21 Miss. 656

Lea v. Guice

Decided January 15, 1850

Mississippi Supreme Court · decided 1850-01-15

In error from the circuit court of Yazoo county; Hon. Robert C. Perry, judge. Ephraim Guice, president of the board of trustees of the sixteenth, section of school lands, in township ten, range one, west, brought his action of assumpsit against James K. Lea, a surviving partner of Calvin Lea, deceased, and Eggleston Cheatham, on a promissory note, in these words, viz: “$1066.66. “One day after date, we, or either of us, promise to, pay Calvin Lea, president of the board of trustees of the 16th section of land, in township ten, of range one, west, or his successors in office, one thousand and sixty-six dollars and • sixty-six cents, value received, with interest, at the rate of eight per cent, per annum, from date until paid. “ (Signed,) C. Lea, “ March 11, 1843. Eggleston Cheatham.” After plea by Cheatham, the suit was discontinued as to him. Lea plead non assumpsit, with an affidavit of its truth in substance and fact. On the trial, the plaintiff offered in evidence, articles of agreement. between James K. Lea and Calvin Lea, which recited that they owned lands, negroes, and ‘other property, situated in said county of Yazoo, and agreed to plant in partnership with them, each to share equally in the expenses and profits of the same; referring to a conveyance for a description of the land owned jointly by them. This was objected to by defendant’s attorney, but the objection was overruled. Plaintiff then gave, in evidence to the jury, the note sued on, which was objected to by the defendant below, but he was overruled by the court. Plaintiff then called Robert H. Cage, who proved, that the signature “ Calvin Lea” to said note was in the handwriting of Calvin Lea, with which he was acquainted; that he had seen Calvin Lea, in his lifetime, sign several writings about his plantation business, with the name Calvin Lea alone; one of them was a transaction about some mules purchased by Calvin Lea for the plantation, for which he gave his note, signed by him in his individual name, and by witness as his surety for. about $170, which was the largest transaction in which witness saw him sign the name Calvin Lea about plantation concerns; witness was obliged to pay the note, and James K. Lea, as surviving partner, repaid him the amount; that he never knew Calvin Lea to sign any other name than his own to any instrument of writing made in connection with his planting business. He also stated that Calvin Lea, at the date of the note, and for some' years before and afterwards, until his death, was engaged in the business of planting in Yazoo county, on a plantation in his (witness’s) neighborhood; that he was very intimate with said Calvin ; and that he never heard or knew, nor was it known in the neighborhood, until after said Calvin’s death, which was in August, 1846, that he was in partnership with James K. Lea; that witness, and all others in the neighborhood, believed him doing business alone; that said plantation was a productive one, producing each year considerably over the expenses; that said Calvin lived on the plantation, and James K. resided in North Carolina, &c.; that he was a planter, and acquainted with the usages and customs of planters, &c., in Yazoo county; that it was the usage of planters in that county to borrow money, when they needed it for carrying on their plantations; that witness has no positive knowledge what the firm name was, nor did he know what was the consideration of the note sued on. Jos. C. Lewis, called by plaintiff, proved Calvin Lea’s handwriting to note; was acquainted with the Leas, and the plantation and negroes; knew nothing of partnership until after said Calvin’s death; that said plantation was a profitable one; that he, as receiving and forwarding merchant, received and shipped the crops of said plantation for several years previous to the death of said Calvin; that the crops of said plantation were never less than one hundred and sixty bales of cotton a year ; that thirty hands were worked on said plantation; that Calvin Lea received the proceeds of the crops; witness furnished the supplies for the plantation, usually amounting to about $600 a year, but did not furnish all the supplies; supposes whole amount of supplies for it would be $1000, exclusive of overseer’s ■wages ; that since the death of Calvin Lea, James K. Lea told him, that he had received $900 from said Calvin Lea, and that said Calvin Lea, at the time of his death, was indebted to him on partnership account several thousands of dollars; was very intimate with said Calvin; that all the instruments made by him about his plantation were signed by him in his individual name; the partnership was not known. The cotton from the plantation was marked in his name alone. Benjamin Lewis, called by same, testified the signature was in the handwriting of said Calvin Lea; was acquainted with him; never knew of partnership, «fee.; that the note sued on in this action was given by said Calvin Lea, in his lifetime, to the said president of the trustees of said sixteenth section, to take up the note of E. C. Wilkinson to the same, for money loaned of about the same amount; that at the time the note sued on was given, witness, who was treasurer of said trustees, was present; and that, at the time, the said Calvin Lea told him, (witness,) that he wanted the note sued on, to take up the note aforesaid of E. C. Wilkinson and others, to said president, «fee. Here the attorney for defendant below stopped the witness, and objected to his testifying to the declarations of the said Calvin Lea, as to the purposes for which he gave said note,1 which objection was overruled by" the court, to whose opinion the defendant excepted. The witness was then permitted to testify; who stated, that at the time the note sued on was given, Calvin Lea told witness, that he wanted to give said note in lieu and stead of said noté of E. C. Wilkinson and others, and that he made the note sued on for the purpose of raising or procuring the money, or means to pay a debt which he owed to Joseph E. Taylor, for overseeing on his plantation in Yazoo county, the same in which said Calvin and James K. Lea were partners, a debt due him, said Taylor, as overseer on said plantation; and that the said CalvimLea did take up with the note sued on, the said note of said E. C. Wilkinson from said president and trustees. Cross-examined by defendant’s attorney. Was and had been a planter in said county for many years; acquainted with planting business and planting partnerships; attorney for defendant then asked witness, Whether it is or is not the general usage and custom of planting partnerships, in this section of country, for one partner to use and exercise the power of borrowing money? To this question the attorney for the plaintiff objected, and contended that the question should be not as to the usage and custom of partners in the planting business, but of planters generally, which objection the court sustained, and decided that the question should be general as to the customs and usages of persons engaged in the business of planting, in relation to their borrowing money necessary for the purpose of carrying on that business, and that it might be thus propounded if desired; and the defendant’s attorney declined asking it, but excepted to the opinion of the court, in sustaining the objection to the question as propounded by him. Plaintiff’s attorney then propounded to witness the question, Is it or not the custom and usage of persons, engaged in the planting business, to borrow money when necessary for the purpose of carrying on that business? And witness answered, “ It is when needed.” On being further cross-examined, witness stated, that at the time the note sued on was given by said Calvin Lea, nothing of or about the partnership was said or known; that Eggleston Cheatham .signed said note as surety for Calvin Lea, and that said note was accepted by said trustees upon the credit of Calvin Lea, as seeming owner of said plantation and negroes which he held in his possession. The defendant then called Alexander Kerr, who proved that he lived with Calvin Lea, as overseer on said plantation, several years; 'went to live with him as overseer in the fall of 1843, and continued with him until his death; that the cotton crop produced on said plantation in 1843, amounted to two hundred and sixty-three bales, besides a crop of corn and meat; enough was raised on the place for the negroes; that no corn or meat was bought for the glace whilst he lived there; never heard of partnership until after death of said Calvin Lea, and that after his death his wages were paid by said James K. Lea. Joseph E. Taylor, for defendant, testified, that he lived with Calvin Lea as overseer on said plantation three years, to wit, 1840, 1841, 1842, and left his employ on the 1st of January, 1843; that the smallest crop of cotton made on said plantation, whilst he lived there, was the crop of 1842, and that one hundred and fifty bales of that year’s crop was baled when he left there, and all the crop had not been then picked out; that said plantation was a productive one, and profitable; that witness received no negroes from Calvin Lea got from E. C. Wilkinson, in payment of any debts due witness; witness received his overseer’s wages from Calvin Lea for overseeing on said plantation, amounting to $1800, January, 1843; that in December preceding, Calvin Lea told witness that he was going to New Orleans, and asked witness if he would like to buy some negroes; that witness told him he would; that said Calvin Lea went to New Orleans, and on his return, told witness that he had not bought any negroes for him, but that he had brought money from New Orleans, and would pay witness all he owed him for overseeing, and then paid witness all he owed him for overseeing, which was $1800; that this witness is positive was paid on the 1st of January, 1843; that some time in March or February, 1843, witness was inquired of by said Calvin, at Benton, the court-house of Yazoo county, if he did not wish to buy some negroes; that witness told him he did; that Said Calvin then requested him to bid off, in his name, some negroes, which were being sold under a deed of trust or execution, in which the said E. C. Wilkinson was either trustee or attorney; that the said Calvin, at the time, said he had made arrangements with some one, (witness does not recollect whom,) to receive the money which said negroes might bring at said sale; that witness consented, and did bid off the same three or four negroes at said sale, in the name of said Calvin; and that witness immediately bought them from said Calvin, and then paid him the money for said negroes, which money was the same money that he received from said Calvin aforesaid ; that he never bought any negroes from said Calvin in consideration of a debt due him; thát he never bought any other negroes from said Calvin; and that at the time he bought said negroes from said Calvin, the said Calvin did not owe him any debt for overseeing on said plantation, or any debt at all. This was all the evidence. The plaintiff then asked the following instructions, viz: 1. That if. the jury believe, from the evidence, that the defendant and Calvin Lea were engaged in the business of planting in copartnership, at the date of the note sued on, and that said defendant was a dormant partner of said Calvin Lea, or not known by the community to be connected in said business with said Calvin Lea; and if they believe, further, that the said note sued on was made by said Calvin Lea, for an account of the firm and for the firm’s benefit, and was for such a debt or liability as men engaged in planting customarily or usually contract, in view of its objects or effects, then the law is for the plaintiff, and they must so find; and that it makes no difference in this respect whatever, whether the credit was given to Calvin Lea alone or not. 2. That if the note sued on was given by Calvin Lea, with the belief that the existing circumstances arid condition of the firm business, in view of, or consistently with, the customs and usages prevailing in the business of planting, rendered it neces.sary to give it, the defendant is equally liable and bound, whether that necessity did or did not exist. 3. That the power of one member of a firm to bind his copartners by contract, does not, in any degree, depend on the state of the account of individual members of the firm with each other. These instructions the court gave, and defendant excepted. The defendant then asked for the following instructions, viz. • 1. That if a person contracts with an individual partner in a matter unconnected with the partnership business, the firm will not be bound ; and if they believe that the contract in this case was not connected with the partnership, the law is for the defendant. 2. That unless they believe that Calvin Lea is proved to their satisfaction, to have been at the time of making of the note sued on, the firm name of James K. Lea, the defendant, and Calvin Lea, in his lifetime as partners or with the sanction of both of them used as such, or that the said note was used on firm account, the law is for the defendant, and they must so find. 3. That where one of several partners subscribes the partnership name to a note for a consideration or in consideration of a transaction, not in the regular course, nor within the scope of the partnership business, it lies upon the plaintiff to prove the authority or consent of the other partners to the use of the firm name in such case, and that if one partner signs the firm name to such note without the consent of the other partner, the latter is not bound. 4. That where a note is given by a partner in the name of the firm, in extinguishment of another note of a third person received by him individually, the other member of the firm is not liable, unless the last named note is applied to the use of the firm with his knowledge and approbation. 5. That dormant partners are not liable on express contracts made by third persons with the known and acting partner, and that a promissory note is an express contract. 6. That a contract by one partner in the partnership name, not in the regular course of their business, will not bind his co-partner, unless it be afterwards adopted and approved by the copartner. 7. That if they believe from the evidence that the partnership was carried on in the name of Calvin Lea as the firm name, yet unless they believe that the transaction in this case was in the business, or upon the credit of the partnership, and not upon the credit of Calvin Lea individually, the law is for the defendant, and they must so find. The court gave the first, third and sixth of these instructions for the defendant, but refused the second, fourth, fifth, and seventh, to which refusal the defendant excepted. The jury brought in a verdict for the plaintiff, upon which the defendant moved for a new trial; 1. Because the verdict of the jury is contrary to evidence and law; 2. Because the court gave erroneous instructions asked by plaintiff’s attorney to the jury; 3. Refused to give instructions asked by defendant’s attorney; 4. Permitted improper evidence to go to the jury; and 5, because the verdict is contrary to justice, and the very right of the cause. Which motion the court overruled, and defendant excepted, and sued out this writ of error.. Cited Story Part. 2d edit. 226, 227, § 139, note 1, and authorities cited; Collyer on Part. (ed. by Perkins) § 411, note 1, and authorities; U. States Bank v. Binney, 5 Mason, 176; S. C. 5 Peters, 529; Etheridge v. Binney, 9 Pick. 272; Story, Part. Ill, § 128; 7 Cow. 202, 214; 11 Wend. 75; 10 lb. 461; 12 Serg. & R. 18; Chitt. oh Cont. 253; Story, Part. 199, § 126; Chit. Cont. 5th Am. ed. 249 a, note v. Cited in addition Hedley v. Bainbridge, 3 Ad. & E.(N. S-) 316; 3 Kent, Comm. 42; Gow on Part. 38. 1. The court did not err in permitting the note sued on to be read in evidence, on proof of its execution by Calvin Lea, and before proof of the partnership and of its having been made on the firm account, because it is a well established and unquestionable principle, that a party litigant may present and introduce his evidence in whatever order he chooses. 2. The court, upon the same principle, did not err in permitting the articles of copartnership to be read, without first requiring proof that th,e note was made on the firm account. 3. The decision of the court, that the plaintiff might prove the usage and custom of persons generally engaged in the business of planting, and was not obliged to prove the custom and usage of planting partnerships, was also clearly correct. The law implies that the business of the firm was to be conducted according to the necessities, usages, and customs of persons engaged in that business generally. And the decision of the court on this point was in accordance with this principle. 4. The propositions of law presented by the instructions asked for by the plaintiff are all obviously just and true, and in accordance with the highest authorities. Story on Part. 215 - 217; 2 Kent, Com. 630, 631; Collyer on Part. 11, 313; 5 Pet. R. 560 ; 4 Cow. 282. The court therefore did not err in giving them to the jury, as requested. 5. That the second and fourth instructions asked for by the defendant were properly refused, is shown by the same authorities. It having been fully proven that the defendant was in the strictest sense a dormant partner in the firm composed of himself and the deceased, his liability did not depend upon whether there was or was not a firm name used by the ostensible partner, or whether it was or was not used in making this note, nor upon whether the contract was express or implied. This is apparent from the authorities cited. 6. The fourth instruction asked for by defendant is unintelli- • gible, and, under every view of its meaning, inapplicable to the testimony, and was for .these reasons properly refused. 7. The seventh instruction asked for by the defendant and refused, was also incorrect. It substantially asserts that if credit be exclusively given to the ostensible partner, the dormant partner is not bound by the contract. The authorities cited show that this is directly the reverse of the law. In fact, exclusive credit is always given to the ostensible partner, because the existence of the dormant partner is always unknown. If known in connection with the firm, he ceases to be a dormant partner. 8. The admissions of Calvin Lea at the time he made the note sued on, as to the object for which he made it, or the purpose which he designed to accomplish by it, were clearly admissible to show that the note was given for a partnership purpose. It is established by the highest authority, that “ the acknowledgment of one partner, during the continuance of the partnership, of a debt as due by the partnership,” -will bind and charge his copartners. Story on Part. 160, $ 107; 5 How. R. 596. Such an acknowledgment can only bind the firm by sufficiently establishing two facts,— 1, the existence of a debt; 2, that it is a partnership debt. If, as shown by the authorities cited, the acknowledgment of one member of a firm be sufficient in law to bind the firm, as proving sufficiently both of these facts, it is difficult to conceive why the admission of one member of a firm is incompetent as evidence to establish only one of these facts alone. The declarations or admissions of Calvin Lea were objected to when offered to prove that the debt was a firm debt. The authority shows that such an admission would have been competent to prove, as against the defendant, the original existence of the debt, and its character as a firm debt also. The court therefore rightly permitted the declaration of Calvin Lea to be proven. 9. It is next and finally alleged, that the court below erred in refusing to grant a new trial, because the verdict was unsustained by evidence. Upon this point I am free to admit there is some difficulty. But taking into view all the circumstances proved, and the statement of Calvin Lea, as to the purpose for which the note was made, we think that it is not such a case as authorizes the court to set aside the verdict of a jury. On this point Mr. Holt reviewed the proof at length.

Relies on Reynolds v. Cleveland

Decided 1850-01-15

Mr. Justice Smith

¶1delivered the opinion of the court.

¶2From the evidence in this cause, it appears that at the date of the note sued on, and for several years before and afterwards, a copartnership in the business of planting existed, in which the plaintiff in error and Calvin Lea, since deceased, were jointly and equally interested. The former resided in the state of North Carolina, and the latter on the plantation owned by them in the county of Yazoo. Calvin Lea was the sole conductor of the business of the firm which he transacted in his own name. *668Calvin Lea was not known to be the name of the firm, and none of the witnesses were cognizant of the fact that a partnership between these parties existed, or that James K. Lea was, in any way, interested in the plantation which had been in the occupation and under the charge of Calvin Lea.

¶3The suit was brought on a note’made by Calvin, against the plaintiff in error as the surviving partner of said firm.

¶4The defence in the court below raised the question of the liability of the plaintiff in error on the note as a partnership contract.

¶5The first objections made to the proceeding in the circuit court are to the admission of the note on which the action was based, and the articles of copartnership between the decedent and the defendant below.

¶6These objections are untenable, and were, at the time they were made, premature. It is a well established rule of practice, that parties litigant are not restricted as to the order in which they may choose to present their evidence. It was not incumbent on the plaintiff to precede the introduction of the note by proof of the existence of a partnership, or that the note was made by the ostensible partner on account of the firm, or for its benefit. If the plaintiff on' the trial had failed to show these facts, by competent proof, the evidence would have been irrelevant, and would have been excluded upon the application of the defendant.

¶7The objection to the admissions of Calvin Lea, the ostensible partner, tending to show that the note was given for a partnership purpose, is,equally unfounded. The admissions of the deceased partner were not competent to prove a partnership between himself and the defendant. But the existence of the partnership in this case was distinctly proved by other evidence in the cause ; and the admissions were not offered to prove that fact, but to show that the note was given for the use and benefit of the firm. For this purpose they were clearly competent. “ The representation of any fact, or the misrepresentation of any fact, made in any partnership transaction, will bind the firm. The acknowledgment by one partner during the continuance of *669the firm, of a debt, as due by the partnership, will amount to a promise binding on the firm; and the admission of any fact by one partner, material as evidence in a suit, will, under like circumstances, be deemed the admission of all the partners.” Story, Partn. 160, § 107. Hence there was no error in. allowing the admissions of Calvin Lea to be submitted to the jury.

¶8The articles of partnership recited that the parties were the several owners of an undivided half of certain lands, slaves and other property; and that it was agreed between them that the same should be cultivated and employed for their mutual benefit, each bearing an equal share of the expenses necessarily and properly incurred in the cultivation and management of said lands, slaves, &c., and receiving an equal share of the net profits arising therefrom. The stipulations of these articles, therefore, left it discretionary with the partner, charged with the conducting and management of the business of the firm, as to the method in which the partnership property should be managed. Hence independent of the general principle that would apply to partnerships of this character, the inference arose from the partnership contract, that the acting partner should conduct the firm business according to the necessities, usages and customs of persons engaged in the occupation of planting generally.. As the partnership which existed between these parties was secret, it was competent for the plaintiff to prove what were the usages and customs of planters generally, in order to show that the contract upon which the secret partner was sought to be charged, was sanctioned by those usages and customs. There was, therefore, no error-in allowing evidence of these facts to go to the jury and rejecting testimony as to the customs of planting partnerships in that part of the country.

¶9After the evidence was closed, the jury were instructed as well at the instance of the plaintiff, as the defendant. We will notice first the charges for the plaintiff.

¶10A dormant partner will be liable for the whole amount of the debts due during his partnership, whether his connection with the firm be or be not known to the creditor at thé time of the *670contract. Coll, on Partn. 313; Reynolds v. Cleveland, 4 Cow. 282.

¶11The liability of the dormant and secret partner is created by operation of law, independent of his intention, from the mere participation in the profits of the business, as the credit in such cases is manifestly given only to the ostensible partner. But even here the credit is deemed in law not to have been given exclusively to the ostensible partner, and is binding on all for whom he acts if done in this business and for their benefit. Story on Partn. § 138, 159.

¶12In fact, a dormant or secret partner is held responsible for the engagements of the firm of which he is a member, on a principle of justice to the community, for by his receipt and enjoyment of the profits he takes from the creditors a part of that fund, which is the proper security for the payment of their debts. Grace v. Smith, 2 Bl. R. 998; Waugh v. Carver, 1 Smith, Lead. Cases, 491.

¶13These principles cover completely the grounds of these instructions. Hence the court did not err in granting them.

¶14We will next consider the exceptions taken to the refusal of the court to give certain charges, at the defendant’s request.

¶15A material allegation of the declaration was, that the deceased and defendant, executed the note sued on by the name and signature of “ Calvin Lea.” Sufficient proof of this averment was essential to entitle the plaintiff to a recovery. The charge of defendant first refused goes further, and made it incumbent on the plaintiff to prove that the signature of Calvin Lea attached tó the note, was, at the time of making the same, the firm name of the partnership then existing between these parties; or that it was used as a firm name with the sanction of both partners.

¶16The partnership existing between the deceased and defendant was proved to be in the most unqualified sense of the terms a secret partnership. The whole of the business of the firm was conducted by the decedent, and in his own name. Hence, if the liability of the defendant were at all dependent upon the existence or use of a firm name, the presumption would exist that the name of the ostensible partner was the name of the firm. *671Blit as we have seen the liability of the defendant did not depend upon the fact that the credit was given to the ostensible partner on account of the firm, or that any copartnership existed. His liability resulted by operation of law, upon proof of the fact, which was a question exclusively for the jury, that the contract was made for the use and benefit of the joint concern. The refusal to give this instruction was correct, as it made the right to recover on the part of the plaintiff dependent upon the proof of an immaterial fact,- or one which was the necessary result of the facts proved.

¶17The last clause of this instruction was not objectionable, except from its connection with the preceding parts of the same charge. And if it could be separated from these objectionable parts, or could be considered as a modification of the principles thereby laid down, the court did.not err in refusing to give it as the rule which it contained was embraced in the first instruction given at the instance of the plaintiff.

¶18There was no error in the refusal of the fourth instruction. It was inapplicable to the facts of the case, and hence it was properly refused.

¶19The seventh and last instruction was properly refused. The principle contained in this charge was, that the note was not obligatory upon the defendant, unless the credit had been given to the firm, and not to Calvin Lea individually. In cases of dormant and secret partnerships, the credit is given solely to the ostensible partner, for the obvious reason that there is no other party known. We have above shown that a dormant and secret partner is responsible for debts due during the time he is a member of the firm, whether his connection with the same be or be not known to the creditor at the time of the contract. His liability arises by operation of law. See authorities above cited.

¶20We will next notice the exception to the decision on the motion for a new trial.

¶21Calvin Lea was in the sole possession of the plantation and slaves, in reference to which the partnership, existed. He was the sole conductor of the business of the firm, in the transaction of which he constantly used his own name, and was *672engaged in no other occupation. His declaration to the witness (Lewis) was evidence, not conclusive however, that the note was given and used for the use and purposes of the partnership, but it materially strengthened the presumption which would naturally arise from the circumstances of this case in the absence of all explanatory evidence, that the contract was made on account and for the benefit of the existing partnership. With the testimony of this witness, that of Taylor conflicts, and as the whole appears in. the record, the preponderance was in favor of the defendant. The jury were the exclusive judges of the credibility of the evidence; and as it conflicted, i't was their peculiar province to weigh it. This they have done, and have decided in favor of the party in whose favor, according to their judgments, the scale turned. We might have been better satisfied-if the verdict had been rendered for the defendant, but according to the settled rules of this court, the preponderance against the verdict is not so great as to authorize us to set it aside.

¶22Let the judgment be affirmed.

¶23A re-argument was asked but refused.