Kaufman v. Catzen

• Decision Date: 15 October 1929
• Docket Number: 6442.
• Citation: 150 S.E. 371,108 W.Va. 1
• Parties: KAUFMAN v. CATZEN et al.
• Court: West Virginia Supreme Court

150 S.E. 371

108 W.Va. 1

KAUFMAN v. CATZEN et al.

No. 6442.

Supreme Court of Appeals of West Virginia.

October 15, 1929

Submitted October 1, 1929.

Rehearing Denied Dec. 4, 1929.

Syllabus by the Court.

It is the general rule, subject to few exceptions, that a question of law or fact once definitely settled and determined by this court, on remanding the case for further proceedings, is conclusive on the parties and privies thereto, and upon the court below, and upon this court upon a second appeal or writ of error. Pennington v. Gillespie, 66 W.Va. 643 651, 66 S.E. 1009.

A coadventurer who makes unauthorized withdrawals of funds of the enterprise must pay interest thereon from the respective dates of withdrawal until repaid or account is made therefor.

Appeal from Circuit Court, McDowell County.

Suit by L. Kaufman against Aaron Catzen and others. From the decree plaintiff appeals. Reversed and remanded.

George C. Peery and A. C. Buchanan, both of Tazewell, Va., and D. J F. Strother, of Welch, for appellant.

F. C Cook, of Northfork, and Russell S. Ritz and Sanders, Crockett, Fox & Sanders, all of Bluefield, for appellees.

MAXWELL J.

Prior decisions in this case are reported in 81 W.Va. 1, 94 S.E. 388, L. R. A. 1918B, 672; 90 W.Va. 719, 111 S.E. 755, and 100 W.Va. 79, 130 S.E. 292. The present appeal is prosecuted by the plaintiff from a decree of the circuit court of October 22, 1928, confirming a report of a commissioner in chancery made pursuant to the directions of this court on the second appeal. There are involved here certain items of account allowed by the commissioner as credits to Catzen, and the question of interest on withdrawals by Catzen.

Appellant seeks to raise the question of the correctness of the allowance by the commissioner of interest on advancements to capital by Catzen, but that matter cannot now be considered, because it was determined on the second appeal. We there held that Catzen is entitled to interest on advancements to capital paid by him. It is res judicata. The reasons for our holding that Catzen is entitled to interest on advancements to capital are clearly set forth in Judge Lively's opinion, 90 W.Va. 719, 111 S.E. 755, and need not be repeated here. Suffice it to say that the general rule, relied on by plaintiff in error, that a partner is not entitled to interest on advancements by him to capital, in the absence of a special agreement that he is to be allowed such interest, is not applicable here, in the first place, because the relationship here presented is not strictly a partnership, it being a joint adventure, as we have heretofore determined, and in the second place, because Kaufman having failed to contribute to capital the sum of $20,000 which he had agreed to contribute, it was necessary for Catzen to borrow money, not only to cover the said sum of $20,000, but also to further finance the affairs of the adventure.

The commissioner found that there were unauthorized withdrawals by Catzen of $66,904.39 down to the 31st day of December, 1926. To this sum there should be added two items which the commissioner did not charge against Catzen, namely, $2,500, for federal income tax and $1,112.49 cost of preparation of federal income tax returns. With these two items added, the total unauthorized withdrawals down to the date mentioned is $70,516.88. The two additional items which we hold should be charged against Catzen are not items of expense of the joint adventure. They are items of tax and expense, respectively, of the Clark Development Company, a corporation, which was organized by Catzen to take over his interest and right in the joint adventure. Kaufman has no interest or concern in the said corporate affairs, and therefore it is improper to carry into the settlement between him and Catzen any of the charges against the corporation.

This brings us to the outstanding and important question of this appeal; namely, whether interest should be charged against Catzen on his unauthorized withdrawals. The commissioner basing his conclusion on our prior adjudication that Catzen is entitled to interest on advancements to capital, found that there was created a relationship of debtor and creditor between Catzen and the joint adventure; that he became a creditor, and as such occupied the same status as any other creditor, and that as exclusive manager of the enterprise he had the right at any time to make to himself, as creditor, payments or credits on...