Mercantile N. Bank v. Lauth

Citations

• 143 Pa. 53
• 21 A. 1017
• 1891 Pa. LEXIS 906

Syllabus

<p>[To be reported.]</p> <p>(a) The act of June 2, 1874, P. L. 271, relating to partnerships, limited, provides, in § 5, that “ no debt shall be contracted.....except by one or more of the said managers, and no liability for an amount exceeding five hundred dollars except against the person incurring it shall bind the association, unless reduced to writing and signed by at least two managers.”</p> <p>(b) A draft for a sum exceeding $500, drawn upon a limited partnership association, organized under said act of June 2, 1874, was accepted in writing in the name of the drawee “ per Bernard Lauth, Chairman,” Lauth being the only manager who signed the acceptance. It was afterwards delivered by Bancroft, another of the managers, to the payee, who had it discounted by a bank:</p> <p>1. The bank was bound to know that the signatures of two managers were necessary to a valid acceptance of the draft, and was in no position to complain that it had been misled by Lauth; it might fairly be treated as having taken the draft on the credit-of the drawer and indorser, as an unaccepted bill, without relying on the responsibility of the drawee: Per Mr. Justice Williams.</p> <p>2. At all events, if Lauth signed the acceptance with the understanding that his name was to be one of the two required by the statute and that it was to be signed also by Bancroft, and placed it in the hands of the latter for that purpose, he did not become personally liable upon the draft by reason of the neglect of his fellow manager to complete the acceptance.</p>