City National Bank v. King

Mr. Justice Bigelow

delivered the opinion of the court.

Numerous questions of both law and fact, have been ably discussed by counsel on both sides of this case, but we think there is only one question necessary to be disposed of, with the record in its present condition, and that is, did the court err in instructing the jury to find for the defendants?

The evidence tends to show, that on January 20,1896, the firm of M. King & Co. owed the firm of King, Williamson & Co. a balance of $1,324.27, of an account carried on the books of appellees, ever since that firm was formed, and that appellees had notice of that fact. It is true that appellees contend that this account was .fraudulent, but whether it was or not, was a question of fact, to be determined only by a jury, and we express no opinion as to where the right lies. But if a jury should find that this account was just, in fact, then the draft drawn by King, in the name of King, Williamson & Co., against M. King & Co., and its acceptance by King in the name of W. King & Co., became an instrument drawn and accepted for a consideration, to wit, the payment of the above named balance of account. The fact that King was a member of both firms, while a circumstance to awaken the watchfulness of both court and jury, by no means shows that the contract of acceptance-was invalid for want of delivery, for we see nothing invalid in the facts, if facts they be, that King, as partner of King, Williamson & Co., drew the draft, and that as a partner of M. King & Go. he accepted it, and that again as partner of King, Williamson & Co., he held it as an obligation belonging and delivered to King, Williamson & Co. It is a mere' illustration of the fact that in transactions, the same person may act as agent for both parties, and bind them by his acts. The firm of King, Williamson & Go. is not shown by this record to have been dissolved; it is merely shown to have ceased doing a particular business, in a particular place, but in what way or manner, or for what length of time, is not fully disclosed by the evidence. So far as shown, King’s active agency in this firm has not been extinguished. If the acceptance was made before the dissolution of M. King & Co., so that the accepted draft was in the hands of King as a valid contract—the property of King, Williamson & Co.—then the question as to whether the appellant was a “ former dealer ” of M. King & Go. or not, or whether appellant did in fact have actual notice of the dissolution of the firm of M. King & Co. when it discounted the draft, can make no difference in this case, because King, Williamson & Co. could have sued M. King and Co. and recovered under such facts, and clearly, King, Williamson & Co. could negotiate and sell the draft to appellant at any time, and appellant could stand on King, Williamson & Co’s, title to it, and would have no need to appeal to the laws and usages of commercial paper, for protection. If, however, the draft was made after M. King & Co. had dissolved, then, if appellant was a “ former dealer ” of the firm of M. King & Co., it must have had actual notice of such dissolution, at the time it discounted the draft. See Bates on Partnership, Secs. 606-607 et seq.

Looking again at what the evidence tends to show, it appears that King, Williamson & Co. owed appellant $2,300, of which sum $1,300 was paid by checks of that amount, drawn by King, on the account of M. King & Co., at the Alexander County National Bank. The balance in two $500 notes, was renewed from time to time by King, acting for King, Williamson & Co., and King likewise indorsed several times, the firm name of M. King & Co. upon their renewal notes, as intended guarantors of the notes. Appellees claimed that the indorsements by King were without their authority, but the testimony of Miss Kennedy, the cashier of M. King & Co., and the account of King, Williamson & Co. tends to show that M. King & Co. bought, not only the goods of King, Williamson & Co., but also the outstanding accounts of that firm, and that claims against the old firm were paid by M. King & Co., as evidenced by charges in the account. From this evidence, a jury might well be warranted in finding that the new firm took the old firm’s business as it stood; taking its stock of goods and accounts, and agreeing to pay its debts. If such were the actual facts, then King was certainly authorized to indorse the name of M. King & Co. as guarantors of King, Williamson & Co’s, notes to appellant. He could have taken them up and given new notes in the name of M. King & Co., because a partner of a trading partnership is authorized to give the firm’s notes, and ,the partner certainly would have the same authority to indorse the firm’s name on commercial paper, when that paper was, in substance, his firm’s own debt. See Bates on Partnership, Secs. 341-351. We think these questions of fact should have been submitted to a jury, and if the jury had found that the new firm made this $2,300 debt its own, then King’s several successive indorsements of the old notes, ought, in law, to have constituted the appellant, a “ former dealer ” with appellees, whether the other partners knew about the fact of the indorsement or not, for they were bound to know that King had such authority in law; and under such circumstances, appellant was entitled to actual notice of dissolution of the partnership, at the time it discounted the draft. The cashier is shown to have been a subscriber to the papers in which notices of dissolution were published, on January 20th and 21st; he denies, however, having read them, and he denies that he had information from any source, as to the dissolution of M. King & Co. Both questions, whether appellant was a “ former dealer ” and whether there was actual notice, should, under the evidence as it stands, have been submitted to the jury. See Bates on Partnership, Secs. 616-617.

We think the court erred in taking the case from the jury because there was evidence tending to show that the account covered by the draft was valid; that the draft sued on, was in fact made before dissolution; that if made after dissolution, then there was evidence tending to show that appellant was a “ former dealer ” with the firm of M. King & Co. and therefore entitled to actual notice of the dissolution of the partnership, a fact to be likewise passed upon by the jury.

Upon another trial, the questions raised by appellant’s counsel as to the notice of defendant’s defense, and defendant’s right to file additional pleas after the trial had begun, as well as others argued, wij.1, doubtless, be disposed of by the Circuit Court in a manner that will be satisfactory to both sides.

Because the court erred in instructing the jury to find a verdict for the defendant, the judgment is reversed and the cause remanded.