Third National Bank of Sedalia v. D. A. Faults & Company
| Decision Date | 04 December 1905 |
| Citation | 90 S.W. 755,115 Mo.App. 42 |
| Parties | THIRD NATIONAL BANK OF SEDALIA, Appellant, v. D. A. FAULTS & COMPANY and J. C. BEEDY, Respondents |
| Court | Kansas Court of Appeals |
Appeal from Pettis Circuit Court.--Hon. George F. Longan, Judge.
AFFIRMED.
Judgment affirmed.
J. T Montgomery for appellant.
(1) There is no pretension that the plaintiff had notice before the notes sued on were executed by D. A. Fults & Company of the agreement between Beedy and co-partners, as to the manner in which they should raise the necessary capital for the firm of D. A. Fults & Co. to engage in the mail business. Therefore all of the evidence of Beedy and the two Fults concerning their private partnership agreement was inadmissible, and the court erred in admitting such evidence over the objections of the plaintiff. Bates v Forcht, 89 Mo. 126. (2) Plaintiff's sixth instruction should have been given. Where one partner has knowledge that the co-partners have used the firm name on promissory notes for their own benefit, or the benefit of the firm, and fails within a reasonable time to repudiate the transaction, he is held in law to have ratified it, and is bound by it. Bates on Partnership, sec. 367; Rauben v Cohn, 48 Cal. 545; Roberts v. Barrow, 53 Ga. 314; Sweet v. French, 2 Cush. 309; Hayner v. Craw, 79 Mo. 293. (3) The trial court erred in refusing plaintiff's eighth instruction, where by agreement the management of the firm's business is given to one of the partners, such partner has by implication the power to perform the duties necessarily incident to the business according to the ordinary and usual course. Morse v. Rickmond, 97 Ill. 302; Seaman v. Escheman, 57 Wis. 547; Casey v. Corver, 42 Ill. 225; Deardorf v. Thacher, 78 Mo. 129; Smith v. Sloan, 37 Wis. 285; Bank v. White, 30 F. 412. (4) The giving of defendant's third instruction was error, because the instruction withdraws from the consideration of the jury the evidence of Dalby and Latimer, to the effect that D. A. Fults told them that Beedy was a partner and a member of the firm of D. A. Fults & Co., which evidence was admissible, when taken with the other evidence submitted to prove partnership. (5) The court erred in giving defendant's seventh and eighth instructions, because these two instructions are inconsistent and diametrically opposed to each other. (6) The court erred in admitting the evidence of D. A. Fults and J. A. Fults over the objections of the plaintiff, as to the conversation they had with R. H. Moses, to the effect that in October or November, 1899, they applied to Moses, who was then an officer of the bank, for a loan to be used in this mail business, and informed him that they wanted the money for their individual use. Such evidence was inadmissible, because the transaction out of which the notes in suit grew, did not take place until three or four months after that conversation, and after Moses had severed his connection with the bank, and such statement made to Moses would not bind the bank and the notice to Moses as to who wanted the money could not be imputed to the bank. (7) This case should be reversed and remanded for a new trial because of the improper remarks by the witness and defendant Franklin to Kingsley, in the hearing and in the presence of the jury in the jury room.
Barnett & Barnett and Charles E. Yeater for respondents.
(1) The case of Bates v. Forcht, 89 Mo. 126, cited by appellant, is applicable to a commercial or trading firm, and hence the testimony in the case at bar that there was no such agreement and that the agreement was to the contrary is competent, and such a ruling has been made by the Supreme Court based on the written articles of co-partnership of a non-trading firm. Deardorf v. Thacher, 78 Mo. 133; Webb v. Allington, 23 Mo.App. 568; Randall v. Lee, 68 Mo.App. 565; Stavnow v. Kenefick, 79 Mo.App. 44. (2) The sixth instruction was properly refused, because it does not state the law relative to non-trading firms, and because under the undisputed evidence defendant Beedy repudiated any responsibility on the notes in question as soon as he learned that the bank sought to hold him. (3) Plaintiff's seventh instruction submitting to the jury the question whether the star route mail business in controversy was that of a trading or non-trading firm was properly refused because, under the pleadings and the undisputed evidence and the law as stated in the first paragraph of such seventh instruction, it was that of a non-trading firm, and it was the province of the court and not of a jury to determine such legal proposition. Carroll v. Campbell, 110 Mo. 571; Cockrell v. McIntyre, 161 Mo. 67; Carter-Montgomerie & Co. v. Steele, 83 Mo.App. 215. (4) That this was a non-trading firm and therefore only the law applicable to such co-partnership should have been given to the jury, does not under the authorities admit of a doubt. Authorities, supra; Bank v. Snyder, 10 Mo.App. 211; Bank v. Noyes, 62 N.H. 35; Harris v. Baltimore (Md.) 20 At. Rep. 111; 17 Am. and Eng. Ency. Law (1 Ed.), p. 887, and authorities cited under note 2. (5) The plaintiff's eighth instruction was properly refused. Cases supra. (6) The giving of defendant's third instruction is correct, as a partnership cannot be established against one person by declarations of another charged to be his partner. Campbell v. Dent, 54 Mo. 330; Dowzelot v. Rawlings, 58 Mo. 77; Peery v. Moore, 24 Mo. 287; Roth v. Kirchoff, 12 Mo.App. 599; Huyssen v. Lawson, 90 Mo.App. 86. (7) There is no inconsistency whatever between the defendant's seventh and eighth instructions and each correctly announce the law. (8) The evidence of D. A. and J. A. Fults, with respect to their conversations with Moses about extending loans for the mail business is competent, inasmuch as the negotiations therefor was a continued transaction with both Moses and Latimer while both were connected with the bank, and terminated with Latimer. (9) The alleged remarks of Franklin to Kingsley, made October 10th, three days before the case was submitted to the jury, are unimportant and inconsequential and not a statement of any controverted fact, but a mere conclusion, and the court correctly refused to grant a new trial on such grounds, and no reason exists for interfering with the discretion of the trial court, moreover, the jury heard Franklin afterwards afterwards testify under oath, which testimony was of no importance in the case. Fendlar v. Dewald, 14 Mo.App. 60; Kennedy v. Holladay, 105 Mo. 24.
This action is based on a petition containing eight counts, each on a separate promissory note for borrowed money, and a ninth count on an overdraft. The judgment in the trial court was for the defendant Beedy and against the other defendants on each of the counts.
The notes are signed, D. A. Fults & Co., J. A. Fults, D. A. Fults and J. D. Franklin. Defendant Beedy is sought to be held on the ground that he was a member of the partnership of D. A. Fults & Co. The only contest here is as to his liability. The business of the partnership of D. A. Fults & Co. was contracting with the federal government for transportation of the mail over certain mail routes. One of the Fults bid for such contracts and, after securing same, would frequently sublet to others. The defendants, including Beedy, became interested in these and divided the profits, though Beedy does not admit himself to have been a partner as charged. We shall, however, assume that he was a partner. It is clear from the business of the firm and the evidence heard that it was what is known as a non-trading partnership. The trial court properly so declared in an instruction.
It is determined as law that partners in a non-trading firm have no implied power to bind one another by commercial paper executed in the name of the firm. To make such paper binding, the party seeking to hold other members must show, either previous authorization, or subsequent ratification. [Deardorf v. Thacher, 78 Mo. 128; Webb v. Allington, 27 Mo.App. 559; Randall v. Lee, 68 Mo.App. 561; Stavnow v. Kenefick, 79 Mo.App. 41.]
But plaintiff complains of the action of the court on the instructions given and refused. The instructions given at plaintiff's instance were quite complete and full in the advancement of its theory of the case. The jury were told in the second instruction to find...
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