Devore v. Woodruff

• Decision Date: 06 May 1890
• Docket Number: 6731
• Citation: 45 N.W. 701,1 N.D. 143
• Court: North Dakota Supreme Court

45 N.W. 701

1 N.D. 143

THOMAS J. DEVORE, Plaintiff and Respondent, v. THOMAS S. WOODRUFF, Defendant and Appellant

No. 6731

Supreme Court of North Dakota

May 6, 1890

APPEAL from district court, Cass county; Hon. WILLIAM B. MCCONNELL Judge.

Judgment reversed and a new trial ordered.

Messrs Greene & Hildreth, for appellant, argued: That as to all transactions involved in this action the parties were partners; that the plaintiff had never demanded an accounting or dissolution, therefore this action at law for damages cannot be maintained; citing, Haskell v. Adams, 7 Pick. 59; Williams v. Henshaw, 12 id. 378; Carey v. Bruth, 2 Caines, 293; Bates on Partnership, vol. 2 § 849; Nugent v. Locke, 4 Cal. 320.

That as to the land near Fargo, there was no proof of indebtedness from defendant to plaintiff; if there was such indebtedness, it was extinguished by the deed from defendant to plaintiff; citing, Hayes v. Carr, 83 Ind. 275; Conroy's Executors v. Alexander, 7 Cranch, 218; Flagg v. Mann, 14 Pick. 467; Jones on Mtgs., §§ 259, 261; Smith v. Crosby, 47 Wis. 160. The transfer, with privilege of repurchase, was a sale on condition. Sacton v. Hitchcock, 47 Barb. 220; Sentland v. Sentland, 3 Mich. 482; Coe v. Cassidy, 6 Daly, 645; Turner v. Kerr, 44 Wis. 433; Lee v. Kilburn, 3 Gray, 594; Baker v. Thresher, 4 Denio, 493; Hilliard on Mtgs., vol. 1, p. 96; Kent, vol. 4, p. 147; Holmes v. Grant, 8 Paige, 243; Woodward v. Pickett, 8 Gray, 617; Henly v. Houghtaling, 41 Cal. 22; McNamara v. Culver, 22 Kan. 661; Garsert v. Boyk, 1 Mont. 240; Horback v. Hill, 112 U.S. 144.

Messrs. Ball & Smith, for the respondent, argued: That the partnership had been dissolved by mutual consent, and by a completion of the business for which it was formed. Rohrer v. Drake, 33 Minn. 408. The partnership affairs have all been settled. One partner can sue another, even on an obligation pertaining to the partnership business, if the obligation can be determined without going into the partnership accounts. Croter v. Benninger, 45 N.Y. 545; Clark v. Mills, 13 P. 569. In this case an adjustment of the partnership affairs may be effected in an action at law. Thompson v. Lowe, 12 N.E. 486. Where fraud exists action may be maintained against a copartner before final settlement. Sprout v. Crowley, 30 Wis. 187. Where one partner lends another the means to pay latter's share of capital, it has been held not a partnership transaction. Bull v. Coe, 18 P. 808; Wetherbee v. Potter, 99 Mass. 354; Dunphy v. Ryan, 116 U.S. 491.

Under code system of pleading, the court can give relief, irrespective of the prayer of the complaint, and if appellant had asked for an accounting he could have had it; but he, without objection, proceeded to trial by jury, and thereafter abandoned his demand for an accounting. Washburn v. Mendenhall, 21 Minn. 332.

The deed and agreement to reconvey amounted to a mortgage. Cornell v. Hall, 22 Mich. 377; Smith v. Crosby, 47 Wis. 160; Jones on Mtgs., §§ 258-61; Montgomery v. Chadwick, 7 Iowa 114.

CORLISS, C. J. WALLIN, J., having been of counsel in this case did not sit; TEMPLETON, J., of the first district, sitting in his place.

OPINION

CORLISS, C. J.

In January, 1882, plaintiff and defendant entered into an oral agreement under which plaintiff, who resided in the east, and had some capital, was to furnish money to purchase real estate in the west for speculation; the defendant agreeing to make the purchases, and do all things necessary in the business, without compensation for his time and expenses--the two dividing the profits of the venture between them. This general statement of the compact between the parties is sufficient to present the first question to be considered on this appeal. In the court below, the plaintiff recovered judgment against defendant for over $ 9,000, and a part of this recovery is based on a written agreement between the parties growing out of the following facts: In the course of their dealings defendant purchased an eighty-acre tract of land near the city of Fargo, and took the deed thereof in the names of himself and the plaintiff. All the money that was paid on this purchase was furnished by the plaintiff, being $ 7,100; and the balance of the purchase money, $ 2,500, was secured by their joint note and mortgage. Subsequently, and in October, 1882, the defendant executed to plaintiff a warranty deed for his half interest, in the legal title to this property, and as part of the same transaction the plaintiff signed and delivered to defendant an agreement which is, in substance, as follows: "Agreement made and entered into this 7th day of October, 1882, by and between Thomas J. Devore, * * * party of the first part, and Thomas S. Woodruff, * * * party of the second part. Whereas, the party of the second part has purchased for himself and party of the first part [certain lands described,] paying therefore $ 7,100 of moneys of party of the first part therefor, executing a mortgage for balance of purchase money in the sum of $ 2,500, with interest from June 7th, 1882, making the total amount of said purchase $ 9,600, now this agreement witnesseth that the party of the second part, for the purpose of securing the party of the first part for the moneys paid by him upon this purchase, has this day deeded his interest in said eighty acres of land to said party of the first part for the nominal sum of one dollar, the party of the first part agreeing to assume the payment of the mortgage and note jointly executed by party of the first part and party of the second part, made payable to C. D. Boughton, of Fargo, for the sum of twenty-five hundred dollars, and interest from June 7, 1882. And it is further agreed, by the party of the first part that, in consideration of the sum of one dollar to him in hand paid by the party of the second part, the receipt whereof is hereby acknowledged, said party of the second part shall have the right at any time, upon making tender to the party of the first part, his heirs, executors, or administrators, of the sum of forty-eight hundred dollars, together with legal interest thereon, to be computed from and after one year from the date of the purchase of said eighty acres, to-wit: June 7, 1883, to receive from the party of the first part, his heirs, executors, or administrators, a good and sufficient deed of general warranty of the undivided one-half of said eighty acres of land, * * * * And it is further agreed that party of the first part, his heirs, executors, or administrators, shall not sell or dispose of said eighty acres of land without the consent in writing of party of the second part first obtained thereto. And it is further agreed that, should an opportunity present itself to sell said eighty acres of land at such an advance as shall be agreed upon, that the rights of party of the second part to become the purchaser thereof shall in no way be prejudiced, but his rights shall be and remain the same as an owner of an undivided one-half of said eighty acres, upon payment to party of the first part, his heirs, executors, or administrators, of the said sum of forty-eight hundred dollars, with interest from June 7, 1883, as aforesaid; this contract to be and remain in force for the period of five years. In witness whereof the party of the first part hath hereunto set his hand and seal this 7th day of October, A. D. 1882."

On the trial the court charged, as a matter of law, this transaction established a liability against the defendant for the sum of $ 4,800 and interest. This is assigned as error. Assuming without deciding, that under the original agreement between the parties the defendant was liable to plaintiff for one-half of the purchase price of the property, it is still clear that the parties could, by settlement, extinguish that liability; and this is what defendant insists was done when the deed and contract were executed. The trial court held that the papers conclusively showed an intention to secure to plaintiff this sum of $ 4,800 claimed to be owing him from defendant. In this we think the court erred. That the parties could enter into a contract to deed the property to plaintiff absolutely, giving the defendant a mere option to repurchase one-half thereof, cannot be doubted. If this transaction can be said to be clear on its face, this is its proper interpretation. It will be noticed, in the agreement already set forth, the plaintiff agrees to assume the payment of the note and mortgage executed by him and defendant jointly to secure the unpaid purchase price of the property. He certainly did not intend by this agreement to release defendant from liability to the holder of such note and mortgage, as that he could not do without the consent of such holder. It cannot be said that he intended to take upon himself the payment of this whole mortgage debt as between himself and defendant, and yet hold defendant to his liability to pay one-half of the purchase price of the property of which it formed part. If the debt of defendant to plaintiff for one-half of the money advanced by the latter to the former was to stand, plaintiff would not have agreed with defendant that he would assume and pay defendant's one-half of the mortgage debt; for, if it was the intention to continue the old relation between the parties, the plaintiff would have left his relations with defendant untouched as to the mortgage debt, and taken the deed merely as security for what he had actually paid. It is singular that the plaintiff, intending to hold defendant to his liability for his half of the purchase price, $ 4,800, should, in the transaction which it is claimed evinces such intention, take upon himself the burden of defendant's half of the mortgage debt of $ 2,500.

We think this assumption...