
    James B. Taylor, Plaintiff and Respondent, v. Silas C. Herring, Defendant and Appellant.
    1. Entries in partnership- books are not evidence for one partner against another, on an accounting between them, Unless it appears, or may be presumed that the latter not only had access to the books, but actually inspected them. (Bosworth, Oh. J., dissented.)
    2. Thus, where the defendant was a dormant partner, who took no part in conducting the business, except to give his notes for its liabilities, and merely visited the place of business occasionally, and thgre was no evidence that he ever looked at any of the books; — Held, that the entries in the books were not admissible against him, in favor of his partner. (Bosworth, Oh. J., dissented.)
    3. Such entries, made by a bookkeeper employed by the partnership, are not admissible on the ground of their being made by a mutual agent, unless it is shown that the bookkeeper was authorized by them to determine with what sums each should be charged. (Bosworth, Oh. J., dissented.)
    4. Entries in partnership books are prima facie evidence, as in favor of one partner, against another who had access to them, and an opportunity to inspect them, notwithstanding his omission to do so. (Per Bosworth, Oh. J., dissenting.)
    5. It seems, that where two creditors take an assignment of their debtors’ stock in trade, agreeing with each other and with him, that they will carry on the business for a certain time, and apply the profits to the payment of their claims, and after that to the payment of other creditors, they are not thereby necessarily rendered partners as between themselves.
    (Before Bosworth, Ch. J., Robertson and Barbour, J. J.)
    Heard, December 3, 1862;
    decided, April 15, 1863.
    This was an appeal from a judgment in favor of the plaintiff, entered upon the report of a Referee.
    This action was brought for a settlement of the accounts of an alleged partnership between the parties, the plaintiff claiming a balance to be due to him on such accounting.
    The defendant denied the alleged partnership, and all indebtedness.
    The case was referred to B. W. Bonney, Esq., as sole Referee, who reported in favor of the plaintiff, finding that the parties were partners in the transactions in question, and that there was a balance due to the plaintiff of $10,713.02.
    The evidence in the case was very voluminous. The facts material to an understanding of the questions decided by the Court, were stated by the Referee iii his report substantially as follows:
    That in 1851, Charles H. Post and Daniel B. Post were copartners in the trade and business of manufacturers of and dealers in hats and caps, under the copartnership name and firm of “ C. H. & D. B. Post,” and conducted their business at Ho. 142 Water street, in the City of Hew York. That on the 1st day of March, 1851, they, as such copartners,#were indebted to James B. Taylor, the plaintiff in this action, in the sum of $6,492.54, and were also indebted to Silas 0. Herring, the defendant herein, in the sum of $5,637.08 ; and, in consideration of such indebtedness, and in payment or on account of the same, the Posts then bargained, sold and delivered to Taylor and Herring their stock in trade, and gave Taylor and Herring a bill of sale of the same.
    That at that time the Posts were also indebted to other persons, and it was then understood and verbally agreed, by and between the plaintiff and defendant.herein, and also between them and the Posts, that the plaintiff and defendant would continue and carry on the business which had been carried on by the Posts; that the proceeds of such business, after paying the expenses thereof, should be applied to the payment of the said indebtedness of the Posts to the plaintiff and defendant, respectively, until the debts owing to them, respectively, were paid and satisfied, and that the residue of the proceeds and profits of such business should be applied to the payment of the Posts’ debts to other creditors; and it was also understood and verbally agreed, between the plaintiff and defendant, that the business should be conducted in the name of the plaintiff, “James B. Taylor,” and that he should take and attend to the management and carrying on of the same, and should receive and be paid for his services in that behalf, with and out of the profits of said business, the sum of fifteen hundred.dollars per annum, and that the defendant Herring should aid in raising or procuring funds for the carrying on of such trade and business, by uniting in or indorsing notes made for that purpose by said James B. Taylor, and should receive and be paid therefor, and for so using his name and credit, with and out of said proceeds and profits, two and one-half per cent commission on the amount of notes by him so made or indorsed, for the purpose aforesaid.
    That in pursuance of this agreement the plaintiff and defendant took possession of the store, Ho. 142 Water street, and the stock in trade; and the bookkeeper and clerks, who had been employed in the service of the Posts, were retained in continuing the business, and made the purchases and sales therefor and therein, and kept the books of account relating thereto. That the business was so continued in the name of the plaintiff, James B. Taylor, who took the management and direction of the same, and made the financial arrrangements therefor, but neither purchased nor sold goods in or for account of said trade and business, nor made any entries in the books of account thereof; and the defendant Herring united with the plaintiff in making promissory notes for the purposes of the business, and also indorsed notes made by Taylor for the same purpose.
    That the books of account of aud relating to the business, and the transactions thereof, were kept -at the same store, Ho. 142 Water street, by the bookkeeper employed for that purpose, as above stated, in which were entered and set down the purchases, sales and other transactions of the business, which books were at all times open to the examination aud inspection of Taylor and Herring, and each of them; and that while the business was so conducted, the plaintiff had his office and place of business at and in the store, Ho. 142 Water street, and the defendant had his office and place of business in the immediate vicinity of, and was frequently in, said store.
    On the trial the Referee admitted as evidence entries in the books thus kept in the business; and he found, among his conclusions of law :
    
      
      First. That the plaintiff and defendant, in continuing and carrying on the said trade and business of manufacturing and dealing in hats and caps, were copartners, and jointly and equally liable, as between ■ themselves, for losses sustained in such trade and business.
    
      Second. That the books of account of the said trade and business, kept by the bookkeeper employed therein, and for carrying on the same, are evidence, as between the said parties to this action, for each or either of them against the other.
    
      And lastly, That upon the accounting the defendant was indebted to the plaintiff in the sum of $10,713.02, without interest, for which sum he ordered judgment, with the costs of this action.
    From the judgment entered upon this report, the defendant, having made a case containing his exceptions, appealed to the General Term.
    
      S. P. Nash, for defendant, appellant.
    I. Eeither the facts, as found by the Beferee, nor the evidence in the case, justify his conclusion of law that the partners were copartners, and jointly and equally liable, as between themselves, for the losses sustained in the alleged partnership business.
    Several persons may in various ways have joint or undivided interests in' property; or be united in undertakings and adventures, without being partners. (See Post v. Kimberly, 9 Johns., 470; Putnam v. Wise, 1 Hill, 234; Mumford v. Nicoll, 20 Johns., 611; Pattison v. Blanchard, 1 Seld., 186; Smith v. Wright, 5 Sandf., 113; Nowlen v. Colt, 6 Hill, 461; Heimstreet v. Howland, 5 Denio, 68; Burckle v. Eckhart, 3 Comst., 132; Fitch v. Hall, 25 Barb., 13; Merrick v. Gordon, 20 N. Y. R., 93.)
    For a case similar in its controlling features, see In re Stanton Iron Co., (21 Beav., 164,) (Ch.) and same case at law; Hickman v. Cox, (36 Eng. L. & Eq., 400; 18 Com. B., 617; 3 Com. B., N. S., 523 ;) reversed finally in House of Lords, Cox v. Hickman, (8 H. L. Cases, 268; 9 Com. B., N. S., 47.)
    II. The Beferee does not find as a fact either that the parties were to share the losses, or that they called themselves partners.
    Whether these facts make out a partnership is a question of law, as the Beferee has treated it. (Coll. on Partn., § 95, Am. ed., 1861.)
    III. If the Court will examine the testimony,' it will appear not only that there was no partnership, but that defendant’s version of the arrangement is the only probable one, namely, that if defendant would furnish credit to buy fresh stock, plaintiff would agree to carry on the business, and work out of it the amount of defendant’s debt against the Posts.
    IY. Assuming that the parties were interested as co-partners, the plaintiff did not establish any indebtedness in the joint business from defendant to plaintiff.
    The evidence to establish this indebtedness consisted entirely of the books of account.
    1. The Referee erred in receiving the books in evidence. (Coll. on Partn., 316, note, ed. of 1861; Stainton v. Carron Co., 24 Beav., 346 ; U. S. Bank v. Binney, 5 Mason, 188; Cameron v. Watson, 10 Rich. Eq. (So. Car.), 64.)
    Y. But if the books were properly admitted as prima facie evidence, their character, as exhibited on further investigation, should have deprived them of all weight as evidence.
    Though the maxim falsus in uno, falsus in omnibus, may not strictly apply to books of account (but see Forsyth v. Clark, 3 Wend., 637, 643; N. Y. Firem. Ins. Co. v. De Wolf, 2 Cow., 56, 68), yet even a stated account examined by the parties and settled between them, will be entirely opened and independent proof of the items required, where fraud, imposition or concealment is established. (1 Story’s Eq., § 523; Barrow v. Rhinelander, 1 Johns. Ch., 550; Bruen v. Hone, 2 Barb., 586; Ogden v. Astor, 4 Sandf. S. C., 311, 348 ; and see Blisset v. Daniel, 10 Hare, 493; 23 Eng. L. and Eq. R., 105.
    VI. But if the books were so far evidence as to conclude the defendant, except where he showed errors or omissions, yet the report does great injustice to the defendant in the several particulars.
    
      E. W. Stoughton, for the plaintiff, respondent.
    I. The partnership between the plaintiff and defendant was established by abundant and substantially by uncontradicted evidence.
    II. The loss sustained by the firm was proven by the accounts kept in their books, by the testimony of Way, their bookkeeper and clerk, and by that of Taylor; and this proof is neither controverted nor weakened by any introduced on behalf of the defendant.
    III. The fact of partnership having been established, the losses and their payment^y the plaintiff proven, and it appearing from the Referee’s report that he allowed to the defendant, by way of commissions, very large sums; all, indeed, which were claimed, it follows that the judgment should be affirmed.
   By the Court—Robertson, J.

Whatever may have been the relations of the parties to this action, the admissibility of the entries in account books kept under the plaintiff’s charge, affects vitally the validity of the judgment. Putting the case in the most favorable aspect for the .plaintiff, the parties were at most partners, and the admission of such entries is only to be vindicated on the ground that they were in partnership books.

There is no question that the general rule is well enough laid down for ordinary cases, that entries in partnership books, during the continuance of the partnership, are evidence against all the partners. But this is neither an arbitrary rule nor an exception to ordinary rules of evidence. For does the reason of it arise from any suppposed authority given by either partner to the other, to bind him by entries in his own favor, as is apparently intimated by Sir Knight Bruce, L. J., in Lodge v. Prichard, (27 Eng. L. & Eq. R., 474.) That would be equivalent to a man’s making a contract with himself, since no such authority can be delegated by one partner to another to create an indefinite liability by admissions in an account book. The true rule in regard to the admissibility of such entries is to be found in the case of The United States Bank v. Binney, (5 Mason, 188,) where it is laid down by Judge Story, with his usual fullness and clearness. In that case he states that the liabilities of the defendants in the case, as partners, depended qn their “knowledge of the entries. “ Whether they had such knowledge is matter of fact upon the whole evidence in the case. The ordinary presumption “is, in cases of partnership that all the partners have “ access to the partnership books, and might know the “ contents thereof. But this is a mere presumption from the ordinary course of business, and may be rebutted by “ any circumstances which either positively or presumptively rebut any reference of such access; such, for “instance, as distance of place, or the course of business of the particular partnership, and, indeed, any other cir- cumslances raising a presumption of non-access.” This doctrine is still further explained in Cameron v. Watson, (10 Richardson Eq., [So. Car.,] 92). Dargan, Ch., says, in that case: “ The admissibility of the books of a copart- “ nership, on questions arising between the partners them- “ selves, is founded on * * the right of each partner “ to have access to the books and to inspect them, and the “ presumption that he has, in fact, inspected them. * * “ His acquiescence amounts to an implied acknowledg- “ ment of a tacit assent to the correctness of the books. “ This is * * analogous to the well settled rule that if “ a creditor presents to a debtor his account as a statement “ of his demand, and the debtor examines it or retains it “ for examination, and makes no objection within a reason- “ able time, it is an admission of the debt.” Upon the same principle, in Hutcheson v. Smith, (5 Ir. Eq., [Exch.,] 123,) an item was rejected in partnership books, “ because “they remained altogether under the dominion of the “ defendant, and it did not appear that the plaintiff ever saw them.” In Heartt v. Corning, (3 Paige, 572,) Ohafc- ■ cellor Walwobth tacitly acknowledged the same principle, by qualifying the principle that partnership books are prima facie evidence against partners, with the proviso that they had access to them at the time or immediately after entries were made.

The opposite doctrine to this, is that' entries in partnership books are conclusive evidence against all the partners who had an opportunity to inspect them, or rather from whom they were not actually proved to have been withheld. This makes the legal presumption of actual access conclusive, in the absence of evidence of physical exclu- ' sion. The presumption of acquiescence follows quite easily when knowledge is thus presumed, and there is no evidence of dissent. Absence, incarceration, loss of sight, ignorance of writing or other physical infirmity, must, equally with other' evidence of want of access, be unavailing, since each partner can employ an agent', spy or sentinel to watch over the entries in the books. The doctrine must extend that far. The cases of Simms v. Kirtley, (1 Monr., Ky., 80,) Fletcher v. Pollard, (2 Hen. & Munf., 549, 550,) Caldwell v. Leiber, (7 Paige, 507,) Lodge v. Prichard, (ubi sup.,) and Stoughton v. Lynch, (2 Johns. Ch., 217, 218,) are cited as authority for it. In none of them was evidence offered and rejected of any omission or want of opportunity to examine the books by the parties sought to be charged. So far as the “course of thebusiness” in them can be gathered from the reports, it would seem that every one of the partners were actively engaged in conducting the business in one and the same place, and equally present and attentive, at their place of business, in its management. There seems to have been no question raised as to actual inspection. In Simms v. Kirtley, (ubi sup.,) the admission of the books was put upon the ground of a supposed agreement to appeal to them as evidence, and their being “ kept sub ject to the inspection of both. Fletcher v. Pollard, (ubi sup.,) is to the same effect. Whether, by being subject to inspection, is meant exposure to it, or actual inspection, does not very clearly appear. The ground of an agreement to be bound by such entries is, I think, untenable for reasons before stated, and it renders the fact of access wholly immaterial, as the entry precedes it. In Caldwell v. Leiber, (ubi sup.,) Ch. Walworth laid down merely the general rule, without regard to any qualifications as stated by him in Heartt v. Corning, (ubi sup.) Lodge v. Pritchard simply disposed of the questions as to the admissibility of one partner’s entry against the others. In Stoughton v. Lynch, (ubi siq).,) the controversy was wholly as to dates; the transactions themselves being apparently admitted or proved; the entries in the books, when appearing to be made in regular and orderly succession, were admitted to fix dates merely.

Of course the admissibility of entries in partnership books, in favor of strangers, has nothing to do with this question, as, in such case, all admissions made by one partner, whether orally or in writing, are binding upon the others in reference to partnership affairs. (Walden v. Sherburne, 15 Johns., 409.)

Taking the course of business in this case, and the conduct of the supposed partners as the test, there was enough evidence to overthrow any prima facie presumption of inspection of the books in question by the defendant. He was a dormant partner, (if one at all,) who took no part in conducting the business, except to furnish his. notes, and merely visited the place where the business was conducted, it being in the neighborhood of his own. So little did he interfere, that none of the clerks, but the bookkeeper, knew he had any interest, and even he did not derive his knowledge of that from any inspection of the books by the defendant. Substantially, all the books were under the plaintiff’s dominion, and he had important ones relating to the business not within the defendant’s reach. The purchases and sales were made exclusively by the plaintiff, who was the treasurer of the concern;' he paid all the bills and managed and directed the business in his own name exclusively. There is not a particle of direct or even circumstantial testimony to show that the defendant ever looked at a book. On the contrary, he seems to have acted as if his only interest was to ascertain if enough had been made to satisfy his claim. These circumstances, unexplained and uncontradicted, are conclusive evidence that the defendant never saw an entry in a book. The Referee has not passed upon the effect of such evidence in determining that the entries were admissible. He finds, as a fact, that the books were open to the defendant’s inspection, and on that alone he undoubtedly determined their admissibility as evidence.

Such entries were received in evidence solely because they were in the books. Hone of them were made by the plaintiff, but all by a bookkeeper, who might, for all evidence to the contrary, have been able to state the facts without the entries. They were, therefore, not admissible as independent entries, (Russell v. Hudson River R. R. Co., 17 N. Y. R., 134; Halsey v. Sinsebaugh, 15 N. Y. R., 487,) the witness being present and not showing any defect of memory. Entries of purchases and sales, except the few made by the witness, were clearly not records of his transactions ; and other entries were copies of those made by third persons.

Bor were such entries evidence by reason of having been made by a mutual agent. The bookkeeper may have been a common agent to charge the partnership as regarded third persons, by his entries. To make him a mutual agent, he must have had power to bind each partner to the others by entries in the books. It is well settled that the same person cannot act as agent between two parties, for both, because he cannot consult the interest of both in making a contract. But can a mutual agent be appointed to make admissions, either verbally or by entries in a book, alternately and mutually for or against either of two parties, and for or against the other ? Parties may employ a common agent to conduct a particular transaction, and agree, as between each other, to be bound by his narration of how he performed it. Such was the case of Peltier v. Sewall, (12 Wend., 386,) wherein a joint adventure was consigned to a foreign factor, who was authorized to make a return of sales, and such return was held to be evidence against both parties. In such case the statement of the common agent becomes mutually binding, not by the joint authority to sell, but by the mutual agreement to take it as binding. In fact, he becomes an umpire, and it is put on that ground in a similar case, (Riche v. Broadfield, 1 Dall., 16.) That he could not bind his principals, after the purpose of his agency was ended by a sale, is clearly shown by Washington, J., in Blight v. Ashley, (Peters’ C. C., 15-21.) A bookkeeper is a simple agent to enter transactions which have actually occurred, and the proof of which must be made out aliunde, not to create evidence of them at his pleasure. The Referee has not found, nor was there evidence to show, that the bookkeeper in question possessed any such authority. Even if he had been authorized to make sales, and enter them, there were entries in the books of purchases and payments not made of his own knowledge, and therefore the books were not, as an entirety, evidence against the defendant. Upon neither ground, therefore, that a mere bookkeeper is a mutual agent selected to determine with what sums each partner shall be charged in the partnership books, or that the person who made the entries in this case had such authority, particularly where it appears he had no knowledge of some of the transactions, were all the entries in the books before mentioned evidence against the defendant.

I think, therefore, that this case should go back for a new trial, for improper admission of evidence alone. But there are some other questions involved which, I think, ought upon such trial to be more fully disposed of than they are in the present report of the Referee.

The rights, of course, of the parties to. this action depend exclusively upon the nature of the transfer to them by-the Posts of their stock in trade, and the agreement made by and between both the former and latter at the time of such transfer; and such is the view taken by the Beferee. The mere subsequent admissions of the parties as to the nature of their relation to each other, of which evidence is scattered through the case, do- not amount to any modification of such agreement. The Beferee has given us most, if not all, of the terms of such agreement in his report, from materials carefully selected from the testimony, which, in some matters, is slightly conflicting; and his statement of them is undoubtedly sustained by the evidence. He does not, however, find whether there was an express agreement to share in losses as well as profits; and perhaps there is no direct testimony upon that point; that must1 be left to the legal consequences of a contract ■ for joint benefit. It also clearly appears that one of the terms of such agreement was that the business should be carried on for a definite time, viz., one year. By the plaintiff’s testimony it would appear that Varnum, another creditor of the Posts, suggested that if the parties to this-action would make the ■ proposed arrangement to carry on the business of the Posts, he would cash their paper. “ He agreed to advance “money on notes for a year.” The consideration to him was, that'“ the parties to this action should carry on the “ business for a-year, and after paying their debts, and “ all their debts, the profits should go to the creditors of “ the Posts. That was agreed to before the Posts cxe- “ cuted the transfer.” This is corroborated by the testimony of Way, (the bookkeeper,) Charles A. Post, and the defendant himself, and I think has some bearing on the liabilities of the parties to each other and the Posts’ creditors.

The transfer by the Posts to the parties to this action, although absolute on its face, was evidently only part of the agreement between the parties. If part óf the consideration for such transfer was that the parties to this action should carry on the projected trade for a year, with the assistance of Varnum, not only for the purpose of realizing the amounts of . their claims, but also those of all other creditors of the Posts, their obligation to the latter did not cease with any supposed acceptance of the transfer in discharge of their debts. The mere form of that transfer, as being of the absolute ownership of the stock, although it contains the words, “granted, "bargained and sold,” which are recited in the findings as the legal effect of the instrument, is no barrier to our access to the substance of the transaction. Upon the facts in evidence, and the substance of the agreement, as found by the Beferee, no one can, with any show of reason, say that the parties to this action could divide the assigned property on the instant of its transfer, and not move a step in carrying on the business agreed upon, without some responsibility to some one for breach of their agreement. The effect of the transfer and its acceptance was, undoubtedly, to discharge the Posts from all liability to the parties in this action, but they had an interest remaining in having the stock and good-will of their business employed in paying their creditors. .With the exception of the discharge of the original debtors, and the transfer of the legal title of the goods to the parties to this action, for the purposes of the agreement, this case does not differ, essentially, from that of Wheatcraft & ano. v. Hickman, (9 Com. B., 47.) It is true that in that case the debtors had expressly reserved to themselves any surplus after paying their debts, but, with the exception of the active trustees, the debtors were held to ,be the only persons liable for any engagement of such trustees, as being the only persons interested in the profits. Lord Cram worth remarked that “he received the benefits of them as they ‘accrued, although he precluded himself from applying ‘them to any other purpose than the discharge of his ‘debts,” and that the trade was still his. The mere receipt of the money by other creditors, in payment of their debts, was held not to be sufficient to make them liable, and, of course, they were not partners. The powers of partners were declared, in that case, to be a branch of agency, and the trustees had no authority to bind the creditors of the assignor.

If- this be so, as the defendant, unless he was to carry on the business after all the creditors of the Posts were paid, could only realize the amount of his debt in any event, he was not a partner participating in the profits as profits so as to make him liable to third persons. His liability to the plaintiff could, therefore, only arise out of an express agreement to pay one-half the losses in the joint adventure, if it was one. (Pattison v. Blanchard, 5 N. Y. R., 186; Ogden v. Astor, 4 Sandf., 311; Post v. Kimberly 9 Johns., 470; Ross v. Drinker, 2 Hall, 415.)

I think it, therefore, a matter of some doubt whether the agreement in this case, as found by the Beferee, sustained his finding, as a conclusion of law, that the parties in this case, in continuing the business, were partners, or that they -were equally liable for its losses, unless the defendant made some agreement binding himself thereto.

This becomes also important, because the business Avas carried on beyond the first year by the plaintiff, and the defendant had some reason to believe that the business had been profitable during that time. I think, in order to make the defendant liable for losses beyond the period fixed by the agreement, there should have been some evidence and finding as to his entering into a new agreement to charge him with the losses of the continued trade.

This reasoning, of course, is founded upon the supposition that, by the original agreement, the business was to cease when the parties to this action, and the other creditors of the Posts, were paid off, and not to continue for the whole jrear if that happened within it. If the defendant had any interest in carrying it on afterward, he would be, of course, liable as a partner; still, however, his acquiescence and participation in carrying it on the second year must be proved and found.

If the agreement, however, should turn out to be one by which the defendant was merely to lend his notes, to be discounted by Mr. Yarnum, for the benefit of all parties, to be applied by the plaintiff on a mere contract by him to carry on the trade for the purpose of paying off his own, and the defendant’s claim, and all other creditors’ claims, the plaintiff’s right to be reimbursed orie-half of his expenditures would be rendered more doubtful.

The case, however, must go back upon the question of evidence, when all the other questions can be determined.

The judgment should be reversed, and a new trial had, with costs to abide the event. The Beferee to be discharged, if either party desire it.

Bosworth, Ch. J.,

dissenting. The pleadings in this case are but six folios in length, while the Beferee’s findings of fact and conclusions of law occupy nearly nine printed pages.

The complaint states, that about the first of March, 1851, the defendant and plaintiff entered into a copartnership, under the name and style of “ James B. Taylor,”, in “ the hat and cap business, in the city of H. Y.,” and carried it on about two years, agreeing each to bear and pay half of the losses; that there were heavy losses, and that the defendant-refuses to account, or pay any part of the loss.

The referee has not found in terms, as a fact, whether there was a partnership or not. He has found a series of special facts, and his first conclusion of law is, the 'plaintiff and defendant “were copartners, and jointly and equally liable, as between themselves for ‘losses sustained in such trade and business.”

But the Beferee finds that, at the time when 0. H. and D. B. Post sold their stock of goods to the plaintiff and the defendant, it was verbally agreed between the latter two, and also between them and the Posts, “ that the said plaintiff and defendant would continue and carry on the business of manufacturing and dealing in hats and caps, * * and it was understood and verbally agreed between said plaintiff and defendant, that said trade and business should be conducted and carried on in the name of the plaintiff, “ James B. Taylor,” * * “that the said trade and business were so continued, conducted and carried on in the name of the plaintiff, “James B. Taylor,” with the result stated in his report.”

In the exceptions taken to the Beferee’s report, the second one is, “ the omission to find, as matter of fact, that the arrangement was that the plaintiff should carry on the business in his own name, and at his own risk, he agreeing, in consideration of defendant’s assistance, to secure to defendant, out of the business, the amount due ■from the Posts.” In accordance with this, is the defendant’s third point on this appeal, viz.: “ that defendant’s version of the arrangement is the only probable one, namely, that if defendant would furnish credit to buy fresh stock, plaintiff would agree to carry on the business, and work out of it, the amount of the defendant’s debt against the Posts.”

It is, therefore, quite evident that neither party claimed, on the trial, that if there was a partnership, the Posts were included in it. And the defendants position, if intelligible, is that Taylor went into the business at his own risk, agreeing in substance, that the defendant should realize his debt against the Posts; this involves the idea that the defendant not only relinquished to'Taylor all control of the stock bought by the two from the Posts, but all property in it.

The evidence was such, that a finding in terms that-the plaintiff and defendant formed a partnership and agreed to carry on this business as partners, and did so carry it on, could not have been disturbed as being against evidence. The actual finding amounts in substance to the same thing. When the evidence on the question of there being a partnership was “closed,” and the plaintiff proposed to go into proof of the state of the accounts, the defendant’s counsel objected, and “ the Beferee held and “ decided that, upon the evidence, the parties were part“ners, and that the accounts must be taken.” It is not, therefore, a mere presumption that he decided, as a fact, that the parties were partners, but it is stated, in terms, that he so decided. (See Grant v. Morse, 22 N. Y. R., 323.)

I have no doubt, upon the evidence, that the plaintiff' and defendant took the transfer of March 1,1851, in payment and satisfaction of the debts which the Posts owed to them.

The draft agreement (Exhibit No. 1) so declares, and that shows Yarn mu’s understanding at the time. St. John says that “Taylor & Herring were to receive the goods for their debts—that was the conversation then.” Way testifies that, “if there was a loss, it was to be borne by Taylor & Herring.”

Charles H. Post testifies thus : “I sold the goods to Herring & Taylor, for a consideration that I owed them, for the neighborhood of $11,000, which I owed part to each; * * I sold out the goods to Taylor & Herring, with the understanding that they were to give me my liabilities, to the amount of about $11,000.”

There is nothing in the evidence of Taylor or Herring tending to show that the business was to be conducted at the risk of the Posts, in any such sense that they were to share any of its losses, if any there should be, or that they were to continue liable on these debts to Taylor & ' Herring, if the latter were subjected to losses, instead of making profits.

They stipulated for the contingent benefit, if there should be profits, of having all the profits, after the debts of Taylor and Herring were realized and the expenses of the business paid, applied to pay debts owing to other creditors. If there had been such profits, those creditors could have recovered them in a suit against Taylor & Herring.

If there were any partners in continuing the business, they were Taylor & Herring only. The stock was theirs, they owned it jointly, and agreed at the time they bought it to carry on this business, and the subsequent declarations of Herring (if he made those which it is testified he made) show that he claimed to be interested in it, and to be carrying it on with Taylor. The case of Cox v. Hickman, (9 Com. Bench, N. S., 47,) is an authority to the point, that the creditors of the Posts, even if they had formally assented to the arrangement, would not, thereby, have become partners. The facts in this case, that the business was a new one, was carried on in a new name by "new parties as principals, and that the Posts had no power or right to control it, and stipulated for nothing to revert or be paid to them in any event, distinguish this case from Cox v. Hickman so materially, that it is not an authority in support of a suggestion that the Posts were partners in the new business.

The fact that the Referee states in his findings of fact, that the Posts, being indebted to Taylor & Herring, “ in consideration of such indebtedness, and in payment or on account of the same,” bargained, sold and delivered their goods, &c., does not appear to me to present any serious difficulty. This report does not, like the Code, contain a definition of some, or any of the words used in it. Ho one, therefore, can assert that his definition of any particular words in the report of the Referee, will express the precise idea which the latter designed to convey by them. But I think it quite clear that he did not use the words, “ on account of the same ” as synonymous with, “ as collateral security for the same.” That idea would conflict with the fact of a sale of the goods, which fact he finds. And the written instrument of transfer signed by the Posts, declares that they “ do sell ” the goods for the consideration of $11,636.73, and the transfer it makes is absolute and unconditional.

I think the Referee, if he should attempt to explain his meaning by a supplemental report, would show that he did not mean by these words anything materially different in meaning from that of the words “ in payment.” The words “on account” are frequently used to express the idea of a partial payment, and, as used here, are, as I think, designed to express the idea of satisfaction, discharge or extinguishment.

When, there is nothing in the report tending'Hc^show that words were used to express an idea justifying ah inference inconsistent with that naturally arising from other facts specially found, such as the fact of an actual sale of the goods, they should not be so construed as to create an inconsistency between that and other findings of fact, when they can consistently be so construed as to harmonize with each other.

I conclude, therefore, that Taylor & Herring bought these goods, and took them in satisfaction of these debts, and that this is the just construction of the Referee’s findings of fact.

Whether the creditors of the Posts could have held this property on executions against the latter, as against Taylor & Herring, it is useless to inquire. Whether they could or would not, will not aid in determining the legal relations between Taylor and Herring on the facts found, or their liabilities inter se.

The only important question, on the facts found, is, whether the books of account kept in this business were, on an accounting between these parties, prima facie evidence in favor of each one of them against the other.

The facts are found “ that the books of account of and “ relating to the said trade and business, and the transac- “ tions thereof, were kept at the said store, Ho. 142 Water “ street, by the bookkeeper employed for that purpose, as “ above stated, in which were entered and set down the “ purchases, sales and other transactions of and in the said “ trade and business, which hooks were at all times open to “ the examination and inspection of said parties (Taylor and “ Herring) and each of them ; that while said trade was “ so conducted and carried on as aforesaid, the plaintiff “ had his office and place of business at and in said store, “Ho. 142 Water street, and the defendant had his office “ and place of business in the immediate vicinity of, and “ was frequently in said store, Ho. 142 Water street.”

That Taylor “ neither purchased nor sold goods in or for account of said trade and business, nor made any entries in the books of account thereof.”

The language of the Court in Simms v. Kirtley, (1 Monr., [Ky.,] 80,) is very pertinent to the question under consideration, in a case like the present. The Court say that “ from the very nature of the case, the books of a partnership must be evidence between the partners themselves. Their situation is one of confidence. They agree to unite, and, as to others, to become one person, and the books of the firm are to speak their language and record their joint transactions, and there is an understanding that these books are to be appealed to to tell their true situation. To admit them as evidence, then, is only effectuating their agreement, and using their own criterion and test, to ascertain the truth. Such books, therefore, kept subject to the inspection of each, must be admitted as correct until.the contrary is shown.” Fletcher v. Pollard (2 Hen. & Munf., 544, 549 and 550) is to the same effect.

The question is not whether either party has neglected or omitted to inspect, but whether he has had opportunity to inspect; whether he has had access and could have inspected. The presumption is, that each partner had access, and an opportunity to inspect, until some fact is proved tending to show that a partner did not have access. United States Bank v. Binney (5 Mason, 176, 188) does not conflict with this view.

In Heartt v. Corning, (8 Paige, 572,) the Chancellor said that, “in stating the accounts of partners, as between themselves, the entries on the partnership books, to which both partners have had access at the time when those entries were made, or immediately afterwards, are to be taken as prima facie evidence of the correctness of those entries.”

In Caldwell v. Leiber, (7 Paige, 507,) the Chancellor says that, “ entries in the copartnership books, made during the continuance of the partnership, are, as a general rule, evidence for and against the different members of the firm, in a subsequent adjustment of their accounts between themselves. And it lies upon the party alleging a fraud •or mistake in such entries to prove it.”

In Lodge v. Prichard, (27 Eng. L. and Eq., 474,) Turner, L. J., said, “ I am aware that some doubt has been felt in the master’s offices whether entries in partnership books are evidence against all the parties, but I am not aware that any such doubt has been expressed by the Court.”

Kniuht Bruce, L. J., said, “Prima facie, the books of the partnership are evidence among all the partners, for them all and against them all, owing to the agency which pervaded all the partnership transactions. * * * The only question is, whether the books are prima facie evidence between the partners and their estates. In my opinion, they are.”

In Stoughton v. Lynch, (2 Johns. Ch., 217 and 218,) the Chancellor says, “I presume, and cannot but deem it proper, that in stating accounts between copartners, the true dates, as furnished Iny the hoolcs themselves,^ought to he assumed.’’'1 The point under the consideration of the Chancellor was, whether the defendant should be charged with various sums of money, at the times when he was debited with them in the books, or at anterior dates. And he held that the books must be taken as prima facie evidence on that point.

Entries made by one of the partners, during the partnership, in a book of account, are admissible evidence against both. (Walden v. Sherburne, 15 Johns., 409.)

An account of sales, rendered by a common , agent of both parties to one of them, has been held to be admissible as evidence against the other, of the facts stated in it. (Peltier v. Sewall, 12 Wend., 386.)

It seems to me quite clear that, as the general rule, the entries in partnership books of account, made during the partnership, are prima facie evidence for all, and against all the partners, on an accounting between them.

That where the books are equally open to the inspection of both partners, the mere fact that one may omit to examine them does not affect the application of the rule.

And that every consideration calls for the application of the rule in a case where no entry is made in the books by either partner, but all of them are made by a bookkeeper employed for the purpose, as the common agent of both.

I have examined all the cases cited, and several others, and do not find one where the books were not held to be grima facie evidence against a partner haying access to them and an opportunity to inspect them, merely because he omitted to do so.

The judgment should be affirmed.  