Hinds v. Battin

Opinion by Mr. Justice McCollum, All the equities of the case are with the defendants, and in accord with the judgment appealed from. In the negotiations which resulted in the contract under which the goods were delivered the defendants were not acting for themselves or a general partnership but for The Scranton Match Company, Limited, an association organized under the act of June 2,1874, and its supplements. The plaintiffs, through their agent, knew the nature of the association, what had -been done in the way of organizing it, what its capital was and the measure of the liability of its members. The statutes under which it was formed and the articles on which it was founded were read and explained to him, and his knowledge was theirs. With this information, the correctness of which is not disputed, they dealt with and furnished their goods to and on the credit of ■ the association, and not until it passed into the hands of liquidating trustees in consequence of losses in business and the destruction of its [495] plant by fire, did they claim that the defendants''as individuals- or general partners were liable for the goods so sold and delivered. It was shown on the trial and found by the referee that the defendants paid their subscriptions to the capital stock of the association, and it is not alleged that its insolvency was the result of fraud or mismanagement. The plaintiffs’ contention is, therefore, not only opposed to the terms of the contract and the understanding between them and the defendants when it was made and the goods were furnished under it, but to the equities of the case. It is a contention based upon a technicality which depends on their construction of the act of 1874. It appears that the articles of association were not recorded when the order of December 14, 1886, was made or when it was changed on the 29th of March, 1887, but it is beyond dispute that they were duly recorded sometime before the goods were delivered, and before the contract under which the deliveries were made became absolute and binding upon the match company by its approval of the samples. But the plaintiffs contend that the defendants are precluded by their admission on the trial from alleging that the deliveries were made under the modified or new orders. We do not think the admission is entitled to the effect now claimed for it. It related to .exhibit “ C ” and was manifestly made to dispense with the production of the plaintiffs’ books of original entries. That it was not intended to set aside the agreement of March 29th or to deny to the same its legitimate effect upon the issue is obvious from the proceedings on the trial and the statements of counsel in their paper-books. The learned counsel for the plaintiffs, referring to this agreement in their history of the case, said: “ All the boxes and goods delivered for which this suit is brought were furnished under the orders of December 14, 1886, as modified so far as price and quality of a portion of the material were concerned. By the arrangements of March 28th or 29th, the plaintiffs went on and filled the orders as fast as the defendants desired it, until the 2d of June, 1888.” These orders were mere proposals subject to the approval of the plaintiffs and to the approval of the match company of the proofs and samples of the goods. Strictly speaking there was no contract until these approvals were given, as they were in [496] the nature of conditions precedent to its existence. The original orders were changed on the 29th of March by the maker, and approvers of them, and if at any time there was a binding and absolute contract in conformity with them it was avoided by the agreement then made. Whether the orders, recognized and acted upon after this agreement, are called new or modified orders, is of no consequence. Surely the ' approval of them and the samples furnished under them constituted a contract inconsistent with any contract arising from the approval of the original orders and the proofs submitted in pursuance of them. The samples furnished by the plaintiffs under the new or modified orders were approved by the association on the 26th of May, 1887, and thenceforth there' was ail absolute contract between the parties on the basis of these orders by which alone their rights and obligations in respect to the subject-matter of it were measured. It was a contract between the plaintiffs and The Scranton Matcli Company, Limited. Did the failure of the company to record the articles before the commencement of the negotiations which culminated in the contract after they were recorded render its members liable as individuals or general partners for the goods delivered to it? We think not. It is the status of the association when the contract was made that must be considered in answering this question, and it is admitted that when it approved the samples furnished under the new orders it was qualified to enter into contracts in connection with and for the proper prosecution of the business for which it was organized. These views are in harmony with the learned referee’s findings of fact and conclusions of law. We have not deemed it necessary to notice seriatim the numerous specifications of error filed in the case although we have examined and considered all of them, together with the argument of the learned counsel in support of them. It is sufficient to say that we discover nothing in the specifications which in our opinion calls for or would justify a reversal of the judgment. They are accordingly overruled and the judgment is affirmed.