Case Name: I. R. DAWSON, Respondent, v. M. E. POGUE and CHARLES NICKELL, Appellants
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1888-12-20
Citations: 18 Or. 94
Docket Number: 
Parties: I. R. DAWSON, Respondent, v. M. E. POGUE and CHARLES NICKELL, Appellants.
Judges: 
Reporter: Oregon Reports
Volume: 18
Pages: 94–126

Head Matter:
[Filed December 20, 1888.]
I. R. DAWSON, Respondent, v. M. E. POGUE and CHARLES NICKELL, Appellants.
The acts and declarations of parties to an action are not competent evidence in their behalf, unless they constitute a part of a transaction which bars or disproves the claim made against them, or are a part of a material fact in the case.
In an action against a party, to charge him with a debt as a co-partuer, it is competent for him to prove that at the time the debt was contracted tbe partnership had been dissolved; but, in order* to render the proof admissible, it must tend to show an actual dissolution of the partnership relation.
"Where, in- an action against one N. and P. for goods sold to the latter, the complaint alleging that they were co-partners at the time, N. denied in his answer, and in his testimony upon the stand, that he and P. were ever partners at any time, and offered in evidence a writing, purporting to have been signed by himself and P. at a time prior to the sale of the goods, to the effect that all partnership that may have existed between them, either express or implied, was that day at an end, which he testified was signed by himself and P. at the time it bore date, but which P. denied ever having signed, or having been asked to sign, or that any conversation had ever been,had upon the subject; and no evidence was offered showing that the writing was executed as corroborative of or as a part of any transaction between the parties, or in accordance with any mutual understanding between them.
Held, that the writing was not admissible as evidence “tending to show that no partnership in fact existed between N. and p. at the time the merchandise was sold, or that any partnership that might have existed between them had been dissolved.”
Held, further, that the facts and circumstances of the case, together with N.’s testimony, to the effect that, having heard that P. had represented to several parties that he was interested with him, as a partner, to protect himself, he prepared the writing, and had it signed, negatived any inference that it was intended as part of a transaction to dissolve a co-partnership between them, or corroborative of any such transaction.
Per Lord, J"., on Re-Hearing.—Filed November 11, 1889.
"Where, on an issue whether a partnership did or did not exist, the record disclosed that one of tbe defendants, “having heard his co-defendant had reported that he was a partner with him, and to protect himself, prepared a writing” to the effect that all partnership which may have existed between them, express or implied, was at an end, which was signed by them, and offered such writing as evidence tending to show a partnership dissolution;
Held, (1) that the writing was not prepared and executed on the assumption of the existence of any partnership, but as a contradictory statement by the author of such reports; and that it could only he used as evidence to effect the credibility of such co-defendant.
Held, (2) that as the writing was prepared to protect the defendant from the declarations of his co-defendant, but that as such declarations could not bind him, or create the relation of partners, the writing could not operate as a dissolution agreement.
Held, (3) that, within the purview of the facts for which the writing was prepared, it was not done to dissolve a partnership which was supposed to exist; but, to give it that effect, it would place the defendant in the position of preparing his own and co-defendant’s written declarations to serve that purpose, which was inadmissible.
"When a bill of exceptions states that the court “instructed the jury upon all the issues involved in the case, and upon matters properly for their consideration,” but such instructions were oral, and no part of the same are incorporated therein, and certain instructions asked and refused are set out and excepted to, whether, upon such a record, the court will presume that the instructions asked and refused, if good Jaw, and applicable to the facts, were covered by the instructions giyeu, not decided; but suggested that the rule as to such presumptions ought to be confined in its operations to the case in which written instructions have been required and given by the trial court, and that then, if a party complains that instructions asked have been erroneously refused, and fails to bring the written instructions given, it is right that such presumption should be indulged.
Strahan, J., dissenting.
Partnership—How Formed.—A partnership is formed by contract entered into between two or more competent persons.
Partnership—Dissolution.—Inasmuch as a partnership is formed by the mutual consene of the parties, it may be dissolved in the same way. Hence, a paper signed by the members oí a firm, declaring, in effect, that any partnership that might theretofore have existed between them was at an end, is competent evidence in favor of a retiring partner, as tending to prove that the remaining partner had no power to bind him by contracts for goods, made after the date of such writing.
Partnership—Evidence.—A paper, signed by the members of a firm, declaring a dissolution, is competent and material evidence on the issue as to the non-existeuce of the partnership after that time. If made at the time,, it is evidence, of the highest character, tending to prove the fact of dissolution.
Partnership—Pleading.—A person sued as a member of a firm, at a particular time, may deny that he was a member thereof at the time alleged, and i>rove upon the trial a dissolution of said firm prior to the time charged in the complaint, without alleging affirmatively in his answer the fact of such dissolution. The dissolution is not new matter, constituting a defense, but a fact which may be shown under the denial of plaintiff’s allegations.
Dormant Partner—Notice op Dissolution.—Upon the dissolution of a partnership having a dormant partner, such dormant j»artner need give no notice ot his retiriug, except to persons who knew of his previous connection with the firm. As to all others, he owes no such duty, and cannot be made liable for debts contracted by the remaining member of the firm after he had retired.
Appeal from tbe -circuit court for tbe county of Jackson.
II. K. Hanna, E. B. Williams, J. B. Neil and P. P. Prim, for Appellant.
Cox, Smith & Teal and H. Kelly, for Kespondents.

Opinion:
Thayer, C. J.
This case, in tbe circuit court, was an action brought by tbe said Dawson against said Pogue and Nickell, to recover for merchandise alleged to have been sold to tbem, as co-partners, under tbe firm name of M. E. Pogue, by certain merchants doing business at tbe city of Portland, and tbe accounts therefor assigned to said Dawson. It was alleged in tbe complaint that at all times therein mentioned tbe defendants were partners, under said firm name; that tbe said merchandise was sold to them, by tbe several merchants referred to, as sucb partners; and that the claims therefor were assigned to -said Dawson. Pogue mado default, but Nickell filed an answer, in which he denied "that he was a partner of the said M. E. Pogue during any of the times stated in the said complaint, or at any other time, under the firm name of M. E. Pogue, or otherwise." Said Nickel! also denied the alleged indebtedness to the several merchants, and denied that the plaintiff, Dawson, was the owner or holder of the said claims, or any portion thereof. The main issue in the case was in regard to the alleged co-partnership between Pogue and Nickell. A trial by jury was had, and a verdict returned in favor of the plaintiff; upon which the judgment appealed from was entered.
The appellant's counsel claims that Dawson was not the owner of the accounts sued on, nor entitled to maintain an action therefor; also, that the circuit court committed error in refusing to allow a certain paper, purporting to have been signed by Pogue and Nickell on the twenty-eighth day of February, 1884, to be introduced generally, as evidence in the action; and in giving and in refusing certain charges to the jury. The only proof of the assignment of the claims' to Dawson seems to have been a stipulation upon the part of Nickell to the effect that they were assigned to him by the respective parties owning them, by written instruments executed in due form, at the times and places alleged in the complaint, but without any valuable consideration, and for the sole purpose of enabling Dawson to enforce collection of them by action in his own name. The stipulation was given as a condition for changing the venue of the action from the county of Multnomah to the county of Jackson, and intended to save the necessity of producing the witnesses to the assignment at the trial. I cannot perceive that it makes any difference whether there was any consideration for the assignment of the claims, or for what purpose they were assigned, if the title to them passed to Dawson. The execution of a written assignment of the claims to Dawson, presumably, vested the legal title to them in him, and made him the real party in interest. The transaction, however, may have been only a sham; but that must be established by the defendants before they can claim that he was not the real party interest. The stipulation itself does not prove it.
The ruling in regard to the admissibility ,of said paper seems to have been made under the following circumstances: The plaintiff submitted testimony tending J~o show the co-partnership between the defendants, as alleged in the complaint. Thereupon Nickell offered himself as witness in his own behalf, and, after testifying to his having loaned to Pogue $1,500 and taken his note therefor, and a mortgage to secure the same, stated that he and Pogue were never pai'tners at any time; that he heard Pogue was behind; he went to him to get the mortgage and secure the note, that after he had obtained the note, and having heard that Pogue had reported to several parties that he was interested with him, as a partner in the business, to protect himself, he prepared an agreement, bearing date February 28, 1884-, which is the paper referred to, and of which the following is a copy:
"Jacksonville, February 28, 1884.
"Know all men by these presents: That, for value received, all partnership that may have existed between the undersigned, either express or implied, is this day at an end.. And it is further understood that neither M. E. Pogue, nor his heirs or assigns, have any claim whatever against Charles Nickell, or' his heirs or assigns, on any account. It is further understood that any claim Charles Nickell has against M. E. Pogue, his heirs or assigns, at this date, is on account of a certain note, given Charles Nickell by M. E. Pogue, for $1,500, and dated January 30, 1884, with whatever interest may have accrued.
' ' Signed and delivered on the date above mentioned.
"M. E. Pogue,
"Charles Nickell."
Said Nickell further stated that he drew up the document, and that the same was signed by M. E. Pogue and himself, in his office at Jacksonville, in the presence of each, other, on the twenty-eighth day of February, 1884. His counsel thereupon offered said document in evidence, as tending to show that no partnership in fact existed between said Pogue and Nickell at the time the merchandise was sold; that any partnership that might have existed had been dissolved,—and, as evidence tending tó impeach the statement made by Pogue, that no dissolution of the partnership testified to by him had been had. The plaintiff's counsel objected to its admission on several grounds. The court sustained the objection, holding that said paper was not admissible under the pleadings; that it was not admissible generally, as to the non-existence of a co-partnership, because it was the act of the defendants, Nickell and Pogue, and could not therefore be introduced in evidence in favor of Nickell; and that it could not be received as evidence tending to impeach Pogue, because no foundation had been laid for its introduction. To this ruling the appellant's counsel excepted. The appellant, by permission of the court, then called his co-defendant, Pogue, as a witness, who testified that the name signed to the paper, purporting to be his, was his signature. Witness was then asked the following question: ' ' Did yon not, on the twenty eighth day of February, 1884, sign the paper ?" to which he answered: "No, sir; I did not. I be ver signed such an agreement at any date. " In reply to other questions put to him he answered: ' T never did sign any such paper at all, — never was asked to sign it;" that he had never had any conversation with Nickell about any such paper; that he could not account for his signature being on the paper, otherwise than that he was in the habit of writing his name on blank pieces of paper, and that it was possible that such piece of paper, upon which he might have written his name, had been found, and the writing' inserted above his signature. Nickell, upon being recalled, testified that Pogue signed the paper, in his office in Jacksonville, on February 28, 1884, in his presence. The court théieúpon allowed the paper to be read to the jury as evidence tending to impeach Pogue, by showing that he had made statements out of court contradictory to his evidence in court, but instructed the jury at the time that it was admitted for that purpose only, and should not be considered by them for any other purpose; and subsequently, in its charge to the jury, the court instructed to the same effect; to which counsel for the appellant excepted.
Said counsel also excepted to the refusal of the court to give certain other instructions as requested by them; but they have only brought here detached portions of the charge which the court did give, and it would be unfair to the court to consider those exceptions, without knowing ^hat instructions were given. It appears from the bill of exceptions'.that after the evidence had been introduced, and argument of counsel concluded, the court proceeded to instruct the jury upon all the issues involved in the case, and upon matters proper for their consideration; and it is apparent ] that] its instructions covered those asked, and refused by the: court, to which reference has been made It is'not unusual for counsel to request a trial court to instruct the jury in regard to matters covered by instructions already given. It seems to me that it is the better rule to require counsel to bring here the instructions which the court did give, or have the bill of exceptions state what instructions were given, if any, in reference to the matter covered by the instructions asked and refused, before they are allowed to complain in consequence of such refusal. Where an ordinary instruction, relating to the matters in issue, is shown to have been requested by counsel and refused by the court, it should be presumed, in the absence of a contrary showing, that the refusal was made upon the ground that it, in substance, had already been given.
The real question to be determined in this case is the admissibility in evidence of the paper referred to Ordinarily, acts and declarations of parties to an action are not competent evidence in their behalf. There are exceptions, however, to the rule. One class of the exceptions is where a transaction is alleged to have been had which, if true, would bar or disprove the -claim sued upon. In such a case the transaction may be shown by the acts and declarations of the parties, where such acts and declarations constitute the transaction. That, in fact, is the only way in which it can be shown Thus, m proving a tender for a debt, payment, an accord and satisfaction, and many other defenses, what the defendant did and said at the time is admissible, as part of the res gestee-; but, where the acts and declarations of the party are not a part of the transaction, they are incompetent proof. In the case at bar it would have been entirely legitimate for Nickell, after the testimony of the plaintiff tending to show his co-partnership with Pogue in the business was submitted, to prove that prior to the time the debts in question were created, the partnership had been dissolved. Such fact, if established, would have disproved the plaintiff's claim. But the dissolution of a co-partnership must be proved by evidence showing that the parties mutually agreed to dissolve it, and performed certain acts in accordance therewith. The dissolution of a co-partnership requires the performance of acts, as much as the formation of one does. It is not what the parties agree tó do which creates or dissolves the relation; but it is what they do in fact. A co-partnership does not begin until the parties commence to do business under the partnership articles; and it does not terminate until they cease to do business under their agreement of dissolution. In the former case, they must launch the partnership; in the latter they must stop it, with a view of winding up its affairs. Tne paper was offered in evidence as tending to show that no partnership in fact existed between Nickell and Pogue at. the time the goods were bought, and that any partnership that might have existed between them had been dissolved; and the question is whether the refusal of the court to admit it for the purpose mentioned was error. The paper was not offered as corroborative evidence that the partnership had been dissolved, nor as part of a transaction between the parties to dissolve it; nor could Nickell, in view of the facts of the case, have consistently offered it as such evidence, or as a part of such transaction, as he emphatically disclaimed, both in his answer and testimony, the existence of any such partnership at any time. He could not, in the attitude he maintained, claim or pretend that any such dissolution in fact had ever been attempted. He said in his testimony that. 11 having heard that Pogue had reported to several parties that he was interested with him as a partner, in the business at Gold Hill, to protect himself he prepared an agreement, " etc., referring to said paper. This wholly negatives any inference that the paper could possibly have been a part of a transaction +o dissolve the co-partnership, or was corroborative of any transaction for such purpose; and Pogue testified that he never signed any such paper at all. never was asked to sign it; and never had had any conversation with Nickell about any such paper.
The case involves these queries: Can a party who apprehends that an attempt may some time be made to charge hun with liability as a partner, by merely securing from his supposed co-partner an instrument purporting to be an agreement of dissolution, be able thereby to successfully defend against an action brought to establish such liability Is such a document admissible as evidence of facts inferable from it, in the face of a denial by the party of their existence, and where it was not prepared or executed for the purpose implied by its terms? Is such a writing a part of a transaction, or corroborative of a transaction, shown positively never to have occurred? Can it be successfully maintained that such a paper, standing alone,.by its own force and vigor, dissolves a co-partnership relation existing between the parties to it? And finally, does an instrument of that character, executed under the circumstances shown, constitute a dissolution of the partnership, or a part of the transaction of its dissolution, or corroborative evidence of its dissolution, or anything more than a declaration of the non-existence of such a partnership?
I cannot understand how there could have been any agreement between Nickell and Pogue to dissolve the part nership found by the jury to exist between them, conceding ' that they both signed the paper, as Nickell claimed. The evidence shows conclusively that there was no talk between them about a dissolution, or understanding had in regard to a dissolution. How, then, can it be claimed that a proposition of dissolution was ever made and accepted, or that the minds of the parties ever met in regard to the matter? What more could said paper have been, under the circumstances, than a formal writing, given without any intention of accomplishing any object or purpose beyond that 'df preventing Pogue from claiming that Nickell was a partner with him in the business at Gold Hill?. I doubt very much, whether any case can be found which holds that a writing executed under such circumstances is admissible in proof to establish facts similar to those which this one was offered in support of. If said parties had orally agreed to dissolve their partnership relations, and reduced the agreement to writing, and acted upon it, a dissolution would undoubtedly have, been accomplished. But where no such foundation is laid nor such act done in pursuance of the writing, and the evidence clearly shows that none was intended, I do not see how any such result could follow. The actual dissolution of the partnership,—the change of Pogue's and' Nickell's relations as such partners,—was the ground of the defense; and unless the paper established that fact it was immaterial;
This case is clearly distinguishable from that of Emerson v. Parsons et al., 46 N. Y. 560. There the defendants, who claimed that the partnership had been dissolved, testified to its dissolution, and then offered the following writing in evidence:
' ' This is to certify that I have purchased the interest of M. H. Parsons and Levi S. Parsons in the firm óf E: P. Baker & Go.; and I hereby agree to assume all liabilities of the said firm, and hold M. H. Parsons and Levi S. Parsons harmless. E. P. Baker."
Thi<3 was objected to by plaintiff, but received by the court, and the ruling excepted to. The judge subsequently charged that this writing was evidence of the dissolution of the firm, together with the proof of parol dissolution. It is evident that in that case the minds of the parties met in the agreement of dissolution. The parties had agreed to a dissolution before the writing was executed, and it was so executed and delivered as evidence thereof; and no question was made as to the existence of a co-partnership between the parties prior to that time. Church, C. J., who delivered the opinion of the court, said: ' 'The two members of the firm who defend this action testified, in substance, that the partnership was dissolved on the third, day of September, and that this paper was then executed and delivered by Baker, as evidence of the dissolution. I apprehend such a writing, in part fulfillment of the parol contract, would be competent upon the question whether such an agreement was in fact made, as corroborative of the alleged parol contract, and as a part of the transaction.'' Another feature m that case which gives the transaction more the character of a dissolution of a partnership is the disposition of the assets and provision for the payment of the debts. But the widest difference between the two cases is in the acknowledgment of the existence of the partnership in the one and in the positive denial of it m the other, except so far as logical rules enforce its confession. In this respect the appellant necessarily occupies an equivocal position. He cannot consistently maintain his attitude. He says, in effect, that he was not a partner with Pogue at any time, and that the partnership was dissolved on the twenty-eighth day of February, 1884. If he had interposed a plea as inconsistent as his attempted proof, it would not have stood a moment; and I do not see that he is any more entitled to prove his case hypothetically than he is to plead it in that manner. His defense, in that respect, involves as great a degree of absurdity as the old case of the hunter, who aimed to kill the animal, if a deer, and miss it, if a calf.
According to my view of the case, the judgment appealed from should be affirmed.
[Filed November 11, 1889.]