Commercial National Bank v. Proctor

Mr. Justice Walker delivered the opinion of the Court: Appellees sued the bank on a check drawn by one Lilly in the name of V. A. Marsh & Co., against funds standing to the credit of a firm that it is claimed existed from the 13th of July, 1878, till the 4th of the following August, between V. A. Marsh and C. W. Lilly. The latter drew the draft, claiming the right to do so as surviving partner of the firm. It is not disputed that Marsh, prior to the 13th of July, 1878, was the agent of appellees, who were manufacturers of soap, for the sale of their goods on commission; nor is it disputed that he had on his account with the bank a credit of over $1100 on the' 29th day of that month, or that he was then sick, or .that Lilly, on that day, had the bank to close that account and open a new one, in the name of V. A. Marsh & Co., and by drawing a check on the bank for the amount of the credit on Marsh’s account, signed in his name by Lilly, as agent, transferred the credit to the new account then opened. It is not contested that Lilly made deposits with the bank to the credit of V. A. Marsh & Co., and drew therefrom moneys on checks drawn in the name of V. A. Marsh & Co., after the death of Marsh, which occurred on the 4th of August, until the check in controversy was drawn in the same name, on the 12th of that month, and payment was refused; nor is it disputed that there was standing, a credit on the account, a sum sufficient to meet the check in controversy. It is, however, denied by appellant, that Lilly had any authority to transfer the money credited to Marsh’s account to the account of V. A. Marsh & Co. It is also claimed that the money thus credited belonged to him individually, and on his death became assets of his estate, and as he died insolvent, the bank had a right to participate in its distribution for the amount of a. $1000 note on Strutz & Co., which Marsh had negotiated to the bank and guaranteed its payment, but which had proved worthless. The bank denies that Marsh and Lilly ever formed a partnership, and even if the money belonged to the business, Lilly had no power to control it as a partner. The parties have argued the weight of evidence on these controverted facts. We are absolutely prohibited, by the 89th section of the amended Practice act of 1877, Sess. Laws, p. 153, from determining controverted facts in this class of cases. We have repeatedly held, that where the Appellate Court affirms a judgment of this character, wé must presume it found the facts as did the trial court. We can only look into the evidence to see whether the trial court instructed the jury properly on the evidence. That is a question of law which we are required to determine, or to see whether the facts found by the Appellate Court warranted the judgment, but not to see whether the evidence warranted the finding of the facts. We shall, therefore, proceed to determine whether the errors are well assigned on the giving, refusing and modifying of the instructions given to the jury on the trial. Were the jury properly instructed in the case? It is objected that the instructions assume that there was a partnership existing between V. A. Marsh and C. W. Lilly. That was one of the issues being tried by the jury. If there was no partnership, then Lilly had no legal right to transfer the amount standing to the credit of V. A, Marsh to any other account, by which he could control the money. If, however, there was a partnership, and the business was done from the 13th till the 29th day of July in the name of Marsh & Co., and the money standing to Marsh’s credit had been received by the firm during that time, and was funds received in the course of its business, then Lilly, as a partner, had a right to change the account during Marsh’s life, and place it to the credit of the firm, and to.check it out as surviving partner. If it was Marsh’s private means, then Lilly had no power to control it, and no power to check it out during the life or after the death of Marsh. If, however, there was a partnership, and this fund belonged to the firm, then it was under the control of the firm during its existence, and of Lilly after its dissolution. These were both important questions in the decision of the case, and should have been clearly presented to the jury. The instructions seem, throughout, to assume that there was a partnership, and that was well calculated to mislead, and probably did mislead, the jury on that issue. In this they were erroneous. What we have said applies to appellees’ first and third instructions, and to the modification of appellant’s second instruction. It follows, from what has been said, that appellant’s fifth instruction should have been given. If, as therein stated, the money belonged to Marsh, then, even if there was a firm, Lilly, as surviving partner, had no right to apply it to the payment of a debt owing by the firm. Appellant’s first instruction was properly refused. Lilly had a right to use the name of V. A. Marsh & Co. in which to transact his business, and the bank had recognized the right by honoring his previous checks thus drawn. On paying such checks, they were protected. It did not matter to them whether he drew in the firm name, or in his own name as surviving partner. If there had been a firm, and the fund belonged to it, he had power to control it, as the title to it had vested in him by the dissolution of the partnership. The modification of appellant’s second instruction was wrong, so far as it assumed there was a late firm. We find no evidence on which to base appellant’s third instruction. It seems to be based on a mere suspicion, not borne out by the record. The fourth was properly modified, as there was evidence tending to prove,—and it was not contradicted,—that the money standing to Marsh’s credit, and which was transferred to the new account, was received for soap sold for appellees; and if there was a partnership, it was a continuance of the agency, not only to sell, but to collect for soap previously sold for appellees. It, by the formation of a partnership, became a part of the business, and when collected would be funds under the control of the firm, unless excluded by the agreement in forming the partnership. This was unlike a partnership employing capital in buying and selling commodities, manufacturing wares, etc., and the employment of capital by the partners. It was a partnership in a commission business for the sale of articles of another person for a per cent on the sales. No capital was used by the commission-man, and when the articles were sold and the money collected, it belonged to the owner of the goods. The commission-men had no interest whatever in the fund, beyond their commissions. It was deposited in the bank for safe keeping, and was checked for as a means of transmitting the money to the owners, in Cincinnati. If the creditors of Marsh have any right to participate in this fund, it is alone by reason of a technical rule of law, but not from principles of natural justice. The bank had no power to retain the money to meet the note of Strutz, not then due, and claimed to have been guaranteed by Marsh, as the bank seems to have claimed the right to do. But that ground is not urged on the argument in this court. For the errors in giving, refusing and modifying the instructions, the judgment of the Appellate Court is reversed, and the cause remanded. Judgment reversed.