Fairly v. Nash

Decision Date05 December 1892
Citation12 So. 149,70 Miss. 193
CourtMississippi Supreme Court
PartiesP. FAIRLY v. D. A. NASH

FROM the circuit court of the first district of Hinds county, HON J. B. CHRISMAN, Judge.

The opinion states the facts.

Affirmed.

Brame &amp Alexander, for appellant.

The features of the contract indicating a partnership are as follows:

1. Sharing net profits. This is prima facie a test of a partnership. No intent to create a mere agency appears on the face of the agreement. 1 Lindley on Partnership, 34; 1 Bates on Partnership, § 15; Wood v. Thompson, 22 How. (U. S.), 330; Lynch v. Thompson, 61 Miss. 354; Tharp v. Marsh, 40 Ib., 158; 114 Mass. 114; 105 N.C. 283; 127 Pa 442.

2. The debts were payable, not by Nash, but out of the business. Even the share of Skellinger was not a debt against Nash. He could not sue Nash at law.

3. Each had a voice in selecting clerks, and the books were always open to both.

4. Skellinger's profits were as contingent as Nash's. Neither could draw out any thing until an accounting. The machinery for terminating the relation was as complicated as in partnerships. Skellinger had the right to compel the application of the assets to the payment of debts.

5. No time was fixed for the duration of the relation. The interests could be separated, and a settlement had, only in chancery.

6. Skellinger was to divide the profits of any other venture. Surely, he was not a mere agent in so doing.

Even as general agent, Skellinger had the implied power to protect the business from ruin. Debts were unpaid, and accumulating. In borrowing money to pay them, no new or greater liability was incurred. The outstanding debts were valid. Skellinger, having express power to make debts, had an implied power to provide, by borrowing, for their payment.

Finally, if not technically liable on the note, Nash is liable as for money had and received. No pleadings are necessary in the justice court. If, under the evidence, defendant is liable, it was error to grant the peremptory instruction.

D. Shelton, for appellee.

1. The contract itself terms the parties principal and agent, not partners. The sign proclaimed the agency.

2. Nash, as principal, furnished the money, and Skellinger conducted the business as "agent and manager" for Nash.

3. No power to borrow money or execute interest-bearing notes is conferred.

The foregoing provisions negative the idea of a partnership. Sharing the net profits cannot change the character of the agreement. There was no contract to share loss. Nash's investment was to be returned. If lost, he could not recover of Skellinger half of it. There was no mutual sharing of profits, each as a principal trader. See Collier on Partnership, §§ 25, 27; Story on Partnership, § 55.

As the agreement shows an intent to create Skellinger merely a superintending agent, this intent will control.

An agent has no implied power to bind his principal by borrowing money and executing notes. In this case, no express authority was shown, and the instrument, by expressing certain powers, excludes all others.

E. E. Baldwin, on the same side.

Argued orally by C. H. Alexander, for appellant, and E. E. Baldwin, for appellee.

OPINION

COOPER, J.

In July, 1890, D. A. Nash, the appellee, and one W. S. Skellinger entered into a written contract, the terms of which were as follows:

"It is agreed between said parties that the said Nash shall furnish the money to purchase the stock and fixtures of Isydore Schwartz, at No. -- South State street, Jackson, Miss. and to fill out said stock, as may be necessary for the purpose of carrying on said business; that the said Skellinger shall take charge of the business, as agent and manager thereof for the said Nash, and shall devote his whole time and attention to the carrying on thereof, for which service he shall receive one-half of the net profit of the said business, after payment of the advances of the said Nash and the debts and expenses; that a clerk, to be agreed upon by the said parties, shall be kept, who shall keep the books of the concern; that the books shall be open to both of said parties, and a general settlement between them shall be had every six months, when an inventory of the stock shall be taken, and the debts and accounts listed, and the amount of the net profit for the six months determined. And it is further agreed upon by and between said parties that if the said Skellinger shall, during the time when the agreement is in force, engage in any other business outside of that provided for in this agreement, out of which should arise any profits, such profits shall be divided by him with the said Nash, and shall, monthly, render to said Nash a statement of any such other business engaged in by him, and the profits thereof, and pay to said Nash the half of said profits. The said business is to be carried on as heretofore, as a confectionery, fruit and cigar and tobacco business; the sales are to be for cash, and the credit purchases shall not exceed two hundred dollars outstanding at any one time.

D. A. NASH,

W. S. SKELLINGER."

Under this agreement the business was conducted, a sign being over the door, on which were the words "W. S. Skellinger, agent for D. A. Nash."

Skellinger opened an account with the Capital State Bank in his name, as agent, depositing the money arising from said business, and drawing checks thereon in discharge of accounts for goods bought by him therein. On December 2, 1890, the Capital State Bank had for collection a number of drafts, drawn on Skellinger, agent, for goods bought by him in conducting the business under the contract with Nash, and there was no money in bank to the credit of Skellinger, agent.

To raise money with which to discharge these claims, Skellinger applied to the appellant, Fairly, to become surety upon a note for $ 100, payable to the Capital State Bank, and represented to him that, as agent for Nash, he had full authority to make the note. Relying upon this representation, and the fact that Skellinger was the recognized agent of Nash to conduct the business, and was so conducting it, Fairly joined in the execution of the note with Skellinger, who signed the same "W. S. Skellinger, agent," intending thereby to bind Nash as his principal. The bank discounted the note, and placed the proceeds to the credit of Skellinger, agent, who drew checks upon the fund thus created in payment of the accounts due in the business of Skellinger, agent for Nash; and, in the payment of such accounts, the amount was exhausted, except as to about eleven dollars, which amount was paid out on the order of Skellinger, agent, to one Carraway--who was the father-in-law of Nash--but on what account this payment was made does not appear in evidence.

When the note above spoken of matured, Skellinger failed to pay it, and Fairly, the surety, being called on by the bank, paid the amount to the bank, which indorsed thereon the words:

"Transferred without recourse to P. Fairly.

CAPITAL STATE BANK,

By E. M. PARKER, Cashier,"

and delivered it to Fairly. Fairly thereupon filed the note, as his cause of action, with a justice of the peace, and caused process thereon to be issued against Nash and Skellinger.

Skellinger made no defense, and a judgment by default was taken against him. Nash filed a plea of non est factum; and, a judgment having been rendered against him by the justice of the peace, appealed to the circuit court, where, upon the development of the facts as above set forth by the witnesses for the plaintiff, the court gave a peremptory instruction for the defendant, Nash, and there was a verdict and judgment for him, from which Fairly appeals.

It is contended for the appellant:

1. That the contract between Nash and Skellinger constituted a partnership between them;

2. That, if Nash and Skellinger were not partners, then Skellinger was the agent of Nash, having authority, real or apparent, to bind him by the note;

3. That the money raised by Skellinger and Fairly from the bank having been applied to the payment of debts which were obligatory on Nash, he has, in contemplation of law, received money which, ex oequo et bono, should be repaid to...

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