Court Opinion

ID: 6512025
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:23:15.38883+00
Date Added: 2024-06-11T15:54:54.637685
License: Public Domain

SOMERVILLE, J.
— Where one partner borrows money, or purchases goods, upon his own individual credit, and afterwards applies such money or goods to the uses of the partnership, the rule is, that the creditor can not, for this reason, have an action against the firm. Such is the rule, at least, where the credit is given exclusively to the partner borrowing the money, or making the purchase, and no part of the credit is extended to the other members of the firm. The question, in such cases, is, to whom was the credit given ; and the solution of this question is usually for the determination of the jury.— Clark v. Taylor & Co., 68 Ala. 453 ; Parsons on Part. 105*; Smith v. Durrett, 2 Am. Dec. 714.
If the plaintiff, in making a loan of the money in controversy, extended no credit to the defendant, Thornton, or to the firm of Thornton & Locke, but only to Mrs. Locke, or Wm. IF. Locke, it is obvious that no liability would be created, either against the defendant, or the firm, by the mere fact that the money afterwards went to the uses of the firm.
The foregoing principle is especially important in view of the defense set up in this case, that the note sued on, although it may have been executed by consent of the defendant, was void for want of any valid legal consideration. This defense is based upon the theory, that the loan was originally made to *472Mrs. Locke, and exclusively on lier credit, and that the note of the partnership was afterwards executed, by defendant’s consent, for the same debt, and delivered to the plaintiff, not in satisfaction of Mrs. Locke’s debt, but upon certain terms and conditions, which are sought to be proved by oral evidence, and which, it is insisted, destroyed its binding force.
The principal question in the case is raised on the ruling of the court admitting the testimony of the defendant, as to an alleged agreement attending the delivery of the note to the plaintiff, Guice. It is insisted by the appellant, that this oral proof was inadmissible, because it tended to vary the legal effect of a written instrument, by incorporating in it certain terms, conditions and limitations, of which the instrument should be required to speak for itself. On the other hand, it is argued by the appellee, that the testimony in question was competent to show a total absence of consideration in the note.
It is our opinion, that the latter view is correct, and that the evidence was competent to show a want of consideration. It is true that certain portions of this evidence were objectionable, and might have been excluded, if separately objected to, so far as it tended to prove a delivery of the note to the payee, upon the oral understanding that the makers should not be bound. Parol evidence is not admissible, to show the delivery of a note or bond to the payee or obligee as an escrow, to take effect upon a condition. This proof is admissible, only where the delivery is made to a stranger. — Firemen's Ins. Co. v. McMillan, 29 Ala. 147. Much less is such evidence admissible, in the absence of fraud or mistake, to show that the instrument was delivered to the payee upon the condition that it was not to have any binding force at all.— Williams v. Higgins, 69 Ala. 517.
But the want of consideration may always be proved to destroy the binding efficacy of a written agreement or promise, unless in the case of negotiable instruments in the hands of an innocent purchaser, or of a sealed instrument, which, at common law, although not so now under our statute, was conclusive evidence of'a sufficient consideration.
The testimony of the defendant, to which objection was taken, tended to show that the note sued on was not given in satisfaction or payment of Mrs. Locke’s previous indebtedness to plaintiff, nor by way of extension of it, nor upon any other consideration. The fear that the creditors of Locke might attach the goods of the partnership for Locke’s debts, may have constituted the motive for executing the note in suit, but it obviously constituted no legal consideration for a promise to pay Locke’s debts.
The articles of copartnership between the defendant and *473Mrs. Locke were admissible, in proof of the existence of such copartnership, which was one of the issues in the case. It was not competent to prove any of its own recitals, however, as to the special powers or duties of the partners, not bearing upon the execution of the note in controversy. Its scope, as evidence, should have been limited by requesting the proper charges to' the jury.
One of the subscribing witnesses to this document being shown to be absent from the State, it was competent to introduce secondary evidence of its execution by proving the handwriting of such absent attesting witness.— Allred v. Elliott, 71 Ala. 224; 1 Greenl. Ev. § 572.
The plea of non est faotum, interposed by the defendant, operated, under our statute, to cast the burden of proof upon the plaintiff, to show the existence of the partnership, and the execution of the note, in the partnership name, by authority of one or more of the partners. — Code, 1876, § 3036. Upon this proof being made by the plaintiff, a prima facie liability was established against the partnership, which again shifted the burden of proof on the defendant to establish any defense which was admissible under his pleas. — Jemison v. Dearing, 41 Ala. 283.
If the money was originally loaned on the exclusive credit of Mrs. Locke, or of her husband, it would be a fraud on the partnership to execute for such debt the firm obligation, without the consent of the defendant, Thornton, although it was done upon a good and sufficient consideration. And the rule in this country is settled to be, that, where the note of the firm is given, even in discharge of the separate debt of one of the partners, the onus is on the holder, or creditor, to repel the presumption of fraud, by showing the consent of the other partners to the transaction. — Story on Part. (7th Ed.), § 133; Parsons on Part. Ill *, et seq.
The foregoing rules do not seem to be violated by any of the rulings of the court.
The first and second charges given at the request of the defendant, however, were erroneous in one particular. They both assume it to be true, that no partnership arises, such as w-ould authorize one partner to bind the other by implied authority, unless the assets furnished by each are brought together and mixed up as joint property in one common venture. The rule is, that each partner can lawfully bind the others, within the proper scope of the partnership business, from the commencement of such partnership, which is the date of the agreement to constitute the firm inprmenti. If no other time is fixed by the articles, it will be presumed to date from the time of the execution of the instrument, unless this presumption *474is rebutted by the terms of the instrument itself. — Story on Part. § 194; Collier on Part. 140; Williams v. Jones, 5 B. & C. 108.
For this error, the judgment of the Circuit Court is reversed, and the cause remanded.