Jackson v. Executors of McLean

• Decision Date: 10 March 1890
• Parties: Jackson, Appellant, v. Executors of McLean
• Court: Missouri Supreme Court

13 S.W. 393

100 Mo. 130

Jackson, Appellant, v. Executors of McLean

Supreme Court of Missouri

March 10, 1890

Appeal from St. Louis City Circuit Court. -- Hon G. W. Lubke, Judge.

Affirmed.

John M Dickson for appellant.

(1) The facts stated in the petition show conclusively that a contract of partnership existed between Jackson and McLean. A partnership may be express or implied from the circumstances of a given case. All the facts stated here point to a relation of partnership between the parties. Collyer on Partnership, chap. 1, sec. 1; Story on Partnership, sec. 13 n. 3; also secs. 20, 21, 22, 23; Lengle v. Smith, 48 Mo. 296; Wear v. Johnson, 48 Mo. 234; Whitehead v. Schiekle, 43 Mo. 537; Bruisley v. Elliot, 38 N.H. 287; Fremann v. Bloomfield, 43 Mo. 291. (2) The facts stated in petition show that the agreement between McLean and Jackson was not immoral or illegal, nor against public policy. It was not violative of any positive law, or morality, nor did it tend to the injury of the public, or any individual connected with the company. Therefore it should be enforced. Pollock on Contracts [4 Ed.] p. 292; Chitty on Contracts [11 Ed.] p. 982; Green v. Corrigan, 87 Mo 359; G. C. & S. S. S. Co. v. Kelly, 77 Ill. --; Cook v. Sherman, 4 McCreary, 20; Bead v. Miller, 22 N.E. 465, and cases cited.

Rowell & Ferris for respondents.

(1) The alleged agreements and transactions, set forth in the bill, are immoral, illegal, and in contravention of public policy, and a court of equity will afford the participants no relief. Wardell v. Railroad, 4 Dillon, 330; s. c., 103 U.S. 651; Thomas v. Railroad, 1 McCreary, 392; Tel. Co. v. Railroad, 1 McCreary, 418; Cook v. Sherman, 4 McCreary, 20; Farley v. Railroad, 4 McCreary, 138; Armstrong v. Toler, 11 Wheaton, 258; Bartle v. Colman, 4 Peters, 184; Tool Co. v. Norris, 2 Wall. 45; Hall v. Coppel, 7 Wall. 542; Hanauer v. Woodruff, 15 Wall. 439; Jackson v. Ludeling, 21 Wall. 616; Oscanyan v. Arms Co., 103 U.S. 261; Iron Co. v. Richmond, 129 U.S. 643; Gibbs v. Gas Company, 130 U.S. 396; Bestor v. Wathen, 60 Ill. 138; Railroad v. Kelly, 77 Ill. 426; Craft v. McConoughy, 79 Ill. 346; Ins. Co. v. Mfg. Co., 97 Ill. 536; Tobey v. Robinson, 99 Ill. 222; Ryan v. Railroad, 21 Kan. 365; Flint v. Dewey, 14 Mich. 477; Dewitt v. Brisbane, 16 N.Y. 510; Woodworth v. Bennet, 43 N.Y. 273; Fuller v. Dame, 18 Pick. 473; Bedford v. Bowser, 48 Penn. St. 29; Griswold v. Waddington, 16 Johns. 485; Watson v. Fletcher, 7 Grattan, 1; Messenger v. Railroad, 36 N. J. L. 407; Todd v. Rafferty, 30 N.J.Eq. 260; Sampson v. Shaw, 101 Mass. 149; Gibbs v. Smith, 115 Mass. 592; Snell v. Dwight, 120 Mass. 9; King v. Winants, 71 N.C. 469; Williamson v. Railroad, 53 Iowa 126; Railroad v. Poor, 39 Maine, 277; Railroad v. Blakie, 1 McQueen H. of L. Cases, 461; Railroad v. Magnay, 25 Beavan, 592; Harrington v. Dock Co., 3 Queen's B. D. 549; Peltz v. Long, 40 Mo. 532; Railroad v Seeley, 45 Mo. 212; Kitchen v. Greenabaum, 61 Mo. 110; Atlee v. Fink, 75 Mo. 100; Green v. Corrigan, 87 Mo. 359; Tyler v. Larrimore, 19 Mo.App. 445; Larrimore v. Tyler, 88 Mo. 661; Attaway v. Bank, 93 Mo. 485; Jackson v. McLean, 36 F. 213. (2) The managers of a railway corporation cannot violate the trust reposed in them by the charter; and under the allegations of the bill they owed a duty to the stockholders, creditors and the public whose trust they accepted, of which neither they nor their successors could divest themselves. Railroad v. Seeley, 45 Mo. 212; Cook v. Sherman, 4 McCreary, 20; Bestor v. Wathen, 60 Ill. 138; Ins. Co. v. Mfg. Co., 97 Ill. 537; Thomas v. Railroad, 1 McCreary, 392; Wardell v. Railroad, 4 Dillon, 90; Tel. Co. v. Railroad, 1 McCreary, 418; Hall v. Coppell, 7 Wall. 542; Oscanyan v. Arms Co., 103 U.S. 291; Tool Co. v. Norris, 2 Wall. 45; Bartle v. Colman, 4 Peters, 184; Armstrong v. Toler, 11 Wheaton, 258; Jackson v. Ludeling, 21 Wall. 616; Hanauer v. Woodruff, 15 Wall. 439; Kelly v. Railroad, 77 Ill. 426.

Brace J. Barclay, J., dissenting.

OPINION

Brace, J.

-- This is an action in the nature of a bill in equity for the settlement of partnership accounts. A demurrer to the bill was sustained, the bill dismissed and judgment rendered for the defendants, from which plaintiff appeals.

The bill, which is very lengthy, in substance, charges: That in March, 1885, the plaintiff and the said James H. McLean entered into a copartnership agreement to build two railroads in the state of Illinois, to be operated together when completed as one continuous line; and for this purpose to form railroad corporations under the laws of Illinois, the capital stock to be owned by plaintiff and the said McLean in equal parts, the said McLean to furnish the means necessary for the construction of the first twenty-five miles, and the plaintiff to take charge and direct the construction thereof. That said corporation, so to be organized, should issue bonds to be secured by mortgage or deed of trust on all its property and franchises, and, on the completion of the said first twenty-five miles, first mortgage bonds or the proceeds thereof to the amount of fifteen thousand dollars per mile, and stock to the amount of sixteen thousand dollars per mile, should be delivered to said partnership, when there should be a statement and settlement of the accounts of said partnership to that date, and in such settlement the said McLean should receive, from the proceeds of said bonds, or in bonds themselves at his option at a valuation of eighty-five cents on the dollar, the amount of his cash advances and interest; the remainder of said stock, bonds, and the proceeds thereof, to be equally divided between plaintiff and the said McLean.

It was further agreed that all donations of lands and subscriptions to said railroad from cities, towns, townships, counties or persons, should inure to the benefit of and become the property of said partnership, and to be accounted for in said settlements; that, in pursuance of said agreement, the said partnership firm in the name of the plaintiff and certain clerks and employes of said McLean, as stockholders, was incorporated under the laws of the state of Illinois as the Carbondale, Metropolis and Paducah Railway Company, with a capital stock of one million dollars "to be used and controlled by plaintiff and the said McLean as an adjunct for the accomplishment of the enterprise for which said partnership was formed, and thereupon, by its nominal officers, the said corporation executed its deed of trust, conveying all its property and franchises to plaintiff and the said McLean to secure the payment of one thousand bonds of one thousand dollars each; that thereafter said corporation under the direction of plaintiff and the said McLean, and in aid of their original scheme for making for themselves the entire profit to be earned from the construction of said road, entered into a contract with the said partnership concern in the name of certain parties acting for said copartnership concern, by which said concern in the name of said parties agreed to construct said railroad for the whole of the bonds, stock and donations of land and subscriptions and all subsidies that might come into the possession of said company, the said McLean to provide the means for carrying on the work of construction and to handle the bonds at not less than eighty-five cents on the dollar. That these parties representing said copartnership concern in said contract were financially irresponsible, and signed said agreement at the request of and as the agents of plaintiff and defendant.

That afterwards the plaintiff and the said McLean, by virtue of said contract, carried on the work of constructing said railroad under said contract, until about the seventh of November, 1885, when the plaintiff was by his said partner unwarrantably excluded from the said partnership concern and from all control of its business. That thereafter twenty-five miles of said road was approximately completed under said...