Ingham Lumber Co. v. Ingersoll

• Decision Date: 31 January 1910
• Citation: 125 S.W. 139,93 Ark. 447
• Parties: INGHAM LUMBER COMPANY v. INGERSOLL
• Court: Arkansas Supreme Court

125 S.W. 139

93 Ark. 447

INGHAM LUMBER COMPANY v. INGERSOLL

Supreme Court of Arkansas

January 31, 1910

Appeal from Polk Circuit Court; James S. Steel, Judge, affirmed.

Judgment affirmed.

J. I Alley, for appellant.

1. One partner may sue in the name of himself and copartners without their consent; but if he does against their consent, he must indemnify them against costs. Lindley on Partnership, p. 473 30 Cyc. 565 and cases cited.

2. If there was no fraud, Cobb had the right to dismiss the cause as much so as Ingersoll had to bring it. Lindley on Part. p. 473.

3. Instruction 4 should have been given. The judgment represents the profits, and the profits belong equally to the two partners.

4. Instruction 2 should have been given, for the burden was on plaintiff to show that defendant rescinded the contract, or rendered its performance impossible.

5. A financial crisis is not the act of God, which always excuses, but it was inevitable and irresistible, and it did not excuse defendant from living up to its contract, still it was a good and sufficient excuse. Defendant acted in good faith and not for the purpose of cancelling the contract, and should not be held liable. 7 A. & E. Enc. Law (2 ed.), p. 147 and cases cited; 30 L. R. A. 33; 7 A. & E. Enc. Law (2 ed.), pp. 147-8-9-150-1-2, etc.

Pole McPhetrige and J. S. Lake, for appellees.

1. As a general rule, one partner, acting within the scope of the partnership business, will bind his co-partners, but there are exceptions. 66 Ark. 448; 30 Cyc. p. 501, note 61; 1 Bates on Part. § 383.

2. Where one party makes a breach of contract, the other party may consider the contract rescinded and sue for the breach. No error in instructions 3 and 4. 80 Ark. 228.

3. If the obligee shall do anything to obstruct or prevent the obligor from performing a contract, the obligor is discharged, the contract is legally performed, and he may demand performance. 27 Ark. 65; 67 Ark. 156; 64 Ark. 228; 38 Ark. 174. Mere difficulties do not excuse. 61 Ark. 315; 2 Pars. on Cont. (2 ed.), p. 672.

4. Partners have an equitable lien upon partnership assets for the liquidation of the firm's liabilities. We find no error in the court's charge.

5. If the admission of Stevenson's evidence was error, it was invited. 87 Ark. 17.

OPINION

FRAUENTHAL, J.

This was an action instituted by Ingersoll & Company, the plaintiffs below, against the Ingham Lumber Company, to recover damages for an alleged breach of contract. On September 16, 1907, the parties entered into a written contract whereby the defendant employed the plaintiffs to cut and manufacture into lumber all the timber on about 880 acres of land owned by the defendant, and agreed to pay certain named prices for the different grades of lumber so manufactured by the plaintiffs. The defendant furnished the mill for sawing the timber, and the plaintiffs made all their preparations for performing the contract on their part, and at once began the work thereunder. They continued actively to cut the timber and manufacture the lumber until. November 1, 1907, when they had manufactured lumber to an amount variously estimated from 400,000 to 800,000 feet. On November 1, 1907, the manager of defendant notified the plaintiffs to stop cutting the timber and manufacturing the lumber on account of the stringency of the money market, due to what was called a financial panic. The plaintiffs claimed that they had been at great expense in making preparations in beginning the work, and objected to stopping the work under the contract. About the 8th of November, 1907, the manager of defendant demanded of the plaintiffs that they stop the work, and declared that, if they did not do so, the defendant would stop them with the aid of officers. The plaintiff then stopped the work, and proceeded no further under the contract. At that time there was timber standing on the land which was variously estimated to be of the amount of from 400,000 to 1,200,000 feet. The plaintiffs were a partnership, composed of J. W. Ingersoll and J. H. Cobb, and the firm business was actively managed by said Ingersoll. On February 21, 1008, the plaintiffs instituted this suit, and on April 8, 1908, the said J. H. Cobb appeared before the clerk of the court in vacation and filed a written statement dismissing the suit at the plaintiff's cost. Thereafter, at the April term of the court, the said J. W. Ingersoll filed a motion to reinstate the suit. In this motion he stated that he had the entire management of the partnership business, and that Cobb had only a nominal interest therein, and had advised and consented to the institution of the suit, that thereafter he had conspired and colluded with the defendant to defraud the said Ingersoll by dismissing the action. The motion was supported by affidavits, and resisted by the defendant. After hearing the motion, the court reinstated the suit. To this action of the court the said J. H. Cobb made no objection, and saved no exception, and does not in this court enter any complaint. The lower court was not asked to require the said Ingersoll to indemnify said Cobb against any cost, or to permit the said Cobb to withdraw from the suit as a party plaintiff or to be made a party defendant. Thereupon the defendant filed its answer; and upon a trial of the cause a verdict was returned in favor of plaintiffs for $ 290 damages. The defendant prosecutes this appeal.

It is urged by the defendant that the court erred in not permitting the plaintiff J. H. Cobb to dismiss the suit and in ordering the action to be reinstated on the motion of the plaintiff J. W. Ingersoll. The claim herein sued on grew out of a contract made with the partnership, and therefore was a partnership asset. All the partners had an interest in the subject-matter of the suit, and accordingly were proper and necessary parties to the action. Kirby's Digest, § 6005; 5 Ency. Pleading & Practice, 854; 30 Cyc. 561; Summers v. Heard, 66 Ark. 550, 50 S.W. 78; Hot Springs Rd. Co. v. Tyler, 36 Ark. 205; Matthews v. Paine, 47 Ark. 54, 14 S.W. 463; Coleman v. Fisher, 67 Ark. 27, 53 S.W. 671.

The partnership contract was a joint contract, and therefore all partners at the time the contract was made were jointly interested therein. According to the common law procedure, where one of the several owners of a joint interest refused to join as plaintiff, the other owners were permitted to use his name as a co-plaintiff. Gray v. Wilson, Meigs (Tenn.), 394; Sweigart v. Berk, 8 Serge. & Rawle 308. One of two or more co-plaintiffs has no right to dismiss an action against the objection of the others unless it can be shown that the prosecution of the suit would result injuriously to him. In the event he might be injured by the prosecution of the suit, upon his being indemnified against loss, the court will permit the action to proceed. Where one partner is unwilling to join in a suit to enforce a partnership claim, the other co-partners have a right to use his name upon indemnifying him against loss, if indemnity is demanded. 5 Ency. Plead. & Prac. 856. And in its sound discretion the court has a right to prevent the dismissal of a suit by one partner where it appears that the dismissal will result in an injury to the other partners. 1 Bates on Partnership, § 383; 14 Cyc. 399; Cunningham v. Carpenter, 10 Ala. 109; Loring v. Brackett, 3 Pick. (Mass.) 403; Daniel v. Daniel, 48 Ky. 195, 9 B. Mon. 195.

By our Code (Kirby's Digest, § 6007) it is provided that: "Of the parties to the action, those who are united in interest must be joined as plaintiffs; but when, for any cause, it may be necessary for the purpose of justice, a person who should have been joined as plaintiff may be made defendant, the reason therefor being stated in the complaint." Under this provision, where a partner refuses to join in an action to recover a claim of the firm, he may be made a party defendant. 5 Ency. Plead. & Prac. 856.

In the case at bar the claim sued on was founded upon a contract made with the partnership, and all the partners joined in the institution of the suit. Thereafter, one of the partners sought to dismiss the suit to the injury of the other partner. It was claimed by the other partner that he conspired wrongfully with the defendant to defeat him of his rights. Upon the hearing the court refused to dismiss the action. The unwilling partner did not except to the ruling of the court. He did not ask to be...