In re Quigley

230 F. 405 | 6th Cir. | 1916

DENISON, Circuit Judge

(after stating the facts as above). [1,2] 1. Bean & Dupfer urge that the question of partnership or not has been twice adjudicated in their favor: First, when their status as creditors of Quigley was fixed by the adjudication in bankruptcy based on their petition; and, second, when tire petition, alleging that they were partners, was dismissed. Neither branch of this position is tenable. Even if Bean & Lupfer were partners until October 28th, they then ceased to be, and they were in the ordinary status of retired partners who were creditors of the continuing sole owner of the business for the agreed purchase price of their interests. No reason is suggested why such creditors may not petition for and obtain an adjudication in bankruptcy; and such adjudication has no bearing upon the question whether the petitioning creditors had, at some former time, been partners of the one against whom they file their petition. The dismissal of the second petition in bankruptcy was not only voluntary, amounting only to that nonsuit which adjudicates nothing, but the meritorious point upon which the action of the court would have rested if that action had been invoked, viz., that Lupfer was not insolvent, did not involve and so could not have decided the question of partnership.

[3, 4] 2. We are not inclined to discuss at length the effect of the contract. This was fully and satisfactorily done, both by the referee and by the District Judge. It is claimed that the transfer of the interest in the business was only by way of security or indemnity against the indorsements, and some, provisions of tire contract are not inconsistent with this view; but we think the contract, as a whole and on its face, malees it reasonably clear that the parties actually intended to create those respective rights and interests from which the relation of partnership and its attendant liabilities must be inferred. We have put in italics those parts of the margin-quoted contract which are persuasive to this effect. The substance of the evidence is embodied in an agreed statement; but we cannot, on this petition to revise, determine any conflicting inferences of fact. There is nothing to dispute the inferences to be drawn from the contract itself which goes beyond the referee’s finding:

“A partnership did not exist in fact; that is, the parties did not hold themselves out as partners, nor did they think they were partners, and Quig-ley was the only person known to any of the creditors when credits were extended.”

This finding, self-explained as it is, is not sufficient to require the overturning of the finding that in law there was a partnership, nor to show that the parties did not in fact intend to do those things which by law made them partners.

The action of the District Judge, confirming that of the referee, i« affirmed.