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As to any persons who have not been properly notified of the dissolution, the partners will be bound by the acts of a copartner, the same as before dissolution.(h) But in one case it was held that an attorney who knew that a dissolution was intended and agreed on, but did not know that it had taken place, as was in fact the case, could not hold the firm on an acceptance made by a partner in the name of the firm after the dissolution.(i)
Ratification and confirmation will have the same effect after a dissolution, as if the partners who adopt the signature and confirm it were still partners.(j)
by an indorsement in blank, in payment of a debt, it was held, that such note, being payable to bearer, might be legally transferred to a third person by another partner, who was authorized to settle the concerns of the partnership. Shaw, C. J. said: "It is contended that, by this indorsement, delivery, and payment, the property in the note vested in all the members of the late firm, and though it was under a blank indorse ment, it could not be passed by delivery, so as to vest a valid title in the holder, without the act of all the partners. But we are of opinion that this defence cannot be maintained. Being under a blank indorsement and passing by delivery, the title vested in any person or persons legally becoming the holders for value. Now we think the authority given to the two partners, the Howlands, to collect the debts and settle the affairs of the late firm, gave them authority to receive negotiable notes and drafts, as a means of obtaining payments. If so, they must be deemed to have received this note, as agents to settle; they received it in their own right, and the property vested in them. This being the case, as they would take merchandise, bank-stock, or other articles affording the means of raising money and getting in the debts, they had a right to dispose of the property for the same purpose; and it being a mercantile agency, each had the requisite authority. As they took the note under a blank indorsement, and it was in a condition to pass by a mere delivery, no indorsement of the firm was necessary; and the want of authority, arising from a want of legal power to make such indorsement, applicable to the case of the other note, does not apply to this. If it be said that they, being agents, took this note for the use and benefit of all the members of the late firm, and so the title vested in them, we think it is necessary to distinguish between the legal and the beneficial interest. Undoubtedly the beneficial interest was in the members of the late firm; and the agents were bound to render an account of the property and apply the proceeds to their benefit. But this is quite consistent with their taking a legal interest themselves in the security, in the same manner as if they had taken goods, bank-notes, or other property, to be turned into money and accounted for, pursuant to the trust and authority reposed in them for that purpose."
(h) Whitman v. Leonard, 3 Pick. 177; Tombeckbee Bank v. Dumell, 5 Mason, 56; Lansing v. Gaine, 2 Johns. 300; Bristol v. Sprague, 8 Wend. 423.
(i) Paterson v. Zachariah, 1 Stark. 71.
(j) Waite v. Foster, 33 Maine, 424; Leonard v. Wildes, 36 Maine, 265; Lusk v. Smith, 8 Barb. 570; Chase v. Kendall, 6 Ind. 304; Eaton v. Taylor, 10 Mass.
IF these are under guardianship, they come under the statutory disability.(k) If not, their natural disability applies. But to such a case, somewhat of the same principle which governs as to the incapacity of infants also applies. If this natural incapacity is not in fact perfect, and if an insane or an imbecile person, while temporarily, or apparently, sane enough to transact ordinary business, gives his note for necessaries, and it is received in good faith, it would seem to be proper, for the sake of the lunatic himself, that the note should be valid. Or if the note were set aside, because it fixed a certain price or amount which ought to be left open to inquiry, still his liability on the contract should be established, and the note might be evidence, of more or less value, of the quantum which should be paid. (7)
It is undoubtedly now true, that a man may "stultify himself," or prove in defence against a claim on any contract his insanity, or imbecility, or aberration, or defect of understanding from any cause, existing at the time the contract was made.(m) The general reason for this is, that there can be no contract unless there be a meeting of minds; and there can be no meeting of minds if the one party has no mind which can meet the mind of the other. Possibly this defence, to be effectual, must go far enough to show that this defect of mind was known to the other contracting party, or was unknown to him by reason of his own fault and negligence. It has been so held in cases of executed
(k) Leonard v. Leonard, 14 Pick. 280.
(1) See Gore v. Gibson, 13 M. & W. 623. In Bagster v. Earl of Portsmouth, 7 Dowl. & R. 614, 2 C. & P. 178, it was held, that a lunatic is capable of contracting for necessaries. Therefore, where a person of rank ordered carriages suitable to his condition, and the coachmaker supplied them bona fide and without fraud, and they were actually used by the party: held, that an action would lie upon the contract, notwithstanding an inquisition of lunacy finding the party to be of unsound mind at the time the carriages were ordered. La Rue v. Gilkyson, 4 Penn. State, 375, is to the same effect. And see Richardson v. Strong, 13 Ired. 106.
(m) Mitchell v. Kingman, 5 Pick. 431; Gore v. Gibson, 13 M. & W. 623; Alcock e. Alcock, 3 Man. & G. 268. See contra, Brown v. Jodrell, 3 C. & P. 30.
contracts.(n) But it may, we think, be well doubted whether any instrument or contract could be enforced in law, if one of the parties was distinctly non compos mentis when it was made.(0) It has been said that the note of one known to the payee to be insane is absolutely void, even in the hands of an innocent indorsee; (p) but such indorsee must certainly have his remedy against the indorser, either on the note or independently.
Sanity is to be presumed; the burden of proof being on him who denies it.(g) But to defeat a promissory note, it is only necessary to prove a condition of mind which makes self-protection against imposition impossible. (r)
An inquisition of lunacy is conclusive against those who are parties to it. But it is said that it may be rebutted by clear evi
(n) Thus, in Brown v. Jodrell, 3 C. & P. 30, Moody & M. 105, which was an action for work and labor, and goods sold and delivered, it was held to be no defence, that the defendant was of unsound mind, unless the plaintiff knew of, or in some way took advantage of his incapacity, in order to impose on him. So in Beals v. See, 10 Penn. State, 56, it was held, that an executed contract by a merchant for the purchase of goods cannot be avoided by proof of insanity at the time of the purchase, unless there has been a fraud committed on him by the vendor, or he has knowledge of his condition. And in Molton v. Camroux, 4 Exch. 17, it was held, that unsoundness of mind will not vacate a contract, if it be unknown to the other contracting party, and no advan tage be taken of the lunatic, especially where the contract is executed in whole or in part, so that the parties cannot be restored to their original position. Therefore, where a lunatic purchased certain annuities for his life, of a society which at the time had no knowledge of his unsoundness of mind, the transaction being in the ordinary course of human affairs, and fair and bona fide on the part of the society, it was held, in the Exchequer Chamber, (affirming the judgment of the Court of Exchequer,) that, after the death of the lunatic, his personal representatives could not recover back the premiums paid for the annuities.
(6) In Seaver v. Phelps, 11 Pick. 304, in trover for a promissory note, pledged to the defendant by the plaintiff when the latter was insane, it was held not to be a legal defence that the defendant, at the time when he took the pledge, was not apprised of the plaintiff's being insane, and had no reason to suspect it, and did not overreach him nor practise any fraud or unfairness. And Wilde, J. said: The defendant's counsel rely principally on a distinction between contracts executed, and those which are executory. But if this distinction were material, we do not perceive how it is made to appear that the contract of bailment is an executed contract, for if the note was pledged to secure the performance of an executory contract, and was part of the same transaction, it would rather be considered an executory contract. But we do not consider the distinc tion at all material. It is well settled that the conveyances of a non compos are roidable, and may be avoided by the writ dum fuit non compos mentis, or by entry." (p) Sentance". Poole, 3 C. & P. 1.
(q) Jackson v. Van Dusen, 5 Johns. 144; Jackson v. King, 4 Cowen, 207. (r) Johnson v. Chadwell, 8 Humph. 145
dence of sanity, by other parties. (s) Before office found, the acts of a lunatic are said to be voidable only; (1) afterwards, void.(u) But we should have some doubt whether this distinction would be enforced so far as to say that the contract of a lunatic could not be ratified and confirmed by him after his sanity was restored.
It is quite well settled that the maker of a promissory note, sued by an indorsee, will be allowed to plead that the indorser was a lunatic at the time of the indorsement. (v)
Drunkenness is a species of insanity; but the law is not quite clear respecting this disability. Perhaps it stands thus: One cannot defend by proving his drunkenness, unless he can show that the drunkenness was known to the payee and taken advantage of by him; or that it was complete, and suspended all use of the mind at the time. (w) It might be doubted, however, whether such absolute drunkenness as this would be compatible with the physical ability of writing one's name. At all events, it must be law that no one can avail himself of drunkenness purposely caused by himself, with the intention of rendering contracts void which he should enter into in that state.
THERE is nothing to prevent an alien, merely as such, from becoming a party to a promissory note or bill, and nothing
(s) Den v. Clark, 5 Halst. 217; Rogers v. Walker, 6 Penn. State, 371. But see, contra, Leonard v. Leonard, 14 Pick 280; Wadsworth v. Sharpsteen, 4 Seld. 388. (t) Jackson v. Gumaer, 2 Cowen, 552.
(u) Pearl v. M'Dowell, 3 J. J. Marsh. 658.
(v) Alcock v. Alcock, 3 Man. & G. 268; Peaslee v. Robbins, 3 Met. 164; Burke v. Allen, 9 Fost. 106.
(w) In Pit: v. Smith, 3 Camp. 33, it was held, that an agreement signed by a person in a state of complete intoxication was void. In Gore v. Gibson, 13 M. & W. 623, to an action by indorsee against indorser of a bill of exchange, the defendant pleaded, that when he indorsed the bill he was so intoxicated, and thereby so entirely deprived of sense, understanding, and the use of his reason, as to be unable to comprehend the meaning, nature, or effect of the indorsement, or to contract thereby; of which the plaintiff, at the time of the indorsement, had notice. Held to be a good answer to the action. And see Jenners v. Howard, 6 Blackf. 240; Berkley v. Cannon, 4 Rich. 136
in his alienage to affect his rights or obligations. If, however, he is an alien enemy, no contract entered into with him can be enforced in the courts of this country. He has no standing there to maintain his rights; and a citizen who enters into a contract with an enemy would be regarded as violating the law, and could not have its aid in carrying the contract into effect.(x)
This has been carried so far in England, that a bill drawn by an alien enemy on an English subject, then in England, and indorsed to an English subject abroad, was not permitted to be enforced in the English courts even after the restoration of peace.(y) The same principle would avoid all contracts for the purpose of remitting funds to an enemy's country, by bill or otherwise.(z) The only exceptions to this rule would seem to be in the case of bills or notes for ransom of property or persons; (a) or for obtaining necessaries while a prisoner; (b) or for purposes connected with a voyage by cartel or license, in which cases there seems to be a kind of partial peace, or at least a suspension of the incidents of war. (c) Nor does it seem to be a sufficient objection to an action on a bill so protected, that it is brought, in part, in trust for an alien enemy.(d)
(x) Griswold v. Waddington, 16 Johns. 438.
(y) Willison v. Patteson, 7 Taunt. 439.
(z) Griswold v. Waddington, 16 Johns. 438; Hoare v. Allen, 2 Dallas, 102. But in United States v. Barker, 1 Paine, 156, it was held, that a citizen of the United States might lawfully, during a war with a foreign country, draw a bill on one of its subjects; such an act not leading to any injurions intercourse, nor amounting to a trading with the enemy.
(a) Ricord v. Bettenham, 3 Burr. 1734; Cornu v. Blackburne, 2 Doug. 641; Anthon v. Fisher, 2 Doug. 649, note; 3 id. 166.
(b) Antoine v. Morshead, 6 Taunt. 237. But see Duhammel v. Pickering, 2 Stark.
(c) Thus, in Suckley v. Furse, 15 Johns. 338, where a bill of exchange was drawn in this country, upon a person in Great Britain, during the late war with that country, for supplies furnished by the payee to a British vessel authorized by act of Congress to sail from this country to an enemy's port, which was sold by the payce to the plaintiff, who remitted it to Great Britain for collection; it was held, that the remittance of the bill was within the protection afforded to the original transaction, and was not illegal.
(d) Daubuz v. Morshead, 6 Taunt. 332.