Fuller v. Rowe , 59 Barb. 344 ( 1871 )

By the Court, Johnson, J.

Upon the facts found, the “ Central City Coal Company,” in whose service the plaintiff engaged as superintendent, was never incorporated, but was, at the time of the plaintiff’s employment, and continued through his term of service, to be, a mere association of individuals transacting business under that name. They were, in fact and in law, mere partners, and the case must be determined by the rules applicable to partnerships.

The defendant was what is termed an incoming partner, after the plaintiff had made his contract and commenced performing on his part. According to the other facts found by the referee in settling the case, not contained in the report, the defendant had no connection whatever with the company until after the plaintiff had been engaged in the performance of his contract for a period of two and a half months. The plaintiff* continued in the employment of the company, under the original agreement, for a period of eight months, when the company disbanded, and suspended operations, and the plaintiff* was thrown out of employment. The defendant is, beyond all doubt, liable to the plaintiff for the work and labor performed by him for the five and half months after he became a member of the company, and was elected and took upon himself the duties of its chief managing and executive officer.

The action is to recover the value of the work and labor. This is the only. action which could have been brought, for this purpose, as the original contract was never performed. The company dissolved and abandoned the work before the year for which the plaintiff was' hired' had expired. This gave the plaintiff the right to bring his action for his work and labor, the same as though no' special contract had ever been made.

Had the action been upon the contract, to recover damages for a breach by the defendants, it probably could not have been maintained against the defendant, within the decided cases, as he was not a party to it originally, and is not shown to have become so, otherwise than by becoming a member of the partnership after the contract was made, and performance had been commenced by the plaintiff, under it. But that ■ question is out of the way here. The only question here, upon the merits, is whether the defendant is liable to the plaintiff for his work and labor for the entire period of his services—eight months. Before the defendant came in, the value of the plaintiff’s services was a debt and charge against the previous partners, with which the defendant had nothing to do. He could not be made liable for that portion of the indebtedness, except by his own act or agreement, founded upon a sufficient consideration. Merely becoming a member of the firm, is not sufficient, and raises no legal presumption against him. His promise or agreement to pay previous debts of the firm cannot be inferred from that circumstance alone. The question, in. such a case, is whether the incoming partner has assumed the old indebtedness. This is a question of fact, or perhaps a mixed question of fact and of law. But it is not a question of law, merely. The true rule on this subject, and which is supported by nearly all the adjudged cases, is laid down by Parsons in his work on Partnership, 434, 435 and 436. (Ayrault v. Chamberlin, 26 Barb. 83, 88.)

The difficulty in the case now is, that the referee has not found that there was ever any agreement on the part of the defendant to pay this portion of the indebtedness, or any binding assumption of it in fact. On the contrary, he finds that the defendant “ never promised or assumed to pay him (the plaintiff,) except as such promise or as- ' sumption may legally result from his acts after he became president of the so-called company.” It appears affirmatively, therefore, from the case as settled, that the defendant was held liable upon the legal inference arising from his conduct and subsequent dealings with the plaintiff. If the referee had found the fact, from such conduct and dealings, and the other circumstances surrounding the transaction, of the promise or assumption, the legal inference would have been correct. But no such legal inference can be drawn from such facts and circumstances, until the conclusion of fact from them has been found. But it is certain that the conclusion of fact was not found. Such a fact may be found from other facts and circumstances attending the entire transaction, but the legal inference cannot be drawn from them, but must be drawn from the conclusion of fact, gathered and found from such collateral facts and circumstances. We might, perhaps, within the rule established by the Court of Appeals, have presumed that the referee had found this conclusion of fact in support of his decision on the legal questions, were it not that the case, as settled, shows expressly that no such conclusion had been found, and forbids such presumption.

It appears from the case, therefore, that the recovery, as against the defendant, is for two and'a half months’ services too much, which, at the rate allowed by the referee, would amount to $375.

It is claimed by the plaintiff’s counsel, that even if the plaintiff is not entitled, upon the facts found, to recover as against the defendant for this two and a half months’ services, still the payments which have been made should be applied upon the indebtedness for those services, that being the oldest debt. But the difficulty in respect to this is, that as the case stands, it was not the oldest debt, as to the defendant, or as to the company as it was constituted after the defendant came in. After that the .money paid was the money of the partnership as then constituted, and could not be applied to the payment of the debts of a different partnership, without an express agreement that it might he so applied; or unless the defendant had ffn fact made himself jointly liable with the others for the payment of the older debt. In that case the law would so apply it, no particular application having been made by either party. The same difficulty, therefore, confronts us here as upon the other point. The fact is not found, and the referee has shown us that he did not deem it necessary that it should be found.

[Fourth Department, General Term, at Syracuse, May 1, 1871.

The judgment must therefore be reversed, and a new • trial ordered, with costs to abide" the event; unless the plaintiff shall -stipulate to deduct the said sum of $375 from the amount of damages included in the judgment as of the day of the entry of judgment; in which case judgment is affirmed.

Mullin, P. J., and Johnson and Talcott, Justices.]