Court Opinion

ID: 6676067
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:16:01.896404+00
Date Added: 2024-06-11T16:00:42.576158
License: Public Domain

The opinion of the court was delivered by
Mr. Justioe Walla ge.
On the first day of April, 1872, W. H. Webb, W. C. Parker, and L. J. Jones entered into a contract of partnership for the purpose of carrying on the business of tanning leather, making and selling saddles, harness, and shoes and of selling buggies, guano, corn, and other articles of merchandise. It was stipulated between them and stated in the memorandum of agreement signed by each of them, that each should contribute the sum of eight thousand dollars to the partnership capital, and that each should share equally in the profits and losses of the business, and that the business should be managed by Webb, with the consent of the other partners, and that books, exhibiting the business, should be kept by him which at all times were to be subject to inspection by the other partners.
When the partnership was entered into Webb was engaged in manufacturing, buying, and selling leather and leather goods. His stock on hand, tools of the trade, and the real estate owned, occupied, and used by him in the conduct of his business, were *87transferred to the new concern at an agreed valuation, as bis contribution to the capital stock. He was credited upon the books of the firm with the sum of eleven thousand, three hundred and fifteen dollars and sixty cents. For the amount of the excess in value, contributed by Webb, over the eight thousand dollars which he had agreed to contribute to the capital stock he was to receive the note of the firm. Jones and Parker, too, were engaged in the business of tanning leather. It was agreed that all their stock, fixtures, and real estate owned and used by them in their business should be transferred to the new concern at an agreed valuation, as their contribution to its capital. Accordingly Jones and Parker were credited with the agreed value of this property, to wit, with the sum of twelve thousand, eight hundred and forty-four dollars, and they, too, it was agreed, should receive the note of the firm for the sum of any excess in value contributed by them over the eight thousand dollars to be contributed by each partner. Parker owned an interest in the property contributed by him and Jones, estimated at about twenty-five hundred dollars. That all the property turned over to the concern by Webb is covered by the credit of eleven thousand, three hundred and fifteen dollars and sixty cents, is denied by Webb. The determination of this question is not necessary to the decision of the case according to the view we take of its essential issues.
In pursuance of the agreement between the partners, the firm entered upon the prosecution of its objects and transacted a large and flourishing business under the management, mainly, of Webb, who, it was agreed, should receive for his services as manager the sum of one thousand dollars per annum. Taking the statement of the books of the concern as to the amount of capital actually contributed by Webb as correct (and it may be assumed to be so for the purposes of this case), on January 6, 1873, Webb had reduced this credit to the sum of five thousand, seven hundred and eighty dollars and fifty-five cents. On that day there is nothing to show that the firm was not perfectly solvent. On that day Webb drew a draft on the account of the firm in bank for the sum of fifteen hundred dollars. This draft was cashed by the bank and charged to the firm. It was drawn and delivered *88by Webb in part payment of the purchase money of a house and lot. The contract of purchase had been previously made for the sum of two thousand dollars. Other payments on the purchase had been made by Webb. One of these consisted of supplies furnished the vendor out of the partnership goods. At the time of the purchase Webb caused the conveyance to be made to himself, and he put his daughter, Mrs. Harrington, into possession of the property. On September 23, 1873, Webb conveyed this house and lot to himself as trustee for his daughter. This latter deed was drawn by L. J. Jones, one of the partners.
The partnership of Webb, Parker & Jones was dissolved by an order of this court, made in a proper proceeding before it on February 16, 1874, and receivers were appointed to administer the assets of the firm. At the date of this order the concern was insolvent. The receivers have brought this action to set aside the trust deed and to subject the property conveyed by it to sale for the payment pro tanto of the partnership debts. This relief is sought upon two grounds : First. Because this deed was a voluntary conveyance to the prejudice of creditors. Second. Because the property was paid for with partnership funds.
The first ground is decided against the plaintiffs by the Circuit Judge, and from this part of the Circuit decree no appeal has been taken. This question is not, therefore, before this court. It may be added, however, that this court concurs with the Circuit opinion upon this point, on the case as made on the trial below.
The second ground questions the right of a partner to acquire individual title to property paid for with funds drawn from the partnership. The law' upon this question in this State has been stated in the recent case of Maybin v. Moorman, 21 S. C., 346. The Circuit decree in this case was filed before the opinion in the case of Maybin v. Moorman, was delivered. A brief statement of the facts of that case will show that it is conclusive of this. Moorman, Maybin, and Chick were partners in a mercantile business. Moorman was bookkeeper. The other partners had access to the books. Moorman was paid a salary for keeping the books. He took one thousand dollars of partnership funds *89and paid for bank stock with it and took the stock in his own name. There was no intentional fraud or wrong doing of any sort. Moorman and Chick died, and the firm proved to be insolvent. Maybin, the surviving partner, brought an action against the executor of Moorman to recover the bank stocks as partnership assets to pay debts. This court decided that Moorman had acquired individual title to the stock and was indebted to the firm for the one thousand dollars paid for it.
With reference to the case in hand, nothing appears in con-, nection with the original purchase of this property or the subsequent change in the nature of Webb’s tenure of it which points to any purpose to prejudice the rights of creditors or partners. There was no concealment, for the check for fifteen hundred dollars was charged on the books of the firm to Webb on the day of its date. The conveyance to himself as trustee was drawn and approved by Mr. Jones, his partner and the attorney of the firm. There is no evidence of conspiracy, for at that time both Jones and Webb were men of means, and, as far as appears, able to respond individually to any existing liability of the firm. Under these circumstances the case of Maybin v. Moorman, supra, clearly decides that a partner may appropriate partnership funds to the payment of the purchase money of property for his own use, and become a debtor to the partnership for the money so used while he acquires individual title to the property so purchased.
It is, therefore, the judgment of this court that the judgment of the Circuit Court be reversed and the complaint dismissed.