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Baker v. Brennan & Co.
"While the division of the product in specie does not necessarily negative the idea of the partnership, it raises a presumption against it to overcome which an actual intent to become partners should clearly appear."
In the discussion of this case which begins on page 8 and runs over several pages, where the facts are referred to as well as the law, it will be observed that the facts in the case are in some of their aspects like the case at bar. In this particular they are alike. While it was held in that case under the law that certain of the defendants were not partners, it was held that certain others, Tupper and Hartry, were in a different position, and were partners. And so, if we arrive at the conclusion that Baker and Winchell were not partners, it does not necessarily follow that Crebbs & White were not partners, and might not be chargeable as such with the proportion of the expense of operation that they jointly had agreed to sustain.
Another case is Brown v. Jaquette, 94 Pa. St., 113 [39 Am. Rep., 770]. This did not involve an oil and gas lease, but the lease of a farm for agriculture, and it is cited by way of illustration of the general principles of law involved.
"J agreed to farm the land of B for which he was to have one-half of the proceeds, each party furnishing one-half of the seed. poultry, stock, hogs, etc. J was to find all the farming implements and the working stock, and all the requisite labor, and pay the road tax, and onehalf of all the other taxes. He was also to submit a statement every three months, and make settlement:
Held, that this agreement was a lease of the farm on shares, and not a partnership.
"J's interest in a portion of the proceeds of the farm was sold at sheriff's sale, on a judgment against him, and B claimed that he was entitled to a partnership account, and that the sheriff's vendee only took title to the balance due J after said account-Held: that no such claim could be sustained."
In Dunham v. Loverock, 158 Pa. St., 197 [27 Atl. Rep., 990; 38 A. S. Rep., 838], is also a case in point. The syllabus reads:
"Tenants in common may become partners like other persons where they agree to assume the relation toward each other; but the law will not create the relation for them as the consequence of a course of conduct and dealing uaturally referable to the relation already existing between them, which makes such a course of conduct to their common advantage.
"An agreement between two tenants in common of an oil lease to drill an additional well on the leasehold at the common cost of the cotenants will not as between themselves create a partnership. In the absence of a distiuct agreement between them that their relations to the property and to each other should be changed, the presumption is that the old relation continued, and that they treated with each other as owners of separate interests in an undivided lease.'
That is pertinent here in view of the form that these defendants acquired their different interests from uiferent persons ai different times. I also call attention to Butler Sav Bank v. Osborne, 159 Pa St., 10 [28 Atl. Rep., 163 39 A. S. Rep. 665], the syllabus of which reads:
Tenants in common engaged in the improvement or development of the common property will be presumed, in the absence of proof of a contract of partnership, to hold the same relation to each other during
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such improvement or development, as before it began. As to third persons, they may subject themselves to liability as partners by a course of dealing or by their acts and declarations, but as to each other, their relation depends on their title, until by their agreement with each they change it. When tenants in common of an oil lease agree to carry on operations upon their land, each contributing towards the expenses in proportion to his respective interest in the land, they will be considered with respect both to themselves and third persons as the ordinary owners of land, working their respective shares of the wells, responsible only for their own acts, subject to no laws of partnership whatever, and possessing distinct rights in the property.
'Two tenants in common of an oil lease entered into an agreement with each other to drill wells on the leasehold property, each to pay onehalf of the costs of sinking the well and pumping the oil. The oil produced was to be run into pipe lines serving the district, and there credited one-half to each of the tenants in common: Held, that no partnership existed between the tenants in common."
The plaintiff below must maintain his claim upon one of two grounds either that Baker and Winchell were actual partners, or that they held themselves out as such. If he relies on the latter, he must maintain it on the principle of estoppel.
It is not sufficient for him to show that they held themselves out to some one else as partners, or that they dealt in such a way as would cause other people to regard them as partners, but he must show that the alleged partners dealt with him in such a way as to give him the right to suppose they were partners, or that they dealt with others in that way, and that it came to his knowledge before he dealt with them, that they had been so dealing, and from this he believed them to be part
In this case, on the evidence, we think it is perfectly clear that these defendants were not, in fact, partners.
Mr. Cribbs has died since the execution of the notes. Mr. White was not present at the trial, and both Mr. Baker and Mr. Winchell testify that there was no partnership agreement, and that they had no knowledge of any transaction in which the alleged members of the partnership seemed to be acting for a partnership, or signing a firm name.
Plaintiff's agent testified that his -ansaction was with Mr. White that the first notes, of which these sued on were renewals, were signed Baker, Cribbs & White."
If that is true, it does not appear that Mr Baker knew that Mr. White had given notes for those boilers, signed Baker, Cribbs & White," and by that of course Mr. Baker would not be estopped to deny that there was such a firm as " Baker, Cribbs & White."
The agent does not testify that he was informed that there was such a firm, or that there was a firm of which Baker and Winchell were members. He says he acquired his information from the best source available, The Oil Well Supply Company.
Exactly what the Oil Well Supply Company people told him, he does not state, and since it does not appear that they were authorized to make any statements binding on Baker or Winchell, whatever they might state would be the merest hearsay, and it does not appear that the plaintiff ever had any other transaction with the alleged firm. We find
o evidence, whatever, on which to fairly base a conclusion that they were partners, or that they held themselves out as such to the plaintiff
Baker v. Brennan & Co.
so as to entitle him to regard and hold them as partners in this transaction.
There is no evidence tending to prove Mr. Winchell a partner. As to Mr. Baker, there is some evidence, viz., his admission that there was a partnership. If that admission was based upon the facts in evidence in this case, then it was clearly wrong, and it might be said of him that there was no evidence tending to show that there was such a partnership.
The admission of partnership involves an admission of facts, and might involve the admission of other facts than those disclosed in this record, and therefore we are not justified in saying, with respect to him, that there was no evidence of partnership, but we do say as to him that the conclusion of the jury is against the weight of the evidence. I have called attention to a number of Pennsylvania authorities, but there is one Ohio authority in line with this case. In Meridian Nat. Bank v. McConica, 4 Circ. Dec., 106 (8 R., 442), it was held that the debtors were not chargeable as partners. Their relations and operations were those that were ordinarily carried on by joint owners of oil property, and very closely resemble those described here.
With respect to the situation in that case, the court says:
These are in substance the material facts * * *that are offered in evidence tending to prove the intention on the part of these parties to become partners. To a majority of the court this falls short of proving such relationship. But, on the contrary, it proved beyond question that they were tenants in common. It is urged that the fact that these parties, under a firm name, bought property to be used in connection with this license or contract, and gave notes in the same firm name to pay for it, charges them as partners. This is, no doubt, true as to the parties that dealt with them in that relation, but it is not because they are a partnership in fact, but because by the law of estoppel, they would be estopped from denying that relationship. But as to all other parties, the question is, was there a partnership in fact? It is further urged from the fact that the property thus bought in the firm name was used in enhancing the value of the license or contract.
"Equity should give the property to the parties who by their property increased its value. Under certain facts and circumstances, equity would so decree; but in the case at bar, those facts and circumstances that would entitle the parties to such relief, are neither pleaded, nor attempted to be proven.
We had occasion to consider this question in Ervin v. Masterman, 8 Circ. Dec., 516 (16 R., 62), and in that case found that there was a partnership.
We referred to certain of these Pennsylvania decisions, and did not presume to depart from the law there laid down, but, as stated in some of those decisions, it does not follow that a partnership may not exist to drill and operate oil wells, under certain relations and conditions.
In Ervin v. Masterman, supra, there was testimony of persons claiming to be members of the partnership that they had agreed to be partners, that they had adopted a firm name, The Erwin Oil Company, that they agreed that their shares of the expenses should be collected by assessments, and that they put certain persons in authority as officers of the company to manage its affairs. Each had his own share of the oil to be sure, but it was stated by a witness that this was a matter of convenience, and that it was to be in lieu of dividends. Partnership books were
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kept, all contracts were made in the company name, all payments were made by checks in the company name, and every member knew of this. We found from the evidence in that case, that the partnership was clearly proven, although the gross product was divided.
At page 73 we say :
"We hold that where all the other indicia of a partnership are unquestionably present, the mere fact that the gross product is to be divided, instead of the net profit, will not necessarily prevent a partnership, especially where by reason of the partnership obligations being met from time to time by means of assessments or otherwise, the result to the partnership is precisely the same as if the net profits were the subject of division, instead of the gross product."
And from the law as we laid it down in that case, we see no reason to depart. But the facts in the case at bar do not, in our opinion, establish a partnership of which Winchell and Baker, or either of them were members.
We hold, therefore, that the motion for a new trial should have been sustained as to Winchell on the ground that the verdict was not supported by the evidence, and is against the law; and as to Baker upon the ground that it was against the weight of the evidence. The judgment will be reversed and the case will be remanded to be retried, and since that has to be done, we will call attention to other alleged errors in the record.
It was shown that Mr. White in correspondence with Mr. Kidd, in respect to some claims of the latter against the defendants in this case, used, in some instances, paper with no heading, signed Wm. W. White for White, Cribbs & Baker." In other instances he used letter heads of "Cribbs & White," and signed "Baker, Cribbs & White."
There is no evidence that either Mr. Baker or Mr. Winchell knew that these letters were written and signed in this way.
The common pleas court allowed these letters to go to the jury, with the caution that they were not to be used as evidence against any other person than the writer.
Now the writer, Mr. White, was in default, making no defense, and there was no occasion for the caution.
We think that the letters of Mr. White had no proper place in the case, and must have been used by the jury improperly, if used at all, and we think they should have been excluded.
Counsel for plaintiff in error requested the court to charge the jury, as follows:
The court instructs the jury that this is an action upon two promissory notes signed "Cribbs & White, per W. W. White." Neither Cribbs nor White make any defense and you are not required to consider any liability of Cribbs & White; their liability is admitted. You are to consider if Baker and Winchell, or either of them, are liable upon these notes, signed "Cribbs & White, per W. W. White."
The plaintiff can only recover on these notes against Baker and Winchell by proving that Baker and Winchell were members of a partnership, doing business under the name of Cribbs & White. The fact that the boilers for which these two notes were given were used on the property in which Baker and Winchell were interested does not make Baker and Winchell partners, nor make them, or either of them, liable on these notes."
Baker v. Brennan & Co.
Whether that should have been given or not depends upon the construction to be given the pleading and the state of the evidence. There are no averments in the pleading that these parties held themselves out as partners in such a way as to estop them from denying their liability as partners upon this claim. It is possible, however, that evidence of that character would be admissible under the averment that they were partners; but we think that the substance of this ought to have been given, for the reason that there does not appear to be any evidence of any such holding out, with the knowledge and consent of Baker and Winchell, as would authorize their being held as partners, and for the same reason we think the court should have withheld from the jury this charge, to-wit: "But if there was no actual agreement to become partners, still if the alleged partners conducted themselves by their words, acts and general conduct so as to reasonably lead those dealing with them to believe they were partners and obtained credit in that way, then they cannot avoid such liability by claiming they were not partners in fact."
For the errors mentioned, the judgment of the court of common pleas is reversed and the cause is remanded for a new trial.
[Cuyahoga Circuit Court, June 10, 1901.]
Caldwell, Hale and Marvin, JJ.
W. J. HAYES ET AL. V. BOARD OF ED.
1 RULE AS TO INTEREST Under Bid for Bonds.
A bid for school bonds, interest and principal payable in New York, offering par, "the accrued interest to date" and premium, in response to a circular letter stating that "no bid for less than par and accrued interest to date of delivery would be entertained" intends and requires payment of interest on the bonds from the date of issue to the date of delivery of the same, notwithstanding they are not delivered for forty-three days after date of issue.
HEARD ON Error.
Henderson & Quail, for plaintiff in error.
T. H. Hogsett, Beacon, Excell, Gage & Carey, for defendant in
This case is here on a petition in error to reverse a judgment obtained by the board of education of the city of Cleveland against W. J. Hayes & Sons for certain interest on bonds.
On November 9, 1889, W. J. Hayes & Sons inquired of the board of education of the city of Cleveland for information touching a proposed sale of bonds by said board. They were furnished with a printed circular letter informing them that it would on December 2, 1889, receive sealed proposals for $190,000 of coupon bonds to be dated December 15, 1889, and the letter stated also that no bid for less than par and accrued interest to the date of delivery would be entertained. On December 2d, the plaintiffs in error bid, in writing, for the bonds, saying "We will give you, par, the accrued interest to date, and a premium of $929." And at the bottom of the memorandum was this, "$190,929, and interest to date."