Planters' & Miners' Bank v. Padgett , 69 Ga. 159 ( 1882 )

Jackson, Chief Justice.

This was a suit on three promissory notes brought by the Planters’ and Miners’ bank against Padgett, Howard and others as partners, using the firm name and style of The Cartersville Car Factory and Building Association.

To this the defendants pleaded they had formed no such partnership, but had been, before the notes were given, incorporated as a company by the superior court of Bar-tow county; that the plaintiffs dealt with the.corporation as such, and loaned the money to the corporation, and received the notes as a corporate obligation, and not. as a partnership contract.

The jury, under the charge of the court, found for the defendants; a motion for a new trial was made and refused ; and on its refusal on all the grounds contained therein, error is assigned here.

In the view we take of the law, it is unnecessary to consider any but the vital points which control the case. The judgment incorporating this manufacturing company was void, the superior court having no such power. 55 Ga., 639.

The court charged that if the plaintiff dealt with the defendants as a corporation, and received the notes from the corporation for the consideration thereof, the money loaned, then there could be no recovery against the defendants as partners, notwithstanding the illegality of the •creation of 'the corporation. The facts are undisputed .that they did so deal; that the contract was made with the corporation as such, the notes received from it as such ; and the controlling legal question is, can.there be a recovery upon these facts against these defendants as partners.

1. If the bank so dealt with the corporation, its co'rporáte existence cannot be denied by it after the execution of the contract. Morawetz on Private Cor. par. 142 ; 11 Cushing, 285; 27 Ohio St., 343, and other cases there cited. In this case, not only were the promissory notes signed by the president and treasurer of the company, but a mortgage was executed to secure them; judgment was had on the notes against the corporation, and the mortgaged property was sold and bought by the plaintiff for ten dollars under the incumbrance of the mortgage it owned. So that it dealt with the company and recognized it as a de facto corporation in many phases of the transaction, and it cannot now deny its existence as a legal entity. . ,

2. Having contracted with the company as a corporation, through. its officer or agent, both parties believing the corporation to exist de jure as well as de facto, and with no intention at the time of giving credit to or binding the members individually or as partners, an action cannot be maintained against-them as partners on that contract. It would be to make a new contract for the parties, never contemplated when the real contract which they made themselves was executed. The members never 'agreed to enter into the contract, either severally or jointly, and it is difficult to see how they can be bound by it. They never agreed to be bound as partners, nor did they hold themselves out to the world as such. “The contract was intended to bind the association in a corporate capacity only.” Morawetz on Priv. Corp., 141; 7 Cushing, 188; 11 ib., 83; 117 Mass., 476, and many other cases cited. See also 43 Ga., 187.

In the case in the 43 Ga., it was held’that a corporation and partners were distinct, “not the same person,” and though the corporation was of the same name with the partnership, and did business by the same agent, before the date of the charter, it was not liable for a debt due by the partnership. There must be another contract to bind it. So here there should be, on the other hand, another contract to' bind the partnership. The case is .not precisely in point, but recognizes the two as distinct persons, and in that view bears upon the point. .

In 52 Ga., 351, some intimations are the other .way; and it is said that a recovery might be had against the corporators as partners, but the expression is coupled with the words, “ if for a compensation, such as the waiver of a mechanic’s lien, they had promised jointly to pay the debt” — a new promise.

The authorities cited from Morawetz, however, are right on the point, and must conclude the question. '

We conclude, therefore, that under the pleadings, law and facts of the case disclosed in the record, the verdict and judgment could not have been, otherwise; and the judgment is affirmed.