Brief Fact Summary. Frontier Refining Company, (Appellant), brought suit against Kunkel’s Inc., and George Fairfield, Clifford D. Kunkel, and Harlan Beach, (Appellees), as partners of Kunkel’s Inc. Appellant alleges that Appellees were indebted to Appellant for the sale of gasoline to the partnership. Appellant appeals the trial court ruling in favor of Appellees holding that no partnership existed.
Synopsis of Rule of Law. All persons who assume to act as a corporation without authority to do so shall be jointly and severally liable for all debts and liabilities incurred or arising as a result thereof.
Issue. Whether Defendants are liable as partners operating a business under the name Kunkel’s Inc.
Held. No. Defendants are not liable because they were creditor of Kunkel’s Inc. not partners.
Discussion. The court was entitled to infer that Kunkel was the sole source of the information given to Appellant concerning a proposed corporation under the name of Kunkel’s, Inc. and that neither Fairfield nor Beach authorized Kunkel to make such representations or enter into any contracts with Appellant in the name of Kunkel’s, Inc. This supports the conclusion that neither Fairfield nor Beach held themselves out as a corporation. Appellant with full knowledge that a corporation had not yet been formed chose to transact its business with Kunkel as an individual and shall be held to its bargain. Further, Appellant in its companion case accepts the fruits of a judgment that carries with it an inherent finding by the trial court that Kunkel, as an individual, was Appellant’s debtor.