Sellers ex rel. Liles v. Streator, 50 N.C. 261, 5 Jones 261 (1858)

June 1858 · Supreme Court of North Carolina

50 N.C. 261, 5 Jones 261

ROLAND R. SELLERS to the use of JAMES A. LILES v. EDWARD H. STREATOR.

Where one partner executed a bond in the name of the firm, under seal, for a debt due by the firm, in an action by the^obligee on such bond, a debt due by the obligee to the firm is a good set-off, notwithstanding the plaintiff is allowed to entera nol.pros. as to one of the firm, and proved that only the partner retained as defendant, signed the instrument.

This was an action of debt, tried before PeesoN, J., at the Pall Term, 1857, of Anson Superior Court.

The suit was commenced by warrant against Thomas Britt and Edward R. Streator, merchants aud partners, trading under the name of Britt and Streator, to answer Roland R. Sellers to the use of James A. Liles, of a plea of debt, due by note for sixty dollars, with interest. Prom the judgment of the justice of the peace there was an appeal to this Court, and here the plaintiff declared in debt against Thomas Britt and Edward II. Streator as partners, &c., upon a bond which is set forth as -being signed by “ Britt and Streator” with a scroll representing a seal. The defendants admitted the execution of the bond, whereupon, the plaintiff read it to the jury and closed his case.

The defendants then produced, in support of their plea of set-off, justices’ judgments in their favor, against Noland N. Seilers, the plaintiff, for more than the amount of the debt claimed by him.

The plaintiff then asked leave to enter a nolle prosequi as to Britt, which was allowed, and then he proved that the signing of Britt and Streator to the bond was in the handwriting of Edward II. Streator; and the plaintiff contended, that inasmuch as one partner cannot bind the other by deed, that this was the debt of Streator alone, and, therefore, the defendants’judgments could not be allowed as a set-off. But the Court held otherwise, and the plaintiff excepted.

Verdict and judgment for the defendant, and appeal.

Kelly, for the plaintiff.

Ashe, for the defendant.

Battle, J.

The debt for which the def’t. Streator endeavored to give the security of the sealed note of Britt and Streator, who -were partners in trade, was undoubtedly the debt of the firm, and the judgments obtained by them against the plaintiff, possessed that mutuality of claim which justified the Court in allowing the one to be set off against the other. Streator certainly did not execute the bond as his own individual obligation, and it cannot be treated as such. In the case of Delius v. Cawthorne, 2 Dev. Rep. 90, it was decided that an agent, who liad only a parol authority, could not bind his principal by a bond, nor would the instrument, though sealed by him, in the name of his principal, be the bond of the agent. It would not be so, because it did not purport to be his deed. Eor the same reason, though one partner cannot bind the firm by deed, yet the deed will not be that of the partner who executes it. And, in truth, a debt intended to be thus secured, -would remain the simple contract debt of the partnership, and must be so treated in any action upon it.

Considered in that light, and supposing it to have been declared upon in a proper manner, the plaintiff could not, by suing one only of the partners, prevent the firm from pleading and proving as a set-off a debt to them from the plaintiff. . In this particular case, there is another fatal objection to the plaintiff’s recovery. From the record, it appears that ho declared upon a bond executed by two obligors, and according' to his own allegation, he proved a bond executed by one person only. The instrument proved, then, was a different one from that which was declared on; so there was a fatal variance between the pleadings and the proof.

Pee Cueiaxi, The j ndgment must be affirmed.