Kneisley Lumber Co. v. Edward B. Stoddard Co.

• Decision Date: 31 March 1908
• Citation: 131 Mo. App. 15,109 S.W. 840
• Parties: KNEISLEY LUMBER CO. v. EDWARD B. STODDARD CO. et al.
• Court: Missouri Court of Appeals

109 S.W. 840

131 Mo. App. 15

KNEISLEY LUMBER CO. v. EDWARD B. STODDARD CO. et al.

St. Louis Court of Appeals. Missouri.

March 31, 1908.

1. APPEAL — REVIEW — FINDINGS — CONCLUSIVENESS.

Where the abstract on appeal does not show whether or not the findings of fact by the trial court were made at the request of either party to the suit, and there is substantial evidence to support them, the court on appeal will defer to

such findings, though it may believe that the weight of the evidence is against the findings, as the trial court, having the opportunity to hear the witnesses and observe their demeanor, was in a better position to pass upon their credibility than the appellate court is.

2. PRINCIPAL AND SURETY — DISCHARGE OF SURETY — GROUNDS — DEPARTURE FROM CONTRACT—ESTOPPEL TO CLAIM DISCHARGE.

Sureties on a building contractor's bond who assented to departures from the contract and its stipulations are estopped to claim discharge from their obligations by reason of the departures.

3. SAME — BUILDING CONTRACTOR'S BONDS — CONSTRUCTION—RELATION TO CONTRACT.

A building contractor's bond, though not signed on the same day with the contract, was written on the same sheet of paper as the contract, and stamped, as was the contract, with a United States revenue stamp; the cancellation of each of the stamps being done by the same mark, dated the same day, in the same ink, and by the same hand. The person contracting with the building contractor absolutely refused to accept the contract without the bond, and so informed one of the members of the firm which went surety for the contractor, who asked if his firm would be suitable as surety, and after being told that it would signed his firm's name to the bond. The contractor at the time of signing the contract agreed to give a bond for the faithful discharge of his duties, and the bond and contract were delivered and took effect simultaneously. Held that, though the contract and bond were not signed simultaneously, the contract did not become effective until the execution of the bond, which was a part thereof, and for which the consideration was sufficient, although the bond was given after the execution of the contract and the commencement of the work.

4. PARTNERSHIP — AUTHORITY OF PARTNER — BINDING FIRM.

The power of a partner to bind his copartners is limited to the objects and ordinary necessities of the firm.

5. SAME—FIRM BUSINESS—ACTS WITHIN.

The signing of a building contractor's bond for the purpose of inducing trade is not one of the objects of a partnership engaged in the business of furnishing lumber and building materials, so as to render the firm and its members liable for the acts of one of the partners in signing such bond.

6. SAME—ACTS OF PARTNERS—RATIFICATION—EFFECT.

Though the signing of a building contractor's bond as surety is not one of the objects of a partnership engaged in furnishing lumber for builders, and hence is not within the power of one of the partners so as to bind his copartners, the subsequent ratification by a copartner made the bond obligatory on both partners.

7. SAME—LIABILITY AS TO THIRD PERSONS—"DORMANT PARTNERS."

Where a partnership was composed of three persons, but two of them were the sole administrative agents thereof, using their judgment for the judgment and skill of the partnership without consultation with the third partner as to any matters connected with the partnership, the third partner who permitted the other two to hold themselves out and to act as the sole members of the firm was a "dormant partner," within the construction given to that term that it implies the quality of secrecy and inactivity, but that it is often used as synonymous with "unknown," and that a "dormant partner" combines in himself the character of both the secret and the silent partners.

8. SAME—LIABILITY OF.

A dormant partner like any other partner is liable on all contracts entered into on behalf of the partnership.

9. SAME.

Between themselves the active members of a partnership have no authority to bind a dormant partner by contract outside of the scope of the partnership, but as to third persons dealing with the ostensible partners the limitation of authority cannot apply, since a secret partner not being liable for the debts of a firm until discovered, he ought not to be allowed, by making himself known, to upset a contract made by an innocent third person with the active members of the firm, and especially since, if the law were not so, the equitable rule that, where one of two innocent persons must suffer by the act of a third party, he shall suffer who has been the occasion of the confidence and credit being reposed, would be reversed.

Appeal from Circuit Court, Greene County; Jas. T. Neville, Judge.

Action by the Kneisley Lumber Company against the Edward B. Stoddard Company and others. From a judgment for defendants, plaintiffs appeal. Affirmed.

Geo. Hubbert, for appellant.

BLAND, P. J.

In 1900 plaintiffs were copartners engaged in the retail lumber business in the city of Neosho, Mo., under the firm name of the Kneisley Lumber Company. Defendants Edward B. Stoddard and J. P. Hawyard were partners under the firm name of the Edward B. Stoddard Company. Defendants G. F. C. Corl and Charles H. Murray were partners in the ice business. Defendant Murray has departed this life since the appeal was perfected, and the suit has been revived in the name of his administratrix, who has entered her voluntary appearance. Corl and Murray had plans and specifications prepared by James Robinson, an architect, for a plant for the manufacture of artificial ice to be erected in the city of Neosho, and advertised for sealed bids for the erection of said plant. The bids were received and opened on April 7, 1900. The Stoddard Company being the lowest bidder at $4,410.50, the contract was awarded to that firm. The Kneisley Lumber Company, under contract with the Stoddard Company, furnished $1,468.98 worth of lumber, which went into the construction of the building. The Stoddard Company failed to pay for the lumber, and the Kneisley Lumber Company filed a mechanic's lien upon the ice plant and the land upon which it is situated. The petition asks for a personal judgment against Stoddard and Hawyard, and to foreclose and enforce plaintiffs' mechanic's lien against the ice plant. The venue of the cause was changed to the Greene circuit court. Stoddard was never served with process of summons, and made no appearance. At the January term, 1907, of the Greene circuit court, the issues were submitted to the judge of the court sitting as a jury who, after hearing the evidence, found for plaintiffs against Hawyard, and rendered judgment against him for $1,468.98 principal and $566 interest; found the issues in favor of Corl and Murray, and that plaintiffs were not entitled to enforce their lien against the ice plant. Plaintiffs appealed from the judgment denying them a foreclosure of the lien.

The building contract between Corl and Murray and the Stoddard Company was in writing. It contains the following provisions bearing upon and relevant to the questions in dispute: "And the second parties, for and in consideration of the first parties completely and faithfully executing the aforesaid work and furnishing all materials therefor, so as fully to carry out this contract and the design according to its true spirit, meaning, and intent, and by and at the times mentioned, and to the full and complete satisfaction of James B. Robinson, superintendent, do hereby agree to pay to said parties the sum of four thousand four hundred and ten and 50/100 ($4,410.50) dollars, lawful money of the United States on certificates of superintendent from time to time as work progresses, to wit, seventy-five per cent. of the estimated value of the same, subject to the additions and reductions as hereinafter provided. Estimates to be made on the first and fifteenth days of each month by the superintendent of value of labor and materials furnished by contractor and payments made on the basis of these estimates, and the remainder on the satisfactory completion and acceptance of the entire work after the expiration of five days. It is agreed by the parties that twenty-five per cent. of the contract price shall be held by the owner as security for the faithful completion of the work, and may be applied under the direction of the superintendent in the liquidation of any damages under this contract, also furnishing to the owners a release from any liens or right of lien by bond herewith annexed within ten days from above date, or, if requested, a sworn statement as required by law before commencing work on this contract. * * * It is also further agreed that the said parties of the second part may make all alterations by adding, omitting, or deviating from the aforesaid plans, drawings, or specifications or either of them which they may deem proper, and the said architect shall advise, without impairing the validity of this contract, and in all such cases the architect shall value or appraise such alterations and add or deduct from the amount herein agreed to be paid to the said first parties the excess or deficiency occasioned by such alteration." Corl and Murray exacted a bond of the Stoddard Company for the faithful performance of the contract. This bond was furnished and signed by the Kneisley Lumber Company as surety. One of the conditions of the bond is that the Stoddard Company "shall duly and promptly pay and discharge all indebtedness that may be incurred by the said Edward B. Stoddard Company in carrying out the said contract, and complete the same, free of all mechanics' liens."

The evidence for plaintiffs show that James Robinson, the architect, did not superintend the erection of the building, and at no time gave an estimate of the value of material furnished or work done, nor did he advise any changes or deviations from the original plans and...