Church v. Adams

• Decision Date: 02 July 1900
• Citation: 37 Or. 355,61 P. 639
• Parties: CHURCH v. ADAMS.
• Court: Oregon Supreme Court

61 P. 639

37 Or. 355

CHURCH v. ADAMS.

Supreme Court of Oregon

July 2, 1900

Appeal from circuit court, Malheur county; M.D. Clifford, Judge.

Action by J.M. Church, administrator of the estate of R.M. Steel deceased, against I.H. Adams. From a decree, plaintiff appeals. Modified.

C.H Finn, for appellant.

J.A Fee for respondent.

BEAN J.

This is an appeal from part of a decree in a suit brought by plaintiff's intestate to dissolve a partnership and for an accounting. The only question for the consideration of this court is whether two tracts of land, known and referred to in the record as the "Timber-Culture Claim" and the "Weaver Place," belong to, and are part of, the partnership assets. On November 17, 1885, the plaintiff's intestate, R.M. Steel, and the defendant, Adams, entered into a partnership, to continue for 10 years, under the firm name and style of Steel & Adams, for the purpose of carrying on the business of farming and stock raising in Baker county. Under the terms of the partnership agreement Steel was to, and did, advance to the partnership $10,000, to remain invested in the business during its continuance, in consideration of which Adams agreed to furnish the labor and services of himself and family in the prosecution and management of the business. At the time of the formation of the partnership, Adams was the owner of a pre-emption claim consisting of 160 acres, and a timber-culture filing on another quarter section, one-quarter interest in the Nevada ditch, and horses, cows, wagons, and farming machinery. Immediately after the formation of the partnership, the firm purchased of Adams the property then owned by him for $11,601, paying for it with the $10,000 advanced by Steel and $1,601 loaned by him to the company on its demand note. The partnership continued the business until the expiration of the time limited in the articles of co-partnership, at which time, the parties being unable to settle their affairs, this suit was brought by Steel for a dissolution of the partnership and an accounting, pending which Steel died, and Church, having been appointed administrator of his estate, was substituted as plaintiff.

The questions presented are, first, whether Adams' timber-culture claim is part of the assets of the partnership. At the time of its formation, there were present and participating in the negotiations R.M. Steel, his son, George A. Steel, and the defendant, Adams, and upon the testimony of these three persons must the question be determined.

R.M. Steel, in referring to the matter, says, in answer to interrogatory No. 16: "Two thousand dollars of the amount furnished by me to the firm of Steel & Adams, on November 18, 1885, which was paid to I.H. Adams immediately after coming into possession of the firm, was invested in land, that sum being paid for the east half of the northeast quarter, and the east half of the southeast quarter, of section twenty-four;" and in answer to interrogatory No. 17: "Two hundred dollars was paid for the improvements on the west half of the southeast quarter, and the east half of the southwest quarter, of same section, this sum being for improvements consisting of fifteen acres of clearing and five hundred trees; the title to the land being then in the United States, the defendant having entered same under the timber-culture act. All subsequent improvements were to be made at the expense of the firm, including fees for making final proof, and when patent issued defendant was to deed the land to the firm forthwith, without further consideration. *** Defendant had no means at the time articles of co-partnership were entered into, except such property as he sold the firm, and all the moneys so received for said property were required and used to pay his indebtedness. I do not know of his having acquired any means in his own right since that time, as his time has been devoted to the care and management of the business of the firm without salary, the necessary wearing apparel for defendant and his family even having been purchased from firm assets and advanced to defendant, no part of which advances have been reimbursed to the firm. I believe defendant claims now to own said timber culture in his own right, notwithstanding the fact that all his rights to same were purchased by the firm immediately after its organization, and that it always has been considered to be firm property. The subsequent improvements on the land were all made by the firm, and cost probably two or three thousand dollars."

George A. Steel, the confidential clerk and accountant of his father, took part in the negotiations leading to the formation of the partnership, and has since been more or less familiar with its business. He says, in answer to interrogatory No. 16: "From the sum of $10,000 invested by the plaintiff in accordance with the articles of co-partnership, November 18, 1885, and the sum of $1,601, loaned by the plaintiff to the partnership on that date, which were invested at the same time, the sum of $2,000 was invested in the east half of the northeast quarter, and the east half of the southeast quarter, of section twenty-four;" and, in answer to interrogatory No. 17, says: "Seventy-five dollars was advanced and paid to defendant for clearing the fifteen acres, and one hundred and twenty-five dollars was paid the defendant for trees set out and growing on the west half of the southeast quarter, and the west half of the southwest quarter, of said section twenty-four, which land belonged at that time to the government, and which the defendant had entered under the timber-culture act. It was agreed between the defendant and plaintiff that in consideration of the formation of the partnership and the purchase of property from the defendant, as contemplated thereby, and the payment of the sum of two hundred dollars above mentioned, together with the making of all subsequent improvements necessary to enable the defendant to make final proof upon said land, the defendant was to deed the said land to the firm so soon as he received the patent therefor. At the time of the formation of the partnership, and upon facts furnished from statements made to me by the defendant, I made up a schedule of all property owned or controlled by him at that time after he should have repurchased from the Oregon Construction Company certain freight teams fully equipped, which he had theretofore sold them, which said schedule, marked 'Exhibit D,' is attached to the deposition of R.M. Steel in this case. The total amount of property, according to the valuation placed thereon by the defendant, amounted to the sum of $12,011. This valuation was afterwards reduced by agreement between plaintiff and defendant by the sum of $410, leaving the balance of the property, as agreed upon between plaintiff and defendant, $11,601, which sum was afterwards paid defendant by the firm for such property. *** I know of no means acquired by the defendant in his own right since the formation of the partnership. The west half of the southeast quarter, and the east half of the southwest quarter, of said section twenty-four, known as the 'Timber Claim,' has always been held, used, and considered to be property belonging to the firm, and improvements thereon, which have been very extensive, have been made by the firm in such a manner as would not have been...