Wood v. Pennell , 51 Me. 52 ( 1863 )

The opinion of the Court was drawn up by

Davis, J.

This case cornos before us on exceptions, and a motion for a new trial, on the ground that the verdict is against the evidence.

The suit was upon certain promissory notes, payable to the plaintiff, and signed "Harmon Pennell & Co.” They were given by Harmon Pennell, who died in May, 1860; and the plaintiff claims that the defendants were his partners ; or, that they had so held themselves out as partners, in the community where they were engaged in business with him, as to bo estopped from denying it.

The defendants were engaged in shipbuilding with Harmon Pennell, who took the principal charge of the business, making purchases, and giving notes, in the name of Harmon Pennell & Co. The Court instructed the jury that "the acts and declarations of Harmon Pennell, which would tend to prove a partnership between himself and these defendants, would bind himself only, unless they were brought to the knowledge of the defendants, and they were aware that he.was obtaining credit on the strength of such co-partnership, and took no steps to deny its existence. This would amount to holding themselves out, or allowing themselves to be held out, as co-partners, and might bind them as such. They might he as much bound as if they suffered tbeir names to be used to deceive the community.” r

These instructions must be interpreted in connection with the evidence. If a person should he aware that another was obtaining credit by representing him to be a partner, he would not necessarily be under obligation to take any steps to deny it.' And, if be should neither do or say anything to give countenance to such representations, or to lead any one to believe them to bo true, he would not be- liable. If inquired of, or if the representations should be made in his presence, it would be his duty to deny their truth; otherwise not. But so far as any acts and representations of Harmon Pennell are proved in this case, they were so far within the personal knowledge of the defendants, and so connected, with the business in which they were engaged, that, if persons were dealing with them under the belief that they were partners, they must have known it, and should have undeceived them.

The counsel for the defendants does not complain of the instructions in this respect. But he contends that another important element was omitted by the Court, for the reason that, if the defendants did hold themselves out as partners of Harmon Pennell, they did not thereby render themselves liable to the plaintiff, unless he knew the fact, and gave the credit in consequence of it.

It is a general principle applicable to all estoppels in pais, that they operate only between the parties affected by them. The acts or statements of the party making them must be known to the other party; and the latter must thereby be induced to change his position. Copeland v. Copeland, 28 Maine, 525; Morton v. Hodgdon, 32 Maine, 127. Eor an estoppel can be asserted or pleaded only by one who has been affected by the act. Miles v. Miles, 8 Watts & Serg., 135; Hicks v. Cram, 17 Vt., 449 ; Rangely v. Spring, 21 Maine, 130. "In all cases where one party has been induced to take a particular course on the faith of statements made, or expectations held out, either expressly or by implication, by another, the latter will be debarred from pursuing any subsequent mode of action at variance with his former language and conduct, to the injury of the former.” 2 Hare & Wallace’s Leading Cases, 165.

Thus, though one has admitted his signature upon a promissory note to be genuine, he is not thereby estopped from denying it, unless the other party was induced to take the note, or was in some other way affected by the admission. Hall v. Huse, 10 Mass., 39, note.

This limitation of the effect of estoppels in pais applies to partnership cases, as well as to others. If one holds himself out to be a partner of another, that does not make him in fact a partner, nor render him liable as such, except to those who are thereby led to believe he is a partner, and who give credit to the supposed firm upon such belief. The cases cited by the plaintiff clearly recognize this distinction.

In Goode v. Harrison, 5 B. & A., 147, it is said, — "if a person holds himself out as being a partner, till he gives notice that he has ceased to be so, those who deal vdth the firm upon the faith of the supposed partnership may Consider him as. such, and he is bound by that representation.”

And, in Chase v. Deming, 42 N. H., 274, the rule is thus carefully stated: — "declarations, statements, and admissions, which have been aeted upon by others, are conclusive against the party making them, in all cases between him and the person whose conduct has been thus influenced, and who would suffer any injury by their denial.”

The instructions in the case at bar contain no such limitation. They assert a general liability against one who holds himself out as a partner.

It is true, that, in the trial of such cases, the evidence is not restricted to the transactions between the parties. The general conduct of the person sought to be held as a partner is proved. His dealings with others in the community are admitted in evidence in order to show, not only that he has held himself out as a partner, but that the fact has been one of such general notoriety in the community that the plaintiff may be presumed to have given the credit on the strength of it. A single admission to the plaintiff, with proof that he was thereby induced to give the credit, would have the same effect, and render any evidence of general conduct entirely unnecessary.

It is true, as the counsel for the plaintiff suggests, that the exceptions do not purport to contain all the instructions on the question of co-partnership; and, if those reported were not erroneous, we might presume that all other necessary instructions were given. But there can never' be a general liability as a partner by estoppel. Therefore the assertion of the doctrine, without limiting it to the persons who were induced by the acts or admissions to give credit to the supposed firm, was essentially erroneous. It was not correct as far as it went, only needing some other instructions, which may have been given, to state the whole truth. It was stating that to be true generally, which could not be true at all, except in some particular cases, which should have been specified. The whole question of the liability of the ‘ defendants turned upon the point of the credit having been given by the plaintiff in conseguence of their acts or admissions ; while the case as reported shows that the jury may not have regarded this point at all.

The inventory of Harmon Pennell’s estate was properly excluded. It was irrelevant to the question at issue; and the plaintiff was not estopped from questioning its relevancy by having himself introduced it in evidence at a former trial. Miller v. Baker, 1 Met., 27.

Exceptions sustained. —New trial granted.

Appleton, C. J., Kent, Walton and Dickerson, JJ., concurred.