Bank of Tupelo v. Hulsey

SteveNs, J., delivered the opinion of the court. (After stating the facts as above). Under the theory of appellant’s defense and in the light of the strong testimony supporting its contentions, we regard instruction No. 1 given the plaintiff in the court below as erroneous and prejudicial to the rights of defendant. The testimony on behalf of appellant, as defendant, tended strongly to prove a partnership. There was evidence of admissions and of conduct on the part of E. B. and F. W. Hulsey calculated to lead the management of the bank at all times to assume that appellee was. a partner in the business of E. B. Hulsey & Co. The testimony is undisputed that appellee put three thousand five hundred dollars into the business and looked out after the interests of the firm and helped in the management of the business in about the way that a partner would naturally be expected to do. If appellee was a partner in the business, then he was individually liable for the debts of the partnership. Conceding that he had an individual interest in the proceeds of the note which had been pledged with the bank and which is here sued for, it yet remains that appellant, after collecting the proceeds of this note, had the legal right to apply such proceeds toward the liquidation of past due indebtedness of E. B'. Hulsey & Co. It is conceded that E. B. Hulsey also had an interest in the proceeds of. this note, and in collecting the pledged note the bank, of course, had to collect the whole '‘amount, and in any amount collected on the note appellee would have an undivided interest. Instruction No. 1 for the plaintiff takes no account of the partnership. It authorizes the jury to return a verdict for the full amount sued for upon the one condition that they believe from the evidence that the plaintiff had an interest in the note and that the plaintiff had not agreed for this interest to be pledged as collateral. [642] Even though E. B. Hulsey, one of the joint owners of the note pledged the same without the knowledge or consent or even against the protest of the plaintiff, yet appellant, after accepting this collateral and after collecting the same, would have been in the attitude of holding funds 'a portion of which belonged to appellee; and if at the- time appellant collected the proceeds appellee was liable to the hank for past-due partnership obligations, then the bank had a right to apply the separate interest of appellee toward liquidating the partnership liability, and, after the money has been so applied, appellee could not maintain this action to recover the same. In his declaration Mr. Hulsey sues the bank on the theory of money had and received, and the undisputed proof on the part of the bank shows that the bank still claims a very large past due indebtedness against E. B. Hulsey & Co. Before recovery can be had in this case the jury must believe and find from the evidence that appellee was not a partner in the firm of E. B. Hulsey & Co. The proof so clearly and strongly tends to establish a partnership that the granting of this, the only instruction which is given the plaintiff, constitutes error for which this case must be reversed. Our view of this instruction renders it unnecessary to criticize or pass upon instruction No. 8, which was refused. appellant. It is the contention' of appellee that any error in instruction No. 1 is cured by instruction No. 7 given appellant. The instructions appear to be in direct conflict, and, read together, left the jury a doubtful rule by which to measure and apply the facts. We have no doubt about the right of appellant to a new trial. Reversed and remanded.