Ala. Fertilizer Co. v. Reynolds & Lee , 85 Ala. 19 ( 1887 )

SOMERYILLE, J.

— One may become liable to third persons as a partner in either of two ways: (1) he may actually be a real partner by express agreement; or (2) he may, although no actual partnership exists, permit himself to be held out to the public as a partner, by the use of his name. In the former case, he is liable on all contracts made by any individual member of the firm, in the partnership name, and coming within the partnership business. — Clark v. Taylor, 68 Ala. 453; Ala. Fertilizer Co. v. Reynolds & Lee, 79 Ala. 497. In the latter case, whether the use of the name is permitted expressly, or by culpable negligence, he is liable, as a partner, for all debts contracted, within the scope of the partnership business, by persons who deal with the firm upon the faith of this fact, and in reasonable reliance upon the honest belief of the authority of the contracting partner to bind the firm. — Humes v. O'Bryan, 74 Ala. 64, 82; Nicholson v. Moog, 65 Ala. 471.

The principle upon which the latter class of liabilities is permitted to be fastened upon one, who is in fact not a partner, is analogous to that of an estoppel en pais-, and “there can be no such estoppel in the absence of one’s being misled to his prejudice by a supposed fact, either positively asserted, or tacitly admitted by the party whom he seeks to hold liable.” — Marble v. Lypes, 82 Ala. 322.

From these .settled principles it necessarily follows, where there is no actual partnership, and no express authority to bind one as defendant, sought to be charged by a given contract, it becomes entirely immaterial that he may have negligently permitted himself to be held out as a partner in a certain business, if the person extending credit to the firm had timely notice of the fact that the defendant was not really a partner, and he did not, therefore, deal with the alleged firm in ignorance of the true relationship of its members. Where such notice exists, there can be no estoppel, because the plaintiff can not be presumed to have been .misled, or injured by contracting the debt upon the faith of a supposed fact which he had been notified did not exist. Marble v. Lypes, 82 Ala. 324, supra; Ala. Fertilizer Co. v. Reynolds & Lee, 79 Ala. 504.

The evidence shows, without conflict, that the defendants, Beynolds and Lee, in the year 1880, associated themselves together in the sale of commercial fertilizers on commission, and that the only benefit or interest Beynolds had in the business was, that he should have what fertilizers he should desire for his own use, without a discount from the price of any commissions for selling. There was on his part no community of losses and profits. When the case was last before us on an appeal, we held, that, under this state of facts, there was no partnership inter se between the defendants. And we also decided, that the authority to carry on the business of commission-merchants, engaged only in the business of selling for others, would not, as between themselves, confer the power on one partner to bind the partnership by purchasing fertilizers on a credit in the firm name — such a transaction being outside of the scope of that particular kind of business. — Ala. Fertilizer Co. v. Reynolds & Lee, supra.

It is shown that the commission business was carried on, under this arrangement, until November 17th, 1882, when Lee made the first purchase of fertilizer from the plaintiffs, in the partnership name. There is no evidence that Beynolds had any knowledge of this transaction, which, as we have said, was a departure from the recognized scope of the ordinary business of commission-merchants. But the evidence tends also to show that, prior to this, the plaintiff had notice of the fact, that the business authorized to be carried on by Lee was only selling on commissions, and that Reynolds had no interest in it as an actual partner. As to the fact of notice, however, the evidence is conflicting. The indebtedness arising from this purchase was settled by Lee, without the knowledge of Reynolds, except a small balance, which was carried forward and included in the amount here sued for. This amount is for a second purchase of commercial fertilizer, from the plaintiff, made on January 1st, 1884, for which Lee, as before, executed the notes of Reynolds & Lee. The undisputed evidence is, that Reynolds knew nothing more of this transaction than he did o£ the first; that he had never authorized the purchase, and that he had no knowledge of the fact that the goods thus bought were afterwards sold in the partnership name as their property, and not on commission.

It is insisted that the notice given in, 1882 to the plaintiff, through its agent, Storrs, was notice only of the business then being carried on, and of Reynolds’ limited interest in the firm at that time; and, admitting that it was given as alleged, it could not operate as notice in the matter of the second purchase, which occurred more than thirteen months after the first purchase. This contention is untenable. It is undisputed, that there was no actual partnership of any kind between the defendants themselves, and that Lee had no actual authority to make either of these purchases from the plaintiff on partnership account, so as to bind Reynolds. The only ground upon which the liability is attempted to be sustained, is an apparent authority inferrible from the culpable silence, and the presumed knowledge of .Reynolds touching these transactions with the plaintiff, by reason of which the plaintiff was misled into making the sale under the mistaken belief that Reynolds was legally responsible as a partner, express or implied. It does not appear that any purchases beside these two — the one in November, 1882, and the other in January, 1884 — were ever made at any time, either from the plaintiff, or from any other dealer. If the plaintiff had notice of Lee’s want of authority to make the first purchase, this was sufficient to put its officers and agents on inquiry, if not to impute to them knowledge as to the non-existence of such authority; and this inquiry, if followed up with proper diligence, must have disclosed the fact, that there was equally an absence of authority to make the second purchase here in controversy.

Under a proper application of these principles, it is obvious that the Circuit Court did not err in giving the written charges, numbered from one to five, requested by the defendants; nor in refusing the charges numbered two, three and five, requested by the plaintiff.

' The first and fourth charges requested by the plaintiff, called on the jury to institute a comparison between the probative force of the testimony of different witnesses, examined on the trial, who were assumed to be equally credible; and they were properly refused, because calculated to confuse and mislead the jury. We emphasized our disapprobation of such charges when this case was last before us. — Ala. Fertilizer Co. v. Reynolds & Lee, 79 Ala. 504.

The seventeen charges given by the court at the request of the appellant, have no proper place in this record. Only those charges should be inserted in bills of exceptions to which an exception was taken. We have often before had occasion to condemn this practice, as one tending to render the record confused and unnecessarily voluminous. .

The rulings of the Circuit Court are free from error, and the judgment must be affirmed.

Clopton, J., not sitting.