Richards v. Grinnell

• Citation: 18 N.W. 668,63 Iowa 44
• Parties: RICHARDS v. GRINNELL
• Decision Date: 19 March 1884
• Court: United States State Supreme Court of Iowa

18 N.W. 668

63 Iowa 44

RICHARDS v. GRINNELL

Supreme Court of Iowa, Council Bluffs

March 19, 1884

Appeal from Poweshiek Circuit Court.

THIS is an action in equity for an accounting, and the settlement of an alleged partnership, between the plaintiff and the defendant. There was a demurrer to the petition, which was sustained, and the plaintiff appeals. The facts appear in the opinion.

REVERSED.

McNett & Tisdale, for appellant.

J. B Grinnell, pro se.

OPINION

ROTHROCK, CH. J.

I. As the cause involves the sufficiency of the averments of the petition to maintain an action, it is necessary that a copy of the petition be set out in the opinion. It is as follows:

"1st. The plaintiff represents that, on or about December 18, 1869 the defendant, accompanied by Julius A. Reed, who was a mutual acquaintance of plaintiff and defendant, came to plaintiff at Ottumwa, Iowa, and then and there represented to plaintiff that a certain railroad, namely, 'The Missouri River, Fort Scott & Gulf Railway,' was then being projected through part of the state of Kansas, and especially through the county of Cherokee in said state, and that he the said defendant, was in a position, and was on such terms with an officer of said railway company, viz., the Hon. James F. Joy, that he would and could receive information in advance of the location by said railway company, in said county of Cherokee, and on Tar Creek therein situated, of an important station and town, and that thereby he would be enabled to purchase lands at reasonable figures, which, after the location of the town, could be laid off into town lots, and sold at a very great advance and profit on the investment.

"2nd. Plaintiff further avers that said Grinnell, at said time, further represented that he had no money to invest, but that, if plaintiff would furnish the money, he would secure and furnish the advance information touching the location of the town site, and that Mr. Reed would go out to Kansas and make the purchase on the information to be sent him by defendant, the deeds to be taken in the name of plaintiff, and to be held in trust for both parties, who should have equal interest, and shares in the common venture, the capital invested and furnished by plaintiff, with ten per cent interest thereon, reckoned annually, to be first returned to him.

"3d. Plaintiff further represents that the terms, as thus substantially stated, were finally agreed upon between himself and defendant orally, and were not put in writing, because the time between the agreement and the hour when the train should leave, on which the defendant then represented it would be absolutely essential for himself and said Reed to depart, was too short in which to reduce the agreement to writing.

"4th. That, in pursuance of said agreement, on the same evening on which it was consummated, at the instance of and by agreement with defendant, for the purposes aforesaid, plaintiff gave to said Reed his letter of credit for $ 10,000, and thereupon said Reed and Grinnell departed from Ottumwa together, and subsequently thereto, and by January 15, 1870, acting as plaintiff then supposed, under advice and directions from defendant, the said Reed drew and the plaintiff paid the full amount represented by said letter of credit, namely, $ 10,000. And said Reed, as plaintiff then supposed, acting under the advice and directions aforesaid, purchased the following lands in Cherokee county, Kansas, namely:

"On or about December 18, 1869, purchased the S1/2 of NW1/4 and the W1/2 of SW1/4, section 32, township 34, range 24 east, known as 'Joy City' lands, for which he paid $ 4,000 down, and assumed to pay the balance due said railroad company on its contract with the party from whom said Reed purchased.

"And on or about January 1, 1870, he purchased a one-twentieth interest in what was known as the 'Finch Farm,' being the W1/2 of the NE1/4 and E1/2 of NW1/4 of section 2, township 35, range 23 east, for which he paid $ 120 down.

"And on or about January 8, 1870, he purchased the SE 1/4 section 26, township 34, range 23 east, on which he then paid $ 2,500, assuming to pay the balance due the said railroad company on its contract with the party from whom Reed purchased.

"And on or about January 10, 1870, he purchased the SE1/4 section 25, township 34, range 24 east, on which he then paid down, $ 3,100, and assumed to pay the balance due said railroad company on its contract with the party from whom said Reed purchased.

"That said land in said sections 25, 26 and 32, were originally railroad lands, and had theretofore been sold on time contracts to the various persons from whom said Reed purchased; and, as the plaintiff believes, the said Reed did not secure deeds at the time, but only assignments of said contracts of purchase, which contracts were afterwards paid out by money furnished by plaintiff as hereinafter more particularly stated, one J. A. Clark being the agent of said railroad company to receive the deferred payments on said contracts as the same became due.

"6th. Plaintiff further avers that at said time various other persons, whose names are to plaintiff unknown, owned or purchased for themselves various other tracts of land near those purchased by said Reed for these parties litigant, and embraced within the contemplated limits of said supposed town, all of which, together with those before described in said section 32, were known as 'Joy City' lands; and that, as plaintiff has since learned, defendant had an understanding with the owners of such 'Joy City' lands, whereby, when the town should be located and laid out, a town company was to be formed, the said lands deeded to defendant in trust, he to have a one-twelfth interest for laying out the town, selling the lots, etc.; and plaintiff is informed that a trust conveyance to this effect was in fact made by members of said town company to defendant, on or about January, 6, 1870, but he is unable at present to furnish a copy of said trust conveyance, or its substance more fully.

"7th. Plaintiff, on information and belief, avers, that said Reed, in some manner at said time, (though without the consent or knowledge of plaintiff,) also placed said lands in said section 32 in said Town Company, and under said trust arrangement, but just the manner of doing so plaintiff is at present unable to more fully set out.

"8th. Plaintiff further avers that, when the deed to said lands in section 32 came to be made, instead of being taken in the name of plaintiff as originally agreed, it was taken in the name of said Reed, who held the same in trust for the parties to this suit, under the arrangement and subject to the terms of this contract, as hereinbefore specified.

"9th. That said Reed in the purchases and payments aforesaid, together with certain expenses connected therewith, expended of said $ 10,000 the sum of $ 9,814.05, leaving a balance of $ 185.95, which he paid back to plaintiff January 19, 1870.

"10th. Plaintiff further represents that the following statement represents the amounts of money and the dates of payments made by him on account of the said partnership, and on account of the purchase of and payment for said lands and expenses connected therewith, to-wit:

"Dec. 18, 1869, To J. A. Reed on letter of credit

$ 5,000.00

Jan. 7, 1870, To J. A. Reed on letter of credit

2,000.00

Jan. 10, 1870, To J. A. Reed on letter of credit

3,000.00

Jan. 15, 1870, To exchange on drafts of Reed

20.00

Oct. 25, To J. A. Clark, R. R. land agent, on con-

tract

56.00

Nov. 24, To J. A. Clark, R. R. land agent, on con-

tract

112.00

Dec. 19, To pay taxes on lands.

62.56

Nov. 15, 1871, To J. A. Clark, R. R. agent, on

contract

$ 324.54

Nov. 27, 1871, To J. A. Clark, R. R. agent, on

contract

324.00

Oct. 19, 1871, To J. W. Richards expenses to see

land

47.20

Dec. 31, 1871, To taxes on lands

24.98

Oct. 30, 1872, To Clark, R. R. agent, on lands

204.80

Nov. 19, 1872, To Clark, R. R. agent, on lands

409.60

Dec. 31, 1872, To taxes on lands

28.82

Nov. 15, 1873, To Clark, R. R. agent, on lands

580.80

Jan. 3, 1874, To taxes on lands

96.80

Dec. 10, 1874, To taxes on lands

66.51

Nov. 2, 1874, To Clark, R. R. agent, on lands

547.20

June 28, 1875, To Clark, R. R. agent, on lands

485.20

Dec. 13, 1875, To taxes on lands

69.45

Aug. 14, 1875, To recording land deeds

2.40

"11th. That the only credits as against said items is the said credit of $ 185.95, of January 19, 1870 aforesaid, down to the transfer of lands to Iowa College, as hereinafter stated.

"12th. Plaintiff further avers that, after the purchase of said lands and interests, the said line of railroad failed to be located through or near enough to them to justify or induce the building of a town, and no town, as plaintiff is informed, ever was located upon or near there, and, as a result, said lands and interests very greatly depreciated in value, and could not be disposed of except at a very great sacrifice. That in consequence of such depreciation said lands were thus held until, on May 5, 1876, the plaintiff, by consent of the defendant, conveyed the said lands in sections 25 and 26 to the trustees of Iowa College, at Grinnell, Iowa, for the agreed consideration, as between plaintiff and defendant, of $ 3,200, the full value thereof, (the said lands in section 32 being also named in said deed), and on September 15, 1876, the said Reed, under direction of plaintiff, and by consent of defendant, conveyed to the trustees of said college the said lands in sections 32, at the agreed price, as between plaintiff and defendant, of $ 1,600, which is and was the full value thereof.

"13th. That the only interest in said land transactions and purchases which remains undisposed of is the said...