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47 Tenn. 140

McElroy v. Melear

Tennessee Supreme Court

Decided December 15, 1869

Tennessee Supreme Court · decided 1869-12-15

PROM LINCOLN. At the July Term, 1867, there was a verdict and judgment in this case, in favor of the plaintiff. Defendant appealed. Judge M. A. Patterson, presiding.

Decided 1869-12-15

Alvin Hawkins, J.,

¶1delivered the opinion of the Court.

¶2S. M. McElroy and John V. McKinney were partners in the drug business in Fayetteville, and as such, transacted business under - the firm name of McElroy & McKinney.

¶3The firm was dissolved and notice thereof given by publication in a newspaper, published in the town, on the 11th day of February, 1858.

¶4On the 2d day of December, 1858, McKinney executed a promissory note, in the name of the firm, to one Robert McMillan, due one day after date, for $400, borrowed money, bearing interest at the rate of ten pet cent.

¶5On the 22d of December, 1859, Melear paid to McMillan, at the business desk of McKinney, -and ill his *142presence, $400 upon said note, and the ' same was credited upon the note.

¶6One George B. Boyles was appointed by the members of said firm, in October, 1859, sole agent to wind up the business thereof, and as such, took into his possession the books and papers of the firm.

¶7On the 30th of January, 1860, Boyles settled with McMillan, and paid him the interest then due upon the note, and took up the same. A portion of this payment was in an account in favor of the firm, against McMillan.

¶8McKinney died, and this suit is brought by Melear against McElroy, the surviving partner, to recover the money paid by him to McMillan, on the 22d day of December, 1859.

¶9There wras verdict and judgment in the court below in favor of the plaintiff below. A motion for a new trial having been overruled, the defendant below has appealed in error to this court.

¶10Various grounds of error have been assigned in argument.

¶11It is insisted Melear cannot recover, because the note upon which the money was paid contained upon its face an illegal stipulation, to-wit: the payment of ten per cent. ■ interest.

¶12■ We think there is nothing in this objection. Melear’s right to recover does not depend upon the validity of the note, or the right of McMillan to enforce the collection of the money; but upon the fact that the payment was made by him at the instance of the makers of the note, *143and for their use. And it can make no difference to him whether the claim of McMillan against the firm was just or unjust, valid or invalid, so the payment itself was not in violation of law.

¶13Another ground of error relied upon, is, that the Circuit Judge erred in excluding certain testimony offered by the defendant below. "We think this objection cannot be maintained.

¶14Boyles, the agent, was examined as a witness for the defense.

¶15After proving the settlement with McMillan, and the payment by himself of the balance due upon the note, the defendant’s counsel asked the Court “to allow the witness to state the circumstances under which the said payment was made;” which the Court refused to do.

¶16It. was certainly competent for the defendant, after proof of the settlement and payment, to prove circumstances constituting part of the res gestee, for the purpose of explaining the transaction.

¶17But no question was propounded the witness, nor is it otherwise indicated that the circumstances which the Court was asked to allow the witness to detail, constituted part of the transaction, or were relevant to the issue. .

¶18Nor can we see that the action of the Court, even if it were erroneous, was error affecting the merits of the controversy, or that the plaintiff in error was prejudiced thereby.

¶19The note in this case, was executed by McKinney' in the name of the firm, after the firm was dissolved, and *144When, from all that appears in this record, he had no power to bind the firm thereby.

¶20There is no proof whatever in the cause, showing, or tending to show, that MeElroy ever, at any time before the commencement of this suit, had any knowledge of the execution of the note, or of the existence of the debt; or in any manner ratified the act of McKinney, Or that the money was borrowed for the use of the firm, Or that the firm ever, in any manner, received any benefit from the same.

¶21McKinney having no power to bind the firm, before MeElroy can be made liable, it must be shown that he has in some manner, ratified the act. That being shown, it would then become the debt of the firm, and this ratification may have been before or after the payment by Melear.

¶22If MeElroy has ratified the act of McKinney since the payment by Melear, at the instance of McKinney, then he would be liable; but, as already stated, there is no evidence in this record of such ratification.

¶23The agency of Boyles was “to wind up the business of the firm;” and, as agent for this purpose, he had ño power to create debts, and hence could not, by any act he could perform, ratify the unauthorized act of One .of the partners, so as to make it binding upon the óther.

¶24And there is no evidence in the case tending to show that MeElroy ever had any knowledge of, or acquiesced in, the act of the agent in paying the balance due upon the note and taking up the same.

¶25*145We are, therefore, of the opinion there is no evidence to support the verdict, and that the Circuit Court erred in refusing a new trial.

¶26Let the judgment be reversed, and the cause remanded.

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