Phillip Van Heusen, Inc. v. Korn
| Decision Date | 08 November 1969 |
| Docket Number | No. 45453,45453 |
| Citation | 460 P.2d 549,204 Kan. 172 |
| Parties | PHILLIP VAN HEUSEN, INC., Appellee, v. Thomas A. KORN (Appellant) and Thomas L. Korn. |
| Court | Kansas Supreme Court |
Syllabus by the Court
1. As a general rule, ratings by or reports of a commercial or a credit reporting agency such as Dun & Bradstreet are not admissible in evidence as against a third party who did not in any way participate in making or publishing the reports. However, where a third person supplies the information upon which the report is made, or in some way ratifies or participates in publishing the report, the report may be admissible against him, particularly where the compiler of the report appears as a witness, the preliminary statement on which it is based is in evidence, and the party sought to be bound has made representations with respect to the report.
2. Under the facts and circumstances disclosed by the record, the special report of a representative of a commercial credit reporting service is held to be a business entry, and an exception to the hearsay rule. (K.S.A. 60-460 (m).)
3. A person may estop himself from denying his liability as a partner, where such relationship does not exist in fact, by holding himself out as such, or where his course of conduct and representations leads another to believe he is a partner, and the party misled extends credit in reliance thereon.
4. Where the evidence is heard orally by the district court, its findings thereon have the force and effect of a jury's verdict and if supported by substantial evidence, they will not be disturbed on appellate review. Following McAdam v. Fireman's Fund Insurance Co., 203 Kan. 123, 452 P.2d 851.
5. The record in an action to recover on an open account for merchandise sold an delivered to a retail clothing business alleged to be operated by a father and son as partners, is examined, and it is held the district court did not err in any of the points urged on appellate review.
J. Willard Haynes, Kansas City, argued the cause and was on the brief for appellant.
Eldon L. Hagan, Kansas City, argued the cause and was on the brief for appellee.
This was an action on an open account brought by Phillip Van Heusen, Inc., appellee, against the defendant, Thomas L. Korn, and the appellant, Thomas A. Korn, as partners and individuals doing business as The Varsity Shop. Trial was by the court which rendered judgment in favor of the plaintiff and against the defendant and the appellant in the sum of $2,020.42. Thomas A. Korn has appealed, and Thomas L. Korn did not appeal.
The appellant, Thomas A. Korn, is the father of Thomas L. Korn, and the parties will be referred to as father and son.
The father owned and operated the Kansas Power Lawn Mower Service in an office building he owned at 1405 North 38th Street, Kansas City, Kansas. The son was employed by the father at his lawn mower place of business. During the summer of 1964, the son mentioned to his father the possibility of putting another business in his building, and a small clothing shop was mentioned. The father and son discussed the matter for six or eight weeks, when it was agreed that the father would help the son start the clothing business and use his credit for starting it. It was also agreed that when the business became self-supporting, the son would pay the father $150 a month rent, but no money would be taken out of the clothing business for salary until the business became self-supporting.
As a result of the agreement, the son composed a letter on the Kansas Power Lawn Mower Service letterhead, which was signed by both the father and son. Identical letters were mailed to twenty some clothing suppliers, and each stated the father and son were planning to start a clothing business; that the father was already in business for himself in his office building which had vacant floor space, and they wanted to use some of the space to start a clothing store to be opened on October 25, 1964. Inquiry was made whether it would be possible to stock the company's merchandise and the manner of payment; whether the parties could order the merchandise they wanted or be required to stock unwanted merchandise, and if fixtures would be supplied; whether the company had any type of co-operative advertising program, and when delivery of merchandise could be expected. A floor plan of the space to be used was enclosed to aid the company in formulating answers to the inquiries, and an immediate reply was requested.
The father signed a note at a bank with his son for $500 and the proceeds were deposited in the Varsity Shop checking account. Signature cards were signed by both the father and son and each wrote checks on the account.
The Varsity Shop was opened on December 15, 1964, and the son placed an order with the Van Heusen Shirt Company, which order was delivered shortly after December 15. It is conceded the merchandise was ordered from Van Heusen by the son and that the amount of the claim was $2,020.42.
On October 7, 1964, August M. DeMarea, the representative of Dun & Bradstreet in Kansas City, placed a telephone call to the Kansas Power Lawn Mower Service office and asked for Thomas Korn. The party who answered the telephone represented himself to be Thomas Korn, and DeMarea informed Korn he had received an inquiry from Dun & Bradstreet's New York Credit Clearing House concerning a Varsity Shop business which was being opened in Kansas City, Kansas. Prior to the telephone call, DeMarea had been furnished only the name of the 'Varsity Shop,' the address of the lawn mower service, and the name of Thomas Korn. When DeMarea was advised Korn was starting the Varsity Shop, he asked questions as to the amount of inventory and fixtures he (Korn) was going to put in; the source of his capital, and who would manage the shop. His only contact with Thomas Korn was the telephone call made on October 7. DeMarea made notes of the telephone interview, which formed the basis of the following report forwarded to the New York Office:
'Dun & Bradstreet Report
------------------------
'Name and Address Started Rating
'Special Notice. SN 65 Oct 7 1964 A
'Kansas Power Mower Sales and Service
'k Varsity Shop
'Lawn Mower Sales & Service 1958 Ck1 1/2
---------------------------
& Retail Men's Clothing
-----------------------
'1405 N. 38th Street
'NEW LINE
'10-7 (51 121)'
'(Exhibit No. 14.)
DeMarea testified he wrote the special report immediately after talking with Korn, and that there would be no reason for him to report the conversation inaccurately; further, that the purpose of the report was to supply information to a subscriber of Dun & Bradstreet in New York with respect to the inventory to be stocked in the Varsity Shop; who owned the business, and who would pay the accounts.
Vincent V. Rathman, general credit manager of Van Heusen, testified his company received the special report from Dun & Bradstreet, and it extended credit based on that report and the financial responsibility of Thomas A. Korn of the Kansas Power Mower Sales & Service. The report was identified as Exhibit No. 14, and admitted into evidence over the appellant's objection that it was hearsay since it was not a record of the appellee, but was a record of another organization.
Thomas A. Korn testified on direct examination he received only one telephone call from a man representing himself to be from Dun & Bradstreet who made inquiry about the Varsity Shop. Korn could not recall the man's name. The telephone conversation was in the late summer of 1964, and it could have been in October. Korn testified he informed the Dun & Bradstreet representative the Varsity Shop had no connection with his lawn mower shop and that he had nothing to do with it; that it was his son's business. He further testified that he did not inform the representative that financing of the Varsity Shop would be from his own funds and that no borrowing would be done. On cross-examination he testified that in the summer of 1964 he agreed with his son to go into a partnership and open a clothing store, but that he never told anyone about it-particularly creditors because there were none-and that he never called or wrote Dun & Bradstreet for anything in his life.
The appellant first contends the district court erred in admitting into evidence Exhibit No. 14 and the testimony of...
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...appears to have generally and consistently required reliance as an element of partnership by estoppel. In Phillip Van Heusen, Inc. v. Korn, 204 Kan. 172, 178, 460 P.2d 549 (1969) the court stressed the long line of cases under which the court had "consistently applied the rule that one may ......
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