Gilliam v. Loeb

• Decision Date: 14 April 1908
• Citation: 109 S.W. 835,131 Mo. App. 70
• Parties: GILLIAM et al. v. LOEB.
• Court: Missouri Court of Appeals

109 S.W. 835

131 Mo. App. 70

GILLIAM et al. v. LOEB.

St. Louis Court of Appeals. Missouri.

April 14, 1908.

1. PARTNERSHIP — ACTIONS BETWEEN PARTNERS— TRANSACTIONS INDEPENDENT OF PARTNERSHIP.

A member of a partnership to purchase and own a jack who fraudulently represented to his copartners that the price paid by him for the jack was double the price actually paid, and thereby obtained from them double their proportionate shares of the price, was guilty of a fraud unconnected with the partnership, and is liable in an action at law for money had and received, since, where a transaction between partners is independent of the partnership, the rule that partners cannot sue each other at law on demands arising out of the partnership does not apply.

2. SAME — PARTIES.

Where a member of a partnership to purchase and own a jack fraudulently represented to his copartners that the price paid by him for the jack was double the price actually paid, and thereby obtained from them double their proportionate shares of the price, the partners having severally contributed to the price, each could sue separately for the amount out of which he had been defrauded.

3. PLEADING—AMENDMENT OF PETITION—NEW CAUSE OF ACTION.

An original petition filed before a justice of the peace alleged a partnership to purchase and own a jack, that one of the partners fraudulently represented to his copartners that the price paid by him for the jack was double the price actually paid, and thereby obtained from them double their proportionate shares of the price, and sought to recover the excess. An amended petition was filed in the circuit court, the effect of which was to state the purchase of the mule in such allegations as made the purchasers co-owners merely instead of partners. Held, that a new cause of action was not substituted by the amended petition.

Appeal from Circuit Court, Newton County; F. C. Johnston, Judge.

Action in justice's court by J. C. Gilliam and others against C. W. Loeb. From a judgment for defendant in the circuit court on appeal from a judgment for plaintiffs, plaintiffs appeal. Reversed and remanded, with direction.

This action was originally instituted before a justice of the peace on the following complaint: "Plaintiffs for their statement say that in the spring of 1906 they and defendant and a number of others were desirous of purchasing a jack; that defendant was desirous and called on plaintiffs and a number of others for the purpose of getting up a company to purchase a jack and bring him into their neighborhood; that plaintiffs and defendant and others held meetings for the purpose of getting up a company that was being promoted by said defendant for the purpose of buying a jack aforesaid, each member of said company to take a small share in the enterprise; that defendant was to become a member, and did become a member of said company or copartnership, and was acting for the company in getting up the enterprise and buying a jack for the said company; that the defendant was desirous of purchasing what is known as the old `Mit' Yost jack, and went around and saw plaintiffs and others and informed and represented to them that said Mit Yost jack would cost $800, and that said Mit Yost would not take a cent less than $800 for said jack, and that a number of the said company protested against the price of the said jack as being too high, and said defendant informed plaintiffs and others that he would again see if the said Mit Yost would sell his jack for a sum less than $800, and again informed plaintiffs and other members of the company said jack could not be purchased from the said Mit Yost for a less sum; that the said jack was purchased from the said Mit Yost for said company by said defendant, who represented the cost of said jack to be $800, to be paid to the said Mit Yost, and the ownership of the said jack was divided up in 16 parts, the said plaintiffs taking three-sixteenths interest in said jack, in connection with others of the company, making eleven-sixteenths, and said defendant five-sixteenths interest; that the said plaintiffs paid to the said defendant $50, to be paid the said Mit Yost, together with one note of $100 in full of their interest; that the said plaintiffs relied upon and believed the statement and representations made by defendant to plaintiffs of the cost of said jack, and upon his representations the said plaintiffs parted with the said $50; that said defendant's representations and statements as aforesaid to members of said company were false and fraudulent in this, the said Mit Yost sold the jack at the price of $400 on one year's time, and received through the said defendant from some members of the company their notes to the amount of $400, payable in one year after date, and the said defendant, through his fraudulent representations and schemes and statements to his copartners or company induced and willfully and fraudulently obtained from the company $400 more than the cost of the said jack to said company. Among this is the $50 paid by the plaintiffs, for which said plaintiffs pray judgment for $50 and costs of suit."

Plaintiffs having recovered judgment before the justice, an appeal was taken to the circuit court, where an amended complaint was filed, which reads as follows: "Plaintiffs for their amended petition state that they are farmers and cattle raisers and are partners in such business, and were at all times hereinafter mentioned; that defendant solicited plaintiffs to join with him and others for the purchase of a certain jack owned by one Yost, and to contribute a certain portion of the purchase money for that purpose, and thereby, with defendant and such others as he may interest, become the owners of the jack so to be purchased as aforesaid; that defendant falsely and fraudulently represented and pretended to plaintiffs that said Yost asked for this particular jack $800, and would not take any less, when defendant well knew said Yost would then take $400 therefor; that these plaintiffs, relying upon and believing said false and fraudulent representations of defendant, and believing same to be true, not knowing the real truth, agreed to pay and contribute for the purchase of said jack $150, and did pay and contribute that sum to defendant, and authorized him as agent for plaintiffs to purchase the same; that defendant took upon himself the agency of purchasing the jack and bought the same from Yost for the secret price of $400, all of which was concealed from plaintiffs, and he falsely represented to them he had paid $800 therefor; that according to the terms of the purchase as agreed on between the parties plaintiffs were to own three-sixteenths of said jack; that by reason of the false representation and pretenses aforesaid, and by reason of the trust and confidence reposed in him, all as above stated, there is due from defendant to plaintiffs $75 as the difference between what said defendant purchased said jack for, on the basis of said interest of plaintiffs therein, and what he represented was its cost, for which plaintiffs ask judgment, less $25 which they voluntarily remit in this action."

On motion of defendant the court struck out the amended petition, and afterwards, on motion of defendant, dismissed the cause to which rulings plaintiffs saved exceptions, and final judgment having been entered against them, prosecuted this appeal.

O. L. Cravens, for appellants. Horace Ruark, for respondent.

GOODE, J. (after stating the facts as above).

The amended statement was stricken out as a departure, as setting up a different cause of action from that alleged in the original statement filed with the justice of the peace. The motion to dismiss the cause is not in the record; but we are told in one of the briefs it was dismissed because the complaint filed with the justice counted on a cause of action in which the two plaintiffs were jointly interested as partners with the other parties alleged to have been defrauded by defendant, and because it solicited a judgment at law, whereas the only remedy lay in equity, the fraud having been perpetrated on the members of a partnership in the course of the partnership business.

We will first consider whether or not the cause of action as originally stated could be maintained, for, if it could not, the case was rightly dismissed, and even though the court erred in striking out the amended statement no harm resulted from this ruling. The first statement says a partnership was formed, consisting of plaintiff, defendant, and other persons, to buy a jack; but the facts alleged show a common ownership of the animal rather than a partnership. The jack was bought for $800 pursuant to an agreement that plaintiffs should have a three-sixteenths interest, defendant a five-sixteenths interest, and the other owners an eight-sixteenths interest. Nevertheless, as it is positively charged a partnership was formed, this averment ought to be taken against the pleader. It is further averred the several members contributed in proportion to their respective interests to the purchase price of the jack as represented by defendant ($800), and that of said price plaintiffs paid $50 in cash to defendant and gave a note for $100, to be paid to the person from whom the animal was purchased.

Allegations are made that defendant promoted the formation of the company and the purchase of the jack, and acted for the company in buying it. The latter allegation is equivalent to an averment of agency on the part of the defendant. According to the facts alleged defendant told the several buyers the price of the jack was $800, whereas it was $400, and by this false representation he obtained from his associates $400 in cash above the true price, of which excess of cash $50 was paid by plaintiffs, for which they prayed judgment. The statement avers Yost, the owner and seller of the jack, was paid in notes due one year after date, given by the...