Beall v. Poole

27 Md. 645, 1867 Md. LEXIS 71

• Court: Court of Appeals of Maryland
• Decided: July 23, 1867
• Status: Published

Opinion

Weisel J.,

delivered the opinion of this Court.

The appellants, with John Howarth and George Hutton, were jointly sued in the Circuit Court for Allegany County, and declared against as partners under the name and style of Howarth & Hutton, for money'payable, goods sold and delivered, money paid, money lent, and work done and materials found. The appellees, plaintiffs’ below, were partners under the name of Poole & Hunt and they so declared. No time was alleged in the declaration, and the suit was instituted on the 3d of April, 1860. The defendants had all been returned “ summoned,” and all appeared by attorneys, except Howarth, whose personal appearance was entered by order of Court. After continuances, Hutton suffered judgment against him, and afterwards and upon trial, a verdict was rendered in favor of the defendants, which, upon motion, was set aside and a new trial granted, on the ground of the repugnancy of the verdict to the judgment confessed by Huttón, the defendants having been sued and declared against jointly. On the new trial Beall & McCullough, two of the defendants, had leave to amend the plea, and each pleaded that he was never indebted as alleged, on which issue was joined. The trial proceeded and the defence was conducted by said Beall & McCullough, who resisted the efforts made by the plaintiffs to fasten upon them responsibility as co-partners with Howarth & Hutton, for the articles in the account produced in evidence and sought to be recovered. Whatever irregularities- may-appear in the proceedings, no question arose upon them. The whole controversy was as to the . liability of the two defendants, Beall & McCullough, or either of them, in the action. The verdict and judgment were for the plaintiffs, and this appeal has been prosecuted by the said Beall & McCullough from the various rulings against them, embraced in the twelve exceptions taken by them in the record.

The first exception was abandoned in the argument.

The plaintiffs offered the two letters in the second exception, with a statement to the Court that they would give in evidence, in connexion therewith, articles of agreement showing a partnership among all the defendants in the cause, and that it existed among them all prior to the 8th day of September, 1859. The Court, upon this promise, allowed the letters to go before the jury, and not upon the ground that they were evidence in themselves of the partnership. The defendants could afterwards, if the connexion with the other proof of partnership to be adduced failed, move the Court to withdraw the letters, and then take their exception to the action of the Court if' refused. The Court committed no error in allowing the letters to be read when offered in the manner proposed.

Articles of co-partnership made the 17th November, 1859, with other proof, having been offered by thé plaintiffs and gone in, they then further offered the paper in the third exception, dated September 29,1859, and admitted to be in the handwriting of the defendant Beall. It is complete with the exception of the signatures of the four parties named therein, (the defendants,) and an attesting witness, and is expressly entitled a memorandum of an agreement made that day to be finally made and entered into at some future day between them. Its admissibility was objected to by the defendants, but the objection was overruled.

As an item of evidence to show Beall’s intention to become a partner at a date prior to that in the articles of agreement given in evidence, the paper offered being in the handwriting of said Beall, we think it was properly admissible, but only as affecting Mr. Beall.

The bills offered in the fourth exception and allowed to be put in evidence by the plaintiffs were admitted to be in the handwriting of Hutton, and were announced to the Court as offered only as evidence of partnership against Hutton. The fact that Hutton had confessed judgment for the claim and thus admitted the partnership, did not preclude the plaintiffs from showing by any further testimony Ms connnexion with it, as a co-partner. The suit was against the four jointly, and it was the privilege and duty of the plaintiffs to establish by competent proof the connexion of each one with the firm. This was all that was proffered to be done, and to this extent and for this purpose the testimony was clearly admissible. Its introduction could not prejudice the rights of the other parties, defendants.

The trial proceeding, the plaintiffs offered in evidence an unsigned paper, admitted to be in the handwriting of said Beall, and described as articles of agreement between Hutton, Beall & Co. (of Allegany county, Maryland, and Boston, Mass.) and Samuel Mattick, of Preston county, Virginia, dated “this ■-■ day of November, 1859.” It proposed to exchange certain lands of the partnership, which had been purchased by Howarth, and describing them, with Mattick for certain other lands containing cannel coal, and for certain mining privileges. Its admissibility was objected to, but allowed by the Court, and to this ruling the fifth exception was taken by the defendants. It was admissible, as another item of proof against Mr. Beall, in whose handwriting the paper was admitted to be, and as cumulative evidence of his membership of the firm, the paper could not be ruled out.

Tibbetts, a witness for the plaintiffs, having been examined in chief, proceeded, on the cross-examination, to state that “ there were complaints made by Sowarth & Sutton, by letter, of the defectiveness of the luorh.” To this statement the plaintiffs objected, and the Court refused to permit it to go before the jury as evidence ; and we think rightly. The offer was to prove by parol the contents of a letter, not produced or for the production of which no notice appears to have been given. This disposes of the sixth exception.

The defendants’ seventh exception was taken to the exclusion by the Court of portions of evidence taken by them under a commission issued to A. W. Boardman, Boston, under which John Howarth, one of the defendants, was examined as a witness. To some of his answers, and portions of others, the plaintiffs filed objections, and they also objected to the admissibility of all the testimony returned under the commission, for reasons set forth in the exception. The Court ruled the objections good to the seventh interrogatory in chief and Howarth’s answer thereto, and also those to the answers to the 8th, 10th, 11th, 12th, 13th, 14th, 15th, 16th, 17th, 18th, 20th, and 21st interrogatories in chief, and those to the answers to the second, third, fifth, and sixth cross-interrogatories. To this ruling, this exception was taken. The paper referred to in the seventh interrogatory, was the one exhibited with the sixth, and proved by the witness as having been executed by tbe parties whose names were signed to it. The seventh interrogatory then proposed to inquire “ whether or not there was any verbal understanding and arrangement made between the parties who signed it, and at the time it was signed, as to when the same should be binding and go into effect, and if so, what it was.” Before disposing of this interrogatory and the answer to it, the defendants’ statement to the Court of what they intended to prove in the progress of the case in relation to that paper, and that this testimony was offered in connection with it, should be considered. That statement was, as found on the 59th page of the printed record, that the articles referred to, were written by the defendant Beall, with the understanding among all who signed them that he was not to give them up or be bound by them, until he should he satisfied by a schedule of the debts of Howarth and Hutton, that their debts did not exceed $3,000; that Beall did so hold it until the schedule was produced, and it being largely over $3,000, he promptly gave notice to the other parties to the agreement, that he would not give up the paper or permit it to go into execution, and that he never did give it up, until he made it a part of Howarth’s testimony. The object of the proposed proof was then not to explain or contradict hy parol the written terms of an agreement, that was in operation and acted upon, but to show that it was a,paper executed- at one time, but to be held in the nature of an escrow not to be delivered or go into effect as to one of the parties, Beall, (who prepared it and beld it in his own close possession,) until he should have produced to him, from two of the parties, an exhibit or schedule of their indebtedness, and if that exceeded a certain amount, the paper was not to be binding upon him. There is no rule or principle of law forbidding a paper thus to be executed and held, and the fact, if it exist, could therefore be shown as evidence to prove that the partnership did not in fact exist among all the parties until the condition, upon which the paper was to take effect, was complied with. With this proffer we think the answers to the seventh, eighth, tenth, and eleventh interrogatories, and the second, third, fifth, and sixth cross-interrogatories, should have been permitted to be read to the jury as evidence. Also the answer to the twentieth interrogatory, as that is explanatory of the witness’ own act, and the production of the letter referred to was not necessary, as its contents were not the subject of inquiry. But the answer to the twenty-first interrogatory was properly rejected as hearsay, even if Hutton’s declarations could otherwise, under the circumstances, have been given in evidence to affect the other defendants. The answer to the seventeenth interrogatory was not admissible without the paper of cancellation therein mentioned ; and we think also that the answers to the twelfth, thirteenth, fourteenth, fifteenth, and sixteenth interrogatories were properly excluded. Looking to the drift of the interrogatories themselves and the answers as responsive thereto, they either relate to matters irrelevant, or to the contents of the schedule of indebtedness, and as its amount became a material fact, of which the paper was the best evidence, it ought to have been produced to the Commissioner or its absence properly accounted for. The paper referred to in the eighth exception of the defendants is not in the record, and we cannot, in its absence, pass upon this exception, or do otherwise than affirm it.

Having proved by Nelson Beall certain facts as detailed in the record, the defendants then offered to prove further by him the understanding with which the agreement of 17th November, 1859, was executed and held by Beall, and also its cancellation of 28th December, 1859. But the Court sustained the plaintiffs’ objection to this offer, except so much as related to the writing and execution of the articles of partnership of 17th November, 1859. We think the Court erred in excluding this proof, for the reasons given in our disposal of the seventh exception, except so much as related to the amount of the exhibits made by Hutton. They ought to have been produced. The tenth exception was to the exclusion of the articles of cancellation of the 28th of December, 1859, offered alone, unconnected with the testimony of Beall, that had been rejected. Standing alone it was not evidence against the plaintiffs; nor did it serve the defendants in this action, and, as immaterial testimony, should have been rejected. The Court was therefore right in refusing its introduction. The proof of Douglass Percy, offered in the eleventh exception, was properly rejected as res inter alios.

We proceed now to the consideration of the defendants’ twelfth exception, which arose upon the prayers, and was taken to the granting of the plaintiffs’ prayers, and its refusal to grant the defendants’ first prayer without the modification to it by the Court, and the rejection of the second and third prayers of the defendants. The objection taken to the plaintiffs’ first prayer is that it omits to put to the jury, the finding of the existence of the partnership among the four defendants, at the time the goods were ordered and contracted for. At first blush the prayer would seem liable to the objection, because the general allegation, “were partners as alleged,” in the prayer, points to no time, and no time is alleged in the narr.; but when it is considered that the defendants are charged as partners and are only liable as such under the pleadings, and that the prayer puts it to the jury to find “ that the articles charged in the account filed in the cause were delivered to them by the plaintiffs,” they could only find the delivery to them as partners; If, therefore, they were partners when the goods were delivered to them, and the account specifies the dates of delivery, the time of the existence of the partnership in reference to the plaintiffs’ demand becomes sufficiently explicit. The prayer might have been more specifically drawn, but we do not think that the jury could be misled by its phraseology. The object of the second and third prayers of the plaintiffs was to procure an instruction, that the jury might infer from the particular facts therein referred to, that Beall & McCullough were each a member of the firm with Hutton & Howarth. The first prayer was general, that if the jury found from all the facts in evidence that a partnership existed among the four defendants, when the goods in the account were ordered and delivered, then the four were bound and the plaintiffs could recover. The second and third prayers sought to instruct the jury how they might find Beall & McCullough to be such partners. The time when, however, is not specified, and it is objected that the evidence referred to was not sufficient to establish the partnership, as to Beall & McCullough, as existing prior to the ITtb November, 1859. To prove this was the object of the testimony. It all went in, or was permitted to go in for that purpose, and as the facts are numerous, occurring at different times, and had a tendency to establish the fact sought by their introduction, their weight and effect were for the jury, and the instruction in the first prayer limited the finding of Beall and McCullough’s participation to the delivery of the goods in the account. Regarding the prayers in this light, we see no error in the instruction so far as the^ plaintiffs’ three prayers are concerned.

The defendants’ prayers are now to he considered.

The first, second and third prayers of the defendants present the hypothesis, that if the articles charged were furnished to, and upon the orders of Howarth & Hutton, then partners, and that they were so furnished or engaged to be furnished prior to the 17th of November, 1859, then the-plaintiffs cannot recover in this action, though they should find that Beall & McCullough became partners with them at that time upon the terms expressed in the paper writing of that date ; unless all agreed that Howarth & Hutton should he released from the engagements made by them and that they and Beall & McCullough agreed anew with the plaintiffs to become responsible therefor; and that there was no evidence in the case of such release and new promise. The Court, by a modification of the first prayer, instructed the jury that the plaintiffs could recover in the action, if in addition to the facts referred to in it, “ the jury should find that Beall & McCullough after coming into the firm of Hutton & Howarth, expressly or impliedly agreed to assume the debt due by said firm to the plaintiffs.” The general principle is, that an incoming partner will not he liable in respect of debts contracted by the firm previously to his joining it, and that the presumption of law is against any such liability. Yet he may become liable by expressly assuming them upon a proper consideration, or otherwise dealing with the, creditor in such a manner as to create an implied obligation and duty to pay the same in common with the old firm, hut this is not to be inferred from the mere act of joining in the partnership ; there must be other circumstances to justify the conclusion. In other words, there must be some agreement between the incoming partner and the creditor, either express or implied, and his liability with respect to the old debts of the firm will attach by virtue of the agreement, and not by reason simply of his having become a partner. Collyer on Part., sec. 520 ; 1 Lind. on Part., 315, 318 ; Story on Part., sec. 152, and cases referred to. And Judge Story, in further remarking on this subject, states that in cases of this nature the first consideration is to ascertain whether there has been subsequently, with the consent of all the parties, any change or extinguishment of the old contract. Where it is established by satisfactory evidence that upon the accession of a new partner, a new promise has been made by the entire new firm in respect of the old debt, with the consent of the old partners, as well as of the creditor, it will amount to what is called in the Roman law a novation of the debt, (novatio debiti,) and the new partner will be chargeable with the debt. But this adoption or ratification of the new promise by the new partner must be clearly shown, otherwise it will not be obligatory on him. Story on Part.; sec. 153. Tested by the law as thus laid down, and extracted from the authorities, as well those cited in the argument as others,'the first prayer of the defendants as propounded by them was correct, unless there was evidence in the cause, to justify or support a modification looking to a new contract of such a nature and extent as to bind both Beall & McCullough. In looking through the proof in the various exceptions, this Court is unable to discover testimony either of an express- promise, or of circumstances which could justify the inference that such a contract was made.

The first prayer of the defendants, according to these views, should have been granted, as propounded; also, the second and third, this Court understanding the word, released, used in them, as expressing the idea that the old contract was merged in the new, and that the agreement referred to, was based upon a proper consideration — the second prayer as expressing a legal proposition, and the third as showing it did not apply in this case, for the want of the evidence sufficient to support it.

We therefore affirm the Court below on the first, second, third, fourth, fifth, sixth, eighth, tenth,' and eleventh exceptions, and reverse on the seventh, ninth, and twelfth exceptions of the defendants.

In the course of the trial the plaintiffs below took two exceptions to the rulings of the Court, and their appeal also. But as the verdict and judgment below were for them, their appeal was inadvertently taken and prosecuted, and will be dismissed. As this Court has reversed in the other appeal, and the case goes back upon a procedendo to be tried over, it is the duty of this Court to express its opinion upon the exceptions taken by the plaintiffs below. The first was to the ruling of the Court in excluding all the testimony of George Hutton, taken under a commission issued to John P. Poe and Frederick Pinkney. The only objections specified in the exception were that the papers referred to in the sixth and seventh interrogatories and the witness’ answer to them, were not returned with the commission and testimony taken under it. The Court not only sustained these objections, but refused to let any part of the testimony taken under the commission be read to the jury. In examining the interrogatories and answers we find that they chiefly related to papers which ought to have been submitted to the witness, and identified, and returned with the commission. Testimony relating to them or their contents, when these themselves are important and material, and are the best evidence of their own existence or nature, is inadmissible, when their non-production is unexplained, and no foundation has been laid for the introduction of parol proof. This is the ' character of nearly the whole mass of testimony taken and returned under this commission, and it was properly excluded hy the Court. The second exception was taken to the granting of the defendants’ first prayer as modified, and the granting of their fourth prayer. We have already expressed our opinion in the appeal of the defendants, on the first prayer offered hy them and the modification annexed to it hy the Court. The fourth prayer took the ground that in case of a new contract by all the defendants with the plaintiffs, the latter could not recover on the pleadings in the case. We, however, are of opinion that the manner of declaring in this case would not be an obstacle'in the way of the plaintiffs’ recovery, if there were evidence to support the theory of a new engagement by all the defendants. As a legal proposition, in reference to the pleadings, the Court therefore erred in granting the défendants’ fourth prayer.

(Decided 23d July, 1867.)

Judgment reversed and procedendo awarded.