Samstag Hilder Brothers v. Ottenheimer , 90 Conn. 475 ( 1916 )

One of the principal questions presented by the reasons of appeal is whether Ottenheimer, by virtue of his authority to represent the firm of Ottenheimer Weil, could, in a transaction such as the record discloses in this case, make a contract binding upon the partnership in New Haven. It cannot be seriously claimed that this contract was within the scope of the partnership business of the defendant. It had nothing to do with the manufacture and sale of corsets in New Haven, in which the defendant company was engaged. It was not a company matter in regard to which each partner would, in his actions, represent himself and the defendant copartnership. This copartnership, as it existed and as its business was transacted in New Haven, could not, upon general principles, be made liable for goods which were sold and delivered to Ottenheimer and which were used by the Ottenheimer company for its business in New york City. In this New York company the partnership of Ottenheimer Weil had no interest.

"An exhaustive definition of partnership is not easy. So far as the facts in the case present the question of partnership it is sufficiently accurate to say that there is a partnership between two or more persons whenever such a relation exists between them that each is as to all the others, in respect to some business, both principal and agent. If such a relation exists they are partners; otherwise not. They are partners in that business in respect to which there is this relation; and as to any other business they are not partners. Partnership is but a name for this reciprocal relation." Morgan v.Farrel, 58 Conn. 413, 421, 20 A. 614. "Contracts made by one of several partners, in respect to matters not falling within the ordinary business, objects, and scope of the partnership, are not binding on the other partners, and create no liability to third persons, who have no knowledge that the partner making the contract is acting in violation of his duties and obligations to the firm of which he is a member." Kimbro v.Bullitt, 63 U.S. (22 How.) 256, 266, 16 L.Ed. 313,316; Coe v. Kutinsky, 82 Conn. 685, 691, 74 A. 1065.

It cannot be seriously claimed that the character of this transaction in New York City was such as to justify the plaintiff in assuming that the defendant could be made liable for these goods. The facts were such as to indicate the contrary. Under the circumstances surrounding this affair it would have been reasonable for the plaintiff to have made an inquiry as to the liability of the defendant to pay a debt of this kind. There is nothing to show that the plaintiff was warranted in selling to Ottenheimer on the credit of the defendant, on account of previous dealings between the parties. No business transaction had ever taken place between them. There was nothing in the general course of the defendant's business that would have warranted the plaintiff in treating Ottenheimer as the defendant's agent for buying goods on credit. It was not shown that Weil or any one having authority to act for the defendant assented to the purchase. Weil never heard of the matter until after the goods were bought.

The record does not show any fact which indicates a ratification of the purchase by the defendant. It is not claimed that the defendant company had the goods purchased or any part of them. Neither does it appear that the defendant, as a company, was in any way benefited by this transaction. "Ratification means the adoption by a person, as binding upon himself, of an act done in such relations that he may claim it as done for his benefit, although done under such circumstances as would not bind him except for his subsequent assent; as where an act was done by a stranger having at the time no authority to act as his agent, or by an agent not having adequate authority. The acceptance of the results of the act with an intent to ratify, and with full knowledge of all the material circumstances, is a ratification. Ratification makes the contract in all respects what it would have been if the requisite power had existed when it was entered into. It relates back to the execution of the contract, and renders it obligatory from the outset. The party ratifying becomes a party to the contract and is, on the one hand, entitled to all its benefits, and on the other is bound by its terms." Ansonia v. Cooper, 64 Conn. 536,544, 30 A. 760. See also Goodwin v. East Hartford, 70 Conn. 18, 42, 38 A. 876. The only facts bearing upon the question of ratification were the letters which were written by the defendant. This correspondence shows no intention to ratify the action of Ottenheimer in making this purchase. These letters simply manifest an intention upon the part of the defendant to induce Ottenheimer to pay the bill for the goods which he had contracted.

The plaintiff bases his right of recovery solely upon the declarations of Ottenheimer, as he was a partner in the New Haven Company. "Each member of a firm is the general agent of the firm in relation to all the business of the firm, and can bind the firm in what he says and does in such business. But when one partner has a transaction with a third person which is neither apparently nor really within the scope of the partnership business, the partnership is not bound by his declarations or acts in the transaction." UnionNat. Bank v. Underhill, 102 N.Y. 336, 340,7 N.E. 293; Kimbro v. Bullitt, 63 U.S. (22 How.) 256, 266,16 L.Ed. 313, 316; Morgan v. Farrel, 58 Conn. 413,421, 20 A. 614.

These principles are applicable to the facts disclosed in the present case.

There is error and a new trial is ordered.

In this opinion the other judges concurred.