Waring v. National Marine Bank

Robinson, J., delivered the opinion of the Court. This is a proceeding in involuntary insolvency, instituted against the appellants as partners inter sese; and the only question to he considered, in the view we take of the case, is whether the fact of partnership is made out by the proof. If no such partnership existed, then this proceeding must fail. And in the determination of this question, there is, we must bear in mind, a well recognized distinction between a partnership as between the parties tJhemselves, and a partnership as to third parties, which arises by operation of law. Persons by their conduct and course of dealing may be held liable as partners to third parties dealing with them, even though there was in fact no agreement of partnership. But the question of partnership inter sese is one of intention, and it may be laid down as a general rule that no such partnership can exist against the consent and intention of the parties. “ The [280] fact of the existence or non-existence of a partnership as between the parties themselves, must be gathered,” says the Court in Bull vs. Schuberth, 2 Md., 55, “from the intention of the parties. Kerr vs. Potter, 6 Gill, 423; Heise vs. Barth, 40 Md., 259; Mollwo, March & Co. vs. Court of Wards, L. R., 4 Privy Council Appeals, 425. Now, what is the proof in this case? Prior to January 1880, the appellants had been engaged in the manufacture of fertilizers, under the firm name of “Thomas Waring & Brother. ” About that time they discontinued doing business =as partners, and transferred to the Waring Manufacturing Company, a corporation chartered under the laws of this State, their brands, trade marks and good will; and agreed to give to the company their labor, skill and knowledge in the conduct and management of the business of manufacturing fertilizers, in consideration of which they were to receive a proportion of the net profits of the business, and were to bear their proportion of losses sustained in the purchase of real estate. After the execution of this agreement, Thomas Waring, One of the members of the firm of Waring & Brother, became the President of the company, and Wilson Waring the other member became the Vice-President, and, as such, they conducted and managed the business of the company. It is not contended there was a partnership between the appellants and the company, but it is insisted that the transfer by them to the company of the brands, trademarks and business of the old firm, and their agreement to conduct and manage the business of the company, in consideration of which they were to receive a certain proportion of the net profits, and the further fact that they did so manage the business of the company, are facts in themselves sufficient to prove a partnership inter sese. Now, we quite agree that these facts, considered alone, might be sufficient to justify the inference of partnership [281] as between tbe parties; but when considered in connection with other facts in the record, they wholly fail to prove the partnership alleged by the petitioning creditors. Thomas Waring testifies that in January, 1880, the firm of Waring & Brother discontinued business, and transferred their trade marks and business plant to the Waring Manufacturing Company; that from that time to the present, a period of ten years, there never has been a partnership transaction between himself and his brother; and that whatever was done by them or either of them since that time, in the conduct and management of the business of the company, was done by them in their respective capacities as officers of the corporation. That in signing and endorsing the notes of tfye company, each signed for h„imself, and neither had authority to bind the other, and not only was there no partnership existing between them, but that no attempt was made by either to do any act which could by any possibility be referred to a partnership between them. So, if it be conceded, that the business was managed by the appellants, in consideration of which they received a proportion of the net profits, these facts cannot be said to prove a partnership in the face of the positive and uncontradicted testimony of the parties themselves. One thing is certain, if Thomas Waring is to be believed, and he is unimpeached, then we are obliged to hold, there was no partnership between the appellants at the time these proceedings were instituted. Row, in Heise vs. Barth, 40 Md., 259, the facts differ widely from the facts in this case. In that case the parties made large purchases, and paid bills rendered to them in the firm name of Barth & Heise. They contracted in their own names and as a firm, says the Court, and those with whom they dealt, trusted solely to their responsibility. In this case, hotvever, although the business of the company was managed by the appellants, yet it was managed [282] by them as officers of the corporation. They did not hold themselves out as doing business as partners, nor did persons deal with them as such. They neither made purchases in the firm name, nor were bills rendered to them and paid by them in the name of the firm. They endorsed, it is true, the notes of the company, but they endorsed them as individuals and not as a firm. So after a full consideration of all the testimony in this case, we are of opinion that petitioners have failed to prove a partnership as between the appellants. And, this being so, it is unnecessary to consider whether the several mortgages executed by the appellants were acts of insolvency within the meaning of our insolvent law. (Decided 16th June, 1891.) Judgment and order reversed, and petition dismissed.