Fountain v. Hutchinson

Grant, J. (after stating the facts). Errors are assigned upon the admission and exclusion of evidence, upon the refusal to give certain requests, and upon the charge as given. The court refused to permit any inquiry to be made into the partnership agreement, and rejected testimony offered to the effect that Mr. Fountain, at- the time of the alleged sale to his wife, had no real interest in the partnership property, and was in fact indebted to defendant. He also refused to instruct the jury as to the effect of a sale by one partner of his interest in any or all of the partnership property in payment of his individual debts, or as to the rights of partners in their joint property. We think it was important that the jury should have been instructed upon these matters. It is evident that Mr. Fountain was at the time insolvent. If it could be shown that in fact he had no real interest in the partnership property, but was in debt to his partner, this would be a very material circumstance for the consideration of the jury in determining who told the truth, Fountain or defendant, and what the contract was. Of course, plaintiff, under the bill of sale from her husband, did not obtain absolute title to the specific property, nor any title whatever, unless upon settlement it was found that Mr. Fountain had some interest to convey. The conveyance to her was subject to the rights of creditors and the other partner. It was her theory that, although her husband may have had no real interest to convey, yet defendant recognized that she was possessed of the title to the undivided one-third of the property [599] described, and agreed to pay her its full value, regardless of his standing in the partnership. It was the theory of the defendant that all the partnership property was to be sold and conveyed to the corporation, and its value, issued in stock to the defendant, to be applied on the partnership accounts. While these accounts could not be settled in this suit if objection were made, still their condition was a pertinent inquiry in determining the probability of the contract as claimed by the plaintiff, and as asserted by the defendant. Richardson v. McGoldrick, 43 Mich. 476; Colwell v. Adams, 51 Mich. 491; Campau v. Moran, 31 Mich. 280; Banghart v. Hyde, 94 Mich. 49. Most of the errors assigned arise upon the erroneous view of the case taken by the circuit judge that the condition of the partnership and the rights of partners could have no bearing upon the issue. We need not, therefore, consider them in detail. The judgment must be reversed, and a new trial ordered. The other Justices concurred.