Court Opinion

ID: 6895475
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:49:10.538717+00
Date Added: 2024-06-11T16:05:58.353051
License: Public Domain

Strahan, J.,
dissenting.—The plaintiff brought this action against one M. E. Pogue and Charles Nickell in the circuit court of Multnomah county, to recover for goods, ware's and merchandise alleged to have been sold by plaintiff’s assignors to the defendants, as partners doing business under the firm name of M. E. Pogue. The venue was changed to Jackson county, on the ground of the convenience of witnesses. Pogue made default, but Nickell filed *119an. answer denying every material allegation of the complaint. A trial before a jury resulted in a verdict and judgment in favor of the plaintiff against the defendant Nickell, from which he has appealed to this court. The principal question litigated upon the trial was whether or not a partnership existed between Pogue and Nickell at the time the goods mentioned in complaint were sold. In other words, whether the said goods were sold to M. E. Pogue, or to M. E. Pogue and Charles Nickell, as partners. The questions requiring our attention on this appeal are those arising on the rulings of the court below in the admission and exclusion of evidence, and the giving and refusing of instructions. The appellant denied that any partnership ever existed between himself and Pogue. On the contrary, Pogue testified that such partnership existed at the time of the sale of the goods, and that Nickell was a dormant partner. The defendant Nickell testified that such partnership was never entered into; that it was talked of between himself and Pogue, and that he prepared duplicate articles of agreement with a view of forming such a partnership, but that the same were never executed; that he advanced to Pogue $1,500, for which Pogue gave him a note and chattel mortgage. The defendant Nickell also testified, in substance, that after he obtained Pogue’s note, bearing date January 30, 1884, and having heard that Pogue had reported to several parties that he (Nickell) was interested with Pogue as a partner in the business at Gold Hill, to protect himself, he prepared an agreement dated February 28, 1884. Said paper was produced and called “exhibit D,” and after the witness identified the same and testified that it was executed by Pogue and himself, in his office at Jacksonville, on the day it bears date, the same was offered in evidence, and is as follows:
“EXHIBIT D.
“Jacksonville, February 28, 1884.
“Know all men by these presents : That, for value received, all partnership that may have existed between the *120undersigned, 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 also further understood that the only 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,
“Chakles Nickell.”
The appellant then offered this writing in .evidence, as tending to show that no partnership m fact existed between said Pogue and appellant at the times the goods mentioned in complaint were alleged to have been sold, and that any partnership that might have existed between them before that time, either express or implied, had been dissolved by said writing. The respondent objected to the introduction of this’ writing in evidence because it was in the nature of impeaching evidence,—it tended to impeach Pogue; and that no proper foundation had been laid for its introduction; and that it was not competent on the question of the dissolution of the partnership for the reason no foundation was laid in the pleadings for its introduction; and, further, it was incompetent for the purpose of proving that no partnership existed, and said document was immaterial. The court excluded the paper from the jury, and this is the first assignment of error demanding our attention.
1. A partnership is formed by contract between two or more competent persons. Kelly v. Bourne, 15 Or. 476. Its terms and purposes, as well as its duration, are all conventional and are within the power of the parties. As the partnership is formed by mutual consent of the parties, it may be dissolved in the same way. 1 Collyer on Part. § 105, Story on Part. § § 267a, 268; Parsons on Part. *384. If this paper was executed as it purports to have been, its legal effect was to dissolve whatever relations of partnership *121may have existed between the defendants at the time. It expresses the will of the parties that any partnership relations that might theretofore have existed between them were at an end, and that is all that was necessary to accomplish that result as between themselves. I think, therefore, that it ought to have been admitted in evidence when offered by the appellant. If it is what it purports to be,— and of that the jury was to judge as a matter of fact,—it was material and competent evidence, on the issue, as to the non-existence of the partnership, and the court erred in excluding it. Emerson v. Parsons, 46 N. Y. 560; Cregler v. Durham, 9 Ind. 375; Skinner v. Tinker, 34. Barb. 333; Pine v. Ormsbee, 2 Abbott’s Pr. (N. S.) 375; Carlton v. Cummins, 51 Ind. 478; Wood v. Gault, 2 Md. Ch. 433; Gardiner v. Bataille, 5 La. Ann. 597; Bank v. Page, 98 Ill. 109; Boyd v. McCann, 10 Md. 118. In Boyd v. McCann, supra, it is held, in effect, that a notice of the dissolution of a partnership, published in a newspaper, though not per se sufficient to show either that the dissolution took place on a certain day prior to the publication, or that the parties dealing with the firm and others had notice of the dissolution on that day, is yet admissible in evidence as a circumstance tending to show these facts. So, in Bank v. Page, supra, it is held that where a partnership is entered into for one year, it may be terminated, by mutual consent, at any time the parties may choose. And in Gardiner v. Bataille, supra, it was held that, if a partnership could be established by parol, it was not easily to be perceived why it could not be avoided in the same manner. Such evidence no more contradicts the act than proof of payment by a witness contradicts a promissory note. So, in Carlton v. Cummins, supra, it was held that where no definite time for the continuance of a partnership had been agreed upon, it may be dissolved at any time, at the option of any member of the firm. And in Pine v. Ormsbee, supra, it was held that a partnership for no definite period is dissolvable by either party, by mere notice; and such notice may be implied. In Skinner v. Tinker, supra, it was decided that, *122where the partnership has no limit in respect to time, it may be dissolved' by either partner, at any time. And in Cregler v. Durham, supra, it was said: “As tehding to prove the fact of a dissolution of the partnership, the statements of the members of the firm, jointly made to third persons, of the fact, were admitted. This is objected to, because the statements were not made in the presence of the plaintiff. Partnerships formed by parol may be dissolved by parol agreement. When so dissolved, how may the fact of dissolution be proved? There being no written evidence- of it, we do not see how it can be shown, except by the declarations and acts of the parties. Had the parties published a notice in an Indianapolis newspaper of the fact of such dissolution, we suppose it might have been given in evidence, though the plaintiff had never seen it. Yet such a publication would have been but the parol declaration of the parties themselves. If such a publicainto would have been admissible evidence, why should not their joint declaration orally made to the public also be admissible? This plaintiff then stood in no relation to the firm requiring notice. We do not say either of the above items of evidence would be sufficient. It certainly would not be conclusive, but would be admissible as tending to prove the fact. Their declarations and acts touching the subject are continuous res gestee.” It was, in effect, insisted upon the argument that Nickell had precluded himself from proving a dissolution of the alleged partnership, because he had denied its existence in his answer. If there never had been any partnership between Nickell and Pogue, then Nickell never became liable for the goods purchased by Pogue. If the partnership once had an exist ence', but was dissolved, by the mutual agreement of Pogue and Nickell, before the goods were purchased, and Nickell was unknown to the plaintiff’s assignors as a partner, then he would not be liable for the purchase price of said goods. It is not, therefore, perceived upon what legal principle this objection can rest. Nickell was unknown to the plaintiff’s assignors at the time the goods were sold. They did *123not rely upon his credit. He did not in any manner deceive or mislead them. Why, then, should he be precluded from proving that, if such alleged partnership ever existed, it had been terminated before the goods were purchased? It was argued that, logically, a partnership that never had any existence could not be dissolved. True; but it is sometimes difficult to determine, upon admitted facts, whether the relations of partners existed or not. When Nickell learned that Pogue had reported that he was a partner, I think he had the right, for his own protection, to enter into an agreement with Pogue dissolving such alleged partnership. If such partnership did exist, said agreement would discharge Nickell from its duties and responsibilities. If it never existed, the agreement could injure no one. Most of all, it could not injure the plaintiff’s assignors, who did not hear of said alleged partnership, so far as appears from this record, until long after the sale of the goods. No authority was cited by respondent’s attorney to support his contention on this point, and I have been unable to find any. On principle, and aside from authority, I am satisfied the rule is the other way. As a mere question of pleading, a defendant is required by the Code, after making such denials as his case will justify, to allege new matter constituting a defense, but not matter which merely controverts, or is inconsistent with, the right set up by the plaintiff. The issue as to the existence of the partnership was already made by the denials in the answer. The defendant would not have been permitted to allege a dissolution, for the reason that such allegation would have been clearly redundant. On the issue as formed, it was proper to introduce all competent evidence which either party desired, tending to prove or disprove the existence of the partnership at the time of the alleged sale.
2. The court, in excluding said exhibit D, said, “that it was not admissible generally as to the 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. ” This ruling seems some*124what obscure, but however meant by the learned circuit judge as applied to the document in question, it was erroneous and misleading. • It was offered to disprove, or as tending to disprove,. the existence of a partnership-between Nickell and Pogue at a particular time, and it was competent evidence for that purpose. It was original evidence on the very fact in controversy. It was the act of the defendants, but it was not for that reason incompetent. The partnership, if it ever existed, was formed by the agreement of these parties. It could have been formed in no other way. Why they could not dissolve-it, and why the agreement of dissolution may not be shown, when proof of the fact became material, has not been in any manner explained to us.
3. The court refused the following instructions asked by the appellant Nickell, to which refusals, in each in stance, an exception was taken.' “(1) That a general partnership may be dissolved by the mutual agreement of the parties; and, if you find that M. E. Pogue and Charles Nickell did, on the twenty-eighth day of February, 1884, mutually agree that any partnership existing between them should cease, and no longer exist, then, and in that event, all jiartnership at that time existing between them was dissolved, and they were no longer partners. (2) If you find from the evidence that M E. Pogue and Charles Nickell were not partners from and after February 28, 1884, the plaintiff cannot recover against Nickell in these actions unless you further find that some or all of those parties with whom Pogue made these- accounts knew at the time they furnished the goods and merchandise of a partnership existing between the said M. E. Pogue and Charles Nickell, prior to said dissolution of February 28, 1884. ” The 'first of these instructions should have been given, for the reasons already given in considering the ruling of the court in excluding exhibit D from the jury. I think the second instruction correctly stated the law applicable to the case of a dormant partner, when sued on account of the transactions of the remaining partners after *125he had retired from the firm. There was no proof that Nickell, gave any notice that he had retired, or ceased to be 'a member of the alleged firm; nor was such notice necessary,, if he was á dormant partner. Newmarch v. Clay, 14 East, 239; Heath v. Sansom, 4 Barn. & Adol. 172; Garter v. Whalley, 1 Barn. & Adol. 11; Grosvenor v Lloyd, 1 Metc. 19; Phillips v. Nash, 47 Ga. 218; Nussbaumer v. Becker, 87 Ill. 281;. Cregler v Durham, 9 Ind. 375; Scott v. Colmesnil, 7 J. J. Marsh. 416; Le Roy v. Johnson, 2 Pet. 186; Magill v. Merrie, 5 B. Mon. 168; Kennedy v Bohannon, 11 B. Mon. 118; Bernard v. Torrance, 5 Gill. & J. 383; Boyd v. Ricketts, 60 Miss. 62; Kelley v. Hurlburt, 5 Cow. 534; Holdane v. Butterworth, 5 Bosw. 1; Davis v. Allen, 3 N. Y. 168; Vaccaro v. Toof, 9 Heisk. 194; Pratt v. Page, 32 Vt. 13; Benjamin v. Covert, 47 Wis. 375; Warren v. Ball, 37 Ill. 76; Cook v. Penhryn Slate Co., 36 Ohio St. 135.
4. The court refused the following instruction, asked by the defendant Charles Nickell: “That the duty of a retiring dormant partner to give notice of the dissolution of the partnership is a duty which he owes to those who before that time had some knowledge of the connection with the firm. To strangers having no such knowledge, he owes no such duty. As, to them, he can only be charged as a partner (when in fact he is not) by showing that he in some way misled them, as that he held himself out to the world as such, or that he held himself out to them. If you find that a silent or dormant partnership existed between Nickell and the said Pogue, but that Nickell retired from said firm prior to the purchase of the said goods for which these actions were brought, the plaintiff cannot recover in said actions, unless you further find that Nickell in some way misled the parties by whom said goods were furnished, by holding himself out to the world as a partner, or to them, or knowingly allowing some one else to do so. ” This instruction should have been given. It is plain elementary law; and it is difficult to suggest any plausible reason for its refusal. The authorities already cited abundantly show that a dormant partner, retiring from *126the firm, need give no notice of the fact of his retiring, except to those who had knowledge that he had been a member of it. Those persons who had no previous notice that such retiring partner had been a member of the firm could have no interest in knowing of the dissolution, for the reason such retiring dormant partner could not be rendered liable to them for new debts contracted by the remaining members of the firm. This instruction should have been given, and its refusal was erroi\
There were some other points made upon the argument by the appellant, but their consideration is not deemed important at this time. What has been said is decisive on the present appeal, and requires that the judgment be reversed, and a new trial had in the court below.