This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The Plaintiff, a food supplier, delivered goods to a sports bar and restaurant owned by a corporation. The Plaintiff extended credit under the belief that the business was a partnership, with the Defendant as one of the partners. The Defendant was later held liable under the doctrine of partnership by estoppel for the debts incurred by the business (paras 1, 9).
Procedural History
- District Court of Bernalillo County: The court found the Defendant liable under the New Mexico statute on partnership by estoppel and entered judgment in favor of the Plaintiff (para 1).
Parties' Submissions
- Plaintiff (Appellee): Argued that the Defendant was liable as a partner by estoppel because the Plaintiff extended credit based on representations that the Defendant was a partner in the business. The Plaintiff also contended that the Defendant waived his right to appeal by paying the judgment (paras 1, 2, 9).
- Defendant (Appellant): Argued that he did not consent to being represented as a partner and that the Plaintiff did not rely on any such representation when extending credit. The Defendant also contended that his payment of the judgment was involuntary and did not constitute a waiver of his right to appeal (paras 2, 9, 24, 26).
Legal Issues
- Did the Defendant waive his right to appeal by paying the judgment?
- Was the Defendant liable under the doctrine of partnership by estoppel?
- Did the Plaintiff rely on representations of the Defendant's partnership status when extending credit?
Disposition
- The Court of Appeals affirmed the judgment of the District Court, holding the Defendant liable under the doctrine of partnership by estoppel (para 32).
- The Court rejected the Plaintiff's argument that the Defendant waived his right to appeal by paying the judgment (para 8).
Reasons
Per Hartz CJ (Apodaca and Flores JJ. concurring):
Waiver of Right to Appeal: The Court held that the Defendant's payment of the judgment was not voluntary because no supersedeas bond was filed, and the payment was made to avoid execution on the judgment. Therefore, the Defendant did not waive his right to appeal (paras 3-8).
Partnership by Estoppel: The Court found sufficient evidence to support the District Court's conclusion that the Defendant consented to being represented as a partner. Evidence included the Defendant's actions, such as signing bank documents as an "owner" and statements made to others about his involvement in the business (paras 24-25).
Reliance: The Court determined that the Plaintiff reasonably relied on the representation of the Defendant's partnership status when extending credit. The Plaintiff's president testified that credit was extended because the business was believed to be a partnership, and partnerships were considered less risky than corporations (paras 26-31).
Statutory Interpretation: The Court clarified that under the New Mexico Uniform Partnership Act, reliance is required to establish liability under partnership by estoppel, even when representations are made in a public manner. The Court rejected the Plaintiff's argument that public representations alone suffice to establish liability (paras 14-23).
The Court awarded the Plaintiff $3,000 in attorney fees and costs on appeal (para 32).