Bank of Tupelo v. Hulsey

• Citation: 73 So. 621,112 Miss. 632
• Decision Date: 22 January 1917
• Docket Number: 18693
• Court: United States State Supreme Court of Mississippi
• Parties: BANK OF TUPELO v. HULSEY

73 So. 621

112 Miss. 632

BANK OF TUPELO v. HULSEY

No. 18693

Supreme Court of Mississippi

January 22, 1917

Division B

APPEAL from the circuit court of Lee county, HON. CLAUDE CLAYTON Judge.

Suit by F. W. Hulsey against the Bank of Tupelo. From a judgment for plaintiff, defendant appeals.

Appellee was plaintiff in the court below, and in his declaration seeks to recover four thousand and three hundred seventy-five dollars with interest, alleged to be due him by the appellant, Bank of Tupelo, as plaintiff's interest in a certain promissory note for ten thousand and three hundred seventy-five dollars which had been pledged as hereinafter mentioned, and the proceeds of which had been collected by appellant. It appears that E. B. Hulsey & Co. were doing a cotton brokerage business at Tupelo, and pledged the note in question for a loan of ten thousand dollars which the bank made to E. B. Hulsey & Co. on or about May 20, 1911. The note in which appellee claims an interest is a certain note for ten thousand, three hundred seventy-five dollars executed by one Arnold and Mayson in favor of Enoch C. Jones, and indorsed by Enoch C. Jones, and then indorsed by three parties by the name of Hulsey, being heirs of a certain Hulsey estate in Georgia, and being all the adult heirs of said estate except E. B. and F. W. Hulsey. This note was given by Enoch C. Jones as part of the purchase money of certain real estate brought from the Hulsey estate in Georgia, and was turned over to E. B. and F. W. Hulsey as their portion of the proceeds of this real estate transaction. At that time E. B. Hulsey was, and for a long time had been engaged in the cotton business at Tupelo under the trade-name of E. B. Hulsey & Co. About October, 1910, F. W. Hulsey, appellee herein, moved from Georgia to Tupelo, Miss., to engage in the cotton business with his brother E. B. Hulsey. The testimony is conflicting as to whether appellee became an employee of E. B. Hulsey & Co. or a partner in the business. The proof on the part of appellant was sufficient to warrant the jury in finding that appellee was a partner in this cotton business. A portion of this testimony tends to show the following facts: That about the latter part of October, 1910, F. W. Hulsey moved from Georgia to Tupelo and was introduced to the officials of the bank by his brother, E. B.; that these brothers represented to the management of appellant bank that F. W. Hulsey had come to engage in the cotton business with his brother and would be interested as a partner in the firm; that they thereupon requested continued accommodation from the bank; that just prior to the time F. W. Hulsey moved to Mississippi the mother of these brothers had died leaving a valuable estate in Georgia, and that some of this real estate had been sold to Enoch C. Jones, and that two notes evidencing deferred payments were taken for ten thousand, three hundred seventy-five dollars each, and each bearing six per cent. interest; that these notes had been executed by Reuben Arnold and Corlas L. Mayson in favor of Enoch C. Jones and by Jones indorsed to the Hulseys, one of the notes being for one year and the other for two years; that shortly after F. W. Hulsey came to Tupelo he returned to Atlanta and collected the one-year note, and came back with New York exchange for ten thousand dollars which he, on October 25, 1910, deposited with the Bank of Tupelo, appellant herein, and placed five thousand dollars of the proceeds to his individual credit and five thousand to the credit of E. B. Hulsey. At the same time E. B. Hulsey drew his individual check on his deposit or checking account for three thousand dollars and placed this sum to the credit of E. B. Hulsey & Co. with the bank, and simultaneously F. W. Hulsey by check placed three thousand dollars of his funds to the credit of E. B. Hulsey & Co. A few days thereafter, on November 7th, the two brothers came into the bank and simultaneously deposited five hundred each to the credit of E. B. Hulsey & Co. On November 16, 1910, E. B. Hulsey deposited with appellant the second real estate note, the one here in dispute, as collateral or margins against the running cotton account of E. B. Hulsey & Co., and thereupon the cashier executed to the firm the following receipt:

"November 16, 1910. Received of E. B. Hulsey & Co. note of Reuben R. Arnold and Carlos H. Mason, favor Enoch C. Jones, ten thousand, three hundred seventy-five dollars, to be used as margin against their cotton account.

M. H. MOORE, Cashier."

That continuously thereafter E. B. Hulsey & Co. did business with appellant and were indebted to appellant in large sums of money, and on May 20, 1911, E. B. Hulsey for and in the name of E. B. Hulsey & Co. executed to the bank a note for ten thousand dollars, payable on demand, and attached or hypothecated this Arnold and Mayson note as collateral security for the note so executed. It is the further testimony on behalf of appellant, and especially its officials, that F. W. Hulsey took charge of the office of E. B. Hulsey & Co. and appeared to be the manager thereof, answering calls, making deposits, drawing checks, and otherwise conducting the office work for the firm; that F. W. Hulsey lived in the same home with his brother, E. B., and ate at the same table; that while F. W. Hulsey claimed in his testimony in this case to have been working on a salary, representations had been made to the officials by both E. B. and F. W. Hulsey that F. W. was coming to Tupelo to go into the firm, and that after he came he was held out to the management of the bank as a partner in the business, and was so considered by the officers of the bank. The ten thousand dollar note evidencing the loan by appellant to E. B. Hulsey & Co. was not paid, and appellant collected the collateral note in question and applied the proceeds to the large indebtedness due by E. B. Hulsey & Co. to appellant. It is the testimony of the cashier that E. B. Hulsey & Co. in 1912 became financially involved, and after crediting the proceeds of the note in litigation the firm of E. B. Hulsey & Co. was still due and owing appellant a balance of forty or fifty thousand dollars.

F. W Hulsey denied the partnership, and testified that, after his brother deposited the note with the bank in pursuance of the first receipt hereinabove copied, he notified the bank that he had a personal interest in the note and objected to the note being used as further collateral for any indebtedness of E. B. Hulsey & Co. He stated that he was employed at a salary of one hundred twenty-five dollars a month; that the advance of three thousand dollars at one time and five hundred dollars at another, shown to have been made by him to E. B. Hulsey & Co., represented loans, and not his portion of the firm's capital. He introduced in evidence two promissory notes, one for three thousand dollars and the other for five hundred dollars executed in his favor by E. B. Hulsey & Co., the first purporting to be dated October 25, 1910, and the second November 7, 1910, as evidence of the loans which he had made. Appellant insists that these notes were executed long after the dates which they purport to bear and as a part of a scheme to avoid partnership liability. These original notes were introduced in evidence, and at the request of appellant were transmitted to the supreme court to support the charge made by appellant that the year "1911" was first written on the notes, and that the figures "1" at the right-hand corner of each note manifestly appears to have been changed to an "0." It is the further contention of appellant that the blank form on which these notes were executed was not in existence or in use by the bank in the year 1910, and it is the bank's contention that these notes were forgeries and evidence an afterthought on the part of E. B. and F. W. Hulsey when they had become financially involved. The collateral note in dispute was not indorsed either by E. B. or F. W. Hulsey at the time it was attached as collateral, but was indorsed in blank by Jones and the other Hulsey heirs. E. B. Hulsey corroborated his brother...