Einstein v. Schnebly

• Decision Date: 16 August 1898
• Docket Number: 771.
• Citation: 89 F. 540
• Parties: EINSTEIN v. SCHNEBLY.
• Court: U.S. District Court — Southern District of California

89 F. 540

EINSTEIN v. SCHNEBLY.

No. 771.

United States Circuit Court, S.D. California.

August 16, 1898

R.R Bigelow and G. W. Baker, for complainant.

Oscar A. Trippet, for defendant.

WELLBORN District Judge.

This is a suit for the dissolution and winding up of the affairs of a partnership, and for the appointment, in the meantime, of a receiver. The bill alleges as follows:

That on March 1, 1888, E. M. Frank, complainant's assignor entered into a contract with F. F. Adams, defendant's assignor, of which the following is a copy:

'This agreement, made and entered into the first day of March A.D. 1888, by and between E. M. Frank, party of the first part, and F. F. Adams, party of the second part, both of the county of San Diego, in the state of California, witnesseth: Whereas, the said parties own, as tenants in common, a certain farm or ranch, called the 'Hicks Place,' situated about two miles east of the village of Fallbrook, in said county, and containing four hundred and eighty-eight acres, more or less, an are desirous of improving the same, and developing the productive capacity ?hereof, therefore, it is agreed by and between the said parties that the said first party shall advance the necessary capital and money for the purpose of improving the said ranch, planting olive, orange, and other trees, and developing water thereof, and making other betterments upon the same; and that said ranch shall be so improved, the present cost of such improvement being defrayed by the said first party; that the said party of the second part shall devote so much of his time and attention as may reasonably be necessary and proper in the oversight and supervision of such improvements and the making of the same, and the general development of the said ranch as the betterment thereof shall proceed by the expenditure of the capital of the first party as aforesaid; that the said party of the first part shall charge no interest for the money and capital invested by him in the improvement of said ranch, but the interest on the capital so employed shall be considered as offset and compensated for by the time and attention to be given to the supervision of the work of such improvement by the said second party, as above stipulated. The said party of the first part, however, shall receive and be repaid the capital and money so to be by him advanced for the purposes aforesaid out of the net returns and proceeds to arise from the improvements, tree plantations, and other betterments to be made on said ranch, pursuant to this agreement, and the said party of the second part shall not be entitled to participate in such net returns and proceeds until the whole of the said capital advanced by the first party as aforesaid shall have been repaid to him, the said first party; but, when said first party shall have been so repaid the whole of his advances for the purposes aforesaid, thereafter the income and returns from such improvements shall be divided equally between the said parties, and they shall share equally the cost and expense and labor of the supervision of the said ranch so improved. It is understood that the foregoing agreement does not relate to the ordinary annual cropping of said land in which the said parties are engaged. As to such annual croppings, the said parties bear equally the burden and expense of the same, including the work of the superintendence, and share equally in the profits. In witness whereof the parties hereto have hereunto set their hands and seals the day and year first above written. In duplicate.

E. M. Frank. 'F. F. Adams.'

That afterwards, on September 19, 1891, the parties to said contract purchased other tracts of land, amounting to 160 acres, for their mutual interests, and which were also held and occupied by them as co-partners under the terms of said contract. That immediately after the making of said contract said Frank and Adams proceeded to fence said lands, and plant the same with a variety of fruit trees, consisting of orange, olive, apricot, and lemon, and other trees and vines, to the extent of 200 acres; to erect on said lands all necessary houses, barns, and other buildings suitable for the purposes contemplated in said contract; to provide conveniences for the cultivation of said land, and water rights, pipes, reservoirs, aqueducts, and other irrigating facilities, pursuant to the ends and objects of said agreement. That the improvements made on said lands, aside from the trees and vines, consist of a dwelling house and furniture, which cost about $4,500; a barn, granaries, sheds, mess house, and other outbuildings, which cost about $3,500; a reservoir, water pipe, tunnel, and other appurtenances, including a suction engine and pump, which cost about $6,000; the necessary fencing of said land, which cost about the sum of $2,000,-- amounting in all to the sum of $16,000,-- said improvements being of a permanent nature, and of such character that no revenue could be derived from them except as they contributed to the market value of said land. That all of said improvements were paid for by funds advanced by said E. M. Frank and the complainant. That on July 30, 1891, said Frank and Adams entered into a further agreement, in words and figures following:

'This supplemental agreement by and between F. F. Adams, of San Diego county, California, and E. M. Frank, of San Francisco, California, made and entered into this 30th day of July, A.D. 1891, witnesseth: That whereas, on March 1st, 1888, an agreement was entered into by the above parties reciting all facts regarding ownership and management of the certain ranch known as the 'Red Mountain Ranch,' near Fallbrook, in San Diego county, California; and whereas, in that agreement, E. M. Frank did agree to advance all necessary moneys for the purpose of putting said 'Red Mountain Ranch' in productive position, and that said moneys so advanced by said E. M. Frank were to be paid back to said E. M. Frank out of the first products of the place, and to be, in fact, a lien upon said ranch until so paid: It is hereby mutually understood by the parties to this agreement that the amount so advanced up to date is the sum of thirty-three thousand six hundred and forty-eight and 10/100 ($33,648.10) dollars, subject to all the provisions of the agreement of March 1st, 1888. In witness whereof, we have hereunto set our hands and seals this 30th day of July, A.D. 1891,

'F. F. Adams. 'E. M. Frank.'

That on December 6, 1892, said Frank, by and with the consent in writing of said Adams, sold and assigned to the complainant all of his right, title, and interest in said partnership and said land, and said agreements of March 1, 1888, and July 30, 1891, and all moneys theretofore advanced by him under said agreements; and thereafter complainant and said Adams became partners in said property, and complainant continued to advance all necessary moneys under said agreements, and in all respects carried out said agreements. That on January 8, 1896, said Adams sold and assigned all his right, title, and interest in said partnership and lands and said agreements to the defendant, F. D. Schnebly. That on April 24, 1896, complainant and defendant entered into the following agreement:

'This agreement, made and entered into this 13th day of April, 1896, between F. D. Schnebly and Jacob Einstein, witnesseth: That whereas, on the 1st day of March, 1888, the real estate hereinafter described was owned and held in co-tenancy by F. F. Adams and E. M. Frank, each owing one undivided one-half thereof, and on said day they entered into an agreement of which the following is a copy:

"This agreement, made and entered into the first day of March, A.D. 1888, by and between E. M. Frank, party of the first part, and F. F. Adams, party of the second part, witnesseth: Whereas, the said parties own, as tenants in common, a certain farm or ranch, called the 'Hicks Place,' situated about two miles east of the village of Fallbrook, in said county, and containing four hundred and eighty-eight acres, more or less, and are desirous of improving the same, and developing the productive capacity thereof, therefore it is agreed by and between the said parties that the said first party shall advance the necessary capital and money for the purpose of improving the said ranch, planting olive, orange, and other trees, and developing water thereof, and making other betterments upon the same; and that said ranch shall be so improved, the present cost of such improvement being defrayed by the said first party; that the said party of the second part shall devote so much of his time and attention as may be reasonably necessary and proper in the oversight and supervision of such improvements and the making of the same, and the general development of the said ranch, as the betterment thereof shall proceed by the expenditure of the capital of the first party as aforesaid; that the said party of the first part shall charge no interest for the money and capital invested by him in the improvement of said ranch, but the interest on the capital so employed shall

be considered as offset and compensated for by the time and attention to be given to the supervision of the work of such improvements by the said second party as above stipulated. The said party of the first part, however, shall receive and be repaid the capital and money so to be by him advanced for the purposes aforesaid out of the net returns and proceeds to arise from the improvements, tree plantations, and other betterments to be made on said ranch, pursuant to this agreement, and the said party of the second part shall not be entitled to participate in such net returns and proceeds until the whole of the said capital advanced by the first p...