Court Opinion

ID: 6564513
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:18:39.906837+00
Date Added: 2024-06-11T15:56:40.390009
License: Public Domain

Mr. Justice Goddard
delivered the opinion of the court: .
The court of appeals, in its opinion above referred to, correctly announces the rule by which the-rights of the respective parties to this controversy are -to be determined, and lays down the law of the case applicable to the facts averred in the answer.
The only question, therefore, presented for our consideration is, whether the evidence introduced established the truth of such .averments.
It is conceded that the firm of King & Wallace was composed of A. J. King, H. S. Wallace and W. J. Wallace, and was at the time of this transaction doing a general merchandise business at King, Park county, Colorado, and it is abundantly shown that the note in question was given by H. S. Wallace without consulting either of the other members of the firm and without their knowledge or consent, and “that the giving of the note was without the scope of the partnership business of defendant, and that its giving was in no way connected with its business, •that at no time since the execution of the note has either of the other members of the firm assented thereto or agreed to pay it.” It was executed solely for the accommodation of the payee, Ferguson, by IT.. S. Wallace, with the understanding that it was to be *319taken np by Ferguson out of money due him from the Union Pacific Coal Company on the nest pay day, which would occur about February 23rd, the time the note was made payable.
The only controverted fact is, whether B. M. Mecklenburg took the note with knowledge of this arrangement, and was thereby advised of the fact that the note was not connected with or given within the scope of the partnership business of the defendants.
Mas Mecklenburg, the husband of B. M. Mecklenburg, and the father of plaintiff, and who represented B. M. Mecklenburg in the transaction, testified :
“I had a talk with H. S. Wallace before I bought the note; I asked him if Ferguson had any money due him, and he said he did from the U. P. Coal Company and they had made a transaction of that kind and if I bought it I would get my money on pay day. ’ ’
On cross-esamination he said:
“I had a talk with Mr. Ferguson about this transaction a day or two before I talked with Wallace; Ferguson said he was going to Cripple Creek and would like to settle the account; he offered to go and get Wallace’s due bill; I understood that was to be done; it was to accommodate Mr. Ferguson and it was an accommodation to me.
‘ ‘ Q. — What did you know about it? A. — I understood from Wallace he had the money coming from the coal company on the contract- he had there, and Mr. Wallace could eschange this- transaction with the coal company and turn the money over to him, and he done that to favor Mr. Ferguson so he could get away. * * *
“Q. — And you knew that Mr. Wallace was intending to collect this from the coal company' before *320you collected? A.- — I supposed lie would collect it before; yes, sir. ”
This testimony discloses that Mecklenburg, before he purchased the note, was advised of the circumstances under and the purpose for which the note was executed by H. S. Wallace in the firm name, and he, therefore, knew that it was not executed by H. S. Wallace in the course of the partnership bush ness or within the scope of his agency as a partner; and we are unable to find any-evidence in the record that supports the finding or conclusion of the court below that “the'note was by the original payee sold and transferred in the regular course of business for full value and without notice of any defect or infirmity, * * * to B. M. Mecklenburg,” or that the “making and issuing of it at the time was within the scope of the agency with which each member of a trading copartnership is vested under the firm partnership of which he is a member.” But, on the contrary, it appears from the undisputed testimony and all the circumstances surrounding the transaction that H. S. Wallace “executed the note in question without the express or implied authority of his copartners for a purpose outside of the partnership business, and such facts were known to the payee and B. M. Mecklenburg.”
That Max Mecklenburg did not at any time regard the note as a’firm obligation is apparent from his subsequent conduct. The firm of King & Wallace ceased doing business on March 10, 1892, and W. J. Wallace lived in Como, where the Mecklenburg’S resided, and not until 1895, about three years after the note matured, was he informed of the existence of the note, when his attention was called to it by Max Mecklenburg for the first time, whereupon he repudiated all liability therefor; and King had no notice of its existence until a few months before this *321suit was commenced, being nearly -six years after its maturity; while, on the other hand, Mecklenburg admits that he had some correspondence about the note with H. S. Wallace in 1894 and about six months before he informed W. J. Wallace of its existence.
In the light of these circumstances and the undisputed testimony of Max Mecklenburg that he purchased the note with the knowledge that it was given for a purpose clearly outside of- the scope of the partnership business, a complete defense to a recovery on the note was established as against the original indorsee, under the rule announced on the former appeal, and the plaintiff, Morris Mecklenburg, having obtained the note after it was past due, took it subject to the same defect and infirmity that was available against his indorser, and consequently he is not entitled to recover as against the firm of King & Wallace or either of the non-signing partners.
The present judgment, therefore, must be reversed, and the cause remanded with direction to enter judgment in favor of defendants.

Reversed and remanded.

Chief Justice Steele and Mr. Justice Bailey concur. _