Deeds v. Gilmer

• Decision Date: 11 April 1934
• Citation: 162 Va. 157
• Parties: JOHN W. B. DEEDS, RECEIVER, B. C. SALES COMPANY, INC., PULASKI VENEER CORPORATION, AND T. C. COLEMAN v. H. C. GILMER, RECEIVER, FIREPROOF WOOD PRODUCTS CORPORATION, A. E. BOGER, ET ALS., AND A. E. BOGER v. H. C. GILMER, RECEIVER, ET ALS.
• Court: Virginia Supreme Court

Page 157

162 Va. 157

JOHN W. B. DEEDS, RECEIVER, B. C. SALES COMPANY, INC., PULASKI VENEER CORPORATION, AND T. C. COLEMAN v. H. C. GILMER, RECEIVER, FIREPROOF WOOD PRODUCTS CORPORATION, A. E. BOGER, ET ALS., AND A. E. BOGER v. H. C. GILMER, RECEIVER, ET ALS.

Supreme Court of Virginia, Richmond.

April 11, 1934.

Present, Campbell, C.J., and Holt, Epes, Hudgins, Gregory and Browning, JJ.

1. APPEAL AND ERROR — Motion to Dismiss as Improvidently Awarded — Presentation with Petition of a Transcript of the Record — Section 6339 of the Code of 1930 — Moot Question — Petition Good as Assignment of Cross-Error — Case at Bar. — In the instant case there was a motion to dismiss a defendant's appeal as having been improvidently awarded, because he did not present with the petition a transcript of the record as required by section 6339 of the Code of 1930. The motion to dismiss presented purely a moot question, the discussion of which is without point. The defendant in question was a party defendant to the original petition for an appeal, and his petition was certainly a good assignment of cross-error, regardless of whether the appeal allowed him was improvidently awarded or not.

Held: That the motion to dismiss the appeal as improvidently awarded should be overruled.

2. OFFICERS AND AGENTS OF PRIVATE CORPORATIONS — Agreement between President of Corporation and Salesman of the Corporation, under Which the President Was to Share in the Profits of the Salesman's Agreement with the Corporation — Whether Agreement Void or Voidable — Case at Bar. — In the instant case there was an agreement between the president of a corporation and a salesman of the corporation, under which the president was to share in the profits of the salesman's contracts with the corporation. The salesman contended that this agreement was void or voidable by him because it constituted a secret arrangement made by the president to permit him to participate in the profits of the salesman's contracts with the corporation without the corporation or others interested therein knowing of his participation. This contention was not sustained by the evidence, which showed that the president's agreement with the salesman that he should share in the profits of these commission contracts and that he was interested in the B. C. Sales Company, Inc., to which the contract was assigned, were not kept secret and that no attempt was made to keep them secret.

3. OFFICERS AND AGENTS OF PRIVATE CORPORATIONS — Agreement between President of Corporation and Salesman of the Corporation, under Which the President Was to Share in the Profits of the Salesman's Agreement with the Corporation — Whether Agreement Void or Voidable — Agreement Not Known to All the Stockholders of the Corporation — Case at Bar. — In the instant case there was an agreement between the president of a corporation and a salesman of the corporation, under which the president was to share in the profits of the salesman's contracts with the corporation. The salesman contended that this agreement was void or voidable by him because it was made without the consent of all the stockholders of the corporation.

Held: That this contention could not be sustained.

4. OFFICERS AND AGENTS OF PRIVATE CORPORATIONS — Participation of Officer in Profits of Contract between a Third Party and the Corporation — Absence of Bad Faith toward the Corporation. — Ordinarily, in the absence of proof of actual bad faith toward the corporation on the part of the officer or director, a contract between him and a third party by which he participates in the profits of a contract between the third party and the corporation is not per se void or voidable as between him and the third party.

5. OFFICERS AND AGENTS OF PRIVATE CORPORATIONS — Participation of Officers in Profits of Contract between a Third Party and the Corporation — Equities in Favor of Corporation. — Generally any equities which arise from the participation of an officer in the profits of a contract between a third party and the corporation are equities in favor of the corporation or its stockholders and not of the third party.

6. OFFICERS AND AGENTS OF PRIVATE CORPORATIONS — Contract between Officer and Salesman, under Which Officer Was to Share in the Profits of the Salesman — Evidence Insufficient to Show that Officer Was Guilty of Moral Turpitude or Bad Faith — Case at Bar. — In the instant case the evidence was insufficient to show that the president of a corporation had been guilty of any moral turpitude or bad faith towards the corporation in entering into a contract with a salesman under which the president was entitled to share in the profits of the salesman's commissions.

7. PARTNERSHIP — Consideration for Partnership — Consent of One Partner to the Other Partner's Devoting His Time to Semi-Competitive Business. — The consent of one partner to the other partner's devoting his time and attention, or a part of it, to a semi-competitive business was a sufficient consideration for the other partner's agreement to treat his commission contract as a part of the business of the partnership formed between him and the president of a corporation.

8. ASSIGNMENTS — Consideration — Case at Bar. — In the instant case it was mutually agreed between the president of a corporation and a salesman, partners, that the partnership should be incorporated and its business transferred to the corporation. This was held a sufficient consideration for the assignment of a contract constituting a part of the partnership business to the newly-formed corporation.

9. CORPORATIONS — Contract between President of Corporation and Salesman — Promise of President to Perpetuate Salesman's Commission Agreement — Case at Bar. — In the instant case a salesman contended that assignment by him of his sales contract to a partnership consisting of himself and the president of the corporation, with which he had made a sales contract, was void because the consideration for the assignment was a promise to him by the president that he would see that the contract was perpetuated, and that this promise was a breach of trust on the president's part towards the corporation and was not kept by the president. The weight of the evidence was that the president did not make any such promise to the salesman; that the salesman's own testimony showed that he had agreed with the president that his contract with the corporation should be treated as a part of the salesman's and president's partnership business some time before he claims that the president made this promise.

10. CORPORATIONS — Contracts — Duress — Case at Bar. — In the instant case there was no evidence which tended to show that the president of a corporation did anything which could be considered as using his relationship with the corporation to coerce a salesman to put his contract with the corporation into the partnership business, the partnership consisting of the salesman and the president. It was plain that the salesman acted of his own free will in the matter and that his suggestion of duress or coercion was an afterthought, born long after he had assigned his contract to the partnership.

11. PARTNERSHIP — Capital Contributed to Partnership — Proceeds Received by Salesman from His Contract — Case at Bar. — In the instant case a salesman of a corporation and the president of the corporation entered into a partnership and the salesman assigned his commission contract with the corporation to the partnership. The salesman contended that the proceeds received from his commission contract were capital contributed by him to the partnership.

Held: That this contention was chimerical. They did not bear a single earmark of capital contributed to either a partnership or a corporation, so as to entitle the salesman thereto on dissolution of the partnership.

12. ASSIGNMENTS — Validity of Assignment — Validity of Agreements between President of Corporation and Salesman of the Corporation — Case at Bar. — In the instant case the president of a corporation and a salesman formed a partnership and the salesman assigned to the corporation to be formed his sales contract with the first corporation.

Held: That the assignment to the corporation to be formed and the agreements between the salesman and the president of the corporation were valid and enforceable.

13. PARTNERSHIP — Keeping of Accounts Left to One Partner — Liability of Such Partner. — Where two equal owners of a proposed corporation left the keeping of the accounts entirely to one owner, as between that owner on the one side and the other owner and the proposed corporation on the other, the burden rested on the owner to whom the keeping of the accounts was left to show what part of the funds were properly used for the expenses of the business, and such owner is personally chargeable with all that he does not show were so used.

14. PARTNERSHIP — Corporations. — Where a corporate entity was disregarded and the business carried on as a partnership composed of two equal owners of the corporation, it was held that the evidence was insufficient to sustain a finding that all the money received by the corporation and expended by one owner went to the payment of the expenses of the business.

15. CONSOLIDATION OF ACTIONS — Whether Causes Become One Suit. — When causes are consolidated, the several suits or proceedings do not become one suit. The parties in one suit do not become parties to the other, and their rights still depend or turn on the pleadings, proof, and proceedings in the respective causes. The issues remain precisely as they were, and are to be determined exactly as if the cases had been heard separately. In short, the consolidation (in equity) merely operates to carry on together two separate suits supposed to involve identical issues, and is intended to expedite the hearing and diminish the expense.

16. PARTNERSHIP — Corporations — Corporation Disregarded by Its Owners and Dealt with...