143 Pa. 352 | Pa. | 1891
The learned judge, before whom this case was tried, correctly-stated the principles that controlled the liability of partners to third persons dealing with them. There is no doubt that, where the relation is shown to exist, each partner is liable individually for all the debts of the firm. It is also true, as a general rule, that participation in profits makes one a partner as to persons dealing with the firm, although this rule is not without some well-recognized exceptions: Edwards v. Tracy, 62 Pa. 374; Hart v. Kelley, 83 Pa. 286. The business of banking is one in which a partnership may lawfully engage, and it is immaterial that the names of the partners do not appear in the firm name: Shamburg v. Ruggles, 83 Pa. 148. The liability of the partners depends, not on the name of the partnership, but on the existence of the partnership relation. These rules were correctly stated on the trial. The ground of complaint is the manner of their application to the facts of this ease.
In his charge to the jury the learned judge drew attention to the evidence showing the organization of the bank, the holding of stock by the defendants, and their receipt of dividends ; and then submitted the questions to the jury in the following order: First, was the bank indebted to the plaintiff as alleged; second, was the bank a partnership; and third, were the defendants members of the firms ? Having simply stated the second question, he proceeded tó consider and discuss the third, and among other things said to the jury: “Did they (the defendants) invest their money in this business, and did they stipulate for a share of the profits of the business ? ” To enable them to understand the significance of their finding upon this question, he immediately added, “If they did, they became partners, and individually liable for all the debts of the firm, unless they can show something by which they protect themselves from this liability. If the institution was an incorporated bank, then they would not be individually liable. But if it was incorporated, the burden is upon the defendants to show it. And if it was a limited partnership, the burden is on the defendants to show it.”
This instruction was calculated to divert attention from the second question, which was the important one, and fix it on the
Now, the important question, in this case, which lay at the threshhold of the plaintiff’s cause of action, was whether this bank was a partnership. The plaintiff alleged it, and claimed to recover against the defendants as members of the banking firm. The burden of proving the partnership was on him, and until this proof was given the defendants were not called upon to enter upon their defence. They were not bound to prove the character of the organization of the bank, in order to “protect themselves,” until they were first put in danger of a verdict against them, by proof that the bank was a partnership, and that they were members of the firm. As they did not deny that they were stockholders, the only open question was that of the character of the bank, and this is the question to which the attention of the jury should have been drawn.
What was the evidence upon this question? The plaintiff showed the fact that the bank was organized; that it conducted a banking business under the management of a board of directors, with a president, vice-president and cashier, until 1887 when
The position of the parties is not without some bearing on this question. The real plaintiff was the wife of one of the sons of the man who organized the bank, presided over its affairs for fourteen years, and conducted it into hopeless bankruptcy. Her husband had been in the employ of the bank for years as a clerk and book-keeper. He had the means of knowing, and, it is fair to presume, did know the character of the bank and the manner in which it was organized. His brother, who was the assignee both of his father and of the bank, and
Something has been said in the argument about the unconscionable position of bankers, who first invite the public confidence, and when they have secured it betray it, and then seek to escape from the legal consequences of their own frauds. We quite agree with all that has been said by way of censure of such conduct, but it is not quite appropriate upon the facts of this case. The defendants took their stock in an organized bank, doing business as a savings bank. They had nothing to
The judgment is reversed and a venire facias de novo awarded.