Smith v. Gregory

• Decision Date: 31 October 1881
• Citation: 75 Mo. 121
• Parties: SMITH v. GREGORY, Appellant.
• Court: Missouri Supreme Court

75 Mo. 121

SMITH

v.GREGORY, Appellant.

Supreme Court of Missouri.

October Term, 1881.

Appeal from Randolph Circuit Court.--HON. G. H. BURCKHARTT, Judge.

AFFIRMED.

M. Y. Duncan for appellant.

Brown and Smith, executors, could not sue Gregory & Brown, partners, on a note made by the firm to the executors. Hill v. McPherson, 15 Mo. 204; Coll. on Part., § 642, and note. The assignment by Brown of his interest in the note to Smith was nugatory. Being at the time co-administrator he could not, as such officer, divest himself of his interest in said note to his co-administrator without at the same time surrendering said office. So long as he was such co-administrator he would of necessity retain his interest in all choses of the estate, and after the attempted assignment the interest would be just what it was before. Having made full settlement of the estate with this note unpaid, the legal interest therein necessarily resulted to Brown and Smith jointly. Brown and Smith might have assigned to Smith, after settlement, so as to have enabled Smith to sue Gregory & Brown, but in no other way could this have been done. 1 Daniel Negot. Instr., §§ 683, 685.Isaac W. Boulware for respondent.

After the administrators had accounted to the estate for the note sued on, had made final settlement of said estate and been discharged, the note became their absolute property, and either of the payees had the power and right to transfer the interest he had in the note to his co-payee. Smith v. Oldham, 5 Mo. 483; Cook v. Holmes, 29 Mo. 61; Henderson v. Henderson, 21 Mo. 379; Shore v. Coons, 24 Mo. 553; Thomas v. Relfe, 9 Mo. 373; Lacompte v. Seargent, 7 Mo. 351; Jeffries v. McLean, 12 Mo. 538. One of two payees may assign all his interest in the note to the other payee, who may then sue. 22 Mo. 347; 5 Mo. 483. Although Brown, one of the payees in the note, was a member of the firm of Gregory & Brown, the makers of the note, yet Smith, one of the co-payees and assignee of Brown, can sue at law on the note. Kipp v. McChesney, 66 Ill. 460; Sherwood v. Barton, 36 Barb. 284; Smith v. Lusher, 5 Cow. 688; Davis v. Briggs, 39 Me. 304; Sidlin v. Williams, 11 Cush. 108; Thayer v. Buffum, 11 Met. 108; Pitcher v. Barrows, 11 Pick. 361; Temple v. Seaver, 11 Cush. 314; Young v. Chew, 9 Mo. App. 387.

RAY, J.

This suit was brought upon the following promissory note, to-wit:

“One day after date, we promise to pay J. W. Brown and J. W. Smith, administrators of the estate of W. H. Smith, deceased, $650.00, for value received, negotiable and payable without defalcation or discount, with interest from date, at the rate of ten per cent until paid. September 1st, 1873.

(Signed)

GREGORY & BROWN.”

On which was the following indorsement, to-wit:

“For value received, I assign and transfer to J. W. Smith my right, title, claim and interest in and to the within note drawn by Gregory & Brown.

(Signed)

J. W. BROWN, one of the

Administrators of W. H. Smith deceased.”

The suit was originally brought in the Callaway circuit court, but afterward, by change of venue, transferred to and tried in the Randolph circuit court. The amended petition, upon which the case was tried, charged that Wm. H. Smith, late of Callaway county, departed this life intestate, in August, 1871; that the plaintiff Smith and defendant Brown were duly appointed administrators of his estate in October, 1871; that they qualified and entered on the discharge of their duties as such; that on the 1st day of September, 1873, the defendants, who were partners in trade, and constituted the firm of Gregory & Brown, by their firm name made, executed and delivered to said administrators their said promissory note, as above set out, by which they promised, for value received, to pay said administrators the sum of money as therein mentioned and described; that in August, 1874, said administrators made final settlement of their administration of said estate, and were, thereupon, duly discharged; that the plaintiff Smith prior to said final settlement, and out of his own private means, had accounted to said estate for said promissory note, and all interest thereon; that said J. W. Brown, for value received, assigned and transferred to the plaintiff all his right, title, interest and claim in and to said note; that the plaintiff now is, and ever since said assignment, accounting and final settlement of said estate, has been the legal holder and owner of said promissory note; and that the same and all interest thereon yet remains due and owing to this plaintiff, and for which he asks judgment against said defendants, and costs of suit, etc.

To this petition, the defendant Gregory filed his separate answer, denying that defendants, by their firm name, executed the note sued on, or that he made or authorized any person to make the same; and further denying each and every allegation therein. And for a further answer he says that said note was not made with his knowledge or consent; nor in settlement of any transaction within the scope or contemplation of said partnership of said firm of Gregory & Brown; nor was it made during the existence of said partnership, but long after its dissolution, as plaintiff well knew; and further, that it was made in payment and settlement of the individual debt of said defendant Brown, and for moneys he had collected as administrator of said estate of W. H. Smith, deceased, as plaintiff, his co-administrator, well knew at the time he received it from said Brown, by virtue of said assignment, as well as the date thereof.

To this answer plaintiff replied, denying all its allegations. Defendant Brown made no defense.

At the trial of the cause before a jury, the evidence showed that in October, 1871, the plaintiff, J. W. Smith, and defendant, J. W. Brown, were duly appointed administrators of the estate of W. H. Smith, deceased; that they accepted the trust and entered upon the discharge of its duties, and that in August, 1874, they made final settlement of their administration of said estate, and were, thereupon, duly discharged. It also appeared that in 1871 the defendants had formed a partnership, under the firm name of Gregory & Brown, for the purpose of selling merchandise and dealing in produce; that the partner Gregory furnished the means, and the partner Brown did the business; that in March, 1873, the firm sold out their store, but continued their partnership business, in dealing in leaf tobacco, until November or December, 1873; that after the sale of their store in March, 1873, and for the purpose of continuing their partnership operations in leaf tobacco, the partner Gregory furnished the partner Brown between $2,000 and $3,000, and told him, if they needed more, they would have to borrow it. It further appeared that Brown, as one of the administrators of said Smith's estate, had collected funds of said estate, and deposited them with the firm of Gregory & Brown, and charged the same to said firm, on its books, and that he, also, as occasion required, paid off claims, due by said estate, with the funds of Gregory & Brown, and kept account thereof on the books of said firm; and that the firm of Gregory & Brown had used the funds of said estate, so collected and deposited, in their partnership operations, in dealing in leaf tobacco; and that the promissory note in question was given for the balance of the funds of said estate, as used by said firm in their partnership operations, as aforesaid; the partner Brown testifying that he had authority from his partner Gregory so to use said funds and to execute said note therefor. It also appeared that plaintiff Smith, out of his private means, had accounted to said estate of W. H. Smith for the full amount of said note and interest, in said final settlement of said estate, said plaintiff also testifying that some time in October, 1873, he called on the defendant, Gregory, and told him he held said note, and wished to make final settlement of said estate in November, 1873; but that Brown said it would not be convenient for Gregory & Brown to pay the note, and that he further told Gregory that if it would be all right, he would pay the amount out of his private means and hold the note; and that Gregory said, if Brown had made the note of Gregory & Brown, it would be all right. Plaintiff further testified that he thereafter, out of his private means, accounted for said note, to said estate, in his said final settlement, and obtained the said assignment thereof from his co-administrator, for value.

The defendant Gregory testified, that he had no knowledge of the use of said funds belonging to said estate, in said partnership operations; that he never authorized or consented to their use; that said transaction was outside the scope of said partnership business; that after the sale of their store in March, 1873, he only authorized dealing in leaf tobacco, when one of their customers chose to do so in settlement of his account; that said note was not given until after the dissolution of said firm of Gregory & Brown, and was made by said Brown without authority and in settlement of his own individual debt; said defendant also denied the alleged conversation between him and plaintiff, as testified to by the plaintiff. There was also other testimony given at the trial, tending, in a general way, to prove the several issues on both sides.

At the close of the testimony, the court, against the objections of the defendant, gave the following instructions for plaintiff, to-wit: 1. If the jury believe from the evidence that J. W. Brown executed said note in the name of Gregory & Brown, for a debt owing by the firm of Gregory & Brown, and the consideration for which said note was given, was applied to and used for the benefit of said firm during the partnership, they will find for the plaintiff.

2. If J. W. Brown assigned and delivered said note to plaintiff, he is the proper person to sue for the same.

3. If defendant Gregory had knowledge of the...