Case Name: Moses Woodward versus John Winship et al.
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1832-04-06
Citations: 12 Pick. 430
Docket Number: 
Parties: Moses Woodward versus John Winship et al.
Judges: 
Reporter: Massachusetts Reports
Volume: 29
Pages: 435–441

Head Matter:
Moses Woodward versus John Winship et al.
W here a member of a partnership for a particular business does an act on account of the firm, primé facie not within the scope of his authority, evidence is admissible to show, that in the exercise of good faith and reasonable discretion, he was warranted in so doing by the course pursued by the firm in the management of their business, and that so the other partners were responsible for his act.
W and B were partners in the manufacture of soap and candles, doing business in the name of W, who was the acting partner. For several years W exported to a foreign market for sale, large quantities of soap and candles, and received in return articles of foreign growth, which were sold by B and the proceeds paid over to W, who passed the same to the credit of the firm. On one occasion W shipped to a foreign port all the soap and candles on hand, and for this purpose chartered a schooner; and in order to complete the cargo, he purchased pork and flour, for which he gave a note signed in his name. In an action upon this note against the partners, the jury were instructed, that primé facie this purchase was not within the scope of the partnership business ; but that if they should find that the exportation of soap and candles was within the scope of the partnership business, and that W chartered the schooner on account of the firm and for their use and benefit, to export their manufactured products to a promising market, and that the purchase of the pork and flour was made in behalf of the firm and to promote the principal object, the exportation of the soap arid candles, and that W acted bondfde and in the exercise of a reasonable discretion, — then he might be considered as acting within the scope of his authority, and the note would bind the firm. It was held, that the defendants could not object to this instruction.
The jury were likewise instructed, that if B had knowledge of the proceedings of W, and that the pork and flour were purchased for the use of the firm, and made no objection, this would be a ratification of the transaction and would render B liable to pay the note, though he might not have known that the purchase had been made on credit. Held, that this instruction was correct.
Assumpsit on a promissory note signed by John Winship, payable to Kendrick, Gray & Co. or order, and by them indorsed to the plaintiff. The cause was tried before Wilde J.
The note was given for pork and flour purchased by Win-snip on a credit, and the plaintiff contended that the purchase was made for the three defendants, Winship, Amos Binney and John Binney, who were doing extensive business together, as copartners in the manufacture of soap and candles, under the firm of John Winship. Winship, who was the acting partner, made large purchases for the use of the firm and had for several years exported large quantities of soap and candles to a foreign market for sale, and received in return produce of foreign growth, such as coffee, sugar, &c, which went into the hands of John Binney and of Binney & Ludlow, who sold these articles as commission merchants and accounted to Win-ship for the proceeds. Winship also occasionally purchased large quantities of raw materials used in manufacturing soap and candles, and more than he had occasion to use for that purpose, and the surplus was sold to other manufacturers, being sometimes, as is usual in the trade, purchased for division among them by previous agreement. And it was proved that this course of dealing was common with all large manufacturers in this branch of business. The articles of foreign growth imported for the firm were commonly sold by John Binney, and the proceeds of sale were passed by Winship to the credit of the firm. The plaintiff offered evidence tending to prove, that just before the note in question was given, Win-ship received a letter from a correspondent at Port au Prince, informing him that soap and candles were at a price there, which in the opinion of Winship was encouraging, and that he thought it important to the interest of the concern, that they should ship immediately for that port, all the soap and candles they had on hand and also all that could be manufactured in a short time ; that this could not be effected without chartering two schooners, which was done ; and that Winship, not being able to fill up these schooners with soap and candles, or on freight, completed the cargoes with provisions &c. on account of the firm, and that the purchase of the pork and flour in question, with other articles, was made for the purpose of com pleting one of these cargoes.
On this evidence the judge instructed the jury, that Amos, and John Binney were not liable for any contract made by Winship, unless it were made on behalf of the firm, and within the scope of the partnership business, and that •prima facie the purchase of provisions for exportation was not within the scope of the partnership business ; that if, however, they should find from the evidence, that Winship was the acting partner, and must have been necessarily invested with a reasonable discretion to conduct the business of the partnership in such manner as in his opinion would best conduce to the benefit of the concern ; and that the exportation of soap and candles was within the scope of the partnership business ; and furthermore, that Winship chartered the schooners on account of the firm and for their use and benefit, to export their manufactured products to a promising market; and that the purchase of the pork and flour was made in behalf of the firm, and for the purpose of filling up the schooners, and to aid and promote the principal object of the undertaking, namely, the exportation of soap and candles, and that in all this Winship acted bond fide and in the exercise of a reasonable discretion, then Winship might be considered as acting within the scope of his authority as a partner, and the note would be binding on the firm.
The judge was requested to instruct the jury as follows ; — that no expectation of profit on the manufactured articles could justify a partner in going out of the range of bis business, so as to bind his copartners by contracts for the purchase of articles not relating to nor within the scope of its ordinary business ; that such speculations were not contemplated by the original contract ; that nothing short of an established usage could make the Binneys parties to such a contract, unless it was particularly assented to by them ; and that any other doctrine would make all limited partnerships general partnerships. But the judge charged the jury on this point with the restrictions and qualifications above stated.
The plaintiff also offered evidence tending to prove, that the Binneys had knowledge of these proceedings of Winship, and that the purchase in question was made for the use of the firm, and that they made no objection thereto ; and the judge instructed the jury, that if they so found the fact, this would amount to a ratification and adoption of the transaction and would make the Binneys liable to pay this note, though they might not have known the articles were purchased on credit.
To these instructions the defendants objected ; and if they were wrong, a new trial was to be granted ; otherwise judg ment was to be rendered on the verdict.
March 15 Ih.
April 6th.
S. Hubbard and C. G. Loring, for the defendants,
cited Cumpston v. M'Nair, 1 Wendell, 457.
Fletcher and D. A. Simmons, for the plaintiff,
cited to the point of ratification, Etheridge v. Binney, 9 Pick. 274.

Opinion:
Putnam J.
delivered the opinion of the Court. The jury-have found their verdict for the plaintiff upon one or both of the following grounds, viz. that the note was given for the use of the firm and in the authorized course of their business, or that the proceeding was ratified by the defendants.
It is contended, however, that the judge misdirected the jury in regard to the discretion which the acting partner has by law to manage the concerns of the partnership, by which instructions the jury might consider the firm bound by such partner acting according to his discretion, although not within the general scope of the partnership, — whereas (it is argued) the discretion must be limited to matter within the general scope of the business; that the judge substituted the discretion of the acting partner as the standard, instead of the well known rule of law which limits his authority to concerns within the course of the partnership. But we do not think that the instructions are liable to this objection, because the questions whether the acting partner exercised a sound discretion or not and whether the matter was within the general scope of the business or not, were left to be settled by the jury. It could only be understood from the charge, that the party must act with such fidelity and discretion, as would be approved ultimately, by the jury, if it should be questioned, and not that the opinion of the party himself should be the standard or rule of the correctness of his own conduct.
Again, it is contended, that as the purchasing of pork and flour for exportation evidently did not relate to the busi*y»ss of the firm, the judge should have instructed the jury, that me evidence which was offered concerning it and tending to prove that it did come within the general scope of the business, should have been rejected as irrelevant or altogether insufficient. But it is very clear that there must have been contradictory evidence upon the point at the trial. Whether the acting partner made the purchase on his own account, or for the firm, — whether or not the firm had been in the constant usage of exporting their manufactures for sale, to foreign countries, and of importing foreign merchandise in return, — whether the party acted discreetly or not in the particular transaction, —for the partnership, or colórably and fraudulently with a regard to his own interest, — were considerations for the jury. Sound discretion is to be proved by reference to a great variety of things having a bearing upon the fact to be ascertained. It was not for the judge, in the course of the trial, to weigh them, but to leave them for the consideration of the jury. And we think that the defendants have no reason to complain of the charge in this particular. The judge told the jury, that prima facie, the purchase of merchandise for exportation was not within the scope of the business.
But if the facts which must have been found by the jury, will not warrant the verdict, it would be the duty of the Court *x> set it aside, because the law resulting from the facts so established must be determined by the Court.
It is said that the business of the partnership was the manufacturing of soap and candles, and was not to be extended to the chartering of ships, and the purchase of merchandise for exportation, unconnected with the manufacturing establishment.
The correctness of these objections must be tested by reference to the general objects of the company. The manufacture of soap and candles to some extent, is indeed a simple business, and common in almost every farming establishment in New England. But the views of these defendants were not confined to domestic use or consumption, either in respect to the quantity or to the disposition of their manufactures.
The case finds that Winship was the acting partner, and that he made large purchases for the use of the firm, and had for years before exported large quantities of soap and candles to foreign markets for sale, and received in return, produce of foreign growth, which the Binneys sold as commission merchants and accounted for the same to Winship for the firm. The importation of foreign merchandise for sale, would seem to be as much unconnected with the ostensible object of the partners, as the exportation of domestic produce would be. But it is very obvious that both the exportation and the impoi tation of such goods or produce might greatly facilitate the manufacturing establishment. The usage as to the importation was proved. The usage of exportation of the manufactures to foreign ports for sale was proved. A great capital was employed. The company looked beyond this country for the raw materials, as well as for markets for their manufactures. They became merchant manufacturers, and their extensive plans opened a wide field for commercial enterprise. The ways and means must be devised by the acting partner. In the case under immediate consideration, it became expedient to send the manufactures to tire West Indies for sale. How shall they be carried ? Shall they be only "put on board the vessels of others upon freight, or may it not be prudent and discreet to charter a vessel for that purpose ? If the latter course is pursued, -and if the manufactures do not complete her freight, is it not consistent with sound discretion to fill her up with merchandise which promises a profit at the port of destination ? If it were proved to the jury, that large importations of merchandise had been made, in aid and on the account of the concern, could they reasonably doubt that circumstances might occur, which would render the exportation of domestic produce advantageous to the same general interest ? For example, suppose that flour would pay'a good freight in the West Indies, and that sugars could there be procured upon good terms and shipped to Russia, to purchase a return cargo of raw materials for the manufactory ; could it be questioned, upon'the facts proved in the case, that the jury might find such an operation to be within the general scope of this extended partnership ? It is a firm of very humble pretensions ; but operating with a great capital, in the business of commerce, as well as in manufacturing. How should these great projects be executed ? As is before observed, the ways and means must be found by the acting partner. He must act with fidelity and sound discretion within the general scope and intent of the company, or he acts at his peril. If the jury shall not be satisfied that he has acted within such scope, the firm will not be answerable. We cannot perceive that any rules could be framed, which would be more reasonable than these, which are familiar and well established.
If the jury affirmed the propositions which the judge submitted to them hypothetically in the part of the charge now under consideration, we think it very clear that the verdict should be established.
And the same result would follow, if they proceeded upon the other ground, viz. upon the ratification of the doings of the acting partner. The Binneys were upon the spot, with the knowledge of the purchase and appropriation for their own use and that of their agent. They suffer him to proceed and to export the goods for their joint account, without any notice to him that he is acting beyond or against the authority delegated to him. They cannot afterwards be permitted to dis-affirm the transaction.
The jury must have proceeded upon one or both grounds above stated, and either would be sufficient to support their verdict.
See Hewes v. Parkman, 20 Pick. 90.