Case ID: tex_8/html/0055-01.html
Source: Caselaw Access Project
Author: {"author": "Wheeler, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Jackson v. Alexander.
    it appears to be well settled that a dormant partner in a commercial partnership who is not privy to the contract need not be joined with the ostensible partners in an ordinary action to recover a debt dne for goods sold.
    Art. 671, Hart. Dig., requires that the petition shall set forth the names of the parties, but it does not prescribe who shall be made parties.
    The act for the regulation of limited partnerships (Hart. Dig., p. 796) has no relation to questions respecting the rights and liabilities of ordinary partnerships.
    Error from Bed Elver. This was an action by the defendant in error upon .an account for goods sold. The defendant pleaded in abatement the non-joinder of two others, alleged to have been partners of the plaintiff in a mercantile firm under the firm name of A. 31. Alexander, and as snob to have sold to the defendant the goods in question. There was also a general denial. The plaintiff replied, and', admitting that the persons named in the plea and not joined were partners, alleged as au excuse for not joining them that they were dormant partners. A jury was impaneled to try the issue, who found for the plaintiff that the persons not joined were, as alleged, dormant partners. There was a verdict aud judgment for the plaintiff on the merits. The defendant brought a writ of error, and relied for a reversal of the judgment ou the non-joinder of the partners named in the plea in abatement.
    
      Morrill and Dickson, for plaintiff in error.
    1. Should dormant partners be made parties plaintiff? The statute by which we are governed is art. C71, Hart. Dig., which requires “that the petition shall set forth clearly the names of the parties,” &e. This is a substantial re-enactment of the act of 1830. (Laws of Texas, vol. 1, p. 201, sec. S.) To apply the language of the chief justice in the case of Fowler v. Poor, Dallam, 402, to the casé at bar, it may be said that the statute which requires that the petition should set forth clearly the names of the parties “ must remain in full force until repealed iu express words by some subsequent statute, or the matter contained in some subsequent statute be so clearly repugnant thereto that it necessarily implies a negative.” It cannot, therefore, be" contended that partners may sne in the partnership name where it does not contain a clear statement of the names of all the partners.
    2. Por a description of dormant partners see Story on Partnership, see. 80. They “ partake of the profits and thereby become partners, either absolutely to all intenlsor purposes or at all events in respect to third persons.” The same, author, in his Equity Pleadings, says, “ all persons materially interested, either legally or beneficially, iu the subject-matter of a suit are to be made parties to it, either as plaintiff or defendant.” "We admit that at common law, agreeabty to the authorities, there is some doubt on this subject. But we have ■not adopted the common-law practice.
    3. The act for the regulation of limited partnerships (Hart. Dig., art, 2635) provides that partners who compty with tlie requirements of that act shall have certain privileges, and, among others, the privilege of suing and being sued in the name of the general partners, “ in tlie same manner as if there were no special partners.” This is obviously an exception to the general rule.
    • The District Court act of 1S46 (Hart. Dig., art. 743) contemplates that all who “carry on business ” as partners should'be joined as plaintiffs.
    
      Morgan and Mills, for defendant in error.
    All persons at interest in equity are required to be made parties to a bill, for the very obvious reason that it is the object of the court in the rendition of its decree to make a final decision of all the matters and interest in controversy. It is different in partnerships. Tlie act of eacii partner in transactions in relation to the partnership business is the act of all and binds all. He can buy and sell partnership effects, and make contracts in reference to the business of tlie firm, and pay and receive and draw and indorse and accept bills and notes. (3 Kent’s Com., 41; 5 Or. R., 289; 1 Dali. R., 243.) If, then, there are dormant partners, the ostensible partner or acting man may bring suit; and a judgment against him is final and conclusive as to his secret associates in business, and the reason given for equitable proceedings therefore fails as to partnership. The reason of the law failing, the law itself fails. It will not be doubted that upon the death of one partner the survivor alone has a vested interest in dioses in action, and he can, without the consent of the, representatives of the deceased partner, appropriate the partnership effects to the payment of partnership debts. Chief justice Marshall says : “ The acting partner has power to transact- the whole business of the firm, whatever that may be, and consequently to bind his partners in such transactions as entirely as himself.” (Winship v. Bank of the United States.) To this
    case and the very lucid exposition of the relative position of partners and those who deal with them the attention of the court is particularly directed.
    2. The article 671, Hart. Dig., requires the names of tlie parties to be clearly set forth. How, who are the parties? They are the party complaining and the party complained against. The court will exact that all whose interest is at stake shall appear before it. In the case of an action such as the one at bar, are not the dormant partners represented in court? Certainly, if the above principles laid down by the chief justice are correct. Will not a judgment bind not only the acting partner who sues but all those directly associated with him ?' Is not the end and aim of the law accomplished? and is not the ease so fully presented and the parties so clearly set forth that all who have either a direct or indirect interest maybe and are, by judgment of the court, finally concluded?
   Wheeler, J.

The present appears to have been a commercial partnership. The partners not joined were dormant partners, who were not privy to the contract. And it appears to be well settled that a dormant partner not privy to the contract need not be joined with the ostensible contracting party in an action like the present. This principle is expressly admitted in the case of Speake v. Prewitt, (6 Tex. R.,) and it appears to be tlie well-settled doctrine of the law on this subject. (Story on Partnership, sec. 241, n. 1, 2d edit.; 3 Kent’s Com., 31, n. a, 5th edit.; 1 Chit. Pl., 12, n. 1, 10th Am. edit., and cases cited.

The present being a commercial partnership, the doctrine as to dormant partners applies.

Tlie provision of theaet of 1846, (Hart. Dig., art. 671,) to which reference was-made in argument, has no relation to the question in this case. The statute requires that the petition shall set forth the names of the parties, but it does-not prescribe who shall be made parties to a suit. The question here is not whether the names of the parties must be set forth in the petition — that does not admit of a question — but who are the proper parties to the suit. That question, as we have seen, is determined by the rule of law on that subject.

The act ‘“for the regulation of partnerships ” (Hart. Dig., p. 796) has no relation to a ease like the present.

We are of opinion that there is no error in the judgment and that it be-affirmed.

Judgment affirmed.