Forbes v. Butler

• Decision Date: 14 December 1925
• Docket Number: 4277
• Citation: 66 Utah 373,242 P. 950
• Court: Utah Supreme Court
• Parties: FORBES v. BUTLER et al

242 P. 950

66 Utah 373

FORBES v. BUTLER et al

No. 4277

Supreme Court of Utah

December 14, 1925

Rehearing denied February 4, 1926.

Appeal from District Court, Fifth District, Iron County; T. H Burton, Judge.

Suit by Raymond T. Forbes against William W. Butler and others. Judgment for defendants and plaintiff appeals.

JUDGMENT REVERSED AND RENDERED, and cause remanded with directions.

Walton Walton & Nelson and Fisher Harris, all of Salt Lake City, for appellant.

Sam Cline, of Milford, for respondents.

THURMAN, J. GIDEON, C. J., and FRICK, CHERRY, and STRAUP, JJ., concur.

OPINION

THURMAN, J.

The complaint, in substance, alleges that in October, 1922, plaintiff and defendant Butler, hereinafter called Butler, entered into a joint venture for the disposal of a certain option which Butler held for the sale of 11,040 acres of land situated in Iron county, Utah. The lands were owned by the Iron Springs Sheep Company, hereinafter called the corporation.

Plaintiff alleges that the agreement between him and Butler was that they were to use their joint efforts to dispose of the land at a profit, and were to share equally in the expenses incident thereto and in the profits, and that they each made efforts and incurred expenses in that behalf; that a purchaser was found by said parties at a gross profit of $ 10,000, of which Butler had received $ 5,000 and the corporation the remainder of the purchase price, except the sum of $ 22,500; that the corporation conveyed the property to said purchaser and took a note and mortgage thereon for $ 27,500, which mortgage secured payment of the sum of $ 5,000 to be paid Butler by the corporation; that Butler has made no accounting for the money received by him, has refused to account to plaintiff, and has repudiated and disavowed the joint venture relation; that Butler is insolvent, is threatening to collect the balance from the corporation, when paid by the purchaser, and to divert the same from the funds of said joint venture and appropriate them to his own use; that he has already appropriated to his own use the $ 5,000 collected by him, and that plaintiff is without adequate remedy at law; that an accounting will show that Butler is indebted to plaintiff in the sum of $ 5,000; that the said option agreement is in Butler's name, but that plaintiff is, and at all times has been, equally interested therein. Plaintiff prays that the agreement of joint venture be established, confirmed, dissolved, and settled; that Butler be required to render an accounting, and that plaintiff have judgment for such sum as may be found due him thereon; that plaintiff have judgment against the corporation, to the use of himself and Butler as their interests may appear, for the balance of $ 5,000. Plaintiff prays for general relief.

The defendants filed separate answers to the complaint. The answer of Butler admits that the purchaser paid certain sums of money on the purchase price of the land, and that the corporation conveyed the land to the purchaser, taking a mortgage thereon as security for the sum of $ 24,000 instead of $ 27,500, as alleged in the complaint. He admits that he has made no accounting to plaintiff, and alleges that he is not required to make an accounting, admits that the option for the purchase and sale of the land is in his name, denies every allegation of the complaint, except as admitted, and for a further defense alleges, in substance, that on or about the 10th day of September, 1923, he was employed by the corporation to sell the land in question; that he made diligent efforts to sell the same, and expended large sums of money in traveling to various places and in advertising the land for sale but was unable to find a purchaser; that in his efforts to find a purchaser he stated to the plaintiff that, if he should find a purchaser for the land, he (Butler) would compensate him for his services; that he also made a number of like offers to numerous other persons, the compensation to such persons, as well as the plaintiff, to be contingent upon their ability to find a purchaser; that neither he nor the plaintiff was able to find a purchaser, and, after spending considerable money in advertising and trying to make a sale, and entirely failing in such effort, he gave the Milford Realty Company, a real estate firm at Milford, Utah, an option to purchase said land; that said firm found a purchaser, and a sale was consummated, but that plaintiff did not in any manner aid or assist in its consummation, and took no part or interest therein; that plaintiff never was in any manner interested in said option agreement, nor in any fees or commission received as the result of said sale, or in the promissory note given for the balance of the purchase price; that plaintiff has never paid, or offered to pay, the defendant Butler any part or portion of the moneys expended by him in effecting the sale of said lands, and has never given any consideration for the alleged interest or equity claimed herein.

The answer of the defendant corporation is substantially the same as that of the defendant Butler, except as to Butler's affirmative defense.

It may be stated now as well as later that the relation of the corporation to the case appears to be that of a stakeholder only. It was made a party to the action solely for the purpose of securing plaintiff's interest in the unpaid purchase price, in the event that plaintiff recovered judgment against the defendant Butler.

The case was tried to the court without a jury. Findings and judgment were rendered in favor of both defendants, from which judgment plaintiff appeals. The principal error assigned is that the findings are not supported by a preponderance of the evidence.

This is an action in equity, in which it is incumbent upon the court to review the evidence and decide the case according to the facts as we find them to be, bearing in mind legal presumptions in favor of the judgment. Many of the important facts are not in dispute. It will simplify the statement if at this time we summarize such facts as appear to be uncontroverted.

Defendant Butler, in September, 1922, procured an option from the corporation for the sale of 11,040 acres of land in Iron county at not less than $ 2.50 per acre net to the corporation, if sold in one parcel. There was some kind of an agreement between Butler and plaintiff in October, 1922, in respect to the disposal of the option or sale of the land. Each of them had separate business in which the other had no financial interest. After the agreement was entered into between them, they procured office rooms together in the same building. They each contributed toward the payment of the rent. Plaintiff's work was mainly in the office, taking care of correspondence, while Butler most of the time was in Salt Lake City and other places. They had one or two items of other business together, but they were of minor importance. The principal business appeared to be the sale of the land. Butler borrowed the sum of $ 1,000 before going to Salt Lake City, ostensibly for the payment of his expenses while there. Plaintiff, at Butler's request, deposited in the bank at Cedar City to Butler's credit something over $ 100 to cover Butler's checks while he was in Salt Lake City. Before going to Salt Lake City, Butler executed a power of attorney to plaintiff for the sale of the land, so that, if necessary, a deal could be closed without delay. Plaintiff and Butler corresponded by letter and telephone concerning the sale of the land, and also, to some extent, as to their separate business, each contributing toward this expense. The fact that they corresponded is not in dispute, but they do not entirely agree as to its meaning and effect. The option between Butler and the corporation would have expired December 10, 1922, had it not been renewed. The renewal required a deposit as a guaranty of fulfillment, and plaintiff, at Butler's request, deposited Liberty bonds in the sum of $ 250, and thereby procured a renewal of the option. An option for the disposal of the land was given by Butler, personally, to the Milford Realty Company, a real estate firm of Milford, Utah, January 18, 1923, and became effective 5 days thereafter. No money was paid on that option until in March next following. Thereafter other installments were paid, leaving a balance which was secured by a mortgage on the property. Neither plaintiff nor Butler kept any book account of their expenses, nor rendered any account as between themselves; nor did Butler account to plaintiff for any money received on the sale of the option. The relation between plaintiff and defendant, as appears from the record, was at all times friendly and cordial until January 23, 1923, when plaintiff received a letter from Butler which will hereinafter be quoted at length. Plaintiff appeared to defer largely to Butler in their dealings respecting the land, and kept him advised by correspondence as to inquiries made concerning the business.

The ultimate question to be determined is, What was the relation of Butler and the plaintiff? Were they parties to a joint venture in the sale of the land, or was plaintiff a mere employe of Butler, and, if so, what, if any, was the nature and amount of his compensation?

The testimony of the parties themselves is sharply conflicting and each of them rely on corroborating circumstances in support of their respective contentions. It would be impracticable here to undertake to enumerate all the circumstances relied on, but it is imperatively necessary to state each party's version of the contract under which the business was transacted. Plaintiff's version is that in October, 1922, the Iron County Realty Company, of which he was secretary, desired to employ...