In re Goetz

• Citation: 289 F. 118
• Decision Date: 27 February 1923
• Docket Number: B-66.
• Parties: In re GOETZ.
• Court: U.S. District Court — District of Arizona

289 F. 118

In re GOETZ.

No. B-66.

United States District Court, D. Arizona.

February 27, 1923

Charles Blenman, of Tucson, Ariz., for trustee.

O Gibson, of Tombstone, Ariz., for claimant.

DOOLING District Judge.

The bankrupt, Goetz, and one Matteson entered into a partnership in 1918 for the production and sale of honey. Goetz was to furnish the money for purchase of apiaries and supplies, and Matteson was to care for the bees. His father was to assist him, but was to receive nothing for his services until the enterprise was clear of indebtedness. The agreement provided further:

'Any funds borrowed for the purpose of purchase of additional bees or supplies, the party of the first part (Goetz) must pay the interest personally; but the principal of sum borrowed will be paid by both parties, received from the sale of honey derived from various apiaries. The funds left after all indebtedness is paid, including material and supplies, shall be equally divided between the parties.'

Certain colonies of bees and 160 acres of land, purchased after the partnership was entered into with money furnished by Goetz and title to which was taken in his own name, but which were used in the partnership business, are the subject of the present proceeding. The business was carried on for about four years, during which time $24,228 was received from the sale of honey, all of which was turned over to Goetz. Of this amount, so far as can be gathered from the record, Goetz paid out the running expenses of the business, amounting to $9,669.15, expended for equipment and replacements $2,300 advanced to Matteson $2,500 in cash and $600 in merchandise, making a total expenditure of $15,069.15, leaving, so far as appears in this proceeding, $9,158.85 unaccounted for. The items of expenditure are material here only in a very general way, and solely as bearing on the question as to whether or not the claim of Matteson is substantial or merely colorable.

The partnership contract was evidently drawn by the parties themselves and is rather inartificial, but the clause quoted providing for the payment of the principal used in the purchase of additional bees or supplies out of moneys received from the sale of honey, must certainly contemplate that such property, at least after Goetz had received enough money to pay the principal, should become partnership property. On April 21, 1922, Matteson brought an action in the state court against Goetz for an accounting of the partnership interests and to have it decreed that the property in question, though held in the name of Goetz, was partnership property. Summons issued and was served on Goetz on the same day, and on May 13th his default was entered, and the action proceeded to trial and judgment. On April 21st a temporary restraining order was issued and served, restraining Goetz from incumbering in any manner or conveying any of the real or personal property...