Roach v. Rector

• Decision Date: 22 November 1909
• Citation: 123 S.W. 399,93 Ark. 521
• Parties: ROACH v. RECTOR
• Court: Arkansas Supreme Court

123 S.W. 399

93 Ark. 521

ROACH v. RECTOR

Supreme Court of Arkansas

November 22, 1909

Appeal from Polk Circuit Court; James S. Steel, Judge; affirmed.

Judgment affirmed.

Wright Prickett and Read & McDonough, for appellants.

The cause should have been transferred to equity. The facts disclose a partnership between the plaintiff and N. M. or E T. Roach. 87 Ark. 142; 134 Pa. 482; 104 Cal. 302; 35 Ga. 234; 74 Ark. 437; 63 Ark. 518; 44 Ark. 423; 80 Ark. 23; 145 U.S 611.

Hal L Norwood, J. I. Alley, J. S. Lake and Wm. H. Rector, for appellee.

1. As to whether or not a partnership exists, it is the intention of the parties which controls and is conclusive as between them. 2 Ark. 346; 22 Ark. 381; 39 Ark. 280; 44 Ark. 423; 54 Ark. 384; 56 Ark. 281; 42 Ark. 390; 4 Ark. 421; 74 Ark. 437; 87 Ark. 412; 145 U.S. 611; 71 Ill. 148; 28 O. St. 319; 30 Cyc. 260-388.

2. All the instructions are to be considered together in determining whether either of them is erroneous. 74 Ark. 377; Id. 431; 77 Ark. 458.

3. Exceptions not brought into the bill of exceptions will not be considered here. 74 Ark. 364; 8 Ark. 428; 25 Ark. 503; 37 Ark 399; 33 Ark. 807.

4. That the verdict was in favor of E. T. Roach is no ground for reversing the judgment against N. M. Roach. They were severally liable, and she will not be heard to complain because he escaped. 34 Ark. 63; 57 Ark. 547.

OPINION

FRAUENTHAL, J.

The appellee, George L. Rector, who was the plaintiff below, instituted this suit in the Polk Circuit Court against the defendants, N. M. Roach, E. T. Roach, Fred Teeter and B. E. Milam, for damages on account of the wrongful taking and conversion of a stock of merchandise. In his complaint he alleged that in 1905 and prior to that time his wife, W. K. Rector, was engaged in the mercantile business at Gillham, Ark., and that she was indebted to the defendant N. M. Roach; that N. M. Roach was the wife of defendant E. T. Roach, who was her agent in the management and conduct of her business. In January, 1906, W. K. Rector was adjudged a bankrupt, and her stock of merchandise was ordered sold in the bankruptcy proceedings. Prior to the day of the sale of said goods E. T. Roach, acting as the agent of his wife, conferred with the plaintiff relative to her said indebtedness against W. K. Rector and the assets of that business; and they considered that, after the sale of the goods and the distribution of the proceeds amongst the creditors, there would still remain due to N. M. Roach $ 800. They then agreed that at the sale of the goods under the bankruptcy proceedings E. T. Roach would bid in the stock of goods for the plaintiff, who would then own and conduct the business and repay the amount bid for the goods and also pay N. M. Roach the said balance of her indebtedness against W. K. Rector.

In pursuance of said agreement E. T. Roach did at said sale bid in said stock of goods, and did purchase same for the plaintiff at and for the price of $ 3,300; and plaintiff did for said purchase price execute to N. M. Roach his note for $ 3,000, payable 90 days after date, and did afterwards pay to her the sum of $ 300, the balance of the purchase money for the goods. He alleged that he thereupon took possession of the stock of goods, and conducted the business at Gillham for a time, and later moved the stock of goods to Mena, Ark., where he carried on the business until April, 1907, when E. T. Roach, acting for and as the agent of his wife, N. M. Roach, wrongfully took possession of the goods and dispossessed him of the storehouse, and then sold the goods to the defendant Fred Teeter, who is a brother of the said N. M. Roach; that Teeter held possession of the goods and business until August, 1907, when he sold same to the defendant B. E. Milam. He alleged that the goods in April, 1907, were of the value of $ 5,754.27. He asked for judgment for the value of the goods and also for damages incurred by reason of being deprived of the business.

The defendants, in their answer, denied that the plaintiff was the owner of said goods, or that same were purchased by or for him; and denied in detail each allegation of the complaint. They alleged that at the sale of the goods of W. K. Rector under the bankruptcy proceedings the said E. T. Roach purchased the same for himself and solely as his own property, and employed the plaintiff at a salary of $ 40 per month to conduct the business under the name of the "Cash Buyers' Union;" and that "E. T. Roach was at all times the absolute owner of the stock of goods, and was in possession of the same, and the plaintiff was conducting the said business for E. T. Roach." They alleged further that it was agreed that the stock of goods should be sold as soon as possible, and the proceeds applied to the payment of the amount bid and paid for same at said sale in bankruptcy proceedings and to the payment of any goods that should be bought to replenish the stock; and that, after these sums were all paid and the further sum of $ 800 to N. M. Roach, the said E. T. Roach would turn the stock remaining over to plaintiff.

In their answer the defendants asked that the cause be transferred to the chancery court, which motion to transfer the court overruled.

The cause was tried before a jury, and there was a sharp conflict in the evidence introduced by the respective parties. The testimony on the part of the plaintiff tended to prove the allegations as set out above in his complaint; while that on the part of the defendants tended to establish the allegations in the answer; upon the one hand tending to establish that the stock of goods at said sale in the bankruptcy proceedings was purchased for the plaintiff and was his sole property, and upon the other hand tending to prove that said stock was bought by E T. Roach as his sole property.

The evidence tended further to prove that when the plaintiff and E. T. Roach were conferring, just prior to the day of the sale of said stock of goods under the bankruptcy proceedings, relative to the purchase thereof, it was thought by them that the same would bring $ 3,000 at the sale. In order to obtain that money, the plaintiff executed to N. M. Roach his note for $ 3,000, payable 90 days after date, and this note was indorsed by N. M. Roach and negotiated to the National Bank of Mena, of Mena, Ark., and a certified check was given therefor by said bank payable to N. M. Roach. And on the day of the sale, when the stock brought $ 3,300, this certified check was paid over to the receiver making the sale, and the balance of $ 300 was paid by check of N. M. Roach. The testimony on the part of the plaintiff tended further to prove that he renewed the above note from time to time, paying the interest thereon, until April, 1907, and that the note was finally taken up or paid to the bank by N. M. Roach, but was not actually marked paid by said bank, but was turned back to N. M. Roach; that plaintiff at once took possession of the stock of goods after the sale in the said bankruptcy proceedings and conducted the business at Gillham for several months, and paid to defendant Roach $ 300 on the balance of the purchase price of said stock of goods; that later he moved the stock to Mena, where he conducted the business until April, 1907; and that from time to time he put into the business moneys and goods of his own amounting to $ 1,800; that during the time E. T. Roach advised with him concerning the management of the business, and at his suggestion employed defendant Teeter as a clerk in the store; and that shortly thereafter they dispossessed the plaintiff of the store house and stock of goods by changing the locks and taking possession of and disposing of the stock over his protest and against his rights.

There was considerable testimony introduced by the parties to sustain their respective contentions, but the above presents the substantial portions of the evidence relative to the issues which are involved in the determination of this case.

A verdict was returned by the jury in favor of the plaintiff for $ 5,754.27, the value of the stock of goods in April, 1907, the time of the alleged conversion, and against the defendants N. M. Roach and Fred Teeter. From the judgment entered thereon these two defendants prosecute this appeal.

The first question involved in this case to be determined is whether or not the plaintiff and the defendant N. M. Roach were partners in the stock of goods and business after the purchase at the sale under the bankruptcy proceedings. Upon the contention that the allegations in the pleadings and the testimony showed that such relationship did exist between these parties, the defendants requested at the trial and now urge that this cause should have been transferred to the chancery court.

It has been found difficult to state any precise rule or any precise test for the determination of the question of when the relation of partnership is created or exists. The difficulty arises in those cases where the agreement does not profess to create a partnership, and yet it is contended that the effect of the agreement is to create one. Each case is so dependent upon its own varying circumstances, and distinctions are made between a partnership between the parties themselves and a partnership as to third persons, that the determination of the question must necessarily depend upon the special facts of each case. There are certain well established principles, however, which fix the requisites of a partnership. The rule recognized and followed for a long time was that participating in and receiving a certain share of the profits of the business was a conclusive test of a partnership. But this rule has been abandoned in England and generally in America. In this State the test of a...