Michael Bros. Co. v. Davidson & Coleman

• Court: Georgia Court of Appeals
• Writing for the Court: HILL, C.J.
• Citation: Michael Bros. Co. v. Davidson & Coleman, 3 Ga.App. 752, 60 S.E. 362 (Ga. App. 1908)
• Decision Date: 24 February 1908
• Docket Number: 759.
• Parties: MICHAEL BROS. CO. v. DAVIDSON & COLEMAN.

60 S.E. 362

3 Ga.App. 752

MICHAEL BROS. CO. v. DAVIDSON & COLEMAN.

No. 759.

Court of Appeals of Georgia

February 24, 1908

Syllabus by the Court.

"When parties hold themselves out to the public as doing a particular business in a firm name, the law will imply a partnership agreement as to third persons who contract with them in that firm name, whatever may be the real nature of their connection as between themselves."

[Ed Note.-For cases in point, see Cent. Dig. vol. 38 Partnership, §§ 49-53.]

Without a charter there is no corporation, and, without organization under the charter, there can be no corporate act, no corporate property, no corporate liability.

[Ed Note.-For cases in point, see Cent. Dig. vol. 12 Corporations, §§ 101-103.]

The uncontroverted evidence proves partnership existence and partnership liability, and the verdict to the contrary is without legal support, and a new trial should have been granted.

Error from City Court of Dublin; J. E. Burch, Judge.

Action by the Michael Bros. Company against Davidson & Coleman. Judgment for defendants, and plaintiffs bring error. Reversed.

Saffold & Larsen, for plaintiffs in error.

S. W. Sturgis and Jas. A. Thomas, for defendants in error.

HILL C.J.

Michael Bros. Company brought suit on an open account in the city court of Dublin against Davidson & Coleman, a firm composed of A. W. Davidson and H. C. Coleman, Jr. The defendants filed an answer, in which they set up as a defense that there was never any such firm as Davidson & Coleman composed of A. W. Davidson and H. C. Coleman, Jr., or either of them, and that neither of them ever did business under such firm name; but that A. W. Davidson and H. C. Coleman, Jr., were stockholders of a corporation under the laws of Georgia, and as such bought the goods from the plaintiffs, and the credit was extended by the plaintiffs to the corporation, and not to Davidson & Coleman as a partnership. The jury found a verdict for the defendants, and the plaintiffs made a motion for a new trial, based upon the general grounds and several special grounds, which was overruled, and the plaintiffs except.

The evidence for the plaintiffs is as follows: The plaintiffs through an agent, sold the bill of goods, the consideration of the account sued, to the defendants at their place of business in Dublin on June 26, 1905. The goods were, in accordance with the order of the purchasers, shipped to them immediately. The defendants at the date of the sale were doing business under the firm name of Davidson & Coleman. When the goods were sold, the agent of the plaintiffs was introduced to H. C. Coleman at their place of business by A. W. Davidson, who stated that the firm was Davidson & Coleman, and that H. C. Coleman was a member of the firm. The goods were then sold to the firm in the firm name of Davidson & Coleman, and credit was extended to the firm of Davidson & Coleman. Neither Davidson nor Coleman stated to the agent at the date of the sale that their business was incorporated, or that they expected to incorporate it; and the agent knew nothing of the existence or proposed creation of any corporation. Davidson testified that in May, 1905, Coleman and himself went into business together; that he had a stock of goods worth $4,000 or $5,000, and he sold a half interest therein to Coleman; that the goods represented by the account sued on were bought from the plaintiffs for the firm by a clerk of the firm; that they had paid the plaintiffs for some of the goods; and that the account for the balance sued for was correct and unpaid. To meet this evidence the defendants offered the following testimony: Both Davidson and Coleman testified that they never formed a partnership, but did business together with the understanding that they would incorporate the business at the earliest possible moment, and they did so incorporate by securing a charter on July 25, 1905, and organized under the corporate name of "Davidson Coleman Mercantile Company." They did not have the charter when the goods sued for were bought, and it was not granted until some time thereafter. Neither remembered whether their application for charter was pending when they bought the goods, or...