Appeal
from City Court of Montgomery; A. D. Sayre, Judge.
Action
by the Georgia Home Insurance Company against F. M. Boykin.
From a judgment in favor of defendant, plaintiff appeals.
Reversed.
The
substance of the counts is that during and prior to March
1896, plaintiff, a corporation, was engaged in business of
fire insurance at Montgomery, Ala., and had a good business
the agent of plaintiff being Stuart Bros., composed of George
and M. W. Stuart, who derived a large income from said
business. That on the 13th March, 1896, Stuart Bros. were
indebted to plaintiff in the sum of $1,803.22, which was past
due and unpaid, and on the said 13th March the defendant
purchased of George Stuart the interest of George Stuart in
the firm of Stuart Bros., and George Stuart executed and
delivered to defendant the following paper: "For and in
consideration of four hundred dollars, paid by F. M. Boykin
I hereby sell, transfer and convey unto said Boykin my 1/2
interest of every description in firm of Stuart Bros., said
Boykin accepting all claims due and against said interest. I
further agree not to engage in real estate or insurance
business for term of 2 years in the city of Montgomery
Ala." That on said 13th March, Stuart Bros. was
dissolved, and the firm of F. M. Boykin & Co., composed of
defendant and M. W. Stuart, executed the following paper
"Notice is hereby given that the partnership heretofore
subsisting between George Stuart and M. W. Stuart,
Montgomery, Ala., under firm name of Stuart Bros., was
dissolved by mutual consent on the 13th day of March,
1896." That thereupon defendant and M. W. Stuart
executed a paper, and attached the same to the dissolution
notice of Stuart Bros., as follows: "Referring to above,
we, F. M. Boykin and M. W. Stuart, having purchased the
interest of George Stuart in the firm of Stuart Bros., have
this day formed a partnership under the style of F. M. Boykin
& Co. All debts owing to Stuart Bros. are to be received by
us, and all debts due by said Stuart Bros. to be paid by
us." That the sale by George Stuart of his interest to
defendant, the dissolution of the firm of Stuart Bros., and
the formation of the firm of F. M. Boykin & Co. were parts of
the same transaction, on the 13th March, 1896. That
thereafter, on the 16th March, 1896, while the said $1,803.22
was still due from Stuart Bros., and unpaid to plaintiff,
said firm of F. M. Boykin & Co. applied to plaintiff for its
insurance agency in the city of Montgomery, and plaintiff,
being informed of said transaction above mentioned, assented
thereto, and agreed to appoint F. M. Boykin & Co. said
agents; and thereupon F. M. Boykin & Co. executed and
delivered to plaintiff the following paper, viz.:
"Montgomery, Ala., March 16th, 1896. To Georgia Home
Insurance Co., Columbus, Ga.--Gentlemen: As successors to the
firm of Stuart Bros., we assume their indebtedness to you and
will pay off the same during the next four months. We will
pay some of it each month, and as much each month as we can.
We understand the balance due up to March 1st to be
($1,803.22) eighteen hundred and three and 22/100
dollars." That the delivery of said paper by F. M.
Boykin & Co., and plaintiff's assent to the arrangement,
as hereinabove described, between Stuart Bros. and F. M.
Boykin, its agents in Montgomery, were all parts of one
transaction. That no part of said $1,803.22 has ever been
paid. That M. W. Stuart is not sued, because he has been
discharged in bankruptcy. That plaintiff performed its
agreement to appoint F. M. Boykin & Co. its agents, and
plaintiff wholly released George Stuart from liability for
said $1,803.22.
Defendant
filed 20 pleas. Demurrers were sustained to all these pleas
except to pleas numbered 4, 4 1/2, 5, 9, 10, 12, 13, 14, 15,
and 18. These pleas were in words and figures as follows:
"(4)
For further plea defendant says that said alleged agreement
on the part of defendant to pay the debt of the plaintiff
was fraudulently procured, in this: That on, to wit, the
13th day of March, 1896, said George Stuart, as a member of
said firm of Stuart Bros., offered to sell to defendant his
interest in said partnership of Stuart Bros. That, in order
to induce defendant to buy said interest, said George
Stuart fraudulently concealed from defendant the true
amount of the indebtedness of said firm of Stuart Bros.,
well knowing that had this defendant been truly informed of
the amount of the indebtedness of said firm he would not
have purchased said interest, as defendant avers the fact
to be. That on, to wit, the 17th day of March, 1896,
defendant discovered that said George Stuart had so
concealed the amount of said indebtedness, and thereupon,
and by reason of said discovery, defendant, on said 17th
day of March, rescinded said agreement, the agreement to
pay the debts of Stuart Bros., including the said debt
owing the plaintiff, and gave notice to said George Stuart
and to plaintiff, on said 17th day of March, and before
plaintiff had appointed Boykin & Co. its agents, as it had
agreed to do as aforesaid, that said agreement had been so
rescinded. That consequent upon such rescission, and for
the same reason as aforesaid, this defendant dissolved said
partnership, and gave notice to plaintiff of such
dissolution on the said 17th day of March, and since that
time this defendant has not been interested in said
partnership or its assets.
"(4
1/2) Defendant, for further plea, alleges that prior to
said 13th day of March, 1896, said firm of Stuart Bros.
were engaged in business as fire insurance agents, and
there had been owing from various persons premiums on
policies insuring their property from fire, of which
premiums, when paid, said firm of Stuart Bros. would have
been entitled to retain a material and valuable part as
commissions, as between said firm and the companies whose
policies had been issued. That at the time of the delivery
of such insurance policies to such persons said George
Stuart was indebted to such persons, and had agreed with
such persons to offset said sums due by them, respectively,
with such indebtedness, as far as said premiums should
extend. That when he sold his interest in the firm of
Stuart Bros. to defendant said George Stuart fraudulently
concealed from this defendant the fact that any such
agreements had been made in respect to said premiums. That
the fact that such premiums were owing said firm was shown
on the books of said Stuart Bros., and formed a material
part of the consideration for the purchase by defendant of
said George Stuart's interest in said firm. That
affiant discovered on, to wit, the 17th day of March, 1896,
the fact that said aforesaid agreements to offset said
premiums with said indebtedness had been made, and
thereupon, and on the same day, and before plaintiff had,
as agreed, appointed F. M. Boykin & Co. its agents,
defendant, because of said fraudulent concealment,
rescinded the agreement to assume with M. W. Stuart payment
of the debts of said Stuart Bros., and dissolved
partnership with said M. W. Stuart, and on that day gave
notice to said George Stuart and to the plaintiff that said
agreements had been rescinded and said partnership had been
dissolved.
"(5)
And this defendant again avers, as if here again fully set
forth, all the statements made in the foregoing plea
numbered 4 1/2, and in addition thereto alleges: Defendant
avers that the plaintiff had not, prior to receiving notice
of the rescission of said agreements and dissolution of
said firm, released either George Stuart or M. W. Stuart,
or said firm of Stuart Bros., from said debt, or suffered
any detriment on the faith of the undertaking of this
defendant sued upon."
"(9)
Comes the defendant, F. M. Boykin, and for further answer
to the whole complaint says that all the agreements sued on
in the complaint arise out of and are based on one and the
same transaction, and no other, to wit, that on, to wit,
the 13th day of March, 1896, this defendant entered into an
agreement with one George Stuart, by which this defendant
purchased the interest of said George Stuart in the then
partnership of Stuart Bros., composed of said George Stuart
and Moses W. Stuart, the said partnership then being
engaged in the real estate and fire insurance business, it
being understood at the time that this defendant and said
M. W. Stuart would at once form a partnership and carry on
said business, and should assume as part of said agreement
with said George Stuart the debts of said firm of Stuart
Bros.; and this defendant avers that at the time of his
said purchase of said George Stuart's interest in said
firm of Stuart Bros., and as an inducement thereto, the
said George Stuart represented to this defendant that
certain persons were indebted to said firm, or the
insurance companies represented by said firm, and on which
indebtedness said firm was entitled to large commissions,
when in fact and in truth such indebtedness had been
previously collected or discharged by the said George
Stuart or did not exist; and the said George Stuart then
and there, as further inducement to said trade, represented
to this defendant that the indebtedness of said firm did
not exceed, to wit, three thousand dollars ($3,000.00),
when in fact said indebtedness amounted to, to wit, about
six thousand dollars ($6,000.00), and the said George
Stuart, at the time of making said representations, knew
the same to be false, and this defendant, relying
thereupon, was misled and deceived into making said
contracts; and defendant further avers that before the
plaintiff had in any manner assented to the assumption of
the said debt by these defendants, or by this defendant,
the said trade
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