Reed, Crane & Co. v. Kremer & Co.

Mr. Justice Gordon delivered the opinion of the court, February 1st, 1886. For the purposes of this case we must assume that the agreement dated 29th October, 1878, between Reed, Crane. & Co. and John B. Watson, did not constitute the latter a member of that firm ; the court below so ruled, and as this ruling cannot be reviewed on the present writ of error it must stand as the law of this case. It is certain, however, that that [486] agreement did not conclude Charles W. Kremer, the plaintiff below, for he was at liberty to prove aliunde the fact of the partnership as he alleged it to be, and that without regard to how the parties had arranged their affairs between themselves. The partnership might be established by the several admissions of all those who were alleged to compose it, or by the admissions of one, and the acts and declarations of the others: Welsh v. Speakman, 8 W. & S., 257; Taylor v. Henderson, 17 S. &R., 453; Johnston v. Warden, 3 Watts, 101. Nor does it at all affect this right of proof by the • plaintiff, that there were in fact articles of co-partnership between the defendants: Widdifield v. Widdifield, 2 Bin., 245 ; Edwards v. Tracy, 62 Pa. St. R., 374. Kremer had nothing to do with the agreements of Reed, Crane & Co., written or oral, nor was he bound by them. Neither would it make any difference that in fact there was no such partnership, if the defendants represented themselves as such to the plaintiff, and thereby obtained his goods: Given v. Albert, 5 W. & S., 333. Kremer was undoubtedly a competent witness to prove the acts and declarations of Watson, and so were Reed and Crane. What they said could not be introduced to make him a member of their firm, but there is no reason why they could not be used as witnesses to prove what he said concerning his own relationship to that firm. It is possible that they might be estopped by the agreement of the 29th of October, 1878, but Kremer was not, and the partners might certainly be used to show that that agreement, as to third persons, was but a sham, and did not truly represent the status of the parties. The learned counsel for the defendants seems to think that we must treat this contract as fixing absolutely the position of the defendants. He .says: “If a stranger proposes to prove actual partnership, as a fact, he is bound by what was the actual contract.” This proposition is true enough in the abstract, but false as to the case in hand. If a stranger undertakes to show the position of certain persons as partners inter se, and there be articles of co-partnership, doubtless such articles would be the best evidence, though even this not absolutely, but prima fade only. But when a partnership is to be established, not as affecting those who may chance to compose it, but others with whom they have had dealing, the case, as we have seen, is very different. It would, indeed, work serious injustice to hold that one dealing with a firm must be bound by a secret agreement of partnership of which he may have had no previous knowledge, or which, even if known, may not embrace all the members of the company, or set forth correctly their several interests or liability. We cannot entertain a proposition such as this, or adopt it as containing a true exposition of the [487] law governing a case like that in hand. What we have already said disposes of the principal assignment of error, and the others require but little attention. The offer to prove the condition of the credit of the house of Reed, Crane & Co. in Januaiy, 1880, is so utterly irrelevant that a serious discussion of it is almost out of the question. It is said that if the fact offered for proof had been admitted, it would have tended to render improbable the,admission made by Watson to Kremer, that at that time he was a member of the firm. But if, as seems to have been established, he was a member thereof, why should he not admit that fact even though its credit was not good? The offer must assume the very fact in controversy, otherwise it comes to nothing, and the determination of this controverted fact necessarily settles the contention, so that on either hand there is no room for the proposed evidence. Moreover, he had all the interest of a partner, whatever may have been his liability; he had put some twenty-five hundred dollars of his money into this partnership; had a general power of supervision over its affairs, and was to have thirty-three per centum of its profits; he was therefore as much interested in sustaining the credit of the house as either of the partners could have been, and if his admission tended, as it undoubtedly did, to sustain that credit, the probability is that he would make it. If, then, we are to deal with probabilities at all, they are certainly to be found as much on the one side as the other, and so the matter rests in (equilibrio. As to the question of the admission of the agreement of J. P. Reed & Co. with John B. Watson, July 15th, 1878, it will be best discussed from the presentation of it as found in the argument of the learned counsel for the plaintiffs in error. He says: “ The third point is whether — when the question was — did the written contract with Reed, Crane & Co. represent the actual contract? Was it not admissible to show that Reed had a similar contract with Watson, and that Kremer was a party to it? It would have opened the door to inquiry, Was this also the real contract, or was that a secret partnership also ? ” It will be seen that the object was to introduce a contract with a company not in any manner involved in this case, and thus create a collateral issue which, after it was fully tried out, could in no legitimate manner affect the matter in hand. Suppose it had been admitted ; what then ? Would it have tended to rebut those facts which were necessarily proved in order to make Watson a member of the firm of Reed, Crane & Co., or to contradict a single word uttered by the plaintiffs witnesses? No such thing is alleged, nor could it so operate, for it belonged to a subject that had no relation whatever to the case trying. The judgment of the court below is affirmed.