Case ID: ala_95/html/0101-01.html
Source: Caselaw Access Project
Author: {"author": "COLEMAN, J.-", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Levy & Co. v. Alexander.
    
      Action on Common Counts, for Goods Sold and Delivered
    
    1. Articles of partnership construed. — Under written articles of partnership signed by D. C. A. and A. D. A. only, and containing these stipulations: (1) that the capital stock of the firm shall be $1,500 ; (2) that each of said partners shall pay an equal part of the necessary expenses in carrying on the business; (3’ that said partners “agree and hereby promise to pay J. D. A. one-third of the net profits of said mercantile business for the use of his storehouse, trade and influence, and for the loan of $500, and more if he thinks it advisable(4) “that the remaining two-thirds of the net profits shall be divided between the said partners, D. C. A. and A. D. A., share and share alikeand (5) “that neither partner shall draw any money from the partnership funds, nor contract any debt against the firm, without the consent of the other partner — J. D. A. does not appear to be a partner.
    2. Liability as partner to creditors. — A person may be liable as a partner to creditors of the partnership, although he was not a partner in fact; but, to render him so liable, it must be shown that he was held out to the public as a partner with his knowledge and consent, and that the creditor contracted with the partnership on the faith and belief that he was a partner.
    Appeal from tbe Circuit Court of Marengo.
    Tried before tbe Hon. Wi. E. .ClaRKE.
    Tbis action was brought by A. G. Levy & Co., against D. C. Alexander, A. D. Alexander, J. D. Alexander, and J. T. McDonald, “late partners under tire name and style of D. C. Alexander & Co.;” and was commenced on tbe 1st February, 1888. The complaint contained two counts, the first claiming $163.05, “ due by account stated between plaintiffs and defendants on the 20th December, 1887and the second $155 “due by account for goods sold and delivered by plaintiffs to defendants on the 21st August, 1886..” J. I). Alexander filed a special plea, denying that he was ever a member of the firm of D. C. Alexander & Co., and issue was joined on that plea. On the trial, as the bill of exception shows, the plaintiffs introduced evidence tending to show that said J. D. Alexander was a partner in the firm under the written articles of partnership, and had been held out to the public as a partner with his knowledge and consent. It was admitted that the written articles were deposited with said J. D. Alexander at the time the partnership was formed, and that the original was lost; and said J. D. Alexander, testifying for himself, produced an alleged copy, which he said was correct in every particular, and which was in these words :
    “Articles of partnership between D. C. Alexander and A. D. Alexander, in the mercantile business at Eairview, near Eaunsdale, Alabama. (1.) The capital stock of said firm is to be $1,500. (2.) The said partners agree to pay equal amounts of the necessary expenses in carrying on said business. (3.) It is further stipulated and agreed that said partnership shall continue at the pleasure of the partners. (4.) The said j)artners, D. C. Alexander and A. D. Alexander, agreee and hereby promise to pay J. D. Alexander one-third of the net profits of said mercantile business, for the use of his storehouse, trade and influence, and for the loan of $500, and more if he think it advisable. (5.) It is further agreed and stipulated, that the remaining two-thirds of the net profits shall be equally divided between the said partners, D. 0. Alexander and A. D. Alexander, share and share alike. (6.) It is further agreed and stipulated, that neither partner shall draw any money from the partnership funds, nor contract any debt against the firm, without the consent of the other partner. (7.) It is further agreed that the firm name shall be D. C. Alexander & Co. (8.) It is further agreed and stipulated, that if any controversy arise between said partners, in relation to the partnership business of the same, it shall be settled by reference to arbitrators.” (Signed by D. C. Alexander and A. D. Alexander, and attested by a witness, but without date.)
    
      “ The plaintiffs introduced evidence tending to show tbat said writing, Exhibit A, was not a true copy of tbe original contract of partnership ; tbat tbe original made no mention of $500 loaned to said firm by J. D. Alexander, and be did not in fact, at any time, lend $500 to said firm, or to tbe other members thereof, taut contributed to said partnership one-tliird of tbe net capital stock, or $500;” also, tbat tbe books of tbe firm were open to bis inspection, and were frequently inspected by him ; tbat trial balance-sheets were sent to him monthly, as to tbe other partners; that be sometimes ordered goods for tbe firm; tbat in the Fall of 1886 “be gave bis one-tbird interest to said McDonald, who was bis son-in-law, and who added nothing to tbe strength or capital of tbe firm, but simply took tbe place and tbe interest of said J. D.;” and tbat afterwards, at tbe instance of said J. D. Alexander, tbe books of tbe firm were changed, so as to show tbat tbe $500 entered to bis credit as capital stock was a loan.
    On this evidence, tbe court charged tbe jury: “ Tbe only issue in this case is, whether J. D. Alexander was a partner in tbe firm of D. 0. Alexander & Co. at tbe time tbe claim sued on was contracted. It is conceded tbat tbe partner-'" ship was formed by a contract in writing, and tbat such contract is lost; and plaintiffs and defendants each have offered . parol evidence of its contents. Tbe defendant offers tbe paper marked Exhibit A as a copy of- tbe original contract, to show that be was not a member of said firm; and I charge you tbat it does not make him a partner.” The defendant-excepted to this charge, and also to tbe refusal of tbe following charges,' which were asked by him in writing: (1.) “ If tbe jury believe from tbe evidence tbat Exhibit A is a true copy of tbe articles of partnership, then J. D. Alexander was a co-partner in said firm of D. C. Alexander & Co.” (2.) “If tbe evidence shows tbat J. D. Alexander was, with knowledge and consent, held forth to tbe public as a partner in tbe firm of D. C. Alexander & Co., then be may be charged as a partner with tbe plaintiffs’ debt.”
    Tbe charge given, and the refusal of tbe charges asked, are tbe only matters assigned as error.
    Geo. B. Johnston, for appellants.
    (1.) J. D. Alexander was a partner in fact of tbe firm of D. C. Alexander & Co., even if Exhibit A be held a true copy of tbe articles "of partnership, and certainly under tbe oral evidence adduced. Emamisl u. Ercmghn, 14 Ala. 303; Moore, v. Smith, 19 Ala. 774; Hoim v, Patterson, 53 Ala. 205; Gouch v. Woodruff.’ 63 Ala. 466; McDonnell v. Battle House Go., 67 Ala. 90; Tayloe v. Bush, 75 Ala. 432; 2 W. Bla. 998; ColL Partnership, 44; Scott v. Campbell, 30 Ala. 728 ; Mealier v. Cox, Brainard é Go., 37 Ala. 201; 45 N. T. 797, or 6 Amer. Rep. 177. When one lends money to a partnership, agreeing to receive a share of the net profits of the business as compensation for it, he becomes liable as a partner to creditors of the firm. — Parker v. Ganfiald, 37 Conn. 250, or 9 Amer. Rep. 317; Loomis v. Marshall, Í2 Conn. 69 ; 53 "Wise. 260, or 40 Amer. Rep. 770 ; 58 N. T. 272, or 17 Amer. Rep. 244; 17 Wise. 140; 20 Wise. 117; 42 Wise. 85; McGovern v. Madison, N. Y., 22 N. E. Rep. 398; Haekett v. Stanley, N. Y., 22 lb. 245. (2.) Although J. D. Alexander may not have been a partner in fact, he rendered himself liable as a partner to creditors of the firm. — McDonnell v. Battle House Uo., 67 Ala. 91; Bush v. Tayloe, 75 Ala. 432.
    Jiro. C. ANdersoN, J. W. Bush, Geo. W. Taylor, and Pitts & Harwood, contra.
    
    (1.) The written articles of partnership, shown by Exhibit A, were signed only by D. C. and A. U. Alexander, and show no interest or liability on the part of J. D. Alexander as a partner. — Bates on Partnership, § 17; Tayloe v. Bush, 75 Ala. 436. (2.) J. D. Alexander was not liable to plaintiffs as a partner, unless they contracted with the firm in the belief, induced by his conduct, that he was a partner.- — 85 Ala. 19; 86 Ala. 3Ó5.
   COLEMAN, J.-

If J. D. Alexander was a party to the instrument offered in evidence, the argument of appellant to show that its terms are of such a character as to constitute him a partner in favor of creditors would be in point, and entitled to consideration. The construction of this instrument by the court did not exclude from the jury the consideration of other evidence, which tended to show that J. D. Alexander was a member of the. firm of D. C. Alexander & Go. Neither was there any error in the charge of the court which construed and declared the legal effect of the instrument offered in evidence as a copy of the original copartnership agreement. The testimony without dispute showed that the corpartnership agreement was in writing, and that the original had been lost. The testimony of the defendant tended to show that exhibit “A” was a true copy of the original agreement, and the testimony of the plaintiffs tended to show that it was not, and that it had other provisions. The charge of the court was simply to the effect, that “Exhibit A,” of itself, did not constitute J. I), Alexander a partner. Of the correctioness of this charge there can be no doubt. Standing by itself, and construed alone, that agreement was no more binding upon J. D. Alexander, than it was upon his counsel. As to him, it was strictly rev inter alios acta; and if there was no other understanding to bind J. D. Alexander as a partner, it could not be said in any sense that he was, inter sese, a partner. The first charge requested by plaintiff was properly refused.

Where one permits himself to be held out as a partner, and persons contract with the firm upon the supposed fact that he is a partner, he makes himself liable as such, whether in fact he be a partner or not; but, if the evidence shows that credit was given to the partnership in ignorance of this fact, and not upon the supposition or faith that he was a partner, then no such liability arises. — Ala. Fer. Co. v. Reynolds, 85 Ala. 23. The second charge asked by appellants, and refused by the court, is erroneous for two reasons. First, it seeks to fasten a liability upon J. D. Alexander, if he was held out to the public as a partner, whether it was done with Ms knowledge and consent, or without it. It must be done with his knowledge and consent, to render him liable. Second, because there is no evidence in the record to show that plaintiffs debt was con.tracted upon the faith that he was a partner, or that such information was ever conveyed to plaintiffs until after their debt was contracted. We have seen that the credit must be given upon the faith that he was a partner.

There is no error in the record. Affirmed.