Pierce v. Caldwell
| Decision Date | 04 April 1917 |
| Docket Number | 31301 |
| Citation | 162 N.W. 8,179 Iowa 868 |
| Parties | WILLIAM PIERCE, Appellant, v. ALBERT CALDWELL et al., Appellees |
| Court | Iowa Supreme Court |
Appeal from Crawford District Court.--E. G. ALBERT, Judge.
SUIT in equity by one partner against the other for a partnership accounting and for a dissolution of the partnership. Third parties are made defendants as alleged custodians of the partnership funds, or as parties having wrongfully appropriated such funds to the discharge of the individual debts of one of the partners. There was a decree dismissing the petition, and the plaintiff appeals.
Affirmed.
Sims & Kuehnle, for appellant.
Conner & Powers, for appellees.
The story of the case is somewhat complicated, and the controversy is principally one of fact. The plaintiff, Pierce, and the defendant Caldwell were partners. The defendant E. J. Peters was the cashier of the Farmers' Bank, and is alleged to have wrongfully appropriated some of the partnership funds to the payment of the individual debts of Caldwell. The interveners, First National Bank of Chadwick, Illinois, and Harry Traum, were mortgage creditors of the partnership. The interveners have not appealed.
The partnership was formed in the spring of 1914. Pursuant thereto, the parties farmed a rented farm for that season. In the meantime, Caldwell became the son-in-law of Pierce, and the two families lived together upon the rented farm. At the time of forming the partnership, the larger part of the personal property which was to be used upon the farm was owned by Pierce. This property was encumbered by a mortgage of $ 1,675, held by the interveners in this case. It was agreed between the parties to the partnership that Caldwell should pay upon this mortgage the sum of $ 1,000, and that by such payment the parties should become equal partners in the property theretofore owned by them individually. The agreement by Caldwell to pay the $ 1,000 was not performed. Later, an extension of time was obtained on the $ 1,675 mortgage, and a new mortgage was given on all the partnership property. This mortgage and the note which it secured were both signed by both partners, and the debt was thereafter treated as a partnership debt. In this transaction, the defendant E. J. Peters represented the Illinois creditors and the new note and mortgage were left in his hands for collection. In the latter end of the year, the mortgage was pressed for collection. The partnership had a large quantity of corn to be sold. This was subject to the lien for rent, which amounted to $ 1,293, and was held for collection at another bank in the same town. An arrangement was entered into between Peters and Traum on the one hand, and the members of the partnership on the other, whereby it was agreed that all the proceeds of corn to be sold should, after the payment of rent, be applied to the payment of the mortgage, and that, if thereafter any unpaid balance remained, then sufficient of the partnership property should be sold, and the proceeds applied in payment of such balance. It was further agreed that Caldwell should have special charge of the performance of this agreement, and that for such purpose Pierce should turn over to him all the partnership property until the agreement should be performed. Pursuant thereto, Peters prepared and Pierce executed a bill of sale of all the partnership property to Caldwell. The corn being sold, the purchaser thereof paid in the full proceeds to the other bank, where the lease was held for collection of rent. Out of these proceeds, there was a balance of $ 224 over and above the amount of the rent. For such balance such bank drew a check to the order of the Farmers' Bank (of which E. J. Peters was cashier), and delivered the same to Peters. Peters did not apply this sum upon the mortgage, but placed the same to the credit of Caldwell. Later, a public sale was held of the partnership property, and the proceeds thereof were all paid to Peters. Of these net proceeds, Peters applied upon the mortgage $ 1,288, and placed $ 120, being the proceeds of sale of certain hay, to the credit of Caldwell. The sums so placed to the credit of Caldwell were all checked out by him prior to the bringing of this suit. The controversy between the parties has concentrated mainly upon the two items here mentioned as having been placed to the credit of Caldwell. On the trial of the case, Caldwell's testimony was in harmony with that of the plaintiff and was hostile to the other defendants. It is the contention for the plaintiff that Peters ought to have applied the two items of $ 224 and $ 120 upon the...
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