in the transaction, unless such guaranty is necessary for carrying on the business of the firm in the ordinary way.
3. Same; Same—On the Facts of This Case Firm Held Not to be Bound.
Where one member of a firm, without the knowledge or consent of his copartners, in consideration of receiving security on a firm debt, guaranteed the note of the debtor to a third party, in an amount several times greater than the debt to be secured, held, that the other members of the firm were not bound by such guaranty.
(Opinion Filed February 2, 1891.)
APPEAL from district court, Stutsman county; Hon. Roderick Rose, Judge. '
Nickeus & Baldwin, for appellants, cited: State v. Caskell, 18 Wend. 478; Zuel v. Bowen, 78 Ill. 234; Blodgett v. Weed, 119 Mass. 215; Deets v. Lonsdale, 49 Ind. 525. Plaintiff cannot hold the partners without showing their authority for or assent to the guaranty. Bank v. Bank, 60 N. Y. 285; Williams v. Wellbridge, 3 Wend. 415; Henderson v. Birkevootz, 37 Cal. 113; Frend v. Durgee, 35 Am. Rep. 92. Appellants did not become liable by receiving the benefit of the transaction. Craighead v. Petterson, 72 N. Y. 280; Lindley on Part. 504; Collyer on Part. 645, § 412.
Edgar W. Camp, for the respondent, cited: Andrews v. Congar, 102 U. S., p. 90 of Lawyers' Co Op. Ed.; Steuben Bank v. Albinger, 4 N. E. 341; Donegan v. Moran, 5 N. Y. Supplt. 575. The effect of the transaction was the same as if one partner had discounted Wallace’s note with funds of the partnership and then sold and guaranteed the note. And this he might have done. Bank v. Bank, 101 U. S. 181. In order to save a debt a bank may do many things which under other circumstances would be ultra vires: Morse on Banking, §§ 54, 57, 60, 78; McCraith v. Bank, 10 N. E. 862; Bank v. Bank supra. Appellants are estopped by retaining benefits of the transaction. Morse, § 752. The managing partner made the promise on which plaintiff recovered; thus asserting his authority to make it as part of the firm business. Johnson v. Trask, 22 N. E. 377;
