Aramburn v. Guerricagoitia

193 P. 922, 98 Or. 258, 1920 Ore. LEXIS 115
CourtOregon Supreme Court
DecidedDecember 14, 1920
StatusPublished

This text of 193 P. 922 (Aramburn v. Guerricagoitia) is published on Counsel Stack Legal Research, covering Oregon Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Aramburn v. Guerricagoitia, 193 P. 922, 98 Or. 258, 1920 Ore. LEXIS 115 (Or. 1920).

Opinion

BEAN, J.

The first question to dispose of is that pertaining to the mortgage of November 21, 1913. It is claimed by appellant Loren that the court erred in decreeing that this mortgage created no lien upon the [264]*264property of the defendant Ignacio, and that it was error to decree that any part of the indebtedness of the partnership to plaintiff, amounting to $29,506.19, should be paid by the receiver out of the share claimed by Loren. It is the position of plaintiff upon the cross-appeal that the mortgage of November 21, 1913, created a lien upon all of the partnership property, and that the plaintiff is entitled to the payment of the indebtedness due the estate, with interest and attorneys’ fees in this suit.

1. It does not appear that any partnership name was agreed upon between the partners in which to conduct the business, except as the business was transacted in the name of Ignacio Guerricagoitia. Where no name has been fixed by agreement of partners, the partner charged with the duty, or clothed with the authority, to sign contracts for the firm may bind all the members by such signature as he may choose to employ: 30 Cyc. 421. It is unquestioned that one partner may execute a valid mortgage of partnership goods to secure a partnership debt by signing the firm name or the individual names of the members of the firm. One copartner, having authority to pass a valid title to personal property of the partnership by bill of sale, may, as incident thereto, execute a transfer of it in any form or mode by which such title could in any case be legally transferred. It is immaterial whether he sign the name of each copartner separately, or sign the firm name: Jones on Chattel Mortgages (5 ed.), §46. In 1 Lindley on Partnerships (2 Am. ed.), page 426, we read thus:

“Firm liable though not named — Written contracts. If, therefore, one partner only enters into a written contract, the question whether the contract is confined to him, or whether it extends to him and his copart[265]*265ners, cannot be determined simply by the terms of the contract. For supposing a contract to be entered into by one partner in his own name only, still if in fact he was acting as the agent of the firm, his copartners will be in the position of undisclosed principals; and they may therefore be liable to be sued on the contract, although no allusion is made to them in it.

In a note to this Section at page 428, we read:

“Thus where one partner enters into a simple contract, though in writing, in his individual name,, but in fact for his firm, although that fact is not known to the other contracting party, an action may be maintained on it in the name of the firm, by alleging that it was entered into by the firm by the name and style of the name of the one partner, each partner being the agent of the firm: Havana etc. R. R. Co. v. Walsh, 85 Ill. 58.”

We find it laid down in 1 Rowley, Modern Law of Partnership, Section 265, as follows:

“Use of firm name. — In opposition to the doctrine that the name formally adopted as that of the firm must be used in order that the partnership may be bound, the proposition that such symbolical name may be displaced by an effective substitute when the intention of the parties is to bind the firm and the partnership appropriates the consideration, has found favor with a number of courts. ‘Partners may bind themselves by other than such prescribed firm name, if they choose to adopt for convenience, or to prevent confusion, a different mode of executing their obligations or contracts from the one prescribed by their original agreement.’ And one partner may, if no firm name has been agreed on, bind the firm within the scope of his authority by any name he may select. ’ ’

A managing partner may bind the firm by borrowing money, executing notes, and renewing notes, at [266]*266least where he has been held ont as having snch authority : 1 Rowley, Modern Law of Partnership, § 417. If the name of an individual partner is used as a firm name, the firm is bound thereby: Palmer v. Stephens, 1 Denio (N. Y.), 471; Bank of Rochester v. Monteath, 1 Denio (N. Y.), 402 (43 Am. Dec. 681); Crable v. O’Connor, 21 Wyo. 460 (133 Pac. 376).

2. Undoubtedly the indebtedness secured by the chattel mortgage, Exhibit “B,” was that of the firm. Loren should have known it. There was no new consideration passed. It was but a renewal of the.old mortgage which Loren had signed himself, with the increase of the indebtedness added. Ignacio was apparently not only authorized to transact the business of the partnership, but for a long time had been transacting such business in his name. The chattel mortgage covered partnership property only. There is no intervening right of a third party affected. As between Frank Aramburn, mortgagee, and Ignacio and Loren, the members of the partnership,, the mortgage in question created a lien upon the partnership property described therein for the security of the partnership indebtedness, and should be foreclosed: Hembree v. Blackburn, 16 Or. 153 (19 Pac. 73); Salt Lake Brewing Co. v. Hawke & Andrews, 24 Utah, 199, 207 (66 Pac. 1058); Reynolds v. Cleveland, 4 Cow. (N. Y.) 282 (15 Am. Dec. 369); Schemerhorn v. Laine, 7 Johns. (N. Y.) 311; Smith v. Collins, 115 Mass. 388; Pahlman v. Taylor, 75 Ill. 629.

By a long course of dealing the partnership impliedly adopted the name of Ignacio Guerricagoitia as the partnership name, although there was no express agreement to that effect. The execution of the note and mortgage of November 21, 1913, was necessary to carry on the business of the partnership in the ordi[267]*267nary manner. The transaction was common in the business in which the firm was engaged, and was well within the scope of such business. The execution of the note and chattel mortgage by Ignacio in the interest of, and for the firm, was sufficient to bind both members of the firm. The firm received the benefit of the instruments so executed. They were the very means by which the life of the business was continued: 30 Cyc. 485, 487.

3, 4. The fact that the writings signed by Ignacio pertained to partnership matters was properly established by the testimony: 20 R. C. L., p. 898, § 109. In order for Ignacio to secure the payment of the partnership debts, it was not absolutely essential to have the concurrence of Loren: 20 R. C. L., p. 912, § 124. It is claimed by Loren that Ignacio, Frank Aramburn before his death, and plaintiff after he assumed control, were working together to defraud Loren. The facts as disclosed by the record do not bear out such claim. It is urged on behalf of Loren that the letter written by Frank Aramburn from Spain, February 12, 1916, after he heard that Loren was to commence a lawsuit, tends to show that he was afraid of the re: suit of litigation. The letter states, in effect, that he had always treated both Loren and Ignacio well; that it was not necessary to have a lawsuit, and requested that none be commenced until he returned. The indebtedness of the firm to Aramburn was then great, and litigation would undoubtedly embarrass Frank Aramburn and delay a collection, as subsequent events have proven. Ignacio made no appearance in the foreclosure suit.

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Related

Smith v. Collins
115 Mass. 388 (Massachusetts Supreme Judicial Court, 1874)
J. J. Crable & Son v. O'connor
133 P. 376 (Wyoming Supreme Court, 1913)
Hembree v. Blackburn & Peckham
19 P. 73 (Oregon Supreme Court, 1888)
Pahlman v. Taylor
75 Ill. 629 (Illinois Supreme Court, 1874)
Havana, Rantoul & Eastern Railroad v. Walsh
85 Ill. 58 (Illinois Supreme Court, 1877)
Salt Lake City Brewing Co. v. Hawke
66 P. 1058 (Utah Supreme Court, 1901)

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Bluebook (online)
193 P. 922, 98 Or. 258, 1920 Ore. LEXIS 115, Counsel Stack Legal Research, https://law.counselstack.com/opinion/aramburn-v-guerricagoitia-or-1920.