Barnes v. Campbell Chain Co., Inc.

267 S.E.2d 388 (1980)

Harry W. BARNES v. CAMPBELL CHAIN COMPANY, INC., Loos and Company, and West Durham Lumber Company.

No. 7914SC1005.

Court of Appeals of North Carolina.

July 1, 1980.

*389 Spears, Barnes, Baker & Hoof by Alexander H. Barnes, Durham, for plaintiff-appellant.

Maupin, Taylor & Ellis by Armistead J. Maupin, Raleigh, for defendant-appellee.

CLARK, Judge.

The primary question in this case is one of first impression in this jurisdiction: Whether an individual partner can sue to recover damages for his personal injuries which proximately result from the breach of warranty on a good purchased by the partnership with partnership funds? We now answer "yes" to this question.

The defendant argues that a partnership is a separate legal entity and that only the partnership may sue in an action arising out of partnership property purchased with partnership funds. This argument does not accurately state the law. In Threadgill v. Faust, 213 N.C. 226, 230, 195 S.E. 798, 800 (1938), quoted in defendant's brief, our Supreme Court stated that the "general rule in this jurisdiction is that one partner may not sue in his name, alone, and for his own benefit, upon a cause of action accruing to the partnership. . . ." (Emphasis supplied). The crucial distinction in the case sub judice is that the partner's personal injury action is not one accruing to the partnership. 60 Am.Jur.2d Partnership § 327 (1972). This is not a suit for recovery of or payment for partnership property, it is a personal injury arising out of the sale of property, and the individual partner, not the partnership was injured. Moreover, while we have not found a similar case in this State, we note that several other states have refused to allow a partnership to bring suit for damages for negligent or unintentional injury to one of its partners. Id.; Annot., 36 A.L.R.3d 1375 (1971). Nor would it be wise public policy to allow all the partners to recover for a personal injury which is suffered by a single partner. Barring some possible exceptions for intentional torts, if anyone can properly sue to recover for personal injury to the partner, it must be the individual partner who is personally injured and not the partnership.

Defendant argues, however, that there is no privity between the defendant-seller and plaintiff since it was the partnership and not the plaintiff which purchased the cable and clamp. We do not agree. It is fundamental that all partners are agents *390 of each other, that a contract entered into by the agent is a contract entered into by the principal and that all partners are liable on any contract executed by a single partner in the name of the partnership. N.C. Gen. Stat. §§ 59-39, 59-45; 10 Strong's N.C. Index 3d Partnership § 4 (1977). If a partner may be sued for nonpayment or other breach of the contract, he certainly is privy to the contract.

Defendant next contends that, because of N.C. Gen. Stat. 25-2-318, an employee of the purchaser is barred from suing the seller of a good for breach of warranty, and that, as a consequence, the partner in this case similarly has no horizontal privity and cannot reach the seller in a warranty suit. Again, this argument fails to recognize the fundamental nature of a partnership: the partner is not an employee of the entity; rather, the partner is a tenant in partnership in the entity itself, and as such, the partner is a purchaser, not an employee of the purchaser. The partner here has directed contractual privity.

The judgment by the court below recited that lack of contractual privity was the basis for dismissing plaintiff's claim against defendant West Durham Lumber Company. That judgment is now reversed. Whether the pleadings and depositions indicate that an express or implied warranty was created is not before us at this time.

Reversed.

VAUGHN and HARRY C. MARTIN, JJ., concur.