Reinig v. Nelson

• Decision Date: 08 October 1929
• Citation: 227 N.W. 14,199 Wis. 482
• Parties: REINIG ET AL. v. NELSON ET AL.
• Court: Wisconsin Supreme Court

199 Wis. 482

227 N.W. 14

REINIG ET AL.

v.NELSON ET AL.

Supreme Court of Wisconsin.

Oct. 8, 1929.

Appeal from a judgment of the Circuit Court for Fond du Lac County; Chester A. Fowler, Judge. Reversed.

Action on a note begun February 27, 1926, by the trustees of the estate of W. C. Reinig, deceased, against Martin H. Nelson and seventeen other members of a syndicate formed to purchase Montana lands. From a judgment entered August 1, 1928, determining that Mr. Handt and Mr. Supple were liable for the entire amount due upon the note and dismissing the action as to the other sixteen joint adventurers, the executrix of the estate of Mr. Handt appealed.

The syndicate was formed for the purpose of purchasing, and eventually selling at a profit, 640 acres of Montana land. The members of the syndicate all signed an agreement by which two of their number were designated as trustees who were to take title to the land and were given power “to enter into all contracts necessary to carry this agreement into effect.” In all matters pertaining to the investment, the trustees were to be governed by the decision of a majority in interest of all parties to the contract.

Title to the land was taken subject to $8,000 of mortgages. When these mortgages became due, a majority of the members of the syndicate directed the trustees to make, execute, and deliver the $8,000 note here in suit to replace the obligations then due. When the note became due, the two trustees, one of whom was Mr. Handt, gave the plaintiffs, the holders of the $8,000 note, three new notes each of which represented the interest on the note in suit that would become due in one, two, and three years respectively. When the first of these interest notes became due, it was not paid. When the second interest note became due, Mr. Handt borrowed a sufficient sum upon his personal note and placed that sum in the syndicate fund and then used these funds to pay the two interest notes which were then due.

Plaintiffs brought this suit on the $8,000 note more than six years after it became due according to its terms, but less than six years after these two interest notes were paid, making all signers of the syndicate agreement parties defendant. The trial court held that all signers to the original syndicate agreement were joint adventurers who were liable upon the note in suit when it was given, that the payment of interest on this note by Mr. Handt was made out of his own funds and not by direction of the members of the syndicate or with their authority and consent and that therefore this payment did not toll the running of the statute of limitations as to any members of the syndicate except Mr. Handt. Mr. Supple did not plead the statute. The court concluded that Mr. Handt and Mr. Supple were liable for the full amount due on the note. Judgment was entered accordingly.Duffy & Duffy, of Fond du Lac, for appellant.

T. L. Doyle, of Fond du Lac (Cecilia Doyle, of Fond du Lac, of counsel), for defendant respondents.

Martin & Kelley, of Fond du Lac, for plaintiff respondents.

STEVENS, J.

[1] 1. The members of the syndicate contend that the agreement signed by them created a joint-stock company and that the plaintiffs have no right to proceed against the individual members of the syndicate until they have exhausted their remedies against the company and its property. Section 288.06 of the Statutes. The learned trial court was clearly right in holding that the agreement did not create a joint-stock company. A joint-stock company is required to have a president upon whom process may be served, as well as shareholders or associates. Section 286.04 of the Statutes. Such joint-stock company ordinarily has a fixed capital which is divided into transferable shares of fixed value. 33 C. J. 884. The syndicate here in question has neither a president nor a capital stock of fixed value.

[2] The trial court was clearly right in holding that the parties to this agreement were joint adventurers. “Such an arrangement, if it related to a continuous business, and if it contemplated numerous transactions, would clearly constitute a partnership. Being confined to one transaction, it comes in the class of joint adventures. * * * Essentially there is little difference between a partnership and a joint adventure; the latter as a rule being more limited, and confined in its scope principally to a single transaction.” Barry v. Kern, 184 Wis. 266, 268, 269, 199 N. W. 77, 78.

[3] The liability of these defendant joint adventurers was essentially that of partners, at least so far as the note in question was concerned. The trustees who signed this $8,000 note were agents of all of their associates in the giving of the note. They were acting strictly within the scope of the authority conferred upon them by these joint adventurers for the purpose of promoting the very object for which the syndicate was formed. They were all liable upon the note when suit was begun unless that liability had been extinguished by the running of the statute of limitations (St. 1927, § 330.19).

2. The question whether plaintiffs have the right to judgment against all the members of the syndicate turns upon the question of whether the payment of interest on this $8,000 note out of the funds borrowed by Mr. Handt for that purpose interrupted the running of the statute of limitations as to all of the defendants, or only as to Mr. Handt, as was held by the trial court. At the time Mr. Handt borrowed this money and placed it in the syndicate funds, he was one of the trustees who held the legal...