Smith v. Millard

Hayne, C. The material issue in this case was whether the defendant Millard, who was an incoming partner, assumed certain obligations of the old firm. The court below found that he did. But we think that this finding is not sustained by the evidence.

The plaintiff Smith, who was a member of a partnership known as the Express Printing Company, sold out his interest to Bynon and Morrill, who continued the business for a short time under the old name. Part of the consideration for this sale was a contract by Bynon and Morrill to do five hundred dollars’ worth of printing for Smith. This contract is one of the obligations which it is claimed was assumed by the defendant Millard, the other being a note of Bynon and Morrill to a Los Angeles bank. Millard had nothing to do with this transaction. There is some testimony by the plaintiff indicating that he thought that defendant’s knowledge of the conditions of the transfer and his subsequent connection with the firm rendered him liable. But it is clear that this transaction was between the plaintiff on the one part and Bynon and Morrill on the other, and that the defendant had nothing to do with it. A short time after Smith’s transfer of interest, a new firm was formed, under the name of the Pacific Publishing Company, consisting of Bynon and Morrill and the defendant Millard. The agreement by which this copartnership was formed was in writing. It contains nothing whatever to indicate that Millard assumed the obligations of the old firm. Some of the partners were evidently under the impression that this contract made the new firm liable for the old debts. Thus Bynon says: “The contract of copart[442]nership by the new firm of Millard, Morrill, and myself contained a paragraph in regard to the payment of these obligations. The intention, so far as I was concerned, was, that we jointly assumed all the liabilities.” And this idea explains some general statements of this and other witnesses for the plaintiff, to the effect that Millard “assumed the payment” of the old debts. They were simply mistaken as to the legal effect of the agreement. There are no facts supporting such an idea. On the contrary, according to Morrill’s own testimony, it was expressly agreed that he himself, and not the new firm, should become responsible for the performance of the printing contract. The following is his account of what occurred when the plaintiff came to the office to get the new firm to assume the obligation in question: “Mr. Millard said he was not ready to sign an agreement to do that printing by our office, for the reason that he did not understand how our office was to receive any remuneration for it,—any pay.....Mr. Bynon and I explained to him that I was to pay the Pacific Publishish Company for doing that printing. It was to be paid' out of money which I was to receive out of the directory and pamphlets which were then being printed, both for San Bernardino city and county. Mr. Millard said that was all right, but he wanted something to show for it. It was considerable work,—five hundred dollars’ worth; he thought that it ought to be secured in some way. We made the arrangement there that I should secure the Pacific Publishing Company for the payment of that work, five hundred dollars, and upon my making that agreement they agreed to sign the paper.” But it seems that the plaintiff repudiated this proposed arrangement, for Morrill goes on to say: “But Mr. Smith said he had nothing to do with the Pacific Publishing Company. The agreement was by Bynon and I to have that printing done for him, and he wanted us to execute the agreement as the Express Printing Company. We did so.”