Perfected Curing & Storage Co. v. First Nat. Bank of Winfield

WIDLSON, C. J. (after stating the facts as above). It is not contended here (and if it was- the contention would toe overruled) that the Perfected Curing & Storage Company was not, in law, a partnership, nor that its members were not, as partners, individually liable for obligations it incurred in transactions within the scope of the business it was engaged in. The contention (as we understand it) is that the assumption by the storage company of indebtedness of the storage system to the bank was not such a transaction; and that, because it was not, it was incumbent on the bank, before it was entitled to the judgment it obtained, so far as it was against appellant, to show, and that it did not, that he agreed to be bound individually for the payment of said indebtedness of the storage system. Undoubtedly it is true, generally, that the assumption by a partnership of indebtedness it did not incur and for which it was not liable is not within the scope of partnership business; and undoubtedly it is also true that a member of a firm which undertakes to assume the payment of such indebtedness is not individually liable on such undertaking if he did not agree to such assumption and is mot estopped from asserting he did not so agree. 20 R. C. L. 985; 30 Cyc. 614; Baptist Book Concern v. Carswell (Tex. Civ. App.) 46 S. W. 858; Oliver v. Moore (Tex. Civ. App.) 43 S. W. 812; Freeman v. Huttig Sash & Door Co., 105 Tex. 560, 153 &. W. 122, Ann. Cas. 1916E, 446; note to Dean v. Collins, 9 L. R. A. (N. S.) 57; Webb v. Butler, 192 Ala. 287, 68 So. 369. The testimony relied upon to show that appellant agreed to become and be liable individually for indebtedness of the storage system, or if he did not so agree, was estopped from asserting the fact, consisted alone of the note sued upon and the provision in the “articles of association” between him and Emerson, Waldrop, and Ormesher that the storage company should assume the liabilities of the storage system. We think that testimony would ' have warranted the judgment rendered but for the provision in said articles of association that persons or corporations contracting with the storage company should look only to its funds and property for the fulfillment of their contracts, and that none of the members of the association should be personally liable for any debt “or other obligation or engagement or contract made or entered into by the trustees or any officer” of the storage company. It is plain, we think, when the provisions in the articles of association referred to are considered together, that it appeared appellant not only did not agree to become and be liable individually for the indebtedness of the storage system, but that he expressly contracted against such liability. The question is, Was he nevertheless liable to the bank as determined by the judgment? We do not think so. If he was, it must have been because he was estopped by the act of the storage company in making the note sued upon from denying that he was so liable. Doubtless he would have been estopped by that act had the making of the note been within the scope of the business of the storage company. But it was not, and we think the bank was chargeable with knowledge of the fact that it was not. If the bank was chargeable with such knowledge, then it was not entitled to claim an estoppel against appellant merely because he was a member of the storage company partnership, for it had no right when it took the note sued upon to assume that he had agreed to be liable individually for the payment of the indebtedness of the storage company to the bank. Webb v. Butler, 192 Ala. 287, 68 So. 369; Meinhard v. Folsom, 3 Ga. App. 251, 59 S. E. 830; Dean v. Collins, 9 L. R. A. (N. S.) note pp. 57, 58. Appellee argues in support of the judgment that the storage company had a right to buy the property of the storage system, and as a consideration for the sale to it to unconditionally assume the payment of the indebtedness of the storage system. We think there is no doubt it had such a right. But it did not exercise it. If the transaction between the storage company and the storage system should be treated as a sale by the latter to the former in which the storage company assumed to pay indebtedness of the storage system, plainly the undertaking of the storage company was on the condition that the individuals composing it should not be personally liable for the payment of the indebtedness assumed., We think the judgment was not warranted by the testimony so far as it was against appellant. It will be reversed in that respect, and judgment will be here rendered that the bank take nothing as against him. The judgment will not be otherwise disturbed.