Breinig v. Sparrow

• Court: Indiana Appellate Court
• Writing for the Court: ROBY
• Citation: Breinig v. Sparrow, 39 Ind.App. 455, 80 N.E. 37 (Ind. App. 1907)
• Decision Date: 07 February 1907
• Docket Number: No. 6,175.,6,175.
• Parties: BREINIG et al. v. SPARROW.

39 Ind.App. 455

80 N.E. 37

BREINIG et al.

v.SPARROW.

No. 6,175.

Appellate Court of Indiana, Division No. 2.

Feb. 7, 1907.

Appeal from Circuit Court, Knox County; O. H. Cobb, Judge.

Action by George M. Sparrow against Henry L. Breinig and others. From a judgment for plaintiff, defendants appeal. Affirmed in part, and reversed in part.

C. B. Kessinger and Cullop & Shaw, for appellants.

ROBY, P. J.

Action by appellee against appellants for the foreclosure of mechanic's lien and personal judgment. Benjamin G. Hudnut and the Vincennes Citizens' Street Railway Company appealed from the judgment for $3,630 rendered against them and their co-appellants Breinigs. The errors assigned by each of said appellants is in the overruling of their separate motions for a new trial, and the grounds stated in such motions are that the finding of the court was not sustained by sufficient evidence and was contrary to law. Appellee, on May 10, 1904, entered into a building contract, in writing, by which he agreed to construct a “casino” or electric park, Fairview avenue, Vincennes, Ind., in accordance with certain plans and specifications and in consideration of $3,108.75, 75 per cent. of said price to be paid upon estimates during the construction, and the residue at the completion of said building. The contract was signed by H. L. Breinig and appellee. It is sought in this action to hold appellants for the contract price of said building upon two theories set up in different paragraphs of complaint: First, that they held themselves out as partners with the Breinigs, under the firm name and style of “H. Breinig.” Second, that they were in fact associated with him in said enterprise and therefore liable with him under said name. There was a trial by the court, without a jury, and a finding for appellee as against the three Breinigs and appellants, and each of them, in the sum of $3,630, for which sum judgment was accordingly rendered. Before executing the contract sued upon, appellee read a contract which had been theretofore executed and which was in the words and figures following:

“Terre Haute, Ind., May 2, 1904.

“This indenture made as above dated between Henry L. Breinig, Chas. O. Breinig, and Geo. J. Breinig, all of Terre Haute, Indiana, their successors and assigns, first parties of, and the Vincennes Citizens' Street Railway Company of Vincennes, Indiana, its successors and assigns, second party, witnesseth:

“Whereas, said first parties have leased from one Fred Fossmeyer, of Vincennes, Indiana, a certain tract of ground on Fairground avenue in said city and situated also on the Street Railway, and Whereas, it is the intention of said parties of the first part to conduct upon said ground various amusements consisting of a theatre, merry-go-round and other forms of amusement, and Whereas, in the conduct of said business it is presumed that certain benefits to the Street Railway will be derived, and Whereas, in order to procure funds for the establishment and conduct of said amusement it is necessary that aid and assistance be extended said first parties by said second party. Now, therefore, this agreement witnesseth:

“First. That first parties in procuring the help and assistance of said second party either by endorsement or otherwise, hereby obligate themselves to fully pay off any and all obligations guaranteed or endorsed by second party. Second. That in the conduct of said amusements above referred to the first parties hereby agree to establish and maintain only first class respectable lines of amusements. Third. That said first parties agree that said amusements shall be carried on under the name of the ‘Electric Park,’ and that the entrance fee thereto shall in no case be less than 10c. per person, and that when patrons who have walked to said park and paid 10c. admission thereto, said amount shall accrue wholly to first parties, and that when patrons who shall have ridden to said park and paid 15c. thereto including transportation and admission of said latter amount, the sum of 7c. per passenger shall accrue wholly to said first parties and the sum of 8c. per passenger to said second party, settlement to be made weekly, and as the essence of this agreement is mutual profit, the said first parties agree to use their best endeavor to induce travel to said park over the lines of railway of said party. Fourth. That as mutual results beneficial to all parties hereto are presumed to follow the installment of said park, it is hereby mutually agreed that all parties hereto shall work in harmony to that end in all things relating thereto. Fifth. That neither party hereto is to sell, assign or transfer any rights hereunder without the written consent of the other, but this contract may be altered or amended at any time by both parties mutually consenting in writing. Sixth. That said second party is to wire said park for light and power purposes at its expense and furnish current to said first parties for power and light at 6c. per 1,000 K. W. settlement to be made weekly. Seventh. That for and in consideration of the sum of one ($1.00) dollar and other considerations herein named, this contract and agreement is signed by all parties hereto this 2nd day of May, 1904. Eighth. That this agreement be and remain in full force and effect from this date until October 1st, 1906. Executed in duplicate.

“Henry L. Breinig.

“Charles O. Breinig.

“George J. Breinig.

“Vincennes Citizens' Street Ry. Co.,

“By B. G. Hudnut, Pt.”

This instrument does not contain an agreement in express terms by the railway company to make advances, but such arrangement is impliable, and the agreement relative thereto might rest in parol.

Partnership is defined as “the relation subsisting between two or more persons who have contracted together to share as common owners the profits of the business carried on by all or any of them on behalf of all of them.” Shumaker, Partnership (2d Ed.) § 1; Meehan v. Valentine, 145 U. S. 611, 12 Sup. Ct. 972, 36 L. Ed. 835. “It is now well established that the fundamental rule to be observed in determining the existence of a partnership is that regard must be paid to the true contract and intention of the parties as appearing from all the facts of the case.” Shumaker, supra, § 13; Bradley v. Ely, 24 Ind. App. 2, 56 N. E. 44, 79 Am. St. Rep. 251. The intention which controls in determining the existence of the relation, is the legal intention deducible from the acts of the parties. If they intend to do the things which in law constitute a partnership, then they are partners, although their purpose was to avoid the creation of such relation, and they have carried it to the extent of expressly stipulating that they are not to be partners. Bradley v. Ely, supra; Shrum v. Simpson, 155 Ind. 160, 57 N. E. 708, 49 L. R. A. 792; Shumaker, supra, § 13. “The ultimate and conclusive test of a partnership is the co-ownership of the profits of the business. If there is a community of profits, a partnership follows. Community of profits means a proprietorship in them as distinguished from a personal claim upon the other associate. In other words, a property right in them from the start in one associate as in the other.” Bradley v. Ely, supra; Macy v. Combs, 15 Ind. 469, 77 Am. Dec. 103;Emmons v. Newman, 38 Ind. 372. The doctrine of estoppel operates against one who knowingly suffers himself to be represented as a partner in a particular firm, and renders him liable to one who is thereby induced to give credit to the firm. Booe v. Caldwell, 12 Ind. 12;Dailey v. Coons, 64 Ind. 545;Thompson v. Bank, 111 U. S. 529, 4 Sup. Ct. 689, 28 L. Ed. 507; Shumaker on Partnerships, § 35. There can be no basis for an estoppel where the party seeking to raise it knew the truth from the beginning, therefore, where a creditor knows of the holding out, but also knows that the parties are not partners, no estoppel in his favor arises. Booe v. Caldwell, supra; Shumaker, supra, p. 73, § 35. Knowledge by the creditor that the real partners have agreed to indemnify the party leading his name, does not prevent an estoppel against him, but so holding himself out he becomes primarily liable to a creditor and must seek his indemnity from those who promised it. Shumaker, supra, p. 67, § 35; Lindley, Partnership, p. 41. A corporation has no power to enter into a contract of partnership unless such power is expressly conferred. Pearce v. Madison, etc., R. Co., 62 U. S. 441, 16 L. Ed. 184;Pittsburg, etc., R. Co. v. Keokuk, etc., Co., 131 U. S. 371, 9 Sup. Ct. 770, 33 L. Ed. 157; Clark & Marshall, Corporations, § 185; Geurinck v. Alcott (Ohio) 63 N. E. 714. Exceptionsto the rule arise when the corporation is expressly authorized by its charter to make such contracts. Butler v. American, etc., Co., 46 Conn. 136; Clark & Marshall, Corporations, § 185b, p. 403. Nor does it apply to prevent the law from imposing upon the corporation the liability of a partner as to third persons by reason of a contract made by it in furtherance of the objects of its creation, for the law may impose such a liability not only when there is no intention to become a partnership, but also when no contract of partnership could have been made. Cleveland, etc., Co. v. Courier Co., 67 Mich. 152, 34 N. W. 556;Catskill Bank v. Gray, 14 Barb. (N. Y.) 471;...