Adkins v. Hash
| Decision Date | 21 November 1949 |
| Docket Number | Record No. 3521. |
| Citation | 190 Va. 86 |
| Parties | W. J. ADKINS, ET AL., TRADING ETC. v. G. L. HASH, ET AL., TRADING ETC. |
| Court | Virginia Supreme Court |
Present, Hudgins, C.J., and Eggleston, Buchanan, Staples and Miller, JJ.
(1) Partnership — Dissolution — Notice to Public Distinguished from Notice to Former Customers.
(2) Partnership — Dissolution — Evidence Sufficient to Support Presumption That Partnership Continued to Exist.
(3) Agency — Liability of Principal to Third Persons — Purchases of Merchandise by Manager of Store.
1. A partnership is not ended, in respect to strangers, merely by an agreement between the several partners to dissolve it. With respect to notice of the dissolution of, or a sale or transfer of partnership assets to a third party, a distinction is made between those who have previously dealt with the firm and those who had no such dealings. From existing debts and liabilities from the partnership to third persons, a retiring partner is in no case exonerated by the dissolution; and as to such as are contracted afterwards, he is responsible in cases of voluntary dissolution unless he gives notice of the fact to the public by general advertisement in the newspapers or otherwise, and to the previous customers of the firm by special communication, as by circular or other similar mode.
2. Plaintiffs sold merchandise in the usual course of business to the manager of a store in the State operated by defendants originally as partners, believing that the partnership continued to exist. Defendants, who were nonresidents, contended that they were not liable for the purchases because at the time the first was made the partnership had ceased to exist and the business was being conducted by a corporation. The only proof offered to support the contention that the corporation had taken over the business was its certificate of incorporation issued under the laws of another State. There was no evidence that the corporation had complied with the conditions required by law to do business in Virginia, or that the partnership transferred any of its property to the corporation, and no notice of a dissolution or transfer of assets to a third party was given. After the date of incorporation the business was conducted in the same name, at the same location, under the same license, and with the same manager as before, and there was no change in the name over the store or on the sides of the company truck. The trial court erred in striking the evidence as plaintiffs, having established the existence of the partnership, were entitled to the presumption that it continued to exist and was conducting the business when they dealt with it in the absence of evidence of an actual transfer of the business to the corporation.
3. Under the facts of headnote 2, the manager was in complete charge of the business but had no authority to make the purchases, and while he testified that the merchandise went into defendants' store, he did not report the purchases to the home office and paid for them with his personal check. These facts were not known to plaintiffs, and the evidence fully justified the statement that, while the manager may have exceeded his authority in buying merchandise from plaintiffs, there was no valid defense to plaintiffs' claim if the action had been brought against the true owner of the business.
Error to a judgment of the Circuit Court of Giles county. Hon. Vincent L. Sexton, Jr., judge presiding.
The opinion states the case.
Samuel A. Martin and W. B. Snidow, for the plaintiffs in error.
Oppie L. Hedrick and J. Livingstone Dillow, for the defendants in error.
The only question presented by this record is, whether two non-residents, who for several years, had conducted a business as a partnership in Pearisburg, Virginia, can escape liability for a debt contracted by the manager of the business by merely proving that at the time the debt was contracted, the partners had obtained a corporate charter in West Virginia to conduct the same business in Virginia.
There is no substantial conflict in the evidence. G.L. and Rose Mary Hash were residents of Beckley, West Virginia. For seven or eight years prior to April, 1946, they, as partners, had conducted a furniture business in Pearisburg, Virginia, under the firm name of "Hash Furniture Company." During this period D. B. Webster was manager and in complete charge of this business. There was a large sign across the front of the store reading "Hash Furniture Company." On both sides of a truck used by Webster in the business was painted, in large letters, the name "Hash Furniture Company."
Plaintiffs, W. J. Adkins, R. L. Clark and I. H. Vassar, Jr., partners, trading as Eastern Electric Company, of Lynchburg, wholesale dealers in electrical supplies, through their salesman, received from D. B. Webster as manager of defendants' business, twenty-three orders for merchandise on various dates from August, 1946, to March, 1947. On receipt of the first of these orders, plaintiffs, upon investigation, ascertained that the Hash Furniture Company was an established concern of long standing, and a good credit risk. This investigation led them to believe that the Hash Furniture Company was a partnership, with the partners residing in Beckley, West Virginia. Relying upon this information, the merchandise, as directed, was shipped from time to time to the Hash Furniture Company, Pearisburg, Virginia. The purchase price of seventeen shipments was promptly paid, some by personal checks of D. B. Webster. While the manager acknowledged receipt of the last six items on the account, the purchase price amounting to $510.92 was not paid.
Webster testified that he, as manager, in the regular course of business, bought the merchandise from the plaintiffs in the name of the Hash Furniture Company "and every item of it went into defendant's store," at Pearisburg. He used his personal checks to pay plaintiffs for the merchandise shipped, but he made no reports of these transactions to the home office of defendant company. These facts were not known to plaintiffs.
Webster also...
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