Hulings v. Jones et al.

• Decision Date: 03 March 1908
• Citation: 63 W.Va. 696
• Court: West Virginia Supreme Court
• Parties: Hulings v. Jones et al.

63 W.Va. 696

Hulings

v.Jones et al.

Supreme Court of Appeals of West Virginia.

Submitted February 25, 1908.

Decided March 3, 1908.

1. Partnership Action Between Partners Jurisdiction.

The circuit court of the county in which partnership property is located and one of the partners is found has jurisdiction, at the suit of the other partner, to wind up the partnership and administer its assets, although the parties to the suit may be nonresidents of the state, (p. 702.)

2. Same Property Employed on Navigable Waters Admiralty Court.

A court of admiralty has no jurisdiction to determine the equitable title or conflicting claims to such partnership property, although it consists of a steamboat and attendant barges employed in commerce upon navigable waters of the United States, (p. 702.)

3. Same.

Such circuit court is not without jurisdiction, in a suit to wind up the business relating to such property, to adjudicate a claim for damages against the firm, although such claim may arise out of a maratime contract, when such adjudication is a necessary incident to winding up the partnership business, (p. 702.)

4. Costs Security for Payment Waiver.

Where in such suit the plaintiff's nonresidence is suggested and security for costs demanded, but the case proceeds without such security being given or objection by the defendant, the demand for such security is presumed to have been waived, (p. 703.)

5. Receivers Effect of Appointment on Vested Bights.

It is a general rule that the appointment of a receiver does not

6. Same Expenses of 'Receivership Priority of Lien.

But if the receivership is necessary to preserve the property from destruction and waste in order to conserve the interests-of those who may succeed in establishing their superior right of title, such property is first Liable for the receivership expenses, including the allowance to the receiver for his services, (p. 706.)

7. Writ of Error Review Accounts of Receiver.

Where in such suit the accounts of the receiver have been audited by a commissioner and allowed by the court, and the disbursements and expenses of the receiver are supported by evidence, this Court will not interfere therewith, unless it clearly appears the discretion of the court below has been abused, (p. 707.)

8. Receivers Accounting Services of Counsel.

Where the services of counsel are required by such receiver, such counsel may be retained by him without previous authority from the court, and their fees, when allowed by the court, constitute part of the receivership expenses, to be paid prior to other liens upon the property, (p. 707.)

9. Same Improvements.

Where one whose title to personal property is being litigated in a pending suit obtains possession thereof upon order of another court, and voluntarily makes improvements thereon, he will not, as a general rule, upon restoring such property to the hands of the receiver, be allowed compensation for such improvements, (p. 708.)

Appeal from Circuit-Court, Wood County. Bill by EL B. Hulings against George F. Jones and another. From the decree, defendants appeal.

Affirmed'.

L. R. Via, for appellants.

J. W. Vandervokt, and Reese Blizzabd, for appellees.

Miller, Judge:

The circuit court of Wood county, January 18, 1905, upon bill filed by H. B. Hulings against George F. Jones, his partner, and one O'Hara Darlington, representing that there was great danger of loss and destruction thereof, appointed C. D. Dotson special receiver of all the property of said partnership, including the steamer Clifton with its attendant barges. By the order of his appointment, said receiver was authorized to carry out the several contracts of carriage referred to in the bill, after entering into bond in the penalty of $15,000, which bond was given, and the receiver took charge of the property accordingly. Hulings, Jones and Darlington were citizens and residents of Pennsylvania, The bill and the contracts exhibited therewith show that on August 18, 1904, through Darlington, Hulings & Jones purchased in Pennsylvania the steamboat Clifton, the legal title thereto and the insurance thereon being taken in the name of Darlington, who advanced to them $4,000 for the purchase, to be repaid in three years in quarterly installments with interest, when the legal title to said steamboat and all papers relating thereto were to be turned over to Hulings & Jones, to whom Darlington leased said steamer for said three years at an annual rental of one dollar; that the agreement of partnership between Hulings and Jones, made at same time but not reduced to writing until December 19, 1904, after referring to the contract with Darlington, among other things provided that the parties thereto thereby agreed to associate themselves together for mutual profit in the business of transporting freight and passengers to and from various points on the Alleghany, Monongahela and Ohio rivers, the partnership to continue during the life of the parties thereto or until terminated by sixty days' notice by the one so desiring of his intention to withdraw therefrom, said contract also providing for division of losses and profits, and that " when the legal title to the steamboat Clifton or any surplus of insurance money is turned over to the parties hereto by O'Hara Darlington said steamboat and papers or surplus of insurance money shall be part of the copartnership assets if the copartnership is then in existence, but if not they shall belong to the parties hereto as tenants in common;" that at the time of making said partnership agreement certain contracts of affreightment had been entered into by said firm the most important with the HolcombLobb Company for transportation of 210, 000 cross-ties, another relating to towing of certain barges from Pittsburgh to Paducah, Ky. which the bill alleged were profitable contracts and to reap the profit therefrom promptness was necessary; that, in the execution of the last mentioned contract, the plaintiff, who had been made master and put in charge of said vessel, left Pittsburg bound for Paducah late in December, 1904, and proceeded with his tow as far as Parkersburg, where, on account of the ice in the river, he was compelled to tie up until navigation should again open; that, after reaching Parkersburg, he received letters from his partner Jones and from Darlington the first notifying him of default by the firm in payment of interest to Darlington on said $4,000, and that, as Darlington had given notice that he considered his agreement with the firm cancelled and of his intention to seize the Clifton, he had taken it upon himself to notify all with whom the firm had been doing business that the partnership relation had ceasedthe latter, in reference to default in payment not of interest but of rent due under the lease contract, notifying him that the rights of the firm under the lease had been forfeited and to immediately vacate said steamboat. The bill also charged that the cause of action partly arose in Wood county, that the defendant Jones was then located within said county, and that the property in charge of the firm was also located within the jurisdiction of said Court. Process was duly executed upon Jones in Wood county, and an order of publication duly awarded, published and posted as to Darlington as a nonresident defendant. The prayer of the bill was for appointment of a receiver, carrying out of said contracts of carriage, settlement of the partnership accounts, dissolution and winding up of the partnership, and for an injunction.

On January 24, 1905, a petition was presented by the special receiver to the judge in vacation for authority to issue receiver's certificates or to borrow not exceeding $3500 to carry out the contracts and conduct the business of said partnership, and, notice of the motion therefor having been served upon Jones and Darlington, the latter appeared thereto and tendered their demurrer to the bill, and Darlington his plea to the jurisdiction. Upon argument the judge, being of opinion that he could not consider the plea or demurrer in vacation, refused to then act thereon, but, being of opinion that the bill presented a prima facie case ordered that the receiver be authorized to borrow said sum for the purpose stated, to be repaid out of funds coming into his hands by reason of said business.

Jones, March 30, 1905, filed his answer to the bill. While it contains charges of recrimination against Hulings of drunkenness, denies the profitableness of the contracts as alleged in the bill, and charges particularly that the contract for carrying cross-ties will be unprofitable and result in bank- ruptcy to the firm and its individual members, yet there is no denial of the partnership agreement, nor of the fact that said contracts were entered into by said firm and that the notices were given Hulings by Jones and Darlington substantially as alleged in the bill.

In May, 1905, Darlington instituted a libel proceeding against Hulings and Jones in the District Court of the United States for the Northern District of West Virginia, to have adjudicated in a court of admiralty his right and title to the steamboat Clifton and its attendant property under his contract with them of August 18, 1904, and therein caused said property to be seized by the marshal of said district. The order of the court provided that said property should be placed by the marshal in the hands of said Dotson as special custodian thereof, which was done. On hearing in said district court, it was adjudged that the said libellant, by virtue of his said contract, had only an equitable mortgage on said property, not cognizable in a court of admirably, and this judgment was, upon writ of error obtained by Darlington, affirmed by the United States Circuit Court of Appeals; and the marshal of said district, in conformity with the order of the district court, was ordered to restore to the receiver said steamboat and paraphernalia, together with all funds in his hands...