Gilbert v. Howard

326 P.2d 1085, 64 N.M. 200
CourtNew Mexico Supreme Court
DecidedJune 13, 1958
Docket6347
StatusPublished
Cited by10 cases

This text of 326 P.2d 1085 (Gilbert v. Howard) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gilbert v. Howard, 326 P.2d 1085, 64 N.M. 200 (N.M. 1958).

Opinion

McGHEE, Justice.

The appellees, plaintiffs below, a copartnership which designs and builds mechanical equipment brought suit against Robert A. Howard and Walter Moore as copartners by representation in Mining Investment and Exploration Co. for rental and damages to a rig leased by plaintiffs to defendants.

Defendants answered denying that Mining Investment and Exploration Co. was a partnership and alleged that it was the individual business of the defendant Howard, and counterclaimed alleging that the machinery would not perform as represented.

Defendants’ attorney withdrew and defendant Moore then answered through his separate attorney denying that he was a copartner and asked that the case be dismissed as to him. The trial was held with Howard absent but represented by counsel. Moore was personally present and represented by counsel.

The court, adopted all of the findings of fact and of law requested by the plaintiffs, finding that a partnership by representation existed and that both defendants were jointly and severally liable to the plaintiffs for $3;674.92 ($3,199.92 for unpaid rent, $200 for missing parts, $100 for damage to water pump, and $175 for collection expenses).

The defendant Moore appealed from the judgment urging that the case should have been dismissed as to him as there was not substantial evidence to support the finding that he represented himself as Howard’s partner.

' This .case' is governed by the Uniform Partnership Act:

“(1) Except as provided by section 16 [66-1-16] persons who are not partners as to each other are not partners as to third persons.” 66-1-7, N.M. 'S.A.1953 Comp.
“(1) When a person, by words spoken or written or by conduct, represents ' himself, or consents to another representing him or any one, as a partner in an existing partnership or with 'one (1) or more persons not actual partners, He is liable to any such person to whom such representation has been made, who has, on the faith of such representation, given credit to the actual or apparent partnership, and if he has made -such representation or consented to its being made in a public manner he is liable to such person, whether the representation has or has not been made or communicated to such person so giving credit by or with the knowledge of the apparent partner making representation or consenting to its being made.” 66-1-16, N.M.S.A. 1953 Comp.

If Moore is a partner it is only by estoppel as plaintiffs did not allege that he was a partner but only that he represented himself to be a partner.

The statutory test for partnership by estoppel requires that (1) credit must have been extended on the basis of partnership representations or (2) that the alleged partner must have made or consented to representations being made in a public manner whether or not such representations were actually communicated to the person extending credit. There is no decision in New Mexico on this section of the Uniform Partnership Act.

The evidence is clear that Howard made the contract in his name only in January at which time five months’ rent was paid and that he never met Moore until the rent became delinquent and upon going to Howard’s office and finding him absent he was directed to see Moore at his business next door.

Since plaintiffs did not even know Moore existed at the time of the leasing there could have been no reliance upon his credit and defendant Moore is not liable under the first part of 66-1-16, which is the same as the common-law test for liability in New Mexico before the adoption of the Uniform Partnership Act in 1947.

However, the last part of 66 — 1— 16, N.M.S.A.1953 Comp, reads as follows:

“ * * * and if he has made such representation or consented to its being made in a public manner he is liable to such person, whether the representation has or has not been made or communicated to such person so giving credit by or with the knowledge of the apparent partner making representation or consenting to its being made.”

This section extends liability beyond the common-law test of reliance so that when one has by his acts or his consent to the acts of others allowed or caused the general community to believe that he is a partner then he is such by estoppel even though this particular creditor may not have heard the representation. This relieves the creditor of the task of proving that he actually knew of such representation and makes the representation itself an offense without the added factor of reliance. However, this test demands that the representations have been made in a “public manner” at the time that credit was extended so that at that time it was general community knowledge even though the representations might not have been communicated to this particular creditor. Since every act or word connecting the defendant Moore with Howard occurred five months after credit was extended there could have been no community impression of partnership at the time the lease was made, and the plaintiffs must fail under 66 — 1—16, N.M.S.A.1953 Comp.

Even so, the statements made by defendant Moore from which Walter Gilbert, one of the plaintiffs, testified he inferred the existence of a partnership are insufficient to meet the statutory test of representations made in a “public manner.”

They are:

“Lucille is out now and I am the • only one left with Bob.”

and

“I am having to scratch like Hell to provide the money for all these trips Bob is making.”

These statements in and of themselves could not lead a reasonable person to believe a partnership existed and are as consistent with an agency, employee or lender relationship as they are with a partnership relationship.

“We will be glad to build the court.”, Cooper v. Knox, 1956, 197 Va. 602, 90 S.E.2d 844, 846, and “that’s the way we tried to carry it on”, West Side Trust Co. v. Gascoigne, 1956, 39 N.J.Super. 467, 121 A.2d 441, were held insufficient to show a partnership relationship and yet are. more indicative of a business relationship than are defendant Moore’s statements.

The plaintiffs then rely on Moore’s acts of not bringing suit to collect back salary from Howard, moving the rig, loaning money to Howard and Howard’s ownership of an interest in Moore’s business.

These actions in and of themselves or when considered cumulatively as establishing a pattern of conduct do not show a representation of an association of two or more persons to carry on as co-owners a business for profit, which must be the representations made as that is the statutory definition of a partnership. 66-1-6, N.M. S.A.1953 Comp.

None of the acts relied upon by the plaintiff are those likely to be performed only by a partner or more likely to be performed by a partner than anyone else.

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Bluebook (online)
326 P.2d 1085, 64 N.M. 200, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gilbert-v-howard-nm-1958.