Stoddard Manufacturing Co. v. Krause
Stoddard Manufacturing Co. v. Krause
Opinion of the Court
This cause was brought to this court on error from the district court of Platte county.
The Stoddard Manufacturing Company, organized as a corporation under the laws of the state of Ohio, and authorized to do business in this state, complains that Gus. R. Krause, Henry Lubker, and W. J. Welch, a copartnership formed and doing business in this state, under the firm name of Krause, Lubker & Welch, on June 24, 1886, bought of the company certain goods, wares, and merchandise, consisting of agricultural implements, which were delivered to the firm, in part payment for which that firm endorsed and transferred to the company a certain promissory note as follows:
“$100. No..........
“Columbus, Neb., October 1, 1886.
“On or before the first day of July, 1887, for value received, I or we promise to pay to Krause, Lubker & Welch, or order, one hundred dollars at Columbus State Bank, with interest from date until paid at the rate of ten per cent per annum.
“(Signed) G. R. Krause.
Indorsed: “ Pay to the order of the Stoddard Mf’g Co., protest waived. (Signed) Krause, Lubker & Welch,”'
“$26. Columbus, Neb., August 24, 1886.
“On or before the 1st day of June, 1887, for value received, in one hay rake, I, we, or either of us promise to pay the Stoddard Manufacturing Company, Dayton, Ohio, or order, twenty-six dollars at the Columbus State Bank, with interest at the rate of ten per cent per annum from date until paid. (Signed) Vm. T. Pjrice.”
Indorsed: “For value received I or we hereby guarantee the payment of the within note at maturity, or at any time thereafter, or any renewal of the same, and hereby waive protest, demand, and notice of non-payment thereof. (Signed) Krause, Lubker & Welch;” which was not paid by drawer or guarantor, by reason of which the company demand judgment against the firm for $126, with interest at ten per cent on $100 from October 1, 1886, and at the same rate on $26 from August 24, 1886, and costs of suit.
The separate answers of defendants, Lubker and Welch denied each and every allegation of the plaintiff except that it is a duly, authorized corporation.
There was a trial to a jury with a finding for the defendants as to the first note of $100, and for the plaintiff on the second note of $26, with verdict for plaintiff of $30.50.
The plaintiff’s motion for a new trial was overruled, judgment entered on the verdict, and exceptions taken.
The plaintiff in error assigns the following causes:
1. The verdict is contrary to law.
2. The verdict is not sustained by the evidence.
3. The court erre.l in giving the instruction to the jury.
It appears from the evidence that the defendants, Krause, Lubker & Welch, were general partners engaged, in the sale of agricultural implements at Columbus, in this state,
The court instructed the jury as follows:
“ In this case the answering defendants, Lubker & Welch, admit their liability for the amount of the note of W. T. Price; you will therefore find for the plaintiff to the amount of said note. The law and the facts are with the defendants so far as the note signed by G. R. Krause is concerned, and you will find for the defendants as to that note.”
The plaintiff presented the following instruction, which was refused:
“The court instructs the jury that if they find from the evidence that the goods in controversy were sold and delivered to the defendants and the notes in suit were transferred to the plaintiffs before they were informed of the dissolution of the firm of Krause, Lubker & Welch, the defendants are liable.”
While as above stated it does not appear from the bill of exceptions whether after the dissolution of the firm the business was continued by any or either of the partners, or whether any provision was made for winding up or settling the partnership business, yet there is a hint in the
Q,. Take this $26.00 note marked Exhibit “B.” Mr. Lubber, who was the owner and in possession of that note at the time of the dissolution of your firm?
A. Why the firm of Krause, Lubker & Welch held it in trust for the Stoddard Manufacturing Company till we dissolved and then turned it over to Mr. Krause.
Q,. Who endorsed that note?
A. I don’t know; it looks like Mr. Krause.
Q,. Was that endorsed while the partnership was in existence ?
A. No, sir.
Q,. Did your firm ever endorse that note and transfer it to anybody?
A. No, sir.
The case of Lloyd v. Thomas; 79 Pa. St., 68, is a case precisely in point with the case at bar, if Krause was either expressly or impliedly made the liquidating partner upon the dissolution of the firm. I copy the syllabus:
“A firm dissolved in May, giving notice by publication and authorizing one to use the firm name as liquidating partner. In August, without the knowledge of his fellows, he drew notes payable to the firm, endorsed them with the firm name, had them discounted by bankers with whom the firm had never had dealings; the proceeds of the notes passed to the individual credit of the partner making them; there was evidence that the proceeds were applied to the firm debts. Held, That if the notes were bona fide for liquidation and the proceeds applied to payment of firm debts, the other partners would be liable.”
In his late and valuable work on the “Principles of Partnership” Professor Parsons thus states the rule: “If no liquidating partner is appointed, any partner who continues the business can bind his copartners for a liquidation.” (Principles of Partnership, sec. 185.)
In the case at bar, although, as above stated, there was an attempt to prove the publication of a notice of the dissolution of the partnership of defendants, yet no evidence of such publication was received or is to be found in the record. It has been often held that where a partnership relation has existed between two or more persons and one or more of them seeks to defend against an obligation incurred in the partnership name by one or more of the partners who continued the business, on the ground that the partnership had been dissolved, they must prove at least constructive notice of such dissolution. (See Southern v. Grim, 67 Ill., 106; Speer v. Bishop, 24 O. S., 598; Johnson v. Totten, 3 Cal., 343; Williams v. Bowers, 15 Id., 321, and Woodruff v. King, 47 Wis., 261.)
But as there must be a new trial it is deemed not inappropriate to say that the mere publication of a notice of dissolution in a local newspaper at the residence of defendants would probably not be deemed binding upon the plaintiff, a resident of a distant state, with whom defendants had. long had important dealings and business relations, but that actual notice should be brought home to him.
Reversed and remanded.
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