Case ID: va_20/html/0792-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Poindexter v. Waddy.
    Decided, Oct. 26th, 1819.
    1. Partnership — Bond by One Partner — Liability of Co-Partners. — If one of two partners in trade give a bond or note, without the consent of the other, and for a debt not contracted with or due from the partnership; such bond or note is not binding on such other partner, at law; nor will a Court of Equity hold him bound on the ground, that the debt in question was-contracted by the partner who.gave the bond or note, for goods the greater part of which were applied to the use of the firm; the vendor having retained no lien on the goods so sold; and it not appearing that the other partner agreed to pay his proportion thereof, or was indebted to the partner who contracted the debt.
    2. Equitable Relief — Adequate Remedy at Law.— where a defendant, who had an adequate remedy at law, has been prevented from resorting to it, by a fraudulent representative or promise of the plaintiff, he ought to be relieved in Equity.
    See Lee v. Baird, 4 H. & M. 453.
    3. Partnership* — New Partner — Liability for Old Debt of Firm. — A new partner, received into a mercantile - firm, upon his buying out the share of an old partner, is not bound to pay any part of the debts previously due from the firm, without a contract on his part to that effect.
    4. injunction — Judgment—Chancery Practice. — Upon a Bill of .Injunction toa Judgment at law; if it appear that the complainant, as to whom the Injunction is made perpetual, was forced to give a forthcoming bond, and thatthereis no equity in favour of another defendant to the suit at law, on whom the execution was not served; the Court should so extend the decree as to enjoin that defendant from availing himself of the return of the execution and. forthcoming bond, to prevent proceedings against him upon the judgment.
    This was a Bill of Injunction exhibited 'to the Judge of the Superior Court of Chancery for the Williamsburg 'District, by Edward S. Waddyj to stay proceedings on a Judgment obtained against Bressie Lewis and the complainant, as merchants and partners trading under the firm of Bressie Lewis & Company, by Carter B. Poindex-ter, upon a note under seal for $463 41 Cents, executed by the said Bressie Lewis, who subscribed thereto the name of the firm, “Bressie Lewis •& Co. for a private debt individually due from himself to Poindexter, and without the consent of the complainant.
    « The Bill stated, that the Writ was served upon the complainant, and no bail required ; as appeared by a special endorsement upon it; that he was prevented from defending himself at law, by the express assurance of Poindexter that he should not look to him for the money, but meant to get it from Lewis: —that, notwithstanding this assurance, execution was issued and levied on the property of the complainant; whereupon, he had given a forthcoming bond with Edward Frith as his surety'; to whom he inconsiderately applied for that purpose ; the said Frith being a material witness to prove an important fact in the case, which he knew before he became surety: — that the complainant, having failed in attempting to prevail on the Sheriff to take another surety in *his stead, had no other means of releasing Frith, and then obtaining his evidence, but by depositing the principal, interest and costs for which he was bound: — he therefore prayed that a receiver be appointed, with whom he should deposit the money. He also stated, that compensation could not be made for the sum in question, by any profits or share of the said Lewis in the concern, to which he was not a creditor; as might be ascertained by an adjustment of the partnership accounts.
    The Chancellor granted the Injunction, and directed a deposit of the money to be made'in one of the Banks in the Borough of Norfolk.
    The statements in the answers of Poin-dexter and Lewis (who was also a defendant) differed, in some respects, from those in the Bill; but it appeared from the deposition of Edward Frith, taken by consent of parties, to be read as evidence in the cause, that, some months before he signed the forthcoming bond, he was present, when a conversation took place between the complainant and Poindexter, relative to the suit which then ' was pending; in the course of which conversation, Waddy enquired of Poindexter, if he intended to hold him responsible for the said debt; saying that he made the enquiry, because, if such was his intention, he, Waddy, must defend himself in the suit; whereupon, Poindexter replied that Lewis had property enough, and he intended to levy the execution upon him.
    ' It appeared from the same deposition, that Poindexter told the witness, that he had been in partnership with Bressie Lewis, and had furnished a considerable sum, for which he had received very little; that the business was closed, and the stock sold to Daniel R. Waddy ; that, from the sickness of Bressie Lewis, a settlement of their partnership was for some time delayed ; but that they had at last settled, and Lewis had given him á certificate of the balance due, with a request to Edward S. Waddy to pay him the amount; that he presented the said certificate to the said Waddy, who refused to pay the money; that afterwards, he returned the certificate to Lewis, and obtained from him the note on which the suit was brought.
    *It was alledged by Lewis and Poin-dexter, that, upon the dissolution of their partnership, the debts and stock on hand were transferred to the firm of Bressie Lewis & Co., of which Daniel R. Waddy was then the partner, with his consent; and that Edward S. Waddy (the complainant) having afterwards purchased of Daniel R. Waddy his share in the concern, received, together with Lewis, (by whom the business was still carried on under the style of Bressie Lewis & Co.,) the benefit of the said transfer, and therefore was equitably bound, as a partner, for payment of the debt to Poindexter: — but Lewis did not alledge in his answer, that he gave the note with the consent of Waddy.
    It appeared, by the Report of a commissioner, to whom the Chancellor referred the accounts between the parties, that Edward S. Waddy bought of Daniel R. Waddy his share in the firm of Bressie Lewis & Co. ; that the debts due to Poindexter and Lewis at the time of the dissolution of their partnership, amounted to the sum of $424 72 Cents; that the goods transferred to Bressie Lewis & Company, were worth between sixty and seventy dollars; but no formal or regular settlement of the co-partnership was made, and no account ot the goods so transferred was produced; neither was any report made concerning the state of accounts of the partnership of Bressie Lewis & Company.
    No replication was put in, to the answer of Bressie Lewis: nor was the'cause set for hearing as to him.
    Chancellor Nelson made the Injunction perpetual; from which Decree Poindexter appealed.
    Stanard for the appellant.
    Leigh for the appellee.
    
      
       Partnership.— See monographic note on “Partnership” appended to Scott v. Trent, 1 Wash. 77.
    
    
      
       Equitable Relief — Adequate Remedy at Law. — It is well settled that a court of chancery will not entertain a party seeding relief against a judgment which has been rendered against him in a court of law, in consequence of his default, upon grounds which mighthave been successfully taken in the court of law, unless some reason founded in fraud, accident, surprise, or some adventitious circumstances beyond the control of the party be shown why the defense at law was not made. This wise rule springs out of the positive necessity that there must be some period at which litigation shall cease. A court of equity will not grant relief merely because injustice has been done. The party seeking relief must show that he has been guilty of no laches, but that he has done every thing that could have been reasonably required of him under the circumstances of the case. But courts of equity have always granted relief in such cases when it is shown that the reason why the defense was not made at law, was founded in fraud, accident, surprise, or some adventitious circumstances beyond the control of the party. Knapp v. Snyder, 15 W. Va. 441, citing principal case. See further, monographic note on “Jurisdiction” appended'to Phipp'en v. Durham, 8 Gratt 457.
    
    
      
       Injunction. — See monographic note on ‘Injunctions” appended to Claytor v. Anthony, 15 Gratt. 518.
    
   The following was the Opinion of this Court.

The Court is of opinion that the firm of Bressie Lewis & Co. consisting of Bressie Lewis and Edward S. Waddy, was not responsible, at law, for the debts of Bressie Lewis & Co. consisting of the said Lewis and Daniel R. Waddy; and that the writing, on which the judgment sought to be enjoined was recovered, if it is to be considered as a ^sealed instrument, and as intended to bind the company first above mentioned, was not obligatory on Edward S. Waddy the appellee, who might have pleaded non est factum thereto; and, if not to be considered a sealed instrument, was not binding on him, being given by his partner, without his consent, for a debt not contracted with, or due by the partnership.

The Court is also of opinion, that the appellee was prevented from making his defence at law, by the representations of the appellant, as stated in his bill; and which statement, though contradicted by the Answer, is clearly proved by the deposition of Edward Erith, taken and read by consent, (and to which therefore no objection earn be made in this Court,) and by adequate circumstances.

The Court is further of opinion, that the mere circumstances that Edward S. Waddy purchased the interest of his brother in the first firm of Bressie Lewis & Co., and that the latter firm of Bressie Lewie & Co., in which the appellee was a partner, had received the greater part of the effects sold by the appellant and his partner to the first firm, is not sufficient, in equity, to charge the latter firm with that debt; there being no lien on the property so sold; and it not appearing in this suit, (and to which Daniel R. Waddy is no party,) either that the said latter firm made themselves liable, by contract, for the debts of the former, or that Edward S. Waddy, when he purchased, contracted with his brother to pay his proportion thereof: — and, as it is neither suggested nor shewn, that Edward S. Waddy is a debtor to his partner Bressie Lewis, who owes this debt, and which money he might apply to the discharge thereof, there is no ground whatever, appearing in the case, on which Edward S. Waddy can be subjected, in Equity, to the payment of this debt. The decree therefore, so far as it goes, is correct, and must be affirmed, with Costs to the appellee.

The Court is further of opinion, that the appellant has a right to enforce the Judgment at law, against Bressie Lewis; but, as he might be prevented therefrom by the '"'return of the Execution and Delivery bond taken in this case, the Decree ought to have been extended so as to enjoin the said Lewis from availing himself at law of those circumstances; and this Court, therefore, proceeding to make such farther decree as the Chancery Court ought to have made, it is farther decreed and ordered, that Bressie Lewis be enjoined from availing himself at law, of the return made on the Execution issued on the Judgment aforesaid, or of the delivery bond given by the said Edward S. Waddy, so as to prevent proceedings against him on the said judgment.