14 Ky.L.Rptr. 451
Court of Appeals of Kentucky.
Taylor v. Watts.
Oct. 29, 1892.
ACTION: Reversed.

Appeal from court of common pleas, Knox county.
"Not to be officially reported."
Action by S. J. Watts against J. W. Taylor to recover the amount of alleged partnership debts which plaintiff had paid, but for which he claimed defendant was responsible.
From a judgment for plaintiff, defendant appeals.

Lewis, J.
Previous to December, 1886, appellee, S. J. Watts, was owner of a store, selling goods at Corbin, Whitley county, a steam sawmill at Emanual, about 11 miles distant, and had made a contract with certain persons to furnish timber for tunnel and bridges on 12 miles of the Cumberland Valley extension of the Louisville & Nashville Railroad, then being constructed. T. J. Taylor having a contract at the same time for grading and masonry of two miles of that road, a partnership between them was formed, Watts selling to Taylor a half interest in his stock of goods and lumber contract, and taking a half interest in Taylor's contract. That partnership continued until April 5, 1887, when Watts, retiring from the firm, transferred to Taylor all the partnership property, including goods of the store, tools, animals, lumber, and houses, in consideration of which Taylor agreed to assume and pay all the firm debts, and the sum of $231.25 found due to Watts on settlement; and, in order to secure performance of his undertaking, Taylor on the same day executed to Watts a mortgage on all the firm property thus transferred to him, including estimates for work done and materials furnished on said road by the firm, the entire property being stated in the mortgage to be of the value of $13,000, and the firm's debts so stated to be about $6,000. This action was brought by Watts against T. J. Taylor and appellant, J. W. Taylor, jointly, to recover amount of the firm debts, all of which it is alleged in the petition the plaintiff has been compelled to pay by reason of the total failure of T. J. Taylor to comply with his contract to pay them, the sum of $231.25, mentioned, damages on account of sacrifice of his property sold to pay said debts, and also the amount of an account for work and labor done for, and goods and materials furnished to, defendant subsequent to April 5, 1887. It is alleged in the petition as cause for suing appellant, J. W. Taylor, that he was a real, though silent, partner of the original firm of Watts & Taylor, and also a partner of T. J. Taylor in the property and business of Watts & Taylor after the transfer of April 5, 1887; and as such partner he received the benefit of the contracts referred to, and, together with T. J. Taylor, clandestinely carried off to the state of Tennessee all the property mortgaged to plaintiff to secure payment of the firm debts of Watts & Taylor and the individual debt of $231.15. At the November term, 1890, of court, a verdict was rendered in favor of plaintiff against J. W. and T. J. Taylor for $5,781.19, though, upon grounds filed by him, a new trial was granted as to J. W. Taylor. But at the retrial had at the May term, 1891, a verdict was again found against him, the amount being $4,500, and from the judgment rendered thereon he has appealed. But T. J. Taylor did not ask a new trial, nor has he appealed, consequently judgment for amount of the first verdict stands against him, which does not, however, avail the plaintiff because he is insolvent.

It seems to us the evidence does not show J. W. Taylor was a member of the original firm of Watts & Taylor; on the contrary, the testimony of the plaintiff himself shows very clearly he was not, for he stated as a witness that December 24, 1886, when the partnership between him and T. J. Taylor was formed, he wanted J. W. Taylor to go into the firm, but he would not do it, saying he knew nothing about railroads, was afraid of it, and would put no money in it. Moreover, at dissolution of the firm of Watts & Taylor, April 5, 1887, T. J. Taylor alone assumed payment of the firm debts and of the individual debt of $231.15; to him alone was transferred Watts' share of the partnership property, and he alone executed the mortgage thereon to secure payment of the debts. In fact Watts does not testify to a single promise, oral or in writing, direct or indirect, made by J. W. Taylor to become a member of the firm of Watts & Taylor, or to assume payment of any of its liabilities. As, therefore, the verdict of the jury was to a great extent, if not altogether, based upon the assumption that J. W. Taylor was a partner,-that being the main issue made by the pleadings,-it is bound to be treated as palpably against the evidence. The evidence shows, however, that J. W. Taylor, who was a resident of Tennessee, stayed at Corbin and Emanual nearly the whole time after the partnership was formed, until the mortgaged property was taken out of this state, and was often at the store and about the mill, and after April 5, 1887, he and T. J. Taylor purchased and operated a mill at Emanual, distinct from the one owned by Watts and previously operated by Watts & Taylor. His purpose in going to Corbin in December, 1886, was, as he testifies, to look after collection of $1,200 loaned by him to T. J. Taylor, and that, after going there, he was employed by Watts & Taylor to superintend the Watts mill. He admits he continued at Corbin to some time in June, for the purpose of collecting or saving the money T. J. Taylor owned him, though in the mean time he and his brother jointly purchased and operated a mill. Whether J. W. Taylor became, after April 5, 1887, interested as a partner of T. J. Taylor in the property and business of the defunct firm of Watts & Taylor, does not fully appear. But it seems to us this record fully authorizes the belief that he appropriated to his own use at least enough of the mortgaged property to satisfy what was due him from T. J. Taylor, who was insolvent, and not otherwise able to pay him. That he collected some of the estimates made on the railroad contracts, and going to T. J. Taylor, is testified by appellee, and not denied by him. While, therefore, there is such signal failure of proof of J. W. Taylor being a member of the firm of Watts & Taylor as to require the verdict set aside, it is not so clear that he did not, after April 5, 1887, as partner with T. J. Taylor or otherwise, appropriate a considerable amount of the mortgaged property; and to the extent he did so appropriate to his own use any of such property or estimates for work, which were likewise mortgaged, he is liable to appellee, Watts, who shows he has paid firm debts for which the property was mortgaged to him. He is also entitled to recover on his account to the extent the alleged services were rendered or goods furnished to J. W. Taylor as a member of the firm of Taylor Bros., if there was such firm, or to him individually.

Wherefore the judgment is reversed, and cause remanded for the verdict to be set aside, and a new trial granted, and further proceedings consistent with this opinion.

Ky.App. 1892.
Taylor v. Watts.
20 S.W. 388, 14 Ky.L.Rptr. 451


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