Court Opinion

ID: 8507357
Source: CourtListenerOpinion
Date Created: 2022-11-23 08:07:33.395322+00
Date Added: 2024-06-11T16:50:56.878483
License: Public Domain

Taft, J.
This case comes into this court on a petition error.
The petition of Miller, plaintiff in the suit below, stated that during the month of September, 1868, he purchased seventeen hogsheads of tobacco and stored them in the warehouse of defendants in the city of Covington; that he paid for the tobacco in cash, and took from the defendants the receipted bills and warehouse receipt of the defendants for the tobacco; that afterward the defendants sold the plain*272tiff’s tobacco without his knowledge and pocketed the proceeds, and refuse to pay over any part of them. The amount of his claim was $3,590.94.
The defendants, by answer, denied all the allegations of the plaintiff"; denied that they made any purchases for him or sold any of his tobacco, or that they are in any manner indebted to him.
Erom the bill of exceptions, it appears that John I. Robbins was a purchaser of tobacco from the defendants from time to time. He was a manufacturer of tobacco and a dealer in the article.
It appears that he was accustomed to purchase of the defendants, giving acceptances for the purchase money at sixty or ninety or some other number of days, leaving the tobacco in the warehouse of the defendants, as the defendants claim, to remain as security for the payment of the drafts.
The clerk of the defendants gave a receipted bill for this tobacco, on receiving the acceptances, and blank tickets or orders for the delivery of the tobacco.
¥e are satisfied, however, that these tickets were not, by the usage of the trade, intended to convey a right to the property without paying for it. They were mere blank orders and could bind nobody.
The defendants say that Robbins ‘bought tobacco in a variety of names, but advised them that the purchases were all made for himself. He himself shys that such was the case generally; indeed, in all cases except in the case of these seventeen hogsheads bought in the name of Miller. The defendants evidently supposed that the purchases were made for himself by Robbins. They had nothing to do with any one else; and we are satisfied that Robbins informed the defendants that the purchases were for himself, though entered at his instance in the name of Miller.
Sullivan and Dunham both testify that they -had a contract with Robbins that tjie tobacco bought by him should *273be held by them as security for the payment of the acceptances,. and that' they knew nothing of Miller. It is not claimed that Miller called on the defendants, or notified them personally of his interest, or had any intercourse with them. The acceptances became due and were renewed perhaps several times, and finally the defendants sold the tobacco and applied the proceeds to the payment of the acceptances, which was in accordance with the understanding they had with Robbins, the only party they had seen or known in the transaction.
This we think is a fair statement of the facts on which the defendants claim that they are entitled to the fund. The proceeds of the sales did not quite pay off the indebtedness to the defendants for purchases made by Robbins from them.
The facts on which the plaintiff claims the proceeds of this tobacco are, that at about the time when these purchases were made, Robbins, meeting the plaintiff, informed him that money could be made by purchasing tobacco, and the plaintiff having seven or eight thousand dollars to invest, it was agreed between them that plaintiff should advance the money to pay for tobacco, and that Robbins should make the purchases and also the sales, and that they should share the profits; that the tobacco should not be sold but by order of Miller, and should be subject to his control. No express arrangement was made as to losses,' as they did not anticipate any. In fact, Miller never did assume any control of the tobacco, or say anything to defendants about it, till some time after it was sold. The moneys which Miller advanced to Robbins were not paid to defendants for the tobacco, although Miller supposed that such was the case. Robbins must have applied these moneys to the payment of his individual debts, while he bought these tobaccos on credit. Probably he paid the money, or most of it, to the defendants on former purchases, and thus was enabled to get a credit for the tobacco in *274question, the plaintiff, Miller, supposing that the tobacco was bought in his name, and paid for in cash, and holding the receipted bill, with the blank tickets, for the tobacco which had been given him by Robbins at or about the time of receiving the money from the plaintiff.
It is evident that both these parties have been deceived by Robbins, and the question for us to determine is, which of them must suffer the loss? They have both trusted him. The plaintiff’ trusted him with his money and property. The defendants trusted him with the receipted bill and the unsigned tickets, though the property had not in fact been paid for, except by the acceptance of Robbins, to secure the payment of which they had an agreement with Robbins tfiat they were to hold the tobacco.
"We think the preponderance of evidence is in favor of the existence of the contract between Robbins and the defendants, that this, with other tobacco purchased by Robbins, should be held for the payment of the acceptances. We can not regard his qualified denial as entitled to great weight. He seems to have been false to both parties in a way to show that truthfulness was not one of his virtues.
As to his relation to the plaintiff, Robbins says that:
“ The arrangement I had with Mr. Miller was this : Miller had money to invest. I told him cutting tobacco was a good investment. I was to share in the profits for my labor and services.”
As to losses, he says they did not suppose there would be any, and did not talk about such a contingency.
Robbins managed the whole matter. He signed Miller’s name, and used it very much as he pleased.
He says that after purchasing tobacco and getting the tickets and passing them to Miller, he in several instances bought the tobacco back, and took the tickets which had been made out for Miller to sign, and instead of having Miller sign his own.name to the tickets when he called *275for the tobacco, he (Eobbins) signed the name of Miller to the tickets, and received the tobacco from the defendants —a circumstance tending to confirm the statement made by him to them, that the purchases were all his own, and that the names of Miller and others, used by him, were merely nominal.
He says, also, that “the Miller money did not go to pay for the Miller tobacco, but to take up acceptances given forty-five days before September 6, 1868.”
Miller himself says: “ I had some money in the fall of 1868, which I was using in various ways. I was acquainted with Eobbins, and he told me to invest in cutting leaf tabacco. I asked him to buy some tobacco, and we would sell again and divide the profits.”
On cross-examination he says: “ The profits were to be shared equally. Mr. Eobbins was to manufacture the tobacco in his factory, if it would sell at a loss, so that I was not to lose anything. Mr. Eobbins was to'sell by my advice; that was my understanding. There was to be no tobacco sold without my consent.”
He says that he got a mortgage'on Eobbins’ factory and some other property as security, which did not, however, turn out to add much to his security. He says: “ I looked to John I. Eobbins to carry out his agreement, and pay me all the money he had from me. I asked him for money, and he said he had none — said it was not a good time to sell. I supposed Eobbins was an honest man. I never went near the defendants’ warehouse. These col-laterals (the mortgage and certain insurance company stock) are held by me for the tobacco sued on, as well as the $4,000, in case I lose this suit. I looked to both Eobbins' and these defendants. "We were to divide profits. We said nothing about losses; we did not expect to make any. If we had, I suppose we should have shared them.
“ If tobacco declined in the market, he (Robbins) could take *276the tobáceo and work it up, so that there should be no loss to me.”
On re-examination, he says:
“ I treated the tobacco as so much money. I looked to these securities for all the indebtedness of Robbins to me, including the tobacco sued on. I considered these tobaccos as so much cash in hand.”
From the testimony of the defendants’ clerk, Queen, it appears that Robbins bought in various names, sometimes in the name of the clerk himself, but that the purchases were all made by Robbins, and, as he represented, for himself, and were so regarded and treated by the defendants.
The first question to be determined oh the evidence is, what was the relation between Robbins and Miller ?
' It has been held, in the case of Boker v. Hatch, in this court, that it does not necessarily result that a man is a partner because he receives a portion of the net profits as compensation for his services. Nevertheless, in the present case, where the plaintiff was to furnish the money and Robbins to do the business and share equally the profits, and under circumstances which imply that if there had been losses they were to share in the losses also, it seems to a majority of the court that Robbins must be regarded either as a partner, or else an agent with power to pledge this property to pay the acceptances given to pay the purchase money of the tobacco, and that the defendants were justified in law in selling the tobacco to pay the debt to them, under the circumstances disclosed in the evidence.
If Robbins was a partner, and purchased the tobacco for the firm, as we think he was, and took a receipted bill, without actually paying for it, the receipt could be explained and the payment enforced as against the partnership. All the evidence on this question comes from the plaintiff himself and from Robbins. It is not to be presumed that the plaintiff gave any more than the full *277strength of the circumstances against him on this point. The defendants never had the slightest notice or knowledge of the plaintiff’.having any interest in the property, except the use of his name by Robbins. They had the property, as they supposed, under an authority to hold it for their security.
The strong point against them is, that their clerk allowed this man Robbins to have a receipted bill, which he presented to Miller. But a receipted bill is not a negotiable paper, and it may be explained. If the purchase was made for plaintiff as a partner with Robbins, neither of them can escape the obligation to pay for it.
Taking into consideration all the circumstances of this case, a majority of the court are of the opinion that Miller was identified with Robbins as a partner in the whole transaction, bound to share the losses as well as the profits, and bound by the contracts of Robbins in carrying on the partnership business, and that, although the money which Miller had intrusted to Robbins to invest had been misapplied by him, the defendants are not responsible for his breach of trust; and being themselves guilty of no fraud, they are entitled to the benefit of their contract with Robbins, and to hold the tobacco as security for the purchase money. ^
The judgment will be reversed.