Tucker v. Murphy
| Decision Date | 06 February 1902 |
| Citation | 40 S.E. 836,114 Ga. 662 |
| Parties | TUCKER v. MURPHY. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
1. When a partnership is dissolved by the purchase by one partner of the interest of another, and the contract of dissolution provides that the purchasing partner shall pay the debts of the firm, the outgoing partner is entitled to bring suit against the purchasing partner as soon as he fails to pay any of the matured debts of the firm.
2. In a case of the character above referred to, the outgoing partner is not entitled to an injunction to restrain the purchasing partner from selling or incumbering his property, even though he may be about to move, or may be causing his property to be removed, beyond the limits of the state, or is fraudulently disposing of the same for the purpose of defeating the payment of the debts of the firm. The remedy in such a case is either by attachment or writ of ne exeat, according to the circumstances of the case.
Error from superior court, Fayette county; E. J. Reagan, Judge.
Action by J. R. Murphy against J. E. Tucker. Judgment for plaintiff. Defendant brings error. Reversed.
W. B Hollingsworth and Hugh M. Dorsey, for plaintiff in error.
J. W Wise and J. F. Golightly, for defendant in error.
This was an application for injunction filed by Murphy against Tucker, and the allegations of the petition were, in substance, as follows: The parties had been engaged in the mercantile business as partners under the firm name of J. E Tucker & Co. The firm was dissolved by the plaintiff selling his interest to the defendant, who took charge of the business and agreed to pay all of the debts of the firm, and to relieve the plaintiff from liability on such debts. The defendant has failed to pay the debts of the firm, and there are two suits pending on debts due by the firm. The defendant is selling or attempting to sell all of his property, and preparing to move beyond the limits of the state, and upon information and belief it is charged that he has sold out his interest in the mercantile business, and the same has not been paid for, and unless restrained he will dispose of all of his property and leave the state. Plaintiff will be responsible for such portions of the debts of the firm as remain then unpaid. The prayers of the petition were that the defendant be enjoined from selling his property or incumbering the same, that a receiver be appointed, for general relief, and for process. At the hearing the defendant showed, as cause for not granting the relief prayed for, a demurrer which had been filed to the petition, setting up that there was no equity in the petition, and that the plaintiff had adequate and complete remedies at law, by attachment and other processes. The judge granted the injunction prayed for, but provided that the same might be dissolved by the defendant upon his entering into a bond with good security in a given amount to indemnify the plaintiff against loss on account of the debts referred to in the petition. To this judgment the defendant excepted.
There was no equity in the petition which authorized the granting of an injunction. If the defendant was actually removing, or about to remove, beyond the limits of the county, or was causing his property to be removed beyond the limits of the state, an attachment might issue against him at the instance of the plaintiff for whatever sum was necessary to discharge the debts of the firm which the defendant had failed to pay as he had contracted to do. Civ. Code, § 4510. The contract entered into between the plaintiff and the defendant at the time the firm dissolved was one by which the defendant obligated himself to pay the debts of the firm, and in such a case there is a breach of the contract whenever the partner agreeing to pay the debts fails to do so, and the outgoing partner can maintain a suit without having paid anything himself. The rule is otherwise when the contract is simply one of indemnity, or to hold the partner harmless, in which case no right of action arises in favor of the outgoing partner until he has either paid voluntarily or been compelled to pay debts against the payment of which he had been indemnified. 1 Bates, Partn. § 239; 2 Bates, Partn. § 636. See in this connection Harvey v. Daniel, 36 Ga. 562. According to the allegations of the petition, the defendant assumed all of the obligations of the firm and agreed to pay its debts. Such being the case, the moment he failed to pay any of the debts when they became due and payable the plaintiff had a right of action against him on the contract and could bring suit to recover as damages for the breach of the contract whatever sum was necessary to protect him from liability on account of the debts which the defendant had failed to pay. This being true, under the allegations of the petition, if the defendant was in a position where an attachment could be sued out against him, the plaintiff was in a position where he could cause the same to be issued. The allegations of the petition show that there are two suits pending upon debts due by the firm which it is...
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