text:
    John Taylor Davies v. John Arthur Atkinson et al.

      Partnership—Payment of Individual Debts out of Firm Assets—Ratification by Acquiescence—Time—Agency—Accounting.

    1. Where a partner has applied the funds of the firm to the payment of his individual indebtedness, the other member of the firm will be held to have ratified and confirmed such payment by acquiescence, unless, when it becomes known to him, he promptly repudiates the act.
    2. Where the relation of principal and agent exists, the principal must disavow the unauthorized act of his agent within a reasonable time, or his silence will be held to be a ratification. This rule applies to a partnership, each partner being an agent of the firm.
    3. Upon a bill filed by one of two partners to recover from various parties moneys paid to them by the other partner out of the firm funds io settle his individual indebtedness to them, it is held: That the complainant’s delay of about nineteen months amounts to a ratification of such payments; and that, in the absence of an accounting between the partners, it does not appear that th^moneys in question are required to give the complainant his share of the firm assets.
    [Opinion filed January 25, 1888.]
    Appeal from the Superior Court of Cook County; the Hon. Egbert Jamison, Judge, presiding.
    On the 20th day of July, 1880, John Taylor Davies of Liverpool, England, and John Arthur Atkinson of "Chicago, entered into a co-partnership for the purpose of carrying on business in Chicago, under the firm name of Davies, Atkinson & Company. By articles of co-partnership executed by the parties under their hands and seals, it was provided that the business of said firm should be that of buying hogs or hog products, and curing, packing and shipping the same to J. T. Davies & Company, at Liverpool, for sale on account of the firm of Davies, Atkinson & Company, on commission; also of buying provisions on commission for shipment to the continenfc of Europe and elsewhere. Said articles of co-partnership further provided that Atkinson should attend to the business of the firm; that he should draw from the firm not to exceed $2,500 semi-annually, the sum so drawn to be charged against his share of the profits; that during the existence of the co-partnership Atkinson should not buy, sell, speculate with or mortgage any firm assets, except as required in the ordinary co-partnership business, and should not engage in any speculations or business ventures on his own account, outside of the business of the firm, without the consent of Davies; that for all sums of money or assets put into the business of the firm by Davies, he should be allowed interest at the rate of five per cent, per annum, payable semi-annually; that the money and assets put into the business by Davies should remain his sole property, the firm to have the use of and pay interest on the same; Davies to have the power at any time to draw out such sum or sums of money from said business as he should choose, and to loan the firm such sums of money or assets as he should think proper; that the profits of the business, after paying interest and expenses, should be apportioned, two-thirds to Davies and one-third to Atkinson; that all business should be conducted under the cognizance and by the direction of Davies, and that there should be kept perfect, just and true books of account, in which should be entered all the transactions of the firm, and to which both partners should have free access; that within thirty days from Marchlst and October 1st of each year, Atkinson should render to Davies a true, just and perfect account of all the profits by them or either of them made, and all losses by them or either of them sustained, and also all payments, receipts, disbursements, and all other things by them made, received, disbursed, acted, done or suffered in said co-partnership; that the co-partnership'might be terminated by Davies at any time by giving Atkinson three months’ notice in writing; that at the termination of the partnership, the partners should make to each other a true, just and final account of all things relating to said business and adjust the same, and distribute the assets of the firm.

      Atkinson was substantially without means, and all the money and property to be used in the business of the firm was furnished by Davies, with the exception of §50,000 belonging to Atkinson’s mother, which was borrowed by the firm, and for which the partners agreed in the articles of co-partnership to pay her six per cent, interest. The firm, after its organization, carried on a very large business, Atkinson being the managing partner, Davies in the meanwhile residing in Liverpool and caz-zying on business there on his own account zznder the name of J. T. Davies & Company, and only occasionally visiting Chicago. Atkinson was a member of the Board of Trade of Chicago and made various purchases for his firm on said Board with the knowledge and approval of Davies. During all the time the business was in progress he kept no individual bank account, but was in - the habit of drawing checks on the firzn account, to sozne extent at least, for his individual debts, as well as for the debts of the firzzz.
    In the sumzizer of 1884 he embarked in various large speculations on said Board on his own account, withozit the knowledge or consent of Davies, and said speculations having resulted in laz-ge losses, he paid said losses by drawing checks on the bank account of the firm in favor of the members of the Board to whom such losses were due. The amount of the losses so paid, as is now claimed, was ziearly §40,000.
    After these 'things had occuzTed, Davies came to Chicago, arriving October 3, 1884. Iznmediately on his arrival he received a letter from Atkinson confessing his misappropriation of the moneys of the firm. Davies thereupon took into his possession a large amount of the firm assets, of the value of about §125,000, and shipped them to Liverpool and converted them into cash. On the 23d day of October, 1884, after having disposed of that amount of the firzn property, he filed his bill against Atkinson alone, alleging that Atkinson, in violation of said articles of co-partnez’ship, had fraudulently and secretly entered into various gaznbiing transactions on said Board of Trade on his own account, and that in payment of losses sustained in said transactions he had drawn checks upon the bank account of the firzn to the amount of neazly §4),000, the respective amounts of said checks and the names of the various persons, in whose favor they were drawn, being particularly stated; that said Atkinson had fraudulently concealed said transactions from the-complainant; that at the time of the misappropriation of said moneys there was nothing standing to the credit of Atkinson on the firm books, and on a settlement of the firm accounts there would be nothing due ,him; that he had made other fraudulent misappropriations of the moneys of the firm to a large amount; that there were various debts due to and from the firm, and that a portion of the firm property was of a perishable nature; that the complainant furnished all the capital invested in said business and that Atkinson was interested only in the profits; that Atkinson was insolvent and had abandoned the business of the firm, and that he had received out of the assets and property of the firm a large sum in excess of his due proportion of said profits. Said bill prayed for an accounting, for a receiver, for a conversion of the partnership assets into money and for a final adjustment of the partnership affairs.
    A receiver was appointed in said suit, who realized out of the assets of the firm the sum of §56,913.95, and the debts proved up against the estate of said firm amounted to $106,-882.73, of which §97,818.13 consisted of a claim in favor of the Bank of Montreal, and by order of the court the money in the hands of the receiver was applied to the satisfaction of said claims.
    Said Atkinson appeared and answered said bill, and afterward, on the 26th day of January, 1885, said Davies filed his petition in said suit representing that he had then lately commenced an action of account against said Atkinson in the Superior Court of ca/pias ad respondendum and had caused said Atkinson to be arrested on said capias and held to bail, and that he was desirous of availing himself of the advantages he might derive from said proceeding by capias and said bail, as well as the benefit he might derive from the prosecution of said action, and praying to be permitted to elect to proceed with said action to its final termination, and that the proceedings in the matter of said bill, so far as they related to an accounting between the complainant and said Atkinson, bo stayed until the final termination of said action; and an order was thereupon entered granting the prayer of said petition and staying the accounting in the chancery suit until the determination of the suit at law.
    On the 15th day of May, 1886, Davies filed an amended and supplemental bill, naming as defendants the several parties to whom Atkinson gave the checks above mentioned in payment of his losses on the Board of Trade, alleging that said checks were given by Atkinson to pay his individual debts and that said debts consisted of Ms losses in certain gambling transactions; that the parties to whom said checks were given received them with notice that the funds against which they were drawn belonged to the firm, and that said moneys were paid to them for Atkinson’s individual debts and in fraud of the complainant’s rights, and praying that said several parties be decreed to pay over to the receiver, or to the complainant, all moneys by them received belonging to said firm. Said amended and supplemental hill was taken as confessed, as against Atkinson, but the other defendants answered, denying the equity of said bill, and alleging, among other things, that said moneys were paid to them by said Atkinson with Davies’ knowledge and consent, and that such payments had been ratified and confirmed by Mm.
    On the 18th day of May, 1886, three days after the filing of the amended and supplemental hill, Davies and Atkinson settled and compromised all their differences growing out of said co-partnership without any accounting in any judicial proceeding or otherwise, and as the evidence of such compromise and settlement they executed an agreement in writing which, after reciting various considerations, contained the following stipulations :
    “The undersigned, John T. Davies, does hereby waive all claims of every description he has against said John A. Atkinson in consequence of past transactions, and covenants never to take any judgment against said Atkinson thereon; hut with the distinct understanding that this agreement or covenant shall not operate to release the liability of any person who has received the money of said firm in payment of said Atkinson’s individual transactions, but said Davies reserves his right against such persons; and further, that said Davies shall be entitled to all moneys, claims or assets due or which might be due to him or to said firm by reason of former transactions of said John A. Atkinson, and of his use of the money of said firm or otherwise, and this agreement shall in no wise interfere with the right of said Davies to sue for and recover at 1ns own cost and expense such money or assets in any suit now instituted or which may hereafter be instituted for that purpose.
    61 And it is expressly agreed also, if deemed necessary for the “ purpose of establishing the rights of said Davies to the firm money so paid to said third parties by said Atkinson, that an account may be taken between the undersigned in regard to their business transactions; but said Davies hei’eby covenants to pay the expense thereof, and not to collect of or enforce against said Atkinson any claim he may or might have against said Atkinson arising out of their business transactions in the past, or by reason of such account, and no judgment or decree shall be entered against said Atkinson for the payment of any sum which may be found due from said Atkinson to said Davies upon such account.
    “And said Atkinson hereby releases said Davies from all claim and demands of every description arising out of their said business, and this shall be a complete settlement between the undersigned of all matters of every description up to date; but it is agreed that all moneys which may be collected by said Davies or by said firm in any way connected with their firm business shall belong to said Davies, and said Atkinson shall have no interest therein.
    “Suit Ho. 94,133, Davies v. Atkinson, in the Superior Court of Cook County is to be dismissed and the bail bond discharged.”
    Ho subsequent accounting was had between said parties) but the cause afterward came on to be heard upon the amended and supplemental bill, the answers and replications, and the evidence taken in open court, said evidence in no way showing the state of the accounts between said Davies and the said Atkinson, and at snchhearinga decree was rendered dismissing said bill at the complainant’s costs for want of equity. From this decree the complainant has appealed to this court.
    Messrs. Smith & Pekoe, for appellant.
    If a partner pay his individual debt with partnership funds, even if the individual creditor does not know that lie was paid with partnership funds, the injured partner can recover back such payment. But, in such case, the injured partner must notify such individual creditors in apt time of his claim, or his acquiescence will estop him. Rogers v. Batchelor, 12 Pet. 221; 3 Kent Com., * p. 42, 43.
    Where the individual creditor receives his pay out of partnership funds, knowing them to be such, that would be a fraud and the transaction void, and he must refund. A subsequent positive ratification will alone relieve him of such liability. It is a positive actual fraud where an individual creditor knowingly receives his pay from partnership funds, and no less delay than -the period of the Statute of Limitation, which is five years, will relieve him of his liability. Story on Part., Secs. 131, 132, 133; 3 Kent, 42, 43; 1 Am. Lead Cas. 507; Rogers v. Batchelor, 12 Pet. 221; Ensworth v. Everingham, 7 Wend. 326; Brewster v. Mott, 4 Scam. 378; Gray v. Ward, 18 Ill. 32; Fifth Nat. Bank v. Hyde Park, 101 Ill. 595; Bodenham v. Hoskyns, 13 Eng. L. & Eq. 222.
    The money of the firm was taken by these Board of Trade men with knowledge that it was firm money, and hence that it was a fraudulent misappropriation of such funds. And they stand liable to the equitable action for money had and' received.
    A party can not assert laches as a defense who has himself been guilty of the fraud upon which the action is based. Bigelow on "Fraud, 446.
    Mere delay, short of the Statute of Limitations, is not sufficient to bar a right. Gibbons v. Hoag, 95 Ill. 45, 69; Hefner v. Vandolah, 57 Ill. 520.
    Lapse of time will be no bar against actual fraud on the part of the person invoking. Bigelow on Fraud, 446; Hefner v. Vandolah, 37 Ill. 520; Preston v. Mann, 25 Conn. 118.

      It is essential, in order that laches should be a bar, that the other side should be acting in ignorance of the real condition of his title, and in the supposition that he was rightful in his own dealing. 2 Pomeroy Eq. Jur., Sec. 818, and notes; Kerr on Fraud (Am. Ed.), 133, 188; Renie v. Young, 2 DeG. & J. 136; Kinney v. Brown, 3 Ridg. 518; McCormick v. McMurtie, 4 Watts, 192.
    There must be some ingredient in the transaction which would make it a fraud in the owner of the fund to insist upon liis legal right. Silence will postpone only where silence is a fraud. Deverenx v. Burgwyn, 4 Ired. Eq. 351; 2 Pomeroy Eq. Jur., Sec. 812.

      Laches can only be invoked where the party claiming has been guilty of such gross negligence as to amount to a constructive fraud. Brant v. Virginia Coal Co., 93 U. S. 326; Henshau v. Bissell, 18 Wall. 255; Bigelow on Fraud, 440.
    In the case of the Marine Co. v. Carver, 42 III. 66, the acts of ratification were positive in their character as well as by lapse of time. The lapse of time in that case was four years between the payment and the suit, while in this case it is only a year and a half. It was not simply a question of mere delay in that case. It does not appear that either the individual parties or the partnership was insolvent at the time of the transaction. The other members of the co-partnership had conversations with the individual creditors, and did not repudiate the transaction. All the acts of the parties were of a nature to ratify the transaction.
    In the case at bar no conversation was had between Davies and these parties; not one word was spoken; the partnership and Atkinson were insolvent, and these defendants knew the money they received was the money of the firm, to which they had no right; they simply united with Atkinson in robbing the firm, and now attempt to keep their plunder by taking advantage of their own fraud.
    The Supreme Court in the Carver case said: “We are obliged to regard the actual facts as amounting to a ratification.” And that case decides nothing else, and whatever else may have been said was obiter dicta.

      Messrs. Bisbee, Ahrens & Decker, for John A. Atkinson et al, appellees.
    These defendants stand in the attitude of bona fide purchasers of these checks for value, without notice.
    It is the'settled doctrine of our Supreme Court, and has been for many years, that the receiving of a note on account of an existing indebtedness makes the party receiving it a bona fide purchaser, our 'Supreme Court differing on this question from the courts of New York and the courts of some other States. Foy v. Blackstone, 31 Ill. 538; Bussell v. Had-duck, 3 Gilm. 233.
    These defendants, within the authorities of the Supreme Court of this State, are bona fide purchasers for value, and their defense on that ground can not be successfully attacked, unless the mere fact that Atkinson did not use the firm name in buying and selling on the Board of Trade, amounted to notice that the debt contracted in the line of the business of the firm was the debt of the individual partner.
    The presumption of notice does not arise under all circumstances, even where the debt paid out of partnership funds appears in form to be the individual debt of one partner. Here the mere using of Atkinson’s name in the trades, without further explanation, and the giving these checks on the firm, the whole being in the business line of the firm, of buying and selling on the Board, the whole being characterized in the evidence as in the usual course of business, can not be fairly claimed to have established a case of constructive notice. These checks were given as money. They simply served to transfer so much money at once. In their brief existence they pass from one to another and are more negotiable than promissory notes. There is every reason of c< m.nercial policy, of business necessity, why these defendants should be protected. Wiley v. Allen, 26 Ga. 563; Darlington v. Garrett, 14 Ill. App. 238; Duncan v. Clark, 2 Rich. 587; Freeman v. Ross, 15 Ga. 252; Redley et al. v. Taylor, 13 East, 175; Frankland v. McGusty, 1 Knapp, 315; Williams v. Thomas, 6 Esp. 18; Gildersleeve v. Mahoney, 5 Duer, 383; Roth v. Colvin, 32 Vt. 125; Babcock v. Stone, 3 McL. 172.

      Whatever may be said as to the right of Atkinson to draw those checks, or the defendants to receive the moneys thereon, as matters stood at the time said checks were drawn, Davies, with full knowledge of the checks, their dates and. amounts, and the persons on whom drawn, and for what drawn, ratified the act,of Atkinson. Marine Co. v. Carver, 42 Ill. 66. See, also, Corbin v. McCliesney, 26 Ill. 231; Perry v. Suit’s Banks, 14 Ga. 699; Burnley v. Rice, 18 Tex. 481; McNeil v. Reynolds, 9 Ala. 313; Ferguson v. Gordon, 1 Sneed, 254; Todd v. Lorah, 75 Pa. St. 196.
    The release between the parties to the firm prevented the complainant from maintaining a suit for accounting against Atkinson, and therefore stands as a bar to the right of complainant to prosecute this suit.
    Mr. William Garnett, for Frank G. Logan and Frank K. Dunn, appellees.
    Logan and Dunn received two checks from Atkinson, drawn by him in the name of Davies, Atkinson & Co., aggregating $3,500. Atkinson was authorized to draw $5,000 per annum from the firm funds for his own personal use. The amount received by these appellees was less than the sum of $5,000, and consequently within the authority conferred by the articles of co-partnership.
    Every partner is an agent for his co-partner ; no third person is chargeable with notice of any private agreement between partners. The mere fact, if it be a fact, that he used more of the partnership funds for his own private purposes than Davies privately authorized him to use, is no notice to us of such fact, and can not deprive ns of the right to rely on those acts of Atkinson which Davies authorized him to do by the articles of co-partnership. Barrett v. Russell, 45 Vt. 43; see also Bank of Rochester v. Monteath, 1 Den. 402; Ontario Bank v. Hennessey, 48 N. Y. 545.
    There was no element of fraud on the part of appellees in this case. They received checks, and Atkinson had authority to draw them for his individual purposes.
    There was a delay of nineteen months and four days to bring suit, and such delay is fatal to this claim. The Supreme Court of- Illinois has decided that mere delay will bar such a suit. Marine Co. v. Carver, 42 Ill. 66; Dobbs v. Halsey, 16 Johns. 39; Reynolds v. Kenyon, 43 Barb. 585; Casey v. Carver, 42 Ill. 225.
    The mere fact of the use of partnership funds for the payment of individual debts of one partner, is no fraud upon the other partner, unless so intended, and this, although the party receiving the payment knew it, was partnership funds; Hurd v. Newton, 36 Mich. 35; Tyler v. Scott, 45 Vt. 261; Sadler v. Robinson’s Heirs, 2 Stewart, 520.
    Mr. H. S. Monroe, for James P. Sherwin, appellee.
   Bailey, J.

The only relief sought by the amended and supplemental bill in this case is to recover back from various parties moneys ¡laid to them by Atkinson, the complainant’s co-partner, out of the co-partnership funds, to settle his individual indebtedness to them for losses incurred in certain dealings had between him and them on the Board of Trade of Chicago. All of said moneys were paid out by Atkinson prior to October 3, 1884, and on that day Davies, the complainant, was notified of such misappropriation of the partnership funds, and at least as early as October 23, 1884, the date of the filing the original bill, Davies was fully informed of all the facts in relation to such misappropriation, as said bill avers specifically the several sums misappropriated, the various parties to .whom the same had been paid and the account upon which such payments had been made. To the original bill Atkinson alone was made a defendant, and the object of that bill was to obtain an accounting and settlement of the co-partnership affairs upon the basis of charging Atkinson, in the statement of the account, with the several sums of money so misappropriated by him. Ho attempt was made to reach said funds in the hands of the parties to whom they had been paid, or in any way to question the validity of such payments, so far as they were concerned, until' May 15, 1886, the date of-filing the amended and supplemental bill. Thus, for nearly nineteen months after obtaining full knowledge of all the facts, Davies acquiesced in the right of the parties now sought to be charged, to hold the moneys paid to them by Atkinson, and we are of the opinion that, upon well settled principles of law, he must be deemed to have ratified and confirmed the acts of his co-partner in paying said moneys to the defendants.

The legal principles involved seem to us to be settled by 'the decisions of the Supreme Court in Marine Co. v. Carver, 42 Ill. 66, and Casey v. Carver, 42 Ill. 225. In Marine Co. v. Carver, suit was brought by Carver & Company against the Marine Company, a banking institution, to recover the amount of a firm deposit which Carver, one of the co-partners, had misapplied to the payment of his individual debt to the bank-It appears that the firm, learning of said misappropriation of its funds, sent to the bank for a statement of its account, which was given, and the check by which the money had been drawn and appropriated to Carver’s individual account returned to the firm. The check was returned by Carver & Company, and after a lapse of nearly four years they, without any previous attempt to repudiate such misappropriation of the funds, brought suit to recover said money from the bank. The court, in holding that no such recovery could be had, say: “ If the firm of Carver & Company had repudiated his act and returned the check, they would have thus advised the Marine Company that, in the opinion of his co-partners, Carver was unworthy of credit, and this would have induced that company to make an effort for the collection of its debt. But the apparent acquiescence of the co-partners of Carver would indicate their own confidence in his pecuniary solvency, and thus tend to strengthen his credit with the Marine Company and lull it into a false security. In cases of this character it if to be remembered that the duties and obligations between the members of a partnership and third persons are reciprocal. While it is true that one partner can not rightfully appropriate the partnership funds in payment of his individual indebtedness, yet it is equally true that, if he does not so appropriate them, his acts, when they come to the knowledge of the other members of the firm, should be clearly and promptly repudiated. At least no room should be left for doubt in the minds of parties concerned as to whether the act is repudiated or ratified. Good faith requires this, for co-partners must necessarily understand the pecuniary condition of each other better than third persons can do, and if they seem to ratify an act of one of their firm, originally unauthorized, it is a declaration in his behalf that he possesses their confidence and is entitled to credit. In Casey v. Carver, the same rule is recognized. It is there said : “ Had it appeared that his partners knew of the settlement, or knew or had reason to suppose that appellants were relying upon the settlement, they could not be heard to repudiate the settlement unless they have given notice that they did not sanction the settlement, at the e irliest practicable period after they learned the facts. To permit them, after acquiescing in the settlement for any great length of time after notice, to repudiate it, would be a fraud on the creditor of the individual partner.”

But we think the rules established by the foregoing cases may also be sustained upon well recognized principles of the law of agency, apart from considerations drawn from the peculiar relations existing between partners. Each partner is the agent of his firm, and it is a familiar rule of the law of agency that, where the relation of principal and agent exists, the principal must disavow the unauthorized act of his agent within a reasonable time, or his silence will be held to be a ratification. Thus it is laid down by Chancellor Kent, that, “When the principal is informed of what has been done he must dissent and give notice of it within a reasonable time, and if he does not his assent and ratification will be presumed.” 2 Kent Com., 616. In Bred in v. Dubary, 14 Serg. & Rawle, 27, it is said by Hr. Justice Gibson: “I take it to be indisputable, that a principal who neglects promptly to disavow an act of his agent, by which the latter has transcended his authority, makes it his own; he is bound to disavow it the first moment the fact comes to his knowledge.” Kelsey v. National Bank, 69 Pa. St. 426. “The principal must, when informed, reject within a reasonable time, or be deemed to adopt by acquiescence.” Law v. Cross, 1 Black, 592. See, also, Walker v. Walker, 7 Baxt. 260; Peck v. Ritchey, 66 Mo. 114; Western & Atlantic R. R. Co. v. McElwee, 6 Heisk. 208; Norris v. Cook, 1 Curtis C. C. 464; Story on Agency, Sec. 258; Wharton on Agency, Sec. 86.

Atkinson being not only a partner but the managing partner of the firm, was an agent haying the custody, control and power to dispose of the partnership property. The partnership funds Were in his hands, and he had authority to deposit them in bank, and to check them out for all purposes within the purview of the partnership business. He had no authority to check them out to pay his individual debts, and his doing so was clearly in excess of his authority and in violation of his duty as agent. But his unauthorized acts would seem to invoke an application of the same rule which obtains in case of other agents. The failure of his firm, or of the partner who was injured, to promptly repudiate his unauthorized act, must, as to third persons, be held to be a ratification.

But there is another reason equally cogent why the decree for dismissing the bill must be affirmed. Ho account has been stated between Davies and Atkinson, and there is, therefore, no basis in the evidence for holding that Ackinson has withdrawn from the firm, for the payment of his individual debts, anything beyond his distributive share of the firm assets. If he has not, there are no equitable reasons why his creditors should restore the moneys so paid them. Ho creditor of the firm is complaining, and it does not clearly appear that there was any firm indebtedness outstanding at the date of the decree. The only possible basis for a recovery by Davies from Atkinson’s creditors of the moneys received by them in payment of Atkinson’s individual indebtedness is, that those moneys are required in order to give Davies his share of the firm assets. What that share is, and whether anything will be due him on final settlement, can only be determined upon an accounting between him and Atkinson. The accounting in the chancery suit was stayed on Davies’ own petition, he having elected to pursue his remedy at law by action of account. A settlement and compromise between him and Atkinson having been effected, the action of account was dismissed by stipulation, and Atkinson released from all personal liability to Davies, and no further steps have been taken either at law or in chancery to obtain a statement of the account. between said co-partners. An accounting was an indispensable prerequisite to the relief sought by the amended and supplemental bill, and there being no accounting, the court could not do otherwise than dismiss the bill. The decree will be affirmed.

Decree affirmed.


source: Caselaw Access Project

author: Bailey, J.

license: Public Domain

text:
    Seth F. Hanchett v. The First National Bank of Chicago.

      Attachment—Lien of Public Warehouseman for Storage, not Subiect to —Sheriff—Negligence.

    1. Goods stored by third parties in a warehouse, upon which the warehouse company has a lien for storage, are not subject to attachment for the company’s debts.
    2. Such liens being personal and dependent upon possession by the lien holder are incapable of assignment either by voluntary act or proceedings in invitum. The levy of an attachment by terminating the possession of the lien holder terminates the lien.
    3. The law protects property stored in public warehouses from removal * therefrom, and warehousemen have no interest in property so stored which
    is subject to attachment.
    4. In the case presented, it is held: That, asno lien was obtained by the attachment, there was no lien on the money paid for storage to the Sheriff on the property to be'attached; and that there was no negligence on the part of the Sheriff in failing to levy on the money so collected.
    5. Where the Sheriff, in the performance of his duty, acts under direction of the plaintiff’s attorney, the plaintiff can not complain of the consequences.
    [Opinion filed January 25, 1888.]
    Appeal from the Superior Court of Cook County; the Hon. Joseph E. Gary, Judge, presiding.
    This was an action on the case, brought by the First National Bank of Chicago against Seth F. Hanchett, Sheriff of Cook County, to recover damages for negligence in the execution of a writ of attachment. The declaration consists of three counts. -Each count alleges the issuing of a writ of attachment from the Superior Court at the suit of the First National Bank of Chicago, against the goods, chattels, lands and tenements of the Garden City Warehouse Company, a corporation located and doing business in Chicago, in an action of assumpsit, brought for the recovery of the sum of §10,000 and interest, due to said bank from said warehouse company, upon a promissory note, and the delivery of said writ of attachment to the defendant, as such Sheriff, to execute. The first count alleges that the defendant executed said writ by attaching divers goods, chattels, rights, credits, moneys and effects of said warehouse company, and yet, not regarding his duty in that behalf, wrongfully and unjustly intending to injure the plaintiff in the premises, did not secure the goods, etc., so attached in his hands, or provide that the same should be liable to further proceedings thereupon according to law, but negligently and wrongfully surrendered and delivered the same to parties unknown, without the consent or authority of the plaintiff, and falsely and deceitfully returned that said goods, etc., were so surrendered and delivered by authority of the plaintiff. The second count alleges that the defendant wrongfully and negligently surrendered the goods, etc., so attached to parties unknown to the plaintiff, and without the plaintiff’s authority, and the third count alleges that there were, at the time said writ was delivered to the -defendant, as aforesaid, and before the return of said writ, divers goods, chattels, etc., of the Garden City Warehouse Company in said county, which said defendant could and ought to have attached; yet, not regarding his duty as such Sheriff, he did not attach the same, but wholly refused and neglected so to do during the life of said writ.
    To this declaration the defendant pleaded the general issue, and a jury being waived, the cause was submitted to the court for trial upon the following stipulation as to the facts:

      “It is stipulated and agreed that the court may take as true and as duly proved in the above entitled cause, all the averments of the plaintiff’s amended declaration, and of each count thereof from the beginning down to and including the averment in each count of the receipt by the defendant, Seth F. Ilanchett as Sheriff of Cook County, Illinois, for service of the writ of attachment therein mentioned; and also, the following stated facts: That the several writs of attachment in the said counts mentioned are one and the same writ of attachment, and that on the 7th day of April, 1884, the Garden City Warehouse Company, the defendant in the attachment suit of the plaintiff referred to in said declaration, was doing a,general warehouse and storage business in the City of Chicago, and had in its warehouse in that city large quantities of goods and chattels of many and various kinds, a comparatively small part of which it owned, but much the greater part of which it held as bailee in the ordinary course of its business. The defendant herein as Sheriff, as aforesaid, by his duly authorized deputy, Dexter W. Nickerson, on said 7th day of April, levied said writ of attachment on all the right, title and interest of said defendant warehouse company in and to all of said goods and chattels, and in and to the warehouse containing the same; as aforesaid, and on the same day said writ of attachment was duly served on said defendant warehouse company. At the time of this levy the said deputy Sheriff was specially notified and instructed by the plaintiff’s attorney that a large but unknown quantity of said goods and chattels doubtless belonged to parties other than the said defendant warehouse company, but that the levy was to be made on all of them nevertheless, because the defendant warehouse company had an interest in or lien on the stored property for the storage thereof, and for loans and advances made thereon; and that after the levy whenever third parties should prove their ownership of any of the property, and should pay to said Sheriff the storage and the loans, the levy should be released and the storage and other money so received should be held by said Sheriff in the place and stead of the property so released; and said Sheriff by his said deputy expressly undertook to proceed on this plan, and in fact so proceeded until lie had so collected and received as storage on property which he had levied on as aforesaid, and had released under the instructions aforesaid, the sum of §4,008.60. Of this amount §3,648.90 was so received by said Sheriff prior to the return day of said writ of attachment (which was May o, 1884), and before the same was in fact returned. Of this latter amount of §3,648.90 said Sheriff appropriated to costs and expenses made under and on account of said writ of attachment, the sum of §865.47, the propriety of which appropriation is not questioned in this action; and the remainder, being the sum of §2,783.43, said Sheriff, on the first day of May, 1884, without the authority, consent or knowledge of said plaintiff, and upon the order of the defendant in said attachment, paid to a party claiming to be a creditor of said defendant warehouse company, but having no special claim to said moneys except such as was conferred by said order of the said defendant; which payment, if not justified by the law upon the facts as herein stated, deprived the plaintiff in said attachment of the benefit of his said attachment to said amount of §2,783.43; that judgment was recovered by the plaintiff in said attachment suit at the June term, 1884, for §10,075 and costs of suit; and for the purposes of this suit it is agreed that more than said amount of §2,783-.43 remains due and unpaid thereon after applying all other moneys w'hich have been or may be realized from said attachment.
    It is further mutually admitted and agreed that the levy on said warehouse (but not the levy on the contents thereof) -ivas on April 23, 1884, released by the Sheriff by the direction of the plaintiff, and that at the time the Sheriff had received only §3,199.07 of the whole amount of §4,008.60 collected and received by him as storage as aforesaid; and that the Sheriff received no other or different instructions as to the manner of levying said writ than those above set forth.
    The court thereupon found the issues for the plaintiff and assessed its damages at §2,783.43, and for that sum and costs the plaintiff had judgment. The defendant brings the record to this court by appeal.

      Messrs. Campbell & Custer, for appellant.
    Appellant, as Sheriff, could not lawfully levy upon chattels held by the Garden Oity Warehouse Company, as bailee, for the purpose of attaching the lien or interest which said company had in said chattels for its storage charges.
    There is nothing in the Attachment Act providing a way of attaching intangible rights or credits by taking possession of the thing to which the right appertains. The statute seems to contemplate attaching something tangible as the property of the defendant.
    In the case at bar, that which is sought to be subjected to the action of the writ as belonging to the defendant therein, is intangible; it can not he taken in custody and possession by the officer, nor can it he found in the possession of any person, nor can it be forthcoming to answer the judgment of the court.
    A question of public policy seems worthy of consideration in connection with this subject. The interest of a bailee for hire in the goods bailed is his lien for the storage charges. In this case a great many persons had goods on store with the warehouse company. If the lien of the bailee is subject to attachment in the manner contended for by appellee, then that lien is subject to sale, and in order to preserve it the officer selling must deliver the goods, to which the lien appertains, to the purchaser. These goods thereupon are scattered over the whole city or State, and even beyond the limits of the State, and beyond the jurisdiction of the court directing their sale. The bailor is entitled to the possession of his goods upon payment of the charges thereon; but they have in. effect been sold without his fault, knowledge or consent, and delivered to one or more purchasers, and where shall he find him or them? The purchaser may, in the meantime, have become insolvent, may have died, or may have sold the goods themselves to an innocent purchaser. Can it he that a person storing goods to-day, can have no assurance that they will not be.seized for the debt of the warehouseman to-morrow?
    The Garden City Warehouse Company was doing a general storage business in the City of Chicago, in this State. Under Secs. 1 and 2, title, Warehouses, Chap. 114, R. S„ the place in which it carried on its business was a “ public warehouse,” of class C.
    This statute gives reasonable assurance and guaranty to the depositor that the warehouseman will not remove his property from the place of storage without his knowledge and return of his receipt. Can the warehouseman evade the penalties of the statute by procuring his creditor (bona fid& or fictitious) to do for him by indirection what he can not do himself? Can a creditor, by process of law, for the collection of his debt, do that which, if done by the debtor, would subject him to imprisonment in the penitentiary ? A negative answer to these questions is a decision against the contention of the appellee in this case.
    The law, as laid down in many authorities, is that a lien is not the subject of sale, and therefore can not be taken in execution. See Leg v. Evans, 6 Mees. & W. 36; Harding v. Stevenson, 6 Harris & J. 264; Kittridge v. Sumner, 11 Pick. 50; Holly v. Huggeford, 8 Pick. 73.
    The interest of a mortgage before foreclosure, or entry for condition broken, is not liable to levy and sale under execution. Blanchard v. Colburn, 16 Mass. 346; King v. Cushman, 41 Ill. 31; Nicholson v. Walker, 4 Ill. App. 405, and cases there cited.
    Although appellant, as Sheriff, did levy upon chattels held by the Garden City Warehouse Company as bailee and did collect storage charges due thereon to the warehouse company, yet the money so collected was not thereby attached, nor was it then subject to attachment as the property of the Garden City Warehouse Company.
    What the deputy Sheriff did about the eollectioiLof the money was done by the express direction of appellee. Even though the writ authorized him to seize the property to the end that the lien of the company might be attached, yet it gave him no direction or authority to collect the money. He could not, as Sheriff, acting under the writ, act as an agent for the plaintiff therein to collect debts due the defendant therein. He conld not even do so as an individual, without the consent of the creditor.

      Coin paid to a.n attorney in satisfaction of a debt held by him for collection, can not be attached as the property of the party for whom it was collected. Maxwell v. McGee, 12 Cush. 137. See also, Carroll v. Cone, 40 Barb. 220.
    Money collected by an officer on execution is not subject to garnishment in his hands, and this outside of any statutory provision requiring its payment to the plaintiff. The money collected is not, in legal contemplation or intendment, the money of the plaintiff in execution until it is actually paid over to him. Reddick v. Smith, 3 Scam. 452; Turner v. Feudall, 1 Cranch, 117.
    The plaintiff in the execution has only a right of action against the Sheriff for the money collected. So in this case, the Sheriff, having collected the storage money, was liable to an action at the suit of the warehouse company.
    If the money so collected was then subject to attachment, appellant was not in law bound to attach it, for the reason that he was not directed so to do, but was specifically directed how to execute the writ. It was not his duty to execute it in any other manner.
    If the plaintiff directs the manner of executing a writ, he can not afterward hold the officer so exec nting it for not executing it according to its exigency. Abbott v. Edgerton, 30 Vt. 208; Cowdry v. Smith, 50 Vt. 235; Ordway v. Bacon, 14 Vt. 378; Levy v. McDowell, 45 Tex. 220.
    If the money so collected was not then subject to attachment, appellant was bound to pay it over on the order of the Garden City Warehouse Company, or, at least, the payment by him was justifiable. See Carroll v. Cone, 40 Barb. 220.
    Mr. Orville Peckham, for appellee.
    The Attachment Act should receive not a restrictive but a liberal construction, and technicalities and subtleties should not be allowed to impair its efficacy, however they may have been allowed to do so in other States. Hannibal & St. J. R. R. Co. v. Crane, 102 Ill. 249, 258.
    By virtue of their lien for storage, etc., the Garden City Warehouse Company had an interest in the goods in question which was attachable.

      As this has not been, so far as we know, expressly decided in the case of a warehouseman’s bailment, but has in the case of a pledgee’s, I wish first to point out that there is no material distinction between these two kinds of bailment— that is, no distinction which is material in this case.
    The warehouseman’s bailment involves in itself a pledge, according to Story’s definition.of the latter, “a bailment of personal property as a security for some debt or engagement.” Story on Bailments, Sec. 286.
    The warehouseman is also declared by the Illinois Supreme Court to have the rights of a pledgee, including the right to sell for his reimbursement when the debt becomes due. Cushman v. Hayes, 46 Ill. 145,153.
    Apart from authority, moreover, it is easy to see that the rights and the duties of the warehouseman do not substantially differ from the rights and the duties of the pledgee. In both cases the rights are to retain the bailment as security, and in the event of non-payment of the debt secured, to sell the bailment and thus obtain payment. In both cases the duties are to keep the bailment safely and return it on demand when the debt secured by it is paid. In the one case the security of the creditor is the primary and more prominent purpose; in the other the safe keeping of the property; but both purposes are always present in both cases, and together they are all that either of these two kinds of bail ments provides for.
    The pledgee’s interest in the pledge is subject to execution.
    Story says this is a proposition on which no direct adjudication has been made. Story on Bailments, Sec. 353, note 5.
    Edwards (on Bailments, § 264) also propounds this as a debatable question and discusses it at some length, decidedly inclining to the negative. In a note, he mentions the fact that it has been decided in the affirmative by the New York Superior Court in Saul v. Kruger, 9 How. Pr. 569.
    All the cases I have been able to find in which the language held by the court would lead logically to the conclusion that the lien could not be attached, are cases in which the attempt was made to levy on the goods without regard to the lien, and the setting np of the lien was a mere afterthought, when the matter had been brought into court.
    In Cool v. Phillips, 66 Ill. 216, the question whether the warehouseman’s right as such could have been levied on does not seem to have been raised at all. Hence Mr. Justice Walker’s obiter dictum, made probably without any thought of an application to such a case as ours, that he “had no interest in it subject to execution,” can not be considered as anything like an adjudication of the question now in hand.
    It would not be at all to the purpose to say that merely equitable interests are not subject to attachment.
    The warehouseman has “all the rights of absolute ownership, except as against the real owner.” German National Bank v. Meadowcroft, 4 Ill. App. 630, 639.
    If either of the two should be regarded as having a merely equitable interest, it is the general proprietor. “The general property which the pledgor is said usually to retain, is nothing more than a legal right to the restoration of the thing pledged, on payment of the debt.” Wilson v. Little, 2 N. Y. 443, 448.
    Certainly this legal right would seem to resemble very closely an equity of redemption.
    “ The pawnee may sell or assign all his interest in the pawn, or he may convey the same interest conditionally by way of pawn to another person, without, in either case, destroying or invalidating his security.” Story on Bailments, Sec. 324; Nash v. Mosher, 19 Wend. 431; Silverman v. Bush, 16 Ill. App. 437; Belden v. Perkins, 78 Ill. 449; Bradley v. Parks, 83 Ill. 169; Warner v. Martin, 11 How. 209; McCombie v. Davies, 7 East, 5.
    When goods are thus pledged by a factor, the original owner must tender the amount of the lien in order to recover them. Warner v. Martin, 11 How. 209; Belden v. Perkins, 78 Ill. 449.
    When the Sheriff attached the interest of the Garden City Warehouse Company in the goods on store, he simply put that interest in pledge to secure a debt due from the company.
    It being well settled that such a pledging would have been valid if done by the voluntary act of the company, what can there be to invalidate it in the solitary fact that it is done against the will of the company, and by operation of law, when that fact merely effects the one object for which the attachment law was enacted?
    To say that the absence of the debtor’s operation, in and of itself, without any other element, invalidates an attachment, is not to construe the attachment law liberally but to nullify it.
    Hence, even if we had not the authority of the decision in Saul v. Kruger, the doctrine of that case is a necessary result of the application of the Illinois attachment law to the facts of the case.
    Thus far we have proceeded on the supposition that the warehouseman’s right in the goods is the same as that ot a pledgee. But his lien is really of a more meritorious character. The pledgee, in his character of pledgee, does nothing for the benefit of the pledge itself; his custody of it is for his own security entirely. So far as the relation of pledgee and pledge goes, it would be just as well for the goods, and better for the general owner, if the pledgee did not keep them.
    The warehouseman, on the other hand, keeps the goods for the benefit of the goods. And though his custody does not add anything to their value, it certainly prevents deterioration, perhaps even total loss, and is, therefore, a benefit of the same kind equally important.
    While the pledgee has, therefore, no natural right in the pledge itself, the warehouseman has in his deposit, and may be properly said to have a jus in re, a virtual right of property by creation.
    It is simply monstrous to say that such a right is not sufficiently real to be laid hold of by attachment or execution.
    That the warehouseman’s lien rests upon this basis, is recognized in Steinman v. Wilkins, 7 Watts & S. 466; Low v. Martin, 18 Ill. 286 ; Story on Bailment, Secs. 422, 453.
    The conversion of the warehouseman’s interest into money by the giving up of the goods to the general owners and reception of the charges from them, operated to transfer the lien of the attachment to the money thus received. Wheeler v. Smith, 11 Barb. 345.
   Bailey, J.

We are of opinion that the goods stored by third parties in the warehouse of the Garden City Warehouse Company were not subject to attachment for the debts of the warehouse company. Said company, it is true, had a lien on said goods for storage, but that was a mere personal lien and was nothing more ilian a right to retain possession of said goods until its charges for storage should be paid or tendered. Chase v. Westmore, 5 Maule Selwyn, 180; Jackson v. Cummins, 5 Mees. & Wels. 342; Kirkman v. Shawcross, 6 Durnf. & East, 14. Such lien is not a conventional but a common lien, and is of the same character with the liens which the law gives to common carriers, wharfingers, inn-lceepers, bailees for hire, artisans and others who are obliged by law to receive the goods of others or to be to some expense about them, or whose services have contributed to enhance the value of the property placed in their hands. In Low v. Martin, 18 Ill. 286, the lien of a warehouseman is placed expressly upon the same footing with that of a carrier or artisan. See also, Steinman v. Wilkins, 7 Watts & S. 456. In case of liens of this character, if the lien holder parts with the possession of the property his lien is lost. Bigelow v. Heaton, 4 Den. 496; Sears v. Willis, 4 Allen, 222; Bailey v. Quint, 22 Vt. 474; Reineman v. C., C. & B. R. R. Co., 51 Iowa, 338; Geneva, etc., R. R. Co. v. Sage, 35 Hun, 95; Board of Trade v. Buckingham, 65 Ill. 72.

Liens of this character confer no rights beyond the mere right to detain the property, and give no power of sale. Mr. Hutchinson, in'his treatise on Carriers, Sec. 494, states the rule as follows: “At common law and without some statutory authority, the carrier can not sell the goods for his charges upon them. The lien confers no such right. It consists merely of the right to keep or detain the goods, and if the consignee or owner refuse to pay for the carriage. and take them, the remedy of the carrier is to have them sold under judicial orders or legal process, to be obtained, by a proceeding in equity. A sale, without such authority would be a conversion by the carrier, and he would thereby become liable to whatever damage the owner might sustain by the illegal act, and the purchaser would acquire no title.” See also, Briggs v. B. & R. R. R. Co., 6 Allen, 246; Hunt v. Haskell, 24 M. E. 339; Fox v. McGregor, 11 Barb. 41; Rankin v. M. & P. Packet Co., 9 Heisk. 564; Jones v. Pearle, 1 Strange, 557; Chandler v. Belden, 18 Johns. 157.

Such liens being personal and dependent for their validity and continuance upon the retention of the possession of the property by the lien holder, it follows necessarily that they are incapable of assignment, either by the voluntary act of the lien holder or by the proceedings in invitum. The levy of an attachment necessarily terminates the possession of the lien holder, and as a legal consequence it, at the same time, terminates also the lien. It follows that after the Sheriff has seized the goods by virtue of his attachment writ and taken the same into his possession, no right or interest of the defendant in the attachment remains in his hands which could be subjected to sale on execution.

But there is another reason why the goods in question-were not liable to attachment for the debt of the warehouse company. The warehouse, in which said goods were stored, being a place where property was stored for a consideration, was a public warehouse within the meaning of the statute of the State on that subject. Chap. 114, Sec. 121, R. S. Property stored in a public warehouse is protected from removal therefrom by the policy of the law. Sec. 143. Chap. 114, R. S., makes the removal of such property from store by warehousemen, except to preserve it from tire or other sudden danger, without the return and cancellation of all outstanding warehouse receipts, a felony, punishable by imprisonment in the penitentiary for a term of not less than one or more than ten years. Also, by Sec. 125 of the Criminal Code, it is provided that whoever, having given a warehouse receipt for property deposited in store in a warehouse, shall remove such property from such place of storage, or allow the same to be done without the written consent of the holder of the receipt, except in cases of necessity for the purpose of saving such property from loss or damage by fire, flood or accident, shall be imprisoned in the penitentiary not less than one nor more than ten years. The right of removal for any purpose except those specified being thus prohibited by law, it is clear that the warehouseman has no interest in the property stored in his warehouse, which is capable of being assigned by him, or which can be seized on execution or attachment. The very act of seizure necessarily involves a taking of the possession of the property by the Sheriff, as well as its removal by him to some other place of custody.

We are referred to some cases which sustain the right of a creditor to seize and sell the interest of a mortgagee or pledgee of personal property on execution. It is sufficient to say that those are cases of conventional liens, that is, of liens created by contract; and it is held that mortgages and pledges of personal property carry with them power of sale in the mortgagee or pledgee.

In the present case, after the Sheriff had seized the goods in store in the Avarehouse, the OAvners of the goods redeemed them from him by paying him the storage due, thus creating in his hands the fund Avhich is the subject of the present suit. The scheme by which this mode of collecting the plaintiff’s debt Avas adopted, appears to have originated with the plaintiff’s attorney, as it is admitted that he directed the Sheriff to levy upon all the property in store in the warehouse, at the same time informing him that probably most of said property belonged to other parties, and directing him to receive the storage money from such OAvners as should appear and prove their property, and hold the money in place of the property. Ho direction was given to levy on the money itself and no such levyy was in fact made.

It is insisted, howeA-er, that the lien of the attachment, upon the redemption of the property by the owners, attached by force of Iuav to the storage money paid to redeem. This, perhaps, might be true if the attachment had ever been itself a lien on the property, but as that was not subject to the attachment, no lien on the property Avas acquired by the leAry, and there Avas, therefore, no lien to be transferred to the fund.

It is further insisted that if the attachment writ Avas not already a lien on the money in the hands of the Sheriff, he should have levied his attachment upon it, and that his failure to do so was negligence. To this there are two answers. First, the Sheriff, in his treatment of said fund, was acting under the instructions of the plaintiff’s attorney, and we are unable to see that he in any degree failed to follovy such instructions. The instruction was to hold the money in place of the property, and, therefore, by the same right by which he held the property. That he did. There was no instruction to levy on the money, and so long as the plaintiff’s attorney undertook to direct the Sheriff in the performance of his duty, the plaintiff can not complain of any consequences resulting from such obedience.

In the second place, the money in the hands of the Sheriff was not the money of the warehouse company subject to attachment. The Sheriff was not the company’s agent to collect said money, and it did not become the company’s property by the mere fact of such collection. It was not until the company adopted the Sheriff’s acts that the money became its property. That it did, when it gave the Sheriff an order to pay the money over to another creditor. If the Sheriff had had a writ in his hands at that time, it might have been his duty to levy it on the money. But the attachment had then been returned, and for the purpose of making a further levy it was functus officio. There was, therefore, no negligence in failing at that time to make a levy and in paying the money over to another creditor on the company’s order.

The judgment of the court below, holding the Sheriff liable to the plaintiff for said money, is unsupported by the evidence, and the judgment will, therefore, be reversed and the cause remanded with instructions to enter a judgment in favor of the defendant for costs.

Judgment reversed.


author: Moran, P. J.

text:
    George L. Dunlap v. Perry H. Smith et al.

      Set-off—Undisputed Evidence—Deal on Board of Trade—Joint Account.

    1. In a civil action an allegation which the evidence tends to prove, must be taken as made out where there is no evidence to the contrary.
    2. In an action on a promissory note this court, upon a review of the evidence, finds that the defendant is entitled to an off-set growing out of a deal in wheat on the board of trade, said deal having been on the joint account of the maker and payee of the note.
    [Opinion filed January 25, 1888.]
    Appeal from the Superior Court of Cook County; the Hon. Joseph E. Gary, Judge, presiding.
    Messrs. E. B. McCagg and John N. Jewett, for appellant.
    Mr. S. P. McConnell, for appellees.
   Moran, P. J.

An action was brought by appellees against appellant upon a promissory note. The only material contest was as to the off-set of some §6,000 which appellant sought to have deducted from the claim against him. The off-set grew out of a certain deal in wheat on the board of trade in which there was a loss of about §12,000, all of which loss was paid by appellant.

Appellant’s contention is, that the deal was on joint account for Perry A. Smith, deceased, and himself, and that Smith’s estate is liable to him for one-half of the loss on said wheat transaction.

The evidence introduced by appellant to establish his off-set was substantially as follows: Jones, of the firm of Jones & McDonald, testified that he knew Perry IT. Smith, in his lifetime, and George L. Dunlap. That his firm had dealings with Smith and Dunlap, as operators in grain and otherwise, commencing in the latter part of 1879.

The first transaction was in short ribs, and was originally Mr. Smith’s. While it was pending, had a conversation with Smith and Dunlap together, in which said rib-deal was made a matter of discussion. Such conversation occurred on LaSalle street, near the office of Jones & McDonald.

At that interview received an additional order from Smith to buy 100,000 ribs at 10 cents decline, and to continue doing so every 10-cent decline, until I bought a million. Mr. Dan-lap asked the price of short ribs at that time. I informed him, and he said: “ Suppose you buy 100,000 for me ? ” Mr. Smith says: “Well, you buy a couple of 100,000; I have got 200,000, and we will pool them and go joint on the transact tion.” That was done and the deal closed up. I was instructed during the same conversation about the rib-deal to take orders from either of them for joint account. They were both present at the time that arrangement was made.

From that time until our firm was closed, we had no separate dealings from either of them on our boobs. Their dealings, and the dealings of each of them, were entered upon our books from that time on under the name of S. & D„, meaning Smith and Dunlap. Had several transactions in the spring, or early in the year 1880, for Smith & Dunlap in wheat, which were closed and settled for.

There was a transaction in 50,000 bushels of wheat that was not closed and settled up; can’t remember the exact date. Received the order from Dunlap at his house, on an evening shortly previous to my departure for Europe, to buy 50,000 bushels of wheat; I think April option.

The order was given for account of S. & D., the only account we had on the boobs at that time. The order was executed and I had nothing more personally tó do with the matter, but my recollection is, it was changed once or twice into options for other months and the result of the deal was a loss of some §12,000.

There was a suit to recover the loss brought by the receiver of our firm. I did not see Mr. Smith that I remember after this order was given, and did not talk with him about it till after the transaction was closed; think he was out of town when the wheat was sold. The conversation I have mentioned on LaSalle street, had with Dunlap & Smith, lasted three or four minutes, merely an accidental conversation.

C. B. McDonald, of the firm of Jones & McDonald, testified that he was present at the conversation between Jones and Smith & Dunlap, related by Jones, and heard the instructions given to Jones, that all transactions should be for their, Smith & Dunlap’s, joint account; says his firm after said conversation had transactions for said parties extending several months, and that orders given by each of them were taken for account of Smith & Dunlap.

M. C. Lightner testified: Knew Perry H. Smith and George L. Dunlap, and also Jones & McDonald. My firm was Smith & Lightner. Our firm had dealings with Jones & McDonald, and at the time of their failure that firm was indebted to us. Had an interview about that time with Perry H. Smith, in relation to our claim against Jones & McDonald; some time in January, 1881. Mr. Smith told me he had made a purchase of my partner of this claim against Jones & McDonald, as an offset to the claim Jones & McDonald had against Smith & Dunlap. He said that they had a claim against Smith & Dunlap, and he wanted this for a protection or part protection.

To rebut this testimony, appellees called one witness, Ernest Smith, the partner of Lightner, who testified subject to objections, that Perry H. Smith made the arrangement about his firm’s claim against Jones & McDonald, with him, and that said Perry H. Smith said, “Jones & McDonald have made a claim against me jointly with Dunlap; they have no claim whatever, and I will buy that of you; they are only paying twelve and one-half cents on the dollar, and it will protect Dunlap anyhow.”

This testimony does not purport to relate to the conversation testified to by Lightner, and it was manifestly hearsay, and not competent testimony in behalf of appellees. As it was admitted subject to objections, it is altogether likely that it was not considered by the court, and at all events it should not be considered and must, in weighing the testimony, be regarded as not in the case.

There remains to he considered only the evidence introduced by appellant to support his claim to set-off. This evidence, in our opinion, fairly tends to show that Dunlap, at the time he gave the order to Jones to purchase the 50,000 bushels of wheat, had the right to give the order for the joint account of Smith & Dunlap, and that the order was given and the purchase made for said joint account.

The instruction given to the firm of Jones & McDonald, and sworn to by the members of said firm, was an instruction which would authorize future dealings by said firm upon orders given by either Smith or Dunlap upon the joint account of said S. & D., and it was a continuing authority from Smith and from Dunlap, each to the other, to give orders to said firm of Jones & McDonald, for the joint account of Smith &* Dunlap.

The contention of counsel for appellee, that the joint venture had reference to, and were authorized only in the rib-deal, which was pending at the time the instruction was given, is answered by the evidence that transactions were carried on for several months afterward and that some of the deals prior to the disputed one, were wheat deals; that Smith & Dunlap each gave orders and that those orders were taken for their joint account. There is nothing that we have been able to discover which leads us to conclude that this evidence introduced should be treated as of no weight.' The suggestion that it is improbable that men "would, with so little discussion or formality, authorize each other to make for both, transactions of such magnitude, loses much force when it is admitted that they actually did authorize the colossal transactions spoken of in the rib-deal.

Courts can hardly establish a rule which will authorize the rejection of unimpeached evidence, because its direct tendency is to prove that men engaged in speculation on the board of trade contracted hastily and in a few words to engage in what might prove large and reckless ventures. It takes but slight-evidence to prove a contract to do or not to do a given thing within the power of the contracting parties where there is no conflicting or contrary evidence. Here there is no conflict as to the facts in evidence. There is no controversy as between witnesses and no occasion to compare their intelligence or their opportunities to Imow whereof they speak, or to defer to the superior advantages of the trial judge in determining which of two conflicting witnesses is most credible.

The question simply is, do the facts established by the evidence, and which the court is bound to take as true, support the allegations of appellant? We think they do.

An allegation which the evidence tends to prove, must in a ' civil case be taken as made out where there is no evidence to the contrary. The ultimate fact to be proved was that Dunlap, at the time he gave the order to purchase the 50,000 bushels of wheat, had authority to give such order for the joint account. That he had such authority is the natural and fair inference from the evidentiary facts proved. They make ajprima facie case, and until their probative force is overcome by some evidence which justifies a contrary belief, we must hold that appellant is entitled to be allowed the set-off claimed against the appellee.

The judgment will be reversed and the case remanded for a new trial.

Reversed and remanded.


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    Stephen L. Mershon et al. v. E. M. Hulse et al.

      Insolvency—Preferences—Judgment Notes—Attorney's Fees.

      1. An insolvent debtor may prefer particular creditors to the extent of his liability to them, but he can not add anything by way of gratuity and make it part of the preferred claim.
    2. Where an insolvent debtor has included attorney’s fees in judgment notes, made and delivered for the purpose of preferring certain creditors and to enable them to obtain immediate judgments and executions, such fees are mere gratuities which equity will follow for the benefit of other creditors into the hands of said creditors and their attorneys.
    The case of Weigley v. Matson, 24 Ill. App. 178, distinguished.
    [Opinion filed January 25, 1888.]
    If error to the Superior Court of Cook County; the Hon. Henry M. Shepard, Judge, presiding.
    Mr. Millard R. Powers, for plaintiffs in error.
    Messrs. Frank J. Smith & Helmer, for defendant in error.
    The Supreme Court have held that contracts for attorney’s fees in trust deeds, mortgages and powers of attorney to confess judgment are legitimate and binding contracts in the following cases s Nickerson v. Sheldon, 33 Ill. 372; Ball v. Miller, 38 Ill. 110; Clawson v, Munson, 55 Ill. 394.
    Contracts for attorney’s fees in judgment notes, mortgages, etc., are upheld also in Indiana, Iowa, Pennsylvania, Tennessee, Texas and Oregon, and probably in other States. Peyson v. Cole, 4 Pacific Rep. 520; Smith v. Silvers, 32 Imler 321: Imler v. Imler, 94 Pa. St. 372; Parham v. Pulliam, 5 Cold. 467.
   Bailey, J.

This was a bill in chancery, in the nature of a creditor’s bill, brought by Stephen L. Mershon and George Bancroft, judgment creditors of E. M. Hulse, to recover from various other judgment creditors of said Hulse and their attorneys certain moneys.collected by them from him as attorneys’ fees. All the material facts alleged in the bill were admitted at the hearing by stipulation, and are in substance as follows:

On the 6th day of October, 1886, the complainants recovered three judgments against Hulse, amounting in the aggregate to §2,704.40, and executions were duly issued on said judgments and returned wholly unsatisfied. The indebtedness upon which such judgments were rendered was in existence and was owing from Hulse to the complainants on the 9th day of September, 1886, said indebtedness being then evidenced by four promissory notes not due. On said 9th day of September, 1886, said Hulse, after having carried on business for a number of years, became and was insolvent. On that day he retained certain attorneys and informed them of his insolvency, and told them that he desired to prefer certain of his creditors in such manner as the law would permit. Said attorneys advised him that he could lawfully give such of his creditors as he saw fit judgment notes for the amounts due them, respectively, and add thereto reasonable attorney’s fees for the entry and' collection of the judgments. Said attorneys thereupon, at the request of Hulse, prepared judgment notes, in favor of the creditors whom Hulse wished to prefer, due on demand, for the full amount of the debts due them, respectively, said debts aggregating $8,151.26, and inserted in each note a provision for an attorney’s fee, in addition to the debt, of about fifteen per cent, of the amount of the debt, the aggregate of said attorneys’ fees being $1,258. Said notes were dated September 10, 1886, and after being signed by Hulse they were left with said attorneys with instructions to send for said creditors, and if they were willing to accept the notes, to deliver the same to them upon their giving receipts in full for their debts in consideration of said notes. Said attorneys sent for said creditors, and they, on being made acquainted with the foregoing facts, accepted said-notes in full of their debts, and gave receipts accordingly. Said creditors at the same time employed said attorneys as their attorneys to enter judgments upon and collect said notes out of the assets of Hulse.

On the lltli day of September, 1886, said attorneys, acting for the payees of said notes, caused judgments to be entered thereon for the full amount thereof, including the attorney’s fees, as above specified. Executions were forthwith issued on said judgments and delivered to the Sheriff, who levied all of them except one for §611, upon the property of Hulse. The last named execution was returned unsatisfied, and a creditor’s bill being immediately filed thereon, a receiver was appointed, and all the remaining available assets of Hulse were placed in his hands. As the result of said proceedings upon said execu tions and creditor’s bill, all the property of Hulse was collected and converted into cash, realizing sufficient to pay all of said judgments, including the attorney’s fees, in full, but leaving no surplus to be applied to the complainants’ judgments or the claims of the other creditors of Hulse. A portion at least of said attorney’s fees- have been received and are retained by said attorneys.

The cause was heard on bill, answer, replication and said stipulation as to the facts, and a decree rendered dismissing the bill at the complainant’s costs for want of equity, and the complainants bring the record to this court by writ of error.

It can not be questioned that an insolvent debtor may lawfully prefer particular creditors to the extent of Ms liability to them, but that is as far as he can go. He has no more power to add anything to such liability by way of a gratuity and make that a part of the preferred claim than he has to make a gratuitous disposition of his property to any other party. All such voluntary gifts of property by an insolvent will be presumed to be fraudulent and therefore void.

In the present case the legal liability of Hulse to his creditors was for the amount of the debts owing from him to them and no more. He was under no legal liability to indemnify them against the expense of collection. If they were under the necessity of employing and paying attorneys 4o enforce collection, that was a matter of their own with which he had no concern and for which, according to the policy of our law, they could never call upon him to respond. It follows that the attorneys’ fees in addition to the amount of the debts were mere gratuities, and stand, so far as we can sec, upon no different footing from other gratuitous dispositions of property by an insolvent debtor. As the creditors to whom the judgment notes were given, as well as their attorneys, had full knowledge, at the time the notes were executed, of the insolvency of Hulse and of the fact that the attorney’s fees were mere gratuities, equity will follow the fund thus fraudulently disposed of into the hands of said creditors and their attorneys, and compel an application of it to the complainants’ judgments.

This case is essentially different from Weigley v. Matson, 24 Ill. App. 178, That case was decided upon demurrer to the bill, and as there were no averments to the contrary, it was presumed that the judgment notes, upon which the judgments sought to be set aside were entered, were given for the indebtedness at the time it accrued, and run for specific periods of time, and it was held that, under those circumstances, the credit given to the debtor was a sufficient consideration for the agreement to pay attorney’s fees and thus indemnify the creditors against the costs of collection. In the present case no credit was given, the only purpose of executing the notes being to prefer the creditors to whom they were given, and to enable them to obtain immediate judgments and executions, and thus make legal appropriation of their debtor’s estate to the payment of their debts before other creditors were in a position to avail themselves of any legal remedy.

The decree will be reversed and the cause remanded with directions to the court below to take an account of the moneys collected as attorney’s fees in the hands of the several defendants, and to decree the payment of said moneys in satisfaction of the complainants’ judgment,

Decree reversed


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    Archie Greathouse v. Sarah Summerfield.

      False Imprisonment&emdash;Arrest&emdash;What Constitutes&emdash;Oral Instructions&emdash; Error without Prejudice.

    1. While it is error for the court to instruct the jury orally, it is not sucli error as will reverse where the appellant is not thereby injured.
    2. In an action to recover damage for false imprisonment, it is held: That the evidence wholly fails to show an arrest of the plaintiff; and that the court properly directed the jury to find for the defendant.
    3. While in general no actual force or compulsory seizure is necessary to constitute an arrest or imprisonment, there must be wqrds and acts used and done toward the person to be arrested clearly showing an intention to arrest, and his submission ípust be to a threatened and reasonably apprehended force.

      [Opinion filed January 25, 1888.]
    Appeal from the Circuit Court of Cook County; the Hon. Bichard S. Tuthill, Judge, presiding.
    Mr. Edward H. Morris, for appellant.
    When there is evidence tending to establish plaintiff’s right to recover, it is an invasion of the province of the jury to instruct them to find for the defendant. Guerdon v. Corbett, 87 Ill. 272; Merricks v. Davis, 65 Ill. 319; Hinsdale Doyle Granite Co. v. Armstrong, 6 Ill. App. 313.
    The giving of an instruction to find for the defendant was practically a demurrer to the evidence, to be tested by the same rules, and eliminated all questions as to the truth of plaintiff’s testimony, but admitted its truth and all conclusions of fact which .the jury might draw from the same. Parks v. Ross, 11 How. 373; Phillips v„ Dickerson, 85 Ill. 11; C., R. I & P. Ry. Co. v. Lewis, 109 Ill. 120.
    Appellee had introduced evidence in her own behalf and had closed her case. At that stage of the proceedings no motion to take the case from the jury or demurrer to the evidence could be made. She was bound to make it at the close of appellant’s evidence or not at all. Holmes v. C. & A. R. R. Co., 94 Ill. 439.
    No brief filed for appellee.
   Moran, P. J.

Appellant brought this action against appellee to recover damages for false imprisonment. After the evidence of both parties had been introduced on the trial, the court orally instructed the jury to find a verdict for the defendant. This action of the court is assigned for error. While it is error for the court to instruct the jury orally,- it is such an error as will not reverse, where it is manifest, on an inspection of the entire record, that no injury could result from such error to the party complaining thereof.

In this case while plaintiff swore that defendant directed an officer to arrest him, he wholly fails, in our opinion, to show any actual arrest, and without having proved an arrest, could not be entitled to a verdict.

Plaintiff’s account of what occurred at the time of the alleged arrest is in substance as follows: Saw defendant holding a conversation with an officer and they came and asked me to search with them for the purse and I looked and took my key and unlocked and pulled out everything. When we could not find it, the officer said, Greathouse, come and go up to the check office with me. And I said what for? and he said, well we have todo a great many things we don’t like to do. I don’t know the officer’s name. He met all trains that came in that depot. I said, well, if I have to go I will go, and I lounged around there about half an hour and a lady was in my charge to go to a certain place. The officer and defendant had a conversation. I did not hear what was said. I had a conversation with another officer. He.said, don’t you want to go up to the court house with me? and I said, all right, and we went. Was taken to Bonfield’s office, and when defendant came in the office she said “ arrest him,” he has the pocketbook. He ordered me to take off my clothes and I was searched. They found some money on me and they looked it over and returned it over to me. Defendant was present. I went right.along with the officer. He did not force me, there was no need to force me. He did not taire hold of me, no man’ laid a hand on me till I came to the office and was searched. I don’t remember whether I took the things off or handed them to him, but I took my clothes off as he asked me to. He ordered me to take my things off and I took them off. I did not consent, but he ordered me and I did not object.

This does not establish an arrest either at the depot or at Bonfield’s office. While in general no actual force or manual touching of the body, no compulsory seizure is necessary to constitute an arrest or imprisonment, yet there must be words and acts used and done toward the person to be arrested which clearly show an intention to arrest, and his submission must be as to the caption. Thus, if an officer with a void process notifies a person that he arrests him and the person so notified submits and accompanies him, this is an imprisonment. But it is the fact of compulsory submission which brings a person into imprisonment; an impending and threatened physical violence, which to all appearance can only be avoided by submission. For discussion as to what will constitute a constructive arrest and imprisonment and a review of the cases, see Searls v. Viets, 2 Thomp. & G. (N. Y. S. C.), 224.

The submission must be to a threatened and reasonably apprehended force. Here the officer said nothing which indicated an intention to arrest. He asked the defendant if he did not want to go to the court house with him, and he said all right, and went along. The officer had no authority to arrest and did not pretend to have. The language and acts of the plaintiff at the depot indicates very plainly that lie knew he was not arrested, and that he did not have to go, unless he was willing to do so to clear himself of the suspicion against him. At Bonfield’s office he was not placed under arrest by word or deed. He was told to take off his clothes, and he did so without protest or objection. Here again his act was voluntary and done to allay the suspicion that he had the lost purse. It may be that defendant in error was liable to plaintiff in another form of action, but certainly not for false imprisonment, for there was no imprisonment and no arrest. There was no evidence of an arrest, competent to sustain a finding against defendant in error, and hence the court in sustaining what was practically a demurrer to the evidence committed no error.

The instructions should have been in writing as required by the statute, but as the plaintiff made out no case the error did not affect him injuriously. Therefore the judgment of the Circuit Court must be affirmed.

Judgment affirmed*


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    Alois Podrasnik and Charles H. Ehlebracht v. R. T Martin Company.

      Partnership — Dormant Partner — Definitions—Dissolution—Notice— Notes—Recovery under Common Counts.

    1. A dormant partner is one whose name is not known or does not appear as a partner, but who is a silent partner and partakes of the profits.
    2. Where one is embraced in the title of the firm under the general description, “ & Co.,” he isa general partner.
    3. Where proper notice of a dissolution is not given and the business is continued in the firm name, the retiring partner remains liable as to persons dealing with the other partner without notice, actual or constructive, of the dissolution.

      4. In an action on firm notes, the plaintiff, if not entitled to recover on the notes because of their invalidity, may recover under the common counts for the firm indebtedness for which the notes were given.
    [Opinion filed January 25, 1888.]
    Appeal from the County Court of Cook County; the Hon. Richard Prendergast, Judge, presiding.
    Mr. Gr. Frank White, for appellants.
    Messrs. Henry C. Van Schaack and Frank E. Page, for appellee.
   Bailey, J.

This was a suit in assumpsit, brought by the B. T. Martin Company, a corporation, against Charles H. Ehlebracht and Alois Podrasnik, as co-partners under the name of C. H. Ehlebracht & Company, to recover the amount of two promissory notes made by C. H. Ehlebracht & Company, payable to the order of said R. T. Martin Company, one for §301.87, dated March 1,1886, and the other for §300, dated March 15, 1886, both maturing four months after date. The declaration consisted of special counts on the notes and the common counts, and the defendants appeared separately and each pileaded non assumpsit, and also a plea verified bv affidavit, denying joint liability with his co-defendant. On the trial before the court, a jury being waived, the issues were found for the plaintiff, and the plaintiff’s damages assessed at $315, and judgment was rendered accordingly.

The principal controversy at the trial arose upon the question of the liability of the defendant Podrasnik as a partner in the firm of O. H. Ehlebracht & Company. It appears that for some time prior to July 1,1885, defendant Ehlebracht and one Baldwin were partners, doing business as retail dealers in wall paper, under the firm name of Ehlebracht & Baldwin, and that on or about that date, Ehlebracht, being financially embarrassed, Podrasnik, at his instance, bought out the interest of Baldwin in said firm and became himself a partner with Ehlebracht, the business thereafter being carried on under the firm name of C. H. Ehlebracht & Company. Podrasnik, as it appears, took no personal charge of the business, and he does not seem to have been advertised or generally known as a member of the firm. On or about February 1, 1886, the firm was dissolved by the retirement of Podrasnik, and Ehlebracht thereafter continued to carry on the business under said firm name of C. H. Ehlebracht & Company. Personal notice of the dissolution was given by Podrasnik to most or all of the then existing creditors of the firm, but no notice of said dissolution was published, nor was any notice, actual or constructive, given to any persons or to the public beyond said personal notice to said existing creditors. About February 1,1886, but whether before or after the dissolution is disputed, Ehlebracht ordered certain goods of the plaintiff, which were afterward delivered, and for the goods so purchased the notes in suit were executed and delivered to the plaintiff by Ehlebracht at or about the days of their respective dates. Subsequently Ehlebracht became insolvent and made an assignment for the benefit of his creditors, and as the result of certain composition proceedings among said creditors, the proceedings under the assignment were discontinued upon payment to each of fifty per cent, of his claim. In this composition the plaintiff received $302.43, and executed a receipt in full on all demands against the estate of Ehlebracht, but therein expressly reserved all its rights, claims and demands against said Podrasnik, and provided that said receipt should in no way be construed as releasing or affecting the plaintiff’s claim against him.

The evidence shows beyond controversy that from July 3, 1885, to February 1, 1886, Podrasnik was actually a partner in the firm of C. H. Ehlebracht & Company. He himself testifies positively and unequivocally that he was such partner. His partnership relation being thus confessed, his liability for the indebtedness in question would seem to follow from any view of the evidence we are able to take.

The plaintiff’s evidence tends to show that the goods for which the notes were given were ordered and purchased by C. H. Ehlebracht & Company in January, 1886, and while Podrasnik was confessedly a member of the firm, though delivered subsequent to the dissolution. If this evidence is true, the indebtedness for which the notes were given was firm indebtedness, for which Podrasnik was unquestionably liable. It is true the defendant’s evidence tends to show that said goods were not ordered until some time in February, and after the dissolution. The most, however, that can be said on that question is that the evidence is conflicting, and the court having found the issues for the plaintiff, will he deemed to have resolved the conflict thus raised in the plaintiff’s favor, and we are unable to say that such finding is not fairly warranted by the evidence. The court below, sitting as a jury, was the proper tribunal to decide contested questions of fact, and it is not for us to disturb his finding, unless it appears to be clearly and manifestly against the preponderance of the evidence, and-we are unable to say that such is the case here.

But it is urged that even if the indebtedness was a partnership indebtedness, Ehlebracht had no authority after the dissolution to execute promissory notes therefor in the name of the firm. Whether the notes were valid as firm paper does not, in the view we take of the case, seem to us to be material, since the plaintiff, if not entitled to recover on the notes by reason of their invalidity, was entitled to recover under the common counts for the firm indebtedness for which the notes were given. The evidence not only established the execution of the notes, but their consideration, and that consideration being a firm indebtedness, was evidence applicable to the common counts, and warranted a recovery under those counts.

But even if we w-ere to construe the evidence as -showing that the indebtedness was incurred after the dissolution, we think that defendant Podrasnik must still be held liable. Hot having given proper notice of the dissolution, and the business being afterward carried on in the firm name, he was still liable to persons dealing with the other partner without notice, actual or constructive, of the dissolution. In Southern v. Grim, 67 Ill. 106, it is held that where a partnership is dissolved and one of the partners continues the business the same as before, the other, in order to protect himself, should give public notice of the dissolution in the town where the firm carried on its business. Unless such not;ce is given, persons dealing with the partner who continues the business, without actual notice of the dissolution, will have the right to rely on the credit of the firm. Sec also Parsons on Partnership, 412. Doubtless as to persons who had not previously dealt with the firm, a notice by public advertisement would have been sufficient. Meyer v. Krolin, 114 Ill. 574; Hicks v. Russell, 72 Ill. 230. Ho such notice, however, was given in this case.

But it is insisted that Podrasnik was a dormant partner and was therefore not required to give notice of the dissolution in order to protect himself from liability to persons afterw-ard dealing with his co-partner. It may be conceded that if he was a dormant partner, such notice was unnecessary; but was he such partner? Story defines a dormant partner to be one whose name is not known or does not appear asa partner, but who, nevertheless, is a silent partner and partakes of the profits. Story on Partnership, Sec. 80. According to Mr-Parsons, the word implies both the qualities of secrecy and inactivity, “ It seems to be most common and most convenient to use the word as indicating a partner who both keeps himself concealed and who refrains from any active interference with the business or management of the firm.” Parsons on Partnership, 33. In Jones v. Fegely, 4 Phila, 1, it is held that a dormant partner is one whose name is not mentioned in the title of the firm or embraced in some general term, as “company,” “sons,” etc. In Deford & Co. v. Reynolds, 36 Pa. St. 325, it was held that one who was a member of a partnership trading under the name of R. McOulloh & Co., did not become a dormant partner by reason of the creditor being ignorant of the name of the co-partner of R. McOulloh, and that it would be deemed that the credit was given to such partner under the name of “ & Co.” In discussing the question the court say: “McOulloh and Reynolds were in partnership, it is admitted, until April 7, 1853. They were the only partners. They transacted business under a firm name that represented to those dealing with them that some other than R. McOulloh was responsible. The vendor of goods of course gave credit, not to McOulloh alone, but to him and to whatever other persons were embraced within the company. He may not have known the name of the person included under the description “& Co.,” and yet have known that the partner not named was the most responsible. Indeed, he might have been the active partner and yet unknown by name to the creditor.” In the same case, after citing the definition of a dormant partner given in Mitchell v. Dale, 2 Harr. & Gr. 172, viz., that every partner is dormant unless his name appears in the firm “or is embraced under general terms as the name of one of the firm and company,” the court remarked: “Without assenting to this as universally true, it may be said that its obvious implication is, that if one is embraced in general description, the name of one partner and company, his is not a ease of dormant or secret partnership.”

While it is true in the present case that Podrasnik took no active part in the management of the business of the firm, and that his relations to the firm were not generally known, yet when he became partner the partnership adopted a firm name indicating and publishing to the world that another beside Ehlebracht belonged to the firm. This was wholly inconsistent with the theory of the silent partnership, or of a partnership professedly concealed from the world. The partnership relation was openly avowed, and the public were invited to treat with the firm composed of Ehiebraclit and another, and the other on inquiry turns out to be Podrasnik. We are of the opinion that Podrasnik was not exempted from the general rule as to notice of the dissolution, in order to protect himself from liability for subsequent debts contracted by his late co-partner.

Some complaint is made of certain rulings of the court in the admission of evidence. We have duly considered the points made and are of the opinion that there is no material error in that respect.

Finding no error in the record, we affirm the judgment.

Judgment affirmed.