Stockgrowers State Bank v. Shultz

• Decision Date: 16 April 1929
• Docket Number: 1534
• Citation: 40 Wyo. 274,276 P. 532
• Parties: STOCKGROWERS STATE BANK v. SHULTZ, ET AL. [*]
• Court: Wyoming Supreme Court

276 P. 532

40 Wyo. 274

STOCKGROWERS STATE BANK v. SHULTZ, ET AL. ^[*]

No. 1534

Supreme Court of Wyoming

April 16, 1929

APPEAL from District Court, Washakie County; EDGAR H. FOURT, Judge.

Action by the Stockgrowers State Bank against Ruby C. Shultz and another. Judgment for defendants, and plaintiff appeals.

Affirmed.

For the plaintiff and appellant, there was a brief by Chas. L. Brome of Basin, and oral argument by Mr. Brome.

The evidence of Muirhead was competent upon the question of the solvency of Millard, which was a material issue in the case. 34 Cyc. 1642; 16 Cyc. 1152, 1243; 6 R. C. L. 651; 13 C. J 367. The court erred in sustaining an objection to question 65 as set forth in the transcript, and the offer of proof made thereon. Notice of bankruptcy is competent evidence of insolvency of the bankrupt. 17 Cyc. 508. Shultz as a partner of Cureton, was, of course, liable on the contract of September 20th. 4180 C. S. 20 R. C. L. 1072-1073; Crable v. O'Connor, 21 Wyo. 460. The court erred in sustaining the objection of defendant Shultz to plaintiff's exhibits Nos. 14 to 21, inclusive, for identification in evidence; and also plaintiff's Nos. 67 68, 161 and 162, for identification, said evidence being competent and bearing upon the solvency of Millard. The court also erred in sustaining defendant's motion for a directed verdict. 20 R. C. L. 912; Chester v Dickerson, 13 Am. Rep. 550. The statute of frauds has no application to this case. The contract was an original promise, based upon a valid consideration. 6 R. C. L. 651; 13 C. J. 367. The judgment should be reversed.

For defendant and respondent, Ruby C. Schultz, there was a brief by E. E. Enterline of Casper, and oral argument by Mr. Enterline.

Most, if not all of the alleged errors discussed in appellant's brief are without a semblance of merit, and the authorities cited by appellant would not seem to have application to the facts as disclosed by the record. No liability could be fixed upon Schultz without proof of a partnership existing on September 20, 1928, and that the contract was executed on behalf of the partnership. 4726 C. S.; Williams-Hayward Shoe Co. v. Brooks, et al., 9 Wyo. 424; Montana & Wyoming Oil Co. v. Gibson, et al., 19 Wyo. 1. Both parties having requested the court to direct a verdict, transferred the functions of the jury to the court, and there being a failure of proof, the court was required to direct a verdict for Schultz. Sneider v. Co., 28 Wyo. 40, 200 P. 1011. It seems unnecessary to discuss the question of partnership.

Chas. L. Brome, in reply.

Less proof of the existence of a partnership is required in an action by a stranger, than one as between the partners themselves. 20 R. C. L. 847; Frankel et al. v. Hillier, et al., 116 N.D. 387, 15 Ann. Cas. 265. Membership in a partnership and liability for its debts may be proven by admission of a person that he was a partner. 20 R. C. L. 847; Kahn v. Bowden, (Ark.) 96 S.W. 126; Dawson v. Pogue, (Ore.) 22 P. 637. Schultz admitted that he was a member of the partnership. The evidence of Cureton, given in the case of Bank v. Millard, should have been received. 20 R. C. L. 848.

RINER, Justice. BLUME, C. J., and KIMBALL, J., concur.

OPINION

RINER, Justice.

This case is before the court upon direct appeal from a judgment entered upon the verdict of a jury directed by the District Court of Washakie county in favor of defendant and respondent Ruby C. Shultz. The action was instituted by the plaintiff and appellant, the Stockgrowers State Bank, against Shultz and also one George D. Cureton. The latter never having been served with process and never having appeared in the case, it proceeded to trial and judgment with Schultz as the only party defendant.

The plaintiff's petition contains two causes of action, but inasmuch as appellant states in his brief that all claims under the alleged second cause have been settled in other litigation, it is unnecessary to regard it here. An abstract of the petition's first cause of action is to the following effect: That the plaintiff is a Wyoming corporation, engaged in the banking business at Worland, Wyoming; that Ruby C. Shultz and George D. Cureton were partners on September 20, 1918, in the conduct of a retail drug store in the town of Worland under the firm name of George D. Cureton; that prior to the date last mentioned, the defendants purchased from L. A. Millard a drug stock and fixtures in said town for $ 9,606.10, of which amount $ 6,106.10 had been paid the vendor; that prior to the sale the parties to it made no attempt to comply with the requirements of Sections 4720, 4721 and 4722, W. C. S. 1920, commonly known as the Bulk Sales Act; that at the date of the sale and also of the agreement presently to be mentioned, Millard owed $ 5,100 to the plaintiff, $ 3,700 to the First National Bank of Worland, $ 2,500 to Davis Brothers Drug Company, a Colorado corporation, and $ 3,500 to other wholesale creditors; that on September 12, 1918, plaintiff brought an action against Millard in the District Court of Washakie County, Wyoming, to recover the amount due it as aforesaid, and procured an attachment order and garnishment for $ 5,000 in cash, claimed by plaintiff to be Millard's property in the hands of the Wyoming Sugar Company; that Millard at the time of his drug store sale was insolvent, and the defendants, to enable plaintiff to recover its claim from Millard and to avoid liability under the Wyoming Bulk Sales law, and also to prevent initiation of bankruptcy proceedings, proposed to plaintiff jointly with the First National Bank of Worland and the Davis Brothers Drug Company, that if plaintiff would prosecute the attachment suit aforesaid and refrain from endeavoring to collect its debt from defendants and from undertaking to initiate bankruptcy proceedings against Millard, that in the event the plaintiff did not realize the full amount due it on its claim against Millard, then the defendants would share such loss with the plaintiff and share also the actual costs of such suit and the attorney's fees therein not to exceed $ 400; that on September 20, 1918, plaintiff and defendants, the First National Bank of Worland, and the Davis Brothers Drug Company, executed a memorandum in writing setting forth the conditions upon which the other parties thereto would share such loss, if any, and the ratio thereof, as well as the share each should pay of the court costs and attorney's fees expended by plaintiff in said suit--the memorandum and signatures thereto being set out verbatim; that plaintiff prosecuted its attachment suit with the result that it was finally lost, and there was a failure to obtain any portion of the debt alleged to be due it from Millard; that plaintiff complied with all the terms and conditions of this agreement on its part, by it to be performed; that the proportionate share of the loss so sustained by plaintiff and which the defendants agreed to pay is the sum of $ 2,033.13; that there is due from the defendants to plaintiff on account of the portion of attorney's fees and costs, which the defendants also agreed to pay, the sum of $ 150.87, and that these sums remain unpaid, although plaintiff has demanded them of the defendants. The answer of the defendant Shultz was a general denial.

A jury having been requested, the trial proceeded and at the close of plaintiff's case the defendant Shultz declined to introduce any evidence but also rested his case. Whereupon both parties moved the court for a directed verdict. The motion of Shultz being sustained, that of the plaintiff being denied, the jury was given a peremptory instruction to find in favor of defendant and the usual form of judgment was entered thereon.

A number of assignments of error have been made and argued by appellant upon this record. They principally relate to the rejection of evidence by the court during the course of the trial. The agreement of September 20, 1918, pleaded in plaintiff's petition was received in evidence and shows that it has attached to it, with the signatures of the other parties already mentioned, the signature "George D. Cureton," but not that of the defendant and respondent Ruby C. Shultz. It is claimed for appellant, however, that on the date the agreement was executed, Cureton and Shultz were partners in the conduct of a retail drug and pharmacy store "under the firm name and style of George D. Cureton." The pivotal question in the case therefore is, whether the general finding below that there was no such partnership at the time the agreement was signed--the legal effect of granting defendant's motion for a directed verdict (O'Brien v. Galley-Stockton Shoe Co., 65 Colo. 70, 173 P. 544; Glanzer v. Shepard, 233 N.Y. 236, 135 N.E. 275, 23 A. L. R. 1425; Campbell v. Willis, 53 App. D.C. 296, 290 F. 271; Beuttell v. Magone, 157 U.S. 154, 15 S.Ct. 566, 39 L.Ed. 654) was clearly against the weight of the evidence before the trial court. Where each party has requested that a peremptory instruction be given the jury in his favor, the rule in this court is as stated in Sneider v. Big Horn Milling Co., 28 Wyo. 40, 200 P. 1011.

"It appears in this case that each party, at the close of the testimony, asked the court for a directed verdict, without at any...