Walker v. Wait

The opinion of the court was delivered by

Barrett, J.

The association is not a corporation, but is a voluntary association for the purpose designated. It was formed for the purpose of becoming the owner of the described water power, and of putting it into condition for use, by doing the things specified ; and the associates were to have individual interest respectively in the property, and the income of it, in the proportion of the contribution of each towards the sum required to purchase the property, and to put it in the proposed condition. By the nature of the association, the relation of the persons constituting it to each other, and to the outside world, was that of partners. The paper of organization and the by-laws made provision, as to modes and agencies, by which the business was to be done. In an ordinary partnership, unless special provision is made in that behalf, each partner may act authentically in th.e business of the company, and bind the company thereby. In the present case the associates agreed in what way the business should be done, viz., by certain persons to be selected as provided, and designated by official names. The persons called directors were to do the business as and for the company, instead of having each member do or help do it. In certain respects they were to be helped by some one called agent, clerk, and treasurer. He was to be subordinate to the directors, not substituting them in the conducting of the business that required judgment, discretion, and decision, but acting rather ministerially, facilitating the carrying into effect of what had been determined by the directors to have done. He was the manual keeper of the funds. He was to pay out the funds; but was not to negotiate the transactions resulting in such payment. He did the pen-and-ink work of making records and accounts, and of drawing papers, instead of these things being done by the directors personally, — not in matters negotiated and transacted by himself, but in matters negotiated and transacted by the directors alone, unless in special respects he may have had authority to do some things as the agent of the association. In this case the company voted to borrow $500 for use in the business in hand. It was for the directors to negotiate the loan. They did so for $300 of it, of Stowell, one of the directors. That was doing what the company had authorized. It was lawful and proper. It was of no concern to the company of whom the money should be procured, provided no prejudice should result on the score of the terms of the loan. And no such prejudice was caused. The loan was to be evidenced in some proper way, according to the contract and the usages of business. The contract was for a loan on six per cent, annual interest, and payable on demand. The note was drawn accordingly — a promise of the association to pay according to the contract, and was signed by the person holding the office of agent, clerk, and treasurer, with the official designation of'treasurer appended to his name. It was his office and business to use the pen for that purpose, as the pen of the company, instead of having each of the directors, or each member of the company sign his name to the instrument. This was conformable to, and was acting out, the mode adopted by the company for the doing of the business of the company. It was creating, as by the hand of the company, the instrument and evidence of the contract of the company, made by the directors. The drawing and signing of the note, as was done in this case, did not involve any function beyond that of the clerkship and agency with which Mr. Albee was invested.

That instrument, in its form and manner of execution, differs from the instruments in the cases where they are held to be the promise or covenant of the person signing with his name, followed by some official suffix. In those cases the instruments purport to be the promise or covenant of. the person by whom signed. In this case the instrument is expressly the promise of the company; and as before expressed, the function of Mr. Albee was merely to authenticate it by a manual act in behalf of the company, of the same effect in law as would have been the signing of it by all the members of the company.

The borrowing of the money having been authorized by the company, and the note having been given for it, the same as if it had been borrowed of any outside person, the association, as such, became the debtor of Stowell, in the same sense as it would have become debtor to anybody outside by such transaction. A partnership, or joint stock company, is just as distinct and palpable an entity in the idea of the law, as distinguished from the individuals composing it, as is a corporation; and can contract as an individualized and unified party, with an individual person who is a member thereof, as effectually as a corporation can contract with one of its stockholders. The obligation and the liability, inter partes, are the same in the one case as the other. The only practical difference is a technical one, having reference to the forum and form of remedy. In the cases it has been held that a person could not sue the partnership of which he was a member, for the reason that he would thus appear personally on both sides of the record: as plaintiff, he would be suing’ himself as defendant partner ; or as plaintiff partner he would be suing himself as an individual defendant — a technical incongruity that the law does not tolerate. At the same time, the creditor partner could betake himself to a co-ordinate forum in which such technical incongruity would not be involved in the proper pleadings and procedure, and find remedy according to the substance and legal effect of the contract or other cause of action.

When, as in this case, the note has been transferred to another, according to the law governing such paper, that law authorizes the bringing of a suit in the name of the holder, without any regard to whether he holds it for consideration or not. The technical rule on the subject would thus be answered, and, at the same time, the substantial rights would -be enforced most directly, and with full justice as between the real parties, in case they should stand upon the naked original transaction. If anything should have occurred to complicate and modify or discharge such rights in such a way that a judgment in a suit at law would not do legal justice between them, then, for reasons of substance, resort would need to be had to the other forum by the one party or the other. But unless such reason should exist for such resort, no reason would exist; because, as in the present case, the technical difficulty of having the same party by name on both sides of the record would not be involved. Nothing appears, as the case is now before us, giving occasion for denying the right to maintain this suit.

Without regarding especially the language used in the printed opinions in the case of Downer v. Norton, 15 Vt. 569, and of Ormsbee v. Kidder, 48 Vt. 361, the judgments in those cases upon the facts which make up each case respectively, are direct authority for what we hold in this pase. So far as the technical rule in question is concerned, it can make no difference whether the holder is such for value or not.

As to what pertains to Mr. Arnold peculiarly it is remarked, 1st. There is no provision of law for the recording in the town clerk’s office of the contract and regulations for the organization and transaction of such an association as this was and is. Mr. Arnold was originally and for some time a member of it, and as such was liable in the character and relations of a partner. Whether he was liable on this note or not, depended on whether he had done what was legally necessary in order to be acquit of partnership liability when this note was given. The selling out to another would not, of itself, be sufficient, as against one who had known of his being a member, and who had dealt with the company in the supposition of, and in reliance upon, his being - a member, and who did not know, nor was chargeable with knowledge, that he had in fact ceased to be a member.

The record vouched in this case did not, of itself, charge Stowell with such knowledge. Whether he had such knowledge, or was chargeable with it, was to be found by the jury, as an open question upon the evidence. That question was submitted to the jury upon a charge to which, in that respect, exception was taken. 2d. The criticism of the charge in that respect is, “ that the court left it to the jury to decide whether Arnold did ‘ enough&c., without telling them what was enoughthat “ the court told the jury that the law required him to give notice to the world, or do something so people might understand, &c., without telling them what that something was. He should have told the jury what was necessary.”

It is to be noticed that the only request as to Arnold was, that the court should charge that as Mr. Arnold had sold out, and hia deed was recorded before the note was given, and he had given notice to Albee and to the said supposed directors that he was not a member of the company, said Arnold was not liable on said note.

The learned counsel did not indicate anything else, either in particular or in general, as the subject of request to charge on that subject.

In looking into the charge, it is plain, and the contrary is not intimated, that what the court did say, as reported, was lawful and proper. The exceptions say that as to said Arnold, “ the court charged the jury substantially as follows ” — purporting to give only the substance of the charge. It cannot be said that error in law is shown to have been committed in not going to the extent now claimed in argument that the court should have gone ; becausé, 1st, it is not shown that the court did not'go to that extent. 2d. The court was not requested to go to that extent. 3d. Unless request is made for such extent and minuteness of charge, when what the court says to the jury is sound and proper in law in its application to the subject and question in hand, exception will not be maintained for the failure of the court to say more, unless by such failure the jury would be misled. It is not apparent, nor reasonably supposable, that the jury were misled by that means in this case.

As to the other points of exception noticed in the argument, there seems to be no occasion for extending the discussion. The subject of the death of some members of the company, as affecting the existence of the company, was properly submitted to the jury. Whether such deaths would work a dissolution or'not, would depend on the terms and effect of the contract of formation, and the character of the organization.

The indorsements of payments on the note were properly to be made by the person whose office made it his duty to pay, and that person was the treasurer. The company acted through him; and his act in that respect is to be regarded as the act of the company, in the absence of any showing that he, in what he did, acted without authority and without duty. Nothing to that effect is shown, either directly or by inference.

Judgment affirmed.