Court Opinion

ID: 7045052
Source: CourtListenerOpinion
Date Created: 2022-07-24 06:54:11.700942+00
Date Added: 2024-06-11T16:11:29.961770
License: Public Domain

On Petition for a Rehearing.
Niblack, J.
A petition for a rehearing has been filed in this case, upon which elaborate arguments on both sides have been submitted.
We have given all that has been said in support of, as well as against, the petition a very careful consideration, and are unable to reach a conclusion different from that announced in. the original opinion. Much of the argument of the appellants is based upon the theory that the stipulation for the indemnity of Sims for advancements to and on account of liabilities incurred for Rinehart, contained in the agreement of partnership, was inoperative as against them, because the agreement containing the stipulation Avas not recorded, and because it was not shown that they had actual notice of the existence of such a stipulation at the time they took their chattel mortgages, thus assuming that so much of the agreement as related to such indemnity was analogous to and stood upon the same footing with a chattel mortgage.
In that respect the appellants are in error, as it was not necessary that the contract or agreement of partnership should *287be even in writing, much less that it should have been recorded. Collyer on Partnership, section 3; Holmes v. McCray, 51 Ind. 358.
The general rule is, that the purchaser or assignee of personal property acquires no better or greater title to it than the vendor or assignor had in it, and that no writing is necessary for the sale or assignment of that class of property. It is only when the statute of frauds intervenes that a writing, or the record of a writing, becomes necessary. That statute provides that no assignment of personal property by way of mortgage shall be valid as against'third persons, where possession of the property is not delivered to the mortgagee, unless in writing, and duly acknowledged and recorded, but neither that nor any other statute contains any similar provision as applicable to articles of partnership. 1 R. S. 1876, p. 505, section 10. Persons, therefore, acquiring, or attempting to acquire, an interest in personal property held in partneiship, must take notice of the tenure by which such property is held, and must necessarily incur all the risks incident to the acquisition of that class of property from whomsoever obtained.
The facts found by the court show that, at the time the appellants obtained their mortgages on the property in controversy, the property was held by and in the actual possession of the firm of Sims & Rinehart, under an agreement with Rinehart that none of it should be sold, or otherwise disposed of, without the consent of Sims, and that Sims was to continue to hold and have a lien upon all of said property, to secure him against advances made to, and liabilities incurred on account of, Rinehart, presumably to enable Rinehart to better perform the obligations he had assumed as a member of the firm. That agreement not only continued Sims in the possession of the property, but greatly increased his authority and personal control over it, thus taking the security it afforded out of the provisions of section 10 of the statute of frauds, supra.
In the light of these facts, it has not been, and we think *288can not reasonably be, contended that if Rinehart had not attempted to mortgage his supposed interest in the partnership property, he would have had any just claim to any of the proceeds of such property as against the estate of Sims. If, in such an event, Rinehart would have had no claim to any portion of the proceeds of the partnership property, we are utterly unable to recall any principle governing the transaction of partnership business, which would enable the appellants to assert a greater claim than Rinehart could have done.
Other questions are discussed, but regarding them as merely incidental, and entirely subordinate to those upon which we have expressed an opinion as above, we deem it unnecessary to extend this opinion by specifically ruling upon them.
The petition for a rehearing is overruled.