Rock Island Implement Co. v. Sloan & Corbin

SMITH, P. J. The defendants were partners, under the name of Sloan & Oorbin, engaged in the retail agricultural implement business, etc. Sloan, for his own individual use, borrowed ,of Richard Oorbin, interpleader $160, for which he executed the note of Sloan & Oorbin; afterwards Sloan sold and delivered to the interpleader certain agricultural implements belonging to Sloan & Corbin to discharge the note. It nowhere appears from the evidence that W. H. Oorbin, the other partner, knew, or in any way approved or acquiesced in the act of Sloan either in the giving of the partnership note or in the sale and deliverey of said partnership property to interpleader to discharge said note. Nor is there any evidence preserved by the bill of exceptions which tends to show directly or inferentially that the money borrowed by Sloan of interpleader was for the use of the partnership. Although the way the note was signed may give rise to the inference that the money for which it was given was for the use of the partnership, the testimony of both Sloan and the interpleader tends to prove that the loan was made to Sloan for his separate use and not for that of the partner-, ship. This is an action of attachment brought by the plaintiff against the partnership, on an account for goods sold by the former to the latter antedating the said transactions between Sloan and the interpleader. The agricultural implements delivered by Sloan to interpleader were seized under the writ as the property of the partnership. The cause was tried by the court without the aid of a jury. The interpleader had judgment and the plaintiff appealed. At the conclusion of the evidence the court was requested to declare, as a matter of law, that the interpleader was not entitled to recover. It seems to'us that this declaration should have been given. The plaintiff did not assail the interpleader’s title to the property in dispute on the ground of fraud. The [441] plaintiff, in its answer to tbe interpleader’s claim, pleaded a general denial. This cast upon the interpleader the burden of establishing his title. The law is well settled everywhere to the effect that one partner has no right to appropriate partnership property to the payment of his individual indebtedness, without the consent of his co-partner. To do so is a fraud on his co-partner and through the right of the firm, creditors may pursue the property. If one partner with the assent of the other sells partnership property to his creditor to satisfy his private debt, and the transaction is bona fide, the title passes and a partnership creditor can not compel an application thereof to his debt, as there is nothing through which the equities of the firm can work. Each partner is liable for the partnership debts. The partners may, so long as the firm exists, do with their property as they see fit. The partnership creditors have no lien on the partnership property for the payment of their debts while the partnership continues to exist. Partners have a right to have the partnership property applied to partnership purposes, but this is a right or lien they may waive. Sexton v. Anderson, 95 Mo. 381; Reyburn v. Mitchell, 106 Mo. 365; Seger v. Thomas, 107 Mo. 635; Grocery Co. v. McCune, 122 Mo. 426. The sale by Sloan to interpleader was not made in furtherance of the partnership business. Generally speaking, each partner is the agent for his co-partners when engaged in the transaction of partnership business. He may without their knowledge or consent sell the assets of the partnership for any purpose within the scope of the partnership. A sale may be said to be within the scope of the partnership business when in furtherance of it and not in subversion of it. Kock v. Fisher, 58 Mo. 532; Clark v. Rives, 33 Mo. 579; Creath v. Distilling Co., 70 Mo. App. 296. Where an agent exceeds his authority, [442] the principal is not bound for such excess; and tbe acts of tbe partner are to be regarded in tbe same light. Flanagan v. Alexander, 50 Mo. 50. Accordingly, we must think that the sale of the partnership property by Sloan to the interpleader, under the circumstances referred to by us, did not have the effect to pass the title of the partnership therein to the latter — that such sale was void, and therefore the title remained in the partnership and was subject to attachment for the debts. It results from this that the judgment must he reversed and cause remanded. All concur.