Moore v. Thorpe
| Decision Date | 09 June 1916 |
| Docket Number | 19,756 - (150) |
| Citation | 158 N.W. 235,133 Minn. 244 |
| Parties | J. C. MOORE v. SAMUEL S. THORPE AND OTHERS |
| Court | Minnesota Supreme Court |
Action in the district court for Hennepin county against Samuel S Thorpe, Louie D. Richardson, William H. Taylor, Samuel C Confer, Richardson-Kellett Company and Richardson-Kellett Land Company, to recover $105,266. From an order, Steele, J. sustaining the demurrer of defendants Thorpe, Richardson and Confer to the complaint, plaintiff appealed. Reversed.
Partnership -- evidence.
1. Defendant Richardson-Kellett Company, a corporation, and the individual defendants, entered into an agreement by the terms of which the individual defendants were to furnish the money to purchase lands under an option held by the corporation, and to finance the sale of the lands; the corporation was to employ agents and manage the sale of the lands, the profits to be divided equally. This agreement construed and held to create a partnership between the corporation and the individual defendants.
Partnership.
2. That the corporation was to have exclusive charge of selling the lands is not important.
Partnership -- recovery by agent against partners.
3. Plaintiff's contract to act as agent for the sale of the lands was made with the corporation only. There is no allegation that he knew that the individual defendants were interested in the enterprise. Held that this does not bar his right to recover of the individual defendants on the theory that there was a partnership.
Corporation -- ultra vires.
4. The individual defendants cannot escape the liability of a partner by the plea that the corporation was not authorized to enter into a partnership.
Selover, Schultz & Selover, for appellant.
Keith, Kingman, Cross & Wallace, for respondents.
Defendants Thorpe, Richardson and Confer interposed a general demurrer to the complaint and to each of the causes of action attempted to be stated therein. The demurrer was sustained by the trial court, and plaintiff appealed from the order.
The ultimate question to be decided is whether the complaint states a cause of action as against the demurring defendants, either on the ground that they were partners with defendant Richardson-Kellett Company, the corporation with which plaintiff made the contract sued on, or upon any other ground.
The complaint alleged, as the first cause of action the following facts:
Defendant Richardson-Kellett Company is a Minnesota corporation, hereinafter called "Kellett Company." It had on May 21, 1909, an option from one St. John to purchase 8,600 acres of Florida land, but was unable to make the purchase for lack of ready funds. It then entered into an agreement with defendants Thorpe, Richardson, Taylor and Confer, hereinafter called the "individual defendants." This contract is not set out haec verba, nor is a copy attached to the complaint as an exhibit, but the pleader attempts to state its provisions, as follows: The individual defendants were to advance whatever funds were needed to complete the purchase of the lands under the St. John option, and Kellett Company was to turn over to the individual defendants, or hold for their benefit and its own, or turn over to a corporation to be formed by the individual defendants in case they desired it, the said option and whatever title to said lands it might meanwhile obtain thereunder. It was further then agreed between said parties, quoting the language of the complaint, "that they would and they thereby did enter into a partnership or joint adventure respecting said lands upon the following terms and conditions." These "terms and conditions," as the complaint sets them forth, are as follows:
The Kellett Company to furnish its said option for the joint account. The individual defendants to furnish all moneys needed to finance the purchase and resale of said lands. Kellett Company to sell same for "the syndicate," furnishing and paying all office rent and clerical assistance, as well as its best efforts and that of its officers and selling force. Kellett Company to sell at best prices obtainable, at not less than $25 an acre, without interest, on monthly instalments of not less than $7.50 per month. Kellett Company to make all collections, to make a regular monthly report of same to individual defendants. Kellett Company to employ subagents, and to pay out of funds received from sales the commissions of such subagents, to make advances to same out of funds received from sales so made, paying from such funds all expenses incurred in making sales. All disbursements made by the individual defendants for taxes upon the lands, for abstracts, for recording, attorneys' fees, expense of forming themselves into a corporation, at their option, and all other expenses incident to the handling of the lands, were to be paid by the Kellett Company from moneys received from sales. Kellett Company was to have a drawing account of $400 per month from said funds, and to account to "the syndicate" for such balance as it might have on hand from collections, after disbursements of the above items of cost and expense, and remit same to the individual defendants monthly until the following items should be remitted in full: (a) The entire purchase price of the land; (b) the amount retained by Kellett Company as drawing account; (c) interest at 6 per cent on all sums paid by the individual defendants for the land. When these payments had been made, a dividend was to be made of the remainder, of which 50 per cent should be paid to the individual defendants, and 50 per cent to Kellett Company. Contracts for the sale of the land were to be made in the form of an application, a receipt for the first payment, and a certificate of acceptance; copies of these were attached to the complaint. The application is to the Kellett Company, and the receipt and acceptance are to bear the signature of that company, the individual defendants in no way appearing in the transactions between the Kellett Company and the purchasers, or in the contracts between the company and its subagents. The individual defendants were to cause proper deeds to the lands sold to be executed and delivered on demand when the buyers should have made full payment. The foregoing is a full statement of all of the allegations of the complaint relative to the contract between the Kellett Company and the individual defendants. The statement to the effect that the parties thereby entered "into a partnership or joint adventure," and the use of the word "syndicate" in referring to the parties, should be treated as the conclusions of the pleader, and the question whether the contract constituted a partnership or joint adventure is to be decided from the specific allegations in the complaint as to its provisions.
The complaint then alleges that in August, 1909, said agreement was confirmed and continued by said parties thereto, by an instrument in writing as alleged, except the division of the net profits, which was changed to 55 per cent to the individual defendants and 45 per cent to Kellett Company. Title to the lands was obtained and paid for under the St. John option, and was held for a time by Richardson-Kellett Land Company, a corporation formed in February, 1910, by the individual defendants under their option to do so. This corporation, hereinafter called the Land Company, then entered into a contract with Kellett Company which embodied the terms of the contract between the individual defendants and Kellett Company, the Land Company assuming and ratifying the previous engagements of the individual defendants. Then follows an allegation that Kellett Company, during all the time since May 21, 1909, has been acting with relation to said lands as the partner and agent of the individual defendants and of the Land Company. This allegation is entitled to no weight in the decision of the question of the relation between the parties, as it is purely a conclusion of the pleader. It is then alleged that during this period Kellett Company has employed many agents under the agreement; has received thousands of applications and large sums of money from the applicants; has advanced to agents large sums out of money so received; has paid large sums on account of expenses; has procured from the individual defendants and the Land Company large numbers of deeds and delivered them to purchasers who had made complete payment; has on numerous occasions accounted to the individual defendants and the Land Company for all moneys received by it from sales.
The complaint then alleges that on May 21, 1909, the said defendants, acting through Kellett Company, made, executed and delivered to plaintiff a contract in writing, a copy of which is attached to the complaint as an exhibit. This contract forms the basis of the claim of plaintiff that a large sum is due him for unpaid commissions earned by himself and his subagents, who have assigned their claims to him. It is dated May 21, 1909, executed by plaintiff...
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