In a small village, Penfield operated a private unincorporated bank named as "The Bank

of Kelley." He issued a booklet regarding the financial affairs of the bank and in this
issue one Banks, his father-in-law, has been presented as one of the partners in the said
banking business. Upon learning of the said booklet, Banks went to the village to
confront Penfield regarding the unauthorized use of his name in connection with The
Bank of Kelley. But unfortunately, Penfield was not the the office.

On that same day, Banks saw Penfield's father, whose name has also been presented as
a partner in the said bank thru the same booklet. The father told him not to worry about
it anymore since he had already consulted it with a lawyer. Two days later, Penfield
visited Banks and confessed that the reason why he used his name was because he
thought that the name would make the bank look better - or would make it more reliable.
Penfield then apologized and promised not to used Bank’s name again in any banking
business affairs. He kept his promise and did not issue anymore booklets.

Three and a half years later, the bank failed and Penfield fled. Many of the old
depositors ran after Banks claiming him to be a quasi partner. They claimed that they
had allowed their deposits to remain in the bank believing on the first issued booklet
presenting Banks as a partner. The other new depositors claimed that they had made
their deposits on the same basis and in the same belief.

Banks was at all times known to all the depositors, either personally or by reputation.
None of the depositors ever asked Banks whether he was a partner in the bank, though
they had ample opportunity to do so. Banks had no knowledge that anyone was dealing
with the bank on the belief that he (Banks) was a partner therein.

Issue: Whether or not there os patnership in estoppel and thus Banks is liable to the
depositors.

Held: NO

Partnership by Estoppel — Burden of Proof. One who seeks to hold another as a quasi partner, on the theory that
such other had been held out as a partner, has the burden to show affirmatively:

(a) That such other assented to such holding out

- did not saw the booklet circulated until after the suit has been filed

- never invested in the bank

- expressed his protest to the cashier regarding the unauthorized used of his name. His protest to
Penfield and the cashier had the effect of putting an end to the issuance and circulation of the objectionable circular,
and that from that time until the collapse of the bank, 3½ years later, it was not renewed or continued.

(b) that such other, by negligence so gross as to be tantamount to fraud, permitted such holding out to continue
(c) that those dealing with the supposed partnership were deceived thereby to their damage.