Bluff City Lumber Company v. Bank of Clarksville

• Decision Date: 02 May 1910
• Citation: 128 S.W. 58,95 Ark. 1
• Parties: BLUFF CITY LUMBER COMPANY v. BANK OF CLARKSVILLE. (Two cases)
• Court: Arkansas Supreme Court

128 S.W. 58

95 Ark. 1

BLUFF CITY LUMBER COMPANY v. BANK OF CLARKSVILLE. (Two cases)

Supreme Court of Arkansas

May 2, 1910

Appeal from Johnson Circuit Court; Hugh Basham, Judge; reversed in part.

Judgment affirmed against Bluff City Lumber Company and judgment against Rutherford reversed.

Austin & Danaher, Cravens & Covington and R. W. McFarlane, for appellants.

The admission of the fact of partnership by one of the alleged partners is not receivable in evidence against any of the others to prove the partnership. 29 Ark. 526. That relation can only exist by virtue of a contract between the parties. 49 Ill. 439; 41 Ore. 617. A corporation cannot become a partner with an individual. 141 Mich. 604; 133 F. 462; 66 C C. A. 336. One holding himself out as a partner does not thereby render himself liable except to those who have extended credit on the strength of it. 80 Ark. 96; 32 Ark 733; 29 Ark. 512; 60 Ill. 484. The true test of partnership is the intention of the parties. 63 Ark. 525.

Patterson & Ragon, J. T. Bullock and Sellers & Sellers, for appellees.

If appellants agreed to become partners, as to third parties they are liable as such. 2 Ark. 346; 5 Ark. 61; 28 Ark. 59; 29 Ark. 512; 32 Ark. 733. When a partnership is once shown to exist, it is presumed to continue until notice is given of its dissolution. 74 Ark. 437; 20 Ark. 171. Since the instructions copied are not shown to be all that were given the question as to whether the jury were properly instructed is not before the court. 28 Ark. 549; 46 Ark. 207. The bill of exceptions must be filed with the clerk within the time allowed. 66 Ark. 312; 72 Ark. 264.

OPINION

BATTLE, J.

The Bank of Clarksville brought an action against Clarksville Lumber Company, alleging that it was a corporation organized under the laws of Arkansas, and that the defendant was a partnership composed of Bluff City Lumber Company, a corporation, J. F. Rutherford, D. T. Reynolds and others, and from 1906 until September, 1909, was engaged in buying and selling lumber and building material in the town of Clarksville, in this State; that soon after defendant began business, as alleged above, it opened an account with the plaintiff, and from time to time borrowed sums of money from it until the 5th day of October, 1907, when it executed its two promissory notes to plaintiff for the sum of $ 500 each, due and payable, respectively, the 5th and 30th days of January, 1908, and bearing ten per centum per annum interest from maturity until paid. The prayer of the complaint was for $ 1,000 and interest.

To this complaint Rutherford and Bluff City Lumber Company separately answered, and denied the foregoing allegations.

E. O. Strong and Dwight Strong, partners doing business under the firm name and style of E. O. Strong & Son, brought an action against the same parties, and made the same allegations as to the Clarksville Lumber Company as contained in the complaint of the Bank of Clarksville, and alleged that they became indebted to them in the sum of $ 964.43 as principal, for lumber material purchased at various times, as evidenced by two notes for $ 250 each, dated 8th day of November, 1907, payable, respectively, the 5th and 20th days of January, 1908, by a note for $ 248.62, dated November 8, 1907, and due February 5, 1908, by a note for $ 215.81, dated April 20, 1908, and due sixty days after date, all of which notes bear ten per cent. per annum interest from date until paid. The prayer of this complaint was for $ 946.43 and interest.

The defendants, J. F. Rutherford and Bluff City Lumber Company, answered and denied the allegations of the complaint of E. O. Strong & Son.

It being conceded by the parties in these actions that the only issue therein was whether or not the defendants were liable as partners, the actions were tried together, by consent, upon that issue in a trial by a jury, with directions to them to find for or against the defendants in each case, which was done, and a verdict was returned in one case in favor of Bank of Clarksville and J. F. Rutherford and against Bluff City Lumber Company, and a judgment was accordingly rendered, and a verdict was returned in the other case in favor of E. O. Strong & Son and against Rutherford and Bluff City Lumber Company, and a judgment was rendered upon the verdict. The Bluff City Lumber Company appealed from the judgment against it in both cases, and Rutherford from the judgment against him in the latter.

Was the evidence adduced in the trial of the two actions sufficient to sustain the verdicts of the jury?

The Bluff City Lumber Company was a corporation engaged in the sale of lumber. J. B. York, Robert York, M. F. Rutherford and J. F. Rutherford were its principal stockholders. Some time in 1905 or 1906 D. F. Reynolds undertook to establish a lumber yard and a business in lumber at Clarksville, in this State. Reynolds had little money, and needed help. He endeavored to enlist J. F. Rutherford, one of the Yorks, and one Samstag, another stockholder of the Bluff City Lumber Company. Reynolds contributed $ 1,000 to the enterprise. That much of an interest was acquired--he was the owner. The negotiation for the promotion of a company seems to have drifted from the stockholders to the corporation itself. In a short time the company was in progress. It had assumed the name of its locality--Clarksville Lumber Company. Reynolds was representing Bluff City Lumber Company as maintaining the business. On the faith of such representation debts were contracted, the debts sued on in these cases being a part of them. The Bluff City Lumber Company apparently accepted the proposition to enter into the proposed partnership by taking joint control with Reynolds of the business; receiving at its principal place of business at Pine Bluff, Arkansas, from the Clarksville Lumber Company daily reports of its business and "a trial balance" at the end of each month, and furnishing the new company with all necessary stationery, such as letter heads, envelopes, books, etc. There is no evidence that Reynolds ever parted with his interest in the business. On the 5th day of April, 1907, the Bluff City Lumber Company disposed of its interest by executing the following instrument of writing:

"This agreement entered into at Pine Bluff, Arkansas, the 5th day of April, 1907, by and between the Bluff City Lumber Company a corporation, party of the first part, and D. T. Reynolds, E. T. Reynolds and A. D. Reynolds, parties of the second part.

...