Maasdam v. Van Blokland

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] In Banc.

This is an action brought by plaintiff Marie Maasdam against Andrew Blokland and Garrett Blokland, partners doing business as Blokland Brothers, to recover upon a promissory note for $3,650, dated April 1, 1921, payable three years after date with interest at 7 per cent per annum, and providing for reasonable attorneys' fees.

The note was executed by Andrew Blokland in the name of Blokland Brothers, a copartnership. The cause was tried before the court and a jury and a verdict rendered in favor of plaintiff. From a resulting judgment defendant Garrett Blokland appeals.

It appears from the record that these brothers had been engaged in business together as a partnership for some twenty or more years. They were extensive ranchers and engaged in the business of raising, buying and selling registered cattle. The testimony tended to show that in the course of their business in conducting their large ranch operations and in buying and selling cattle, it was necessary for the partnership to borrow large sums of money, amounting to many thousands of dollars.

At first the partnership name was signed to the notes, executed by one or both of the partners; afterward, when they got above the limit of the bank, which was about $26,000, notes were signed individually, but the money placed to the credit of the firm. At that time, as the note of plaintiff was not yet due, Andrew Blokland, as between himself and his brother, agreed to pay the note, but no claim is made that Miss Maasdam ever consented to release Garrett Blokland on the note, or that she had any knowledge of the dissolution of the partnership as she worked in a store in Colorado. The interest was paid for several years, but when the note became due Andrew Blokland became financially involved and failed to pay the same, and this action was instituted against both partners.

Andrew Blokland defaulted. Garrett Blokland filed an answer in the case and contested the note, contending that he knew nothing about the execution of the note, and that if it was executed, it was done without his knowledge or consent, and that Andrew Blokland had no authority to execute the note for the partnership; that it was not within the scope of partnership business; that it was not given for the purpose of the firm; and that the proceeds thereof were not used in the firm business.

AFFIRMED. The first error complained of by appellant arises out of the refusal of the court to admit in evidence a copy of a letter written by Garrett Blokland's attorneys, in which they denied, on behalf of their client, any knowledge of the note.

On February 15, 1926, appellant received a letter from a Colorado attorney, representing the plaintiff, calling attention to the note and requesting the appellant to take care of the obligation. After the appellant testified to the receipt of the letter, and that he took it to Mr. Ringo, his attorney, and that he directed him to answer the letter, a copy of the letter was offered in evidence. Upon objection by plaintiff's counsel, it was excluded by the court. The letter advised plaintiff that Mr. Garrett Blokland disclaimed any knowledge of the execution of this note and denied any liability upon it. The same matter is contained in the answer of appellant. It was not competent testimony, but was in the nature of self-serving written statement and was properly excluded: Maeder Steel Prod. Co. v.Zanello, 109 Or. 562, 577, 578 (220 P. 155); 22 C.J., § 193, p. 220.

The appellant claims that as the letter from plaintiff's attorney was received in evidence it would only be fair that the answer thereto be admitted. The letter from plaintiff's attorney was introduced by defendant Andrew Blokland without objection. It tended to prove no issue in the case and was afterward withdrawn from the jury by the court. There was no error in excluding the letter.

Appellant assigns error of the court in giving the following instruction to the jury:

"I instruct you, Gentlemen of the jury, that if you find from the evidence in this case that at the time of the execution of the note in question, Andrew Blokland and Garrett Blokland were engaged in the business of buying and selling cattle, then I instruct you that this would constitute what is known in law as a trading partnership, and I instruct you that one of the incidents of a trading partnership is the right to borrow money for the purposes of the business, and in this connection if you find from the evidence that Andrew Van Blokland borrowed money from the plaintiff and executed the note in question for the purpose of the business, and that at that time they were engaged in the business of buying and selling cattle, then your verdict must be for the plaintiff."

The objection urged against this instruction is that it is not warranted by the evidence. The testimony indicated that the two defendants had for a long time prior to the date of the note in suit been engaged as partners in extensive farming and stock-raising, and buying and selling registered cattle. That for such purposes they often borrowed large sums of money and gave notes in the firm name; that the money evidenced by the note in suit was borrowed and used for the partnership purposes with the knowledge and acquiescence of the appellant; that when the partnership was dissolved, after the execution of the note, in the settlement of the affairs and dividing the liabilities, it was agreed that Andrew Blokland would assume and pay the note. The latter transaction tended strongly to show that the appellant ratified and received the benefit of the transaction pertaining to the note. We think the charge to the jury, taken with the other instructions, was applicable and proper.

A trading or commercial partnership is one whose business consists of buying or preparing for sale and selling commodities for profit: Shumaker on Part. 2d 78; Smith v. Collins,115 Mass. 388. It is not essential that buying and selling be the sole purpose of the firm, nor its most characteristic feature in order to constitute a trading partnership: Ann. Cas. 1916A, 206;March v. Wheeler, 77 Conn. 449 (59 A. 410, 107 Am. St. Rep. 40).

The power of one partner to pledge the credit of the partnership in the issuance of commercial paper is implied with respect to trading or commercial partnership: 20 R.C.L., p. 900, § 111; 1 Lindley on Part. 2d, p. 307 et seq.

Exception was saved to the following instruction:

"I instruct you that even though you believe from the evidence in this case, that Andrew Blokland was not authorized to execute the note in question, but if you find from the evidence that the plaintiff loaned money to said Andrew Blokland at the time of the execution of said note and that said money was received by the partnership, and used in the partnership business with knowledge of the defendant Garrett Blokland, then I instruct you that your verdict must be for the plaintiff."

Andrew Blokland testified that the defendant Garrett Blokland knew of this particular note at the time the money was borrowed and that it was again referred to at the time of the dissolution of the partnership. He further testified that this money was placed to Blokland Brothers' account and that it was used in expenditures by Blokland Brothers. This instruction must be taken in connection with the further admitted fact that the note in question was executed in the name of the partnership by Andrew Blokland. This instruction relates to the matter of ratification of the note transacted by Garrett Blokland.

Partnership is a branch of the law of agency. Each partner is the agent of the other: 2 C.J. 425, § 12. If one partner does an act which is not within the scope of his express or implied power, if the other partner ratifies the unauthorized transaction, it will bind him or the firm: 20 R.C.L. 888, § 99.

The appellant could not ratify the act of his partner in receiving and using the money for the benefit of the partnership business, and accept the fruits of the transaction, and repudiate the obligation incurred in obtaining such benefits: Mechem, Agency, §§ 128, 130; McLeod v. Despain, 49 Or. 536, 552 (90 P. 492, 92 P. 1088, 124 Am. St. Rep. 1066, 19 L.R.A. (N.S.) 276); La Grande Nat. Bank v. Blum, 27 Or. 216 (41 P. 659). See, also, 30 Cyc. 510, 511.

The charge in regard to ratification was correct. The following charge to the jury is excepted to by appellant, viz.:

"I instruct you that the defendant Garrett Blokland admits in his answer that about the 1st day of April, 1921, he and Andrew Blokland were engaged in farming and stock raising in Union County, under the firm name and style of Blokland Brothers, and in this connection I instruct you that if you find from the evidence, that said partnership in the course of its business repeatedly borrowed money and executed negotiable promissory notes therefor, and that the same was necessary in the conduct of the partnership business, then I instruct you that the action of Andrew Blokland in signing the note in question would be within the scope of the partnership business, and that the defendant Garrett Blokland is liable therefor, even though he did not know of the signing of the note at the time the same was executed by Andrew Blokland."

In order to determine the scope, or apparent scope, of authority of a partner to bind the firm, recourse may be had to past transactions indicating a custom or course of dealing peculiar to the partnership: 20 R.C.L., p. 885, § 96; 30 Cyc. 504. In order to show that the act of Andrew Blokland in emitting the partnership note was binding upon the partnership, testimony was introduced tending to show, and it seems to be admitted that the firm for a long time had been in the habit of borrowing money at the bank and executing negotiable notes in the firm name. The testimony indicates that the regular business of this firm in conducting a large ranch and raising and selling blooded livestock all over the country and also buying some cattle for such purposes, necessitating the use of many thousands of dollars, and using the credit of the firm in borrowing the same, was quite different from that of a nontrading firm operating an ordinary farm as appellant claims this partnership's business was. Appellant cites McManus v. Smith, 37 Or. 227 (61 P. 844), showing the rule as to a nontrading firm which was publishing a small newspaper. Appellant also cites Ah Lep v.Gong Choy and Gong Wing, 13 Or. 205 (9 P. 483), to sustain his contention. The latter case did not involve the execution of a promissory note in the firm name. There was nothing showing that the money claimed to be a loan to the firm was ever used for or went into the partnership concern.

The charge to the jury, taken as a whole, fairly submitted the issues to them. The evidence indicated, and the jury apparently found, that the plaintiff was warranted in believing that Andrew Blokland had authority to execute the note in suit in the firm name, and that he had such authority; that Garrett Blokland had knowledge of the transaction and assented thereto.

Finding no error in the record the judgment is affirmed.

AFFIRMED.