Guthiel v. Gilmer

• Decision Date: 03 January 1901
• Citation: 63 P. 817,23 Utah 84
• Parties: KATE GUTHEIL, Administratrix of the Estate of Moroni R. Williams, Deceased, Appellant, v. J. T. GILMER, MONROE SALISBURY and O. J. SALISBURY, Partners Under the Firm Name and Style of GILMER, SALISBURY & COMPANY, Respondents
• Court: Utah Supreme Court

63 P. 817

23 Utah 84

KATE GUTHEIL, Administratrix of the Estate of Moroni R. Williams, Deceased, Appellant, v. J. T. GILMER, MONROE SALISBURY and O. J. SALISBURY, Partners Under the Firm Name and Style of GILMER, SALISBURY & COMPANY, Respondents

Supreme Court of Utah

January 3, 1901

Appeal from the Third District Court, Salt Lake County.-- Hon. A. N Cherry, Judge.

Action upon a contract in which it was sought to establish the individual liability of defendant S. as a partner in the firm of G. S. & Co. From a judgment for defendant, plaintiff appealed.

AFFIRMED.

Messrs Truman & Williams, J. E. Frick, Esq., and G. M. Sullivan Esq., for appellant.

"Where a member of a co-partnership gives a note in the co-partnership name, the presumption is that it is given for partnership purposes; and the burden of proof is upon the co-partnership to show the contrary." Littell v. Fitch, 11 Mich. 525; Carrier v. Cameron, 31 Mich.

After the fact of a partnership is proved by other evidence, the admission of one partner may be received to charge the partnership in relation to transactions during its existence, apparently within the scope of its partnership business. Phillips v. Purington, 15 Me. 425; Boyce v. Watson, 3 J. J. Marsh. (Ky.) 498.

The presumption is that Gilmer, who acted for the firm, was within the scope of its business. To presume otherwise is to presume that men go beyond the scope of authority and incur personal liability, wholly for the benefit of others.

The deed itself proves that some benefit was received by O. J. Salisbury.

"Although a purchase of property made by one partner upon the credit of the firm was originally outside of the firm business, yet if the other partner subsequently claims and obtains possession of it from the partner making the purchase, upon the ground that it is firm property, he ratifies the purchase and becomes liable for the price. He can not take the benefit and deny the obligation." 2 Herman on Estoppel, sec. 1098, citing Porter v. Curry, 50 Ill. 319.

The law is well settled that if one party by his own act intentionally makes the performance of his promise impossible, the other may at once bring an action against him for a breach. This principle of law is based upon good reason and absolute justice. Heard v. Bowers, 23 Pick. (Mass.) 445, 456; Newcomb v. Brackett, 16 Mass. 161; Butrick v. Holden, 8 Cush. (Mass.) 233; James v. Burchell, 82 N.Y. 108; Packer v. Steward, 34 Vt. 127; Rensens v. Mexican Nat. Construction Co., 22 F. 522; Burton v. Shotwell, 13 Bush. (Ky.) 271; Wolf v. Marsh, 54 Cal. 228.

W. C. Hall, Esq., and Messrs. Dickson, Ellis & Ellis for respondent.

One of the most important matters in partnership law is to ascertain what is included in the apparent scope of the business. Scope may be generally described as including what is reasonably necessary for the successful conduct of the business, measured by the nature of the business, the usages of those engaged in the same occupation in the same locality and subject to be enlarged also by the known habits and conduct of the particular firm itself. 1 Bates on Partnership, sec. 315.

The most important element to be relied upon, by persons dealing with the firm through one partner, to determine his authority, is the nature of the particular business in which it is engaged. Every occupation has certain essential characteristics, determining in the absence of notice to the contrary, what powers a partner may be assumed to possess; and the articles almost never enumerate a partner's power, and are rarely, if ever, seen; hence, the public can judge only by appearances, and the articles can not be used to control the apparent scope of the business as against one who had no notice of them. 1 Bates on Partnership, sec. 316.

The powers of a partner do not extend beyond what may fairly be regarded as coming within the ordinary necessities of the business. Hotchins v. Kent, 8 Mich. 526.

A partner can only bind the firm within the scope of the business, and a firm is not bound by a purchase of goods by one partner which is outside the real or apparent scope. When that limit is departed from, the act is analogous to the act of a member of a non-trading firm, and every person must take notice of this fact. Irwin v. Williar, 110 U.S. 499.

Almost all partnerships are, in one sense, particular partnerships. It is very rare that more than one branch of business is in view, or that all varieties of trade are embraced; and the intrinsic characteristics of well-known callings are recognized by the court as presumptive limitations. Beach on Partnership, sec. 317, note 3, and cases cited.

The scope of business is a matter of judicial cognizance, and many acts have become settled, as matter of law, to be within or without the implied powers of a partner. We cite the following cases: Ferguson v. Shepard, 1 Sneed (Tenn.) 254; Irwin v. Williar, 110 U.S. 499; Waller v. Keyes, 6 Vt. 257; Boardman v. Adama, 5 Iowa 224; Rimel v. Hayes, 83 Mo. 200; Freeman v. Bloomfield, 40 Mo. 391; Wells v. Turner, 16 Md. 133; Taylor v. Webster, 39 N. J. Law 102; Lawrence v. Dale, 3 Johnson Chanc. 23; Goodman v. White, 25 Miss. 163; 1 Bates on Partnership, sec. 317.

BARTCH, C. J. Miner and Baskin, JJ., concur.

OPINION

BARTCH, C. J.

This is an action upon contract, brought by the administratrix of the estate of Moroni R. 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 plaintiff's intestate, Moroni R. 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 on April 20, 1894, the defendants conveyed the mining claim in question for more than $ 5,500 but that they paid no part of that sum either to Williams in his lifetime, or to any one for the benefit of his estate since his death. The complaint also contains allegations of demand and refusal to pay before the bringing of suit, and alleges that the sum due, including interest, is $ 7,920. From the complaint and the record it further appears that, on March 29, 1881, the mining claim in dispute was conveyed by Williams to Monroe Salisbury; that the grantee, at the time of the execution of the contract, held the legal title; and that the contract was executed in the name of Gilmer, Salisbury & Company. In his answer, defendant O. J. Salisbury denies specifically all the allegations of the complaint referred to above, and denies that the defendants sold the mining claim, mentioned in the contract set forth in the complaint, for the consideration alleged or for any other consideration, or that they received any consideration or money therefor.

From the evidence introduced by the plaintiff, it appears that the firm name of Gilmer, Salisbury & Company was signed to the 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 the vicinity of the Peabody mine, but it is not shown that the firm, or ...