Powell v. Flowers & McPhail

MANNING, J., after stating the facts: The defendant McPhail rests his defense against liability for the damages assessed by the jury for the improper and poor construction of the store building upon two grounds, viz.: (1) that the contract of warranty was executed-without his knowledge or consent, and (2) that it was not within the scope of the partnership agreement and not *143 necessary in the ordinary and usual manner of conducting the business of the partnership. We do not think either ground of defense can avail the defendant. The partnership between the defendants was formed for the purpose of contracting for and building houses, was general in its terms, and both partners actively participated in the partnership undertakings. Each partner, by virtue of the partnership relation, was a general agent for the other as to all matters within the scope of the partnership dealings, and had communicated to him, by virtue of that relation, all authorities necessary for carrying on the partnership. George on Partnership, p. 212; Story on Partnership, sec. 101; 1 Bates on Partnership, sec. 315 ; 1 Lindley on Partnership, p. 124; Winship v. Bank, 5 Pet., 529; Wilkins v. Pearce, 5 Denio (N. Y.), 541; Cotton v. Evans, 21 N. C., 284; Abpt v. Miller, 50 N. C., 32; Carter v. Beaman, 51 N. C., 44; Long v. Carter, 25 N. C., 238. It is decided by the cases above cited, and must necessarily follow from the principle announced, that the invalidity of an act of one partner does not arise from a want of power nor from the absence of actual knowledge or assent of the other members of the partnership, but from the bad faith of such partner by the perversion of his power for his “several advantage” and from the knowledge of him with whom he deals of such bad faith. There is an entire absence of evidence in this case that the giving of the warranty by the partner, Flowers, was for “his several advantage,” or that it was given by perversion, in bad faith, of his authority. That it was given without the knowledge of'the defendant McPhail is certainly no proof of bad faith in-Flowers. The contract simply warranted, for a specified time, the durability of the materials and workmanship used by the partnership in constructing the building; was executed in the name of the partnership and concerning a matter of joint enterprise. It follows, therefore, that the defendant McPhail must be conclusively fixed, as against the plaintiff, with a knowledge of the terms of that contract. “Thus both partners are authorized to treat for each other in everything that concerns or properly belongs to the joint trade.” Carter v. Long, supra. Can it be said that it is beyond the scope of the implied power of one member of a partnership, formed for the purpose of constructing stores and other buildings, to warrant the quality of its workmanship and the durability of its materials used in a building constructed by it? The contract, in this case, contained both, and the defendant McPhail collected a part of the price. The misnamed “guaranty contract” simply extended the duration of the warranty. The partners engaged to erect the building for plaintiff, of proper *144 materials and in workmanlike manner. "Whatever pertained to the carrying out of this contract concerned a joint enterprise, and the power, implied in each partner, was coextensive with any act of either partner in its furtherance. That after events demonstrated that the particular contract was unwise and entailed a loss upon the partnership is wholly insufficient to vitiate the act as to strangers. “In such a case there is a loss to fall on one of two innocent persons, and the question is, which of them ought to bear it? Manifestly, he who entrusted the power. It was susceptible of abuse, and that he knew when he conferred it. It is not, in point of form, exceeded; and if it has been employed for a different purpose than that for which it was created, that is a risk that must have been seen and undertaken from the beginning.” Cotton v. Evans, supra. The plaintiff was therefore entitled to judgment upon the verdict against both defendants, and this result is not changed by any fact found by his Honor. In declining to render judgment against the defendant McPhail there was Error.