Court Opinion

ID: 6543327
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:17:34.344442+00
Date Added: 2024-06-11T15:55:53.714335
License: Public Domain

Wood, J., dissenting. The fraud of Farris was egregious and overwhelming; so much so that appellant does not deny it, but bottoms his claim solely upon the theory that he was an innocent purchaser for value. That is impossible, under the facts of this record, if Hudgins was a partner with Farris. The court says: “There is some evidence going to show that appellant B. B. Hudgins, was interested as a partner in said firm of R. M. Farris, or R. M. Farris & Co. How weak or strong that evidence may be, it is not our province to declare.” The partnership being denied by Hudgins and determined against him by the verdict, fraud upon his part follows as inevitably as the night the day. As a partner, he undoubtedly had the right to purchase the interest of his co-partner, and, as is said in the majority opinion, such a purchase “is only invalid as to creditors when it is made with the intent to defraud them, or so clearly has that effect as that the intent is implied.” That is exactly the case heré, in the light of appellant’s contention and the verdict of the jury. We must treat Hudgins as a partner purchasing the interest of his co-partner, and after this purchase denying liability for the partnership debts. Why, as a partner, active or dormant, Hudgins could not buy out the interest of his co-partner, paying as a consideration the sum of nearly fourteen thousand dollars, and then deny that either the partnership effects were subject to,, or that he individually was liable for, the partnership debts, without being guilty of fraud. Yet, that is precisely his attitude, since the jury has found that he was a partner. The consideration for his purchase was a note of four thousand nine hundred dollars, with interest, which Farris owed him and which he surrendered to Farris, and a debt of three thousand one hundred. and fifty dollars which Farris owed J. W. Hudgins, his brother, and which appellant assumed, and then executed his notes to Farris for the balance amounting to some three thousand seven hundred and ten dollars. Now, if he was a partner, as the jury determined, could he convert nearly fourteen thousand dollars of partnership assets into individual property without paying a single partnership creditor, and then deny all individual liability, without being guilty of a fraud ? I say such conduct would be clearly fraudulent. Bates, Partnership, sec. 559, et seq. If Hudgins was solvent, as was insisted in argument, it is but fair to presume that no attachments would have issued had he admitted the partnership instead of denying liability for the partnership debts. But, having denied the partnership and all individual liability, when he was in fact a partner, his conduct clearly evidenced an intent to defraud creditors in making the purchase. The fraud of Parris being palpable and undisputed, the moment the jury determined that Hudgins was his partner at the time of the purchase, ipso facto Hudgins’ complicity in the fraud became established, if he is to be held to the position which his pleadings, his evidence and the instructions asked show him to have assumed. The law would visit him with all the knowledge that Parris had of the firm’s financial condition, and the manner of his purchase, as indicated, being uncontradicted, when taken in connection with his denial of partnership and individual liability, stamped the purchase as fraudulent per se. So in my judgment, with all dué deference, to reverse this cause because of the giving of the seventh instruction enables the appellant to reap a benefit from his own misleading and fraudulent conduct, which doubtless superinduced the very condition of which he is now complaining. Abstractly considered, the seventh instruction is not the law. But, .in the light of the record before us, I do not think the court erred in giving it, for the reasons stated.