Blue Valley State Bank v. Milburn

• Decision Date: 14 November 1930
• Docket Number: 27357
• Citation: 232 N.W. 777,120 Neb. 421
• Parties: BLUE VALLEY STATE BANK, APPELLEE, v. A. W. MILBURN ET AL.: WILLIAM PRAHL, APPELLANT
• Court: Nebraska Supreme Court

232 N.W. 777

120 Neb. 421

BLUE VALLEY STATE BANK, APPELLEE, v. A. W. MILBURN ET AL.: WILLIAM PRAHL, APPELLANT

No. 27357

Supreme Court of Nebraska

November 14, 1930

APPEAL from the district court for Clay county: LEWIS H. BLACKLEDGE JUDGE. Reversed.

REVERSED.

Syllabus by the Court.

It is the duty of the court to instruct the jury upon the issues presented by the pleadings and evidence whether requested so to do or not.

Where the existence of a partnership is in dispute and the evidence contradictory, the question is for the jury under appropriate instructions.

Where plaintiff seeks to hold a third party as a partner upon a contract signed by only one person, there is a presumption of law that the contract is that of the individual signing the same, and it is incumbent upon plaintiff to show that it was a partnership transaction.

If plaintiff seeks to hold the defendant as a partner by reason of his having held himself out as such, plaintiff must show that he relied upon such holding out in making the contract.

The refusal of the court to give instructions requested by the defendant upon issues presented by the pleadings and evidence, and not covered by the instructions given by the court upon its own motion, may be ground for reversal of the judgment.

Where the petition presents several distinct grounds for recovery and the court fails to properly instruct upon each of such grounds, such failure is reversible error when the verdict is a general one for plaintiff, as it is impossible to determine upon which ground the jury based its verdict.

Additional Syllabus by Editorial Staff.

That portion of profits is received by one party as compensation for use of property does not constitute " partnership."

Appeal from District Court, Clay County; Blackledge, Judge.

Action by the Blue Valley State Bank against A. W. Milburn, William Prahl, and others. From the judgment William Prahl and others appeal. On the death of said Prahl the action was revived in name of A. F. Magdanz, executor of his estate.

Reversed and remanded.

M. H. Leamy and Flansburg & Lee, for appellant.

Perry, Van Pelt & Marti and C. L. Stewart, contra.

Heard before GOSS, C. J., ROSE, DEAN, GOOD, THOMPSON and DAY, JJ., and REDICK, District Judge.

OPINION

REDICK, District Judge.

This action was originally brought by Blue Valley State Bank, a corporation, against A. W. Milburn, William Prahl, and Milburn & Prahl, a copartnership, to recover a judgment upon four promissory notes aggregating about $ 8,000, payable to the bank and signed by A. W. Milburn. Owing to the bankruptcy of Milburn, the insolvency of the bank, and the death of Prahl, pending the action, the personnel of the parties has been changed, but for the purposes of this opinion it will be considered a suit by the bank against Prahl.

The petition of plaintiff predicates liability of Prahl upon three grounds: First, that Milburn and Prahl were partners; second, that Milburn and Prahl held themselves out as partners and the moneys were loaned on notes signed by Milburn in reliance on such holding out; and, third, an oral agreement between the bank and Milburn and Prahl that the bank should loan money on Milburn's notes and Prahl would be liable thereon as upon his own obligations.

The answer of defendant Prahl denies generally the allegations of the petition, and denies specifically the existence of a partnership, and alleges that the relationship between Milburn and Prahl was that of landlord and tenant; that Prahl was the owner of a farm and leased it, together with stock, farming implements and tools, to Milburn. The defendant further alleges that the moneys advanced upon the Milburn notes were for the personal use and benefit of Milburn and without the knowledge or consent of the defendant. The answer further sets up the statute of frauds and several other matters which it will not be necessary to notice. The reply was in the nature of a general denial.

There was a trial to a jury resulting in a verdict for plaintiff for $ 10,000, judgment thereon, motion for a new trial overruled, and defendant Prahl appeals. A former judgment against Prahl was reversed by this court, and reference may be had to the opinion in that case for a more extended statement of the issues. Blue Valley State Bank v. Milburn, 116 Neb. 131.

The errors relied upon for reversal are: (1) The verdict is not sustained by sufficient evidence; (2) error in the assessment of the amount of recovery; and (3) error in the giving and refusing of instructions.

As to the first error asserted, it will suffice to say that the evidence is in conflict and we think the case fairly presents questions of fact for the jury. As to the second assignment, the verdict is less than the amount due plaintiff if it was entitled to recover, but of this the defendant cannot be heard to complain. The only questions, therefore, which we will consider are the assignments relating to the giving and refusing of instructions.

The first objection requiring notice is to instruction No. 2 given by the court upon its own motion. By its first instruction the court stated the issues substantially as made by the pleadings, and as instruction No. 2 is the only one purporting to state the law as applied to the pleadings and proof we copy it in full:

"As to the plaintiff's demands, the proposition here in controversy is whether the defendant, William Prahl, assumed responsibility for the sums loaned by the bank in the transactions had by it wholly or chiefly with the defendant Milburn, and whether said defendant Prahl authorized such loans to be made as they were made, agreeing on his part to be liable therefor jointly with Milburn as his own obligations and to see that they were paid to the bank. The burden rests on the plaintiff to establish at the trial by the greater weight of the evidence the truth of these facts before it would be entitled to a favorable verdict. If it has done so as to the whole or any part of its demands sued on herein, then it would be entitled to a recovery in this case for the amount due on so much of its demands as are so established. If it has not done so as to any of its said demands, then it would not be entitled to a verdict in its favor.

"In determining the liability of defendant Prahl upon the plaintiff's demands you will consider the evidence given at the trial bearing upon that question. And you are instructed that it was competent for the parties if they chose, to agree with the bank that upon request of Milburn and Prahl or either of them loans should be made by the plaintiff bank upon the credit and responsibility of both; and if they did so agree, and if relying thereon loans were in good faith so made by the plaintiff bank to defendants or either of them, for use in conduct of the business of the defendants in which they were then engaged, the defendant Prahl would be liable thereon.

"You should consider whether the defendants were in business together in the nature of a partnership and what the agreement between the parties actually was; what the parties Milburn and Prahl and the bank said in reference thereto; what they did in and about their business, and what they now say as to their agreements and transactions; all as the same are shown by the evidence given at the trial, and from this determine the truth of the matter.

"So far as concerns the purpose or use to be made of the moneys loaned, the bank would not be bound to follow the same up so as to see to it that the moneys were actually applied to the ranch business in order to protect its own claim, but if the agreement therefor was made by both defendants as is alleged by the bank, then so long as the same remained unrevoked the plaintiff bank in making a loan would have the right to rely upon the statements, if any, of the defendant then transacting the business as to the purpose for which the loan was desired or to be used; but if such loans or any of them were used or to be used for other purposes than the joint business of the parties, and the bank at the time of making the same knew such fact or in the exercise of ordinary care would have known it, then as to any loans so used and as to which the bank had such knowledge or notice it would not be authorized to recover herein in the absence of a specific agreement or approval thereof by defendant Prahl."

The objections to this...