Redenbaugh v. Kelton

• Decision Date: 12 July 1895
• Citation: 32 S.W. 67,130 Mo. 558
• Parties: REDENBAUGH et al. v. KELTON et al.
• Court: Missouri Supreme Court

32 S.W. 67

130 Mo. 558

REDENBAUGH et al. v. KELTON et al.

Supreme Court of Missouri, Division No. 2.

July 12, 1895.

SALE BETWEEN PARTNERS — CONSTRUCTION — LIEN — RIGHTS OF BONA FIDE PURCHASER — HARMLESS ERROR.

1. In the contract of dissolution, the retiring partner agreed to sell to his copartner his interest in the partnership property for $500 in trade, and the balance in cash within three years, the purchasing partner to pay off the firm indebtedness as it came due and take up a certain note; and when the purchasing partner complied with the terms of the agreement, the retiring partner was to convey to him his interest in certain property. Held to constitute a sale on time, by which absolute title to the goods passed without a lien reserved.

2. Rev. St. 1889, §§ 5180, 5181, making conditional sales of property void as to creditors or subsequent purchasers unless the same are in writing and recorded, are applicable to sales between partners.

3. Where money is advanced by one partner to the partnership, and to reimburse him therefor another partner borrows money on his own note, the note does not become the obligation of the firm unless expressly assumed by it.

4. A retiring partner, selling and transferring all his interest in the partnership estate to his copartner, who assumes open and exclusive possession and treats it as his sole property, has no lien on the partnership property for the unpaid purchase price in the hands of a bona fide purchaser from such copartner.

5. In an action by a firm against a third person to recover an interest in firm property alleged to have been wrongfully sold by one of the partners, the admission in evidence of a judgment of dissolution in an action between the partners is harmless where there is other evidence sufficient to show such dissolution.

Appeal from circuit court, Newton county; J. C. Lamson, Judge.

Action by A. G. Redenbaugh and W. H. Collings against Moses W. Kelton and W. C. Kelton, as the Kelton Mercantile Company, to set aside as fraudulent the sale of partnership property on which a lien was claimed. From a judgment for defendants, plaintiff Redenbaugh appeals. Affirmed.

N. F. Heitman and Geo. Hubbert, for appellant. Cloud & Davis, for respondents.

GANTT, P. J.

This is an appeal from the circuit court of Newton county. On the 12th of May, 1893, a demurrer was sustained to the original petition in the case, and on that day an amended petition was filed, upon which the cause was tried. The petition alleges substantially these facts: That defendants are and long have been copartners; that on the ____ day of ____, 1891, plaintiffs were partners under the name of "W. H. Collings & Co."; that said partnership was organized for the purpose of carrying on a general retail store, to buy at wholesale and sell at retail in the ordinary course of business, at least until Redenbaugh should be fully reimbursed for his capital invested, which amounted to $5,000, which amount he avers Collings agreed to see he should receive out of the proceeds of the business in the ordinary course of selling; that their place of business was Noble, Ozark county; that their stock consisted of general merchandise usual in a country store, and was owned by them in equal shares; that on the ____ day of ____, 1891, Collings, without authority of Redenbaugh and without his knowledge, and to defraud Redenbaugh and convert the said stock to his own use, sold and delivered the whole of said stock to defendants Kelton, and applied the proceeds to his (Collings') use, in pursuance of a fraudulent conspiracy with defendants; that the stock so converted was worth $6,000; that said sale was wholly without the authority of Collings and the scope of the said partnership, and was made in pursuance of a collusive agreement with defendants; that defendants knew said goods were the property of the firm of Collings & Co., and that said sale was beyond the scope of said partnership and contrary to the agreement between Redenbaugh and Collings, and that Redenbaugh had never been paid for his interest in the same; that defendants conspired with Collings for the purpose of cheating Redenbaugh out of his share, and converted the goods to their own use and to aid Collings to defraud Redenbaugh; that the partnership was not in debt to any other person, and this suit was brought solely to protect Redenbaugh; that Collings is joined simply to avoid a demurrer for nonjoinder, — and concludes: "Therefore, by reason of the premises, this plaintiff has been damaged in the sum of $6,000, for which said sum, and for costs herein, plaintiff asks judgment." To this petition defendants filed a general denial. Defendants filed an affidavit denying the partnership of Redenbaugh and Collings. A jury was waived, and the cause submitted to the court, which found for defendants, and rendered judgment accordingly. Before judgment, at the request of plaintiff Redenbaugh, the court made a finding of facts, which was as follows:

"W. H. Collings & Co., a firm composed of W. H. Collings and A. G. Redenbaugh, v. Moses Kelton et al. Conclusions of Facts as Found by the Court. The court, on request of plaintiffs, finds the conclusions of facts in the above-entitled cause as follows, to wit: (1) That on or prior to the 20th day of May, 1891, the plaintiffs were equal partners, doing business in general merchandise, land, and live stock, in Ozark county, Mo., under the firm name of W. H. Collings & Co. (2) That they owned a stock of goods, town lots, storehouse, and a farm at an estimated value of $5,000, (3) That prior to and nearly up to the said 20th day of March, 1891, plaintiff Redenbaugh, either in person or by clerk, participated more or less in said business. (4) That on the said 20th day of May, 1891, plaintiffs entered into the contract in evidence. (5) That defendants had no knowledge of the existence of said contract until after the commencement of this suit. (6) That on the said 20th day of May, 1891, plaintiff Redenbaugh sold and delivered to plaintiff Collings his entire interest in said business for a consideration of $2,500, — $500 paid in live stock at the time, and the remainder, $2,000, to be paid in three years without interest. (7) that plaintiff Redenbaugh retained no lien on said stock of goods for the payment of said $2,000, or for the debts due and owing by said firm. (8) That said Redenbaugh thereupon withdrew from said business by himself and his clerks, and did not thereafter participate in said business, nor was he known to look after or participate in said mercantile business thereafter. (9) That said mercantile business was thereafter carried on in the name of W. H. Collings, who filed bond and took out license in his own name, and bought and sold goods in the name of W. H. Collings at the same stand until the 2d day of October, 1891. (10) That on said 2d day of October, 1891, said W. H. Collings sold said stock of goods to defendants at 71 cents on the cost and carriage price of said goods, except cost price for a few groceries, and except a stock of damaged clothing up stairs, which he exchanged in bulk for 120 acres of land in Douglas county, Mo.; that the stock of goods, exclusive of the clothing, invoiced, at 71 cents on the dollar, at some $1,358; that said stock of goods was shelf-worn, moth-eaten, and really not worth over 50 cents on the dollar at first price. (11) That defendants paid down $758 and gave their promissory note to W. H. Collings, of date October 2, 1891, due in one year; that said note was indorsed to one McKeurley before maturity, and was paid by defendants to said McKeurley on demand when due. (12) The defendants had no notice, or knowledge sufficient to put a prudent person on the inquiry, that Collings owed Redenbaugh anything on said stock of goods; that defendants bought and paid full value for said goods in good faith, without knowledge of the equities existing between plaintiffs, bought them in the usual course of business, and without any intent to defraud anyone in the transaction. (13) That it appears from the records of the circuit court of Texas county, Mo., wherein said A. G. Redenbaugh was plaintiff, and W. H. Collings was defendant, that said A. G. Redenbaugh, as plaintiff, obtained a decree in said court, finding that the sale of the 20th day of May, 1891, by Redenbaugh to Collings, worked a dissolution of the partnership of that date, and enforced a lien on the real estate of Collings in Ozark county, Mo., to secure any amount that may be found to be due and owing from said Collings to said Redenbaugh under said sale of May 20, 1891."

To which said conclusions of facts the plaintiff at the time then and there excepted, and still excepts, and on the 17th day of June, 1893, the plaintiff submitted to the court his statement of facts, and moved the court to...