Goss v. Lanin

• Decision Date: 09 April 1915
• Docket Number: No. 29735.,29735.
• Citation: 152 N.W. 43,170 Iowa 57
• Parties: GOSS v. LANIN ET AL.
• Court: Iowa Supreme Court

170 Iowa 57

152 N.W. 43

GOSS

v.LANIN ET AL.

No. 29735.

Supreme Court of Iowa.

April 9, 1915.

Appeal from District Court, Chickasaw County; A. N. Hobson, Judge.

Action for an accounting. Opinion states the facts. Affirmed.P. H. Paulsen, of Waterloo, and E. A. Morling, of Emmetsburg, for appellant.

J. W. Sandusky, Smith & O'Connor, M. E. Geiser, Clary & Condon, and R. Feyerbend, all of New Hampton, for appellees.

GAYNOR, J.

This is an action in equity for an accounting.

The first petition filed was based upon the claim that the plaintiff and defendants were a copartnership for the purpose of promoting a railroad in the state of Texas. An amendment was filed to this petition, after some of the evidence had been taken, and this amendment seems to base a right for an accounting upon the theory that these parties had entered into an agreement for a joint adventure for the construction of a railroad in the state of Texas, or, if not a joint adventure, an employment or agency was created and agreed to between the plaintiff and the defendants.

The plaintiff claims that by his own efforts and expenditures of time and money he had acquired information touching the expediency and feasibility of constructing a railroad in the state of Texas between certain points; that he invited the defendant Lanin to assist him; that Lanin accepted the invitation, and they were to share the fruits of the enterprise together; that they afterwards employed Springer in the matter, and he also accepted and entered into the enterprise to assist in the prosecution of it; that the three were to share the profits of the enterprise; that the expenses of the parties in the enterprise should be mutually shared, or paid out of such enterprise; that there was, at that time, a general demand for a railroad connecting the towns of Sterling City, Carlsbad, and Water Valley in the counties of Sterling and Tom Green, and it is claimed by the plaintiff that the inhabitants of these communities to be served by this railroad were willing to pay large sums in aiding the construction, and were willing to furnish a right of way free of cost; that, all this, plaintiff had discovered before he came in contact with these other parties; that he had made a personal investigation of the situation at his own cost and expense, and had interviewed the leading and influential citizens of that community from whom he had secured promises of aid in donations and free right of way; that thereafter it was verbally agreed between the plaintiff and the defendant Lanin that they would undertake to promote the construction of the railroad, and that they would unite their services and efforts in such enterprise; that they would jointly visit the territory, and would proceed at once to procure definite arrangements for procuring the right of way and the bonuses for the construction of the railroad; that, in pursuance of such agreement, plaintiff and Lanin visited the territory and attempted to make arrangements with the citizens of Carlsbad and Sterling City for the payment of certain bonuses, and for certain rights of way, for the contemplated road; that, in pursuance of said arrangements, they visited said towns, but were unable to procure favorable recognition from the citizens of San Angelo, a town to be affected by the road, and the matter was temporarily dropped; that afterwards the plaintiff visited the community and revived the interest in the road and obtained favorable assurance from the citizens, and got an agreement from them that, if he and his associates would construct a railway, they would pay a bonus, together with the right of way; that plaintiff returned and visited Lanin again, and they jointly renewed their efforts and procured certain agreements from the citizens looking towards the construction of the road; that, by the terms of the agreements, so made orally with the citizens, a right of way was to be furnished, and a cash bonus paid when trains were in operation upon the road; that thereafter it was jointly agreed between plaintiff and Lanin that, in order to prosecute the enterprise, it was desirable to take in the other defendant, W. J. Springer, and he was accordingly taken in, and he became associated with the plaintiff and Lanin in the promotion and construction of the road, and it was jointly agreed between the three that they would undertake to promote the construction and that they would use their services and efforts to that end, and would proceed at once to make definite arrangements for carrying out the enterprise, which was accordingly done; that plaintiff thereafter procured all necessary information with reference to the building of the grade, and laid such information before the defendants; that the information which plaintiff acquired looking to the building of this road was through his own effort and the expenditure of his money; that thereafter Lanin and Springer conceived the fraudulent purpose of excluding the plaintiff from the further participation in the enterprise, and to appropriate to themselves the business and fruits of the enterprise, and thereafter proceeded on their own account to negotiate with a certain railway company to sell to it their interest and rights in the enterprise, and to that end associated with themselves, the defendant Shaffer, without the knowledge or consent of the plaintiff, and did thereafter sell and transfer all the rights and interests acquired in the construction of the road, but concealed from the plaintiff the amount received therefor, but the plaintiff alleges they realized large profits, not less than $30,000; that plaintiff has received nothing from said enterprise; that he expended in all the sum of $370 of his own money in connection therewith. Plaintiff says that there was never any express agreement between the plaintiff and the defendants Lanin and Springer, as to the proportion in which the plaintiff and the defendants should share the profits of said enterprise, but alleges that they were coadventurers therein, and that the plaintiff is entitled to payment of his expenses, and to an undivided one-third interest of the profits arising therefrom, and asks that any share that Shaffer may have in the enterprise be paid from the portion that would otherwise go to Lanin and Springer.

Defendant Shaffer filed first a general denial. Lanin and Springer answered, denying every allegation of plaintiff's petition in so far as he seeks to fix a liability on these defendants for an accounting. Shaffer filed an amendment to his answer disclaiming any knowledge of plaintiff's interest in the adventure, previous to the time the deal was consummated. Denies that he had any knowledge of plaintiff's connection with the matter prior to entering into the partnership with the other defendants. Says that he would not have entered into it if he had known of plaintiff's claim, that he expended money and time in pursuit of the purpose; and further says that, if plaintiff had any interest in it, he permitted the defendants to go on and form a partnership with him and to control the enterprise, with the apparent right to dispose of the alleged interest to the plaintiff; that in May, 1909, he formed a partnership with the other defendants for the promoting and building of the railroad, without any knowledge of any interest of the plaintiff therein; that the plaintiff knew that this defendant was expending time and money in the prosecution of the said enterprise and in no way notified this defendant of any alleged rights or claims which he had thereto, and says that he is now estopped.

Upon the issues thus tendered, the cause was tried to the court, and judgment and decree entered for the defendants, dismissing plaintiff's petition. From this, plaintiff appeals.

The appellant's first contention is that Lanin and Springer sustained fiduciary relationships to him, in that they were coadventurers or copartners and joint promoters with him in the enterprise here under consideration. This is a question of fact.

[1] So far as this controversy is concerned, it is immaterial whether we treat the parties as coadventurers or as copartners. In either event, each would be the agent of the other.

While it is true that, at common law, coadventurers in an enterprise were recognized in courts, only when the element of partnership was disclosed, and upon proof of the essentials of a partnership, this is not the law at the present time, and, although courts in modern times do not treat a joint venture as identical with a partnership, it is so similar in its nature and in the contractual relationships created by such adventure that the rights as between themselves are governed practically by the same rules that govern partnerships. As some of the courts hold that, while a partnership is ordinarily formed for the transaction of general business of a particular kind, a joint adventure, as a rule, relates to the single transaction, although it may comprehend a business to be continued for a period of years. See McCreery v. Green, 38 Mich. 172;Alderton v. Williams, 139 Mich. 296, 102 N. W. 753;Knapp v. Hanley, 108 Mo. App. 353, 83 S. W. 1005;Felbel v. Kahn, 29 App. Div. 270, 51 N. Y. Supp. 435;Derickson v. Whitney, 6 Gray (Mass.) 248;Field v. Woodmancy, 10 Cush. (Mass.) 427;O'Hara v. Harman, 14 App. Div. 167, 43 N. Y. Supp. 556;Bradley v. Wolff, 40 Misc. Rep. 592, 83 N. Y. Supp. 13.

[2] In a joint venture, as in a partnership, fiduciary relations are created between the parties entering into the enterprise. It is also settled by authority that, as to joint ventures, the duration of the adventure, if no date is fixed by the contract for its termination, the agreement remains in force until the purpose is accomplished, and neither party can end it at will by notice or otherwise. Green v. Higham, 161 Mo. 333, 61 S. W. 798; Hubbell v. Buhler, 43 Hun (N. Y.) 82.

It is also held by authority that where the undertaking...