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Haven & Co. v. Goodel, Haven & Co.

became due, Haven, one of the plaintiffs, told a witness, that the note was loaned to his brother Augustus, and that he knew that he could not recover the amount from Goodel, as one of the old firm, and relied solely on his brother to secure him against loss.

The plaintiff's rest their right to recover, principally upon the fact stated by Augustus Haven, that the money raised from the notes, was applied to the liquidation of the partnership debts, and very strenuously urge that such an appropriation creates a new liability on the part of all the former members of the firm; that as they are responsible for the original debt, no additional burden is imposed by the subsequent contract to raise the means to pay it, and it is, therefore, equitable and just to compel all the partners to unite in discharging the obligation. This argument is sustained by the supreme court of Pennsylvania, in 5 Wharton, 530, Estate of Davis v. Desauque; 4 Barr, 242, Robinson et al v. Taylor; 3 Watts & Serg't 345, Houser v. Irvine.

This construction of the law is confined, so far as we can discover, to the courts of that State. It is not the law as laid down in the text-books; but, on the contrary, we believe it is directly opposed to the whole current of decisions on the subject. 1 Henry Blackstone, 156, Kilgour v. Finlyson; Collyer on Partnership, §540; Story on Partnership, §322; 1 Hill, N. Y., 572, National Bank v. Norton; 2 Metcalf, Mass., 309, Bowman v. Blodgett.

And the power to settle and adjust the affairs of the partnership, does not authorize the use of the partnership name, for that purpose. 19 Maine, 355, Perrin v. Keene; 18 Pick. 505, Parker v. Macomber; 13 Vermont, 522, Woodworth v. Downer; 3 Esp., 108, Abel v. Sutton; 1 Carter, Ind., 188, Hamilton v. Seaman; 33 Maine, 424, Waite v. Foster; 21 Conn., 388, Brooks v. Holland; 3 Richards's Eq. Rep., 119; 4 McLean, 383, Lockwood v. Comstock & Bissell.

These cases are but the repetition of the rule that has been long and very clearly established, by the English, and

Haven & Co. v. Goodel, Haven & Co.

the great majority of the American courts; we should say all, with the exception of those of Pennsylvania. If, as the law is broadly laid down, the duties and the rights of the co-partnership cease, so far as the one requires the personal attention of the individual members to the common property; and the other, so far as they could have bound the co-partnership, whenever the contract of co-partnership is dissolved; if, at that period, neither partner can use the name of the other, by indorsement, or any other form of contract, we can not understand why it is claimed that one partner can borrow money in the name of the original firm, and its subsequent application confirm the act that could not be supported if such application had not been made. The assent of the other partners is not thus given to the conduct of the individual, who pledges the name of the firm, and no authority can be inferred from the act itself.

In any aspect we are permitted to view the question, we feel it to be our duty to adhere to the law, as we find it; not in the adjudications of a single State, but in the broad principle already alluded to, and that is so universally regarded as an axiom in the law of partnership. A dissolution destroys the unity of the original association; the partners then become individuals only, with full ability to assume new liabilities that may bear upon each other, but will not affect the former relation.

In our judgment, we must find the merits of the case, upon the questions thus mooted, in favor of the defendants.

Another point was raised, that there were acts of recognition, on the part of Goodel, as to the conduct of Augustus Haven, after the dissolution of the concern. They depended upon isolated instances, when Haven used the firm name, after dissolution, and Goodel was privy to it; but these instances are explicable by the circumstances that induced the permission, or sanctioned the act. They do not apply to the responsibility assumed by the individual partners in the present case, and we can not infer from either, or all the transactions proved, any intention to confer a

A. G. Burt v. The Kentucky Trust Co. Bank.

general power upon Haven, to use the partnership name, for any purpose whatever, other than the ordinary liquidation of the debts, and the collection of the credits. We must render judgment for the defendants.

A. G. BURT v. THE KENTUCKY TRUST Co. BANK.

1. The "act prohibiting the circulation of foreign bank-bills of a less denomination than ten dollars," passed May 1, 1854, did not divest the ownership, or property, in such bills, nor deprive the owner of his right to maintain a suit upon them, against the bank of issue,-nor prevent him from imparting this right to a third party, by an assignment, for value. 2. The 1st, 2d, 3d, and 5th sections, all convey the idea that the illegality of the act consists in the circulation of these bills, as a substitute for money, in the ordinary commerce of the country, thereby becoming a part of the medium of exchange and barter. Hence, the words, "pass, transfer, and circulate," and "receive, or cause to be received," the forbidden noteslanguage which must be interpreted to describe the same transaction, as including the buyer and the seller, the merchant and his customer, the banker and the broker, and the borrower on time, by discount or loan.

SPECIAL TERM.-Action to recover money on bank-bills, issued by the defendant.

The facts appear sufficiently in the decision.

Jones & Ware, for plaintiff.

Fox & French, for defendant.

Worthington & Matthews, for garnishees.

STORER, J. The plaintiff is a bill-holder of the Kentucky Trust Company Bank, a corporation created by the legislature of another State, and there transacting its business, at the time the bills were issued. The defendant objects to a recovery, by the plaintiff, upon all bills below the denomination of $10, claiming that the act to prohibit the

A. G. Burt v. The Kentucky Trust Co. Bank.

circulation of foreign bank-bills, passed May 1, 1854, embraces the several rights of action, and under it, we must hold, that no remedy can be given in the courts of Ohio.

The evidence in the case, establishes the following facts: The bills were, for the most part, purchased after the 1st of October, 1854, when the law referred to went into operation. Some were borrowed, but afterward paid for. They were generally bought at a large discount, and at the time of purchase, the bank had suspended, refused to redeem its notes, and had gone into liquidation.

That the bills were all received by the present holder, either to be sued upon, or returned for redemption at some future period. There is no proof that they were received to be circulated as the representatives of money, or that the plaintiff has attempted to "pass, transfer, or circulate" them; nor is it in evidence, the bills were not in actual circulation, in Ohio, when the statute took effect.

The largest amount of the bills are of the denomination of $10 and upward; of course, there can be no objection to judgment in the several cases, for the various sums represented by those notes. As to the residue of those bills, we are asked to apply the prohibition, already referred to, and it will aid, very essentially, the proper construction of the various provisions of the statute, if we, in the first place, ascertain the object of its enactment.

The title, which may be regarded as in some measure expressing the intention of the law-makers, though we admit that it does not always give a very clear indication of the purposes they contemplated, is here very plainly set forth: "An act to prohibit the circulation of foreign bank bills of a less denomination than ten dollars." The circulation, then, of such bills, was prohibited. If the bills were in circulation at the time the law took effect, they certainly might have been withdrawn and remitted for redemption, or kept on hand by the holder. They were not confiscated, as contraband, or declared of no value in the possession of the bona fide holder; and no such power could be claimed to

A. G. Burt v. The Kentucky Trust Co. Bank.

exist in the legislature. If it was lawful, before the statute operated, to circulate the notes, the person who held them, at that time, could not be deprived of his legal right to his property, nor denied his legal remedies to protect it. While thus in his hands, their value was the subject of recovery, and, if he should have lost them, by accident, or been deprived of them, by force, his action could, doubtless, be maintained as for any other species of property. But the holder had no right to aid in the circulation of the prohibited currency. The sections 1, 2, 3, and 5, all convey the idea that the illegality of the act consists in the circulation of these bills, as a substitute for money, in the ordinary commerce of the country, thereby becoming a part of the medium of exchange and barter. Hence, the words "pass, transfer, and circulate," and "receive, or cause to be received," the forbidden notes-language which must be interpreted to describe the same transactions, as including the buyer and the seller, the merchant and his customer, the banker and the broker, and the borrower on time, by discount or loan. Hence, also, the prohibition against the receiving such currency in payment of debts, to public officers, or individuals, and the declaration that all such unlawful paper shall, in the State, be held worthless; added to these, we find the penalties for the violation of the provisions of sections 1 and 2, and the closing paragraph in section 5, which avoids all discounts, whether of notes, or other securities, where the consideration was the paying out, or receiving the illegal currency. More than all, we have, in the very first section, the provisions which qualify the operation of the whole law, as to the class of holders it includes.

We think, then, that the end the statute was designed to accomplish, was, to keep out of circulation foreign bills, and thereby substitute our own, for all commercial purposes. The end sought to be thus attained, can not require a more liberal exposition of the law, and certainly ought not to demand such a construction of its provisions as would

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