Joseph Kimbro, Plaintiff In Error v. Cuthbert Bullitt, Thomas Miller, and Lloyd Addison, Partners In Trade Under the Name and Style of Bullitt, Miller

• Citation: 16 L.Ed. 313,22 How. 256,63 U.S. 256
• Parties: JOSEPH KIMBRO, PLAINTIFF IN ERROR, v. CUTHBERT BULLITT, THOMAS D. MILLER, AND LLOYD D. ADDISON, PARTNERS IN TRADE UNDER THE NAME AND STYLE OF BULLITT, MILLER, & Co
• Decision Date: 01 December 1859
• Court: United States Supreme Court

63 U.S. 256

22 How. 256

16 L.Ed. 313

JOSEPH KIMBRO, PLAINTIFF IN ERROR, v. CUTHBERT BULLITT, THOMAS D. MILLER, AND LLOYD D.

ADDISON, PARTNERS IN TRADE UNDER THE NAME AND STYLE OF

BULLITT, MILLER, & Co.

December Term, 1859

THIS case was brought up by writ of error from the Circuit Court of the United States for the middle district of Tennessee.

The suit was brought upon three bills of exchange, which were accepted and paid by Bullitt, Miller, & Co., the drawees, for the accommodation of the drawers, Dement, Kimbro, & Sons, of which firm Joseph Kimbro was a partner. This action was brought by Bullitt, Miller, & Co., against Joseph Kimbro alone. The place of business of the firm of Dement, Kimbro, & Sons, was in Mississippi. Kimbro resided in Tennessee, and therefore was sued there.

The defence set up in the court below rested on two grounds, viz:

1. That Dement, the principal acting partner of the firm of Dement, Kimbro, & Sons, had no power to draw the bills sued on.

2. That the bills were drawn for the purpose of raising money to be laid out in the purchase of slaves to be carried into Mississippi for sale; which slaves were so carried in and sold, contrary to laws of Mississippi.

On the trial, the judge charged the jury in the following words:

'The court charge the jury that Dement, the principal acting partner of the firm of Dement, Kimbro, & Sons, had power to draw the bills given in evidence, according to the proof adduced to them, if true; that if the bills were accepted and paid at maturity by the plaintiffs for said firm, the defendant, Joseph Kimbro, was responsible, and it mattered nothing to the plaintiffs how the proceeds of the bills were disposed of, as this was a fact the plaintiffs could not know, and were not bound to prove.'

This ruling was excepted to, upon which the case was brought up to this court.

It was argued by Mr. Benjamin for the defendants in error, no counsel appearing for the plaintiff in error.

Mr. Benjamin said:- 1. The charge that Dement had power to draw the bills was correctly given, and is sustained by the proof.

The witness, Ready, deposed that he knew the firm of Dement, Kimbro, & Sons, in or near Lexington, Holmes county, Mississippi; that Joseph Kimbro was a member of the firm; that the firm commenced business on the 1st January, 1853, and continued till the death of Dement, one of the partners, on the 3d October, 1853; that the business of the firm was farming, steam saw-mill, and general trading, and that Dement was the principal business partner.

The witness, West, confirmed the depositions of Ready, and added, that 'Dement was the principal financier of the firm of Dement, Kimbro, & Sons, did the principal trading, borrowed money, and paid it back, &c., in the name of the firm.'

The partnership articles, as introduced by defendant, provide for a copartnership between Dement, the defendant, Joseph Kimbro, and the two sons of the latter, 'for the purpose of farming, and also of running a steam saw-mill—the parties of each part to furnish one-third of the capital stock of the partnership, or the said party of the second part to furnish two-thirds of said capital stock, on behalf of himself and his two sons, parties of the third part; and the said parties are to furnish negroes or hands, stock, provisions for man and beast, and all necessary utensils, in the same proportion, and are to pay and defray the expenses of said copartnership, and share its profits in the same proportion; * * * and the said parties of the third part are to superintend—one of them the said farm, and the other the said mill; and the said party of the first part is to render them such needful assistance as he can, without any extra charge therefor; and at the expiration of said two years, after paying the debts of said copartnership, the profits are to be equally divided between said parties of the first, second, and third parts, & c.'

Botters, a witness for defendant, testified that 'said firm, so far as I know, has never been held out by any of the Kimbros as having any more extensive powers than those conferred by said articles—(Joseph Kimbro, senior, the defendant, left here for Tennessee either a day or two before or a day or two after said articles were signed, and did not return until next fall;) nor did ever said Dement do so with the knowledge of defendant, so far as I know.'

'Planting and mill partnerships in this country are not numerous, and it is no easy matter to say what powers are by usage exercised by the several partners, without the express consent of their copartners in such partnerships; but among the few partnerships of the kind that have come to my knowledge, where money had been needed, and the several partners cannot be consulted, the managing one raises the money on his own credit, and charges the same to the partnership.'

On the foregoing testimony, it is plain that even inter se there was such a trading partnership as authorized the drawing of bills by one partner in the name of the firm; although the farming business might not authorize the exercise of such a power, running a saw-mill for two years necessarily required the purchase of the requisite stock of wood, and its re-sale as boards, planks, scantling, &c. The business of running a steam saw-mill is neither more nor less than a manufacturing business, requiring the purchase of raw material and sale of the manufactured article; all such partnerships are trading partnerships, in which the power to draw bills of exchange in the partnership name is vested in each partner.

In mining partnerships, and farming partnerships, it has been held that such powers are not vested in the partners; and the reason is, that their business is simply to sell the produce of the real estate, to make profits out of the soil by gathering its fruits; but wherever the business imports in its nature the necessity of buying and selling, the partnership is in its essence a trading partnership.

The general doctrine is admirably summed up in the opinion of Chief Justice Marshall, in the case of a manufacturing partnership.

Winship v. Bank of the U. S., 5 Peters, 529.

So it was held that one partner could bind the firm by a promissory note, where the partnership was for carrying on the business of farming and coopering.

McGregor v. Cleveland, 5 Wendell, 475.

And although there be no partnership in real estate, the parties being tenants in common, yet if they are common tenants of timber land, and do a lumber business, they are trading partners in the timber cut from the land.

Baker v. Wheeler, 8 Wendell, 505.

Coles V. Coles, 15 Johns. R., 160.

Partners in a steam saw-mill are bound by the note of the partnership given by some of the partners for partnership purposes.

Johnston v. Dutton, 27 Alabama, 245.

And even where the partnership is limited, a note by one of the partners, in the name of the firm, is prima facie for the firm's account.

Holmes v. Porter, 39 Maine, (4 Heath,) 157.

See, also, Story on Partnership, sec. 102.

And it makes no difference as to the power of a partner to bind the firm, that the trade was a particular and limited trade.

Chitty on Bills, 10th Am. ed., p. 44.

2. But, independently of the question as to the powers of the partners in controversies inter se, as regards the present ease, where the holders of the bills are third persons, ignorant of the special partnership agreement, the partnership is bound, because it was actually engaged in general trading, and Dement, who signed the bills, was the ostensible principal business partner. It was in the light of a general trading partnership that this firm exhibited itself to the public; it adopted by its articles a partnership style or firm of 'Dement, Kimbro, & Sons,' without any indication of a restriction in its business; the fact of its carrying on a general trading business was proven by Ready and West, and the charge was, that under this proof, if true, Dement's signature of the bills in the firm name bound the firm. It was quite immaterial whether or not there existed a secret contract limiting his powers.

Story on Partnership, secs. 111, 126, 130.

Collyer on Partnership, sec. 386.

Gow on Partnership, pp. 52 to 55.

3 Kent's Commentaries, pp. 40 to 45.

Winship v. Bank U. S., 5 Peters, 529.

Cargill v. Cosby, 15 Miss., 425.

Nicholls v. Cheairs, 4 Sneed, (Tenn.,) 229.

Frost v. Hanford, 1 E. D. Smith, 540.

And in the above case of Cargill v. Cosby, the test of the power to draw bills and notes in the name of the firm is stated to be, whether the business was to 'buy and sell.' It is plain that the business of a steam saw-mill cannot be conducted without buying and selling.

3. Independently of the legal presumption that the bills drawn in the partnership name were for partnership account, Ready's testimony shows that Dement, the deceased partner, was at his house at about the date of the bills, with certain negroes; 'spoke of them as firm negroes, and employed Nesbit to take them in charge and sell them, and keep McAfee from having anything to do with them, or the funds arising from the sale of them; his object being to save Joseph Kimbro from loss, and to meet the liability to Bullitt, Miller, & Co., and to Bolton, Dickens, & Co., incurred in the purchase of these negroes by the firm of Dement, Kimbro, & Co., in connection with Morgan McAfee and William M. Joyne.'

The partnership articles show that negroes were necessary for their business, and that the parties promised to furnish them for carrying it on.

4. The only remaining point to be considered is the legality of the second charge of the judge, 'that if the bills were accepted and paid at maturity by the plaintiffs for said firm, the defendant, Joseph Kimbro, was responsible, and it mattered nothing to the plaintiffs how the proceeds of the bills were disposed of, as this was a fact the plaintiffs could not know, and were not bound to prove.'

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