Opinion
35666.
DECIDED JUNE 29, 1955.
Action on check. Before Judge Geer. Terrell Superior Court. February 26, 1955.
R. R. Jones, for plaintiff in error.
Lippitt Lippitt, contra.
1. Where a husband and wife petition for and obtain a charter for a corporation which is never organized, this without more does not constitute them partners.
2. Whether they become partners depends upon their engaging in business under the name of the proposed corporation. If the wife takes no part in the business, she is not a partner.
DECIDED JUNE 29, 1955.
Southern Cotton Oil Company brought an action in the Superior Court of Terrell County against Dawson Milling Company, a partnership composed of J. W. Duskin and Mrs. Theodosia H. Duskin.
The subject of the suit was two checks, given by Dawson Milling Company to Southern Cotton Oil Company, which were returned because of insufficient funds.
The petition alleged: that Dawson Milling Company was a partnership composed of J. W. Duskin and his wife, Theodosia H. Duskin; and that the defendants were indebted to the plaintiff for the amount of two checks given to the plaintiff to cover the purchase price of the merchandise sold and delivered to the defendants, the checks having been returned because of insufficient funds.
Mrs. Duskin filed a special plea of no partnership, and also an answer, in which she alleged that she was not indebted to the plaintiff in any amount because she had never purchased any merchandise from the plaintiff; that she was not a member of the firm of the Dawson Milling Company; and that she was not and never had been a partner in any partnership firm known as the Dawson Milling Company.
The plaintiff's case was based solely on the following documentary evidence: two checks given by Dawson Milling Company in payment of two loads of cottonseed meal. The checks were not given in payment of an account where credit had been extended, but were paid upon delivery of the cottonseed meal. Both checks were signed Dawson Milling Company, and there was nothing on either check to indicate whether Dawson Milling Company was an individual, partnership, or corporation. A note was introduced in the form of a bill of sale to secure a debt, which was given in consideration of $37,500 and conveyed as security feeds, seeds, and farm commodities and all assets of every kind and nature belonging to or used by Dawson Milling Company. The bill of sale was signed "J. W. Duskin, Theodosia H. Duskin, individually and d/b/a Dawson Milling Company." The plaintiffs also introduced in evidence the original application and charter of Dawson Milling Company, which was signed by J. W. Duskin, Mrs. Theodosia H. Duskin, and E. W. Duskin, and the order granting the charter signed by the superior court judge, together with the affidavit of the publisher of the Dawson News.
The defendants testified that nothing was ever done to accept the charter; that the corporation was never organized, no capital was ever paid in, and no stock was ever issued; that all that was done by the petitioners for the charter was to obtain and file it with the petition in the office of the clerk of the superior court.
The only issue in the case was whether Mrs. Duskin was a partner in the business of Dawson Milling Company.
The jury found in favor of Mrs. Duskin on this issue. The plaintiff filed a motion for new trial, which was later amended by adding certain exceptions to the charge of the court. The court denied the motion, to which judgment the plaintiff excepted.
The plaintiff contends that Mrs. Duskin was liable as a partner for the debts of Dawson Milling Company. This contention is based upon the rule that promoters of a corporation who are granted a charter, but make no effort to accept the charter by complying with its requirements, will be held liable as partners if they go forward with the business.
The plaintiff's position that Mrs. Duskin was a promoter, and that she took part in the business of Dawson Milling Company and therefore is liable as a partner.
That Mrs. Duskin, her husband and son jointly filed a petition and obtained a charter for a corporation which was never organized, did not without more constitute them partners. Whether they became partners depended upon their engaging in business under the name of the proposed corporation.
If the promoters begin doing business before they organize the corporation and make no effort to accept the charter or comply with its requirements, they are held liable as partners. Brooke v. Day, 129 Ga. 694 (2) ( 59 S.E. 769).
"Merely participating in the signing and filing of articles of incorporation, however, will not render a person liable as a partner for obligations contracted by one of his associates who assumes to transact business under the proposed corporate name where the organization is never perfected and the one sought to be charged has not participated in the business or held himself out as a partner." 13 Am. Jur. 201, § 57.
It was not shown that Mrs. Duskin took any part in the business except that she signed a note with her husband, who did conduct the business of Dawson Milling Company, and that after their signatures appeared the typewritten words "d/b/a Dawson Milling Company." This was a circumstance from which it could be inferred that she was a partner with her husband, doing business under that firm name. Unexplained it would have been sufficient evidence that Mrs. Duskin was engaging with her husband in the partnership business. However, there was uncontradicted testimony of Mrs. Duskin and W. D. Owens, president of the Bank of Albany, that the words "d/b/a Dawson Milling Company" were typewritten on the note by Mr. Owens' secretary and were a mistake on her part. Mr. Owens testified he loaned the money to Mr. and Mrs. Duskin as individuals and not as partners. Mrs. Duskin testified that she borrowed the money as an individual and never had been a partner in Dawson Milling Company. This evidence was admissible. Tollison-Davenport Co. v. Carr, 42 Ga. App. 340 ( 156 S.E. 274); Code § 38-510.
The fact that Mrs. Duskin signed the note with typewritten words following her signature indicating she was doing business as Dawson Milling Company was perfectly consistent with the testimony of the witness Owens that she did not obtain the loan, evidenced by the instrument, as a partner and did not intend to sign as her husband's partner.
There was no other evidence that after applying for the charter Mrs. Duskin went forward with the business of Dawson Milling Company.
We think the attempt to prove that she was a partner in Dawson Milling Company or that she ever did business in that name completely failed, and that the verdict in her favor was demanded by the evidence.
In view of the foregoing holding, it is not necessary to consider the special grounds of the amended motion, none of which assigns error on the admission or exclusion of evidence.
Judgment affirmed. Felton, C. J., and Nichols, J., concur.