Baum v. Stephenson

• Decision Date: 20 October 1908
• Citation: 113 S.W. 225,133 Mo.App. 187
• Parties: BAUM, Respondent, v. STEPHENSON, Appellant
• Court: Missouri Court of Appeals

113 S.W. 225

133 Mo.App. 187

BAUM, Respondent, v. STEPHENSON, Appellant

Court of Appeals of Missouri, St. Louis

October 20, 1908

Appeal from St. Louis City Circuit Court.--Hon. Jas. K. Kinealy Judge.

Reversed and remanded.

G. B Webster and James D. Simms for appellant.

(1) The denial of the right of trial by jury was error. This proposition is not open to dispute, if the action was properly one of law. Mo. Const., art. II, sec. 28; Rogan v. McCoy, 29 Mo. 356; Donovan v. Barnett, 27 Mo.App. 460; Hardware Co. v. Wolter, 91 Mo. 484; New Harmony Lodge v. Railroad, 100 Mo.App. 407. (2) Under the facts pleaded and proven there was never any partnership between the parties. Musser v. Brink, 68 Mo. 242; Donnell v. Harshe, 67 Mo. 170. (3) There is no joint agency, for the record shows that each considered the consent of the other necessary to a sale, and this is a good test. Jarnee v. Simonson, 58 N.J.Eq. 282; Harvey v. Childs, 28 Ohio St. 319; Ashby v Shaw, 82 Mo. 76; Hallet v. Desban, 14 La. An. 535; Lee v. Cravens, 9 Colo.App. 272; Grigsby v. Day, 95 S.D. 585. When the question as to the existence of a partnership arises between the alleged partners, it must be proven by an express contract. As between them it never exists by operation of law. Ingals v. Ferguson, 59 Mo.App. 306; Lucas v. Cole, 57 Mo. 143; Freeman v. Bloomfield, 43 Mo. 391; Einstein v. Gourdin, 4 Woods 415; Priest v. Chouteau, 85 Mo. 398. (4) It was formerly the rule that any sharing of the profits of a venture constituted partnership. It was first announced in Grace's case, 2 W. Bl. 998 (1775), and continued in effect until 1860 when it was overturned in the leading case of Cox v. Hickman, 8 H. L. Cas. 268. The latter case has been uniformly followed in the United States. Chung Kee v. Davidson, 102 Cal. 188; Purvis v. Butler, 87 Mich. 248; Emmons v. Bank, 97 Mass. 230; Brundred v. Muzy, 25 N. J. L. 268; McDonald v. Matney, 82 Mo. 358; Taylor v. Herring, 10 Bosw. 447; Webb v. Hicks, 123 N. Car. 244; Righter v. Farrel, 134 Pa. St. 482; Diles v. Bridges, 23 W.Va. 20; Dunnel v. Stone, 30 Me. 384. As between the partners, the question is one of intention on their part. Hazzard v. Hazzard, 1 Story 371; Earle v. Pub. Co. 95 F. 548; Niehoff v. Dudley, 40 Ill. 406; Ruddick v. Otis, 33 Iowa 402; Macy v. Combs, 15 Ind. 469; Runnels v. Maffat, 73 Mich. 188; Pillsbury v. Pillsbury, 20 N.H. 90; Sheridan v. Nedara, 10 N.J.Eq. 469; Mershon v. Hohensack, 22 N. J. L. 372; Osbrey v. Reimer, 51 N.Y. 630; Smith v. Lennon, 14 N.Y.S. 260; Krall v. Forney, 182 Pa. St. 6. Of course it is the legal intent which is the test rather than what they may have said, and that does not militate against the rule, although in a doubtful case the expressed intent may be sufficient to turn the scales one way or the other. 22 Am. and Eng. Enc. L. (2 Ed.), p. 27. Even common ownership of property does not create any partnership of itself, although it be used for the purpose of making gains. Magruder v. Bowie, 2 Cranch 577; Holton v. Guinn, 76 F. 96; Donnan v. Gross, 3 Ill.App. 409; Chapel v. Washburn, 11 Ind. 393; Sears v. Munson, 23 Iowa 380; Banchor v. Culley, 38 Maine 553.

Lee Sale for respondent.

(1) Under the facts as found by the court, the plaintiff was entitled to a judgment for the five hundred dollars paid by him to defendant with interest from November 27, 1899, because said payment was a gift which, although made voluntarily, was made under circumstances which entitled plaintiff to rescind the gift. Neilson v. Bowman, 29 Grat. 732; Story's Equity Jurisprudence, sec. 315; Bates on Partnership, secs. 303, 309, 961. (2) Under the facts as testified to by both plaintiff and defendant, and as found by the court, there was clearly a partnership which had for its object the building of an electric street railroad. This was a joint business enterprise undertaken by plaintiff and defendant under an agreement to share the expenses and profits thereof, and was therefore a partnership. Meehan v. Valentine, 145 U.S. 611; Hughes v. Ewing, 162 Mo. 261. (3) Defendant was not entitled to a jury trial, because the action was based upon equitable rights, towit, the right to have defendant declared a constructive trustee for plaintiff as to one-half of the bonds clandestinely received by defendant as his individual property, and the right to rescind for fraud a settlement made between partners. Weil v. Kume, 49 Mo. 158; Gay v. Ihm, 69 Mo. 584; Hunter v. Whitehead, 42 Mo. 524; Lime & Cement Co. v. Bank, 158 Mo. 272; Conran v. Seller, 28 Mo. 320; Ely v. Coontz, 167 Mo. 371; Ellis v. Kreutzinger, 31 Mo. 432.

OPINION

BLAND, P. J.

Omitting captions and signatures, the pleadings are as follows:

PETITION.

"Plaintiff states that prior to the month of November, 1890, plaintiff and defendant had been associated together in business for several years; that between the years 1884 and 1889 he and the said defendant had been engaged as partners in the practice of law at the city of Shelbyville, in the State of Illinois.

"That in or about the month of November, 1897, plaintiff and defendant agreed to form a partnership for the purpose of obtaining or controlling a right of way between the cities of East St. Louis and Belleville, in the State of Illinois, over the turnpike between said cities, with a view to the construction and operation of an electric railway between the said cities; that in pursuance of said agreement, and as part thereof, plaintiff and defendant agreed to attempt to obtain a controlling interest in the St. Clair County Turnpike Company, a corporation organized under the laws of the State of Illinois, owning and operating a turnpike road between said cities of East St. Louis and Belleville; that it was further agreed between said parties that all stock so to be purchased should be divided equally between them, each party paying his one-half of the cost thereof, and that all stock so to be purchased should be held and managed in common and by the parties hereto as partners; that neither of said parties should, without the consent of the other, sell any portion of the stock so purchased.

"Plaintiff further states that in pursuance of said agreement, plaintiff and defendant did in November, 1890, purchase three hundred and fifty-seven (357) shares of the capital stock of the said St. Clair County Turnpike Company, each of said parties paying one-half of the purchase price thereof.

"Plaintiff states that thereafter in pursuance of said partnership agreement shares of the capital stock of said St. Clair County Turnpike Company were purchased from time to time by said plaintiff and defendant severally, and that the shares of stock so purchased were thereupon divided equally between plaintiff and defendant, and paid for by the plaintiff and defendant, share and share alike; that the amount of stock so purchased and owned by plaintiff and defendant in the year 1897 aggregated the sum of six hundred and twenty-five (625) shares; that the entire capital stock of said St. Clair Turnpike Company aggregated twelve hundred and seventy (1270) shares, of which two hundred and seventy (270) shares were at all times herein mentioned retained in the treasury thereof as treasury stock of said company.

"That for some years prior to the year 1897, in pursuance of said agreement, defendant had occupied the position of president of the said St. Clair County Turnpike Company, and plaintiff during the same time had occupied the position of secretary and treasurer of said company, both plaintiff and defendant receiving the same salary as such officers.

"That during the entire period prior to 1897, during which plaintiff and defendant were connected with the said Turnpike Company, plaintiff had active control and management of said company, and devoted all the necessary attention to the business of said company, defendant being during all said period in poor health, and unable to give his time and attention to the business of the said company.

"Plaintiff further states that for several years prior to the year 1897, he and the defendant, in conjunction with one D. P. Alexander, had made efforts to obtain franchises that would enable them to build an electric railway over the said turnpike road, and during the said years had respectively obtained various franchises with the view and purpose of building said electric railway from East St. Louis to Belleville, and that each of the said parties had during said period made efforts to interest capitalists in the building of said electric railway, but that prior to the month of November, 1897, all of the efforts of said parties had been of no avail.

"That in the month of November, 1897, the firm of Townsend, Reed & Company, being desirous of constructing and operating an electric railway between the said cities of East St. Louis and Belleville over the turnpike then owned by the said St. Clair County Turnpike Company, entered into negotiations with the defendant for the purchase of the six hundred and twenty-five (625) shares of the capital stock of the St. Clair County Turnpike Company, then owned and held by plaintiff and defendant as partners in the manner and upon the terms hereinbefore set out; that all of said negotiations were had by the said firm of Townsend, Reed & Company with defendant, who was acting on behalf of himself and plaintiff in the city of St. Louis, while plaintiff was residing in the city of Shelbyville, Illinois, and attending to the business of said St. Clair County Turnpike Company.

"Plaintiff further states that in pursuance of said negotiations plaintiff and defendant did, on November 12th, 1897, enter into a contract with said firm of Townsend, Reed & Company, by the terms of which plaintiff and defendant agreed to sell the...