Foley v. Robards, 25 N.C. 177, 3 Ired. 177 (1842)

Dec. 1842 · Supreme Court of North Carolina

25 N.C. 177, 3 Ired. 177

PATRICK FOLEY vs. WILLIAM H. ROBARDS, Jr. & AL.

December 1842.

Where a writ is issued against two copartners for a partnership debt, and one' of them is arrested and gives bail, such bail, upon being afterwards compelled by due course of law to pay the debt, has no remedy except against the individual for whom-he became bail. He has no' claim upon* the'other partner.

The case of Osborne v Cunningham, 4 Dev. & Bat. 423, cit'éd and-approved.

Appeal from the Superior Court of Law of Granville County, at Fall Term, 1842', his Honor Judge Settle presiding.

This Was an' action of assumpsit, to which the defendants pleaded the general issue, and on the trial, the facts appeared to be these. The defendants, being partners in trade under the firm of Robards and Ferguys, on the 26th of March, 1839, made their promissory note in- the' name of the said firm, for $870 75, payable six months after date, to Messrs, Doremus, Suydam <fc Nixon, of New York — that on the 29th of October, 1839, the said Doremus, Suydam & Nixon sued out a writ from the Circuit Superior Court of Law, for the town of Petersburg, in the State of Virginia, against the defendants as partners, under the said name and style of Robards and Ferguys, upon which writ the defendant Fer-guys was arrested, and gave a bail bond in due form for his appearance to answer the action with the plaintiff, as bail — that the writ was returned, “non est inventus,” as to the defendant Robards — that judgment was duly obtained against the defendant Ferguys alone, by default, the writ being abated as to Robards for want of service — and that such proceedings were taken upon the judgment, that (the said Ferguys neither appearing nor paying the judgment nor any part thereof,) a recovery was regularly had against the as bail, and the said judgment paid and satisfied by the plaintiff. The counsel for the defendant Robards insisr-ec*> l*iat plaintiff was not, upon this state of facts, entitled to sustain his action against the said Robards, because no privity was established between them, inasmuch as by becoming bail for the said Ferguys, the plaintiff incurred a Há-bil ty not for the said firm of Robards and Ferguys, but for the personal benefit and relief of the said Ferguys only, and was not in law the surety of the said Robards or of the said firm — and as it was not proved nor alleged that the plaintiff had in fact become bail upon any request of thesaid Robards, the plaintiff had not shewn himself entitled to a verdict as against him ; and the counsel prayed the court so to instruct the jury. The judge being of that opinion, instructed the jury accordingly. The jury found a verdict against the defendant Ferguys, and in favor of the defendant Robards, and the court having rendered judgment in pursuance of the verdict, the plaintiff appealed to the Supreme Court.

Badger & Waddell for the plaintiff.

Iredell for the defendant.

Ruffin, C. J.

The opinion delivered to the jury is founded on the decision of this court, in the case of Osborne v Cunningham, 4 Dev. & Bat. 423 ; and, as we think, is in conformity to that decision. On the part of the plaintiff, however, a distinction is taken between the case of ordinary joint and several contracts, and that before the court; which is the case of partners, each of whom had authority to request for both, and on the credit of both, another person to lend money to pay their partnership debt, or to become in any way responsible for it. We admit that there is that difference between the two cases. If one. of two makers of a promissory note borrow money to pay the debt, and therewith he doth pay it, the lender cannot look to the other maker of the note, saying that this money went to pay a debt for which he was liable; for it was not advanced at his request. On the other hand, one partner has authority to borrow money for the partnership purposes generally, and especially to pay a debt of the partnership; and for the money thus borrowed, or for that which the surety was compelled to pay upon his undertaking for the firm, each member of it is undoubtedly liable. But that distinction, as it occurs to us, will not sustain this action by taking it out of the rule of Osborne and Cunningham. For, although one, who lends the money or becomes responsible upon the request of one partner, may have his redress against all the partners ; yet that is only when he lends the money to the firm, or when he becomes responsible as surety for the debt of the partnership, as the debt of the partnership. With respect to advances of money, it is true that, if partners agree to borrow money and it goes to their use, the lender may come in upon the joint effects, although he took as a security the bond or note of an individual partner; as was decided in Ex-parte Brown, cited in Ex-parte Hunter, 1 Atk. 225. But it was held by Loud Hardwicke, in the latter case, that where the contract was not made with both partners, but the money was lent to one of them, though for the purpose oí being applied to a partnership in which he was engaged, and the lender took his separate bond, he was confined to his remedy on the bond, and could not make the partnership liable, on the ground that it had the benefit of the money; for that was a matter between the partners themselves. The case of Bevan v Lewis, 1 Sim. 376, is a very strong authority to the same effect. There, one partner, with the privity of his co-partner, borrowed money in his own name, and gave his separate notes for it, and it was applied to the purposes of the partnership by being paid, by the direction of the co-partner, to the bankers of the co-partners to their joint credit and used in payment of their debts; yet, after judgment on the notes, and execution served on the stock and effects of the company, it was held, on the bill of the other partner, that the judgment creditors could, in equity, only subject the share in the surplus of the defendant in execilt'on 7 and consequently, -the partnership accounts taken in order to ascertain what was comino; to that partner. To the same effect, is the case at law, of Lloyd v Freshfield, 2 Carr and Payne, 325. These cases seem to establish a general principle, that in point of law the contract must be joint in order to charge thereon the partnership ; and that it is not sufficient to make it a joint contract, that the money was applied to a partnership debt, provided it was not advanced upon a treaty with the partnership, but was advanced to one of the partners and upon his separate security. Thus, if Ferguys had given the note of “-Robards & Ferguys,” for the debt to Doremus, Suydam and Nixon, and Foley had joined therein as surety, it is dear that the plaintiff would be entitled to an indemnity from the joint effects.of both partners. But if Ferguys had given his own note for the debt, and Foley had executed that note as his surety, the cases cited establish, that the form of that contract would limit Foley’s recourse to Ferguys, although the debt originally was that of “ Robards and Ferguys.” In point of law, .that separate note of Ferguys was not the joint contract of the partnership ; and that gives character .to the remedy of the .creditor and of the surety.. The same principle applies to the case of the plaintiff’s undertaking as the bail of one of the partners. The creditor in that action could take no steps upon that judgment against Robards, n.or could the bail arrest Robards and surrender him, .so that h.e plight be imprisoned and enforced to pay the debt in discharge of the bail. He had the right to discharge himself by taking Fer-guys, and he is confined to 1ns redress against him. In point of form and law, the plaintiff entered into no engagement for “Robards and Ferguys,” or for Robards, but only for Fer-guys as Ms bail. It does not even appear that he knew the debt was a partnership debt. It would be a .dangerous application of the doctrine of substitution, to enable .a person, who pays money as the bail of one person, to have recourse for it against another person, who was remotely liable for it, if sued in another action. There is no case of the kind that we are aware of; and that there is none, is one of the strongest arguments and authorities against this action; since the instances must have been numerous, in which the bail of one partner has been obliged to pay a partnership debt.

Peu Curiam. Judgment affirmed.