A promissory note given by one member of a commercial company to
another member for the use of the company will maintain an action
at law by the promisee in his own name against the maker
notwithstanding both parties were partners in that company and the
money when recovered would belong to the company. If the
declaration be upon a joint note, and the defendant plead that the
note is the separate note of one of the defendants and was given to
and accepted by the plaintiff in full satisfaction of the debt,
this plea is bad upon special demurrer because it amounts to the
general issue.
The principle that a partner cannot sue a partner on a
partnership transaction does not apply to a case where a note in
writing is given for money not to the firm, but to an individual
member.
The case as stated by MR. CHIEF JUSTICE MARSHALL in delivering
the opinion of the Court was as follows:
Page 12 U. S. 31
The defendant in error, who was president of a commercial
company consisting of four or five hundred members, sold certain
merchandise, the property of the company, to Jehiel Crossfield and
took his note payable in twenty days to Joseph Forrest, president
of the commercial company, for the purchase money. Default having
been made in payment, Joseph Forrest instituted a suit against
Jehiel Crossfield and John P. Van Ness, who was a dormant partner
of Crossfield, and also a partner of the commercial company.
The declaration contains several counts. The first is on the
promissory note, which is charged as the note of Crossfield and Van
Ness, trading under the firm of Jehiel Crossfield. The second and
third, for goods, wares and merchandise sold and delivered, the
fourth for money had and received by the defendants, to the use of
the plaintiff, and the fifth on an
insimul
computassit.
The defendant, Van Ness, pleads the general issue, on which plea
issue is joined.
He also pleads in bar several special pleas, amounting in
substance to this that the several assumpsits in the declaration
mentioned, were made for goods, wares, and merchandise belonging to
the commercial company, consisting of many partners, and of which
both the plaintiff and himself were members.
The third plea alleges that the plaintiff did agree to accept
and did accept the separate promissory note of the said Crossfield,
in payment of all and singular the debt and debts, promises, and
assumptions in the plaintiffs said declaration above supposed; in
pursuance and execution of which agreement aforesaid, the said
defendant, Jehiel Crossfield, made the said promissory note in the
plaintiffs said declaration mentioned and delivered the same to the
said plaintiff on the day of the date of the said note at the
county aforesaid, and the plaintiff then and there accepted the
same as payment in pursuance of the aforesaid agreement.
To these several special pleas the plaintiff in the
Page 12 U. S. 32
court below demurred specially, and the defendant joined in
demurrer.
On argument, the demurrers except to the third plea, were
overruled and the pleas sustained as to the 2d, 3d and 4th counts,
but the demurrers were sustained as to the 1st and 5th counts of
the declaration. The demurrer was also sustained as to the 3d plea,
which was adjudged bad as to all the counts.
On the trial of the issues, Van Ness objected to the evidence
offered by the plaintiff below to support the first count, and his
objection being overruled, excepted to the opinion of the court.
This exception brings on the whole question made by the pleas on
the point that the goods for which the note was given were
partnership goods belonging to a company of which both the
plaintiff and defendant were members.
The jury found a verdict for the plaintiff below, on which
judgment was rendered, and the cause is brought into this Court by
writ of error.
Page 12 U. S. 33
MR. CHIEF JUSTICE MARSHALL, after stating the case delivered the
opinion of the Court as follows:
It is contended by the plaintiff in error
1st. That this action is not sustainable, it being brought by
one partner against another.
Page 12 U. S. 34
2d. That the separate note of Crossfield discharges the original
debt, due from Crossfield and Van Ness.
As the first error assigned by the plaintiff is, if it be really
an error apparent on the bill of exceptions as well as in the
pleas, it is not necessary to examine the formality of the pleas
respecting it.
It is alleged that at law one partner can sue another on a claim
growing out of the partnership in no other case than for a general
balance on a stated account.
The terms in which this proposition has been laid down are
perhaps too general.
In the case at bar, the suit is instituted on a promissory note
given not to the company, but to Joseph Forrest, president of the
company. Although the original cause of action does not merge in
this note, yet a suit is clearly sustainable on the note itself.
Such suit can be brought only in the name of Joseph Forrest. It can
no more be brought in the name of the company than if it had been
given to a person, not a member, for the benefit of the company.
The legal title is in Joseph Forrest, who recovers the money in his
own name as a trustee for the company. Upon the record, and
technically speaking, he is the sole plaintiff, and the Court can
perceive no reasonable or legal objection to his sustaining an
action on the note. The principle that a company cannot sue its
members does not apply to the case, nor does the principle that a
partner cannot sue a partner on a partnership transaction apply to
any case where a note in writing is given for money not to a firm,
but to an individual member.
The third plea alleges that the plaintiff in the court below
agreed to accept the separate promissory note of Crossfield in
payment, and that in execution of this agreement Crossfield made
the note in the declaration mentioned, which was accepted in
payment of the several assumptions stated in the declaration.
Now the note in the declaration mentioned is a joint note, so
that this plea in one place alleges it to be a joint note, and in
another place to be a several note.
Page 12 U. S. 35
It becomes unnecessary to inquire into the effect of this
repugnancy, if it be one, because the plea, if to be understood as
averring that the note, in the declaration mentioned, is a several
and not a joint note, would amount to the general issue. The plea
is no more, to the first count, than
nonassumpsit. For if
the note was not the note of Van Ness, he had not made the
assumpsit stated in the first count. This is ill upon a special
demurrer, when assigned as cause of demurrer.
The plaintiff in error supposes the case of
Sheehy v.
Mandeville & Jameson, 6 Cranch 253, to be a
case in his favor on this point. The Court thinks otherwise. In
that case as in this, a note was given by one partner for a debt
contracted by the firm. In that case as in this, one count in the
declaration was special, on the note, stating it to be a joint
note, and other counts were general, on the original transactions.
The defendant, whose name was not on the note, stated it to have
been received in discharge of the open account. The Court decided
that the plea was good not in bar of the special count on the note
itself, but in bar of the general counts for goods sold and
delivered.
Upon the special count, the Court was in favor of the plaintiff
below, who was also plaintiff in error, and the judgment of the
circuit court, which had been against him, was reversed. The case
of
Sheehy v. Mandeville & Jameson, then, is not in
favor of the plaintiff in error so far as his third plea applies to
the first count in this declaration.
This Court is of opinion that there is no error in the judgment
of the circuit court either in sustaining the demurrers to the
several pleas filed in that court to the first count in the
declaration or in admitting the note, in the declaration mentioned,
to be given in evidence to the jury on the trial of the issue of
fact. This opinion renders it unnecessary to examine the decision
of the circuit court as it respects the pleas to the other counts,
since, should their decision respecting the pleas to those counts
even be deemed erroneous, their judgment will stand.
Judgment affirmed with costs and damages at the rate of 6
percent per annum and costs.
