Richardson v. Davis
Richardson v. Davis
Opinion of the Court
delivered the opinion of the court.
The evidence abundantly establishes the fact that Whitten sold to his partner, Davis, his interest in the firm of Davis & Co., and accepted in payment therefor the note of Davis
We are unable to appreciate the process of reasoning by which it is sought to be proved that these debts, certainly and confessedly due from Davis to Whitten, became simulated and fraudulent, simply because Davis, by his assignment, attempted to provide for their payment.
It may be true that Whitten is liable to those who gave credit to the firm of which he had been a member, alter his withdrawal from it, beca'use he failed to give notice of its dissolution. But this would not operate to discharge the debts Davis owed Whitten, nor re-create the partnership between them. .
The good faith of the sale by Whitten to Davis is not denied. That transaction is not assailed; but counsel insist that if Whitten was bound to complainants for the debts contracted by Davis after the dissolution of the firm, it is because, as to them,'he is still to be treated as a partner, and that, if, as to complainants, Whitten is still a partner, the assignment has devoted partnership assets to the payment of a debt due one of the partners.
The fallacy of the argument is in assuming that the creditors of Davis and Whitten (if Whitten was liable) or Whitten, had some interest in the property of Davis, because of Whitten’s liability. If mere liability to third persons as a partner created a partnership inter sese, the argument would be sound. But one is not a partner simply because he is bound to third persons as such.
The property assigned was that of Davis, and he owed the debts preferred to Whitten or his assignee, and the assignment was properly declared valid by the chancellor.
Other grounds of attack are argued, but, by the pleadings, the issue was confined to the question of the genuineness of
Affirmed.
Reference
- Full Case Name
- Richardson v. E. V. Davis
- Cited By
- 2 cases
- Status
- Published
- Syllabus
- 1. Assignment. Preferring debt to former partner. Where there is an actual dissolution of a mercantile firm, one of the partners buying the interest of the other, giving a note therefor, and he after-wards fails, and makes an assignment, preferring this debt, creditors cannot defeat the assignment on the ground that there was no notice of the withdrawal, and that, therefore, the retiring partner being personally liable to them, it would be a fraud on their rights to permit the assets thus to be devoted to the claim of the retiring- partner. 2. Same. Debt for money loaned former partner. This is true also of a debt for money loaned by the retiring member to his former partner after the withdrawal, it being likewise preferred in the assignment. 3. Same. Dissolution inter sese. Right of former partner. That the retiring partner, by failing to give notice, may have become personally liable for the payment of the debts subsequently contracted in the business, does not make him in fact a partner, and in no way affects the validity of the claims due him or the right of the former partner to prefer them in an assignment of the previous firm assets. 4. Chancery Practice. Charges of fraud. Evidence confined to issue. Creditors attacked an assignment, averring that certain debts therein preferred were simulated, and were inserted for the purpose of defrauding them. They also alleged generally that the assignment was fraudulent and void. The allegations were denied. The chancellor at the hearing decreeing for defendants, -declined to consider any evidence of fraud other than that relating to the genuineness of the preferred debts, although there was no objection to the introduction of testimony. Held, proper. Railroad Go. v. Neighbours, 51 Miss., 412.