Standard Horseshoe Co. v. O'Brien

Bryan, J., delivered the opinion of the Court. This was an action of replevin brought by the appellant against the appellees. It was maintained that certain kegs of horseshoes had been fraudulently purchased by the defendant, O’Brien, from the plaintiff, and that consequently it had the right to rescind the contract of sale, and take the horseshoes under a writ of replevin. At the close of the plaintiff’s case the Court granted an instruction that there was no evidence of fraud, and that the verdict must be for the defendants.

Verdict and judgment having been rendered, the plaintiff has appealed. O’Brien & Co. had on two or three occasions purchased horseshoes from the plaintiff, and they desired a more extensive credit. The statements made by O’Brien to Cook, a salesman in the employment of the plaintiff, constitute one of the grounds of the allegation of fraud. It is insisted that these statements were false.

It is important to consider carefully this evidence. We shall state the material part of it as it appears in the record. It is contained in Cook’s testimony as follows: “ That he, Cook, came on to Baltimore to look into O’Brien & Co.’s standing, and determine to what extent to trust them; he then, on or about February 17, 1896, had a personal interview with O’Brien, in which he, O’Brien, stated that he had a cash capital of $2,000, which had been contributed to the business by James W. Amoss, that Amoss was backing him, and that he, Amoss, was to have a share in the profits, and that Amoss had contributed the $2,000 against his, O’Brien’s, experience. On the strength of the representations made to him by O’Brien, he determined to give him the desired credit, and agreed to furnish him shoes at $3 per keg, f. o. b.

Baltimore, with an additional discount of ten per cent., provided fifteen hundred kegs per year ³³⁸ were sold; that he reported to his company that O’Brien had a clear cash capital of $2,000 in the American National Bank, and on the strength of these representations the line of credit given by the company to O’Brien & Co. was given.” O’Brien was examined as a witness for the plaintiff. He stated that he commenced business in July, eighteen hundred and ninety-five. He further stated in his testimony: “ I started business at that time in conjunction with Mr. James W. Amoss and Samuel Morrison, Mr. Amoss furnishing the capital of two thousand dollars; I earning a salary of eighteen dollars per week; Mr. Morrison having the privilege of coming in as a partner at the end of two or three years ”; and also “ Mr. Amoss having put the capital against my knowledge of the business I told him I looked upon him as the principal in the business.” He also stated that he understood that Amoss owned the “ corpus of the business.” It was also shown by the testimony of the cashier of the American National Bank and by the production of the bank book of O’Brien & Co., that the firm opened an account in July, eighteen hundred and ninety-five, by a deposit of two thousand dollars, which could be drawn on at any time by O’Brien & Co. It was shown that there was an understanding between O’Brien and Amoss, that O’Brien should draw on the deposit only to the extent of a thousand dollars. The cashier testified that Amoss requested him not to permit O’Brien to draw his account below two thousand dollars, but it had been permitted.

The account was closed in May, 1897. During its continuance the deposits had amounted to over eighteen thousand dollars. According to O’Brien’s testimony Amoss was a partner in the business; and although there was a restriction on O’Brien’s right to draw on the deposits in the bank, they belonged to the firm of O’Brien & Co. The restriction on the right of one member of the firm to draw is a matter which the partners have a right to regulate by agreement with each other, but it cannot affect the firm’s ownership of the funds. The whole of the money in bank was subject to the partnership debts, and by appropriate ³³⁹ proceedings could have been subjected to the payment of them.

According to the testimony in the case the statement made by O’Brien to Cook was strictly true. But there was testimony on other points. Cook testified that in the summer or early fall of eighteen