Ullman v. Myrick

McCLELLAN, J. — We can conceive of no partnership, whether commercial or non-trading, which may not, in the line of the partnership business, incur debts. It is not at all controverted in this case that the partnership of Nesbit & Nesbit did incur, or was liable for, the claim of Myrick & Bowman, which, it is alleged, was satisfied pro tanto by the transfer of firm assets to them. We regard it as thoroughly well settled law, that a partnership, or any one of its members, without express authority from his co-partners, may transfer a part of the partnership property in payment of a debt of the firm, and this wholly regardless of the non-trading character of the concern. The creation of a debt being within partnership competency, it is in the line and scope of the partnership business to pay debts, either with money or other property; and being thus in furtherance of the joint venture, it is competent for one partner to apply the funds, or other property of the partnership, to the discharge of its indebtedness. — Parsons on Partnership, 180, and authorities cited; Cullum v. Bloodgood, 15 Ala. 34; Hirschfelder v. Keyser, 59 Ala. 338. Whether [537] one partner may make a general assignment for the benefit of creditors, is a different question, and one not involved here. Adams v. Thornton, 82 Ala. 260. That Nesbit & Nesbit, though insolvent and in failing circumstances, had the right to sell, and Myrick & Bowman the right to buy, the property in controversy, in payment of a bona fide pre-existing debt — the debt being satisfied to the extent of tíre fair value of the property — is, of course, unquestioned. If the plaintiffs did so purchase the property, nothing they afterwards did with or in respect to it could at all affect the validity of the sale, or their title thereunder. It was entirely competent for them to'constitute E. A. Nesbit and Woodruff, or either of them, their agents to hold and dispose of the property, and to account to them for the proceeds of it; and neither this fact, nor the fact that a discretion as to the time, manner, terms, &c., of the sale was lodged in the agent or agents, would suffice to impeach the transaction on the ground of fraud. — Murray v. McNealy, 86 Ala. 234. E. A. Nesbit, if he was the agent of plaintiffs at all in respect to-this property, was a special agent, with limited and defined powers, beyond which he could not bind his principals. He was their agent to sell, to collect the price for which he sold,, and to pay the proceeds of such sale over to the plaintiffs. He had no authority to pledge the property to secure a debt due from himself, or from Nesbit & Nesbit. Fie had no authority even to use the property, and certainly none to rent or hire it out to third persons, in payment of his own or the debt of his firm. And Ins contract to that effect with Marable & Hicks, or Harris & Co., was not binding on plaintiffs, nor could it in any degree affect their title. — Medlin v. Wilkerson, 81 Ala. 147; Singer Man. Co. v. Belgart, 84 Ala. 519. The unexplained retention of the possession of personal property, which, it is alleged, has been sold to a creditor in payment of a debt, by the vendor, is, when the transaction is drawn in question by another creditor, a badge of fraud going to the fact of sale and the sufficiency of the consideration, casting upon the purchaser the onus of explaining the vendor’s continued possession, so as to make that fact consist with the bonafides of the sale.] This burden is discharged, when it is shown that the vendor-ftblds the property for and only as the agent of the vendee, either for the latter’s mere convenience, as, for instance, to afford him a better- opportunity to remove it, or for the purposes of sale by the agent on account of the principal. A possession so explained affords no evidence or presumption of fraud, prima faeie, or otherwise. The agency of the vendor for the vendee, devolving upon the former the [538] duty of selling the property for his principal, transferring to the purchaser his principal’s title, and paying the purchase-money to his principal, fully rebuts any presumption arising from the naked fact of continued possession that a benefit had been reserved to the vendor. — Tompkins v. Nichols, 53 Ala. 197; Kirksey v. Crawford, 55 Ala. 282; Danner Land & Lumber Co. v. Stonewall Ins. Co., 77 Ala. 184; Murray v. McNealy, supra. The several rulings of the trial court upon the charges given and refused, find j ustification in one or another of the principles stated above; and the exceptions reserved thereto are untenable. Whether the evidence offered for the purpose of showing that J. O. Nesbit consented to the sale made by his partner to the plaintiffs was competent or not, is an immaterial inquiry on this appeal. We have seen that E. A. Nesbit had the power to make the sale, irrespective of his co-partner’s consent; and if error was committed in the admission of the evidence in question, the appellant was not, and could not have been, injured by it. Several exceptions were reserved to the admission of evidence which tended to show that the sheriff at first declined to levy the attachment on the property which Myrick & Bowman ■claimed to have purchased from Nesbit & Nesbit, but subsequently returned and took possession of it under the writ. The action is for the joint trespass of certain persons who executed to the sheriff an indemnifying bond, conditioned to •save him harmless in the event the property levied on should not belong to the defendants in attachment; and it proceeds on the theory, that the bondsmen induced and procured the sheriff to make the wrongful levy complained of. The evidence referred to tended to support this theory, and was properly admitted to show the connection of the defendants with the act of the sheriff, and hence their responsibility therefor. On the same principle, and for a like purpose, what passed between the sheriff and the attorneys of the defendants with reference to the levy in question, tending to show that but for the interference of the defendants, through their attorneys, the ■officer would not have seized the property of the plaintiffs, was competent and properly admitted. It was competent for the defendants to show that some of the property in controversy had remained in the possession of E. A. Nesbit, or Nesbit & Nesbit, after the alleged sale to Myrick & Bowman, and had been held and treated by them as the property of Nesbit & Nesbit, as these facts, unexplained, as we have seen, tended to impeach tire sale to the [539] plaintiffs. The property being found after the alleged sale in the possession of Marable & Hicks, it may be that it was proper to receive their declarations explanatory of their possession, and to the effect that it had been hired to them by E. A. Nesbit to pay an indebtedness of Nesbit & Nesbit to them. Even if it be conceded that these declarations should not have been excluded, which we do not decide, the bill of exceptions shows that the same facts were deposed to by Marable and Hicks, as witnesses on the trial. The proposed testimony as to their declarations made out of court may be considered, therefore, as merely cumulative evidence, the exclusion of which, even if erroneous, will not work a reversal of the judgment, when, as here, it is quite apparent that the declarations excluded were of less probative force than the sworn statements of the persons who made them, and could not have given any additional strength to the testimony of the fact in question. — Dowling v. Blackman, 70 Ala. 303; Tayloe v. Bush, 75 Ala. 432. The knowledge of Ullman, who was one of the plaintiffs in attachment, and who is sued in this action for causing the sheriff to levy on property of third persons, that the property was claimed by others, was material on the question of punitive damages, which it is sought to recover in this case. He having testified that he had never heard that third persons claimed the property, until alter the institution of this suit, it was entirely competent for the plaintiffs to contradict him in the manner in which they attempted to do so, as shown by the bill of exceptions. It was not an effort to contradict the witness as to an immaterial statement made by him. We find no error in the record, and the judgment of the Circuit Court is affirmed.