Fuller v. Laws

• Decision Date: 04 May 1925
• Docket Number: No. 14829.,14829.
• Citation: 271 S.W. 836
• Parties: FULLER v. LAWS et al.
• Court: Missouri Court of Appeals

271 S.W. 836

FULLER v. LAWS et al.

No. 14829.

Kansas City Court of Appeals. Missouri.

May 4, 1925.

Appeal from Circuit Court, Mercer County; Arch B. Davis, Special Judge.

Suit by 3. E. Fuller against James E. Laws and another. Decree for defendants, and plaintiff appeals. Affirmed.

Hyde & Hyde and John E. Powell, all of Princeton, for appellant.

A. G. Knight, of Trenton, and W. K. Amick, of St. Joseph, for respondents.

BLAND, J.

This is a suit in equity to dissolve an alleged partnership, to recover of defendants the amount due from them to the "partnership, and to determine the amount due from the partnership to plaintiff. The chancellor, at the conclusion of the evidence, rendered judgment for defendants, and plaintiff has appealed.

The facts show that James Laws and Leonard Easter on August 6, 1919, purchased from one James. K. Reiger a farm containing 160 acres in Grundy county, Mo., hereinafter referred to as the Reiger farm, agreeing to pay therefor the sum of $16,000. One thousand dollars of this sum was to be paid on the signing of the contract, $1,000 60 days after date, and $14,000 on or before March 1, 1920. They had also looked at a farm referred to in the evidence as the Gibson farm, which contained 223.38 acres and which they desired to buy; but having bought the Reiger farm with the financial obligations entailed in that transaction, they were unable to finance and buy the Gibson farm, fearing that they would not be able to resell it in time to raise the balance of the money to pay Gibson. So on August 7, 1919, they approached plaintiff and told him that they were trying to buy the Gibson farm. They took plaintiff to view the Reiger farm, and he told them that he would lend them $100 an acre on it if they would let him in as a partner. On August 8th Easter and Laws purchased the Gibson farm for $25,000; thereafter they told plaintiff of the purchase and that they would take him in as a partner. A contract was drawn between the parties on August 9, 1919, reading as follows:

"Above parties having bought what is known as the Harry D. Gibson farm of 223 38/100 acres, for a consideration of twenty-five thousand dollars and what is known as the Reiger farm of 160 acres for a consideration of $16,000.00, now therefore it is agreed that each is to pay for his third interest in the above-described farms according to contract, the title to same being held by James E. Laws and Leonard Easter.

"It is further agreed that in case of sale the profits or loss is to be divided equally between the three contracting parties."

On the day the contract between the defendants and plaintiff was entered into, the Gibson farm was sold to one Coon for $30,156. Four thousand dollars was paid in cash to Gibson, and the balance of the purchase price was to be paid on March 1, 1920. Coon paid down $2,400. The sum of $5,000 having been paid to Reiger and Gibson, and the parties having procured $2,000 from Coon, it was necessary for them to advance $3,000 of their own money to cover the initial payments on the farms. This money was advanced by the parties, each paying $1,000. Some time after buying the Reiger farm, defendants procured a loan of $8,000 on it, secured by a first mortgage. Reiger was paid In full in February, 1920. The Reiger farm was sold by defendants on February 2, 1920, to one Wendt for $18,400, subject to the first mortgage of $8,000, which was assumed as a part of the purchase price. Easter negotiated the sale of the farm to Wendt, who hesitated in buying it for the reason that he had only $3,000 in cash and thought he was not in a financial position to make the purchase. Easter then went to plaintiff and asked him if he would lend $7,400, being the difference between $3,000 and $10,400, the amount that it was necessary for Wendt to raise in cash in order to buy the place, and if he would take a second mortgage on the land so that Wendt would be enabled to buy it. Plaintiff agreed to furnish the money, but did not want Wendt to know that he was interested in the property with defendants. When Wendt found that he could borrow $7,400 from plaintiff, he agreed to take the place, and it was sold to him; the $7,400 notes and mortgage being taken in the name of the Mercer County Trust Company (where the parties made their financial arrangements) at the request of plaintiff, and immediately indorsed by the trust company to plaintiff. Wendt took possession of the farm, but defaulted in the payment of taxes and interest for the first year, and the property was deeded by him to plaintiff on February 28, 1921. The farm was subsequently sold at foreclosure by plaintiff at a loss of $5,530.95, two-thirds of which, together with two-thirds of the taxes and interest that plaintiff had paid, he seeks to recover of the defendants.

It is insisted by plaintiff that the contract had between himself and defendants on August 9, 1919, created a partnership between them, and that the $7,400 he lent in order to enable Wendt to buy the farm was advanced for the benefit of the partnership. Defendants deny that the contract created a partnership, but contend that if one was created it came to an end on or about March 1, 1920, when, as the record shows without dispute, the sale by the parties hereto of the Reiger and Gibson farms was consummated and the profits of the venture arrived at and divided between the parties.

In order to intelligently pass upon the questions involved, it is necessary to state the' testimony of the witnesses in some detail in order to make clear the facts admitted and those in dispute. Plaintiff in his own behalf testified that he and the defendants saw Wendt about getting a deed back to the farm sold Wendt in order to save the expense of foreclosure, and that they procured a deed from Wendt to the place, the grantee's name being left blank; that the witness took the deed to the Mercer County Trust Company and deposited it there in escrow; that either Laws or Easter called on Wendt and brought him to town where the deed was made. The deed was left at the trust company far about nine months, when plaintiff suggested to Easter that the latter get it; that it was the understanding of the witness that if the deed was not recorded within a year after it was made, it would have to remain on record for a year. Easter procured the deed, brought it to plaintiff's bank, and in the presence of Easter plaintiff asked his daughter to insert the names of plaintiff and defendants in the deed as grantees and have it recorded, all of which was done. The envelope containing the deed had indorsed on it the following: "Deed, Wendt to Fuller et al. Property of J. E. Fuller, Leonard Easter and Jim Laws." There was other evidence that this was in the handwriting of an employee of the trust company.

About a year after the farm was taken back, according to plaintiff's testimony, he and the defendants leased the same to one Roebeck, that the lease was negotiated by the plaintiff and Easter, and that both signed the lease in the names of the three parties. The back taxes and the interest on the first mortgage were paid by plaintiff and defendants, each bearing his one-third part. Roebeck raised a crop on the premises; the proceeds of the crop coming to the lessors were -divided equally between them. Some pasturage money coming from the place was likewise divided. Fuller further testified that during the time the farm was rented to Roebeck, Easter attempted to trade or sell it, but was unsuccessful. In January, 1922, defendants first told plaintiff that they would not have anything more to do with the farm, Easter stating that he was not going to stand any of the loss; that "I was able to stand, the loss, that he wasn't, they wasn't." Before this time, as a matter of compromise, plaintiff and Easter agreed that the farm should be sold for $14,000 if possible, and Easter figured up what the loss of each partner would be. Shortly after this last conversation, plaintiff foreclosed his second mortgage upon the farm.

Plaintiff further testified that he agreed with Wendt that the second mortgage should be released as far as Wendt was concerned when the latter redeeded the farm. He denied that he agreed to lend $16,000 on the Reiger farm, or $100 an acre. He testified that the defendants found a buyer for the farm in the person of Wendt, and that he told the latter that he would lend him $7,400 on the place, but insisted that there was an understanding between the parties hereto that the firm was going to lend the money. When asked why the deed of trust was not taken in the names of the three parties, he answered that—

"I was furnishing the money to the firm.

"Q. Why didn't you take it (the mortgage) in your own name then? A. Because I wanted Easter and Laws behind it.

"Q. That is why you took it in the name of the Mercer Trust Company ? A. Sure, I wanted them to help me pay this loss if there should be any."

Later on he was again asked why it was drawn to the Mercer Trust Company, and he answered that he did not know—

"Q. Then it isn't true you had it drawn to the trust company to hold Laws and Easter? A. I didn't say it did, but it does.

"Q. In what way? A. That ain't for me to decide. * * *

"Q. Well, if the partnership was furnishing the money, why didn't you write the papers in the partnership's name? A. Because it was my money."

He further testified that the reason the Wendt deed was made in blank was "so we could sell it (the farm) again"; that about the 1st of March, 1920, he received the sum of $3,502.95, being his one-third of the profits made on the two farms.

Roebeck, testifying for plaintiff, stated that he first talked with Easter about renting the farm and at that time Easter told him that the farm was owned by Fuller, Laws, and himself; that about the time the lease expired, Laws told him that there was no partnership; that at that time it had been dissolved.

Plaintiff's witness Grigsby testified...