Case Name: Speake v. Prewitt
Court: Supreme Court of Texas
Jurisdiction: Texas
Decision Date: 1851
Citations: 6 Tex. 252
Docket Number: 
Parties: Speake v. Prewitt.
Judges: 
Reporter: Texas Reports
Volume: 6
Pages: 126–130

Head Matter:
Speake v. Prewitt.
Where the plaintiff amends by the introduction of new matter, the defendant may answer the same by exception or plea, as in the first instance, ft is the well-settirid general rule that all the partners must join in an action upon a contract made with the firm or to recover a debt due the firm ; but a dormant partner who is not privy to the contract need not he joined. (Note 44 )
“The law as to dormant partners, it has boon held, is confined to commercial partnerships;” but the decision of tho ease was not rested on that principle.
A dormant partner is one who participates in the profits of the partnership, but whose name is not mentioned in the linn or embraced under general terms in the firm name.
The eases in which an agent is allowed to sue in his own name are exceptions to the general rule, which requires remedies to be pursued in the names of the parties in interest; the exceptions are as well defined as the rule itself, and do not include the agency which subM.sig between .pat tnors. even in the ease where the partner, seeking to maintain the suit in his own name, is the general agent, and active business member of the firm, to whose control the whole business was entrusted.
Appeal from Cn-ss. The appellee sued the appellant to recover the proceeds of nine bales of cotton alleged to be of the'value of nine hundred dollars. The original petition contained two distinct statements of the cause of action, in imitation of counts in a common-law declaration — one upon a promise to pay to the. plaintiff (he proceeds of so much cotton delivered to the defendant, to be by him sold for the plaintiff; the. other upon an alleged conversion by the defendant, to his own use. of so much cotton of the. plaintiff. The original petition was filed on the 13th day of May, 18-18. The defendant answered by a general demurrer and general denial,"filed on tlie 9th day of June, 1848. On the 22i 1 day of March, 1819, lie filed an amended answer setting tip special matters in defense. On the 23d of the same mouth the plaintiff filed an amended petition, alleging in substance that in February, 184(1, he entered into articles of partnership with 'Elijah and Mieajali Bennett, by which the parties thereto agreed to carry «n a certain farm and tan-yard in partnership, each member oí the firm to sitare and share alike in tiie profits arising, according to the number of hands furnished by each, "‘it.being agreed and understood by (lie said partners that the said Prewitt (tiie plaintiff in (his suit) should take charge of and control the said farm and tan-yard, and dispose of tiie same for the benefit of the partnership; ” that the plaintiff and the said Micajah complied with their agreement by furnishing hands. &c., “and also by the plaintiffs’ taking charge of the said farm and tan-yard in person, and managing- and controlling- the same,” but that the said Elijah failed to comply except in certain particulars mentioned, and that in consequence the farm was conducted with the capital of tiie plaintiff and Micajah, and by tile skill, labor, and personal attention of the plaintiff'; that two of the bales of cotton sued for were his individual property and the other seven bales were “ under the direction and control and management of (lie plaintiff, as tiie agent of the said linn of Micajah Bennett and plaintiff, and that the said Micajah resided during- the year 1SIG in the State of Mississippi, and never liad possession of or controlled said seven hales; ” that the plaintiff' was solely possessed of said seven bales for the purpose of disposing of the same; and that the defendant, knowing- the. said cotton to be tiie property of tiie plaintiff, with the intent to defraud him of the two hales, his own property, and to render him responsible to his partner, (he said Micajah, for tiie one-half of the seven bales, converted the same to his own use by shipping the same and applying the proceeds to tin; individual debts of tiie said Elijah, who had departed this' life.
On the 271 li day of March, 18-19, the defendant tiled exceptions to the amended petition,-assigning for special canses “ that by llie averments of tiie same the said plain till lias no separate cause of action against this defendant, and that this defendant is not liable to be sued severally for the cause of action specified in said original and amended petitions; and further, because the original and amended petitions set up different and inconsistent causes of action.” The court overruled the defendant’s exceptions f,o tiie petition.
Oil tiie trial the partnership was proved as alleged. It was also in proof that the plaintiff' liad the entire control of tlie farm, &c-., for the firm ; that he delivered tiie cotton at tiie warehouse of ST. G. Butt & Co., of which firm the defendant was a member; that two bales of tiie cotton were his individual property and tiie balance was partnership property of the firm of G.VW. Prewitt & Co., composed of tiie persons mentioned in tiie petition; that the cot.lon was shipped and sold by tiie firm of H. G. Butt & Co., and the proceeds applied by them to tiie payment of tiie accounts of E. and M. Bennett due the defendant; that E. Bennett made purchases of goods on account of the partnership, and was generally understood to he the trading- member of the firm, composed of the plaintiff and tiie Bennetts; that M..Bennett liad given his assent to his so acting, and had approved the application made of tiie proceeds of the cotton, and that purchases made in behalf of rhe firm of G. W. Prewitt & Co. liad been placed to the account either of one or the other of the Bennetts. E. Bennett died in February, 18-17. Tiie court instructed the jury that the plaintiff' could recover of the defendant in this action the value of tiie two bales of cotton which were his, individual property; hut that as to the seven bales, which were partnership property of tiie firm of G. IV. Prewitt & Co., he could not maintain tiie action unless lie was the general agent of that linn ; that if the plaintiff -was such general agent, and conducted the Business of the firm, he could maintain tiie action.
There was a verdict and judgment for the plaintiff for the amount claimed in the petition, a motion for a new trial overruled, and the defendant appealed.
Tiie assignment of errors related to tiie ruling of the court—
1st. In overruling- the defendant’s exceptions to the petition.
2d. In the instructions to the jury.
3d. In overruling the motion for a new trial.
/. JT, Rogers, for appellant.
J. The first error assigned by the appellant is that the court below overruled tlie demurrer to the amended petition of the appellee. It clearly shows a cause of action arising out of a contract, and that there is a non-joinder of plaintiffs, for which the demurrer should have been sustained. (1 Chit. PI., 5, 7; 10 Johns. It., 34; Coffee v. Eastland, Cook R., 150; Palter v. Jewell. 0 Mass. R., 040; Converse v. Symmcs, 10 Mass. R., 377.) Our practice assimilates more to that of equity that to the common-law practice. (Wheeler v. Wheeler, 3 Cow. R., 537; Story Eq. PI., secs. 72, 230, 541.)
II. The court erred in instructing the jury. (Baker v. Brown, 21 Wend. R., 110; Butts e. Collins, 13 Wend. It., 139.)
III. The verdict was most clearly and manifestly wrong, for which a new trial should have been granted.
S. F. Moseley, for appellee.
I. Defendant’s (appellant’s) amended answer and demurrer were improperly filed — the demurrer, because the defendant had already previously answered to the meri ts of l he cause, and because it was not filed in due order of pleading; (Stat. 1840, p. 371, sec. 21;) the amended answer is in the nature of a plea hi abatement-, and should have been sworn to. (Stat. 1840, p. 371, see. 31.)
II. Dormant partners need not be joined either as plaintiffs or defendants. (1 Chitty PI., 43; Story on Part., see. 241, and authorities there cited; 2 Wheat- Sclw. 1ST. P., 1150, 1157, and notes.) As to who are dormant partners see Story on Part., sec. 80, and authorities there cited.
III. As to the kind of agent each partner is to the others and the firm the books declare this as the rule : “ It is only to act in the course of their particular trade or line of business that an authority is delegated by partners to each other, [25Í5] and it is only in such transactions that strangers have a right to go on the credit of the partnership funds.” (Watson on Part., 180; 1G Viner Ab., 242; 1 Salk., 12G; Coup., 814; 6 Ves. Jr. R., G04; 1 Esp. Ca., 29.)
“When an agent has an3 beneficial interest in the performance of the contract, as for the commissions, &c., or a special property or interest in the subject-matter of agreement, he may support an action in his own name upon the contract.” (1 Chit. PI., 8.) The non-joinder of proper parties as plaintiffs or defendants, a ground for pleas in abatement. (See PARTIES TO ACTIONS, 1 Chit- PL, Passim.) Pleas in abatement are not permitted to be received or admitted, unless the truth of the matters stated appears on the record or is sworn to. (Acts of 184G, p. 371, sec. 31.)
J. C. Everett, also for appellee.

Opinion:
Wiieeler, J.
The objection that the exceptions to the amended petition cannot be entertained, there having been an answer to the merits previously filed, is not tenable. The answer to the merits was filed previous to the filing of the amended petition. Where the plaintiff thus amends by the introduction of new matter it is the right of the defendant to plead anew to the new matter so introduced by the plaintiff. Otherwise it might be in the power of the plaintiff so to-frame his pleadings as to deprive the defendant of his just defenses. The exceptions were taken at the earliest stage of the pleadings practicable, and that they were rightly received and entertained is, we think, quite too clear to admit of question.
It appears by the averments in the amended petition that the plaintiff's action as to a part of his demand is for the recovery of the partnership dues of the firm in which the Bennetts were his copartners. And it is not averred nor does it appear that another party in interest whose name as a copartner with the plaintiff is disclosed by the petition was not in being and competent to sue at the time of the commencement of this action.
It is the well-settled general rule that all the partners must join in an action upon a contract made with or to recover a debt cine the firm. (16 Johns. R., 34; 2 J. J. Marsh. R., 300; 2 Litt. R., 353.) In actions ex contractu, where the legal interest is joint, those in whom such interest is vested must, if living, join iu an action for the breach of such contract. This is the general rule at law. And in equity it is the rule (subject to certain exceptions) that all persons materially interested, either legally or beneficially, iu the subject-matter of a suit, are to be made parties to it, either as plaintiffs or defendants, so that there may be a complete decree which shall hind them all. (Story Eq. Pl., see. 72.) For it is a principle admitted in all courts that the rights of no man shall be finally decided in a Court of Justice unless he he present or at least unless he has had a full opportunity to appear and vindicate his rights, (lb.)
The general rule which requires all the partners to join as plaintiffs is not controverted, but it is sought, to take the present case out of its operation, and with this view, it is insisted—
1st. That the surviving partner not joined is a dormaut partner; and
2d. That the plaintiff was the general agent and managing business partner of the firm, and as such entitled to maintain the action without joining Iris copartner.
It is true that a dormant partner who is not privy to the contract need not be joined. (1 Chit. PL, 12; 3 Kent Comm.) But the law as to dormant partners, it lias been held, is confined to commercial partnerships. (Ib.; 4 Mass. R., 424 ; 3 Sumn. R., 435.) This, perhaps, might be a sufficient answer in the present case to the proposition that the partner not joined is a dormant partner. But it is not deemed necessary to rest the decision of the question upon this principle; and it [35 §] is conceived due to the argument of counsel upon this point to pass directly upon the question presented and discussed.
A dormant partner, in the legal acceptation of the term, is one who participates in the profits of tile trade but conceals his name. A partner is considered dormant whose name is not mentioned in the firm or embraced under general terms as the name of one of the firm. (3 Kent, 31; 2 Harr. & Gill. li., 150; o Cow. R., 53-1.) A dormant partner differs from an actual, ostensible partner, in that his name being suppressed and concealed from the firm, his interest is consequently not apparent. (3 Tom. L. D., 71.) Such is not the character of the partner not joined iu this action. His name was not suppressed or withheld from the firm. On the contrary, he is presented by the petition in no other character than as an actual, apparent, ostensible partner, one who appears and exhibits himself to the world as a person connected with the partnership, and as forming a component member of the firm. IIo must therefore be regarded in the character not of a dormant but of an ostensible partner. As such, he was a necessary party plaintiff in the suit.
But it is insisted that the plaintiff could maintain the action in his own name, as tlie general agent of the firm, upon the principle that when an agent has a beneficial interest in the performance of the contract or a special property in the subject-matter of the agreement, he may support an action iu his own name, as in 1 lie case of factors, who may sue in their own name for the price of goods sold by them for their principal, for the reason that they are treated as special owners of the property consigned to them ; as also in the case of a broker, a carrier, an auctioneer, &e. But these cases are exceptions to the general rule; and although as well established as the rule itself, they aro in derogation of the general doctrine that remedies must he pursued iu the name of the party in interest, and not iu the name of the agent who made the contract. The several exceptions to the rule rest on their own peculiar reasons. They are reduced by Mr. Story, in his work on agency, into four classes, which, however, it is not necessary here io present. It is sufficient for the purposes of the present inquiry that the facts of this case do not bring it within any of the exceptions to the general rule which have been recognized by law. (1 Chit. Pl., 7; Story on Agency, sec. 393; 21 Wend. R., 110; 13 Id., 139.) That the plaintiff may have been the general agent and active business partner of tlie firm did not authorize him to maintain tlie action in his individual name. The very constitution of tlie partnership relation furnishes a presumption that each individual partner is an authorized agent of the rest. Yet they must all join in an action for the price of goods sold in tlie name of one only. (2 Stark. Ev., 800; 6 Pick. R., 359; Story on Part., sec. 241.)
Note a.—Jackson v. Alexander, 8 T., 109; Garrett v. Muller, 37 T., 589.
We conclude therefore that it was not competent for the plaintiff to maintain the action in his individual name, in so far as it seeks a recovery of partnership dues.
We have considered the question in reference to the averments of the petition. The statement of facts presents still more clearly tlie members of tlie firm in the character of actual ostensible partners, the survivors of whom must have joined in order to maintain tlie action for the recovery of partnership dues.
This conclusion will dispense with the necessity of considering the other questions presented.
We are of opinion that the court erred in overruling the exceptions to the petition, and also in instructing tlie jury that if the plaintiff was the general agent of the firm he could recover the value of the seven bales of cotton which were partnership property in this action.
As to the two bales, the individual property of the plaintiff, alleged to be of tlie value of one hundred dollars per bale, that being an amount within tlie jurisdiction of the court, it was rightly ruled that the action could be maintained.
The judgment must therefore be reversed, and tlie cause remanded for further proceedings.
Judgment reversed.