Johnson v. Haws

Barrett, J. (concurring):

What I conceive to be the fallacy of the appellants’ position — upon which, in Justice Ingraham’s opinion, the case for reversal rests — lies in the statement that “ there is no agreement as between the parties by which these defendants were not to be liable to third parties for materials furnished to'the joint adventure.” This is emphasized by the further'observation that the clause in the contract providing that Haws should not be liable for any expense.or cost of the erection of stands “ does not, in terms, refer to liability to third parties, but to the liability of the parties to the agreement as between themselves.” It is difficult to perceive how an agreement between two joint adventurers—A. and B.— that A. should not be liable for the expense or cost of certain stands for which materials are required, would be strengthened by the additional provision that A.should not be liable to third persons for these materials. The latter agreement is implied from the former ; and any one having notice of the terms of the contract could not fail to understand that it was so implied. We might, indeed, go further and say that it was in terms here provided that Haws should not be liable to third persons for materials purchased by Chatterton ; for there is no real difference between. such a provision and that contained in the contract. If Haws was not to be liable for the expense of erecting the stands, *600 then surely Chatterton ¡alone was to be liable and pay for the materials required in their erection.

It seems like playing with words to base a, distinction upon the two forms of expression.

In either case the agreement was between the two joint adventurers ; and it was the sale to Chatterton with knowledge of that agreement which effected the plain distinction between the present case and that of Johnson v. Alexander. It is idle to speak of our expressly overruling the latter case. We are doing nothing of the kind. We there held that the contract in question effected a partnership. That is all we held and that we now hold.

Of course the conclusion there, of liability under the contract, was not based upon notice of its terms, for the simple reason that that there was no such question in that case — there being no proof that the plaintiffs there had notice. Here they had full notice and in fact sold directly to Chatterton, trusting him individually and exclusively.

Each member of a partnership is its agent, and persons who deal with an individual partner with knowledge of the limitations put upon his agency by the articles, are bound thereby. This is settled by an unbroken current of authority.

To say, because parties are partners and thus liable to third persons, without regard to the limitations of their private compacts, that third persons are not bound by notice of these limitations is simply to repudiate the rule and inaugurate a new doctrine, namely, that the liability of partners is so absolute that it cannot be limited as against third persons at all—a doctrine which has no support in principle or authority.

In Tradesmen's Bank v. Astor (11 W end. 90), Savage, Ch. J., said, “ if several persons become' partners, and agree among themselves that neither shall make any contract to charge the other, such agreement between the partners will not affect strangers having no notice of it.” A similar observation was made by the chancellor (in the Court of Errors) in Whitaker v. Brown (16 Wend. 508), “ one partner may bind the firm for a debt contracted on account of the partnership business, although it is in direct opposition to a* private agreement between the partners if the creditor has not notice of such agreement at the time the debt is. contracted.” This latter *601 observation was referred to with approval by Bronson, Oh. J., in The Bank of Rochester v. Monteath (1 Den. 406). Chief Justice Bronson there said that “ although Allen may have departed from the agreement between himself and his partners in drawing the bills, that cannot affect third persons who took the paper without notice.” And in Frost v. Hanford (1 E. D. Smith, 541), Judge Woodruff, speaking of a similar agreement, said that “ however valid such a stipulation may be between the copartners themselves it does not affect third persons dealing with the firm in the usual course of their business, unless knowledge thereof is brought home to such third persons.” The numerous cases in other States, to be found in the citation from the American and English Encyclopaedia of Law, given in Justice Bumsbt’s opinion, are to the same effect. With this factor of notice here for the first time I am quite at a loss to understand how it can be said that the exact question now before us was decided in Johnson v.Alexander.

I concur in the affirmance of the judgment.

Van Brunt, P. J., concurred.