Cottam v. Smith

The plaintiff sued George H. Smith, Simeon Belden, J. W. Hillman, Edward Gay and James B. Eudt, severally and in solido, as commercial partners doing business under the style and name of G. H. Smith & Co., on a promissory note for $1000, with interest, cost, etc. Judgment was rendered in favor of the plaintiff and the defendants appealed. The answer was a general denial. One of the partners, Simeon Belden, subsequently filed a separate answer. In this answer it is alleged that the promissory note sued on was indorsed G. H. Smith & Co. without authority from the commercial firm of G. H. Smith & Coq that said note was neither given or indorsed by authority of said company, nor in connexion in any manner with the business of said commercial firm. The note, it seems, was drawn by *129James B. Eudt to the order of G-. T. Raoul and by him indorsed, and further indorsed by Gr. H. Smith & Co. After the note was indorsed, Messrs. Belden and Hillman became members of the firm, but the new firm, by notarial act, assumed the obligations of the old one. A bill of exceptions was taken to the admission in evidence of this notarial act, on the ground that the plaintiff had not alleged in his pleadings the 'assumpsit of the debts of the old firm by the new firm. We think the evidence was properly admitted. The defendants by pleading a general denial put at issue the question of their liability to pay the note, and the plaintiff -had the right by proper evidence to show that they were liable.

By the commercial law every member of a commercial firm can bind the others bv drawing or indorsing commercial paper. If by an agreement inter se a different rule were established by commercial partners it would be without effect against third parties, unless it were shown that such third party had knowledge of that agreement. In this case it is not alleged that any such agreement existed, and if there had, there is no proof that the plaintiff knew anything of it.

We think the decree .of the court a qua correct.

Judgment affirmed.

Rehearing refused.