| Kan. | Jul 15, 1892
The opinion of the court was delivered by
It is insisted by plaintiffs in error that, as Settle and Keith were dormant partners of the firm of John Y. Benfer, they are liable for the goods ordered during the existence of the partnership. It will be observed that while the goods were ordered during the continuance of the partnership, they were not to be shipped nor delivered until the partnership had expired. By agreement of the parties, the partnership was to be discontinued on the last day of February, 1888, and Benfer ordered the goods in his own name, to be shipped the day after the dissolution of the partnership occurred. It is true, as contended, that the persons who participate in the profits of a trade or business, ostensibly carried on by another, are liable for contracts made and credits given during the existence of the partnership. The credit is not presumed to have been given on the sole and separate responsibility of the ostensible partner, but binds all for whom the partner acts, if done in their business and for their benefit, to the same extent as though the partnership had been open and avowed. Here, however, no goods had been furnished, no sale made, nor was any credit given while the partnership existed.
Particular attention is called to the case of Bromley v. Elliott, 38 N. H. 287, as being on all fours with the case at bar. In that case the goods were furnished and the credit given while the dormant partner was a member of the firm. He received the benefits of the transaction, and, according to all the authorities, was equally liable with the ostensible partner. The distinction in this case is that the goods were not received while Settle and Keith were connected with the partnership, nor was it intended by Benfer that they should be shipped and delivered to the firm. Knowing that the partnership would expire with the month of February, Benfer ordered the goods in his own name, and particularly directed that they should
“ Of course, the retiring partner is not by his retirement exonerated from the prior debts and, liabilities of the firm. In the first place, then, a dormant partner is not liable for any debts or other contracts of the firm, except for those which are contracted during the period that he remains a dormant partner. Upon his retirement, his liability ceases, as it began, dejiire, only with his accession to the firm. The reason is that no credit is, in fact, in such case given to the dormant partner. His liability is created by operation of law, independent of his intention, from his mere participation in the profits of the business; and therefore it ceases by operation of law, as soon as such participation in the profits ceases, whether notice of his retirement be given or not.” (Story, Part., § 159.) .See, also, Pars. Part. (3d ed.), p. 451.
Here no liability was created until Settle and Keith had retired from the firm. The goods never came into the possession of the firm, nor was it the purpose that they should. They were sold to Benfer and came into his individual possession as his own property, and he sold them as such. We think the court correctly held that he alone was liable for the price of the same.
The judgment of the district court will be affirmed.