## Facts

- Cheesecake Factory, Inc., a foodservice supplier, sold goods on credit to Triples American Grill, an Albuquerque restaurant operated through Triple Threat, Inc.
- Cheesecake Factory asserted it did not know Triples was incorporated and extended credit believing the business was owned by a partnership that included John R. Baines.
- A restaurant associate told Cheesecake Factory’s representative that Triples was owned by named individuals as partners, contributing to Cheesecake Factory’s belief that Triples was a partnership.
- Baines engaged in conduct and made statements indicating ownership/partnership status, including opening a bank account and signing as an “owner,” and telling others he “had a sports bar” and “was a partner.”
- Cheesecake Factory’s president testified that the company extended credit based on the belief that Triples was a partnership including Baines and would not have extended equivalent credit to a corporation due to limited liability.
- Cheesecake Factory sued Baines personally, seeking to impose liability under New Mexico’s partnership-by-estoppel statute for Triples’ unpaid account.
- The district court found Baines liable as a partner by estoppel and entered judgment for Cheesecake Factory.
- Baines paid the judgment and appealed; Cheesecake Factory argued the payment barred the appeal as acquiescence.

## Issues

1. Whether Baines waived or mooted his appeal by paying the judgment, as a voluntary satisfaction inconsistent with appellate review.
2. Whether the evidence supported liability against Baines as a partner by estoppel, including representation (or consent to being held out) and creditor reliance in extending credit.

## Decision

- The Court of Appeals of New Mexico affirmed the district court’s judgment.
- Baines’s payment of the judgment did not waive his right to appeal because the payment was not treated as clearly voluntary acquiescence under the circumstances.
- The evidence supported holding Baines liable as a partner by estoppel because he was represented, and effectively consented through conduct and statements, as a partner, and Cheesecake Factory extended credit in reliance on that apparent partnership.

## Legal Principles

- Satisfaction of a judgment does not automatically bar an appeal; waiver depends on whether payment shows voluntary acquiescence inconsistent with pursuing appellate relief.
- Payment after posting a supersedeas bond may be treated as voluntary because the bond removes the threat of legal compulsion pending appeal; absence of a supersedeas bond may indicate payment to avoid execution rather than acquiescence.
- Under New Mexico’s partnership-by-estoppel statute, a person may be personally liable for partnership debts if the person represents himself, or consents to being represented, as a partner and a third party extends credit on the faith of that representation.
- Consent to being held out as a partner may be inferred from a totality of conduct and statements, not only from formal partnership agreements.
- Reliance is satisfied when the creditor proves it extended credit because it believed the apparent partnership existed and included the defendant.

## Conclusion

The court held that paying a judgment without the protection of a supersedeas bond did not, by itself, waive appellate rights, and it affirmed personal liability under partnership by estoppel where the defendant’s conduct and statements supported an inference of consent to being held out as a partner and the creditor extended credit in reasonable reliance on that appearance.


Cheesecake Factory, Inc. v. Baines, 125 N.M. 622, 964 P.2d 183 (Ct. App. 1998)