Koontz v. Whitaker

• Decision Date: 06 December 1937
• Docket Number: No. 19011.,19011.
• Citation: 111 S.W.2d 197
• Parties: KOONTZ v. WHITAKER.
• Court: Missouri Court of Appeals

111 S.W.2d 197

KOONTZ v. WHITAKER.

No. 19011.

Kansas City Court of Appeals. Missouri.

December 6, 1937.

Appeal from Circuit Court, Benton County; C. A. Calvird, Judge.

"Not to be published in State Reports."

Action for money had and received by J. C. Koontz against Roy Whitaker. Judgment for plaintiff, and defendant appeals.

Affirmed.

W. M. Raines, of Kansas City, for appellant.

F. M. Brady, of Warsaw, for respondent.

SPERRY, Commissioner.

Koontz was plaintiff and Whitaker was defendant in an action in the lower court for money had and received. The cause was tried to a jury, and, from a judgment for plaintiff, defendant appeals. The parties will be referred to in this opinion as plaintiff and defendant.

The parties, for many years prior to 1930, had bought and sold livestock as partners, but the partnership, during that time, was based on each individual transaction, and was not a continuing one, or one of a general character. In December of 1930, they orally entered into a general partnership agreement for the purpose of engaging in the mercantile business and also in the business of feeding livestock, and in buying, selling, and trading in all kinds of personal property.

In December, 1930, plaintiff paid the sum of $459.50 for what was known in evidence as the Brown and Eaton cattle. The cattle were delivered to defendant, who, plaintiff claims, later sold them but never accounted to him for any part of the proceeds, nor was he ever given any credit for this sum of money on the books of the partnership. Defendant admitted the transaction, and admitted that no credit was given plaintiff on the books, but claimed that the cattle were sold at a sale of partnership personal property conducted by plaintiff, and that plaintiff received all of the money from the sale and paid defendant his share. This was the first count of the petition.

Plaintiff alleged in the second count of his petition that on March 3, 1931, he paid to defendant the sum of $481.50 which, by agreement, was to be placed on the partnership books as a credit to plaintiff's contribution to the original capital. It was admitted by defendant that he received said sum of money, but he claimed that it was paid to him by plaintiff in settlement of a pre-existing balance due defendant from plaintiff. This item did not appear on the books of the partnership.

In the final count it is alleged that plaintiff, on or about the — day of March, 1931, delivered to defendant several head of livestock which were to be, and actually were, sold at public sale by defendant. The stock brought $178 at the sale, and the proceeds were to have been credited by defendant on the partnership books as a contribution to the original capital by plaintiff. Evidence on behalf of plaintiff, if true, established the above facts. Defendant offered evidence to the effect that the stock mentioned in this count was sold at public sale conducted by plaintiff and the entire proceeds received by him; but his explanation of the transaction was very hazy and unsatisfactory.

The jury found for plaintiff on each count for the full amount sued for, and allowed interest thereon.

Defendant pleaded and proved that this same plaintiff had, prior to this action, at the February, 1936, term of circuit court, sued this defendant for an accounting, alleging fraud and concealment in a former settlement as between them. It is admitted by plaintiff that the three items forming the basis of the three respective counts of this petition were pleaded in the prior action and were among a large number of items listed in plaintiff's reply as having been not accounted for in the settlement of October, 1934; and that the court, in said prior action, entered the following decree:

"Now on this day comes the plaintiff in person and by his attorney, F. M. Brady, and comes the defendant in person and by his attorney, W. M. Raines, and this cause having been heard by the court upon the petition, answer and reply, and the evidence adduced by the respective parties hereto, and the court having duly considered same, doth find that the partnership which had existed between plaintiff and defendant as set forth in the pleadings was finally settled and dissolved, by the sale by plaintiff of all his interest therein, in the month of October, 1934, for the sum of Five Hundred Dollars ($500.00), which said sum was paid by the defendant to the plaintiff; that both the parties hereto as partners had equal opportunity to know and be familiar with the affairs of said partnership, and that said settlement was not procured through fraud or mistake on the part of the defendant:

"Therefore, the court does order, adjudge and decree that the plaintiff is not entitled to an accounting of said partnership affairs, and his petition therefor is denied, and dismissed, and that the costs of this cause are adjudged against the plaintiff, and that execution issue therefor."

This prior suit and judgment is urged here as res adjudicata of the matters involved in this action.

Plaintiff's theory below was that there had been a private settlement as between the parties, in October, 1934, at which time it was agreed that plaintiff was entitled to receive $500 for his net share of the assets of the partnership, and same was paid to him by defendant; that it was further agreed at that time that said settlement, upon which the partnership was dissolved, was based upon the book accounts between the partners, the stock of merchandise, and the accounts receivable; but that it was agreed at that time that if there were any items due plaintiff which were not included in, or shown on, the books, plaintiff might demand settlement of such items at a later date. It was, in effect, admitted by defendant that the items sued on in this action were not shown on the books, which were the basis of the other settlement.

Plaintiff admits that there was no ground for the prior suit for accounting because there was no partnership in existence when it was brought; and that he mistook his remedy when he brought it. But he claims that the items sued on here were not taken into consideration in the settlement because they were not shown on the books which formed the basis of the settlement. These items were never discussed at the time of dissolution; plaintiff claiming that he was deceived by defendant and led to believe that the books, which were kept by defendant, were accurate, and that all transactions affecting the parties, from and after the establishment of the partnership, were recorded therein; that he was uneducated and could scarcely sign his name to a check, and hence was incapable of discovering for himself the condition of the books; that the two representatives of the respective parties who struck the balance, upon which the partnership affairs were settled, had no knowledge as to these transactions because same were not on the books; that he claimed at the time the settlement was made that he should have had more credits but was unable to explain, at that time, why his credits were not as large as he thought they should have been; and that he did not learn of the fraud, concealment, and conversion of the property mentioned herein until defendant produced the books of the partnership, under order of court, in the trial had in February, 1936. The evidence adduced, in this case, supported these contentions of plaintiff; and the jury found for him on said evidence.

Ordinarily, an action at law between partners cannot be maintained until there has been an accounting and a balance struck, 47 C.J. 804. Such an accounting may be by private contract and agreement, 47 C.J. 804; Day v. Stafford, 128 Mo.App. 438-443, 107 S.W. 433; or it may be had by appropriate action at equity. Day v. Stafford, supra. There are some exceptions to the above rule, as where the partnership is limited to a single venture, or where the items sued on are few and simple of solution. 47 C.J. 805. In such cases an accounting is not a condition precedent to the bringing of an action at law for recovery. And if a partnership has...