Kaufman v. Catzen S.

• Decision Date: 13 October 1925
• Docket Number: (No. 5357.)
• Citation: 100 W.Va. 79
• Parties: L. Kaufman v. Aaron Catzen et als.
• Court: West Virginia Supreme Court

100 W.Va. 79

L. Kaufman

v.Aaron Catzen et als.

(No. 5357.)

Supreme Court of Appeals of West Virginia.

Submitted May 13, 1925.

Decided October 13, 1925.

1. Joint Adventures Joint Adventure Held to Relate to Single Transactions, Though it May Comprehend Business to be Continued for Period of Years.

While a partnership is ordinarily formed for the transaction of a general business of a particular kind, a joint adventure relates to a single transaction, though it may comprehend a business to be continued for a period of years. (p. 83.)

2. Corporations Joint Adventure Held to Continue, Although Active Member Assigns Interest to Corporation Which He Forms to Carry on Business.

A joint adventure continues, notwithstanding the active member assigns his interest therein to a corporation which he forms to carry on the business, (p. 84.)

3. Appeal and Error Decision of Supreme Court of Appeals on Prior Appeal Held to Constitute Law of Case, Both in Subsequent Proceedings in Circuit Court and on Subsequent Appeal.

A decision of this court on a prior appeal constitutes the law of the case, both in subsequent proceedings in the circuit court and on subsequent appeal. (p. 88.)

4. Partnership Receiver Will Not be Appointed to Take Charge of Partnership Enterprise Except on Showing That it Should be Dissolved.

A receiver will not be appointed to take charge of a partnership enterprise unless it appear that the same should be dissolved. (p. 87.)

5. Joint Adventures In Absence of Strong Equities to Support Decree, Court Will Not Interfere With Management of Joint Adventure, and Will Not Appoint Receiver to Sell Land in Which Capital of Joint Adventures is Invested.

In the absence of strong equities to support such a decree, a court will not interfere with the management of a joint adventure by the parties thereto, and will not appoint a receiver to sell the land in which the capital of the joint adventurers has been invested. (p. 87.)

Appeal from Circuit Court, McDowell County.

Suit by L. Kaufman against Aaron Catzen and others to dissolve a joint adventure, for appointment of a receiver and for other relief. From a decree dismissing plaintiff's second amended and supplemented bill in part, defendant appeals.

Affirmed.

A. C. Buchanan and D. J. F. Strother for appellant, F. C. Cook, Russell S. Ritz and Sanders, Crockett, Fox & Sanders, for appellees.

Woods, Judge:

This cause has been considered by this court twice before on appeal. See Kaufman v. Catzen, 81 W. Va. 1, and. Kaufman v. Catzen, 90 W. Va. 719, which opinions are referred to for a statement of the facts. However, a brief history of the litigation will be necessary to an understanding of the questions involved here.

The plaintiff's original bill sought a recovery of $30,000 advanced by the plaintiff to cover the prepayment of five years' ground rent upon the leasehold involved herein, and also a one-third interest in the enterprise in addition thereto. This claim was met by the defendants by asserting that the $30,000 so advanced by the plaintiff, Kaufman, under the contract between the said Kaufman and the defendant Aaron Catzen wTas not to be returned to him as such, but that the said Kaufman advanced said sum, and, in addition thereto, agreed to advance the additional sum of $20,000 to develop the leasehold, in consideration whereof he was then to have a one-third interest in the profits to be realized out of said enterprise and that the said Kaufman forfeited his right to the one-third interest in said enterprise by reason of his enmity and hostility to the development thereof. The circuit court decreed that the plaintiff, Kaufman, was not entitled to the $30,000 advanced by him for five years' ground rent, but did hold that he was entitled to a one-third interest in the enterprise, and appointed a receiver to take charge of said enterprise. From this decree the defendants appealed to this court. Upon this first appeal the decision of the lower court was affirmed as to the holding that the plaintiff, Kaufman, was not entitled to recover the $30,000 advanced by him, and reversed as to the holding that the said plaintiff was entitled to the appointment of a receiver and a one-third interest in the enterprise. This court further held that while the said Kaufman did not forfeit his right to the one-third interest so purchased by him by the advancement of the said $30,000 for ground rent, that said one-third interest was, however, subject to be charged with all damages arising out of the conduct of the said Kaufman on account of any enmity and hostility exhibited by him against said enterprise, and directed the cause to be referred to a commissioner to make and state a report covering these questions. Kaufman v. Catzen, 81 W. Va 1. In accordance with the foregoing decision the circuit court referred the cause to a commissioner and certain findings were made by said commissioner from the evidence submitted to him. This report came on before the circuit court on numerous exceptions made by both plaintiff and defendants, but the trial court overruled all the exceptions made by the defendants and sustained certain of the exceptions made by the plaintiff, and found that the enterprise had, up to the 7th day of September, 1918, made a profit of $37,756.44, subject to distribution among the interested parties, and decreed a recovery to the said Kaufman of one-third of this amount, or $12,585.48, together with $1,902.50, interest thereon to the 7th day of September, 1918, aggregating the sum of $14,487.98. From this decree the appellees herein prosecuted a second appeal, and upon the hearing this court reversed said decree. In their findings this court used the following language: '' Our conclusion, therefore, is to reverse the decree and remand the cause, with direction to order another reference to revise and restate the account, showing: (1) the debts and liabilities of the joint enterprise; (2) the advancements made by any party, the dates thereof, the interest thereon, and any payments made toward the reduction thereof out of the revenues or assets of the enterprise; (3) the receipts and expenditures since the entry of the final decree in the cause, together with a statement showing the funds on hand, including any liquid assets." Kaufman v. Catzen, 90 W. Va. 719. This cause was remanded to the circuit court for further proceedings in conformity with the two decisions of this court. Thereafter the plaintiff, Kaufman, tendered and filed in the circuit court his second amended and supplemental bill praying, among other things, that the joint enterprise involved herein be dissolved and the affairs and business of the same be wound up; that a receiver be appointed to manage the affairs of said enterprise, and that the assets and property of said enterprise be sold and the funds arising therefrom be distributed to the interested parties, to which second amended and supplemental bill the defendants interposed a demurrer and specifically answered each and all of the allegations of said bill, negativing the same and all of them, and particularly those allegations of the bill wherein the plaintiff charged a conspiracy between the defendant Aaron Catzen and the Northfork Realty Company to so conduct the said enterprise by reinvesting the earnings derived therefrom in making further improvements so that at the expiration of the lease the same would revert to the said Northfork Realty Company. Upon this second amended and supplemental bill and the answer thereto considerable evidence has been introduced, which is set forth in the present record, upon consideration of all of which the circuit court entered the decree complained of herein. Kaufman appeals from that part of said decree which dismisses said second amended and supplemental bill of the said plaintiff in so far as the same "prays for the appointment of a receiver, a dissolution of said partnership or joint enterprise, and a sale of said property."

We are not permitted to review any question heretofore decided in the present cause, as the party who loses in this court may not have the cause reheard by a second or1 third appeal.

The subject matter of the joint enterprise involved in this cause consists of a lease from the Northfork Realty Company for the use and occupancy of approximately forty-four acres of land. The grantee in this lease was the defendant Aaron Catzen. The term was twenty-five years from September 1, 1907, subject to a renewal at the expiration of the said twenty-five years for an additional term of twenty-five years. The contract between the plaintiff, Kaufman, and the defendant, Catzen, as interpreted by this court on the first appeal, is that Kaufman, in consideration of advancing to the grantee of said leasehold the sum of $30,000 to cover the ground rent for the first five years under said lease, was to receive a one-third interest in the rents and profits arising out of said enterprise, and that by reason of the contract thus established the parties to the same became and were co-adventurers in said enterprise, whose relation to each other and to said enterprise was similar to or the same as partners. The subject of joint adventure is of comparatively modern origin. It was unknown at common law, being regarded as within the principles governing partnerships. While some courts hold that a joint adventure is not identical with a partnership, it is regarded as of a similar nature, and is governed by the same rules of law. One distinction lies in the fact that, while a partnership is ordinarily formed for the transaction of a general business, a joint adventure relates to a single transaction, although the latter may comprehend a business to be continued for a period of years. 23 Cyc. 453; Saunders v. McDonough, 191 Ala. 119. Testing the right of these partners to dissolve said joint enterprise, the first inquiry to be made is what is the period of time or term over which the partnership or joint...