Truitt-silvey Hat Co v. Truitt

• Decision Date: 14 May 1908
• Citation: 61 S.E. 481,130 Ga. 637
• Court: Georgia Supreme Court
• Parties: TRUITT-SILVEY HAT CO. v. CALLAWAY & TRUITT.

130 Ga. 637

61 S.E. 481

TRUITT-SILVEY HAT CO.

v.CALLAWAY & TRUITT.

Supreme Court of Georgia.

May 14, 1908.

1. Contracts —Action for Breach —Petition.

The petition was not open to attack by genera] demurrer.

2. Same—Fraud—Procurement of Contract.

One having the capacity and opportunity to read a written contract, and who signs it, not under any emergency, and whose signature is not obtained by any trick or artifice of the other party, cannot afterwards set up fraud in the procurement of his signature to the instrument.

[Ed. Note.—For cases in point, see Cent. Dig. vol. 11, Contracts, § 425.]

3. Same — Action on Contract — Fraud — Pleading.

Where one brings an action to recover a certain portion of a fund in the hands of the defendant, and the latter in his plea defends on the ground that the fund is the proceeds of a contract with a third party, and that this contract was procured by means of certain fraudulent representations made to such third party at and before the execution of the contract, the defendant, in order to make such a defense complete and effective, should distinctly allege that both parties to the suit are in fault and have been guilty of fraud as against such third party.

[Ed. Note.—For cases in point, see Cent. Dig. vol. 11, Contracts, §§ 689-690, 693, 696.]

4. Partnership — Dissolution—Subsequent Firm Contract—Ratification.

When, after the dissolution of a partnership consisting of two members, one of the former partners executes a contract in the name of the partnership, intended to benefit both of the former partners, the partner who did not join in its execution is bound thereby, if he afterwards performs acts which amount to a ratification of the terms of the instrument.

(Syllabus by the Court.)

Error from Superior Court, Fulton County; J. T. Pendleton, Judge.

Action by Callaway & Truitt against the Truitt-Silvey Hat Company. Judgment for plaintiffs, and defendant brings error. Affirmed.

The petition alleges substantially as follows: The plaintiffs, a partnership composed of E. C. Callaway and Alfred Truitt, under the firm name of Callaway & Truitt, were formerly engaged in the business of selling hats, but on October 10, 1902, were succeeded in business by the defendant, Truitt-Silvey Hat Company, a corporation, which bought the stock of goods, fixtures, etc., of Callaway & Truitt; the latter retaining only their bills and accounts receivable. At the time of the change in business Callaway & Truitt were carrying a bond of indemnity or policy of insurance in the American Credit Indemnity Company against loss by the insolvency of their customers. This bond expired in due course on December 31, 1902. This policy of insurance was transferred by Callaway & Truitt to the Truitt-Silvey Hat Company, thereby protecting the losses of Callaway & Truitt up to October 10, 1902, and of the Truitt-Silvey Hat Company from October 10, 1902, to December 31, 1902, the date of the expiration of the contract. About December 31, 1902, the Truitt-Silvey Hat Company, the defendant, took out an additional bond of indemnity with said company, to run until December 31, 1903; said bond being made subject to the conditions of the bond transferred to them by Callaway & Truitt. Contemporaneously with the taking out of this additional bond of indemnity the Truitt-Silvey Hat Company entered into a contract with Callaway & Truitt touching the credit insurance under both these bonds, a copy of which contract is attached to the petition. This contract reads as follows:

"Whereas, Callaway & Truitt, a partnership formerly doing business in the city of Atlanta, was on the 10th day of October 1902, succeeded by the Truitt-Silvey Hat Company; and whereas, at the time of said change, said Callaway & Truitt held a bond of indemnity of the American Credit Indemnity Company, No. 19, 386, which expired December 31, 1902, and which, by appropriate riders, was duly transferred by the company to the Truitt-Silvey Hat Company; and whereas, the Truitt-Silvey Hat Company has taken out an additional bond of indemnity from the American Credit Indemnity Company, No. 24, 381, which expires December 31, 1903, with a rider thereto attached providing that all covered losses accruing after December 31, 1902, on sales, shipments, and deliveries made since January 1, 1902, may be proven under said bond 24, 381, but subject to conditions of bond No. 19, 386, therein fullystated; and whereas, the said firm of Callaway & Truitt is interested in losses on sales, shipments, and deliveries occurring prior to October 10, 1902, which may be recovered under said policy 24, 381: It is now, therefore, agreed between said Callaway & Truitt, a partnership composed of E. C. Callaway and Alfred Truitt, parties of the first part, and the Truitt-Silvey Hat Company, a corporation of said county, parties of the second part, as follows:

"First. The initial losses required under said policies for the year 1902 shall be borne by the parties hereto on the basis of a pro rata of the sales of the respective parties herein made during the year 1902.

"Second. The initial losses provided for under said policies for the year 1903 shall be borne by the Truitt-Silvey Hat Company and the said Callaway & Truitt in that proportion which the gross sales of the former for the year 1903 bear to the amount of notes and accounts of the latter remaining unpaid on the 1st day of January, 1903, which are covered by said indemnity bond, excluding all said notes and accounts on which claims have heretofore been made under said bond of indemnity.

"Third. The losses paid on sales, shipments, and deliveries prior to October 10, 1902, shall be accounted for to said Callaway & Truitt, whether same be collected under policy 19, 386 or policy 24, 381, and the losses paid on sales, shipments, and deliveries made since October 10, 1902, shall be retained by said Truitt-Silvey Hat Company, except sales of samples and such merchandise as was retained by Callaway & Truitt and sold by them since October 10, 1902, and any losses collected from said indemnity company on such sales shall be accounted for to Callaway & Truitt.

"Fourth. The premiums on said bond of indemnity shall be apportioned as follows: For 1902, in proportion to the gross sales of the parties hereto during the year 1902, which are covered by said bond. For 1903, on the same proportion as that fixed in the second paragraph above for apportionment of initial losses for 1903.

"In testimony whereof, the parties hereto have executed this agreement in duplicate this the 31st day of December, 1902.

"[Signed] Callaway & Truitt.

"Truitt-Silvey Hat Company,

"Per Jerome Silvey, V. P."

The petition alleged that the defendant had collected from the investment company, under...