Court Opinion

ID: 6235611
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:31:49.529999+00
Date Added: 2024-06-11T08:58:02.439324
License: Public Domain

Mr. Justice Sharswood
delivered the opinion of the court, October 15th 1877.
There is not in all the testimony produced on the trial of this case in the court below a scintilla of evidence upon which the defendants could be held liable as partners. They were not a committee of the creditors carrying on the business as their agents, and for their exclusive benefit, as was the case in Cox v. Hickman, 8 H. of L. 268, nor were they a committee of an indefinite and unknown number of principals, as in the case of Eichbaum v. Irons, 6 W. & S. 67; but they were a committee of the Dunbar Iron Company — ra corporation chartered under the laws of the Commonwealth. The contracts sued upon were made in the name of the corporation — the charges on the plaintiffs’ books were against it— the bills made out and all the business transacted in its name. On what principle then could they be held personally liable as partners ? They had not agreed to be partners. They did not receive any part of the profits, and they did not hold themselves out to the,world as partners: Irwin v. Bidwell, 22 P. F. Smith 244. Whether they were rightful directors of the corporation could not be controverted in this action. They were de facto directors and a committee appointed by -the board to manage the affairs of the *201corporation for its benefit, and to enable it to pay its debts: Cochran v. Arnold, 8 P. F. Smith 399. Even if they had been outside parties appointed by the board of directors to manage its affairs, and acting in its name and on its behalf, it is not easy to understand on what principle they could be held personally liable. An agent who is authorized by a principal — who discloses him and makes a contract in his name — is not personally liable. It is unnecessary, surely, to cite authorities to sustain this position. It is horn-book law. There was manifest error, therefore, in the refusal of the learned judge to affirm the second point of the defendants below — “ that the defendants are not personally liable for the claim in suit, by reason of their election into the board of directors of the Dunbar Iron Company, under the alleged arrangement between the company and its creditors, their election as an executive committee and their acting as such executive committee.” It is said that this was a mere abstract point, but surely if there ever was a concrete proposition directly applicable to the evidence in the case this was one. In the absence of any evidence of a joint promise which was not pretended or of a partnership between the defendants, which, as we have seen, cannot be maintained, the converse of the proposition was really the only ground upon which the plaintiffs could recover, and the defendants had a clear right to have the jury instructed upon that point. It is clear also that the declarations of William Beeson, either as proved by James Dunlap or J. N. Cooper, were incompetent to fasten liability upon the other defendants. We have seen they were not partners, and his acts and declarations could not make them such or subject them to a contract engagement which there was no evidence that they had authorized. We think, also, that the affirmance of the second point of the plaintiff — and so much of the general charge of the learned judge as instructed the jury — that if the plaintiffs sold the goods to the defendants on their personal credit they were liable, were clearly wrong and calculated to • mislead. Concede the fact that the plaintiffs believed that the defendants were personally liable and had sold the goods on their credit, surely that would not make them liable if they had said or done nothing which would have that effect. Yet this seems really to have been the question upon which the learned judge put the case below to the jury — did the plaintiffs trust the Dunbar Iron Company or did they trust the defendants ?
On the whole case we are of the opinion that the defendants’ third point, “that, under all the evidence in the case, the verdict should be for the defendants,” ought to have been affirmed.
Judgment reversed.