Security State Bank of Benson v. Nelson

Supreme Court of Minnesota

Security State Bank of Benson v. Nelson

214 N.W. 51, 171 Minn. 332, 1927 Minn. LEXIS 1588

CourtSupreme Court of Minnesota

DecidedMay 20, 1927

DocketNo. 26,009.

StatusPublished

Cited by2 cases

This text of 214 N.W. 51 (Security State Bank of Benson v. Nelson) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Security State Bank of Benson v. Nelson, 214 N.W. 51, 171 Minn. 332, 1927 Minn. LEXIS 1588 (Mich. 1927).

Pincite

Opinion

Holt, J.

The appeal is from the order denying defendant Nelson’s motion for a new trial, a directed verdict for plaintiff having been returned.

The short facts are these: On February 3, 1922, seven persons, appellant being one, signed an agreement forming a “joint partnership to do business under the name of Cash Sales Co.” The declared purpose was to buy the stock of the Benson Mercantile Company and close it out. Each person was to pay in $500 and be an equal partner. It was stated in the agreement that Christ Hagen, one of the members, should be manager, also that the first available money should be paid on a note given plaintiff for funds borrowed *333 to buy tbe stock. It appears the stock was bought and a note given plaintiff! for $5,000 to help pay for the same. This note was renewed January 4, 1923. There have been some payments thereon. Another note for $4,000 was given June 13, 1923, for money loaned by plaintiff to the partnership and used in its business. There have been part payments on this note also. The defense was, in substance, that appellant sold his share in the partnership to Hagen in April, 1922; also that the partnership did not confine the business to selling out the stock bought, but replenished the same and so continued to do business. There was no claim that the money loaned by plaintiff went to the use of any one else than the partnership; nor that any notice was ever given plaintiff that appellant had transferred his interest therein. Indeed, all the partners save Hagen testified to not being informed of appellant’s deal with Hagen until in April, 1923.

It being established by a written agreement executed by appellant that a partnership was formed of which he became a member, and that plaintiff received the notes of the partnership for money loaned the firm, it follows that all the partners are liable on such notes, since neither actual nor constructive notice was had by plaintiff of any change in the partnership. This is so elementary that we refrain from a discussion or citation of authorities. There is no evidence that plaintiff was ever notified of any supposed limitation to the scope of the partnership business. The natural inference would be that the buyer of a mercantile stock in a place like Benson would continue the business theretofore carried on there. Nor can there be any defense in the fact that, when the loans were obtained from plaintiff, it was not willing to have appellant as an indorser or guarantor on the partnership notes since it already had appellant’s obligations to the full extent permitted by law. Concede that a change in the personnel of a partnership dissolves it, neither G. S. 1923, § 7412, (§ 29 of the uniform partnership act) nor any other provision in that act furnishes a defense to these notes. On the contrary, (I) of subd. (b) of (1), § 7418, Gr. S. 1923 (§ 35 of the act), clearly entitles plaintiff to recover as one who “had extended credit *334 to the partnership prior to dissolution and had no knowledge or notice of the dissolution.” The authorities cited by appellant are not applicable to the undisputed facts, nor do they indicate an available defense upon such facts. We see no issue whatever to go to the jury, and the learned trial court was clearly right in directing a verdict in favor of plaintiff.

The order is affirmed.

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Holt, J.

The appeal is from the order denying defendant Nelson’s motion for a new trial, a directed verdict for plaintiff having been returned.

The short facts are these: On February 3, 1922, seven persons, appellant being one, signed an agreement forming a “joint partnership to do business under the name of Cash Sales Co.” The declared purpose was to buy the stock of the Benson Mercantile Company and close it out. Each person was to pay in $500 and be an equal partner. It was stated in the agreement that Christ Hagen, one of the members, should be manager, also that the first available money should be paid on a note given plaintiff for funds borrowed *333 to buy tbe stock. It appears the stock was bought and a note given plaintiff! for $5,000 to help pay for the same. This note was renewed January 4, 1923. There have been some payments thereon. Another note for $4,000 was given June 13, 1923, for money loaned by plaintiff to the partnership and used in its business. There have been part payments on this note also. The defense was, in substance, that appellant sold his share in the partnership to Hagen in April, 1922; also that the partnership did not confine the business to selling out the stock bought, but replenished the same and so continued to do business. There was no claim that the money loaned by plaintiff went to the use of any one else than the partnership; nor that any notice was ever given plaintiff that appellant had transferred his interest therein. Indeed, all the partners save Hagen testified to not being informed of appellant’s deal with Hagen until in April, 1923.

It being established by a written agreement executed by appellant that a partnership was formed of which he became a member, and that plaintiff received the notes of the partnership for money loaned the firm, it follows that all the partners are liable on such notes, since neither actual nor constructive notice was had by plaintiff of any change in the partnership. This is so elementary that we refrain from a discussion or citation of authorities. There is no evidence that plaintiff was ever notified of any supposed limitation to the scope of the partnership business. The natural inference would be that the buyer of a mercantile stock in a place like Benson would continue the business theretofore carried on there. Nor can there be any defense in the fact that, when the loans were obtained from plaintiff, it was not willing to have appellant as an indorser or guarantor on the partnership notes since it already had appellant’s obligations to the full extent permitted by law. Concede that a change in the personnel of a partnership dissolves it, neither G. S. 1923, § 7412, (§ 29 of the uniform partnership act) nor any other provision in that act furnishes a defense to these notes. On the contrary, (I) of subd. (b) of (1), § 7418, Gr. S. 1923 (§ 35 of the act), clearly entitles plaintiff to recover as one who “had extended credit *334 to the partnership prior to dissolution and had no knowledge or notice of the dissolution.” The authorities cited by appellant are not applicable to the undisputed facts, nor do they indicate an available defense upon such facts. We see no issue whatever to go to the jury, and the learned trial court was clearly right in directing a verdict in favor of plaintiff.

The order is affirmed.

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Bluebook (online)

214 N.W. 51, 171 Minn. 332, 1927 Minn. LEXIS 1588, Counsel Stack Legal Research, https://law.counselstack.com/opinion/security-state-bank-of-benson-v-nelson-minn-1927.

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