Gutheil v. Gilmer

BABTCH, O. J. This is an action upon contract, brought by the administratrix of the estate of Moroni K. Williams, deceased, against the defendants as partners doing business under the firm name of Gilmer, Salisbury & Company, to recover $5,500. The suit, in fact, is against the defendant O. J. Salisbury as a partner of the firm, he being the only one upon whom summons was served. In the complaint it is alleged, in substance, that, on November 20, 1882, the defendants, as co-partners, entered into a contract with the plaintiffs intestate, Moroni B. Williams, by the terms of which the defendants were to pay Williams $5,500 upon the sale of a,certain mining property, known as the Peabody mining claim, and that such payment was to be made only out of the proceeds of the sale when the same was effected by them. On information and belief it is alleged that — 89 — on April 20, 1894, tbe defendants conveyed tbe mining claim in question for more than $5,500 but that tbey paid no1 part of that sum either to Williams in bis lifetime, or to any one for tbe benefit of bis estate since bis death., Tbe complaint also contains allegations of demand and refusal to pay before tbe bringing of suit, and alleges that tbe sum due, including interest, is $7,920. Erom tbe complaint and tbe record it further appears that, on March 29, 1881, tbe mining claim in dispute was conveyed by Williams to Monroe Salisbury; that tbe grantee, at tbe time of tbe execution of tbe contract, held tbe legal title; and that tbe contract was executed in tbe name of Gilmer, Salisbury & Company. In bis answer, defendant O. J. Salisbury denies specifically all tbe allegations of tbe complaint referred to above, and denies that the defendants sold tbe mining claim, mentioned in the contract set forth in tbe complaint, for tbe consideration alleged or for any other consideration, or that tbey received any consideration or money therefor. Erom tbe evidence introduced by tbe plaintiff, it appears that tbe firm name of Gilmer, Salisbury & Company was signed to tbe contract by John T. Gilmer, a member of that firm; that the firm was composed of John T. Gilmer, Monroe Salisbury and O. J. Salisbury; and that Gilmer was working other mines in tbe vicinity of tbe Peabody mine, but it is not shown that tbe firm, or tbe defendant O. J. Salisbury was interested in any of them. Among tbe instruments introduced in evidence was a deed, dated March 29, 1881, from Williams to Monroe Salisbury, conveying tbe mining claim in dispute for a consideration of $25,000, tbe receipt whereof is acknowledged by tbe grantor, in tbe instrument. The deed is absolute in form and contains nothing to indicate that it was a conveyance in trust, or that the grantee took it in trust for the firm or tbe defendant O. J. Salisbury. Tbe contract sued — 90 — on and a quitclaim deed from O. J. and Monroe Salisbury and their wives, conveying the Peabody mining claim to the Stewart Mining Company, for the consideration of one dollar, were also admitted in evidence. There is likewise testimony showing that the individual members of the firm of Gilmer, Salisbury & Company were engaged in mining, but there is nothing to show that the firm, as such, was so engaged. On the contrary, it is shown by the proof that the firm of Gilmer, Salisbury & Company was engaged in the business of carrying mails of the United States Government, express matter and passengers. At the close of the testimony, the court, on motion of the defendant, entered a judgment of nonsuit, and its action in the premises has been assigned as error. The decisive question presented is, whether the contract sued on renders the firm of Gilmer, Salisbury & Company, and, consequently, the individual members thereof, liable for the sum claimed to be due thereon. Counsel for appellant insist that the presumption of law is that a contract made in the firm name is a co-partnership contract, and argue that the contract itself was prima facie proof that it was made on partnership account, and shifted the burden upon the defendant to show that it was not binding on the firm or on him. The clause of the agreement, referring to the contracting parties, reads: “This agreement, made and entered into this twentieth day of November, 1882, between J. T. Gilmer, Monroe Salisbury and O. J. Salisbury, co-partners, and doing business under the firm name of Gilmer, Salisbury & Company, parties of the first part and Moroni R, Williams, party of the second part:” Then follow clauses to the effect that-the same mining claim was previously conveyed by Williams to Monroe Salisbury for $16,000, of which $10,500 was paid; that such sale was made for the use and benefit of the firm of Gilmer, — 91 — Salisbury & Company, with tbe expectation tbat tbe purchaser would effect a sale of tbe property to third parties, and pay tbe balance of the purchase price out of tbe proceeds; and tbat no sale has been effected. Then follow stipulations tbat tbe first parties will pay tbe second party $5,500 out of tbe proceeds of any sale of the mining claim which they make, with interest after sale; tbat tbe second party releases tbe first parties from any liability or obligation to pay such balance, except out of tbe proceeds of sale; and tbat tbe first parties will exert themselves to make a sale. Tbe contract is signed “Gilmer, Salisbury & Company. M. R. Williams.” If it be conceded tbat this instrument, in itself, is sufficient to raise a. presumption that it was a partnership contract, then tbe question is, whether tbe plaintiff’s own evidence is of such a character as to rebut the presumption, and show that no recovery against tbe defendant can be bad in this case. TJpon careful consideration we are of tbe opinion tbat this question must be answered in tbe affirmative. It is apparent from tbe proof tbat tbe firm of Gilmer, Salisbury & Company was a non-trading partnership. It was engaged in tbe business of running stages, carrying United States mails, transporting express matter and passengers. Tbe very nature and character of that business is such that, in the absence of affirmative proof, it can not be assumed tbat mining or dealing in mines was within tbe scope of the partnership. No member of tbe firm, therefore, could bind tbe partnership, or any other partner thereof by a transaction, not within tbe ordinary or apparent scope of tbe partnership business, without special authority for that purpose. Of this a person dealing with a partner was bound to take notice. Tbe law, in general, is, that one dealing with an individual member of a co-partnership, as to matters not within the real or apparent scope of tbe business of tbe concern, does so at bis peril, and, in tbe absence — 92 — of subsequent ratification of tbe transaction, no liability attaches to the partnership. When, therefore, the plaintiff’s intestate entered into the contract in question, with Gilmer, he was bound to take notice that Gilmer, without special authority, had no power to bind his firm, because the transaction was not within the scope of its ordinary business. There is no evidence whatever to show that Gilmer had any special authority to make the contract. Nor is there any proof to warrant a holding that either the firm or the defendant O. J. Salisbury ever ratified the transaction, or that such defendant was aware of the existence of the contract, until about the time this suit was commenced. The mere fact that about twelve years after the making of the agreement, in dispute, the defendant and his wife executed a quitclaim deed for the same property, to the Stewart Mining Company for the nominal consideration of one dollar, when there is no proof that the grantors were interested in that company, or that the existence of the contract was known to them, is not sufficient to justify the assumption that the defendant ratified the contract. Nor is there any thing, except the mere declaration of the contracting parties that the sale to Monroe Salisbury was for the benefit of the firm, to show that the contract was made for either the partnership or tire defendant, or that the firm or any member thereof, except Gil-mer, had anything to do with the transaction, or received any benefit or advantage because thereof. From the pleadings and the testimony it is manifest that the transaction, because of which this controversy arose, was without the scope of the ordinary business of the firm, and Gilmer having had no* special authority for the firm, and there being an absence of any ratification by the firm or the defendant, no liability attached to either. There appears to be an entire failure of proof to hold the defendant liable, and, therefore, the nonsuit was properly granted. — 93 — In tbe case of Cavanaugh v. Salisbury, decided at tbe present term, where practically the same question was presented, this court said: “A partner without special authority can bind the firm only within the scope of the business, and the firm, in the absence of ratification, is not bound by any transaction of a partner outside the real or apparent scope. Where, therefore, as in this case, a partnership is engaged in the stage business, or the carrying of mails, passengers and express matter, a partner has prima facie, no authority to bind the firm or another partner in a transaction relating to the business of mining, and he who would seek to- hold the firm liable, by virtue of such transaction, has the burden to show that the contracting partner had the authority to enter therein. The law in the ease of a non-trading partnership implies no such power in a partner.” There are other questions presented, but, from the view we have taken of the case, further discussion is not regarded important. We find no reversible error in the record. The judgment is affirmed, with costs. Miner and Basicin, JJ.j concur.