Soule v. Atkinson , 18 Cal. 225 ( 1861 )

Baldwin, J. delivered the opinion of the Court

Field, C. J. and Cope, J. concurring.

It is conceded that the plea of the Statute of Limitations would be good in this case, unless this effect be denied in consequence of the fact that the defendants, partners, were not, known as such to' the plaintiffs, find that, by an article of the partnership agreement between them and the ostensible partner, their relation was to be kept secret. It is argued that this concealment of the partnership by the dormant partners, effected in this way, was a fraud which prevents the running of-the statute in their favor. Waiving for the present the consideration that this agreement and concealment are not shown to have been made or done with the intent of deceiving or defrauding the plaintiff, we think the argument of the respondent’s counsel conclusive to show that neither this agreement, nor this concealment, nor both together, amounts to such a fraud as maintains the pretension of the plaintiff. A dormant partner is not bound to give notice of his relations to the firm of which he is a member. No credit is given on the strength of his connection with the firm. The very name which describes his character implies that his relations to the firm are secret. Many justifiable reasons may exist for his keeping a knowledge of his connection with the firm from being made public, while no injury is necessarily done to any one from a failure to disclose it. The many cases cited by the respondent’s counsel show that the mere concealment by the dormant partner of this- fact is not fraudulent. If this be so, the conclusion is irresistible that it cannot be a fraud to agree to do what, when done, is innocent, or, at least, not legally culpable.

It is not necessary to examine the other questions, for this one is decisive".

Judgment affirmed.