Wilcox v. Dodge

McAllister, J. It appears by the undisputed testimony, that the services sued for were all performed under the written contract declared upon, bearing date October 6, 1881. That instrument was under seal, and was executed by defendant Toms alone, in the absence of all the other defendants, and was described in the declaration as having been made by all the persons named as defendants. Under the issues, it was incumbent upon plaintiffs to show that it was made by all such persons, or there would be a fatal variance. Fox v. Norton, 9 Mich. 207; Gates v. Graham, 12 Wend. 53. In order to show that it was so made, it was necessary, under the circumstances of the case, that it be made to appear that all the defendants were co-partners at the time the contract was executed. Assuming that they were, then it is settled by the great weight of authority, that the instrument, though under seal and signed by one in the absence of the others, would be held binding, if each of the others had either given his parol assent previous to the execution thereof, or had subsequently, with knowledge of its purport, ratified it. Such prior assent or subsequent ratification need not be express, but may be implied from the acts and declarations of the parties whose liability is sought to be established, and from other proper evidence tending to show such assent or ratification. Gram v. Seton, 1 Hall (N. Y.), 262; Smith v. Kerr, 3 Comstock, 144; Butler v. Stocking, 4 Selden, 408; Purviance v. Sutherland, 2 Ohio (N. S ), 478; McDonald v. Eggleston, 26 Vermont, 154; Drumright v. Philpot, 16 Ga. 424; Cady v. Shepherd, 11 Pick. 400; Swan v. Stedman, 4 Metc. 548; 2 Kent’s Com. * pp. 47, 48; Chitty on Contracts (10th Am. Ed.), 278, note c. In the absence of such assent or ratification, by the other alleged partners, Toms, the one who signed the contract, would alone be liable upon it. White v. Skinner, 13 Johnson, 307; Skinner v. Dayton, 19 Johns. 513; Gates v. Graham, supra. That being the case, and the contract binding as to him, and the services having been performed under it, the plaintiffs would be confined, in their remedy at law, to the contract so made, and would not beat liberty to proceed against the defendants, Wilcox and Stock, upon any implied contract or on a quantum meruit. Walker v. Brown, 28 Ill. 378; Compton v. Payne’ 69 Ill. 354; Ford v. McVay, 55 Ill. 119. Were the defendants partners at the time of the making the contract sued on? The answer to that question depends upon the construction to be put upon the contract between them, respecting the same subject-matter entered into, in the previous month of May. When that contract was made Toms and Magee were under a previous contract with the South Chicago Dock Company, to do the same dredging for that company, and which provided for a compensation by the latter, to them, upon estimates, etc. By the said contract between Toms and Magee and Wilcox and Stock, made in May, 1881, it seems to us there was a community of interest in the capital to be em - ployed in the enterprise. The three dredges which were to be used, it is true, belonged to Wilcox and Stock, and were, at the time of the contract, at Toledo, Ohio. They were to be there appraised at their cash value ; the expenses of putting them in repair, of bringing them from Toledo to South Chicago, and returning them, if returned, were to be borne equally by the parties; all risk of loss by transporting them to South Chicago, and returning to Toledo, and all losses consequent thereon; and all breakages and repairs, either in the transportation or during the progress of the work, were to be borne equally by said parties. The contract provided further, that there should be allowed to Wilcox and Stock, to be paid jointly by the parties from the proceeds of said work, a sum equal to ten per centum per annum, of the valuation of said dredges, for the time employed in removing them, during the work, and in returning them to Toledo, if returned. Toms and Magee agreed to furnish all the money necessary to carry on the work, until estimates were made under their contract with the Dock Company, and any additional money required to carry on said work to completion; also that Wilcox and Stock might receive ninety per centum of all estimates made, and paid by the Dock Company, under its contract with Toms and Magee, but Wilcox and Stock were to pay out of it what was necessary to carry on the work, so far as said percentage should be required for that purpose. There was also a community of interest in the profits and losses. The contract contained this provision: u After the completion of the said dredging, the net profits of doing the same, after paying for the use of the dredging machines, as aforesaid, and all other expenses, shall be equally divided between the said parties, one half to said Wilcox and Stock and one half to the said Toms & Co.” There was also contemplated bv the parties a community of power of management, .and there was an intention to create the relation of partnership, as shown by the following provision of the contract: “ It is further agreed that neither of the partners of said Toms & Co., or the said Wilcox and Stock,1 shall be allowed or paid anything, as between themselves, for their personal services or expenses, in attending to or supervising the said work of dredging ; and if either of said firms, or either members of either of them, shall hereafter, before the completion of the work by this agreement provided for, obtain any contract for similar work upon said Calumet river, or in the vicinity, it is agreed that" said contract so obtained shall be performed under the terms of this agreement.” It appears that operations under this contract had been commenced and carried to a substantial extent when the contract sued on was entered into, and which embraced the same work as that contemplated by the above contract between all the defendants. We are inclined to the opinion that by such contract between all the defendants the relation of partners arose. We have no space to give to any extended discussion of the question or citation of authorities. “ An agreement that something shall be attempted with a view to gain, and that the gain shall be shared by the parties to the agreement, is the grand characteristic of every partnership, and is the leading feature of nearly every definition of the term.” 1 Ewell’s Lindley on Part. 1. Again on page 15, the same author says : “ Nothing, perhaps, can be said to be absolutely essential to the existence of a partnership, except a community of interest in profits, resulting from an agreement to share them. «But, although this is so, the usual characteristics of an ordinary partnership, are a community of interest in profits and losses, a community of interest in the capital to be employed, and a community of power in the management of the business engaged in.” Again, on page 18, the same learned and accurate author says : “ But an agreement to share profits and losses, may be said to be the type of a partnership contract. Whatever difference of opinion there may be as to other matters, it admits of no doubt whatever, that persons engaged in any trade, business or adventure, upon the terms of sharing the profits and losses arising therefrom, are partners in that trade, business or adventure.” An agreement to share the net profits necessarily implies a sharing of the losses. Considering the agreement in question, in all its legal aspects, we are inclined to the opinion that it presents all the requisite characteristics of an ordinary partnership. Notwithstanding that conclusion, we are compelled to reverse the judgment below, for errors in the instructions given to the jury, on behalf of the plaintiffs. The first instruction purported to be a definition of the term partnership, and is that given in Parsons on Partnership, p. 6. While that definition, as a starting point in the author’s treatise, might be very well, yet we very much doubt whether it is so accurate and explicit as would justify its being given in that form, as an instruction to the jury. 1 Lindley, supra, 4 et seq. The second instruction was, that if the jury believed from the evidence, “ that the defendants Wilcox and Stock were partners with Toms & Co., and engaged in doing dredging work at South Chicago, as such partners, under the firm name of Toms & Co., the said Wilcox and Stock are liable to the plaintiffs in this action, for the full amount of their claim in evidence in this cause.” By that instruction, the court passed upon all matters of fact necessary to a recovery, where the general issue was pleaded, and referred to the jury, the matters of law arising upon a. construction of the contract between the defendants, above discussed. A construction of that written contract was indispensable to the decision of the question of partnership, and that devolved exclusively upon the court. The third instruction was wrong and misleading because it omits any hypothesis of whether the work was or was not done, under the sealed instrument declared on, and implied that the plaintiffs might recover upon some other contract express or implied, which was several as to Wilcox and Stock. The sixth instruction was manifestly erroneous because, as respects the matter of a subsequent ratification, it omits any hypothesis as to Wilcox and Stock, or either of them, having any knowledge of the import of the contract, supposed to have "been ratified; and because omitting all hypothesis as to the other facts necessary to a recovery, it closes.with this independent direction: “ and your verdict should be in favor of the plaintiffs.” That the effect of such a direction would be to impress the jury with what they would suppose to be the opinion of the court as to the merits of the case, and thus give the plaintiffs an unfair advantage, there can be no doubt, and just such a direction was condemned in Roach v. The People, 77 Ill. 29. The ninth was thus:1 “ Every partner possesses full and absolute authority to bind all the partners by his acts or contracts, in relation to the business of the firm, in the same manner and to the same extent, as if he held full power of attorney from them.” How, the question here was, as to other alleged partners being bound by an instrument under seal, executed by one of such alleged partners, in the- absence of all the others. It is well settled and elementary law, that no such power is implied from the partnership relation, as will authorize one to bind the others by the execution of a deed or sealed instrument, not made in the presence of the others or the one sought to be held bound: Sloo v. Bank of Illinois, 1 Scam. 441, and cases above cited. That instruction was erroneous and misleading. The judgment below will be reversed and cause remanded. Judgment reversed.