Capital Food Co. v. Globe Coal Co.
| Decision Date | 08 April 1909 |
| Citation | 120 N.W. 704,142 Iowa 134 |
| Parties | CAPITAL FOOD CO., Appellee, v. GLOBE COAL CO., and A. D. BOTHNE, Defendants, and W. W. WHEELER, Appellant |
| Court | Iowa Supreme Court |
Appeal from Polk District Court.--HON. JAMES A. HOWE, Judge.
THIS is an action in equity for the recovery of assets of the defendant Globe Coal Company, and to have the same applied to the payment of a judgment against said company. The Globe Coal Company was a copartnership, consisting of one Bothne and defendant Wheeler. The proceeding is directed against the defendant Wheeler alone on the theory that he is in possession of the assets of the company. There was no service on the Globe Coal Company nor any appearance, nor was any relief asked against Bothne. There was a decree against the defendant Wheeler, and he appeals.--Modified and affirmed.
Modified and affirmed.
Dale & Harvison, for appellant.
Baily & Stipp, for appellee.
OPINION
On December 1, 1902, the defendants Wheeler and Bothne entered into articles of partnership. The partnership was organized exclusively for the business of buying and selling coal. The business was to be in the personal charge of Bothne. Wheeler put in all the capital, which was "not to exceed ten thousand dollars unless otherwise arranged for by special agreement." In May, 1903, Bothne entered into a contract with the plaintiff for the purchase of a large amount of "stock food, poultry food, lice killer," etc. This contract was entered into by Bothne in the name of the Globe Coal Company. The plaintiff subsequently brought an action on the contract against the Globe Coal Company by serving notice upon Bothne alone, and obtained a judgment against the partnership as such for about $ 1,400 and costs. No attempt has ever been made to obtain a judgment against Wheeler as a member of the partnership. So far as is disclosed by any evidence in this record, the contract of purchase with plaintiff was outside of the scope of the partnership business, and could not be enforced against Wheeler. The only right claimed by the plaintiff is that it is entitled to collect its judgment out of partnership property. Wheeler put up the capital for the Globe Coal Company to the full limit of $ 10,000, and advanced $ 3,000 additional. He claims to have been a creditor of the firm to the extent of $ 3,000. Upon the dissolution and settlement of the partnership as between the partners, his claim was agreed to by his copartner, Bothne, and all the assets on hand, amounting to $ 3,700, were turned over to him. The contention of the plaintiff is that the appropriation of the assets of the firm by Wheeler was such a violation of its rights that it was entitled to a judgment against Wheeler by reason thereof.
I. The appellee has filed its motion to dismiss the appeal for failure of the appellant to serve notice of appeal upon Bothne. It is apparent from the record that Bothne can not be affected injuriously or otherwise by the result of this appeal. Indeed, it is not clear from the record that he is a party to the case at all. His name is included in the caption. The decree recites his default; but there is no averment against him in the petition. He did not appear in the case except as a witness, nor does it appear, except by inference, that he was served with notice. The petition asked no relief against him. The decree awarded no relief against him, except that a judgment for costs was entered against "defendants." The motion to dismiss must therefore be denied.
II. It is argued by appellant that he was not, and is not, bound by the contract entered into with the plaintiff, because it was outside of the scope of the partnership, and that for the same reason the partnership firm is not bound thereby, and that he is therefore entitled to have the judgment against the firm set aside. As an abstract proposition we may concede appellant's contention in this respect. The difficulty with his position is that his only direct affirmative attack upon the judgment is contained in his argument, and not in his pleading. His answer is strictly defensive, and consists wholly of general and special denials. There is in it no affirmative averment which can be considered as a direct attack upon the judgment. His answer is in no sense a cross-bill. Defendants' special denial that the judgment defendant, the Globe Coal Company, is identical with the company of which defendant was a member avails him little. The evidence is against him on that question. We must hold, therefore, that the defendant by his pleading presents no direct attack upon the judgment, and that the judgment must be deemed valid. The judgment, however, only purports to be against the firm as such. It does not purport to be against the defendant personally. The defendant is not liable upon it personally, nor can his property be appropriated to the payment of it.
III. This brings us to the question whether Wheeler was guilty of any legal fraud upon the plaintiff in appropriating the assets of the partnership to the payment of his own claims. That plaintiff could have levied an execution upon the assets of the firm while they remained such is manifest. It did not do so. That Wheeler was a creditor of the Globe Coal Company to the extent of $ 3,000 must be deemed a fact in the case. This was so recognized in the settlement between the partners. There is no evidence that he ever agreed to put up more than $ 10,000 capital against the labor of his copartner. If he was a creditor, he had a legal right to receive payment of...
To continue reading
Request your trial