Dantzler v. Cox & Dantzler , 75 S.C. 334 ( 1906 )

Mr. Justice Woods.

I dissent. The evidence shows conclusively that A. L. Dantzler was not only a member of the defendant copartnership! but the manager of the business, and his authority to- give the notes sued on is beyond controversy. Any private understanding among the members of the film that he should not give notes or borrow money wa.s not binding on third persons without notice, and there was no evidence that the plaintiff had notice of such understanding. There was evidence of great confusion in the partnership books kept by A. D. Dantzler and of irregularities in the conduct of the business which might justify the inference that he had misappropriated some of the funds of the partnership', including perhaps the money received for the notes on which the plaintiff seeks to. recover. But so far from the evidence offered by the defendants showing that the notes were taken by the plaintiff in collusion with A. D. Dantzler for the purpose of defrauding the partnership, it tended to show affirmatively the actual payment by the plaintiff to A. D. Dantzler, the managing partner, of the money for which the notes were given. For, on June 1st, 1901, the date of the first note for $316, given by Cox & Dantzler, due twelve months after date, the check of the plaintiff to Cox & Dantzler was paid by the Bank of Darlington; and on September 13th, 1901, the date of the second note for $79.50, plaintiff drew from the Bank of Darlington $75, and this gives color to the claim that lie paid that sum to> A. D. Dantzler when he took the note on the same day. The difference between the amount paid by the plaintiff and the face of the note manifestly represents, the interest. A. L. Dantzler testified he received these sums from his brother for the notes, and there was no evidence to the contrary. Any fraudulent appropriation of this money to his own use by the partner whom the defendants had entrusted with the management of the business could not affect the plaintiff, unless he had notice of an intention to- misappropriate. So far as I can discover, there was no evidence of such notice. A. D Dantzter and D’. K. Dantzler are brothers, and the defendants proved intimate relations between- them, but knowledge by the plaintiff of his brother’s improper conduct of the business of Cox & Dantzler was not proved. Business transactions between members of the same family in which the out-side world is concerned, as has been often- held, should be subjected to- more than ordinary scrutiny, but a- business transaction is not presumed to be fraudulent merely on the relationship- or intimacy of the parties.

In argument much- stress was laid on the failure of the plaintiff to testify in exoneration of himself from- the charge of fraudulent collusion, and this is the only point upon which it seems to me there is any room for doubt. The rule of law as well as of common sense is that if there is any evidence of fraud against a party, his failure to take the stand and give his version imparts additional strength- and significance to such evidence. But where there is simply a charge of fraud, unsupported by any evidence, no inference is- to be dr-awn against the party charged from' his failure to- testify. The defendant in all cases may sit in silence until the plaintiff has- offered some proof against him, and cases in which fraud is- charged are not exceptions te» the rule.

As a result of these views, I think the Circuit Judge was right in admitting in the first instance all the testimony as to any irregularity or fraud of A. B. Dantzler in the conduct of the firm’s business, for all this was a necessary preliminary to connecting the plaintiff with such irregularities or fraud. But when the -defendant failed to connect the plaintiff with any of the alleged wrong-doing on the-part of A. L. Dantzler, the testimony became incompetent and should have been stricken out. For the same reason I think there should have been a new trial, because the verdict for the defendants was without evidence to support it.