roy, Bayard & Co. v. Johnson, 27 U.S. 2 Pet. 186 186 (1829)

Le Roy, Bayard & Co. v. Johnson

27 U.S. (2 Pet.) 186

Syllabus

In an action originally commenced against A. and B. as partners upon an alleged engagement by the firm, and where A., who was not found or served with process, was offered as a witness in favor of B., having been released by B., the Court said

"It is to be premised that the only ground upon which the objection can be rested is the supposed interest of the witness in the event of the cause, since, the suit having regularly abated as to him by the return that he was 'no inhabitant,' he was no more a party to it than he would have 'been had his name been altogether omitted in the declaration.' As to the objection upon the score of interest, it is sufficient to remark that it was manifestly hostile to the party in whose favor he testified and who offered it in evidence, since the plaintiffs' recovery against the defendant and satisfaction from him would be a bar to their action against the witness, and the release of A. protected him against any action which A. might bring against him for contribution or otherwise."

It is well settled that if a bill of exchange be drawn by one partner in the name of the firm, or if a bill drawn on the firm by their usual name and style be accepted by one of the partners, all the partnership is bound. It results necessarily from the nature of the association and the objects for which it is constituted that each partner should possess the power to bind the whole when acting in the name by which the partnership is known, although the consent of the other partners to the particular contract should not be obtained or should be withheld.

Third persons are not bound to inquire whether the partner with whom they are contracting is acting on the partnership account or for his individual advantage. The interest of the partner in the joint stock of the concern, and his consequent authority to use the partnership name raises a presumption that the contract was made for joint account, which is sufficient to bind the firm unless to the contrary be shown, and that the person with whom the partner deals had notice or reason to believe that the former was acting on his separate account.

Where in the articles of partnership no name of the firm was mentioned as agreed upon, and the concern went into operation under the articles, the books being kept and the bills and accounts relating to their transactions being made out at their warehouse in the name of "Hoffman & Johnson," it cannot be questioned but that a name thus assumed, recognized, and publicly used became the legitimate name and style of the firm, not less so than if it had been adopted by the articles of partnership.

Where a bill of exchange was drawn by A. after the dissolution of his partnership with B., and the proceeds of the bill went to pay and did pay the partnership debts of A. & B., which A. on the dissolution of the firm had assumed to pay, the holder of the bill after its dishonor can have no claim on B. in consequence of the particular appropriation of the proceeds of the bill. It is admitted, that if one of the partners contracted with a third person, in the name

Page 27 U. S. 187

of the firm after the dissolution, but that tact not made public or known by such third person, the law considers the contract as being made with the firm and on its credit. But if the partner deals with another in his individual name and upon his sole responsibility, without even an allusion to the partnership, it was unimportant to that other to know that the partnership was dissolved, since he was dealing not with the firm and upon its credit, but with the individual with whom he was acting, upon his own credit.

An action of debt upon a bill of exchange for

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