Grigsby v. Day

• Decision Date: 16 April 1897
• Citation: 9 S.D. 585,70 N.W. 881
• Parties: MELVIN GRIGSBY , Plaintiff and respondent, v. FREDERICK T. DAY, Defendant and appellant.
• Court: South Dakota Supreme Court

9 S.D. 585

70 N.W. 881

MELVIN GRIGSBY , Plaintiff and respondent,

v.

FREDERICK T. DAY, Defendant and appellant. South Dakota Supreme Court Appeal from Circuit Court, Minnehaha County, SD Hon. J. W. Jones, Judge Affirmed Palmer, Preston & Rogde, Sioux Falls, SD Attorneys for appellant. Wm. A. Wilkes, Davis, Lyon & Gates, Sioux Falls, SD Attorneys for respondent. Opinion filed April 16, 1897

CORSON, P. J.

This is an action to recover $37,000, claimed by plaintiff to be due him from the defendant as the result of certain business transactions set out in plaintiff’s complaint. The defendant, in addition to certain denials, pleaded as a defense that in the transactions set out in the complaint the plaintiff and defendant were partners, and that there had not been any settlement of their partnership transactions between them. The case was tried by a referee, who found for the plaintiff for the full amount claimed. This amount was reduced by various sums remitted before and after judgment, leaving a balance of over $21,000. From this judgment, and order denying a new trial, the defendant appeals.

Between 1878 and 1893, the plaintiff made numerous farm loans in Dakota, which the referee finds were made under the following understanding or agreement between the plaintiff and defendant:

“That in the latter part of the year 1878 the plaintiff saw the defendant at defendant’s office in said city of Milwaukee, and there had a conversation with him concerning the making of farm loans in the then territory of Dakota, the result of which conversation was that the defendant gave to plaintiff a number of blank applications for loans, with directions to plaintiff to procure and forward to defendant some applications for loans … and stated to plaintiff, that if satisfied with such applications, he would send plaintiff funds with which to make such loans as defendant should accept from among such applications; and further stated to plaintiff that upon the application so accepted and filled by the defendant the plaintiff should allow the defendant such portions of the commissions received upon said loans from the borrowers as plaintiff should think fair; and if thereupon defendant was not satisfied with what plaintiff allowed the defendant as commissions, the plaintiff would hear from the defendant concerning the same.”

The plaintiff also furnished farm lands for defendant, which the referee finds were purchased under the following agreement: “That some time subsequent to the arrangement between the plaintiff and defendant for making loans as aforesaid, the defendant requested the plaintiff to purchase for the defendant farm lands in the territory of Dakota, whenever the plaintiff should have an opportunity to purchase the same at a bargain, and that the defendant agreed with the plaintiff that he, the defendant, would hold such lands so purchased until the same could be sold at a profit, either by plaintiff or defendant; and when so sold would give to plaintiff for his services in purchasing said lands, and in looking after and paying of taxes on them and renting them, one-half of the profit obtained for such lands over and above the cost thereof, and seven per cent interest thereon.” These findings are fully sustained by the evidence, the plaintiff and defendant agreeing substantially as to the terms under which the loans and purchases were made. The defendant testified as follows:

“Mr. Grigsby has [been] associated with me in the conduct of my loan business in several counties in Southeastern Dakota. Mr. Grigsby gathered applications from the parties who desired to borrow money, and forward the same to me. I would select such as I desired, and forward the money to make the same, reject the rest, and return the applications to him. That is as comprehensive as I can make it. This method of transacting business with him was the result of an agreement between myself and him. That agreement was that we should charge a certain commission for making the loans that were accepted, and such commission should be divided equally between us. These commissions were paid sometimes in cash, but most generally by giving a mortgage on the property upon which the loans were made, which mortgage was in all cases a second mortgage. Mr. Grigsby and myself each owned one-half, respectively, in such second mortgage. These commission mortgages were generally payable in installments running over five years, and the amount due to Mr. Grigsby was payable to him when it was received by me. … In 1879, I commenced to buy lands in Southeastern Dakota, through Mr. Grigsby. On all such lands that I purchased and acquired title to myself, he was to have one-half interest in the profits when sold, after allowing me seven per cent interest on the money which I had advanced for the purchase price, taxes, and other expenses which I might have been to. … There are still a great many commission mortgages, due and not due, unpaid, one-half of which belongs to Mr. Grigsby, and one-half to myself; and there are still in the neighborhood of four thousand acres of land upon which he has an interest, should [it] appear at the sale of the same that there is a profit over and above reimbursing me for all I have advanced as purchase price, taxes, and other costs, and after allowing myself seven per cent interest on such advances.”

In the early loans the commissions were collected in cash, and divided between the parties as the same were received; but later second mortgages were taken for the commissions, in the name of the defendant. The methods of proceeding in regard to these loans are thus stated in the findings of the referee:

“That the instructions and directions given by defendant to plaintiff concerning the making of said loans were always made so as to apply, not in a general manner concerning the conduct of said business, but, on the contrary, each application that was received by the defendant, and by him accepted, was returned by him to plaintiff, together with a separate letter of instructions, as to making that particular loan, and with a check for the amount of money to be loaned in that particular case. That plaintiff, upon the making and completing of the loans so accepted and filled by the defendant, thereupon sent to defendant all papers, notes, mortgages, and abstracts of title with each completed loan, and also sent the defendant one-half the amount of money which the plaintiff had received from the borrowers as commissions for procuring and making of said loans. … That subsequently in the progress of said loan business plaintiff and defendant adopted a method of securing their commissions from the borrowers by taking a commission note or notes from the borrowers. which said commission note or notes were secured by a second mortgage upon the property upon which the principal loan was negotiated, and which said commission note and mortgage were made payable in each instance to the defendant, and were at the time of the taking thereof sent by plaintiff to defendant at Milwaukee, Wisconsin, and the record of the same was kept by the plaintiff upon the books in his office at Sioux Falls.”

At the time of the commencement of this action a large quantity of the farm lands purchased by the plaintiff for the defendant had been disposed of by the defendant, and for which no division of the profits had been made. In 1893 the defendant made a general assignment for the benefit of creditors, and as to the property therein included the referee finds as follows: “And I further find that under and by virtue of the said assignment the said William H. Momsen, assignee, took possession of all the personal property in the name of the said defendant,- and claims the right of possession of all the real property in the name of the said defendant in the state of South Dakota, and especially that he took and retains the possession of all the commission notes and second mortgages taken in the name of the defendant in the state of South Dakota, still outstanding and unpaid, in which the plaintiff herein has an interest by reason of the facts herein found.” It further appears from the evidence that the plaintiff resided at Sioux Falls, and kept an office and clerks at his own individual expense; and that the defendant resided at Milwaukee, where he had an office, and a number of clerks, maintained at his own individual expense; and that both he and plaintiff did a large amount of other business not connected with the loans or purchases above mentioned. The referee found for the plaintiff one-half of the face value of the commission notes and mortgages, with the interest due thereon. He also found for the plaintiff one-half of the profits realized from the sales of farm, lands which had not been paid over to the plaintiff. There were numerous other...