Wood v. Connell

• Decision Date: 29 April 1837
• Citation: 2 Whart. 542
• Parties: WOOD and Others v. CONNELL and Others. CARTER v. The Same. BELL and Another v. The Same. MEREDITH and Another v. The Same.
• Court: Pennsylvania Supreme Court

2 Whart. 542

WOOD and Others v. CONNELL and Others.

CARTER v. The Same.

BELL and Another v. The Same.

MEREDITH and Another v. The Same.

Supreme Court of Pennsylvania.

April 29, 1837

1. In an action against A., B. and C. as partners, to recover the price of goods sold and delivered to A., where the defence was that the articles of partnership were entered into through fraud on the part of A. and never actually carried into effect, it was held, that the plaintiffs might give in evidence an assignment by A. of all his estate and effects to B., in which B. was preferred, and the proceedings of B. under the assignment.

2. The plaintiffs sold goods to A., who afterwards made an assignment to B., in which B. was a preferred creditor. The assignment stipulated for a release, which was executed by the plaintiffs. Afterwards the plaintiffs, understanding that A. was a dormant partner of B. and C., brought suit against the three for the price of the goods sold. The writ was returned n. e. i. as to A: Held, that A was not a competent witness for the other defendants.

3. Where notice has been given to a party to produce books or papers on the trial of the cause, and he is sworn, and states that the books or papers required are not in his possession he cannot be examined by the counsel generally as to the merits or gist of the the cause. The case does not resemble in this respect that of a bill of discovery in chancery.

4. To exonerate a dormant partner from liability to creditors, on the ground of a fraud practised upon him by the ostensible party, actual fraud must be proved by him. It is not sufficient for him to show that the other partner was largely indebted at the time of entering into the partnership without also proving inquiry into the circumstances of the latter, and imposition practised upon himself.

5. The assent of one of two partners to a contract made by the other partner for the junction of the firm with a third person in another partnership, may be inferred from circumstances; and such assent may be implied from the acts of one of the parties, the declarations of another, and the conduct of a third, taken together.

THE first three of these actions were tried together, (by consent) before SERGEANT, J. at a Court of Nisi Prius, held in Philadelphia, on the 18th of November, 1836. The fourth case was tried before ROGERS, J. at a Nisi Prius in Philadelphia on the 30th of November, 1836. A verdict was rendered in each case for the plaintiffs; and they now came before the court on a motion for a new trial.

The first suit was brought by Joseph Wood, Thomas Wood, Thomas Bowman, and Richard C. See, trading under the firm of J & T. Wood & Co. against John Connell, Francis Worley, and Thomas Welsh, copartners under the firm of John Connell & Co.; the second suit was by Durden B. Carter; the third by Samuel Bell and Henry Sterling, trading under the firm of Bell and Sterling; and the fourth by Thomas Meredith and Edward Spencer, who survived Thomas Mummy, late trading under the firm of Mummy, Meredith and Co. against the same defendants.

The actions were in assumpsit, for goods alleged to have been sold and delivered by the respective plaintiffs to the defendants. Process had not been served upon John Connell. The other defendants pleaded non assumpserunt.

The plaintiffs having proved the sale and delivery of the goods to John Connell; viz. by Wood and Co. on the 9th of June 1829, by Carter on the 8th of June, 1829, by Bell and Sterling on the 1st of September, 1828, and by Mummy and Co, on the 3d of June, 1829, gave in evidence the following papers:

" Memorandum of John Connell's situation in business, according to his representation of it, on the 1st of April, 1828, including sales made out of his stock, to the first of April, 1828:--

Amount of stock belonging to Anderson and Co., taken by John Connell, April 1st, 1828, $9,044 00

Amount of goods in Philadelphia, bought by John Connell, in Philadelphia, in May, 1828, 9,959 04

Amount of stock belonging to Anderson and Co., in the retail store, taken by John Connell, 1st April, 1828, 9,130 36

$28,133 40

Deduct for sales made from 1st April to August 1st, 1828, 11,453 96

$16,679 44

Deduct for amount of goods sent to Cincinnati, $1,700

Deduct for goods in the hand of auctioneer, 2,600

____ 4,300 00

Balance on hand 1st August, 1828, $12,379 44

The foregoing schedule, exhibits the amount of goods in the hands of, and belonging to John Connell, merchant of Pittsburgh, state of Pennsylvania, on the 1st day of August, 1828; which goods, or the amount thereof, he agrees to hold subject to a co-partnership, now about to be formed between him and Francis Worley, merchant, residing in Philadelphia, and Thomas Welsh, merchant, residing in Baltimore, and trading under the name and firm of Worley and Welsh, in the city of Philadelphia; and further, the said John Connell agrees to place in the said co-partnership now about to be formed, the above amount, $12,379 44, at the rate or value of $9,000, and to be received and taken by the above named parties, at the specie value of $9,000.

In witness whereof, we have subscribed our names, the 1st September, 1828.

JOHN CONNELL,

WORLEY & WELSH."

" Articles of agreement and co-partnership entered into, and agreed upon, by John Connell, residing in the city of Pittsburgh, state of Pennsylvania, on the one part, and Francis Worley, merchant, residing in the city of Philadelphia, and Thomas Welsh, merchant, residing in the city of Baltimore, on the other part; witnesseth that the above named John Connell, of the city of Pittsburgh, and the above named firm of Worley and Welsh, of Philadelphia, have this day formed and entered into a co-partnership, to carry on and conduct the mercantile business, under the name of John Connell, in the city of Pittsburgh, and state of Pennsylvania, on the following terms: The said John Connell does agree and hereby bind himself, his heirs, executors, administrators and assigns, to place in the said concern as above named, the amount and full value of $12,379 44, of goods or merchandize, agreeable to the annexed statement: the same to be taken and held by the above named parties, at the specific value of $9,000, as a capital stock in trade: And the above named firm of Worley and Welsh, agree and bind themselves, their heirs, executors and administrators, to place in the above named co-partnership, or let remain in the hands of the concern in Pittsburgh, carried on under the name of John Connell, the amount of $2,000 out of the bill of goods or merchandize bought in the name of John Connell, from the firm of Worley and Welsh, under date of the 26th August, 1828; and they further agree and bind themselves, to place in the above concern, or let remain out of the goods bought subsequently to the date thereof, for the concern of John Connell, the further sum of $3,000. The said $3,000, it is however agreed upon, is not to be placed in said concern of John Connell, before the first day of July, 1829, unless it can be made convenient to the firm of Worley and Welsh: And it is further agreed upon by the parties hereto named, that on and after the 1st of March, 1829, the business of the concern, shall allow John Connell an interest of six per cent. per annum, on $7,000: and after the said Worley and Welsh, shall have placed the additional sum of $3,000 in the business, which will then make a capital stock of $5,000, placed in the concern by them, then the concern shall allow to John Connell an interest of six per cent. per annum, on $4,000. It is further understood and agreed upon by the parties herein named, that after paying the expenses necessary or unavoidably accruing in the business, then there shall be an equal division of the profits that may or shall be made in the business; that is to say, one-half to John Connell, and one-half to Worley and Welsh: And it is further agreed by the said parties herein named, that the co-partnership shall continue to exist for the term of three years, from the date thereof, unless sooner dissolved by the mutual consent of the partners.

In witness we have hereto subscribed our names, the 1st September, 1828.

JOHN CONNELL,

WORLEY & WELSH."

It was agreed that the name of the firm, Worley and Welsh, was written in both places in which it is signed in the foregoing paper, by Francis Worley.

The statement, or " memorandum of John Connell's situation in business," and the " articles of agreement," were written upon the same sheet of paper: the latter immediately following the former.

The plaintiffs also proved that goods sold by them to Connell were sent to the store of Worley and Welsh; and read in evidence, (the books having been produced upon notice,) the ledger of Worley and Welsh, at pages 467--397, & c. containing the account of John Connell.

The day-book of Worley and Welsh, at page 78, and date of 2d September 1828, showing " bills payable," charged to John Connell, $2,169 36.

The sales book of Worley and Welsh, under date of 26th and 28th August, 1828, showing sales to John Connell, $4,084 29.

John Connell's ledger at page 71, containing account with Worley and Welsh, beginning 17th October, 1828, and ending 15th May, 1829.

The same ledger, at page 148, containing an account with Thomas Welsh of Baltimore.

The same ledger, pages 22, 23, 24, ‘ bills payable’ account.

The same ledger, pages 37, 54, a profit and loss account, and page 16, John Connell's own account.

The plaintiff then offered in evidence, an assignment for the benefit of creditors, dated 21st July, 1829, from John Connell to Francis Worley, preferring in the first...