Holdane et al. v. Butterworth.

year; on the 1st of March, 1855, the defendants, Tupper & Lee, formed a partnership, under the name of "C. H. Tupper & Lee;" Lee was a man of but little means, and for some time previous had been foreman of the establishment; the new firm conducted its business at the same place, and in its proper name. They sent circulars, dated March 1, 1855, signed with their names in full, "by the post, to such parties as had formerly dealt with the house," stating that they had formed such partnership to transact the same business as the Atlantic Forge Company had previ ously done, and at the same place; and the same fact was also communicated orally to some of those who had formerly dealt with the old firm; no notice of the dissolution of the old firm or of the formation of the new one was published in any news

paper.

It was proved that there was a small tin sign on the front office, before the new firm was formed, which was taken down, and that a new sign was put up, (when the new firm was formed,) having on it the names, "C. H. Tupper & W. M. Lee." That the debts owing in March, 1855, when the firm was dissolved, were paid principally by Butterworth, at his office in the Merchants' Exchange. Butterworth was not in any way interested in the new firm.

The sale of the iron by the plaintiffs was made thus: On the 8th of October, 1855, the plaintiffs sent to C. H. Tupper a note in these words, viz.:

"C. H. TUPPER, Esq.:

"NEW YORK, Oct. 8th, 1855.

"Dear Sir-We have for sale about ten tons faggoting iron, $55 per ton, 6 months. These are of Ford's make.

Tupper called on the plaintiffs soon, and said he would take the iron, and would send his cart for it. He did so. The plaintiffs charged the iron to C. H. Tupper, and made out and sent with it a bill for it in the name of C. H. Tupper. About a month after the iron was delivered the defendants sent to the plaintiffs a note, dated October 10th, 1855, for the amount of the bill at six months, signed "C. H. Tupper & Lee," which note the plain

Holdane et al. v. Butterworth.

tiffs produced at the trial and offered to cancel. The plaintiffs were ignorant of Lee's connection with the firm until they received this note. James H. Holdane (one of the plaintiffs) testified that this was the only transaction of his firm with the house doing business at the Atlantic Forge. That as early as 1853 "he learned, and it was generally known in the trade, that Butterworth was a member of the house doing business in Eleventh street;" that he had not heard of his retirement until C. H. Tupper & Lee had failed, in December, 1855, and "supposed" when the iron was sold that Butterworth was a partner. The case does not show whether John H. Holdane, the other plaintiff, was or was not examined. "There was evidence on both sides, on the questions whether or not Butterworth was generally known to be a member of the house, and whether or not it was generally known that a change had taken place in the firm in March, 1855." The plaintiffs objected and excepted to this question being put to Josiah Shove, who was in the employment of the new firm, viz.:

Q. "Was it or not generally known among the dealers of the Atlantic Forge Company or Charles H. Tupper, and the trade generally, that there had been a change in the firm ?"

A. "It was."

Being shown a bundle of papers, the same witness stated that they were fourteen letters received by Tupper & Lee from various customers, in different parts of the country, since the 1st of March, 1855, and that all of them were addressed to Tupper & Lee. To the admission of this evidence the plaintiffs excepted. Butterworth testified that it was not generally known that he was a partner in the business of Charles H. Tupper.

Tupper & Lee, in December, 1855, when they failed, made an assignment to the defendant, Butterworth, for the benefit of their creditors. The judge charged that the plaintiffs cannot recover, if it was not a matter of public notoriety that Butterworth was a member of the prior firm, so that the plaintiffs from that source had, or may fairly be supposed to have had, notice of his connection with the firm.

That they cannot recover, although it was a matter of public notoriety that he was a member of the firm, if the change of the firm on the first of March was also a matter of public notoriety,

Holdane et al. v. Butterworth.

or if "such steps were taken by the old or new firm or by Butterworth to make it known, as that the plaintiffs on inquiry might have ascertained it."

:

But if the change of the firm was not also a matter of public notoriety, or if "no such steps were taken to make it known as that the plaintiffs on inquiry could have ascertained it, then they are entitled to recover."

That as there is no evidence "that Butterworth ever held himself out to plaintiffs, as a member of the firm, and his name not being used in the firm, and the plaintiffs having had no transactions with the firm while he was a member of it; they cannot now charge him as a member of the firm, except on the ground that they may be reasonably supposed to have given credit to the firm in the transaction in question, from the belief induced by the general notoriety of his previous connection with it, that he was still a member, and the absence of a general notoriety of the change of the firm, or of steps taken to make the change known, so that on inquiry they could have ascertained it."

The plaintiffs excepted, severally, to each part of the charge. The jury found a general verdict for the defendant, and in answer to questions specially submitted to them by the judge, found:

1. That it was a matter of public notoriety that Butterworth was a member of the firm, existing up to the 1st of March, 1855. 2. That it was a matter of public notoriety that the firm was changed on and after that date.

The plaintiffs requested the Court to charge:

1. That if they knew, by general report or otherwise, that for several years prior to the 1st of March, 1855, Butterworth was a partner, the latter was liable unless he proved "that the plaintiffs had notice of his retirement or disconnection before they sold the goods."

2. That it was his duty, either to prove actual notice of such disconnection, to the plaintiffs; or to have published it in some public newspaper in the city of New York; or in some other public and notorious manner put the public on their guard.

3. Unless the defendants had done this, the plaintiffs must recover, unless before selling the goods, they had in some other way obtained knowledge of his retirement.

Holdane et al. v. Butterworth.

4. That knowledge by the plaintiffs, when they sold, of a change of the name of the firm from the Atlantic Forge Company, or Charles H. Tupper to C. H. Tupper & Lee, of itself gave no information to the public concerning the defendant Butterworth; nor had that any tendency to show that he ever was a partner; or if he had been, that he had ceased to be one. The judge refused to charge, in respect to either request, otherwise than as he had charged, and the plaintiffs excepted, seriatim, to the several refusals to charge as thus requested.

Judgment having been entered on the verdict, the plaintiffs appealed from it to the General Term.

Thomas Nelson, for appellants.

I. Upon the dissolution of a partnership, the retiring partner, to exonerate himself from liability to the creditors of the continuing firm, for contracts entered into by them subsequent to his retirement, must give notice of his retirement. (Collyer on Partnership, 530.)

II. As to persons who have been in the habit of dealing with the firm, it is requisite that actual notice be brought home to them. (Collyer on Partnership, § 533; Clapp v. Rogers, 2 Kern., 283.)

III. As to all persons who have not had any previous dealings with the firm, a notice in one of the public and regular newspapers published in the place where the business was carried on, is the usual mode of giving information, and should be given to exempt the retiring partner from liability for the future engagements of the continuing firm. (Collyer on Partnership, § 532, and notes, § 534; Lansing v. Gaine, 2 Johns. R., 304; Kitchen v. Clark, 6 id., 147; Graves v. Merry, 6 Cow., 704; Vernon v. Manhattan Co., 17 Wend., 527; 22 id., 193, 198; National Bank v. Norton, 1 Hill, 578; Munn v. Baker, 2 Stark., 255.)

IV. When a notice of the dissolution has not been published in a newspaper, or brought home to the knowledge of the party to be affected by it, evidence of the mere notoriety of the dissolution is not admissible to prove such notice. (Collyer on Partnership, $533; Pitcher v. Barrows, 17 Pick., 361; Gorham v. Thomson, Peake's C., 42.)

Holdane et al. v. Butterworth.

V. A dormant partner is liable after his retirement from the firm, to creditors who knew him as a member of the firm, if they were not notified of his retirement. (Davis v. Allen, 3 Comst., 168; Collyer, § 536, and note 4; Kelly v. Hurlburt, 5 Cow. R., 534; Evans v. Drummond, 4 Esp., 90; Carter v. Whalley, 1 B. and Ad., 11; Grosvenor v. Loyd, 1 Metc., 19; Farrar v. Deflinne, 1 Car. and Kir., 580.)

VI. Butterworth, in fact, was not a dormant partner. It is a well settled rule of law that a person is not to be deemed a dormant partner because his name does not appear in the firm and partnership style which they choose to adopt. (Goddard v. Pratt, 16 Pick., 428.)

VII. The plaintiffs had no knowledge of the change of the firm at the time they sold their goods; but even if they did, that fact furnished no presumption that Butterworth had ceased to be a partner, if he had not given sufficient notice of his retirement. SHAW, Ch. J., says: "When a business is carried on by three or more partners, and one withdraws, or one is added, or both, and notice thereof given, and the business is carried on as before, those as to whom no notice is given must be presumed to hold the same relation to the concern that they did before, and such change furnishes no presumption that the others have ceased to be partners." (Howe v. Thayer, 17 Pick., 95.)

VIII. The giving of the note of C. H. Tupper & Lee to the plaintiffs was no payment of the plaintiffs' claim. (Davis v. Allen, 3 Comst., 168; Vansteenburgh v. Hoffman, 15 Barb., 28.)

IX. The plaintiffs' several exceptions to the charge made by the court, and its omissions to charge as requested, were well taken.

E. S. Van Winkle, for respondent.

I. The jury found as a fact that it was a matter of public notoriety that Butterworth ceased to be a member of the firm on the 1st of March, 1855.

The plaintiffs had never had any transactions with Butterworth's firm, and months after he had retired from it, sold to parties doing business under a different name a quantity of iron, for which they took the new firm's note at six months.

The old firm was "The Atlantic Forge Company." The new firm "C. H. Tupper & Lee."