Case ID: ad_140/html/0797-01.html
Source: Caselaw Access Project
Author: {"author": "Cochrane, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William Shanley and Michael Shanley, Appellants, v. Thomas B. Merchant, Respondent.
    Third Department,
    November 16, 1910.
    Partnership — contract made by partner without disclosing partnership — election to sue individual partner or firm — defenses — non-joinder of partner — burden! of proof—evidence — facts establishing partnership.
    Where a partner makes a contract with one ignorant of the existence of the firm without disclosing that he is acting for the partnership, the person with whom he deals on discovering that fact may at his option bring action against the person who made the contract or against the members of the firm.
    Where the action is brought against the individual partner, in order to take the defense that his copartner was not joined, he must show not only that the partnership existed but that the plaintiff had knowledge thereof when the contract was made, or must prove facts sufficient to charge him with such knowledge.
    In such action it is not error to exclude evidence that a partnership existed where the defendant makes no offer to connect the evidence with proof that the plaintiff had knowledge thereof.
    Appeal by the plaintiffs, William Shanley and another, from a judgment of the County Court of Broome county in favor of the defendant, entered in the office of the clerk of said county oil the 14th day of April, 1909, pursuant to an order of said County Court, entered on the same day, reversing a judgment of a justice of the peace in favor of the plaintiffs, and also from the said order. upon which such judgment was entered.
    
      Edmund B. Jenks, for the appellants.
    
      T. B. & L. M. Merchant, for the respondent.
   Cochrane, J.:

This is an action to recover of the defendant rent of telephone appliances and fixtures furnished to him by the plaintiffs. The defense is that there is a non-joinder of parties defendant because the defendant had a partner, and that the telephone was rented and used in the partnership business. The evidence shows an oral contract with ’the defendant individually and without reference to a partnership. The plaintiff Michael Shanley testified in detail concerning the contract, and that nothing was therein .said as to a partner by the defendant, or that the telephone was to be thus used by a partnership. This evidence was uncontradicted by the defendant by whom, if untrue, it might and should have been contradicted, and we must, therefore, assume that the contract was made as claimed by plaintiffs and that it was in form at least .the individual contract of the defendant. There is no evidence that plaintiffs knew that defendant had a partner.

Where a party makes a contract without disclosing that he has a partner, and the party with whom the contract is thus made is at the time ignorant of a partnership, but subsequently discovers that the contract was in fact made for the benefit of such partnership he may bring an action on the contract either against the person alone who made the contract or at his option against both partners. (North v. Bloss, 30 N. Y. 374; New York Dry Dock Co. v. Treadwell, 19 Wend. 525; Marvin v. Wilber, 52 N. Y. 270.)

In the case last cited it was said : “ If a party purchase for himself without disclosing that he had a partner, and the vendor was ignorant thereof, the action may be brought against the party alone who made the contract.”

In order to make the defense of non-joinder available to the defendant the burden was upon him not only to show that a partnership existed but that the plaintiffs had knowledge thereof when the contract was made or of circumstances sufficient to charge them with such knowledge and that the oral contract although negotiated with the defendant individually was, nevertheless, intended for the firm benefit. (North v. Bloss, 30 N. Y. 374; Woodhouse v. Duncan, 106 id. 527, 534; New York Dry Dock Co. v. Treadwell, 19 Wend. 525 ; Cookingham v. Lasher, 1 Abb. Ct. App. Dec. 436.)

The defendant, for the purpose of proving the partnership, called a witness who had access to the books and was acquainted with the business transactions. His testimony was excluded on the ground that it was irrelevant. Various offers to prove the partnership were also rejected. Because of such exclusion and rejection of evidence the Oounty Court reversed the judgment. It is clear, however, from what has been said, that if all this evidence had been received it would merely have established the fact that a partnership existed. It would not have tended to show that plaintiffs had knowledge of such partnership, nor would it have connected them in any such way as to charge them with knowledge thereof. The defendant urges that evidence of the partnership constituted merely 'the first step in the order of his proof, and that he intended to follow that up by proving knowledge on the part of the plaintiffs. He did not, however, disclose liis purpose in Justice’s Court, nor did he make any offer other than to prove the partnership, nor give any intimation of a design to bring notice thereof home to the plaintiffs in any manner. The inference from the justice’s return is that the evidence of partnership standing alone was relied upon as sufficient to constitute a defense unaccompanied by evidence of knowledge thereof on the part of plaintiffs.

In Flyrm v. Murphy (2 E. D. Smith, 378) a similar question arose under circumstances very similar to those which here exist. That was an action for commissions due plaintiff as agent of defendant. The defendant asked a witness for the usual and uniform rate of commissions allowed by defendant to his agents, which evidence was excluded. The court, after holding that such evidence was irrelevant unless it were shown that plaintiff rendered his services with knowledge of such usage, said : And although in this particular case the most convenient course might have been to prove the usage first and the notice afterwards, we cannot, I think, say that the justice erred in excluding evidence of the usage when the defendant neither offered to prove that the plaintiff had notice nor gave any intimation whatever of a design to bring notice of’such usage home to the plaintiff in any manner. So far as we can gather from the return the evidence of usage was insisted .upon as per se admissible to affect .the plaintiff’s claim, unaccompanied by and independent of any other evidence, given or proposed to be given, to charge the plaintiff with notice thereof. And in this view I think the evidence was properly rejected.” (See, also, to the same effect, Van Buren v. Wells, 19 Wend. 203.)

It is clearly inferable from the return herein that the defendant did not intend to prove knowledge of the partnership on the part of plaintiffs. If he'had such a purpose he most successfully concealed it from the court. In Woodhouse v. Duncan (106 N. Y. 533). a defense of this nature was characterized as strictly technical and of no real consequence to any one, and the court further said: “ A defense thus technical should be closely scrutinized and should not be permitted to prevail if upon any permissible view of the case it can be avoided.”

The defendant made various attempts to prove the partnership, and in several instances stated the purpose of his efforts, but at no time did he manifest the slightest indication to establish the supplementary facts which alone could give efficacy to the excluded evidence. In an attempt to succeed on an unmeritorious defense he should within the authorities be strictly held to the attitude-he assumed on the trial.

The judgment of the County Court should be reversed and that of the Justice’s Court affirmed, with costs to the appellants in" this court and in'the County Court.

All concurred.

Judgment of the County Court reversed and that, of the Justice’s Court affirmed, with costs to the appellants in this court and in the County Court."