24 S.W.2d 287 | Ky. Ct. App. | 1930
Reversing.
This appeal is a sequel to the case of Ross v. Ross,
It is ably argued that the judgment may be soundly supported upon any one or all of three different grounds, which are: (a) That the testimony of A.D. Ross is incompetent: (b) that if competent, the testimony is too vague and uncertain to support the finding that the money lent to A.D. Ross went into the partnership property; and (c) that even if the partnership did receive the benefit of such funds, the partnership assets are not liable if the money was borrowed by one partner in his individual capacity and not upon the credit of the partnership. It is apparent that the case required either that A.D. Ross be given the money invested in the lands, although borrowed by him, or that the notes given by him for money borrowed and put into the partnership should be treated as firm obligations. A.D. Ross was carrying on the business which required considerable capital. In order to buy the lands, and to operate the business, it was necessary to use his credit, and considerable money was borrowed by A.D. Ross to meet such obligations. It does not appear, and is not intimated, that A.D. Ross was doing any other business or that he invested money in any other enterprise. The losses are accounted for by the drop in land values. At the sale of the partnership lands which had cost $13,725, less than $8,000 was realized. It is true the money was borrowed by A.D. Ross individually, but the title to the partnership property was then in his name. If the notes should be considered *587
as personal debts, they would be payable out of the assets in his possession and standing in his name. When the judgment of this court took the assets from A.D. Ross individually and put them into a partnership relation, it necessarily carried with it the debts which had been incurred in creating the assets and conducting the business. Geo. Bohon Co. v. Moren Sipple,
The partnership relation is one of mutual agency (Carter v. Tucker,
But it is argued that even though the money was borrowed by A.D. Ross for the purpose and actually used in the partnership business, it is nevertheless an individual debt because the credit was extended to him and his notes were taken to evidence the contract. It has been noted that when the obligations were created A.D. Ross was acting in his individual capacity as owner of the property and manager of the business and the title to the property was in him. But when it was determined that it was a partnership business, his acts respecting it became partnership transactions. The fact of the partnership is the essential thing, and the name in which the business was transacted is wholly immaterial. Faris v. Cook,
It is apparent that the circuit court erred in disallowing the three claims mentioned. They should be paid from the funds arising from the firm assets.
The judgment is reversed for proceedings consistent with this opinion. *590