
    Christopher L. Williams, as Receiver of the First National Bank of Bayonne, Respondent, v. Adolph E. Wuppermann and Others, Copartners Doing Business under the Firm Name and Style of A. E. Wuppermann & Company, Defendants. Alfred J. Moisant and Drurie S. Sanford, Appellants.
    First Department,
    March 3, 1916.
    Partnership — liability of partners on notes discounted by bank — presumption as to note having been given in partnership business — evidence.
    In a business partnership it is presumed that a note signed by a member of the firm in the firm name was made in the partnership business, but this presumption may be rebutted by showing that the partnership was not one which called for the borrowing of money or that the moneys borrowed were for another purpose to the knowledge of the bank loaning the same.
    Hence, where in an action by the receiver of a national bank to recover on certain notes and drafts claimed to have been made or indorsed by the defendants, members of a partnership, and to have been discounted by the bank, the defendants claim that they were at no time the members of the partnership who were the signers of some of the notes and indorsers of others, it was material error for the court to refuse to allow the defendants to show the nature of the partnership and that • the funds advanced by the bank upon the notes of the firm were not used for any of the purposes of the firm, but were used in part, at least in a business in which the president of the bank himself was interested.
    Appeal by the defendants, Alfred J. Moisant and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 3d day of May, 1915, upon the verdict of a jury rendered by direction of the court, and also an appeal by the defendant Moisant from an order entered in said clerk’s office on or about the same day denying his motion for a new trial made upon the minutes.
    This is an action by the receiver of a national bank to recover
    
      on certain notes and drafts claimed by him to have been made or indorsed by the defendants, who composed the firm of A. E. Wuppermann & Co., and to have been discounted by the bank.
    
      W. K. Van Meter, for the appellant A. J. Moisant.
    
      Hampton D. Ewing, for the appellant Drurie S. Sanford.
    
      Stuart G. Gibboney, for the respondent.
   Smith, J.:

This case is defended by Moisant and Sanford upon the ground that the notes upon which they have been held liable were not made in the business of the copartnership to the knowledge of the bank of which the plaintiff is receiver. These defendants also defended upon the ground that they were at no time members of the copartnership of A. E. Wuppermann & Co., who were the signers of some of the notes and the indorsers of others upon which this liability has been predicated. Upon that question the court properly found a copartnership to exist. The court, however, refused to allow the defendants to show the nature of that copartnership and to show that the funds advanced by the Bayonne bank upon the notes of the partnership were not used for any of the purposes of the partnership, but were used, in part at least, in a matter foreign to the business of the partnership and in which the president of the bank himself was interested.

In a business partnership it is presumed that a note signed by a member of the firm in the firm name was made in the partnership business. This presumption may be rebutted, however, by showing that the partnership was not such a partnership as called for the borrowing of money, or it may be rebutted by showing that the moneys borrowed were for another purpose than that of the partnership to the knowledge of the bank loaning the same. Any other rule of law would enable one member of a partnership to subject the other members thereof to large liabilities for moneys borrowed, even to a corporation which had knowledge of the fact that the moneys were not borrowed in good faith for the purposes of the partnership.

Evidence as to the nature of this partnership and the purposes for which the money was borrowed and the knowledge of the president of the Bayonne bank was sought to be brought out by a cross-examination of the witness Wuppermann, who was a member of the firm. The questions asked by which it was sought to prove these facts were not as direct and to the point as to best indicate the purpose of the examination, but they were sufficient, I think, to indicate to the court the general purpose which the defendants’ counsel had in mind to show that the moneys were not borrowed for the purposes of the partnership to the knowledge of the president of the bank. They were sufficient, especially in view of the ruling of the court prior to the asking of such questions, to the effect that it held a general partnership to exist and that it would not permit in an action brought by the bank or the receiver of the bank upon negotiable instruments to go into the intimate relations between the partners. It is not necessary here to designate each question and discuss its relevancy to the purpose for which the question might legally be asked. The exclusion of the evidence sought to be introduced, to which exception was duly taken, constituted material error as against the defendants.

The judgment and order appealed from should, therefore, be reversed and a new trial granted, with costs to appellants to abide the event.

Clarke, P. J., McLaughlin, . Dowling and Davis, JJ., concurred.

Judgment and order reversed, new trial ordered, costs to appellants to abide event.  