Clark v. Rumsey — 52 N.Y.S. 417

Majority

p. 417

CLARK v. RUMSEY et al.

(Supreme Court, Special Term, Niagara County.

June 27, 1898.)

Headnote

1. Partnership—What Constitutes—Sharing Profits.

A subscription agreement to drill for gas, providing that all the subscribers were to be sharers in the profits, proportioned to the sum subscribed, constitutes the subscribers partners inter se.

2. Surscribers—Joint Liability.

Subscribers to an agreement to drill for gas and share the profits are liable jointly for the acts of their executive committee, which existed with the approval and authority of the subscribers, in employing third persons in such work, who relied on said agreement, even though not considered as co-partners, in the strict sense.

Action by William F. Clark,' executor, against Bronson Rumsey and others. Judgment for plaintiff.

Hickey & Morris, for plaintiff.

Wilcox & Miner, Geo. C. Miller, Henry S. Thayer, Theodore Wende, Cary & Wallace, and Baker, Schwartz & Bake, for various defendants.

It is unimportant to determine what the relations of the defendants are among themselves. The agreement was made to exploit for gas, and it was consummated, after notice to all the parties, by the election of officers, the designation of a company name, and the selection of a committee, who were to be the executive managers in the development of the enterprise foreshadowed in the chart, which all subscribed. The executive committee, thus pushed into existence with the approval and authority of the defendants, agreed with Sutton to drill the well a certain depth. Clearly, this committee possessed the power to make this agreement. The formation of the company, and the election of the committee, were made after notice to each defendant, so none can be heard to disown his offspring. The subsequent agreements were made with Sutton by the same committee for the prosecution of the same line of work which was the basis of the original agreement of the defendants among themselves. That some of the defendants failed to respond, or to attend meetings, or to assent to the continued prosecution of the work, constitutes no defense against Sutton, who was earning his money, relying upon their liability to pay him. The subscription agreement provided that all the subscribers to it were to be sharers in the profits in proportion to the respective sums subscribed, and that is sufficient to constitute them partners inter se. Clift v. Barrows, 108 N. Y. 187 -193, 15 N. E. 327 ; In re Sheldon, 25 App. Div. 182 , 49 N. Y. Supp. 377 ; King v. Barnes, 109 N. Y. 267 -285, 16 N. E. 332 ; Wilcox v. Pratt, 125 N. Y. 688 , 25 N. E. 1091 . But in any event that agreement established a joint liability among its subscribers in favor of third persons who expended money or did labor fairly within its compass, and in reliance upon it. Colly. Partn. § 78 et seq.; Story, Partn. §§ 60-63; Manufacturing Co. v. Sears, 45 N. Y. 797 ; Haas v. Roat, 26 Hun, 632 ; Magovern v. Robertson, 116 N. Y. 61 , 22 N. E. 398 ; Mason v. Partridge, 4 Hun, 621 . It is no sort of con

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sequence whether or not they were co-partners, in the strict sense of that relation. They joined together to drill for gas, and in the execution of that design they are liable jointly to third persons.

Cases cited

Clift v. Barrow 108 N. Y. 187 N.Y. 1888-01-17 p. 417
In re Sheldon 25 App. Div. 182 N.Y. App. Div. 1898-01-21 p. 417
King v. Barnes 109 N. Y. 267 N.Y. 1888-04-10 p. 417
Wilcox v. Pratt 125 N. Y. 688 N.Y. 1890-12-02 p. 417
Manhattan Brass & Manufacturing Co. v. Sears 45 N. Y. 797 N.Y. 1871-06-22 p. 417
Magovern v. Robertson 116 N. Y. 61 N.Y. 1889-10-08 p. 417