Heald v. Owen

• Decision Date: 21 January 1890
• Parties: HEALD ET AL. v. OWEN ET AL.
• Court: Iowa Supreme Court

79 Iowa 23

44 N.W. 210

HEALD ET AL.

v.OWEN ET AL.

Supreme Court of Iowa.

Jan. 21, 1890.

Appeal from district court, Chickasaw county; L. O. HATCH, Judge.

The plaintiffs and the defendants were members of an organization known as the “Bradford Township Creamery Association,” which was organized and commenced business in the spring of the year 1883. Its affairs were conducted in such a manner that, on the 10th day of September of that year, it was indebted to the First National Bank of Nashua in about the sum of $4,800, on account of overdrafts. The plaintiffs, who are four in number, are directors of the association, and they executed their personal promissory notes to said bank for said amount. This transaction afforded but temporary relief. During the fall of the year the association became further indebted to said bank, for which the board of directors, of which plaintiffs are members, mortgaged all of the property of the association to the bank, and in the spring of 1884 the association went out of business, having no property nor assets whatever. The plaintiffs, having become personally indebted to the bank by executing the note for $4,800, paid the same, and brought this action in equity against the other members of the association, and demanded an accounting, and that defendants should be required to contribute their pro rata share of said debt to reimburse the plaintiffs. The cause was heard upon its merits in the court below, and a decree was entered dismissing the petition. Plaintiffs appeal.J. S. Root, for appellants.

Ellis & Ellis, for appellees.

ROTHROCK, C. J.

The plaintiffs claim that the creamery association was a partnership, and that the plaintiffs, having paid a partnership debt, are entitled to contribution from the defendants. The defendants claim that, under the articles of association, they are not liable to the plaintiffs as partners, nor in any other right. To the end that the relation of the parties to each other may be fairly understood, it is proper that a brief statement should be made of the facts attending the organization of the association, and the manner in which its affairs were transacted. It appears from the record that on the 3d day of March, 1883, a meeting was held at a school -house in Bradford township, Chickasaw county. The object of the meeting was to organize a creamery association. A temporary organization was effected, and the meeting adjourned until March 10th. At the adjourned meeting it was determined that an association should be formed and incorporated, and a plan of organization was adopted by which the capital stock should consist of 100 shares of $10 each. At this meeting some 70 shares of stock were subscribed by the persons present, including the plaintiffs, and part and possibly all of the defendants...