Court Opinion

ID: 6574095
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:32:38.672321+00
Date Added: 2024-06-11T15:57:01.115508
License: Public Domain

Daggett, J.
It was suggested, by the counsel for the defendants, though not pressed, that it should have been left to the jury to decide, whether the defendant Chapman, was a partner. Surely, it was a question of law, and therefore, within the province of the court to decide, whether by the articles recited and the facts admitted, a partnership, which subjected the partners to this debt, existed. There being no fact in controversy, it was the undoubted duty of the judge to state to the jury whether the defendants were liable, as partners.
It was further suggested, that the plaintiffs trusted Henry R. Mott, and charged the hides to him. Such is the fact, in every case, where the suit is brought against a dormant partner; yet when he is discovered, he is rendered liable. This is familiar law, and hardly requires support from authorities. In Hoare *351& al. v. Dawes, Doug. 371. Lord Mansfield said, “that the law with respect to dormant partners is not disputed, viz. that they are liable when discovered.” Indeed, it would be most unjust, that a person really in partnership, and participating in the profits, should not be rendered liable for the debts of the partnership, merely because he chose to conceal himself, or because his partner, when buying goods for the use of the partnership, did not disclose his connexion. Such a principle is not to be tolerated.
It was also suggested, that the leather, when manufactured, was to be divided between the copartners, that is, the two Motts were to receive and sell one half, and Chapman the other. Be it so: The leather was to be divided into moieties in quantity and quality. Such is the clear meaning of the article. Is it not the same, then, as if the whole leather was, by agreement, to be sold, by either of the partners, or by an agent, and the avails divided?
Where, then, is there room for a question in this case? The counsel for the defendants answer, here is no copartnership in purchases for this establishment, because the Motts, by the articles, were to purchase one half the hides, and Chapman the other half; and neither of these parties were to use the credit of the other. This agreement might bind the parties. And it could not influence the present decision, if it were admitted, that it ought to affect third persons, dealers with either of the partners, if they were cognisant of the fact; but it is no part of the case, that either the public at large, or these plaintiffs in particular, were acquainted with the stipulations in question. On the contrary, it is conceded in the motion for a new trial, that the plaintiffs were ignorant of any copartnership at all; it is therefore to these plaintiffs a case of a dormant partner, dis covered after the debt was contracted. And is it to be endured, that a clause inserted in a private agreement between two or more partners, that one of the partners only should be liable for property purchased for the use and benefit of the whole, should bind third persons, ignorant of any partnership? The injustice of such a doctrine is too great to need animadversion.
The case, then, under consideration, presents a partnership between three persons, with an agreement between themselves, substantially, to share in profit and loss, but that in the purchase of one of the materials for the manufacture, viz. hides, two of them should, with their own funds or credit, purchase one half, *352and the third the other half. For hides, thus purchased for the tannery, by either, I am satisfied, all the partners are liable. It would be to depart from the spirit of all the decisions on this subject, to decide otherwise.
In Grace v. Smith, 2 W. Bla. Rep. 1000. De Grey, Ch. J. says: " Every man who has a share in the profits of a trade, ought also to bear his share of the loss. And if any one takes part of the profit, he takes part of that fund on which the creditor of the trader relies for his payment.” In reference to the present case, the principle may be thus laid down: If Chapman takes part of the profits of these hides manufactured, he takes part of the fund on which the plaintiffs relied, when they sold them to H. R. Mott. The case of Grace v. Smith, is constantly referred to, as a leading authority. See Coop v. Eyre, 1 H. Bl. 37. Gouthwaite v. Duckworth & al. 12 East, 421. And many other cases.
The only case cited with confidence, by the counsel for the defendants, is that of Saville v. J. Robertson & J. Hutchinson, 4 Term Rep. 720. In that case, it was decided, that in an action against the defendants for goods sold and delivered, if it clearly appeared, that no copartnership existed at the time of the contract to sell to one of them, any subsequent agreement between them to share in the profits of the goods, would not render them liable as partners in the purchase.
The court compared it to a case where several persons agree to enter into partnership, each to bring in a stipulated sum of money, and each borrowing his proportion of different persons, in which case, the persons advancing the money, could not maintain actions against all the partners for their several proportions lent to each.
So in our courts, it has been decided, that where two agreed to build a vessel, one to furnish the materials and the other to do the work, and then to own it together, the building of the vessel was not a partnership concern. But Lord Kenyon, in giving his opinion in the case of Saville v. Robertson, above cited says: “ It is clear, that if all these parties had been partners at the time when their goods were furnished, though that circumstance was not known to the plaintiff, they would all have been liable for the value of the goods.” And Buller, in giving his opinion, says : “ It is certainly true, that if one partner order goods himself without disclosing the names of the other partners, and the goods be afterwards delivered to them all, they are *353all liable." And one of the judges (Ashhurst) thought it a case of partnership. This authority, then, is so far from justifying the defence, that it vindicates the claim of the plaintiffs; for these defendants were in partnership when the hides were purchased-they were bought for the concern-they were delivered into their tannery-they went to their joint benefit, having been purchased by H. R. Molt, without disclosing the names of his copartners.
In Gouthwaite v. Duckworth, Brown and Powell, 12 East 421. the facts were more like those in this case. That was an action for goods sold and delivered. There was an agreement, in that case, that Brown and Powell were to purchase goods for an adventure to Lisbon, which were to be shipped on board the Betsey, and to pay for the same and the returns of such adventure were to be made to Duckworth, and to go in liquidation of his demands on Brown and Powell. Brown and Powell purchased goods of the plaintiff; but Duckworth was not known in the purchase, nor did he authorise the purchase on account of the three, who were to share in the profits and loss.-Duckworth, in his own name, purchased and paid for goods, sent out at the same time. Brown and Powell were to share in the profit and loss of these goods. They were all consigned to Barlow, who acted as the agent of all the defendants. The whole court of King's Bench adjudged this to be a partnership transaction, and held the defendants jointly liable.
I think the court are warranted, from a view of all the cases, and the general principles of law on this subject, to declare the purchase of these hides to be for the defendants and said H. R. Mott; that had a loss been sustained in the hides, it must have been borne by the three, and any profit shared in like manner; and that the stipulation respecting the individual purchases of hides, cannot affect creditors, who furnished this joint fund; and therefore, that the charge was correct, the verdict right, and of course, that no new trial ought to be granted.
The other Judges were of the same opinion, except Brainard, J. who was absent.
New trial not to be granted.