[Townsley vs. Sumrall.]

such promise to accept is binding upon the party. It is an original promise to the purchaser, not merely a promise for the debt of another; and having a sufficient consideration to support it, in reason and justice, as well as in law, it ought to bind him. It is of no consequence that the direct consideration moves to a third person, as in this case to the drawer of the bill; for it moves from the purchaser, and is his inducement for taking the bill. He pays his money upon the faith of it, and is entitled to claim a fulfilment of it. It is not a case falling within the objects or the mischiefs of the statute of frauds. If A. says to B. pay so much money to C. and I will repay it to you, it is an original independent promise; and if the money is paid upon the faith of it, it has been always deemed an obligatory contract, even though it be by parol; because there is an original consideration moving between the immediate parties to the contract. Damage to the promissee, constitutes as good a consideration as benefit to the promissor. In cases not absolutely closed by authority, this court has already expressed a strong inclination not to extend the operation of the statute of frauds, so as to embrace original and distinct promises, made by different persons at the same time upon the same general consideration(a). Then, again, as to the consideration, it can make no difference in law, whether the debt for which the bill is taken is a pre-existing debt, or money then paid for the bill. In each case there is a substantial credit given by the party to the drawer, upon the bill, and the party parts with his present rights at the instance of the promissee; whose promise is substantially a new and independent one, and not a mere guarantee of the existing promise of the drawer. Under such circumstances, there is no substantial distinction, whether the bill be then in existence, or be drawn afterwards. In each case the object of the promise is to induce the party to take the bill upon the credit of the promise; and if he does so take it, it binds the promissor. The question, whether a parol promise to accept a non-existing bill, amounts to an acceptance of the bill when

(a) D'Wolf vs. Rabaud, 1 Peters, 476.

[Townsley vs. Sumrall.]

drawn, is quite a different question, and does not arise in this case. If the promise to accept were binding, the plaintiff would be entitled to recover, although it should not be deemed a virtual acceptance; and the point whether it was an acceptance or not, does not appear to have been made in the court below.

The instructions prayed for on behalf of the defendant. and refused by the court, present several objections to the plaintiff's right of recovery.

The first is, that the plaintiff is not entitled to recover, if he knew that the defendant at the time of taking the bill, had not funds of the drawer in his hands, and if the defendant's promise was under the expectation of receiving funds, and he did not, in fact, receive them at the maturity of the bill. We are of opinion that this objection is unfounded in point of law. If the drawee have no funds in his hands, and the fact is known to the other party, and yet the inducement to take the bill is the promise of the drawee to accept it, it constitutes a valid contract between the parties; if there is a purchase of the bill upon the credit of such promise. The acceptance of the drawee of a bill binds him, although it is known to the holder that he has no funds in his hands. is sufficient that the holder trusts to such acceptance.

It

Another objection is, that the object of taking the bill was to pay the partnership debt of the plaintiff and the drawer (who had been partners in trade); and it was passed in pursuance of an agreement between them, to a creditor of the firm, who subsequently returned it for the dishonour. In what respect this changes the rights of the plaintiff as to the defendant, it is somewhat difficult to perceive. There was evidence in the case, to show that the plaintiff was upon the dissolution to discharge the partnership debts; and also that upon the faith of this very promise of the defendant, he allowed partnership property to the full amount of the bill, to pass into the drawer's hands for his own exclusive use. But independently of this evidence, the bill itself was not a partnership bill, though the drawer and the plaintiff had been partners. On the contrary, it was to be drawn on the sole account and credit of the drawer, and was to be ac

[Townsley vs. Sumrall.]

cepted on that account; and if the plaintiff took the bill as the sole bill of the drawer, on the credit of the defendant's promise to accept it, for a valuable consideration, the use to which he should apply it, whether in payment of joint debts or otherwise, was nothing to the defendant. It in no respect changed the nature of his own undertaking. The receiving of such a bill, with the intent to apply the same to the payment of a partnership debt, might materially affect the plaintiff; and we see that by the subsequent insolvency of the drawer, and his parting with the partnership effects, it did seriously affect his remedy in respect to his partner. The question is not put, whether, if no loss had been sustained in any way, the plaintiff would have been entitled to recover against the defendant. By becoming an indorser upon the bill, he incurred a responsibility to those to whom he indorsed it, very different from that which he incurred to them as creditors of the partnership. This alone was a sufficient consideration to support the promise to accept. It should be added, that the application of the bill to the payment of debts constituted no part of the ground of the promise of the defendant.

Another objection is, that the partnership accounts remain unsettled, and therefore the plaintiff ought not to recover. Surely this alone is not sufficient to deprive the plaintiff of his right of action. It is perfectly consistent with this state of facts, that the plaintiff should be a creditor. of the firm to an extent far beyond the amount of $4000. There is evidence in the record from which the jury might fairly presume, that such was the case. But the circumstance, that the accounts of the partnership were unsettled, is put as of itself sufficient to defeat the plaintiff's recovery; which it cannot be admitted to be, if in any possible case, consistently with that fact, he might have sustained any loss by taking the bill upon the faith of the defendant's promise.

Another objection, arising out of the fourth instruction prayed for by the defendant, which is very complicated and embarrassing in its presentation; is the effect of the agreement therein supposed between the plaintiff and the drawer to risk both the bills; and if the defendant should not ac

[Townsley vs. Sumrall.]

cept both, then that the plaintiff would assist the drawer with funds to take up the non-accepted bill at maturity. This agreement was not in the slightest degree prejudicial to any rights of the defendant. Its object was to provide funds in the event of a non-fulfilment of the promise of the defendant to accept either of the bills. It did not waive or vary the defendant's contract; and, at most, could be considered only as a collateral agreement of the parties, forming additional private inducements for the drawing of the bill.

;

The same instruction includes another objection, which is, that if from the evidence the jury should believe that the plaintiff did at the time of drawing the bills state to the drawer, that defendant promised him that he would accept one of the bills unconditionally, and the other, if in funds; and that the drawee did not accept and pay at maturity one of the bills, and had not funds of the drawer, or of the plaintiff to pay the other at maturity; that they ought to find for the defendant. This part of the instruction proceeds altogether upon the ground that the mere statement of the plaintiff to the drawer, that the promise of the defendant was conditional, was a bar to the recovery. It does not affect to state, that if in point of fact the promise was conditional, such would and ought to be the result; but, that it was sufficient that the plaintiff so told the defendant, whether the fact were so or not. In our judgment the rights of the plaintiff are to be decided by the fact, whether the promise was conditional or not; and not by the mere assertion of the plaintiff. His assertion might properly be weighed by the jury as part of the evidence, to control or explain it; but their verdict ought to be governed by their belief of the facts, and not their belief that a particular assertion was made.

These are all the objections which have been urged at the bar; and we are of opinion, that the court was right in rejecting the instructions prayed for by the defendant.

The judgment is therefore to be affirmed with costs.

VOL. II.-Y

LE ROY, BAYARD & Co. PLAINTIFFS IN ERROR US. GEORGE JOHNSON, DEFENDANT IN ERROR.

In an action originally commenced against A. and B. as partners, upon an alleged engagement by the firm, and where A. who was not found or served with process, was offered as a witness in favour of B., having been released by B., the Court said; "It is to be premised that the only ground upon which the objection can be rested is the supposed interest of the witness in the event of the cause; since the suit having regularly abated as to him by the return that he was "no inhabitant," he was no more a party to it, than he would have been had his name been altogether omitted in the declaration. As to the objection upon the score of interest, it is sufficient to remark, that it was manifestly hostile to the party in whose favour he testified, and who offered it in evidence; since the plaintiffs' recovery against the defendant, and satisfaction from him, would be a bar to their action against the witness; and the release of A. protected him against any action which A. might bring against him for contribution or otherwise." [194]

It is well settled, that if a bill of exchange be drawn by one partner in the name of the firm, or if a bill drawn on the firm by their usual name and style, be accepted by one of the partners, all the partnership are bound. It results necessarily from the nature of the association, and the objects for which it is constituted, that each partner should possess the power to bind the whole, when acting in the name by which the partnership is known; although the consent of the other partners, to the particular contract should not be obtained, or should be withheld. [197]

Third persons are not bound to inquire whether the partner with whom they are contracting is acting on the partnership account, or for his individual advantage. The interest of the partner in the joint stock of the concern, and his consequent authority to use the partnership name, raises a presumption that the contract was made for joint account; which is sufficient to bind the firm, unless to the contrary be shown; and that the person with whom the partner deals had notice, or reason to believe that the former was acting on his separate account. [198]

Where in the articles of partnership no name of the firm was mentioned as agreed upon, and the concern went into operation under the articles, the books being kept, and the bills and accounts relating to their transactions being made out at their warehouse, in the name of "Hoffinan & Johnson;" it cannot be questioned but that a name thus assumed, recognised, and publicly used, became the legitimate name and style of the firm; not less so, than if it had been adopted by the articles of partnership. [199]

Where a bill of exchange was drawn by A., after the dissolution of his partnership with B., and the proceeds of the bill went to pay, and did pay, the partnership debts of A. & B., which A. on the dissolution of the firm had assumed to pay; the holder of the bill after its dishonour can have no claim on B. in consequence of the particular appropriation of the proceeds of the bill. [199] It is admitted, that if one of the partners contracted with a third person, in the name