226 F. 978 | D. Vt. | 1915
C. H. Kendrick & Co. is a partnership composed of Clarence H. Kendrick and Eugene A,. Prindle, and was formed on April 14, 1905, to engage in the retail drug business. On January 15, 1914, the partnership and the partners, individually, were adjudged bankrupts on a petition filed by their creditors. The Quarry Saving;; Bank & Trust Company was organized to and did succeed to the business, of the National Bank of Barre, and C. II. Kendrick & Co. did their hanking business with the National Bank and later with the Trust Company. Among other securities that the Trust Company took over from the National Bank were five promissory notes, for $500 each, which were signed: “C. H. Kendrick. E. A. Prindle.” Three of these notes are still in their original form, and are dated November 7, 1905, M.ay 1, 1909, and March 13, 1913, made payable to the order of the National Bank, two of them on demand and o.ne in four months. The National Bank indorsed these notes to the Trust Company. The other two notes, dated April 3 and 18, 1913, are renewals, and are made payable to the Trust Company on their face.
These five notes were originally given to the National Bank for money which it loaned C. H. Kendrick & Co. to use in their drag business; it was all placed to the credit of the partnership in the National Bank at the different times the money was loaned, viz. June 1, 1905, $500; November 7, 1905, $500; June 15, 1906, $500; April 3, 190-8, $500; and May 3, 1909, $500. The referee finds that the money was all pioperly used to pay obligations of the partnership contracted in the transaction of their business and for the purchase of new goods to enlarge their stock.
The evidence conclusively shows that Mr. Kendrick was the active partner and gave his whole time to the management of the business; that Mr. Prindle furnished much more of the capital than Mr. Kendrick, hut, as he was etigaged in other business, he gave very little oí Ilis time to the business of this partnership; that the method of having the notes signed by the individual partners, instead of the partnership name, was adopted at the request of Mr. Prindle, so that he would always be kept informed as to when and how much money was hired at the bank; and that the bank was fully advised of this arrangement and the reason for it. The bank sent all statements requesting payment of the interest on the demand notes to the partnership semiannually, and payments were made by the partnership accordingly; that notices of the maturity of the time notes were sent to the partnership, and they were renewed by giving new notes signed in the same way.
The order of the referee is reversed, and the petitioner’s claim, of $2,500 and accrued interest, is allowed, and an order will be made accordingly.