Hoke, C. J.,
after stating the case: For general application it is recognized as difficult to give an adequate and satisfactory definition of a partnership. Probably that approved by
Associate Justice Gray,
in
Meehan v. Valentine,
145 U. S., pp. 611-623, is at once as accurate and comprehensive as any that suggests itself. Delivering the opinion in that case it was said by the learned judge: “In the present state of the law on the subject, it may perhaps be doubted whether any more precise general rule can be laid down than, as indicated at the beginning of this opinion, that those persons are partners, who contribute either property or money to carry on a joint business for their common benefit, and who own and share the profits thereof in certain proportions.” Other definitions in our own reports, correct as to the facts therein presented, appear in
Gorham v. Cotton,
174 N. C., p. 727;
Fertilizer Co. v. Reams,
105 N. C., pp. 283, 296;
Mauney v. Coit,
86 N. C., p. 464. In
Gorman’s
case,
by way of further illustration, the opinion quotes also the definition given in
Karrick v. Hannaman,
168 U. S., p. 328 as follows: “A contract of partnership is one by which two or more persons agree to carry on a business for their common benefit, each contributing property or service, and having a community of interest in the profits.” Within the terms and meaning of any of these definitions, we are of opinion that the contract between the bank and trust company and D. L. Odom and K. B. Tyer, has been properly held a partnership, so far as the bank and trust company are authorized to enter into such an agreement, and on the facts of this record, we find no present reason for disturbing the verdict on that issue, and the results that have been deduced from it. As we understand its position, appellant does not seriously insist but that the original agreement in form constitutes a partnership between appellant and the other two members, but it is contended that same was, in effect, put an end to in June, 1922 when, as appellant claims, the bank withdrew by selling out its interest taking the note and mortgage sued on to secure the purchase price. It will suffice in answer to this position to note that the question of whether there was a sale and consequent dissolution in June, 1922, was submitted to the jury on a separate issue No. 2, and their verdict was against the sale as claimed. The questions debated, therefore, by appellant on whether such sale had been authorized by Tyer, one of the alleged partners, or ratified by him— and whether proper notice had been given to creditors of the alleged dissolution, is no longer material. Considering the record in reference to the manner that this issue was submitted and answered by the jury, this finding of fact, in effect, determines that there has never been any dissolution of the alleged partnership, as far as same is expressed and controlled by the agreement.
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Hoke, C. J.,
after stating the case: For general application it is recognized as difficult to give an adequate and satisfactory definition of a partnership. Probably that approved by
Associate Justice Gray,
in
Meehan v. Valentine,
145 U. S., pp. 611-623, is at once as accurate and comprehensive as any that suggests itself. Delivering the opinion in that case it was said by the learned judge: “In the present state of the law on the subject, it may perhaps be doubted whether any more precise general rule can be laid down than, as indicated at the beginning of this opinion, that those persons are partners, who contribute either property or money to carry on a joint business for their common benefit, and who own and share the profits thereof in certain proportions.” Other definitions in our own reports, correct as to the facts therein presented, appear in
Gorham v. Cotton,
174 N. C., p. 727;
Fertilizer Co. v. Reams,
105 N. C., pp. 283, 296;
Mauney v. Coit,
86 N. C., p. 464. In
Gorman’s
case,
by way of further illustration, the opinion quotes also the definition given in
Karrick v. Hannaman,
168 U. S., p. 328 as follows: “A contract of partnership is one by which two or more persons agree to carry on a business for their common benefit, each contributing property or service, and having a community of interest in the profits.” Within the terms and meaning of any of these definitions, we are of opinion that the contract between the bank and trust company and D. L. Odom and K. B. Tyer, has been properly held a partnership, so far as the bank and trust company are authorized to enter into such an agreement, and on the facts of this record, we find no present reason for disturbing the verdict on that issue, and the results that have been deduced from it. As we understand its position, appellant does not seriously insist but that the original agreement in form constitutes a partnership between appellant and the other two members, but it is contended that same was, in effect, put an end to in June, 1922 when, as appellant claims, the bank withdrew by selling out its interest taking the note and mortgage sued on to secure the purchase price. It will suffice in answer to this position to note that the question of whether there was a sale and consequent dissolution in June, 1922, was submitted to the jury on a separate issue No. 2, and their verdict was against the sale as claimed. The questions debated, therefore, by appellant on whether such sale had been authorized by Tyer, one of the alleged partners, or ratified by him— and whether proper notice had been given to creditors of the alleged dissolution, is no longer material. Considering the record in reference to the manner that this issue was submitted and answered by the jury, this finding of fact, in effect, determines that there has never been any dissolution of the alleged partnership, as far as same is expressed and controlled by the agreement.
It is further and very earnestly contended that appellant being a banking institution is not authorized to enter into a partnership agreement of the kind presented, and that same is so far
ultra vires
that no liability can be enforced against appellant by reason of it. It is undoubtedly the general rule that a corporation, especially a banking institution, is not allowed to enter into a separate business entirely foreign to the purposes as contemplated and authorized by its charter, and that executory agreements in such an enterprise imposing liability are not binding.
Victor v. Mills,
148 N. C., pp. 107-111;
Wiswall v. Plank Road Co.,
56 N. C., p. 183;
First National Bank v. Converse,
200 U. S., p. 425;
Central Transportation Co. v. Pullman Car Co.,
139 U. S., 24;
Harding v. Glucose Co.,
182 Ill., 551; 3 R. C. L., p. 422, and authorities cited. In answer to this proposition it may be suggested first, that this appellant corporation bears the title of the Snow Hill Banking & Trust Company. The charter of' the institution
is not in evidence, nor does tbe record contain any data or reference by wbicb tbe court is enabled to ascertain its powers or tbe limitations upon it. We know that these trust companies are not infrequently possessed of very enlarged privileges extending into various kinds of enterprises — and acting on tbe position that there is always a presumption against error in a completed judicial proceeding, tbe exception here might well be disallowed because no lack of power is shown.
R. R. v. Nichols,
187 N. C., p. 153; but conceding that in the present case the appellant by its charter has only the usual privileges of a banking institution, we are of opinion that no reversible error has thus far been shown; for though the general rule be as stated, it is fully recognized as a proper limitation upon it that when a banking corporation has acquired and taken over property pledged to it to secure an indebtedness contracted in its regular course, it may enter into a separate and established business or enterprise to the extent reasonably required to enable it to realize on the property with the view of constituting it bankable asset, a position that is assuredly true as to a State institution. Thus in the case of
Emigh v. Earling,
134 Wis., 565, the right of a bank to take over and operate a creamery business was, to some extent, presented and the bank was held liable to account to shareholders for moneys realized in the conduct of business, the decision in that case being approved on writ of error by the Supreme Court of the United States. 218 U. S., p. 27. True that both in the State and Federal Courts the decision was made to rest on the ground that the bank, having acquired and holding the funds belonging to the shareholders, could be held to account for same regardless of the doctrine of
ultra vires
or the effect of it, but in both courts the limitation in the general rule is fully recognized, and in the State decision,
Dodge, J.,
speaking to the question among other things said: “The conclusion of the trial, is attempted to be averted by most vigorous contention that it is wholly beyond the power of a national bank to engage in creamery business, and much citation is made of Federal authority to that effect. The exact limits of the power of a bank which, being a creditor, becomes possessed of property or property rights in various forms as security, to do acts in management or improvement of such property or development of such rights, in order to render them valuable, to the end, in good faith, or thereby securing liquidation of the debts to it, is quite indefinite, and doubtless public policy requires that a bank, like an individual, should have broad powers to the exercise of discretion and judgment, to the end that property or rights so held as security be rendered as valuable as possible, so that it may not lose that which it ought to collect.” The position finds further support in
Shawnee Nat. Bank v. Grocery Company,
34 Okla., p. 34;
Reynolds v. Simpson,
74 Ga., p. 454;
Bank v.
Bannister,
7 Kan. App., 787;
Roebling Son’s Co., v. First Nat. Bank,
30 Federal, 744. And in our own Court the cases of
Bank v. Lacy, ante,
pp. 25-29 and
Sherrill v. Trust Co.,
176 N. C., p. 591, are in full recognition of the principle. Considering the agreement in view of these authorities, here was a bank, that to secure a debt contracted to it in its regular course of business, had taken over the stock of goods, and fixtures of a drug store of the value of $5,500. Desiring to realize on the goods, it entered into the partnership agreement adding to the stock $1,000 in money and the other two partners put in $500 each, one of them to be in control and management of the business— it appears that the agreement, apparently drawn with care, with a view of protecting the bank and all concerned. Operating in the same town, it will be noted that the other partners were not allowed to take out more than $100 per month on their part of the profits during the continuance of the business and are required to make monthly reports to the bank, as to the condition and state of business, indebtedness, etc. Under these circumstances, we are of opinion, on the facts as now presented, the agreement was within the powers of the bank, and assuredly so as to the property put into the business. As to that it has become an executed contract giving to the other parties to the agreement the -right to have the assets applied to the payment of the debts contracted in the name of the partnership.
Chemical Co. v. Walston,
187 N. C., p. 817;
Farmer v. Head,
175 N. C., p. 273. Possibly if, in the further development of the case, it should appear that the debts are so extensive as to threaten the solvency of the bank, it may be that on application of the stockholders, or even the directors, the claims against the alleged partnership could be restricted to the amount of the funds and property invested, on the general principles prevailing in our statutes on the subject of limited partnership, C. S., ch. 64, and constituting the bank a special partner to the extent of its investment— not under the statute referred to, for the provisions have not been complied with, but assimilated to it by reason of the limitations imposed by the charter of the bank, if existent, and when properly made to appear. But no such question is now presented, nor is there any suggestion or evidence tending to show that there are debts in excess of the assets.
The judgment of the court is, therefore, affirmed and the receivers, as directed, will proceed to an ascertainment of the debts, and to that end, the same be paid out of the assets now in the hands, of the bank, and the surplus, if any, divided in proportion to the respective investments of the parties. G-ilmore on Partnership, p. 394.
There is no error and the judgment below is affirmed.
No error.