## Facts

- In 1957, William G. Burns (plaintiff), doing business as International Advertising Agency, and Roloff Evangelistic Enterprises, Inc. (Roloff) entered into a written contract with Inter-American Advertising Agency (Inter-American), a partnership owned by Arturo C. Gonzalez and Ramon D. Bosquez, and with Compania Radiodifusora de Coahuila, S.A. (Radiodifusora), the owner of Mexican radio station XERF.
- Under the 1957 contract, Radiodifusora and the partnership agreed, in return for $100,000 paid by Burns and Roloff, to make available two 15-minute broadcast segments daily over XERF for as long as the station’s franchise remained in force, beginning July 1, 1957.
- Burns and Roloff paid the $100,000 in installments; Burns retained a commission as allowed by the contract.
- Inter-American’s partnership business was selling XERF broadcast time on a commission basis.
- Roloff later assigned all its rights under the 1957 contract to Burns, effective June 16, 1962; both Radiodifusora and the partnership approved the assignment.
- After June 16, 1962, the station experienced shutdowns and other interruptions, and the contract broadcast periods were generally not made available to Burns or to customers to whom Burns sold time.
- On November 28, 1962, Bosquez executed a $40,000 promissory note payable to Burns (due November 28, 1964), signing both individually and in the partnership name.
- The note was given in exchange for Burns’s promise not to sue Radiodifusora at that time concerning the station’s failure to provide broadcast time.
- In 1963, Burns and Bosquez (purporting to act for Radiodifusora and Inter-American) entered into a written agreement that recognized the 1957 contract and set out terms for future broadcast availability and payments; the agreement included an integration clause and did not include the 1962 note.
- Burns sued Gonzalez and Bosquez to recover on the 1962 note; Bosquez suffered a default judgment.
- As to Gonzalez, the case was tried to the court. Gonzalez filed a sworn denial that Bosquez had authority to bind the partnership by executing the note.
- The trial court denied Burns any recovery against Gonzalez, and Burns appealed.

## Issues

1. After Gonzalez’s sworn denial of Bosquez’s authority, did Burns prove that Bosquez had actual or statutory apparent authority under the Texas Uniform Partnership Act to bind the partnership (and Gonzalez) by signing the 1962 promissory note?
2. If the note was not shown to be within Bosquez’s authority, was there proof that Gonzalez or the partnership ratified the note or became bound by estoppel?

## Decision

- The Texas Court of Civil Appeals (San Antonio) affirmed the take-nothing judgment in favor of Gonzalez.
- Because Gonzalez filed a sworn denial of authority, Burns had the burden to prove that the note was binding on the partnership.
- Burns did not prove that executing a $40,000 promissory note was an act for apparently carrying on the partnership business in the usual way, given the partnership’s limited business of selling broadcast time on commission.
- The record did not establish authorization by Gonzalez, nor did it show ratification by Gonzalez or conduct supporting estoppel.

## Legal Principles

- Under the Texas Uniform Partnership Act, a partner’s act (including signing an instrument in the partnership name) binds the partnership only if it is an act for apparently carrying on, in the usual way, the partnership business, unless the other party knows the partner lacks authority.
- When a non-signing partner files a verified denial that a co-partner had authority to bind the partnership, the party seeking to enforce the instrument bears the burden to prove authority (actual or statutory apparent authority) or another basis for liability.
- A partnership’s ordinary course is a fact question; without evidence that borrowing money or issuing promissory notes is part of the partnership’s usual operations (or usual for that kind of firm), a creditor cannot impose liability on a non-signing partner based solely on the signature of another partner.
- Ratification or estoppel can bind a partner who did not sign, but only upon proof of knowing approval, acceptance of benefits with knowledge of material facts, or conduct that justifies reliance.

## Conclusion

The court affirmed judgment for Gonzalez because, after Gonzalez’s sworn denial, Burns failed to prove that Bosquez had authority to bind the partnership by issuing the 1962 promissory note as part of the partnership’s ordinary business, and the record also lacked evidence of authorization, ratification, or estoppel that would make Gonzalez liable.


Burns v. Gonzalez, 439 S.W.2d 128 (1969)