Lynchburg v. Miller

• Decision Date: 22 September 1898
• Citation: 31 S.E. 812,96 Va. 357
• Parties: COMMERCIAL BANK OP LYNCHBURG. v. MILLER et al.
• Court: Virginia Supreme Court

31 S.E. 812

96 Va. 357

COMMERCIAL BANK OP LYNCHBURG.

v.MILLER et al.

Supreme Court of Appeals of Virginia.

Sept. 22, 1898.

Partnership — Creation — Member's Liability.

1. Where two firms of tobacco dealers, one in Virginia and the other in England, agreed that the American firm should buy tobacco in this country, and ship it to the English firm to be sold on their joint account, and agreed to bear the expenses, and divide the profits and losses of the business equally, the members of each firm are partners, so far as this business is concerned.

2. Where one was in partnership with a trading firm in a particular business, he was not bound by notes executed by the firm in its own name to a bank after his partnership was dissolved by mutual consent, in settlement of prior obligations of the firm to the bank, where it was not proved that it was represented to the bank, at or before the notes originated, that he was a partner in the transaction out of which the indebtedness arose.

Appeal from circuit court of city of Lynchburg.

Bill by the Commercial Bank of Lynchburg against R. L Miller and others. The bill was dismissed, and the plaintiff appeals. Affirmed.

J. E. Edmunds, Caskie & Coleman, and J. W. Daniel, for appellant.

Thos. N. Carter, R. G. H. Kean, Harrison & Long, and A. W. Nowlin, for appellees.

CARDWELL, J. This is an appeal from a decree of the circuit court of the city of Lynchburg dismissing the bill of appellant, the Commercial Bank of Lynchburg, filed to enforce, by way of foreign attachment the collection of a debt amounting to $7,000 and interest, alleged to be due and owing to the bank by R. L. Miller, T. B. Watkins, William Wilberforce Jose, John Edmund Jose, and Thomas P. H. Jose, as partners in the leaf tobacco business, and trading under the firm style of Miller & Hawkins, the attachment having been levied upon a debt amounting to about $12,000, due to the Joses underthe style and firm of T. P. Jose & Sons, by Miller & Hawkins, which debt is secured by deed of trust to Thomas N. Carter, trustee, upon certain real estate in the city of Lynchburg; the Joses being nonresidents of the state of Virginia and residing in Great Britain.

It appears that on the 24th of December, 1S87, an agreement was entered into between the Joses, doing business under the style and firm name of T. P. Jose & Sons, of the one part, and R. L. Miller and T. B. Hawkins, doing business as Miller & Hawkins, of the other part, for the purpose of doing what the parties to the agreement denominated "a joint-account business together in the purchase, preparation, and sale of tobacco, and all usual trade operations connected therewith, for a term of five years from the 1st of January, 1888, determinable as mentioned in article 10" of the agreement. The other features of the agreement are as follows:

(2) The costs and expenses of the business were to be borne in equal shares, and the profits or losses equally divided.

(3) Miller & Hawkins (at Lynchburg) were to buy, free of commission, prepare, and ship to T. P. Jose & Sons at their Bristol house, in England, bright Virginia leaf, or such other classes of tobacco as T. P. Jose & Sons should prescribe, quantities, prices, grades, and styles to be as T. P. Jose & Sons should direct; paying all charges and insurance until t. o. b. the cars at Lynchburg, and consign the same by through bill of lading to T. P. Jose & Sons at Bristol.

(4) The tobacco so shipped to Bristol, T. P. Jose & Sons were to sell free of commissions and brokerage, pay insurance, inland and marine, and freight, landing, warehouse, and selling charges, and render accounts of such payments, to be charged to their "joint account and the sales credited to the same."

(5) When through bills of lading were sent to T. P. Jose & Sons, Miller & Hawkins were at liberty to draw against the shipment at 60 days, for not exceeding 80 per cent. of the cost of the tobacco, and expenses and charges accrued and paid by Miller & Hawkins, up to the time the tobaccos were put f. o. b. the cars at Lynchburg.

(6) T. P. Jose & Sons were to have interest, at 5 per cent, on the amount of such drafts from their payment.

(7) Miller & Hawkins were not to ship (with an exception in favor of other firms with which Miller & Hawkins were interested) any tobacco to any merchant in Great Britain or England, except at Edinburgh, Glasgow, or London, and all shipments to T. P. Jose & Sons at Liverpool were to be for sale by the latter on commission, and not on joint account.

(8) Miller & Hawkins were to forward to T. P. Jose & Sons, as early as possible in every season, samples of all such grades and styles of tobacco as T. P. Jose & Sons might require or direct, and keep them as well posted as possible as to crops, prospects, prices, and other things relating to the business, and in all respects conduct this joint-account business with due regard to the advice, suggestions, and interests of T. P. Jose & Sons.

(9) The joint-account brands were to be joint property, and Miller & Hawkins were to take cars to brand all tobacco consigned to persons in Glasgow or London in manner absolutely different from the joint-account brands.

(10) Miller & Hawkins were to pay or allow T. P. Jose & Sons £250 sterling if they from any cause, except death or mental incapacity, failed to continue the agreement during the term of five years from January 1, 1888, unless previously terminated by T. P. Jose & Sons, who should be at liberty to do so at any time, by three calendar months' previous notice In writing.

T. P. Jose & Sons were extensively engaged In business as tobacco merchants and tobacco brokers with one of their business houses located at Liverpool and the other at Bristol, England, handling tobaccos for all shippers to them; and Miller & Hawkins were located at Lynchburg, Va., and engaged in buying, preparing, and shipping to the tobacco markets in America, Great Britain, Germany, Australia, and other countries, and had been for a number of years prior to this agreement with T. P. Jose & Sons, and went on with their general business after January 1, 1888, as before, without any change in their firm name or in their method of dealing with the appellant, the Commercial Bank of Lynchburg, —Miller attending to the finances of the firm, while Hawkins superintended the factory or warehouse. They began to make shipments to Bristol under this joint-account agreement, drawing drafts against their shipments to T. P. Jose & Sons through the Commercial Bank. The first draft drawn against the first shipment on joint account was on March 28, 1888, and numerous drafts were thereafter drawn, until May, 1891. In the meanwhile, Miller & Hawkins were also shipping to foreign markets, and drawing against other parties than T. P. Jose & Sons-at other points to a large amount, besides their dealings with other markets in the United States, and all of this business was done through the Commercial Bank of Lynchburg. In the spring of 1891, this joint-account business at Bristol having become unsatisfactory to T. P. Jose & Sons, T. P. H. Jose, a member of this firm, who was in Lynchburg, Va., in April, and again In May, of that year, put an end to it, Miller acquiescing in its termination at that time, though no notice in writing of its termination had been given as stipulated In the tenth article of the agreement of December 24, 1887. An effort was afterwards made by Miller to renew the arrangement with T. P. Jose & Sons, but it was never assented to by the latter.

It further appears that all invoices on this joint account were so expressed on their face, and the last one sent was dated April 29, 1891; and all subsequent shipments to Bristol, as well as to Liverpool, to T. P. Jose & Sons, were "for and on account of the undersigned, "—that is, Miller & Hawkins, —until this firm was dissolved, and then on account of R. L. Miller or R. L. Miller & Co. on commission.

In August, 1892, the firm of Miller & Hawkins was dissolved, and notice of its dissolution given in a newspaper published in Lynchburg; Miller buying out all interest of Hawkins in the business, assuming the debts of the firm, and thereafter conducted the tobacco business alone for awhile as R. L. Miller, and afterwards as R. L. Miller & Co., until he failed, in 1894; and left the state.

When the joint-account business was finally closed out, there was a small balance of profit resulting from it to Miller & Hawkins, which was transferred to Miller's account with T. P. Jose & Sons at the Liverpool house; and the general account between Miller & Hawkins and R. L. Miller & Co. with the Liverpool house, involving shipments for sale on commission only, after 1891, resulted in large losses.

Miller & Hawkins had, in 1889, in order to get a line of credit with T. P. Jose & Sons for advances, conveyed to T. N. Carter, trustee, their lot and factory in Lynchburg to secure such advances up to $12,000, and as of October 1, 1895, they owed T. P. Jose & Sons over $13,000, secured in part by this deed of trust; and it is this debt due to T. P. Jose & Sons that the appellant seeks to subject in this suit to the payment of its notes, alleged to have been contracted by T. P. Jose & Sons and Miller & Hawkins, as partners in the leaf tobacco business in Lynchburg, Va., under the firm name of Miller & Hawkins.

Appellant's original bill, filed November 27, 1894, alleged that it was a creditor of R. L. Miller and the Joses, partners in business under the style and firm name of R. L. Miller & Co., to the amount of $7,002.16, with interest, evidenced by four notes, drawn by R. L. Miller, by the style of R. L. Miller & Co., and indorsed by H. J. Hatcher, by the style of H. J. Hatcher & Co.—one dated July 24, 1894, for $1,500; one August 4, 1894, for $3,-000; one August 18, 1894, for $1,000; and the other August 22, 1894, for $1,500; and charged that the Joses were partners of R. L. Miller, under the style and firm name of R. L. Miller & Co.; and...