Hedges, Battrrton & Co. v. Wear

• Citation: 28 Mo.App. 575
• Parties: HEDGES, BATTERTON & COMPANY, Appellants, v. JOHN G. WEAR, Respondent.
• Decision Date: 17 January 1888
• Court: Missouri Court of Appeals

28 Mo.App. 575

HEDGES, BATTERTON & COMPANY, Appellants, v. JOHN G. WEAR, Respondent.

Court of Appeals of Missouri, St. Louis.

January 17, 1888

APPEAL from the St. Louis Circuit Court, HON. DANIEL DILLON, Judge.

Affirmed.

GEO. H BENTON and FORD & PAYNE, for the appellants: The court erred in dismissing plaintiffs' bill because the answer admits plaintiffs' cause of action, and asks for an accounting and settlement of the assets of the stock company or partnership. Rev. Stat., sec. 3398; Bispham on Equity (2 Ed.) sec. 509; Kennedy v. Kennedy, 3 Dana 239; Williamson v. Wilson, 1 Bland, 418; Berry v Cross, 3 Sandf. Ch. 1; Holden v. McMackin, 1 Pars. Eq. Cas. 270; Miller v. Jones, 39 Ill. 54; Maynard v. Railey, 2 Nev. 313; Shulte v. Hoffman, 18 Tex. 678; Coudrey v. Gilliam, 60 Mo. 97. The court erred in permitting the defendant, in his evidence, to explain what he intended to convey by the chattel mortgages executed by him and introduced in evidence by plaintiffs, and the court also erred in permitting the defendant to contradict the admissions in his answer. The court erred in dismissing plaintiffs' bill and entering judgment for the defendant, on the ground that property rights fairly obtained by purchase for a valuable consideration were not entitled to protection in equity because of the improper intention or purpose which actuated plaintiffs to acquire those rights. The maxim, " he who comes into equity must do so with clean hands," was improperly applied in this case. Pomeroy's Eq. Jur., sec 399; Lewis' Appeal, 67 Pa.St. 166; Meyer v. Yesser, 32 Ind. 294; Willard v. Taylor, 8 Wall. 557; Johns v. Norris, 7 C. C. Green, 102; Curts v. Leavitt, 15 N.Y. 9; Osborne v. Williams, 18 Ves. 379; Cassidy v. Metcalf, 1 Mo.App. 593, 601.

ALEXANDER MARTIN, for the respondent: The bill is drawn upon the theory that the association was a joint-stock company. The characteristics of such a company permit a transfer of interest without working a dissolution. Parson's Part. [1 Ed.] 545. But we have no such companies in this state. It follows, therefore, that the association was a partnership. An assignment of interests to plaintiffs worked a dissolution of the partnership. The property acquired by the partnership belonged to it and is subject to its liabilities. Phelps v. McNealy, 66 Mo. 554. A bill to ascertain and enforce the liabilities resting upon this property cannot be entertained against only one of the original partners. They are all necessary parties to an accounting. Story's Eq. 167; Scott v. Caruth, 50 Mo. 120. At common law a tenant in common could not sue for partition of a chattel. Blood v. Bland, 110 Mass. 54; Cridgell v. Mead, 8 Mo. 53. Under the act of 1879 it is true that such action can be maintained. 1 Rev. Stat. 1879, p. 579. But plaintiffs and defendant are not mere tenants in common. They are owners of property originally belonging to the partnership. Equity cannot grant the relief because the necessary parties to the accounting are not in court.

OPINION

THOMPSON J.

This is a suit in equity. The petition alleges in substance that a joint-stock company was formed for the purpose of purchasing certain printing material and the establishing of a newspaper at Poplar Bluff, Missouri, called the Renovator; that the capital stock of the company was divided into nine shares; that such subsequent transfers of shares were made that the plaintiffs became the owners of four of the shares, and the defendant, originally the owner of one and one-half shares, purchased the other three and one-half shares for the purpose of defrauding the plaintiffs out of their just rights, title, and interest in the property and enterprise; that he openly denies and refuses to recognize their rights, interest, and title, and refuses to permit them to have any voice or action in the management or control of the property, but has designedly and fraudulently appropriated the same to his sole and exclusive use; and that he has refused to permit them to examine the books of account and the subscription list of the company, etc.

The petition prayed for a temporary injunction, commanding and requiring the defendant to cease the publication and management of said newspaper; for the appointment of a receiver to take charge of said property pending the litigation; for a dissolution of the said joint-stock company, a sale of its property, and an equitable distribution of the proceeds thereof, and for general relief.

Upon this petition an interlocutory decree was entered, granting an injunction restraining the defendant from the further publication of the said newspaper, from the further use of the said printing materials, and from the collection of any bills due the said newspaper; appointing a receiver to take charge of said materials pending said suit, and requiring the defendant to turn over the materials to such receiver.

Some time afterwards the defendant filed an answer, which consisted, first, of a general denial of all matters not subsequently admitted; and which then charged that the object of the plaintiffs in bringing this suit was the suppression of the newspaper called the Renovator, which was the rival of a newspaper owned by the plaintiffs, called the Citizen, published also at Poplar Bluff; admitted that, at the date of the institution of the suit, the defendant was the owner of five-ninths of the property described in the petition and that plaintiffs controlled the other four-ninths; recited the proceedings by which the continuance of the business in his hands was enjoined, and the property taken out of his hands by the court's receiver; alleged that, subsequently, the property, while in the hands of the receiver, was destroyed by fire and became a total loss; set up that he furnished all the labor and paid all the expenses of running the paper; claimed damages for the destruction of the business by the injunction; stated certain conclusions of law as to the manner in which the damages should be apportioned between him and the plaintiffs; and wound up by praying that the injunction be dissolved, that an account be taken between the plaintiffs and the defendant on the basis of their having a four-ninths and he a five-ninths interest in the property and business, and that the damages which have accrued from the destruction of the property and business, in consequence of the plaintiffs' suit, be ascertained, and then apportioned on the same basis, and for general relief.

Afterwards there was a change of venue to the circuit court of the city of St. Louis, and upon a final hearing, that court dissolved the injunction and dismissed the bill, from which decree the plaintiffs prosecute this appeal.

The substantial facts are not at all in dispute. It appears that, on the first day of March, 1884, the defendant and six others entered into the following agreement: " We the undersigned, for the purpose of forming a joint-stock printing company, hereby subscribe the amount set opposite our names for the purpose of buying the press, materials, and all racks, stands, and stones, paper-cutter, mailer, job-press, and all things used in connection with the printing-office, known as the Golden Era, at McLanesboro, Illinois, that being a part of the object of the organization, which amounts subscribed by each shall by them be paid by the first day of March, 1884.

John G. Wear $150 00

Henry Turner 100 00

G. A. Standard 100 00

H. E. Johnson 100 00

Chas. Campbell 300 00

Josiah Harper 100 00

R. F. Scott 50 00"

It appears that, in pursuance of this agreement, the printing-press and materials therein described, were purchased, and the newspaper, called the Renovator, established at Poplar Bluff, with Campbell as editor. It...