by the name of "A. E." Of course, those were the initial letters of his given names, and were known to be by every literate person who knew those names, and it was shown that he was sometimes referred to as "A. E. Hewlett"; but there is no ground for saying that anybody ever used the letters "A. E." or sounded those letters as his name, but only as the initials of his names. On this state of case the court erred in refusing the affirmative charge requested by the defendant on this issue, and also in giving, at the request of the state, this charge: "If you believe from the evidence that he is known by A. E. Hewlett as much as Gus Hewlett, then your verdict must be for the state."

We do not consider the questions sought to be raised as to the validity of the act providing for jury trials in the Cullman county court.

There was no error in the other rulings of the trial court.

Reversed and remanded.

(135 Ala. 380)

SABEL et al. v. SAVANNAH RAIL & EQUIPMENT CO.

(Supreme Court of Alabama. Jan. 22, 1903.) PARTNERSHIP-FORMATION-EVIDENCE.

1. Plaintiff and defendants agreed that either party having an opportunity should purchase a certain lot of secondhand engines "on the best terms possible," and the engines should then be sold on joint account. After defendants had purchased the engines, plaintiff wrote: "We had an agreement with you to purchase those locomotives on joint account. Please let us know what you have done in the matter." Defendants replied that they had bought the locomotives for $18,000, and, "if you desire to be half partners of this material, send us your check for $9,000, and we will consider you in on joint account.' Plaintiff made no reply to this, and thereafter defendants sold the engines at a profit of $10,000. Plaintiff discovered that they paid only $17,000, and sued for an accounting, alleging partnership in the deal. Held, that no partnership was formed.

Appeal from city court of Montgomery; A. D. Sayre, Judge.

Action by the Savannah Rail & Equipment Company against M. Sabel and others. From an order overruling a motion to dismiss the bill for want of equity, the defendants appeal. Reversed.

The bill prayed that complainants and defendants be decreed to be partners, and that defendants be required to account to complainants for one-half of the profits arising from the sale of the engines mentioned in the bill.

Graham & Steiner, for appellants. Watts, Troy & Caffey and J. J. Willett, for appellees.

TYSON, J. The important question presented is whether the agreement shown by the bill constituted complainants and respondents partners. It is made to appear that re

spondents called the complainants' attention to the possibility of purchasing on very favorable terms 17 secondhand narrow-gauge locomotives from the Plant System; and thereupon an agreement was made to purchase the engines, and whichever party (complainants or respondents) should have the opportunity to buy would do so "upon the best terms possible," and when purchased the engines should be sold on joint account. It further appears that respondents did buy, but it does not appear that the purchase was made on joint account. After the purchase, complainants, without knowing the terms of the contract of purchase, wrote the respondents, saying: "We had an agreement with you to purchase these locomotives on joint account. Please let us know what you have done in the matter." To this the respondents replied: "We have bought the seventeen narrowgauge locomotives from the Plant System for $18,000, as they are. As we stated to you that we would consider you in the deal, if you desire to be half partners of this material, send us your check for $9,000, and we will consider you in on joint account." It does not appear what, if any, reply was made to this letter. It must be inferred that complainants made no reply, or declined the offer. Complainants allege that they afterwards discovered that respondents bought the engines for $17,000, without paying any cash except as the engines were sold by them, and that they received $10,000 profit out of the transaction. The purpose of the bill is to make the respondents, as partners, account to complainants for these profits. It would seem that, from complainants' refusal to reply to the respondents' letter, although the latter may have stated the trade with the Plant System differently from that actually made, the complainants did not consider themselves bound by the dealing of their alleged partners-conceding that there may be a valid partnership between the two concerns -unless the terms of the trade were favorable. This is not the way partners deal. When a partnership transaction is made, partners are absolutely bound thereby. There is no discretion about participating. The respondents' letter also plainly indicated that they did not consider the complainants concerned in the purchase until they consented to be bound. Here, then, we have the interpretation of the contract by both parties concerned, each indicating to the other and each acquiescing in the view that there was a mere agreement relating to the future, and not an actual partnership. And when we look at the nature of the agreement as detailed in the bill, we see it could mean nothing else. There was nothing contributed; nothing done at the making of the agree ment, except to stipulate that the parties, acting separately, as occasion might offer, would buy (if possible) the engines on "the best terms possible," and that when purchased on those terms, as the complainants in

simply declares the law applicable thereto. It says the facts proved by the plaintiff fail to cast any legal liability upon the defendant; but it does not attempt to determine the actual facts of the case, nor can it do so, for the law has imposed that duty elsewhere; and, as the facts of the case are not determined, it does not follow that the plaintiff in some future suit may not be able to produce more and better evidence of his claim, which he is at liberty to do." This quotation is but an extended announcement of the well-settled rule that a judgment of nonsuit involves no element of an estoppel (of res adjudicata), because there is no trial of an issue of fact, no decision or determination of the facts. Note in Cartin v. Railroad Co. (S. C.) 49 Am. St. Rep. 831-833 (s. c. 20 S. E. 979); 1 Freeman on Judgments, § 261. We are of opinion that the motion to dismiss the appeal must be granted. Appeal dismissed.

(134 Ala. 580)

PENNEY V. McCULLOCH et al. McCULLOCH et al. v. PENNEY. (Supreme Court of Alabama. May 11, 1899.) FRAUDULENT CONVEYANCE-MORTGAGE-EVI

DENCE-LIABILITY OF MORTGAGEE.

1. Where, in a suit to set aside a mortgage as fraudulent as to creditors, complainants have established the existence of their debts prior to the mortgage, it devolves on defendants to prove that the debt for which the mortgage is claimed to have been given was a bona fide one. 2. Where, in a suit to set aside as fraudulent a mortgage given by a firm, it appeared that originally the mortgagee had been given a bill of sale to secure personal indebtedness of the mortgagors, which bill contained a reservation of benefit for the makers, and the mortgage was thereafter given, largely to secure the same indebtedness secured by the bills of sale, and at a time when the mortgagors were hopelessly insolvent, a decree finding the mortgage fraudulent was warranted.

3. Where, in a suit to set aside a mortgage as fraudulent as against creditors, it is shown that the mortgagee has appropriated some of the mortgaged property to his own use, and that some of it had been disposed of or converted by the mortgagors with the knowledge of the mortgagee, a decree holding the mortgagee liable for the property he had appropriated or converted was proper. Tyson, J., dissenting.

Appeal from chancery court, Morgan county; Wm. H. Simpson, Chancellor.

Suit by W. B. McCulloch and others against J. E. Penney. From the decree, all parties appeal. Reversed on appeal of defendant; otherwise affirmed. On rehearing, affirmed on the cross-appeal of defendant.

The bill prayed that their several debts be ascertained; that the mortgage be declared fraudulent and void, and be set aside as to complainants; that said Penney be required to account, and to pay into court for complainants the value of the property mentioned in said mortgage, which had been appro

1. See Fraudulent Conveyances, vol. 24, Cent. Dig. § 809.

priated or converted by him to his own use, and that the remaining property mentioned in the mortgage, which he had not used, converted, or appropriated, be condemned for sale for the satisfaction of complainants' debts. There was also a prayer for general relief. The answer of Penney merely denied the averments of the bill, and required proof thereof, except that it admitted the residence of the parties, and that said partnership became indebted to respondent in the sum of $525.94, to secure which it executed the mortgage described in the bill. The demurrers to the bill, incorporated in the answer, were not insisted on in argument, and hence it is not deemed essential to set them out. In addition to the evidence noted in the opinion, the record shows the following evidence as to the various items constituting the consideration for Penney's mortgage: Penney and Bibb testify that Penney paid Miller's house rent during the months of November and December, 1895, amounting to $40. And Palmatier testified: "It was agreed between Miller and myself that we would both pay our house rent and grocery bill in that way. We agreed that this might be paid by Penney to Bibb, and charged to the Co-operative Furniture Company. When we first went into business, we agreed that we would not any of us draw out of the company any more than was necessary to pay our house rent and grocery bill. At the time we gave Penney the mortgage we owed him $75 paid Lovin, $75 paid J. L. Brock, $40 paid Bibb & Hoff, $50 for glass, $50 for rent of one building and services, $44 rent for Palmatier, $25 for cow, $10 paid Hudnall. The Co-operative Furniture Company was indebted to Lovin in that amount, and more, too, for supplies and groceries for the hands. I suppose I saw as much as $40 worth of goods supplied to the men. Lovin let the men have what we told him to. Miller wrote the orders, and gave Lovin credit for it, and charged the hands with it. I do not know whether Penney paid them or not, but they gave us credit for the amounts. I saw the entry on Lovin's books where he gave us credit for the amount paid by Penney. Penney paid J. L. Brock $75 for the furniture factory. That was for orders given on Brock. Miller and myself both asked Penney to assume the payment of the $75 to Brock. It was for a debt contracted or about to be contracted with Brock for the benefit of the Co-operative Furniture Company. I did not see Penney pay Brock. Penney paid one Hudnall $10 for the company. Hudnall was one of the employés of the furniture company." Penney's testimony as to the three items of Brock, Lovin, and Hudnall is as follows: "I gave an order to Brock for $75, and charged Miller and Palmatier up with the $75 at the time I paid it. I paid $75, less 47 cents, which was credited back to Miller and Palmatier. They were owing Lovin for groceries. I paid Lovin $75 for the Co-operative Fur

That

niture Company at Miller and Palmatier's request. They said Lovin was pushing them for pay for groceries he had furnished their hands. Miller and Palmatier requested me to settle this account with Lovin, which I did. The paper shown me is the receipt I got from Lovin at the time I paid the account for the Co-operative Furniture Company. I paid Miller $10 in Bibb & Hoff's bank, and he went right outside, and paid it to Hudnall, who was waiting to get it. was for labor. I did not see Hudnall perform the labor." Hudnall, Brock, and Lovin were not examined. The mortgage was dated November 29, 1895, and was due one day after date, and provided for a foreclosure, in case of default, at public or private sale. It was filed for record on the day it was given. It covered practically all the firm's property, and the firm was insolvent when the mortgage was given. Penney had access to their books. The evidence showed that the firm rented one of Penney's stores, the rent of which constituted part of the consideration of the mortgage. The property mortgaged remained in this store after the execution of the mortgage and after the law day, Penney having the key to the store. The mortgagors had an agreement with Penney that the furniture was to be shipped in Penney's name to different markets to be found by the mortgagors, and Penney was then to consent to the sales negotiated by them. There was evidence that some of the property was sold by Penney, and some by the mortgagors with his knowledge and in his name, and some they sold clandestinely without his knowledge, and some was still on hand when the bill was filed in April, 1896, and at the time of the final decree. On submission on the pleadings and proof a decree was rendered declaring complainants entitled to relief, holding the mortgage constructively fraudulent as against complainants, and setting it aside for such fraud, and holding Penney liable for the value of the property which he had up to the time of final decree appropriated or converted to his own use. This value was less than the total amount of complainants' debts, but this property, together with that which had been disposed of or converted by Miller and Palmatier and that which remained on hand unsold, was more than said entire debts. Respondent Penney appeals, assigning as error the said action of the court, and complainants also assign as error the failure of the decree to charge Penney with the value of the property remaining unsold and that sold or converted by Miller and Palmatier.

E. W. Godbey, for plaintiffs. D. W. Speake, Paul Speake, O. Kyle, and J. M. Chilton, for defendant.

TYSON, J. The bill in this case was filed by the complainants, as creditors of Miller and Palmatior, against them and Penney, to

have declared fraudulent and void a mortgage executed by them to Penney upon certain personal property conveyed by it, and to require him to account for the value of the property appropriated or converted to his own use; and prayed a personal decree for such value, a condemnation to sale for the satisfaction of the complainants' debts and costs the property not used, converted, or appropriated by him, and for general relief. The allegations of facts upon which the complainants based the relief thus prayed for were, in substance, that each of the complainants were, prior to the 29th day of November, 1895, existing creditors of Miller and Palmatier, who had for some months prior to that date been engaged as partners under the name of the "Co-operative Furniture Company," sometimes called the "Co-operative Furniture Factory," in the manufacture of various kinds of furniture for sale; that on the 29th day of November, 1895, they executed to Penney the mortgage assailed to secure a recited and an alleged indebtedness of $525.94 upon certain articles of their partnership property which they then owned, or was held in trust for them, a part of which property conveyed by the mortgage was stock in trade, a part was raw material in process of manufacture into furniture, and a part was machinery and tools; that the partnership was badly embarrassed financially, and there was no consideration for the mortgage; and since the execution of the mortgage Penney had taken possession of the property described in it, a portion of which he converted and disposed of, a portion he allowed others to convert, and dispose of, and the remainder he still holds in undisputed possession. Just what portion was disposed of by him or he allowed others to dispose of, or what portion he had in his possession at the filing of the bill, complainants did not know, and were unable to state. The respondent Penney answered the bill, incorporating in his answer four grounds of demurrer, which were overruled by the chancellor. This demurrer is so manifestly untenable we will not consider it. The answer contains nothing but a mere general denial of the allegations of fact charged in the bill, and was utterly insufficient to relieve the respondent of the prima facie case made against him, and upon whom rested the burden of overcoming not only by clear proof the presumption of unfairness and mala fides, but by a clear and distinct response to each averment of the bill. Moog v. Barrow, 101 Ala. 209, 13 South. 665; Robinson v. Moseley, 93 Ala. 70, 9 South. 372; Wood v. Pebbles (Ala.) 25 South. 723. But, aside from this, under the averments of the bill, when the complainants established the existence of their respective debts, it then devolved upon the respondent to prove that the notes evi. dencing the debt claimed by him against Miller and Palmatier were given for a bona fide debt due to him in the sums recited in

them, and that the mortgage was to secure this bona fide debt, untainted with any fraud. The evidence establishes beyond disputation that the complainants were creditors of the Co-operative Furniture Company for material sold to be used in the manufacturing of furniture, and that practically all of it was used and constituted a portion of the manufactured articles which went into the possession of Penney under bills of sale made to him by Miller and Palmatier some time prior to the execution of this mortgage. It is also practically undisputable from the evidence that the debt secured by the mortgage was the same debt, at least the greater portion of it, which was secured by bills of sale to the same property made by Miller and Palmatier to Penney. In fact, Penney himself testifies to having two bills of sale upon this property, and shows conclusively that they were intended as mere mortgages. He says the first one was for $292.92, the second for $75; and he invariably speaks of them as having been given to secure these debts due him. According to his testimony, the consideration of the mortgage of $525.94 was made up of these two items and an item of $100, which was secured by a bill of sale upon a portion of the property held by Mrs. Miller, wife of respondent Miller, and the item of fifty-odd dollars for rent of store and personal services rendered by him in and about the sale of the furniture, which should, under a fair and legal status, have belonged to him. He also shows in his testimony that some of the items included in the $525.04 were individual debts, which he claimed Miller and Palmatier owed to him or to other persons, which he paid at the request of either Miller or Palmatier. These individual items, as found in his account against the Co-operative Furniture Company (furniture account), attached to his deposition, are as follows: "Nov. 19, 1895. Cash to W. A. Bibb for rent of the house occupied by Miller and his family, $40." On the same date there appears a charge of $23, amount of rent due him by one Campbell, who had long before retired from the firm; also of the same date a charge of $44 for rent due him by Palmatier. Of date December 28th this concern is charged with the amount of a note ($25) given by Palmatier for a cow, and transferred to him. There is also an item in Penney's account of $50 for rent of a storehouse for one month, the rental value of which, according to all the evidence, was $10 or $15 per month. He explains that the balance of the $50 was charged for services to be rendered by him in looking after the furniture to prevent its being purloined by Miller and Palmatier, notwithstanding the key to this storeroom was in his possession. He further explains why the charges for personal liabilities of Miller and Palmatier entered into the consideration of the bill of sales and mortgage by saying that they, as partners, agreed to assume to pay them. When this agreement was made, we

are not informed; whether when the mortgage was made or when the first bill of sale was executed, we are not told. The other items included in the $525.94 were $75 which he said was paid to Lovin, $49.02 paid German Looking Glass & P. Co., $10 paid Miller for Hudnall, $75 paid by order on J. L. Brock account labor. These items make a total of $209.02. The $75 which he says he paid to Lovin was not shown to have been a subsisting legal demand, in that the correctness of the account which was composed of items aggregating this sum was not shown. Furthermore, it appears that there were items of merchandise charged upon this account for which the partnership as such was not liable. They were purchases made by the individual members of the partnership for their personal use. The $10 paid by him to Miller for Hudnall was not shown to have been received by him, or, if received, that the partnership justly owed it. The order of $75 to Brock was for groceries, but whether he furnished them Penney did not know.

It is useless to pursue any further the investigation into the facts as disclosed by the evidence relied upon by Penney to establish the bona fides of the transaction. Nearly every item composing the account making up the recited consideration is subject to some infirmity going to its integrity as a just demand affecting the validity of the mortgage as against the complainants. Indeed, upon Penney's own testimony the conclusion cannot be escaped that the whole transaction had its inception in fraud of the creditors of Miller and Palmatier. The first act consummated by the parties was to bring into existence a fraudulent conveyance, confessedly fraudulent by the reservation of a benefit to Miller and Palmatier-a bill of sale, absolute upon its face, for the security of a debt; and this, too, to secure in the main their individual indebtedness to him. By the acceptance of it, and dealing with the property as was shown by the evidence in this cause, Penney became a trustee for these complainants not only for the proceeds of all property sold by him, but for the value of all property which he suffered Miller or Palmatier to dispose of. Dickinson v. National Bank of the Republic, 98 Ala. 546, 14 South. 550; Birmingham Shoe Co. v. Torrey, Curtis & Tirrell et al. (Ala.) 25 South. 763. After their rights attached-which they did while he held the property under the bills of salehe could not defeat those rights, or discharge himself of the liability incurred as trustee by the taking of the mortgage to secure the larger part of this same indebtedness secured to him by the two bills of sale and an additional amount which he claimed they owed him, even if there had been no infirmity as to the items making up the recited consideration of the mortgage. The decree adjudging him liable was correct, but the amount of his liability, as there ascertained, was too small. The evidence shows that the value