E.A. Rainold, Inc. v. Waguespack Dufresne

O’NIELL, O. J. The question in this case is whether the members of an ordinary partnership, engaged in farming, are liable, each for his share, of a debt contracted by one of the members of the firm for money borrowed by him individually and contributed as his share of the capital invested in the business. The plaintiff has appealed from a judgment declaring that only the partner who borrowed the money was liable, and rejecting the demand against the firm and the two other members of the firm. Appellant admits, frankly, that he loaned or advanced the money to only one member of the firm, Anicet Dufresne, not knowing that he was a member of a partnership, and believing that the money was to be used by him alone, for a farming enterprise of his own. Appellant learned of the partnership after the money had been advanced and when the crop was ready for harvest. He relies upon article 2874 of the Civil Code, viz.; “If a debt be contracted by one of the partners of an ordinary partnership, who is not authorized, either in his own name or that of the partnership, the other partners will be bound, each for his share, provided it be proved that the partnership was benefited by the transaction.” The partnership of Waguespaek & Dufresne was benefited by the transaction by which Dufresne borrowed his share of the capital from appellant, only in this respect, that Dufresne did not have any money of his own, and the partnership could not have been organized, as far as he was concerned, unless he had obtained his share of the capital from some source. But that is not what the article of the Code means by the expression, “that the partnership was benefited by the transaction.” It means that the partnership was benefited so that the other partner or partners got a benefit over and above what he or they contributed. It has been decided, at least twice, that a debt contracted by a member of a partnership for money borrowed by him individually and contributed as his share of the capital invested in the business is not a -debt of the partnership or of the other member or members thereof. See Smith v. Sénécal, 2 Rob. 453, with regard to an ordinary partnership, and Wells v. Siess, 24 La. Ann. 178, with regard to a commercial partnership. The judgment appealed from is affirmed, at appellant’s cost. ROGERS, J., recused.