Gamble v. Grether

• Decision Date: 15 November 1904
• Parties: GAMBLE v. GRETHER et al.
• Court: Missouri Court of Appeals

83 S.W. 306

108 Mo. App. 340

GAMBLE v. GRETHER et al.

St. Louis Court of Appeals. Missouri.

November 15, 1904.

PARTNERSHIPS — LIABILITY AS MEMBERS — BROKERS — RIGHT TO COMMISSION.

1. One who advisedly permits the representation to be made to a person doing business with a firm that he is a member of the firm is liable as a member of the firm.

2. A landowner authorized G. to sell property, and he negotiated for a sale to T., who offered $1,000 less than the price, which the owner refused to accept, and the negotiations were broken off. Thereafter F., another broker, called T.'s attention to the property, and submitted to the owner the offer of T. therefor, which was the same T. submitted through G.; and the owner decided to accept it, but, before doing so, told G. he might sell it if he could, but T. refused to further deal through G. The sale through F. was then closed; the owner, however, not knowing that T. was the purchaser; the offer being made in the name of M., to whom the deed was made. Held, that G. was not entitled to commissions.

Appeal from St. Louis Circuit Court; D. D. Fisher, Judge.

Action by Sallie M. Gamble against John L. Grether and others. Judgment for plaintiff. Defendants appeal. Affirmed.

Geo. W. Lubke and Geo. W. Lubke, Jr., for appellants. James Hagermann and Lee W. Hagermann, for respondent.

GOODE, J.

The respondent sued for rents collected by the appellants as her agents, and they counterclaimed for a commission alleged to be due them for selling a piece of property in St. Louis belonging to the respondent. An issue was raised as to whether Ellsworth T. Grether was a member of the firm of John Grether & Co., employed by the respondent to act as her agents. After hearing the evidence, the court below directed the jury to find a verdict in respondent's favor on her account against all the appellants, and on the counterclaim as well.

It is asserted that error was committed in ordering a verdict against Ellsworth T. Grether, notwithstanding he was held out as a member of the partnership with his consent, because it did not appear that respondent either extended credit or otherwise dealt with the firm on the faith of his name. It was shown his name appeared on the firm's letter heads as a member of it, and that the respondent thence derived the belief that he was a member, and dealt with the firm so believing. In truth, she had no intimation to the contrary. Ellsworth Grether defended on the ground that he was an employé of the firm, instead of a member. But the respondent had no means of knowing this. The law is that when a man advisedly permits the representation that he is a member of a partnership, or so represents himself (and Ellsworth Grether did both), to a person who is doing business with the firm, he will be treated as a partner as to that person. Rimel v. Hayes, 83 Mo. 200. It is true, no doubt, that a person who was not deceived by the representation, because it was not made to him or he never heard of it, has no footing in law from which to push the pretending member of the firm into the position and liabilities of an actual member. Liability in such instances is said to depend on estoppel. Hahlo v. Mayer, 102 Mo. 93, 13 S. W. 804, 15 S. W. 750, 22 Am. St. Rep. 753. We understand the rule to mean that there must have been a representation concerning the membership of the firm to the person seeking to hold the pretended partner, before the contract sought to be enforced against the latter was made. Undeniably such a holding out to Mrs. Gamble of Ellsworth Grether as a member of appellant's firm occurred prior to the transactions between her and the firm. The essence of the rule is that the person complaining should have been misled, and Mrs. Gamble was. The estoppel arises from the misbelief created by the misrepresentation. The argument is that respondent is not shown to have relied on Ellsworth Grether's name in her dealings with the firm, or to have parted with anything of value on the strength of it. There was, indeed, no proof that she would have refrained from giving her business to the firm, had she known Ellsworth Grether was not a member of it. Neither was it shown that she would have given the firm the business with that knowledge. But it was proven that, believing him to be a partner, she made the firm her agents for a duty in which the financial responsibility of the members was an important guaranty against loss at their hands. She was not required to make proof that she would not have trusted the partnership but for a belief that Ellsworth Grether belonged to it. Such proof might be impossible, for it is easy to see that she cannot now be sure whether she would or not, if she had been confronted with the question when she was considering whom to select as her agent.

We take up next the ruling on the counterclaim. It is said the trial court erred in withdrawing the evidence on that demand from the jury. The facts are that Mrs. Gamble authorized the appellants to sell the property, for the sale of which they claim a commission, for different prices at different times, and at first, in the latter part of 1901, for $26,000. Appellants spoke to two men by the name of Tobin (John D. and John E.), and in December, 1901, and January, 1902, received several offers from those men, beginning with one of $20,000, and rising to one of...