Sneider v. Big Horn Milling Co.

200 P. 1011 | Wyo. | 1921

Bltjme, Justice.

The parties will be hereinafter referred to in the same order as in the court below. The plaintiff sues the defendant for a balance of $3668.91 and interest for goods sold and delivered to defendants commencing with January 30, 1917, to and including June 30, 1917, Plaintiff is a corporation. located at Basin, Wyoming, engaged in the milling business. The evidence shows that' about January 1st, 1917, defendant Sneider wanted to make arrangements with plaintiff, through one J. W. Alexander, an employe of plaintiff, for an extension of credit to Sneider and Wallace in connection with the feed business. Alexander referred him to the manager of plaintiff. About January 10th, 1917, N. J. Long, manager of the plaintiff, accordingly had a conference with the defendants at Thermopolis, Wyoming, during which the defendant, Sneider, in the presence of defendant Wallace stated that they, the defendants, were going into business (at Thermopolis) to sell flour and feed in a building owned by Sneider; that defendant Wallace had had experience but had no money, and that they wanted to arrange to buy goods of plaintiff and asked for extension of credit to the firm. To this plaintiff, through its manager, agreed on the strength of the responsibility of the defendant Sneider. During the conversation nothing whatever was said as to the formation of a corporation by defendants. All orders for goods seem to have been given either by telephone or in writing by defendant Wallace, but none of the written orders could be found. The first order for $744.12 was shipped on January 30, 1917; the second, for $1895.95 on February 10, 1917. Both of these orders were billed to defendants in the name of Sneider and Wallace. Subsequent orders, eight in number, were billed in the name of Stone Barn Grain Company. This change in the name in which the goods were billed was made, as stated by the manager of plaintiff, because the defendants in the meantime had used printed stationery reading: ‘1 The Stone Barn Grain Company, Incorporated,” but that all sales were in fact made to Sneider & Wallace in accordance with the talk at Thermopolis, and that credit was extended only to Sneider & Wallace. The various shipments were put on board of the railroad cars at Basin, billed to Thermopolis, and actually received, at least, by defendant Wallace in some capacity, except one car delivered to another party at tbe request of Wallace. It will not be necessary to refer to this one car again, but will for convenience be considered as delivered the same as the other cars. Four payments were made on the shipments from time to time; one for $800 and three for $500 each, and a further credit given on July 14, 1917, of $1094.03 by reason of a car of oats turned over by defendants to plaintiff. In the month of June, 1917, defendant Sneider had a conversation with witness Alexander, and on July 10, he had another with plaintiff’s manager. Both of these conversations were to the effect that he had more business than he could manage; that he was going out of the feed business and turn it over to de-defendant Wallace, and wanted to know whether from that time on plaintiff would rely solely on the credit of Wallace. An amount of $50.00 due for shipment previously made was on the latter date arranged with him to be debited to the account of Wallace instead of the old account. On July 14th defendant Wallace told plaintiff’s manager that defendant Sneider had left the firm on July 10. Subsequently, upon statement and request of Mr. Sneider, the credit for the car of oats was changed from the account of Wallace to that of the old account. The books of accounts of plaintiff, properly identified, were introduced in evidence, showing credit extended in the manner as above mentioned. Defendant Sneider did not take the witness stand. Plaintiff offered the deposition of defendant Wallace, and upon that being excluded, called him as a witness. He admitted that he had, at the time when the deposition was taken, testified that the various shipments had been received by him. Upon cross-examination, he testified that all the orders he gave and all business done by him were for and on behalf of the Stone Front Grain Company, and that the goods were not received and accepted for or on behalf of himself or Sneider & Wallace. On re-examination he produced the bills of shipment made on January 30 and February 10th which show that the goods were billed to Sneider & Wallace. He stated further that the Stone Barn Grain Company was not a corporation'; that the letter heads and checks were in that name instead of in the name of thé Stone Front Grain Company, a corporation, by mistake. It appears that this corporation had no stock subscribed or paid for. The only evidence introduced by defendant was the certified copy of articles of incorporation of the Stone Front Grain Company filed in the office of the Secretary of State of Wyoming, on February 2nd, 1917, accompanied by a certificate stating that a certificate for resident agent and proof of publication of notice of the articles of incorporation were duly filed on March 2nd, 1917. At the close of the testimony both the defendants and plaintiff moved for a directed verdict. The court directed the jury to return a verdict for plaintiff for $4374.11, which was accordingly done and judgment entered thereon. A motion for new trial filed was overruled, and the case is here on petition in error.

1. The defendants allege as error' the method of examination of the defendant Wallace. His deposition had been excluded upon protest by defendants, and he was then called and asked whether at the time of the taking of the deposition he had not made certain statements — all relating to the receipt of the various shipments of goods. Counsel for defendants contend that the witness, like any other witness, should have been asked to testify to the transactions directly, rather than relative to the statements that he had made. While we see no advantage gained by counsel for plaintiff in eliciting the testimony in the manner in which they did, it was not improper to do so. Testimony as to admissions made by a party to the suit is primary evidence, and such admissions may be proved by any competent witness who heard it. (22 C. J. 410.) The defendant Wallace was a competent witness. He was asked the same questions that any other witness would have been asked, except only that they were made to conform to the fact that he himself made the admissions, and except, further, that they were leading. Being a competent witness, it was perfectly proper to call him to the witness stand and ask him to testify to these admissions. (Reed v. Rice, 25 Vt. 171; Miller v. Wood, 44 Vt. 378; Wilcox v. Green, 28 Conn. 572.) In a note to Reed v. Rice, supra, it is said:

“It has sometimes been said, that you cannot show the admissions or declarations of a party, who is himself a competent witness in the case, but must call him as a witness. But we apprehend there is no soundness in this declaration. If the admissions of a person are competent evidence in a case, it is not important how they are shown. It may be by writing, under the hand of the party, or by a witness, who heard them made, or both, or the party himself may be called. And if called, and does not recollect the admission, or if he denies making them, they may still be shown by other testimony. All that can in any case be made out of the party omitting to call the person, making the admissions, to prove them, is merely one of presumption or argument. The omission to call the very person making the admissions, when he is a competent witness, is always liable to remark, and will weigh more or less, according to circumstances. But this is all which can be justly objected against such course. If the admissions are themselves evidence, it matters not how they are shown, so it be satisfactory to the triers, to show they were in fact made. ’ ’

2. Counsel for the defendants contend that the arrangements made at Thermopolis on January 10th, 1917, constituted such a contract as was within the statute of frauds, and that the evidence in regard to them was inadmissible, relying upon sections 4719 and 4726 of the statutes providing in substance, among other things, that an oral contract for the sale of goods of the value of $50.00 is not enforceable unless the buyer accepts and receives part of the goods. They do not contest the rule that a delivery, or partial delivery and receipt and acceptance of the goods, takes the case out of the statute. (See Berry v. Summers, 13 Okl. 425, 130 Pac. 152, also note to 11 Ann. Cas. 517, 20 Cyc. 247.) No contention is made, and it could not well be, that the goods were not actually delivered to, and received and accepted by, Wallace in some capacity. They contend, however, that there is no evidence in the ease that he received the goods in his capacity as partner, or in his individual capacity, but that it is shown that he received and accepted them in his capacity as manager of the Stone Front Grain Company. In other words, they seem to contend, if we understand them correctly, and their objection must mean, that, in order to satisfy the statute of frauds, it is necessary to show by evidence entirely distinct from any previous contract, authority or order, that the delivery in this case was made to the defendants in their capacity as co-partners. They cité no authority on this point. An implied contract to pay may, of course, arise from delivery, receipt, acceptance and retention of goods, and counsel evidently are under the impression that in the absence of a memorandum in writing, such an implied contract is the only one that can be relied on in a case like this. In any event that is the effect of their contention. If such were the law, failure of justice would result in a large number of cases. In such event, responsibility could never be fastened for instance upon a person ordering goods to be delivered to a third party. The contention, however, is not warranted. The statute refers to and contemplates the existence of prior oral contracts, but, in order to prevent perjury, provides that they shall not be enforceable, except only under the conditions mentioned, namely, delivery of the goods to the buyer, and receipt and acceptance thereof. It imposes upon the party suing thereon the necessity of not alone proving the oral contract, but also that it has been ratified or performed by receipt and acceptance of the goods, and puts, accordingly, a substantial obstacle in the way of false swearing. (Brown, St. Frauds, (5th Ed.) 316b.) In the case of Marsh v. Hyde, 3 Gray 331, the court said:

“It is to be borne in mind that, in all cases where there is no memorandum or note in writing of the bargain, the verbal agreement of the parties must be proved. The statute does not prohibit verbal contracts. On the contrary, it presupposes that the terms of the contract rest in parol proof, and only requires, in addition to the proof of such verbal agreement, evidence of a delivery or part payment under it. It does not therefore change the nature of the evidence to be offered in support of the contract. ■ ’

The test, in a ease like that at bar, is as to whether there has been shown an oral contract, and a delivery, acceptance and receipt pursuant thereto. If these facts appear, then the requisites of the statute are fulfilled. (Marsh v. Hyde, supra; Pinkham v. Mattox, 53 N. H. 600; McMillan v. Heaps, 85 Nebr. 535, 123 N. W. 1041; Hinchman v. Lincoln, 124 U. S. 38, 54; 8 Sup. Ct. 369; Brown, supra., § 337; Williston on Contracts, § 540.) If there is a contract for delivery of goods, and a subsequent delivery thereof is made, and the goods are received and accepted by the purchaser, then the conclusion may be warranted, that delivery was made pursuant to the contract. So, if a contract is made with a partnership, and a delivery is made to one partner, accompanied or followed by receipt and acceptance of the goods, then, too, the same conclusion may be warranted, because delivery to and acceptance by one partner is a delivery to and acceptance by the partnership. (Blumenthal v. Greenberg, 130 Cal. 384, 62 Pac. 599; Adler v. Wagner, 47 Mo. App. 25; Williston on Contracts, § 548.) In the case at bar, defendants seek to deprive plaintiff of the very means of proof which the statute of frauds contemplates and provides as at least part of the means by which a sale may be taken from out its operation. That cannot be done. All the facts and circumstances tending to identify and fasten responsibility upon the real purchaser, his relationship to the party to whom the goods are delivered, and the capacity, individual or otherwise, in which the defendant made the contract are admissible In evidence. (35 Cyc. 567; Botefuhr v. Rometsch, 34 Or. 491, 56 Pac. 808; Blumenthall v. Greenberg, supra; Munroe v. Mundy & Scott, 164 Ia. 707, 146 N. W. 819); (see also Rothschild v. Kennedy, 86 Or. 566, 169 Pac. 102; Caldwell v. Glazier, 138 App. Div. 826, 123 N. Y. S. 622; Cotton Co. v. Lee (Ala.) 72 So. 158.) Bearing in inind that delivery to a partner is a delivery to the partnership, the language of the court in Munroe v. Mundy & Scott, supra, where a similar contem tion as here was made, is apropos. There the court said:

“The appellee moved to strike from the record the testimony of Munroe, the appellant, as to the alleged sale of the team, for the' reason that no part of the consideration was paid, and there was no delivery of the team. This objection is based upon the first division of Code See. 4625, being the statute of frauds. It, of course, will not be claimed that, if Mundy & Scott purchased the team for themselves, and that delivery was not made to them until several days after the contract was entered into, proof of the contract, to sustain a recovery against them, must be in writing. It is only when no part of the purchase money has been paid, and no part of the property delivered, that the rule has application. ’ ’

3. The next contention of defendants is that the court should have directed a verdict in their favor, for the reason that it is shown by the undisputed evidence that delivery of the goods was made to the Stone Front Grain Company, a Corporation, and not to defendants. The force of this contention is considerably weakened by reason of our determination that the testimony regarding the arrangements made on January 10th, and regarding the statements of defendants then made is admissible. We do not think the point well taken, but, on the contrary, think that there was sufficient evidence to warrant a finding for defendants. As we stated before, delivery to and acceptance by a partner is delivery to and acceptance by the partnership. A person may be liable to a third person if he is an actual partner of another or holds himself out as such. If á person holds himself out as a partner of another and credit is extended to the partnership on the strength thereof, be is estopped from!' claiming that be is not in fact a partner. (30 Cyc. 390. Gershner v. Scott, 93 Ark. 301, 124 S. W. 722.) Nor is it always necessary that such holding out shall be as to a partnership then actually existing of operating. (Lake v. Duke of Argyll, 6 Q. B. 477; 115 Engl. Reprint 178; Battley v. Lewis, 1 Men. & Gr. 155, 133 Engl. Repr. 286; Stiles v. Meyer, 64 Barb. 77, 7 Lans. 190.) In the last case, Meyer was to become a future partner and with that understanding credit was extended to the partnership. The court said:

“The question is, whether the facts found establish á legal liability against Meyer. We think they do, for the reason that he was a party to the contract of purchase of the goods. The credit was given to the individuals who were to become members of the proposed partnership; and this was done with the express assent of Meyer. Although, therefore, the agreement was that the partnership should not commence until some timé after the purchase, and the agreement was riever carried out, yet the purchase itself was a quasi partnership transaction; and having been expressly sanctioned by Meyer, he is estopped from disputing his liability.”

In the ease atibar, the evidence shows without dispute that there was at least a holding out by both defendants as to a partnership in future. In fact, we think that it may be said that the holding out was as to a partnership then existing, or at least, as to one then commencing. The de-defendants stated on January 10th, 1917, that they were going t,o be associated together in the feed business, wanted to buy goods from plaintiff for that purpose, and desired an extension of credit. Now it is often necessary for a partnership to arrange for the purchase of goods and for an extension of credit; to do so is frequently one of its important business transactions, and when goods are subsequently bought and credit extended pursuant to such arrangement, it may well be said that the proof thereof shows an actual working partnership or at least the commencement thereof. Let us then first direct our main attention to the first two shipments. Twenty days after the foregoing arrangements were made, plaintiff made the first shipment of goods to the firm of Sneider & Wallace, which was received by Wallace. The Stone Front Grain Company was not then incorporated. No credit could have been asked for or extended to it at that time. A second shipment was made to the same firm and received about February 10th. The goods were delivered to a common carrier for the purchaser, and this constituted a receipt of the goods, though not an acceptance. (Williston on Contracts, §§ 548, 556.) Invoices or bills showing these two shipments as so made were also sent and received. During this time nothing had been said to plaintiff concerning any corporation, and no notice of any kind, changing the arrangements made on January 10th appears to have been given to plaintiff. The books of accounts of the plaintiff were introduced in evidence. These showed that credit was extended to defendants as co-partners, and they were admissible for the purpose of showing who were the actual purchasers (35 Cyc. 43) and in connection with the other evidence in the case, that delivery was made. (Cascade L. Co. v. Ind. Co., 56 Wash. 503, 106 Pac. 158; Ducoign v. Schreppel, 1 Yeates (Pa.) 347; Curran v. Crawford, 4 S. & R. (Pa.) 2; Cargill v. Atwood, 18 R. I. 303, 27 Atl. 214; Rush v. Hance, 3 N. J. L. 630; Bayonne v. Standard Oil Co., 81 N. J. L. 717, 78 Atl. 146; Benoliel v. Homac, 87 N. J. L. 375, 94 Atl. 605; Eatman v. Moulton, 2 N. H. 156; Bailey v. Harvey, 60 N. H. 152; Schmidt v. Scanlon, 32 S. D. 698, 144 N. W. 128, 22 C. J. 862; See also Lewis v. England, 14 Wyo. 128, 82 Pac. 869; Dear v. Tracy, 1 Wyo. 393.) The manager of plaintiff testified that credit was extended at all times only to the partnership, and this evidence was admissible for the purpose of showing the intention of the -parties in regard thereto. (Hale Bros. v. Gibbs, 43 Ia. 380; Maher v. Wilson, 3 N. Y. S. 80.) The statements of Sneider in June and July that he wanted to leave the concern or firm; the statement of Wallace about July 14 "that Sneider had left the firm on July 10; the talks in regard to the extension of future credit to Wallace alone, and the arrangements of credits on the old account instead of the new, each and all can he explained on no other theory than that up to that time the defendants had been co-partners in connection with the old accounts that had then accrued, and that they recognized them as valid. Besides, no .transfer or change of accounts was necessary if the business was done by the corporation, even though one of the stock-holders or person interested therein severed his connection therewith. We think that this evidence was sufficient to justify the lower court in finding that the defendants were co-partners as to the first two shipments, which we have mainly considered so far, and that these two shipments were made, received and accepted pursuant to the arrangements made on January 10th. Now, the evidence as to the remaining shipments is substantially the same or of the same effect as that in connection with the first two shipments, with the exception of the testimony in regard to the Stone Barn Grain Company and the Stone Front Grain Company, and our -finding must be the same as that in reference to the first two shipments unless the latter evidence would change it. The shipments other than the first two were made in the name of the Stone Barn Grain Company, on the supposition of plaintiff, as testified to by the witness Long, that defendants were doing business under that name, and that, by making these shipments in that manner, would be convenient for the defendants. The books of accounts of plaintiff, in view of this explanation, were still admissible in evidence in regard to the shipments. (Schetter v. Jones, 20 Wis. 433, 437; Mitchel v. Belknap, 23 Me. 475; Hartley v. Brooks, 6 Whart. 188; Church v. Davis, 9 Watts. 304; Williamson v. Fox, 38 Pa. 214; Eddy v. Church, 118 N. Y. S. 795.) And where a partnership is shown to exist, the presumption is that it continues until dissolution is shown; (30 Cyc. 403; Lellman v. Mills, 15 Wyo. 149, 173, 87 Pac. 985.) So, after it appeared in evidence in this case that defendants had engaged in business as partners up to and including February 10th, the time of the second shipment of goods, and that credit was extended to them as such, then the burden was on the defendants and not the plaintiff to show that they were absolved from liability as partners for their subsequent transactions, and that a corporation was liable therefor instead. (Harrill v. Davis, 168 Fed. 187; Owen v. Shepherd, 59 Fed. 746; 8 C. C. A. 244; Wechselberg v. Bank, 64 Fed. 90; 12 C. C. A. 56; Clark v. Jones, 87 Ala. 474; 6 So. 362.) In the first of these cases it was said:

“The general rule is that parties who associate themselves together and actively engage in business for profit under any name are liable as partners for the debts they incur under that name. It is an exception to this rule that such associates may escape individual liability for such debts by a compliance with corporation laws or by a real attempt to comply with them which gives the color of a legal corporation, and by the user of the franchise of such a corporation in the honest belief that it is duly incorporated. When the fact appears, as it does in the case at bar, by indisputable evidence that parties associated and knowingly incurred liabilities under a given name, the legal presumpr tion is that they are governed by the general rule,. and the burden is upon them to prove that they fall under some exception to it.”

The burden has not been sustained by defendants. No notice of any kind appears to have been ever sent that plaintiff could no longer rely upon the arrangements made on January 10th. There is nothing to show that the partnership was ever dissolved, that notice of dissolution was given, or that the business of the partnership was transferred to the Stone Front Grain Company. The Stone Barn Grain Company was not a corporation; it was nothing but a name under which defendants conducted their business; the letter-heads of defendants containing that name did not com vey information that the Stone Front Grain Company was doing business; it does not appear that during the time of any of the shipments plaintiff even heard or knew of such corporation. The corporation had no capital stock subscribed or paid for. Its directors mentioned in the certificate of incorporation were not stockholders as required, by § 5051 of the statute. In fact there is no evidence that the corporation ever engaged in any business whatever, except only the testimony of Wallace, given many months after these transactions, that he acted as manager thereof in connection with the orders and shipments in question, without showing that the plaintiff had any knowledge of what appears to have been his secret intentions at the time. Such secret intentions cannot transfer liability from a partnership to a corporation. We need not, therefore, determine the question as to what constitutes a de facto corporation in this state. In the case of Goodwin v. Smith, 23 Ky. L. 1810, 66 S. W. 179, a case where the defendant tried to> show that the plaintiff was in the employ of a corporation the court said:

“There is nothing to show that the partnership business; was settled, or that an inventory was taken of the property of the corporation, or even that the stock of the corporation had been paid for. According to the proof, the most that can be said in favor of the corporate proposition is that the partners had determined to merge the firm, with its. assets and liabilities and the partners’ holdings, into a corporation, with the same relative position among themselves. But it is not pretended that any knowledge or information of this change was actually given to appellee or to other employes. Under the proof the court would not be authorized to say as a matter of law that appellee was employed by a corporation of whose existence he had not learned. There was no contract of employment entered into on May 15, 1900. The old contract simply continued, and appellee went to work as usual. He had been engaged by the partnership, and had neither been discharged or re-employed. Appellee was therefore in the employ of the partnership, and not the corporation.' In the absence of proof of a dissolution of the partnership and an assumption of that busi-> ness by the corporation, the court was not authorized to say that the organization of a corporation in Hardin county, by the partners, to engage in the same business as the partnership, would operate as a dissolution of the partnership existing in Hart County or anywhere. ’ ’

(See also The Christian, etc. Grocery Co. v. Fruitdale L. Co., 121 Ala. 340; 25 So. 566; Ward Fruit Co. v. Bryan & Lamb, 144 Ga. 769, 87 S. E. 1037; Provident Bank & T. Co. v. Saxon, 116 La. 408, 40 So. 778.) Accordingly, we think that our finding on the last shipments must be the same as that in regard to the first two shipments.

Counsel for defendants contend, that, in view of the testimony of the defendant Wallace that he ordered the goods shipped and did business as manager of the corporation, it became a question of fact for the jury as to who received' and accepted the goods in question. However that might be under other circumstances, it appears in this ease that each party, at the close of , the testimony, asked the court for a directed verdict, without at any time, before or after the ruling of the court thereon, asking that the jury pass upon any questions of fact. By this course they waived the right to have the jury pass on any question of fact, and transferred its functions to the court. A finding of fact by the court made under such circumstances should not be set aside by a reviewing court unless clearly against the weight of the evidence. While this point has never been passed on by this court, and counsel have not called it to our attention, we find this to be the rule in the Federal courts, and the prevailing rule in the State courts. (Empire State Cattle Co. v. R. Co., 210 U. S. 1; 52 L. Ed. 931; Fifty Asss. Co v. Quigley, 56 Mont. 348; 185 Pac. 155; Butcher v. Butcher, 21 Colo. App. 416, 122 Pac. 397; City of Deadwood v. Hursh, 30 S. D. 450, 138 N. W. 1122; Howell v. Bowman, 89 Nebr. 389, 131 N. W. 597; Perkins v. Commissioners, 88 O. S. 495, 103 N. E. 377; Koehler v. Adler, 78 N. Y. 287; Stanford v. McGill, 6 N. D. 536; 72 N. W. 938; Deeter v. Burk, 107 Ind. App. 449, 107 N. E. 304; Home Sav. Bank v. Woodruff, 14 N. M. 502, 94 Pac. 957; Conkling v. Knights & Ladies, (Ia.) 166 N. W. 384; Sevier v. Hopkins, 101 Wash. 404, 172 Pac. 550; Patty v. Flouring Mills, 53 Or. 350, 96 Pac. 1106, 98 Pac. 52, 100 Pac. 298, 26 R. C. L. 1080.) The reasoning of these cases commends itself to our view.

There is, in our judgment, sufficient evidence to sustain the finding of the court below. The judgment herein accordingly should be, and is, affirmed.

Affirmed.

Potter, C. J., and Kimball, J., concur.