Horn v. Lupton

• Citation: 182 Ind. 355,105 N.E. 237
• Decision Date: 20 May 1914
• Docket Number: No. 21984.,21984.
• Parties: HORN v. LUPTON et al.
• Court: Supreme Court of Indiana

182 Ind. 355

105 N.E. 237

HORN

v.LUPTON et al.

No. 21984.¹

Supreme Court of Indiana.

May 20, 1914.

Appeal from Circuit Court, Wells County; Charles E. Sturgis, Judge.

Action by Lenora Horn against Ambrose G. Lupton and others. From a judgment for defendants, plaintiff appealed to the Appellate Court, and it transferred the cause to the Supreme Court under Burns' Ann. St. 1908, § 1405. Reversed, with instructions.

For dissenting opinion, see 106 N.E. 708.W. A. Thompson and R. W. Sprague, both of Muncie, and Sharp & Sturgis, of Bluffton, for appellant. Jay Hindman, of Hartford City, Eichhorn & Vaughn, of Bluffton, and Smith & Moran and John M. Smith, all of Portland, for appellees.

MORRIS, C. J.

This was an action by appellant against appellees Lupton and Gemmill, and Lupton as executor of the will of Eliza Lupton, deceased. The complaint is in two paragraphs, the first of which alleges that in February, 1901, appellant and appellees Lupton and Gemmill and Eliza Lupton executed a written contract for the formation of a partnership to engage in the banking business at Pennville. A copy of the agreement, set out in the first paragraph of complaint, provides for a captial of $20,000, each partner to contribute a fourth thereof, and for the business to continue for 10 years, under the management of appellee Ambrose G. Lupton as president and appellee Gemmill as vice president, until otherwise agreed; said officers are authorized to appoint a cashier. The contract further provides that the death of a partner shall not terminate the partnership if the survivors desire to continue the business; that in such event the business may be continued, if the survivors shall pay the personal representative of the deceased the amount invested by the decedent in the business, together with his share in the undivided profits. It is averred that on the execution of the contract, appellant contributed $5,000, for the use of the partnership, and thereupon the business contemplated by the contract was established, and that it continued, under the sole management of appellees Ambrose G. Lupton and Gemmill until June 30, 1905, when they, without appellant's knowledge or consent, wrongfully terminated the partnership, and turned over to a new partnership, managed by them, all the assets of the old one, including good will, money, choses in action, etc., and placed the new partnership in possession of the room formerly occupied by the old one; that the new partnership was formed by said appellees Eliza Lupton and others. It is also alleged that the old partnership conducted a profitable business, and at the time of its dissolution had on hand net earnings of the value of $20,000; that during all the time of its existence, appellees Lupton and Gemmill kept $10,000 of its funds in a bank in Hartford City, in which they were interested, and of which said Lupton was an officer; that the Hartford City bank loaned said funds, but never accounted to the Pennville Bank for the use thereof, and the latter never received anything for the use of said funds. It is averred that appellees Ambrose G. Lupton and Gemmill are the managers of said new partnership, and have in their possession all of the assets of the old firm, together with all the books and papers thereof, and refuse appellant an inspection of such books and papers, for the purpose of ascertaining the amount of property belonging to the old firm. The paragraph also alleges that the old partnership matters have never been adjusted or settled; that appellant has demanded of said appellees, and been refused, an accounting for her capital invested in the partnership, and the earnings thereof; that she had demanded of them payment of the amount invested in her by the partnership, together with one-fourth of the partnership's net earnings, which demand has been refused; that all the indebtedness of the partnership has been paid; that after the dissolution of the firm said Eliza Lupton died testate, and said Ambrose G. Lupton is the qualified executor of her will; that the business of said old firm was very profitable, and, had it not been wrongfully dissolved, it would, at the termination of its 10 years existence, as provided for by the contract, have earned $50,000 on its capital invested, instead of the $20,000 actually earned before the wrongful dissolution. It is alleged that appellant is a housekeeper, has no knowledge of the banking business, and never inspected the books of the firm. By reason of the facts averred, appellant avers she has been damaged in the sum of $20,000, for which she demands payment. The second paragraph of complaint alleges that appellees Lupton and Gemmill converted the assets of the old firm to their own use, instead of turning them over to another partnership, as alleged in the first paragraph. In other respects, the allegations of the second paragraph are substantially the same as those of the first. There was no demurrer to either paragraph of complaint. Appellees answered by general denial. Appellant's motion for a trial by jury was denied. The court made a special finding of facts, from which it concluded that appellant was not entitled to recover. Appellant's motions for a venire de novo and a new trial were overruled, and judgment was rendered for appellees.

[1] Appellant contends there was error in denying a trial by jury. If the cause was one of equitable jurisdiction, there was no error. It will be noted that the first paragraph of complaint alleges that there has never been any adjustment or settlement of the partnership business, that there were large net earnings, and that appellees Lupton and Gemmill had permitted another bank to use this partnership's funds in its own business without recompense. Law courts are not possessed of the special machinery required for dealing with complicated accounts and interest. Powell v. Bennett (1892) 4 Ind. App. 112, 29 N. E. 926;McBride v. Stradley (1885), 103 Ind. 465, 2 N. E. 358; 30 Cyc. 715, 716; section 683 (12th Ed.) Story, Eq. Jur. In refusing a jury trial there was no error, because, on the facts stated, the cause was one of exclusive equitable cognizance.

The court found the facts specially, and concluded therefrom that appellant was not entitled to recover. Appellant excepted to the conclusion.

By the special findings it is shown that in February, 1901, appellant, appellees Ambrose G. Lupton and Gemmill and Eliza Lupton executed the partnership agreement set out in appellant's complaint, and pursuant to the provisions thereof established a partnership banking business at Pennville; that each of the partners contributed $5,000 to the prosecution of the business, and the same was continued, under the management of appellees Ambrose G. Lupton and Gemmill, until June 30, 1905; that appellant took no part in the management or conduct of the business, and never inspected or examined the books of the bank; that on certain dates there were various amounts apportioned among the partners as net earnings of the business; that on June 30, 1905, the value of each partner's interest in the bank was $5,800, which interest consisted of his original investment, and $800, as his share of the undivided profits, after deducting certain taxes unpaid, some interest on certificates of deposit, and some unearned discount. On said day appellee Ambrose G. Lupton tendered appellant a written agreement, already signed and acknowledged by himself and Gemmill, for the formation of a partnership, to exist for 10 years, which was substantially the same as the former contract, except that it provided for a capital stock of $25,000, instead of $20,000. He requested appellant, who was his sister, to sign and acknowledge the contract, and told her...