McCrary v. Slaughter

BRICKELL, C. J. The statute establishing the City Court of Selma, provides that civil causes at law, pending in the court, shall be triable by the court without the intervention of a jury, unless the plaintiff, at the commencement of the suit, or the defendant at the time of appearing and plead — 233 — ing, shall demand a trial of issues of fact, by a jury; or, if tbe cause is introduced into tbe court, by transfer from tbe Circuit Court of Dallas county (wbicb is authorized), at tbe time of application for transfer, a trial by jury is demanded. It is further provided, if tbe cause is tried by tbe court without a jury, not only questions of law, but “the conclusion and judgment of tbe court upon tbe evidence,” may by bill of exceptions be presented to this court for review. In reviewing the judgment of tbe court upon tbe evidence, tbe mandate of the statute is, there shall he no presumption in favor of the ruling of the City Gourt. If this court finds error, whether of law or of fact, such judgment as tbe City Court ought to have rendered, may be rendered, or there may be a reversal and remandment, as to this court may seem right— Pamph. Acts, 1875-6, p. 390, §§18-14. This cause was originally commenced in tbe Circuit Court of Dallas county, and transferred to tbe City Court, where a trial was bad by tbe court without a jury, judgment having been rendered in favor of tbe appellee, who was plaintiff, a bill of exceptions was taken, setting out all tbe evidence, and we are required to determine tbe correctness of that judgment rather than any special rulings of tbe court. There are exceptions to tbe admission of evidence, not important in tbe view we take of tbe case, and we pass them, directing our attention to tbe consideration of tbe question, whether tbe evidence discloses that tbe appellee was entitled to recover. Tbe primary question is, whether a partnership existed between tbe appellant and Blair, who made tbe promissory note, tbe foundation of suit; and if such partnership existed, whether this contract was within its scope, and within-tbe capacity of either partner to bind tbe partnership. Tbe evidence in reference to tbe facts wbicb must control tbe decision of this question is, fortunately, without conflict, and we are not embarrassed by tbe difficulties which must attend tbe revision of questions of fact under this statute, when tbe evidence is oral, and tbe witnesses are contradictory and conflicting in their testimony. Tbe facts are, that appellant was tbe owner of an undivided half of a plantation, situate in Dallas county, and Blair, though not tbe owner, bad possession, and tbe right to occupy tbe other undivided half. In 1866 and 1867, it was cultivated by tbe appellant and Blair, each furnishing one-half tbe labor, and tbe appellant furnishing tbe mules, or tbe necessary team, and Blair devoting bis personal services to tbe supervision of its cultivation, and tbe expenses of tbe plantation to be borne by them equally, tbe proceeds or profits of tbe crops to be — 234 — equally divided between them. These facts embrace every element of a partnership. There was a union of the use and occupancy of the lands, of the mules or team provided by the appellant, of the labor each party furnished,' of the skill and service of Blair in supervising the cultivation, community in the expenses of the plantation, and in the proceeds or profits of the crops. It may not have been, and was not contemplated, that either party should acquire any right or interest in the property, the other contributed to the joint undertaking. It is not necessary to constitute a partnership, .that there should be property forming its capital, jointly owned by the partners. The property employed in the partnership business -may be the separate property of the partners, but if they share in the losses and profits arising from its use, a partnership exists. — Champion v. Bost-wick, 18 Wend. 183. If there is a joint undertaking, and a community of profit and loss, each party sharing in these mutually, and having a specific interest in the profits, not as compensation for services rendered, but as an associate in the undertaking, the relation of partners is formed. — Collyer on Part. Ch. 1. The obvious difference between this case and that of Moore v. Smith, 19 Ala. 774, to which we are referred, is the community of profit and loss in which Blair and .the appellant were to participate. If there was no profit, neither had a specific interest in the. crops or their proceeds. If there was a loss, each was bound to contribute equally to make it good ; while in the case cited, Smith had a defined interest of one-fourth in the crops, as compensation for his services, without regard to the profit or loss resulting from the farming operations. In commercial partnerships, the general principal is, that either partner, by virtue of the relation, is the general agent of the partnership, and has capacity to bind it by any contract or engagement, within the scope of the. partnership business. Bestraints on this capacity, imposed by the partnership agreement, are operative only between the partners themselves. They are not limitations of authority, as to third persons, dealing in ignorance of them, on the faith of the general nature and character of the partnership, and its business. — Mauldin v. Br. Bank Mobile, 2 Ala. 205; Catlin v. Gilder, 3 Ala. 536; Story on Partnership, § 101. But one partner has not, without the consent of the others, power to bind the partnership, though he contracts in the firm name, by any contract not connected with and without the scope of the partnership business. The authority with which he is clothed, and on which strangers dealing with him as the representative of the partnership, have the right to rely, re — 235 — fers, and is confined to the business of the partnership ; and of the extent and character of that business, and the authority it involves, they must take notice at their own peril. — Cocke v. Br. Bank Mobile, 3 Ala. 175. If the contract is not necessarily or usually incident to the business transacted by the partnership, the partner contracting is alone liable, unless the other partners have assented to it. — 1 Am. Lead. Cases, 545. In the application of these general principles, regard must be had to the nature and objects of the partnership, and the business it is formed to transact. A partnership may be formed for the transaction of any lawful business, and partnerships exist in most if not all professions, trades and occupations. Some branches of business and some classes of pursuits involve, from their very nature, power and capacity, in either partner, more limited than that of necessity resulting from others. Commercial partners have an implied authority to borrow money, to draw or indorse bills of exchange or promissory notes, in the firm name, binding the partnership, because these acts are incident to the nature of the partnership business, and may be necessary for its transaction. But partners in the practice of law or of medicine, have no such authority, because such acts are not connected with and are foreign to the nature of the partnership and the objects for which it is formed. — Am. Lead. Cases, 545. If a partnership is formed for, and engaged in buying and selling goods, it is not within the scope of its business to receive and undertake to collect promissory notes, or other evidences of debt; and one partner, by undertaking their collection, would impose no liability on the partnership, though contracting in its name. — Hogan & Co. v. Reynolds, 8 Ala. 59. This would lie precisely within the range of the business of partners in the practice of law, as that business is known to be here pursued. Uncontrolled by evidence of usage, which in doubtful cases may determine the inquiry, the test to which the particular transaction must be subjected is, whether it is appropriate to the business in which the partnership is engaged.- — Story on Part. §§ 111-113. If it be not, the partnership is not liable, but only those partners entering into or. assenting to the transaction. Partnerships in planting, or in farming, do not involve the power in each partner to borrow money, or to draw or indorse bills of exchange or promissory notes, because such power is not necessary or appropriate to the business. — Collyer on Part. § 402, p. 366; Story on Part. § 126. In Lea v. Guice, 13 Sm. & Mar. 656, a dormant partner, the partnership business being planting, was charged with a promissory note given by the ostensible partner in consideration of the loan of a promissory note of a third — 236 — person, wbieb was used as money in paying a debt of the partnership for overseer’s wages. The articles of partnership were in evidence, and as construed by the court, conferred on the ostensible partner large discretion in the management of the plantations and authority to conduct it according to the necessities, usages, and customs of persons engaged in the business of planting. As the partnership was secret, evidence that'it was the usage of planters generally to borrow-money and make promissory notes in the course of their business was received. The case has its peculiar facts, which controlled its decision. It is not intimated, that as matter of law, it can be declared from the nature, objects, and business of a planting partnership, that each partner can bind the partnership by making or indorsing promissory notes. It seems to us such power is not involved in the business of such partnerships, now becoming more frequent than formerly. The object and business for which they are formed is the cultivation, gathering, and sale of annual crops. It may be necessary to contract debts, in the course of the business, on short credits, maturing at or about the time the crops will be ready for sale; but it is not necessary to draw or indorse bills of exchange or promissory notes. If such a power was implied, it would, contrary to the intention of the partners, involve not only the property each partner contributed to the joint undertaking, but his entire credit and all Ms individual property. The business does not, as does the trade of merchants, include such power, and we cannot indulge the presumption that it is usually conducted by such instrumentalities. Though the note may not impose liability on the appellant, he may be liable on the original consideration, if Blair had authority to bind the partnership by the purchase of the mules. The successful prosecution of the joint undertaking required the employment and use of mules or horses suitable for plowing, hauling, ginning, and, it may be, other work necessary in planting, cultivating, gathering, and rendering marketable the crops produced. It is not insisted that Blair had any express authority to make such purchases, and bind the partnership for payment. The stipulation in the partnership agreement, that the appellant should furnish the mules necessary, as a part of his contribution to the joint undertaking, excludes the idea of such authority, as does the stipulation that neither party should by any contract bind the other. The inquiry then is, whether the authority can be implied as a matter of law from the nature and character of the business. When a contract is made by a member of a commercial partnership, the business of the part — 237 — nership being shown, and the nature of the contract, as matter of law, the court can generally determine whether it falls within the implied power of the- respective partners. But if the partnership is not commercial, it is a matter of difficulty to ascertain whether a particular transaction, not indisputably within tbe scope of the partnership business, falls within the power of each partner which may be implied. In such cases it is said by Judge Story: “ To answer the inquiry satisfactorily, it is not enough to show that in other trades or other business, certain rights, powers, and authorities are incident thereto, and may be lawfully exercised by each of the partners; but we must see that they appropriately belong to or are, by usage or otherwise, implied or incidental to the particular trade or business in which the partnership is engaged.” If a planting or farming partnership has any joint property, from its business, we would naturally suppose, it was the land it was cultivating, the team, and implements employed in the cultivation. These must exist and be in the possession of the partnership at the inception of its operations. They are usually contributed by the respective partners at the time of entering on the joint undertaking, in such proportions as the agreement of partnership requires. Contracts for their purchase, made by one partner without the concurrence of the others, are not necessary or appropriate to the business. Such contracts are supported only when it is necessary to the successful conduct of the partnership business that power in the partner to make them should be implied, or the exercise of such power is according to the usages and customs of the business. If a power to purchase mules could be implied, the same implication would support a contract for the purchase or rent of land, or for the purchase of a gin, and the limit of the implication it would be difficult to define. If a court cannot clearly see, in reference to these non-commercial partnerships, that a particular contract made by one partner is necessary to the successful prosecution or in accordance with the usages of the business, it is better to let it stand or fall upon the express authority which may have been conferred, or on the assent of the partners, than to indulge implications to support it. It is scarcely necessary to add that the evidence fails to show that the appellant assented to or ratified Blair’s contract of purchase. "We are of opinion the City Court erred in rendering judgment against the appellant, and its judgment must be reversed, and the cause remanded.