Aramburn v. Guerricagoitia

BEAN, J. The first question to dispose of is that pertaining to the mortgage of November 21, 1913. It is claimed by appellant Loren that the court erred in decreeing that this mortgage created no lien upon the — 264 — property of the defendant Ignacio, and that it was error to decree that any part of the indebtedness of the partnership to plaintiff, amounting to $29,506.19, should be paid by the receiver out of the share claimed by Loren. It is the position of plaintiff upon the cross-appeal that the mortgage of November 21, 1913, created a lien upon all of the partnership property, and that the plaintiff is entitled to the payment of the indebtedness due the estate, with interest and attorneys’ fees in this suit. 1. It does not appear that any partnership name was agreed upon between the partners in which to conduct the business, except as the business was transacted in the name of Ignacio Guerricagoitia. Where no name has been fixed by agreement of partners, the partner charged with the duty, or clothed with the authority, to sign contracts for the firm may bind all the members by such signature as he may choose to employ: 30 Cyc. 421. It is unquestioned that one partner may execute a valid mortgage of partnership goods to secure a partnership debt by signing the firm name or the individual names of the members of the firm. One copartner, having authority to pass a valid title to personal property of the partnership by bill of sale, may, as incident thereto, execute a transfer of it in any form or mode by which such title could in any case be legally transferred. It is immaterial whether he sign the name of each copartner separately, or sign the firm name: Jones on Chattel Mortgages (5 ed.), §46. In 1 Lindley on Partnerships (2 Am. ed.), page 426, we read thus: “Firm liable though not named — Written contracts. If, therefore, one partner only enters into a written contract, the question whether the contract is confined to him, or whether it extends to him and his copart — 265 — ners, cannot be determined simply by the terms of the contract. For supposing a contract to be entered into by one partner in his own name only, still if in fact he was acting as the agent of the firm, his copartners will be in the position of undisclosed principals; and they may therefore be liable to be sued on the contract, although no allusion is made to them in it. In a note to this Section at page 428, we read: “Thus where one partner enters into a simple contract, though in writing, in his individual name,, but in fact for his firm, although that fact is not known to the other contracting party, an action may be maintained on it in the name of the firm, by alleging that it was entered into by the firm by the name and style of the name of the one partner, each partner being the agent of the firm: Havana etc. R. R. Co. v. Walsh, 85 Ill. 58.” We find it laid down in 1 Rowley, Modern Law of Partnership, Section 265, as follows: “Use of firm name. — In opposition to the doctrine that the name formally adopted as that of the firm must be used in order that the partnership may be bound, the proposition that such symbolical name may be displaced by an effective substitute when the intention of the parties is to bind the firm and the partnership appropriates the consideration, has found favor with a number of courts. ‘Partners may bind themselves by other than such prescribed firm name, if they choose to adopt for convenience, or to prevent confusion, a different mode of executing their obligations or contracts from the one prescribed by their original agreement.’ And one partner may, if no firm name has been agreed on, bind the firm within the scope of his authority by any name he may select. ’ ’ A managing partner may bind the firm by borrowing money, executing notes, and renewing notes, at — 266 — least where he has been held ont as having snch authority : 1 Rowley, Modern Law of Partnership, § 417. If the name of an individual partner is used as a firm name, the firm is bound thereby: Palmer v. Stephens, 1 Denio (N. Y.), 471; Bank of Rochester v. Monteath, 1 Denio (N. Y.), 402 (43 Am. Dec. 681); Crable v. O’Connor, 21 Wyo. 460 (133 Pac. 376). 2. Undoubtedly the indebtedness secured by the chattel mortgage, Exhibit “B,” was that of the firm. Loren should have known it. There was no new consideration passed. It was but a renewal of the.old mortgage which Loren had signed himself, with the increase of the indebtedness added. Ignacio was apparently not only authorized to transact the business of the partnership, but for a long time had been transacting such business in his name. The chattel mortgage covered partnership property only. There is no intervening right of a third party affected. As between Frank Aramburn, mortgagee, and Ignacio and Loren, the members of the partnership,, the mortgage in question created a lien upon the partnership property described therein for the security of the partnership indebtedness, and should be foreclosed: Hembree v. Blackburn, 16 Or. 153 (19 Pac. 73); Salt Lake Brewing Co. v. Hawke & Andrews, 24 Utah, 199, 207 (66 Pac. 1058); Reynolds v. Cleveland, 4 Cow. (N. Y.) 282 (15 Am. Dec. 369); Schemerhorn v. Laine, 7 Johns. (N. Y.) 311; Smith v. Collins, 115 Mass. 388; Pahlman v. Taylor, 75 Ill. 629. By a long course of dealing the partnership impliedly adopted the name of Ignacio Guerricagoitia as the partnership name, although there was no express agreement to that effect. The execution of the note and mortgage of November 21, 1913, was necessary to carry on the business of the partnership in the ordi — 267 — nary manner. The transaction was common in the business in which the firm was engaged, and was well within the scope of such business. The execution of the note and chattel mortgage by Ignacio in the interest of, and for the firm, was sufficient to bind both members of the firm. The firm received the benefit of the instruments so executed. They were the very means by which the life of the business was continued: 30 Cyc. 485, 487. 3, 4. The fact that the writings signed by Ignacio pertained to partnership matters was properly established by the testimony: 20 R. C. L., p. 898, § 109. In order for Ignacio to secure the payment of the partnership debts, it was not absolutely essential to have the concurrence of Loren: 20 R. C. L., p. 912, § 124. It is claimed by Loren that Ignacio, Frank Aramburn before his death, and plaintiff after he assumed control, were working together to defraud Loren. The facts as disclosed by the record do not bear out such claim. It is urged on behalf of Loren that the letter written by Frank Aramburn from Spain, February 12, 1916, after he heard that Loren was to commence a lawsuit, tends to show that he was afraid of the re: suit of litigation. The letter states, in effect, that he had always treated both Loren and Ignacio well; that it was not necessary to have a lawsuit, and requested that none be commenced until he returned. The indebtedness of the firm to Aramburn was then great, and litigation would undoubtedly embarrass Frank Aramburn and delay a collection, as subsequent events have proven. Ignacio made no appearance in the foreclosure suit. He employed the attorney in the suit for an accounting and dissolution of the partnership, who represented Aramburn in the foreclosure suit. This fact is dwelt upon as supporting — 268 — the contention made by Loren, but we fail to see that it justifies such a conclusion; there being no clash of interests between Aramburn and Ignacio. The record discloses that Amos Aramburn had been lenient in his dealings with both of the defendants. It is only by reason of the high prices prevailing for sheep and wool at the time they were fortunately sold by the receiver that the mortgagee is able to obtain his money. The failure of the firm to pay the indebtedness necessitated the bringing of this suit, and plaintiff is entitled to recover $1,500, the amount fixed by the trial court but not decreed, as reasonable attorneys’ fees. This is in accordance with the tenor of the note and mortgage. A supplemental complaint was filed, showing that since the filing of the original complaint, and on October 15, 1916, Ignacio being unable to care for the sheep longer, delivered the possession of the mortgaged property to plaintiff. Since that time plaintiff has furnished feed and pasture, herders, camp-tenders, and camp supplies in caring for the mort-gaged property. He sheared and marketed the wool obtained from the sheep in 1917, ■ and expended large sums of money to preserve the property. Loren, by his answer to the supplemental com-' plaint, claims that the 16,578 pounds of wool sold by plaintiff on June 15, 1917, for 43 cents per pound, amounting to $7,128.54, was on and prior to November 5th and since that time of the value of 60 cents per pound, or the total market value of $9,946.80; that one half of such wool was his property, and was sold without authority; and that he is entitled to one half of the difference between the two - mentioned sums, amounting to $1,409.13,. which plaintiff should be required to pay him. Loren also claims by this — 269 — answer that there are now in the possession of this plaintiff 350 head of ewes of the value of $16 per1' head, and 75 lambs of the value of $9 per head, which plaintiff failed to deliver to the receiver, one half of which is the property of Loren; and that plaintiff should be required to deliver one half of the sheep to Loren or pay to him the value thereof, $3,175.50. He asks judgment against plaintiff in the sum of $4,584.63. Plaintiff replied to the effect that all the property and money held by him, as mortgagee, was turned over to the receiver. We have carefully read all of the testimony in the case. It was given by the defendants in the Basque language, through an interpreter, and is conflicting. A statement of the testimony would be difficult and of no value. When Amos Aramburn took possession of the mortgaged property with the consent of Ignacio, no care was taken to count the sheep until shearing time the next season, when 2,377 were counted. He had no other sheep with which they could become mixed, and we think the testimony shows that all of the mortgaged property was delivered to the receiver. The sheep were then carefully counted. If any sheep had been sold, disposed of, or retained by the administrator, it would seem such fact could have been easily ascertained and shown. As to the sale of the wool clip in 1917, the mortgagee acted much the same as it had theretofore been the custom. Defendant Loren has no real complaint to make on account of the difference in market price of wool on the different dates. It is contended by Loren that there were wethers sold from the band of sheep by Ignacio prior to 1915, when there was such sale made and accounted for. We do not think the claim is sustained, taking into — 270 — consideration all of the circumstances and testimony in connection with the matter; the fact that Loren had himself- herded the sheep for considerable of the time prior to June, 1913, and was in a position to know of any sale up to that time; that the means of the partnership were limited and they were much of the time running on “low gear,” so to speak, and kept the sheep “on the desert” sometimes in winter without feed prepared; and that a number of sheep were lost and others died. We have carefully examined the testimony as to the other items mentioned in the decree. It does not warrant any change in the findings of the lower court. The decree of the lower court, modified as above indicated, will be affirmed, with directions for the trial court to make such supplemental orders and decrees as may be deemed necessary in winding up the partnership affairs and settling the mortgage, not inconsistent herewith. The costs and disbursements in both of these suits should be paid from the partnership assets. Affirmed as Modified.