Sun Insurance v. Kountz Line

A person who-conducts himself with reference to the general public in such a way as to induce others, acting with reasonable caution, to believe that he is a partner in a partnership, is liable as such to a creditor of the partnership who contracted with it under such belief, although he is not in fact a partner. The defendants in error so conducted. themselves towards the general public, in their business relations with each other, as to iuduce a shipper, acting with reasonable caution, to believe that they had formeij a combination in the nature of a partnership, or were engaged as joint traders, under the name of the Kountz Line.

APPEAL PROM THE CIRCUIT COURT OF' THE UNITED STATES FOR THE EASTERN DISTRICT OF LOUISIANA. This was a libel in admiralty and in personam. The libellants were insurance companies, which issued policies covering certain produce and merchandise delivered, May 21, 1880, on board the steamboat Henry C. Yeager, at St. Louis, Missouri, for transportation to the city of New Orleans and other ports on the Mississippi River; which cargo was lost by the sinking of the boat the day succeeding its departure, from St. Louis.' The Yeager was unseaworthy, both at the commencement of her voyage and at the time of the loss. The sinking and the loss were the direct consequence of such unseaworthiness. The libellants having paid to the owners of the cargo the damage? sustained by them — $31,720.10 — and having been subrogated to all the rights and claims of the latter on account of mch íoss, brought this suit against the appellees jointly to recover the amount so paid. In the District Court, the attachments sued out by the libellants were discharged, and the libel dismiss d. In the Circuit Court, it was adjudged that there was no joint liability on the part of the respondents, or any of them, and that liability for the loss of the cargo was alone upon the Yeager, and her owner, The H. [J. Yeager Transportation Company. As to all the other respondents, the libel was dismissed. Of that'decree the libellants complained, the principal assignment of error being that the court erred in not holding the respondents, or some of them, jointly liable for the loss of the cargo. The general ground upon which this contention was placed was that' the shipment of May 21, 1880, on the Henry C. Yeager was a part of the general business of transportation, in which The II. C. Yeager Transportation Company, The C., V. Kountz Transportation Company, The K. P. Kountz Transportation Company, and The M. Moore Transportation Company, were jointly engaged under the name of the “ Kountz Line,” ánd, consequently, that said companies were jointly liable for the loss and damages in question. The decree below proceeded upon -the ground that said companies were not jointly engaged in business, and that the loss must be borne entirely by the company owning the Henry C. Yeager. Citizens’ Ins. Co., v. The Kountz Line, 4 Woods, 268. The determination of the question of joint liability depended upon the facts set out in the finding by' the Circuit Court. Those facts — preserving, in the statement of them by this' court, substantially, the language of»-the court below — were as follows: In June, 1872, William J. Kountz, John, W. King, W. W. Atex, and Charles Scudder organized, under the laws of Missouri, a corporation by the name of the Kountz Line, of which they were to be, and did become, directors for the first year;' and of which Kountz was president and King general agent.' Its capital stock was fixed at fifteen thousand dollars, divided into shares of one hundred dollars each. The declared object of the corporation was to build or purchase, use or employ, one or more wharf-boats for" the use of steamboats and other vessels belonging to the stockholders of the company; to build, purchase,- or charter. steamboats, towboats, etc., for transporting freight and passengers on* the Mississippi River and. its tributaries; and do a.general river business. It does not appear that the Kountz Line corporation owned, at . the time of the shipment on the Yeager, or at anytime during, the year 1880, any steamboat or other water craft, except a wharf-boat at St. -Louis. In a few months after the organization of that corporation, to wit, on the 13th' of November, 1872, Kountz, King, and' one Sheble- organized, under the laws óf Missouri, the four, transportation companies above named,, of each of which Kountz and King were chosen directors, and King treasurer and secretary. Kountz, King, and Sheble, Charles H. Seaman, H. K. Haslitt, and W. .P.' Braithwaite, having-interests, as owners, respectively, in the .steamboats .Henry C. Yeager, Carrie V. Kountz, Katie. P. Kountz, and Mollie Moore, transferred the same, by bills,of sale, as follows: The Henry C. Yeager, to The H. O. Yeager Transportation Company; the Carrie V. Kountz, to The Carrie V. Kountz Transportation Company; the Katie P. Kountz, to The K. P. Kountz Transportation Company ; and the Mollie Moore, to The M. Moore- Transportation Company; the vendors receiving, in consideration of said transfers, stock in the respective transportation companies. Of the stock of the Kountz Line corporation, on the 6th of July, 1871, William J. Kountz owned two shares; King, D. C. Brady, Yan Hook, and C. H. Seaman, one share each;. the steamboats John F. Tolle, Henry O. Yeager, Mollie Moore, and Carrie V. Kountz, thirty-six shares each. There was no change in the ownership of such stock by those steamboats up to the commencement of this suit, except that the shares held by the John F. Tolle belonged to the steamboat J. B. M. Kehlor, when, on September 11, 1878, the latter was transferred to The M. Moore Transportation Company. W. J. Kountz never, at any time, owned more than two. shares in the Kountz Line corporation, and "was a stockholder in all of the transportation companies. On the 15th of January, 1873, W. J. Kountz owned 398 shares, and King and Sheble each one share of the stock of The M. Moore Transportation Company. But, on December 19, 1879, the stock of that company was held as follows: Katie P. Koúntz, a daughter of W. J. Kountz, 397 shares, and Kountz, King, and Kogers each one share. November 4, 1878, Katie P. Kountz held 241¾ shares, her father and King each one share, and Braithwaite 56¼ shares, in The K. P. Kountz Transportation Company. December 19, 1879, Katie P. Kountz' held 379 shares, and her father, King, and Bogers each one share in The H. C. Yeager Transportation Company. On the 21st of May, 1880; of the stock of The C. V. Kountz Transportation Company, Katie P. Kountz held 323 shares; Clement Seaman 71 shares; and her father, King, and C. H. Seaman each one share. Bo subsequent transfers of stock m any of these companies were made, and, at the time of the shipment on the Yeager, “ the stock in no two of said companies was held by the same person.” It thus appears that; at the time of the shipment- on the. Yeager, almost all the stock of these transportation companies stood in the name of- a daughter of William J. Kountz. It was'further found by the court below, that the steamboats Carrie V. Kountz, Katie P. Kountz, Henry ,C. Yeager, and Mollie Moore “‘were employed by the respective transportation companies, to which they were conveyed, under the direction of the officers of said companies, in carrying freight and passengers on the Mississippi and its tributaries,” the Kountz Line corporation being the “ common agent ” of said companies, and charging the latter “ for the services rendered to them respectively, from one hundred to one hundred and fifty dollars per trip.” Its office, as well as the business offices of the transportation companies, was in the same room on its wharf-boat at St. Louis. It — the Kountz Line corporation- — collected the dues of the transportation companies, keeping a separate account with each, and paying to each the earnings of its own steamboat. By means of advertisements in newspapers, placards, hand bills, and cards, the Kountz Line corporation advertised the “ Kountz Line,” setting forth the advantages offered by the boats of that line, their low rates of freight, &c., and “announced that it was ready to contract for the carrying of goods and passengers by the Kountz Line boats.” In those advertisements, placards, and hand bills, usually one, but sometimes two or more of the boats belonging to the transportation companies were mentioned “as belonging to said Kountz Line.” The Kountz Line corporation made out bills of freight upon blanks headed “Kountz Line, St. Louis and New Orleans Backet,” the bills being “in the name of the particular steamboat to which the freight was due, and the dray tickets of shippers indicating on what boat the goods were to be shipped.” The bills of lading were usually signed “John AY. King, ag’t Kountz Line, St. Louis,” the signature thereto .being made by a stamp; but the bills were sometimes signed by the clerk of the steamboat on which the goods were shipped. Some of the Is of lading for the produce and merchandise shipped May 21, 1880, on the Yeager, recited “that the same were received from John AY. King on board the steamboat Henry C. Yeager, to be delivered to the consignee at New Orleans. In witness whereof, the master, clerk, or agent of said boat hath affirmed to three bills of lading,” &c., and were signed, some of them, “ John "VV. King, ag’t Kountz Line, St. Louis,” .and some by E. B. McPherson, clerk. Others of said bills of lading' recited the shipping of produce by other shippers oh board the Henry C. Yeager, and were signed by King in the manner, aforesaid, and others by E- B. McPherson, clérk. In order that the boats belonging to said transportation companies might have freight, the Kountz Line corporation-sometimes purchased produce and merchandise for the purpose of its being shipped" upon them, the sum paid for such produce and merchandise being charged to the particular company in whose, interest the purchase was made. The goods so purchased were usually bought and paid for by the Kountz Line corporation. Against sueh shipmeiits it made drafts, in its own name, on the consignees. All moneys, whether received-for freight, carried by said several steamboats or for goods shipped and sold for their account, were remitted to Ym. J. Kountz or John W. King, as the agents of said Kountz Line, the cost of the goods being charged to the individual boat on' which they were shipped. - After deducting costs and charges, the net proceeds, although “ deposited in bank to the credit of said Kountz Line, were placed in the books of account to the credit of the boat carrying the goods, and were her separate profits.” The Circuit Court found that the Kountz Line and the said' transportation companies “owned no property in common,” and-that “there was no community of profits or. property between said companies, including the Kountz Line, or any two or more of them.” But it also found that “ none of said steataboats were ever advertised by the name of the corporations that owned them,” and that from the date of the incorporation of said transportation companies to the date of the said shipment on the Henry C. Yeager, “none of said transportation companies ever transacted any commercial business lay their several and respective names, but the same was done by the name of the Kountz Line, or in the name of the individual boats belonging to said transportation companies.” Such, in substance, was the case made by the finding of' facts.