Robertson v. de Lizardi

Bullard, J.* A re-hearing was allowed in this case, and we [312] have attentively and deliberately considered the arguments adduced by the parties. The controversy appears to us to turn upon the question ; whether the partnership between McKenzie & Co. and the defendants, as evidenced by the letter of the latter of the 17th of August, 1836, still existed at the date of the bill of exchange, and whether they were drawn in relation to the business of the partnership: for we cannot doubt that a partnership did exist between the parties, in the cotton trade between Mobile and England, in which the parties were to divide the profits ; but whether it ceased as soon as the fund provided, through the Mobile banks, was exhausted, and the house of M. De Lizardi & Co. of New Orleans declined furnishing any further credits, forms the main question in this cause. The whole of the letter must be taken together. After explaining the nature of the trade in which they are about to embark, on joint account, and stating that letters of credit to the Mobile banks are enclosed, to the extent of twelve thousand pounds sterling, they say: “For these two objects the above credits are solely to be employed, and if our extension of them be required, please immediately to address our friends in New Orleans, Messrs. M. De Lizardi & Co., who will open further credits with such banks as you may name, and to such an extent as the probable business may require." This shows, that the defendants did not contemplate a limitation of the capital to be advanced by them in the business, at the twelve thousand pounds. Nor does it appear that they intended it should depend upon the will of M. De Lizardi & Co., to put an end to the concern, by declining to open further credits. And what was the probable business to which the defendants allude, and which was to form the limit of the new credit ? It was the cotton business, during the season, the purchase in Mobile, and the sale in England, for joint account. Suppose' the defendants, instead of referring to their friends in New Orleans to open further credits, had directed McKenzie & Co. to write to them, and that they would open further credits, commensurate with the probable business undertaken by them, it would have been a promise to permit such further credits, instead of a limitation to the sums [313] already advanced. This view of the matter is greatly corroborated by another clause in the letter, which escaped our notice on the first argument of this cause. It is towards the close, in which they say: “ It is understood that Mr. Berthoud will not charge more than one-half per cent, for accepting and paying your drafts, and negotiations on us, when that course is found most beneficial.” Now, it is. asked, who is Mr. Berthoud ? To this it may be answered, that the record does not inform us : but he was, certainly, a person indicated by De Lizardi & Co. as willing to facilitate the negotiation of bills, for the joint benefit of the parties, and that McKenzie & Co. were at liberty to resort to that means of raising money, if they found it most advantageous. This repels the idea of a limitation as to amount, as stated in the letters of credit addressed to the banks in Mobile; because, it left it to the judgment of McKenzie & Co. to draw through Berthoud, or to apply to M. De Lizardi & Co. for further credits. But the letter says in express terms : “ This agreement to be in force for the present season, to be renewed hereafter, if mutually agreeable.” Now, the agreement related to the purchase and sale of cotton, on joint account; and the mutual or reciprocal recommendations of consignments, in the commissions upon which, the parlies were to participate. It would appear also, from the correspondence between the parties, that the defendants did not consider the authority of McKenzie & Co. to purchase on joint account, as limited, originally, to the sum of twelve thousand pounds. In a letter of the 2d of March, 1837, they speak of the great derangement in the money market, of the want of confidence, and of the danger of further depression in the price of all commodities, and cotton among the rest; and they say: “ We shall he thankful if your purchases on joint account are limited to those which you announce as per Dalhousie Castle, and John R. Gosslin, together, 746 bales, as we cannot hold oiit the hope to you of our getting out of them without a heavy loss ; although you may rely, that every exertion to this effect will be made.” They add : “ We shall not wish, during the present season, to extend operations beyond the direct credit forwarded your Mr. McKenzie, &c.” The bills of exchange on which this action is brought, had al [314] ready been drawn at the date of this lettter. It is further shown that cotton, to the amount of more than the twelve thousand pounds, was sold by the defendants on joint account; although the cotton, purchased with the proceeds of the bills in question, was, in point of fact, sold for the particular account of McKenzie & Co. The fact of a partnership being clearly shown, and that the bills were drawn for the purpose of carrying on the business contemplated. by the parties, it does not appear to us, necessary for the plaintiffs to show that they knew of the existence of the partnership, at the time they took the bills ; and the circumstance, that the letter of the 17th of August was not communicated to the plaintiffs, until after the bills were drawn, does not appear to us material. The parties certainly contemplated a participation in the profits of the cotton trade during the season, and that is sufficient to constitute them partners, as to third persons dealing with them, or either of them, in relation to that branch of trade. Story on Partnership, sect. 55, 103. 3 Kent’s Commentaries, (1st edition,) page 17. It is, however, contended by the counsel for the defendants, that the parties never contemplated a general partnership ; and he infers this from their having assumed no social name, from there being no capital provided, no partnership books opened, no provision make for expenses, and because no such thing is named in their correspondence. Let it be admitted that all this is true, and that there was not, between the defendants and McKenzie & Co., a regular, formal, and general partnership ; yet the moment it is shown that, for a limited period, and in relation to a particular branch of commerce, they were to buy and sell on joint account, and participate in the profits, they became thereby, as to third persons, partners in relation to that trade. There may be cases in which, in point of fact, the parties are not partners inter se; and yet, are held liable, as such, towards third persons dealing with one of them. This was the doctrine recognized by this court in the case of McDonald v. Millaudon, 5 La. 409. In that case, Millaudon was to receive a portion of the profits in the concern of Flower & Co., in the shape of interest over and above ten per cent, upon an advance of money to the firm. As [315] between themselves, Flower and Millaudon were not partners ; but the latter was held liable towards third persons, 5 Peters, 561. In the case now before the court, McKenzie & Co., and the defendants, in the settlement of the concern, admit, that upwards of sixteen thousand pounds sterling were employed in their joint operations ; the whole of which was raised by bills of exchange drawn on the authority of the letter of the 17th of August, 1836. The bills in question were drawn in the course of the same trade; and before any intimation had been given, that De Lizardi & Co. were not inclined to extend the-business on joint account, beyond the amount of the original credit. Notwithstanding our first impressions, we are now satisfied, that, although that letter was not communicated to the plaintiffs when the bills were drawn, so as to bind the defendants to an acceptance of those particular bills, or to amount to an acceptance beforehand; yet the partnership being shown, and the transaction being in relation thereto, the defendants are liable. Judgment affirmed. Footnotes [*] Morphy, J., having been of counsel in this case, did not sit on its trial.