McCormick v. Stimson

MR. JUSTICE HOLLOWAY delivered the opinion of the court. This action was brought to recover $52.50 alleged to be due plaintiff for work done by him, $50 for pasturage furnished by H. O. Bakken, the claim for which was assigned to plaintiff, and $50 for pasturage furnished by Arthur Reilly, the claim for which was assigned to plaintiff. It is sought to fasten liability upon defendant Stimson upon the theory that he and defendant Crawford were copartners. Crawford admitted his individual liability for each of the $50 claims and for $37.50 of the labor claim. Stimson denied liability altogether, and each defendant denied that any partnership existed. The trial resulted in a judgment against both for the full amount of the [275] claims, and from that judgment, and from the order denying his separate motion for a new trial, Stimson appealed. 1. Were Stimson and Crawford partners? Section 5466, Revised Codes, defines the term “partnership.” Section 5467, provides: “A partnership can be formed only by the consent of all the parties thereto.” In other words, the intention of the parties is a controlling consideration. (Beasley v. Berry, 33 Mont. 477, 84 Pac. 791.) The evidence is undisputed that Stimson purchased a herd of cattle paying therefor some $22,000 and the freight from Norris to Ravalli; that he let these cattle to Crawford, who at his own expense was to feed and care for them for the term of three years; that the proceeds from the sales of any of these cattle were to belong to Stimson until he should be fully reimbursed for his entire investment, freight and taxes, and if, after that event, any profit was realized, it should be divided equally between them. Each of these parties testified that it was not his intention to form a partnership. There was not, according to the record, any property contributed to a common stock when this business venture was launched. The cattle belonged to Stimson and title was not to pass from him until he was fully reimbursed, and this contingency might never be realized. A partnership results only from an agreement of the parties, [1] and though the agreement may be implied, as well as express, there must be evidence from which it can be said the parties consented to assume those liabilities which the law attaches to a partnership. There is no such evidence in this record. It was not the intention of either Stimson or Crawford that Stimson should be liable for any part of the expense of range riders or pasturage. Crawford agreed to -bear this expense himself. Considering the rights and liabilities of Stimson and Crawford inter sese, they were not partners in fact. (Hanrahan v. Freeman, 35 Mont. 584, 90 Pac. 793; Flathead County State Bank v. Ingham, 51 Mont. 438, 153 Pac. 1005.) 2. May Stimson be held as an ostensible partner? Section [2] 5491, Revised Codes, provides: “Anyone permitting him [276] self to be represented as a partner, general or special, is liable as such to third persons to whom such representation is communicated, and who, on the faith thereof, give credit to the partnership.” (a) There is not a scintilla of evidence that Stimson ever permitted himself 'to be held out as Crawford’s partner, or ever knew that he was represented as such. (b) There is not any evidence that plaintiff, Bakken, or Reilly knew that Stimson was being represented as Crawford’s partner at the time the credit was extended; on the contrary, the evidence is fairly conclusive that not one of these parties knew that Stimson was actually or ostensibly interested in the business when his claim was contracted. (c) The evidence is conclusive that the credit was not extended to a partnership but to Crawford individually. Stimson’s financial responsibility did not enter into the transactions out of which these claims arose. There is not any evidence upon which Stimson can be held as an ostensible partner. [3] Unless one is a partner in fact, or an ostensible partner, he cannot be held liable as a partner. (Sec. 5492, Rev. Codes.) The judgment as against defendant Stimson and the order denying his motion for a new trial are reversed and the cause is remanded, with directions to enter judgment in his favor for costs. Reversed and remanded. Mr. Chief Justice Brantly and Mr. Justice Sanner concur.