Caplen v. Cox

• Decision Date: 12 March 1906
• Citation: 92 S.W. 1048
• Parties: CAPLEN v. COX.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Court of Appeals

92 S.W. 1048

CAPLEN v. COX.^*

Court of Civil Appeals of Texas.

March 12, 1906.

Rehearing Denied April 26, 1906.

Appeal from District Court, Grimes County; Gordon Boone, Judge.

Action by John A. Caplen against Robert H. Cox. Judgment for defendant. Plaintiff appeals. Reversed and remanded, subject to remittitur.

W. W. Meachum, S. S. Hanscom, and Clay S. Briggs, for appellant. John M. King and McDonald Meachum, for appellee.

REESE, J.

This suit was brought by John A. Caplen against Robert H. Cox for settlement of a partnership between them, and to recover the balance alleged to be due him by Cox after settlement of the partnership business. Cox answered by general demurrer and general denial, and by special plea in the nature of a cross-bill alleged that he had been induced to enter into the partnership by the false and fraudulent representations of Caplen, and praying that the partnership be dissolved and that he have judgment for the amount of his investment and interest and the value of his services in conducting the business, less the amount drawn out by him. Upon trial before the court without a jury defendant, Cox, had judgment for the amount of his original investment, with interest from the date of the partnership agreement, and $75 per month from that date until the cessation of the business thereunder for his services, less the amount actually received by Cox out of the business, in the aggregate $2,512.64. From this judgment Caplen appeals.

It was alleged in the petition: That on October 16, 1901, appellant and appellee had entered into a written agreement of partnership to carry on a general merchandise business in Navasota, Grimes county, Tex., under the firm name of Robert H. Cox & Co., appellant to be a silent partner. That appellant put into the business $8,111 and appellee $1,180, making a total capital of $9,291. Appellee was to have charge of the business, so far as selling was concerned. Appellant was to do the buying and was to handle all cash. Each party was to be allowed to draw $75 per month, and no more, for personal expenses. The partnership was to continue for five years, but might be dissolved at any time by Caplen or by mutual agreement. That the business had run down, the sales were not sufficient to meet current expenses, and Caplen, not being satisfied, had dissolved the partnership, as he had a right to do under the agreement. Appellant prayed for an injunction, the appointment of a receiver, and that an auditor be appointed, and for judgment for what might be found to be due him upon a statement of the accounts between them. Appellee, after general demurrer and general denial, pleaded specially that on or about October 16, 1901, he was engaged in business in Galveston, owning a stock of goods of the value of $3,678.30, with a liability thereon of $1,228.21, leaving a net value of $2,450.09, and that appellant was also engaged in business in Navasota, having a stock of goods at that point; that appellant proposed to appellee that they form a partnership whereby the stock of each should be put into said partnership as the assets of the firm to be known as "R. H. Cox & Co."; that appellee should remove his stock of goods from Galveston to Navasota, the partnership business to be conducted at Navasota; that, in order to induce appellee to enter into said partnership, appellant falsely and fraudulently represented to appellee that the reasonable value of appellant's stock was $8,111, and that appellant knew that such representations were false and fraudulent; that appellant's stock was of the reasonable value of $3,443, and such false representations were made by appellant with a design of deceiving appellee, and to induce him to make said partnership; that appellee did not know of the falsity of said representations, and was deceived thereby, and he believed them to be true at the time made, and acted upon same, and was induced thereby to enter into the partnership; that he did not know the reasonable value of said stock of appellant, and had never seen same, etc.; that in plaintiff's petition it is stipulated that appellee put into said partnership $1,180, and that appellant put in $8,111, but in truth neither put in any money, but put in their stock of goods, etc., as aforesaid; that in truth and in fact the reasonable value of appellee's stock of goods, etc., was $3,678, with a liability of $1,228, leaving a net value of $2,450, which was its true value; that appellee was induced by appellant to put in said stock at said agreed value of $1,180; that appellee closed his business in Galveston, and moved his stock of goods, etc., to Navasota, and took charge of said business, devoting his entire time and attention to same from October 16, 1901, until about April 1, 1903, until he discovered the alleged fraud, whereupon he repudiated said contract and demanded of appellant restitution; that his services during the time he was employed in said business was of the reasonable value of $1,627.70, prays that said contract be held null and void; that he recover of appellant the full value of his said stock of goods, etc., to wit, the sum of $2,450, with interest thereon, together with reasonable compensation for his services rendered to said partnership; that he be protected by the judgment of the court from any liability arising out of the business of the firm, and for general relief. An auditor was appointed, who in his report found that the amount of appellant's original investment was $4,825.51 and appellee's original investment $1,180.38. The auditor reports an indebtedness of appellee to appellant upon a statement of the accounts of either $556.79 or $1,757.02, depending upon whether the stock on hand is to be taken at its invoice value or the amount for which it had been sold by the sheriff during the pendency of the suit. Appellee filed objections to several items of the auditor's report, but afterwards withdrew all of them except those to that part of the report in which the original investment of appellee is placed at $1,180.38.

If the view taken of the case by the court was correct, the only part of the auditor's report material to the issues were the findings of the amount of the respective investments of appellant and appellee and the amount withdrawn by appellee while carrying on the business. The trial court filed findings of fact as follows, which we find to be supported by the evidence, and which are here adopted: "(1) That on or about the 16th day of October, A. D. 1901, the defendant, R. H. Cox, was engaged in the mercantile business in the city of Galveston, Galveston county, Tex., and owned a stock of goods, wares, and merchandise and fixtures of the value of $3,678.30, with a liability thereon of $1,228.21, having a net value of $2,450.09. (2) That on or about said date plaintiff was engaged in the mercantile business in Navasota, in Grimes county, Tex., with E. B. Deason, under the firm name of E. B. Deason & Co., owning and operating under said business two stocks of goods, one in a building known as the `Vaughan Building' and the other in a building known as the `Smith Building'; both of said stocks of goods, wares, and merchandise and fixtures being of the aggregate value of $4,825.51. (3) That on or about the 16th day of October, A. D. 1901, plaintiff, Caplen, proposed to defendant, Cox, that they form a copartnership and combine the stocks of E. B. Deason & Co. and the stock of R. H. Cox and conduct the business in Navasota, Grimes county, Tex., under the name of R. H. Cox & Co., such combined stock to become the assets of said firm and be operated as one business under one management, Caplen to buy out his partner, E. B. Deason, and the firm to be composed of Caplen and Cox. (4) That, in order to induce Cox to enter into such copartnership, Caplen represented to Cox that the stock of goods, wares, and merchandise, fixtures, etc., owned by him, known as the `E. B. Deason & Co's. stocks' was of the value of $7,000 or $8,000, or of a value more than twice the value of the stock, etc., owned by Cox. (5) That Caplen and Cox were on terms of friendly relations and had been for many years prior to said date, and Cox reposed great confidence in Caplen and placed great faith in his statements and representations...