Denithorne v. Hook , 112 Pa. 240 ( 1886 )

The only question contested in the court below was whether a partnership existed between the defendants Richard Denithorne and James Denithorne. The plaintiffs sued them as partners trading as Denithorne Brother, and to sustain the issue on their part offered in evidence, under objection, an agreement in writing between the E. G. Brooke Iron Company of the one part and Denithorne Brothers of the other part, for the construction of a certain storage reservoir. This agreement was signed by Richard Denithorne and James Denithorne. This paper was offered as evidence of the partnership, "to be followed by proof that Denithorne Brothers constructed said reservoir under said contract, and that the plaintiffs furnished goods to the said Denithorne Brothers for the construction of said reservoir by Denithorne Brothers."

This offer was objected to by the said defendants for the following reasons: 1. As irrelevant, showing a contract entered into by Denithorne Brothers, which firm is not a party to this action; and 2. Being an offer to prove a constructive partnership between Richard and James Denithorne, it must be accompanied or followed by proof of knowledge of the instrument, and the facts sought to be proved by it, on the part of the plaintiffs, and that they acted upon and were misled by that knowledge.

The agreement was admitted by the learned court as the declarations of the parties that a partnership existed between them, to which ruling the defendants excepted. This raises the only question in this record which requires discussion.

We are of opinion that this evidence was improperly received. The paper itself was an agreement between the defendants and strangers to this suit. It was a contract to perform a particular piece of work, and was not in itself a contract of partnership inter se. If so at all it was only so inferentially. It was at most the declarations of the defendants from which an inference of a partnership might perhaps be drawn, and was no more than holding themselves out to the world as partners in the absence of an actual partnership relation. In such cases it is settled by abundant authority that before a party can charge the alleged firm, or a person who has been held out to the world as a partner, that the party seeking to charge them has had knowledge of such fact and given credit upon the faith of it. In Burgan v. Cahoon, 1 Pennypacker, 320, it was said by the court below, and affirmed by this court, that "the evidence from which you would have to find that he has so held himself out and acted as a partner must be his acts in connection with the circumstances that were known to the plaintiffs when they gave him credit, and not only must his acts have been such as to justify a reasonable belief that he was a partner, but to hold him on that account you must further find, as a matter of fact, that they gave him credit as such, because, if they did not, his holding himself out as a partner would do them no harm." This proposition of law is accurately stated and is sustained by abundant authority. The rule is thus given in Collyer on Partnerships, vol. 1, § 19: "No person can be fixed with liability on the ground that he has been held out as a partner, unless two things occur, viz., First, the alleged act of holding out must have been done either by him, or by his consent; and secondly, it must have been known to the person seeking to avail himself of it." In Dickinsonv. Valpy, 10 Barb. C., 140, it was said by PARKE, J.: "If it could have been proved that the defendant had held himself out to be a partner, not to the world, for that is a loose expression, but to the plaintiff himself, or under such circumstances of publicity as to satisfy a jury that the plaintiff knew of it and believed him to be a partner, he would be liable to the plaintiff in all transactions in which he engaged and gave credit to the defendant, upon the faith of his being such a partner." See also Wood v. Pennell, 51 Me., 52; Vice v. Anson, 7 Barb. C., 409; Wright v. Powell, 8 Ala., 560. It is useless to multiply authorities. We regard this as settled law.

Had the offer of this agreement been accompanied by a further offer to show that the plaintiffs knew of its existence at the time they sold the goods in question, and acted upon the faith of it, we are of opinion that it would have been competent. But there was neither allegation nor proof of such a state of facts, and outside of this paper there was no evidence of the partnership to submit to the jury, while the defendants' evidence was strong that no such partnership existed in fact, and that the paper was never intended to create one. In this view of the case the remaining assignments of error are not deemed material.

Judgment reversed.