Redenbaugh v. Kelton

• Decision Date: 19 November 1895
• Parties: Redenbaugh et al., Appellants, v. Kelton et al
• Court: Missouri Supreme Court

32 S.W. 67

130 Mo. 558

Redenbaugh et al., Appellants, v. Kelton et al

Supreme Court of Missouri, Second Division

November 19, 1895

Appeal from Newton Circuit Court. -- Hon. J. C. Lamson, Judge.

Affirmed.

Numa F Heitman and George Hubbert for appellants.

(1) The pretended sale was made by Collings without any authority express or implied, from Redenbaugh, his partner, and said want of authority was known to the purchasers, Kelton and son. Said sale was made by Collings to defraud Redenbaugh of Redenbaugh's lien as partner, on the stock of goods, and Kelton and son had knowledge of Redenbaugh's lien as partner on the goods, and bought the same at a grossly inadequate consideration to aid Collings to defraud Redenbaugh of Redenbaugh's rights in and to the stock of goods. Cayton v. Hardy, 27 Mo. 536; Croughton v Forrest, 17 Mo. 131; Priest v. Choteau, 85 Mo. 398; Hager v. Graves, 25 Mo.App. 165; Ackley v. Staehlin, 56 Mo. 558; Phelps v. McNeely, 66 Mo. 554; Shackelford v. Clark, 78 Mo. 491; Hilliker v. Francisco, 65 Mo. 598; Sexton v. Anderson, 95 Mo. 373; Noble v. Metcalf, 20 Mo.App. 360; Level v. Farris, 24 Mo.App. 445; Kingsland v. Drumm, 80 Mo. 646; Coover v. Johnson, 86 Mo. 533; Lee v. Bowman, 55 Mo. 400; Peet v. Spencer, 90 Mo. 384; Bender v. Merkle, 37 Mo.App. 234; Tufts v. Thompson, 22 Mo.App. 564; Reyburn v. Mitchell, 106 Mo. 365. (2) A condition in a contract of sale of personal property that the title shall remain in the vendor until the purchase money is paid, is valid, and will be enforced even against a bona fide purchaser. Wangler v. Franklin, 70 Mo. 659; Parmlee v. Catherwood, 36 Mo. 480; Sumner v. Cotty, 71 Mo. 121; Little v. Page, 44 Mo. 412; Matthews v. McElroy, 79 Mo. 202; Ridgeway v. Kennedy, 52 Mo. 24; Griffin v. Pugh, 44 Mo. 326. (3) Collings had no authority to make sale of the entire stock in bulk at less than wholesale price and to give away the $ 1,000 worth of clothing upstairs, and the Keltons knew it. Ins. Co. v. Bennett, 5 Conn. 597; Chapman v. Deverough, 32 Vt. 616; Williams v. Bennett, 10 Kan. 455; Yale v. Yale, 13 Conn. 185; Rogers v. Batchelor, 12 Pet. 221; Pollock v. Williams, 42 Miss. 88. (4) One of a firm of retail merchants has no power to make a fraudulent sale of all the retail stock in bulk at a grossly inadequate consideration for the purpose of defrauding his copartner, as was the case here, to persons who had knowledge of the existence of the partnership and the nature of it. Loeb v. Pierpont, 58 Iowa 469; Matter of Daniels, 14 R. I. 500; Wells v. March, 30 N.Y. 344; Dickinson v. Legate, 1 Desau. Eq. 537; Moddwell v. Keever, 8 Watts & S. 64; Leeschick v. Addison, 19 Abb. Pr. 169; Hewitt v. Sturdevant, 4 B. Mon. 453; Soberheimer v. Wheeler, 45 N.J.Eq. 614; Mussey v. Holt, 24 N.H. 248; Hudson v. McKinsie, 1 E. D. Smith, 358; Cayton v. Hardy, 27 Mo. 536. (5) The dissolved partnership continues in force, in legal contemplation, for the purpose of winding up its affairs, until a full settlement has been had, and all outstanding liabilities have been met. Brown v. Higginbotham, 27 Am. Dec. 618; Ellicott v. Nichols, 48 Am. Dec. 546; Kinsler v. McCants, 53 Am. Dec. 711.

Cloud & Davies for respondents.

(1) The $ 800 note mentioned in the contract of May 20 was not a partnership debt. A. G. Redenbaugh testifies that it was $ 800 that W. H. Collings borrowed to reimburse him for money that he had advanced. 17 Am. & Eng. Encyclopedia of Law, p. 1109, par. 3; Kimball v. Walker, 30 Ill. 482, loc. cit. 514; Drake v. Williams, 18 Kan. 98; Gibbs v. Bates, 43 N.Y. 192; Patterson v. Martin, 6 Ired. (N. Car.) 111; Wright v. Troop, 70 Me. 346. (2) The Texas county decree was competent evidence on the part of defendant. He was a privy thereto as a purchaser from Collings. (3) Redenbaugh had no lien on the stock of goods sold to Collings, and, if he had, could not enforce it in this action. 2 Lindley on Partnership, top page 429; Parker v. Merritt, 105 Ill. 293. (4) The findings of fact by the trial court will be binding in this court. Handlan v. McManus, 100 Mo. 124; Krider v. Milner, 99 Mo. 145; Beck v. Pollard, 55 Mo. 26; Miller v. Breneke, 83 Mo. 163.

Gantt, P. J. Burgess, J., concurs; Sherwood, J., not sitting.

OPINION

Gantt, P. J.

This is an appeal from the circuit court of Newton county. On the twelfth of May, 1893, a demurrer was sustained to the original petition in the case, and on that day an amended petition was filed, upon which the cause was tried.

The petition alleges, substantially, these facts: That defendants are, and long have been, copartners; that on day of , 1891, plaintiffs were partners under the name of "W. H. Collings & Co.;" that said partnership was organized for the purpose of carrying on a general retail store; to buy at wholesale and sell at retail in the ordinary course of business, at least until Redenbaugh should be fully reimbursed for his capital invested, which amounted to $ 5,000, which amount, he avers, Collings agreed to see he should receive out of the proceeds of the business, in the ordinary course of selling; that their place of business was Noble, Ozark county; that their stock consisted of general merchandise usual in a country store, and was owned by them in equal shares; that on day of , 1891, Collings, without authority of Redenbaugh, and without his knowledge, and to defraud Redenbaugh and convert the said stock to his own use, sold and delivered the whole of said stock to defendants Kelton, and applied the proceeds to his (Collings') use, in pursuance of a fraudulent conspiracy with defendants; that the stock so converted was worth $ 6.000; that said sale was wholly without the authority of Collings and the scope of the said partnership, and was made in pursuance of collusive agreement with defendants; that defendants knew said goods were the property of the firm of Collings & Co., and that said sale was beyond the scope of said partnership, and contrary to the agreement between Redenbaugh and Collings; and that Redenbaugh had never been paid for his interest in the same; that defendants conspired with Collings for the purpose of cheating Redenbaugh out of his share, and converted the goods to their own use and to aid Collings to defraud Redenbaugh; that the partnership was not in debt to any other person, and this suit was brought solely to protect Redenbaugh; that Collings is joined simply to avoid a demurrer for nonjoinder, and concludes: "Therefore, by reason of the premises, this plaintiff has been damaged in the sum of $ 6,000, for which said sum and for costs herein plaintiff asks judgment."

To this petition defendants filed a general denial. Defendants filed an affidavit denying the partnership of Redenbaugh & Collins. A jury was waived and the cause submitted to the court, which found for defendants, and rendered judgment accordingly.

Before judgment, at the request of plaintiff Redenbaugh, the court made a finding of facts, which was as follows:

"W. H. Collings & Company, a firm)

composed of W. H. Collings and)

A. G. Redenbaugh,)

v.)

"Moses Kelton et al.)

"Conclusions of facts as found by the court.

"The court, on request of plaintiffs, finds the conclusions of facts in the above entitled cause as follows, to wit:

"1. That on or prior to the twentieth day of May, 1891, the plaintiffs were equal partners, doing business in general merchandise, land, and live stock, in Ozark county, Missouri under the firm name of W. H. Collings & Co.

"2. That they owned a stock of goods, town lots, storehouse, and a farm, at an estimated value of $ 5,000.

"3. That prior to and nearly up to the said twentieth day of March, 1891, plaintiff Redenbaugh, either in person or by clerk, participated more or less in said business.

"4. That on the said twentieth day of May, 1891, plaintiff entered into the contract in evidence.

"5. That defendants had no knowledge of the existence of said contract until after the commencement of this suit.

"6. That on the said twentieth day of May, 1891, plaintiff Redenbaugh sold and delivered to plaintiff Collings his entire interest in said business for a consideration of $ 2,500 -- $ 500 paid in live stock at the time, and the remainder, $ 2,000, to be paid in three years, without interest.

"7. That plaintiff Redenbaugh retained no lien on said stock of goods for the payment of said $ 2,000, or for the debts due and owing by said firm.

"8. That said Redenbaugh thereupon withdrew from said business by himself and his clerks, and did not thereafter participate in said business, nor was he known to look after or participate in said mercantile business thereafter.

"9. That said mercantile business was thereafter carried on in the name of W. H. Collings, who filed bond and took out license in his own name, and bought and sold goods in the name of W. H. Collings, at the same stand, until the second day of October, 1891.

"10. That on said second day of October, 1891, said W. H. Collings sold said stock of goods to defendants at seventy-one cents on the cost and carriage price of said goods, except cost price for a few groceries, and except a stock of damaged clothing upstairs, which he exchanged in bulk for one hundred and twenty acres of land in Douglas county, Missouri; that the stock of goods, exclusive of the clothing, invoiced at seventy-one cents on the dollar, at some $ 1,358; that said stock of goods were shelf-worn, moth-eaten, and really not worth over fifty cents on the dollar at first price.

"11. That defendants paid down $ 758 and gave their promissory note to W. H. Collings, of date October 2, 1891, due in one year; that said note was indorsed to one McKeurley before maturity, and was paid by defendants to said McKeurley on demand when due.

"12. The defendants had no notice or...