Thompson v. Harmon

• Decision Date: 15 January 1919
• Docket Number: (No. 2-2544.)
• Citation: 207 S.W. 909
• Parties: THOMPSON et al. v. HARMON.
• Court: Texas Supreme Court

207 S.W. 909

THOMPSON et al. v. HARMON.

(No. 2-2544.)

Commission of Appeals of Texas, Section A.

January 15, 1919.

Error to Court of Civil Appeals of Sixth Supreme Judicial District.

Action by M. H. Harmon against W. R. Thompson and others. To review judgment (152 S. W. 1161) of the Court of Civil Appeals affirming judgment against all defendants, they bring error. Reformed and affirmed, in accordance with the recommendation of the Commission of Appeals.

S. L. Samuels, Geo. Thompson, and Theodore Mack, all of Ft. Worth, for plaintiffs in error.

R. L. Carlock and W. P. McLean, both of Ft. Worth, for defendant in error.

SONFIELD, P. J.

This action was brought by plaintiff, M. H. Harmon, against defendants, W. R. Thompson and J. Z. Carter and G. W. Duke as temporary administrator of the estate of W. A. Green, deceased.

Plaintiff alleged that on the 23d day of December, 1905, defendants, Thompson, Carter, and W. A. Green formed a partnership for the operation of a private bank under the name of Citizens' Bank of Newark, Tex., with Thompson president, Carter vice president, and Green cashier. Business was actively begun in the spring of 1906, and continued until the bank failed or suspended on the 30th day of January, 1911. There was never a dissolution of the partnership, or, if any dissolution in fact occurred, no notice thereof was given those then dealing with the bank or to the public. Defendants continued to hold themselves out and permitted Green to hold them out as partners. On the date of the suspension of business by the bank there was owing to depositors the sum of $22,008.47. Of this amount the sum of $2,136 was owing to plaintiff individually, and the remainder had been duly assigned to him by the respective creditors. All the depositors and creditors placed their money in the keeping of the bank believing that defendants Thompson and Carter, together with W. A. Green, constituted the partnership owning and conducting same. If there was a dissolution of, or any change in, the partnership the creditors were in ignorance thereof. Thompson and Carter were the financially responsible members of the partnership. Plaintiff sought a recovery of the amount of the deposits and an additional sum of $1,100 due by the bank in a transaction pertaining to certain vendor lien notes with H. B. Otis; this claim having been assigned to plaintiff.

Defendants Thompson and Carter, among other things, pleaded under oath that the partnership was dissolved in the month of October, 1907, when Green became the sole owner of the business, since which time they had no connection with Green or with the business of the bank, which could have been known to plaintiff and to all those under whom he claimed by the exercise of reasonable diligence. They denied holding themselves out as partners, and, if so held out by Green, it was without their knowledge or consent.

The tenth paragraph of the answer was in the nature of a cross-bill against the estate of W. A. Green, deceased, the surviving wife and child of Green, and any administrator of his estate, seeking a recovery in the event any judgment should be rendered against these defendants. It was alleged that no permanent administrator had yet been appointed, and the claim of the defendants was one which a temporary administrator was not competent to approve or reject. Leave was asked to make the surviving wife and child of Green and such administrator, when appointed, parties to the action.

Duke, the temporary administrator, filed an answer alleging full authority under the appointment of the court to represent the interest of the estate of Green in all matters pertaining to this litigation. Therein he denied the allegations in the answer of defendants Thompson and Carter, seeking to hold the estate of Green for the entire indebtedness, alleging that Thompson and Carter were equally liable with Green for all the said indebtedness.

Before going to trial, defendants Thompson and Carter made application for continuance of the case, in which application they recounted substantially the allegations contained in their cross-bill against the estate of W. A. Green and sought a continuance in order that the surviving wife and child of Green and the permanent administrator, when appointed, might be brought before the court, and the issues raised in the cross-bill between the said defendants and such parties determined.

The trial court charged the jury upon two theories, that of liability as partners, no dissolution taking place, or, in the event of actual dissolution liability based upon failure to give notice thereof and of permitting themselves to be held out by Green as partners. The court instructed the jury to state the ground upon which liability, if any, was predicated.

The jury returned a verdict in favor of the plaintiff against all the defendants for the amount of deposits owing by the bank in the sum of $22,008.47 with interest and for the principal of the Otis notes, amounting to $1,100 with interest, and 10 per cent. additional as attorney's fees.

The verdict, as stated therein, was found under section 2 of the court's charge, that is, on liability the result of failure to give notice of dissolution, and the holding out of defendants as partners. Upon this verdict judgment was entered against all the defendants. Defendants Thompson and Carter appealed, and the judgment of the district court was affirmed by the Court of Civil Appeals. 152 S. W. 1161.

The evidence establishes that the partnership between defendants, Thompson and Carter and W. A. Green, deceased, was entered into, as alleged. No notice of any kind or character was given to those who were dealing with the bank or to the public at large of the dissolution of the partnership. The bank, at the time of its suspension, owed the various depositors the sum of $22,008.47 exclusive of the Otis notes, all of which had been duly assigned to plaintiff; of said amount, the sum of $10,656.76 was due persons who were creditors of and dealing with the bank at the time of the dissolution, plaintiff's individual claim being among the number, and the balance of $11,351.71 was due the persons who became depositors and creditors subsequent to the dissolution of the partnership. The transaction with reference to the Otis notes took place subsequent to the dissolution, and the amount of same was as found by the jury.

Defendants urge...