Fore v. Hittson

• Decision Date: 27 April 1888
• Parties: FORE <I>et al.</I> v. HITTSON <I>et al.</I>
• Court: Texas Supreme Court

8 S.W. 292

FORE et al. v. HITTSON et al.

Supreme Court of Texas.

April 27, 1888.

Appeal from district court, Tarrant county.

Hunter & Stewart, for appellants. Wynne & Carter, for appellees.

WALKER, J.

It appears that, early in 1883, Fore, Morphy & Henderson were partners in a contract to deliver cattle to the Stone Cattle & Pasture Company. The cattle purchased for the contract were thrown back upon them, and were sold to the Texas Investment Company in July, 1883. From that time until the date of the bond sued on, May 27, 1884, the parties had transactions together in winding up their old matters. They had debts to settle, and had paper of the Texas Investment Company to use to meet and settle their debts. July, 1884, an organization of the Texas Investment Company, Limited, was made, which assumed the indebtedness of the original company, including a large debt to Fore, Morphy & Henderson on account of the purchase of cattle the year before. In the new company, Fore, Morphy & Henderson took $20,000 in stock, paid for in their note for $5,000, signed in the firm name by Morphy, by consent of Fore and Henderson, and by $15,000 in paper of the company surrendered by said Fore, Morphy & Henderson. In handling the paper of the Texas Investment Company and of the Texas Investment Company, Limited, which Fore, Morphy & Henderson held and used in settling up their debts made in their cattle enterprise of the previous year, the firm name was signed, as it became necessary, by both Morphy and Henderson. It seems that in May, 1884, Morphy used the firm name, Fore, Morphy & Henderson, by signing it as surety to a cattle contract, made by the Texas Investment Company, Limited, with the Independence Cattle Company of Kansas City, for delivery of 8,000 head of cattle. Of this, Fore and Henderson knew nothing until several months after it was done. Morphy was president of the Texas Investment Company and of its successor. Reed, of Reed & Hittson, was vice-president of the company. May 27, 1884, Morphy, president of the company, made the contract and bond sued on, for the delivery of 1,500 head of cattle to Reed & Hittson, and to the bond made Morphy signed, as security, the firm name, "Fore, Morphy & Henderson." Morphy made no declarations to Reed, who acted in the business for Reed & Hittson, as to having the authority to sign the name of the partnership. It appeared that the partnership had been formed only to fill the contract for cattle with the Stone Cattle & Pasture Company, and its continuance was only in settling up the debts of the concern made in obtaining funds and debts made in that enterprise. Morphy advised and succeeded in making the firm take $20,000 of stock in the new company; paying for it as before stated. Under this joint holding of this stock it seems that Morphy concluded that he had the right to use, at pleasure, in any way, the names of Fore and Henderson. August 5, 1884, Hittson & Reed brought suit against the Texas Investment Company, Limited, as principal, and against J. P. Smith and Fore, Morphy & Henderson as sureties, upon their bond, to recover money alleged to have been paid by plaintiffs on the contract made with said investment company for the delivery of certain cattle described, and which it was alleged the investment company had failed to deliver. The petition set out details about which there is no question. The defendants Fore and Henderson separated; pleaded non est factum; that there was no such partnership as Fore, Morphy & Henderson, — the pleadings being verified by oath of each. In replication, plaintiffs alleged that the defendants Fore and Henderson, by their course of dealing, had misled plaintiffs as to Morphy's authority to act; that the defendants had ratified the act of Morphy; and that the reorganization of the company (limited) was made for the purpose of providing funds and means to pay the debts of the old company; and that the taking of stock by Fore, Morphy & Henderson was in an effort to secure their debts on the company, — setting out details, and charging that Morphy had special authority to make such contracts, and had done so with the knowledge and ratification of the other defendants, Fore and Henderson. There was much testimony adduced; Morphy, Smith, Henderson, Fore, plaintiff Reed, and others having been examined. Both Fore and Henderson testified that they never knew, before suit was brought, that Morphy was using their names as sureties upon the contract sued on, or any other. Each denied Morphy's authority in signing the bond in suit. The court instructed the jury "that a partnership can only exist, as between the parties themselves, in pursuance of an agreement to which the minds of all have...