Chautauqua County NyArchives Court.....Holt, Walter Vs. Bertie Allenbrand 1889
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Source: Reports Of Cases - New York
Written: 1889

Fifth Department, March Term, 1889.

WALTER D. HOLT, as Assignee of HIRAM J. D. MINER, Respondent, v. BERTIE 
ALLENBRAND and Others, Creditors of HIRAM J. D. MINER, Respondents, Impleaded 
with EDWIN ISHAM and GEORGE P. ISHAM, as Assignee of EDWIN ISHAM, Appellants.

Notice of the retirement of a member of a firm—the sufficiency of it is a 
question of law.

It is not necessary, in order to charge a customer with a notice of the 
retirement of a member of a firm with which he has been accustomed to deal, that 
the notice of the fact should be positive and explicit. It is enough if it be 
such as to put him on inquiry, that is, sufficient to suggest to a reasonably 
prudent man that it is the part of prudence to inquire whether the fact be so.

This notice may be given by a change in the firm name, if the change is such as, 
of itself, to indicate the fact with notice of which the customer is sought to 
be charged.

Each case of this kind must stand on its own facts; and when the facts are 
ascertained the question of the sufficiency of the notice is a question of law. 

The facts in this case held to be sufficient to put customers of a banking firm 
upon inquiry as to whether a member of the firm had retired, and to affect them 
with notice of the fact which such inquiry would have elicited.

Appeal by the defendants Edwin Isham and George P. Isham, as assignee for the 
benefit of the creditors of Edwin Isham, from a judgment entered in this action, 
in the office of the clerk of Chautauqua county on July 16, 1888, upon the 
report of a referee.

C. D. Murray, for defendants, appellants.

Stearns & Kinsley, for defendants, respondent.

Dwight, J.:

The plaintiff is the assignee, for the benefit of creditors, of one Hiram J. D. 
Miner. The assignment preferred three classes of creditors, two of which have 
been paid, and the controversy in this case arises upon the distribution of the 
residue of the estate among parties entitled thereto under the third preference 
of the assignment.

On this appeal the question is, by consent of all parties, narrowed to the 
inquiry: For what debts of the plaintiff's assignor is the estate of the 
defendant Edwin Isham (assigned to the defendant George P. Isham) also liable? 
The data of the problem are the following facts: About the year 1861, Hiram J. 
Miner and others, including Hiram J. D. Miner and Edwin Isham, formed a 
copartnership in the business of banking, at Dunkirk, under the firm name of H. 
J. Miner & Co., which copartnership continued down to the death of Hiram J. 
Miner, in 1872. The business was continued, under the same firm name, at first 
by all the surviving partners and afterwards by remaining partners (one after 
another having withdrawn) until February 2, 1884. Prom June 14, 1880, to 
February 2, 1884, the firm consisted of Hiram J. D. Miner, the plaintiff's 
assignor, and the defendant Edwin Isham. At the last mentioned date Isham sold 
his interest in the business to Miner, and the latter assumed all the 
liabilities of the firm. Hiram J. D. Miner continued the business down to May 2, 
1885, when he made his assignment to the plaintiff. From the first organization 
of the firm (in 1861) the business was conducted in the same banking office. The 
sign over the principal entrance was "H. J. Miner & Co.'s Bank," until the 
withdrawal of Isham from the firm, when it was changed to "Miner's Exchange 
Office." The certificates of deposit issued by the several firms before June 14, 
1880, were headed in displayed type "H. J. Miner & Company's Bank." June 14, 
1880, a new form of certificate was adopted, printed on paper of different shape 
and texture, in different type, and headed in large "script" characters "H. J. 
Miner1 & Company, Bankers," and immediately under that heading the words, in 
plain type, "Remaining partners, E. Isham, H. J. D. Miner." This certificate is 
known in the case as "Form A." From March 2, 1884, to March 17, 1884, Miner made 
use of a certificate the same in all respects as the last, except that the 
letter "S," at the end of the word "partners," and the name of "E. Isham," were 
plainly erased in red ink, so that the unerased portion of the heading read: "H. 
J. Miner & Company, Bankers; remaining partner, H. J. D. Miner." This 
certificate is known as "Form B." After March 16, 1884, Miner changed the 
heading of the certificate to read "Miner's Exchange Office, H. J. D. Miner, 
Prest." This certificate is known as "Form C."

All the certificates from 1861 were numbered in a continuous series till March 
17, 1884, when Miner began numbering a new series with No. 1, and continued it 
to the date of the assignment. The persons employed in the banking office were 
the same before and after the withdrawal of Isham from the business. Isham was 
never personally employed in the business of the office. No notice of his 
withdrawal from the firm was given to the public or to persons dealing with the 
office, other than by the changes in the sign and in the certificates of 
deposit, as above described. The question was of the sufficiency of such notice 
to discharge Isham from liability to customers of the office. The referee held 
that the certificate (Form B) in which the name of Isham was erased, was a 
sufficient notice to all persons receiving it of his withdrawal from the firm, 
and that he was discharged from liability on all such certificates and for all 
subsequent deposits made by persons who had received that notice; also, that he 
was not liable to depositors, subsequent to his withdrawal, who had not been 
customers of the office for a long time, or never, prior thereto. But he held, 
in effect, that, as to all persons who had been customers of the firm down to or 
within a short time before the withdrawal of Isham, and who made deposits in the 
same banking office after that time, the certificate (Form C) issued on or after 
the seventeenth of March, together with the change of sign made on the second 
day of February, did not constitute notice of such withdrawal nor put them upon 
inquiry as to a change in the firm, and, accordingly, that as to such persons, 
who had no other notice of the change, the estate of Isham was liable on such 
certificates; and this is the particular conclusion which is questioned on this 
appeal.

In this particular we are inclined to think the learned referee was in error. It 
is not necessary, in order to charge a customer with notice of the retirement of 
a member of a firm with which he has been accustomed to deal, that the notice of 
the fact should be positive or explicit. It is enough if it be such as to put 
him upon inquiry; that is, sufficient to suggest to a reasonably prudent man 
that it is the part of prudence to inquire whether the fact is so. (Lovejoy v. 
Stafford, 93 U. S., 430; Claflin v. Lenheim, 66 N. Y., 306.) This notice may be 
given by a change in the firm name, the only requirement being that the change 
should be such as, of itself, to indicate the fact with notice of which the 
customer is sought to be charged. (American Linen Thread Co. v. Wortendyke, 24 
N. Y., 550; Howe v. Thayer, 17 Pick., 91; Kirby v. Hewitt, 26 Barb., 607; 
Barfoot v. Goodall, 3 Camp., 147.) In the two latter of these cases notice by 
change of name was held to be sufficient, and in the two former not sufficient, 
to relieve the retiring partner from liability. 

Thus, in the Wortendyke case, the earlier firm name was "Wortendyke Bros." On 
the retirement of one of three Wortendykes and the admission of one Hoffman, the 
name was changed to "Wortendyke Bros. & Co." It was plain that this change did 
not even suggest the withdrawal of a Wortendyke, but only the addition of 
somebody else, and accordingly the retiring partner was held not discharged from 
liability. So in Howe v. Thayer, where the business had been conducted under 
several different styles, in neither of which did the name of the retiring 
partner appear, it was held that a change from Colton & Fellows to Newton & 
Fellows had no tendency to disclose the fact that the defendant Thayer had 
retired from the firm. Whereas, in the case of Barfoot v. Goodall, where the 
plaintiff's testator had been accustomed to draw by checks furnished him by the 
firm, in the address of which the name of Fisher appeared as a partner, and was 
afterwards furnished with checks in which his name was omitted, Lord 
Ellenborough said it became him to inquire, before using these, what change had 
really taken place; and, he added, "when he did continue to use them, I must 
presume that he was perfectly well aware that Fisher had retired and that he 
continued to deal with the house upon the credit of the other partners." Of 
course, every case of this kind must stand on its own facts; and, it is to be 
observed, that when the facts are ascertained the question of the sufficiency of 
notice is a question of law. (See the cases above cited.)

Let us see, then, what are the facts of this case which bear upon the precise 
question of the sufficiency of notice, of the retirement of E. Isham from the 
firm composed of himself and H. J. D. Miner. During the four years of their 
continuance of the business as the only remaining partners of H. J. Miner & Co., 
bankers, they had kept the old sign over the door, "H. J. Miner & Co.'s Bank," 
and had issued to their customers, including all the respondents in this case, 
certificates of deposit headed "H. J. Miner & Company, Bankers; remaining 
partners, E. Isham, H. J. D. Miner." It is to be assumed that it was from this 
certificate alone that the customers in question derived their information that 
Isham was a partner in the business. He retired on the 2d of March, 1884, and 
that, was the end, in fact, of the old firm of H. J. Miner & Co. Thenceforward 
the business was carried on by H. J. D. Miner individually. The question is, are 
the respondents chargeable with notice of this important change? Immediately the 
old sign was taken down and in its place was erected one bearing the 
inscription "Miner's Exchange Office." Both signs were large and prominently 
displayed, and the change was one likely to attract attention. There was some 
significance in this change alone. The old sign indicated the business of a 
copartnership, the new one that of an individual. At the same time a change was 
made in the certificates of deposit issued, which the referee held was, of 
itself, sufficient notice to all who received them, but did not affect the 
respondents with notice, because none were issued to them. The first 
certificates received by them after the change bore the heading "Miner's 
Exchange Office, H. J. D. Miner, President." As to the respondents, then, the 
change in the certificate corresponded to the change of sign, but it went 
further. It seems to us that it gave unmistakable indication, not only that the 
partnership with which the respondents had formerly done business had ceased to 
exist, but that there was no longer any copartnership engaged in the 
business. "Miner's Exchange Office" was not an appropriate designation for a 
copartnership, and the addition, "H. J. D. Miner, President," was entirely 
foreign to such a designation. Strictly, it indicated that the business was 
being done by an incorporated company or a joint-stock association. Certainly it 
indicated a notable change in the organization and conduct of the business. The 
name of Isham which had appeared upon all the certificates formerly issued to 
the respondents, as that of a partner, was no longer there; the only name the 
new heading bore was that of Miner, and he was described as president of some 
organization under the new name of "Miner's Exchange Office." It seems to us 
reasonably clear that if this change was not a positive indication that Isham 
was no longer a partner in the concern, it was, at least, sufficient to put the 
respondents upon inquiry as to whether he was or not, and thus to affect them 
with notice of the fact, which inquiry would have elicited.

If these views are correct, the judgment must be reversed and a new trial 
granted.

Barker, P. J., and Adams, J., concurred.

Judgment reversed and a new trial granted before another referee, with costs to 
abide the final award of costs.

Additional Comments:
Reports of Cases Heard and Determined in the Supreme Court of the State of New 
York. Marcus T. Hun, Reporter. Volume LIX, 1889, HUN 52. Banks & Company, 
Albany, NY. 1901.

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