Prince v. Crawford & Gaither

| Miss. | Oct 15, 1874

Simrall, J.,

delivered the opinion of the court:

The bill of exchange purports to have been drawn by Prince & Morrow, per T. L. Morrow, who are averred in the declaration to have been partners, and were sued in that capacity.

They were jointly interested in the-cultivation of a plantation, on the terms set forth in the articles of partnership.

In the cases of Richardson and May ads. Davis, 45 Miss. Rep., 506, and Cooper v. Frierson, 48 Miss., 309, the difference between general trading and commercial partnerships, and those of a more limited character, was stated, as respects the authority of a member to make contracts and incur obligations which would bind all the members. . As to the former, the principle is, that all acts done by one partner in the course of the business is in legal effect, as if done by all. Each partner is clothed with authority, or constituted an agent for all, as to all matters within the scope of the business. Restrictions imposed by partnership articles have no operation in transactions with strangers, unless they have notice of them.

In associations of a more limited character, the measure of authority imparted to the individual member, to bind the partnership, in transactions with third persons, is limited by the nature of the business.

In a planting partnership, there does not exist the implied power in the several members to borrow; money, make promissory notes, draw bills of exchange, and thereby bind the firm.

Those who deal with an individual jointly interested with another in the dultivation and production of agricultural products, must at their peril inform themselves of the articles of association, and the power communicated to each to bind all. Judge Story sums up, from the cases, the rule to be, that express authority must be given for the purpose, or that it is implied by the usages of the business, or the ordinary exigencies and objects thereof. Story Part., § 126.

The rule is founded in manifest wisdom and propriety. One man may be entirely willing to engage with another in the cultivation of a farm, on terms defined by articles, who would not risk his associate beyond that special business. A landlord might well agree to unite with one or several, in the cultivation of his land, on joint account, on specific terms, who would not confide to him or those joined with him, the powers implied by law in a more general partnership.

One who holds himself out as a partner, or suffers it to be done, is often held to that responsibility by a third person. That is upon the principle that the credit was given, or the contract made on the faith of his actually being what he appeared to be, and what by his conduct he published himself to be.

But whether the liability is incurred, or the extent of it, in such circumstances, depends upon the nature and scope of the business. Prince held himself out as a member of this planting partnership. It does not matter whether it continued one, or two years, or more/, the public could infer no more than that he invested Morrow with such authority as was germain to the business, which did not in-elude power to draw joint bills of exchange and promissory notes. Strangers, therefore, proposing to have such negotiations and transactions with Morrow, were put upon inquiry to ascertain whether he had express authority, or they must know that Morrow had been in the habit of so using Prince’s name and credit, with Prince’s sanction and acquiescence, which would have been of equal effect with an original authorization. Or it must be shown that he had authority to draw the bill from the habit of this firm, or usages of such business. But such usage must be so notorious, common, and public, that it must be presumed that Prince was aware of it.

Let us make an application of these principles, to the facts in evidence to the jury, and the instructions of the court.

The partnership agreement does not authorize Morrow to make contracts of the character sued upon.

Both of the plaintiffs in their depositions state that they had never seen Prince, and had no acquaintance with him. They knew from what they heard and what they saw, the marking and shipping cotton, and branding mules in the name of “Prince and Morrow,” that there was a partnership, but not its terms. The The draft was taken in renewal of two other drafts given by Morrow for mules, in the belief that Prince would be bound. In their dealings with Morrow, they had no other information of Morrow’s power to make the joint contract, other than such as was disclosed by the above circumstances. From the existence of the partnership and the other circumstances detailed by them, they assumed that Morrow had the right to pledge the joint credit. They did not know, nor did they inquire whether Prince acquiesced in and consented to that mode of doing business.

Prince, in his testimony, emphatically denies that he authorized or assented to such use of his name, and had no knowledge or notice until informed by lettter from Chaffe & Brother, factors in New Orleans, in Feb., 1870, that Morrow had run up a large joint account with them, when he took steps to notify them that it was without authority. He also denied knowledge of the bill of exchange until sued upon it.

On the trial, Prince, to prevent a continuance, admitted that the absent witness would testify that he, Prince, was aware, during the continuance of the partnership, that Morrow was in the habit of drawing bills of exchange, shipping cotton, purchasing supplies, and making contracts and accounts in the joint name; that he had knowledge of the draft and of the purchase of the mules, and that they were necessary; and that upon the division of the joint effects, all or nearly all of the mules were received by him. If these statements were accepted as true, they would warrant the inference, or rather positively show that Prince consented to the use of his name and credit by Morrow, and that he ratified the purchase of the mules and the giving of the draft.

The testimony was conflicting and contradictory on the points of knowledge and acquiescence in the eourse of the business and subsequent ratification. There are circumstances in testimony derived from other sources than the defendant Prince, conflicting with what this witness would have sworn.

The credibility of testimony is especially intrusted to the jury. In such state of the evidence, the court would be assuming a responsibility unwarranted, to set aside the verdict unless there was a great preponderance of evidence against it, or unless the jury were misdirected by the court.

The charges to the jury are so numerous and voluminous, that it would require perhaps more' discrimination than usually belongs to the nonprofessional mind to digest, and apply them to the testimony.

The second instruction for the plaintiff may have had the effect of misleading the jury. The court informed the jury that Prince is liable if the “draft was given for necessaries, and was usual with said firm or others in like business, in carrying on their business,” etc. To affirm that a certain line of business is usual with a firm, implies that the several members concur in what is done. The very point controverted by Prince was, that he did not consent. To prove that a certain course of business was usual, so as to charge a member who did not participate in its management, it must be shown that the active manager so conducted the business that his partner was cognizant of it, or circumstances must be put in evidence from which that inference may be drawn. But further, there was no testimony before the jury as'to what was the usage of similar planting partnerships.

The third instruction is obnoxious, to the objection of tending to mislead the jury, because the jury may have construed it as embracing the idea that, if Morrow was in the habit of drawing drafts in the purchase of supplies and necessaries in the firm name, that established “ the usual practice of the firm,” although Prince may have known nothing about it. It was proved that Prince had not been in Washington county where the planting operations were conducted, from its beginning until long after the partnership closed. There was testimony — whether creditable or not was for the jury to determine — that he was ignorant of what Morrow was doing. In this condition of the testimony, it was eminently proper to have qualified the instruction as we have suggested.

The same objection lies to the modifications of the 1st, 2d and 3d instructions asked by the defendant. It may be observed, as respects the modifications of the 3d charge, that in,'order that silence or negligence may have the effect of binding the nonparticipating partner, it ought to be shown that he was so situated, as that he must have known, or it should be inferred that he did know of the course of business, so that his conduct would mislead and deceive, if he were permitted to plead ignorance and nonacquiescence.

It seems, therefore, that on the vital question in controversy, the jury may have been misled to the prejudice of the defendant.

Judgment reversed and a venire facias awarded.