Letson v. Hall , 1 Ala. App. 619 ( 1911 )

DB GRAFFENRIED, J.

1. The burden of proving a partnership rests on the plaintiff, who sues the defendants as partners, but he is only required to make out a prima facie case. If the plaintiff, in such case, offers sufficient proof to make out, prima facie, the evistence of the partnership, the burden is then shifted to the defendants to prove that they were not in fact partners.—Clark v. Jones, 87 Ala. 474, 6 South. 362.

The existence of a partnership may be shown by oral evidence. It may be shown, just as the existence of any other questioned fact may be shown, by circumstantial evidence. In McGrew v. Walker, 17 Ala. 824, the Supreme Court say that the intimacy of the defendants with each other may be shown, along with other evidence, as tending to establish a partnership. The business intimacy between persons and their conduct with regard to a particular enterprise may be admissible as tending to prove a partnership between them, although each item of such evidence may have but slight weight, when separately considered.—30 Cyc. 404. In the case of Haug v. Haug, 90 Ill. App. 604, the court held that, Avhere the firm stye was “A. Haug & Son,” and ther,e Avas evidence that both father and son gave personal attention to the business, there was a strong presumption of the existence of a partnership. In the case of McDonald v. Gilbert, 16 Can. Sup. Ct. 700, the court held that, where plaintiff had received letters Avritten by one of the alleged partners on paper, on which the names of both were printed as constituting the firm, a prima facie case of partnership was made out. While we think that, in the latter case, the court went too far in holding that the letter heads on Avhich the letters were written made out a prima facie case of a partner,ship between the parties, we do think that such letter heads Avould be a matter of material consideration, along with other evidence, tending to show a partnership.—See, further, 30 Cyc. 402, 403.

When the question vel non of a partnership arises between partners and third persons, the law does not require so strict a degree of proof as is required when the question arises in a case in which one alleges the existence of a partnership between himself and others. Evidence that one permitted himself to be held out as a partner by another is evidence tending to establish a partnership; and as to thir¡d persons one who, by his acts or conduct, authorizes a stranger to believe that he is a partner is, as to such stranger, a partner.—4 Mayfield’s Dig. p. 387, § 75.

Proof of facts tending to show a partnership at a certain date is admissible to show a partnership at a later date, as a partnership once shown to exist will be presumed to have continued, until something to the contrary appears.—Jones et al. v. Sims & Scot, 6 Port. 138; 22 Am. & Eng. Ency. Law (2d Ed.) p. 49.

2. This suit was brought by the plaintiff against the defendant as surviving partner of Sanders & Hall, which the complaint alleges was a partnership composed of the defendant and one D. M. Sanders, on several promissory notes, dated November, 1904, which were executed by the partnership, and, by successive assignments for value, became the property of the plaintiff. The complaint further alleges the death of D. M. Sanders, and that defendant is the surviving member of said partnership.

Applying the principles of law above announced to the evidence in the case, it is manifest that a partnership, not only as to strangers, but inter sese, is shown to have existed between the defendant and D. M. Sanders from September, 1904, until the death of Sanders, which occurred some time after the execution of the notes sued on.

The plaintiff, Letson, testifies that in September, 1904, he sold Sanders & Hall a sawmill on Shade’s creek, known as Letson’s Mill, and that when he sold them the mill they both told him that they were partners, and he further testifies that, of his own knowledge, they were partners, and that the partnership was engaged in the sawmill business from the time he sold them the mill until Sanders died; that Sanders was a son-in-law of Hall, and that both of them looked after the sawmill; that when he sold them the mill the contract was reduced to writing (a copy of it was introduced), and in this contract it is stated that “Hall & Sanders” agree to saw .all timber, placed at the mill by plaintiff at the uniform rate of $2 per 1,000; that shortly after Hall and Sanders bought his mill it was burned, and they.then bought another mill, for the purchase money of Avhich the notes sued on in this suit were given, and installed that mill on the site of the mill Avhich they had bought from plaintiff, attaching it to the parts of the old mill that were left serviceable after the fire, and continued the sawmill business; that after the death of Sanders defendant assumed control of the property and business, took in with him. a man by the name of Harris, and continued it under the name of Hall & Harris; that after the death of Sanders plaintiff saw defendant about the notes sued on, that he did not, at first, dispute his liability ther,eon, but tried to settle them for a small amount, and did not deny his liability until shortly before the bringing of the suit.

One Edwards testified that after the death of Sanders the sawmill business was changed from the name of Sanders & Hall to that of Hall & Harris, and that Hall & Harris continued the business in the same way as it had previously been conducted; that the new firm used the sawmill, teams, and outfit of the old firm; that be dealt with the new firm just as be bad done with the old fir,in; that defendant, after the death of Sanders, paid him the balance due on an account of Sanders & Hall.

E. G. Betts testified that he sold to Sanders the sawmill outfit which is above referred to, and that be did not know Hall in the transaction until the papers were signed, when Sanders told him that Hall was helping him out, and signed Sanders & Hall, at which time Sanders told the witness that Hall was interested in the business. The evidence further showed that from September, 1904, up to Sanders’ death, the bill heads and dray tickets of the business were in the name of Sanders & Hall, and that their checks were made in that way. After Sanders’ death, the defendant, as above stated, took possession of the milling business, and certainly a part of the property so taken possession of by him was the property for which the notes sued on in this case were given, and With that mill Hall continued the business under the name of Hall & Harris.

The evidence further showed that the notes sued on were, by proper and legal assignment, the property of the plaintiff; that they Were secured by a mortgage on the property for the purchase money of which they were given; that the mortgage was recorded in Jefferson county, Where the property Was situated, on or about the date of its execution; and that the mortgage was tbe property of the plaintiff.

The fact that the notes contained clauses Avaiving exemptions as to personalty did not affect their legality. Sanders signed the name of Sanders & Hall to the notes, and then signed his Own name to them. H'e did not sign the name of the defendant to them. As a partnership is entitled to no exemptions, the presence of the clauses waiving exemptions in the notes had no field of operation as to it, and in no way affected Sanders’ authority to sign and make them binding, as simple promissory notes, on the firm. The legal effect of the notes, when delivered, was the same as to the partnership, and to Hall, as a member thereof, as if no clause waiving exemptions had been placed in them.

If there was a partnership, and the above evidence not satisfactorily rebutted by other legal evidence, showed a partnership, there can be no question about Sanders’ authority to bind the firm by the execution of the notes. They were given for the purchase money of property which went into the business of the firm, and was used by it in carrying on that business. Having the authority, as a member of the firm, to buy the property and contract the debt, he necessarily possessed the power, in the name of the firm, to execute the notes, which were evidences of the debt and of the time fixed for payment. The execution of the notes and mortgage by Sanders in the name of Sanders & Hall was duly proven. The notes were therefore admissible ,in evidence. The court erred in excluding the plaintiff’s evidence, and also erred in refusing to admit the notes sued on in evidence.

3. We have thus far considered this case, as presented by the evidence, on the question vel non of a partnership, and the liability of the defendant in this suit, if there was in fact a partnership. Under the evidence as presented by the bill of exceptions, the question also arises as to whether the defendant is not liable to the plaintiff, under the doctrine of estoppel, even if the defendant, on the next trial of this case, should, by evidence, successfully show that there was in fact no partnership. It is to this phase of the case that this opinion now addresses itself.

The evidence quoted above tends to show that Sanders held himself out to the public as defendant’s partner; that he was his son-in-law; that he contracted debts in the name of Sanders & Hall in Bessemer, one at least of which was paid by defendant after Sanders’ death; that the bill heads and dray tickets of the business Avere in the name of Sanders & Hall; and that the checks on banks were in the name of Sanders & Hall, which necessarily means that there was someAvhere one bank at least in which money Avas deposited in the name of Sanders & Hall. While the evidence does not disclose whether they lived in the same house, it is inferable from the evidence that they certainly lived in the same neighborhood. It appears, therefore, from the evidence that it was a matter, at least of neighborhood notoriety, that, while Sanders was in the saAvmill business, from September, 1904, until his death, he Avas running the business under the name of Sanders & Hall, and was holding the defendant out as his partner in such business. This being true, the defendant in all probability knew it. As the evidence tends to establish the fact that Sanders held himself out as defendant’s partner, the common report of that fact in the neighborhood tends to show that the defendant knew the fact. This rule is based upon the probability that a particular individual knoAvs what the balance of the community seems to know.—Humes v. O’Bryan, 74 Ala. 64.

It further appears from the evidence that defendant, after Sanders’ death, possessed himself of all the property of which Sanders had control under the name of “Sanders & Hall,” and, forming a partnership with one Harris, continued the business, just as it had been formerly conducted, under the name of Hall & Harris; that plaintiff informed him of his notes against Sanders & Hall; that there was a mortgage on the property, and, while the court refused to admit the mortgage, it is shown in the hill of exceptions, its execution was duly proven, and it was of record in the probate office of the county of Jefferson long before Sanders’ death.

If the above is true, the defendant .is estopped from denying his liability on the notes. He will not be permitted by the law to reap the benefits of Sanders’ purchase of the property, and keep property upon which plaintiff had a valid mortgage, and for the purchase money of which, or a part of which, the notes were given, and at the same time deny Sanders’ authority to bind him on the notes. Courts are the instruments of the law in enforcing the principles of justice between man and man, and no court will permit a party to knowingly reap the fruits of a transaction entered into for him by another, although unauthorized, and deny that he was bound thereby. The doctrine of estoppel in cases like the present, simply means that one shall not take the fruits of an illegal transaction and afterwards set aside the transaction as illegal. A man cannot accept the benefits and reject the burdens of a transaction. He cannot blow hot and cold at the same time.—3 May-field’s Dig. p. 410, §§ 7, 8, and authorities cited. As a circumstance tending to establish an estoppel, the mortgage securing the notes should have been admitted in evidence.

4. Plea 2 was good, as a plea denying the existence of the partnership. It was sufficient to cast upon the plaintiff the burden of showing by evidence, prima facie, the existence of a partnership between Sanders and I-Tail, either inter sese or as to a third person. If Hall was estopped from denying' the existence of the partnership, the plaintiff can set those facts np in a special replication to the plea.

5. The fourth plea Avas bad. It is dual, in that it undertakes to deny the plaintiff’s OAvnership of the notes, and also that defendant executed the notes; and Avhile duplicity in pleading, except in pleas in abatement, is alloAved in Alabama, this plea denies that the defendant executed the notes, but does not deny that they were executed by the partnership of Sanders & Hall. If executed by Sanders & Hall, and the defendant Avas a member of the firm, or so connected himself as to estop himself from denying his liability on them, then they are binding on him.

6. It is not necessary for us to consider the ruling of the court is sustaining the demurrer to the count in trover. As we understand the plaintiff’s argument, he proposed, under this count, to offer evidence tending to show that, after the death of Sanders, the defendant converted to his own use certain property which belonged to Sanders & Hall. As Ave have already stated, if the defendant Avas a member of the firm of Sanders & Hall, he is liable to the plaintiff on the notes. If he was not a member of the firm and has estopped himself from defending against them, he is also liable on the notes, and if, after the death of Sanders, defendant possessed himself of the effects of Sanders & Hall and used them in his business, either individually or in connection with one Harris, under the name of Hall & Harris, this can all be shown by evidence on the questions of partnership vel non, or estoppel vel non.

But if the defendant was a mere stranger to Sanders & Hall, and is not, by his acts and conduct preceding and succeeding the death of Hall, estopped from denying his liability on the notes, then, if he converted effects of Sanders & Hall, after the death of Sanders, to his OAvn use, this would not render him liable in trover in tbis action, which is against him as surviving partner of Sanders & Hall, and not simply as an individual.

The plaintiff asked, in writing, a number of charges in his behalf, but, as the court excluded the evidence of plaintiff and refused to admit the plaintiff’s notes and mortgage, we cannot consider them.

We do not think that it is necessary to discuss any of the other questions presented by the record.

Reversed and remanded.