Scheuer v. Wise

• Decision Date: 11 June 1925
• Docket Number: 3 Div. 716
• Citation: 104 So. 831,213 Ala. 329
• Parties: SCHEUER et al. v. WISE.
• Court: Alabama Supreme Court

104 So. 831

213 Ala. 329

SCHEUER et al. v. WISE.

3 Div. 716

Supreme Court of Alabama

June 11, 1925

Appeal from Circuit Court, Montgomery County; Walter B. Jones Judge.

Action by Mose and Nathan Scheuer against Emil Wise. Judgment for defendant, and plaintiffs appeal. Affirmed.

Weil Stakely & Vardaman, of Montgomery, for appellants.

Steiner Crum & Weil, of Montgomery, for appellee.

MILLER J.

This is a suit brought by Mose Scheuer and Nathan Scheuer against Emil Wise, to recover the sum of $6,250, with interest.

There are four counts in the complaint, numbered 1, 2, 3, and 4. As originally filed, the complaint was composed of counts 1 and 2 and counts 3 and 4 were added by amendment. The court sustained demurrers of defendant to each and all of the counts, the plaintiff declined to plead further, and the court dismissed the case and taxed the plaintiffs with the costs. This appeal is prosecuted from that judgment, and the court's action in sustaining demurrers of defendant to counts 1, 2, 3, and 4 are four of the errors separately assigned, and the final judgment of the court, dismissing the case and taxing plaintiffs with the cost, is also assigned as error.

The appellants, plaintiffs, insist on, argue, and urge in brief only three errors--the rulings of the court in sustaining demurrers of defendant to counts 2, 3, and 4 of the complaint. We will consider and discuss only these three, because the other errors assigned, but not argue and urged in brief of appellant in this, a civil case, will be treated as waived by this court. Ala. Mid. Ry. Co. v. McDonald, 112 Ala. 216, 20 So. 472; Southern Ry. Co. v. Cunningham, 112 Ala. 496, 20 So. 639; Hymes v. State, 209 Ala. 91, headnote 3, 95 So. 383.

Mose Scheuer and Nathan Scheuer, plaintiffs, and Emil Wise, defendant, and one A.J. Harris, were partners prior to May 1, 1922, doing business under the firm name of Scheuer, Wise & Co.; on that day this firm was dissolved, and a new firm composed of only the plaintiffs was formed. The plaintiffs composing the new firm purchased all of the interest of defendant, Wise, in the business of Scheuer, Wise & Co. The contract was in writing, signed by the parties, and is made an exhibit to each of the counts (2, 3, and 4) under consideration. In July, 1923, the United States government assessed the said Scheuer, Wise & Co. with a federal income excess profits tax for the year 1917, amounting to $31,000. The defendant paid no part of this tax, but plaintiffs were forced to pay it in full, and they seek by this suit to recover the proportionate part thereof, one-fourth, which they claim should have been paid by defendant. These averments are contained in all of the counts 2, 3, and 4.

Count 4 further avers that plaintiffs, defendant, and Harris were, prior to the dissolution of the firm, each equally interested (one-fourth each) in its assets and equally liable for its debts or liabilities. Count 3 contains the foregoing averments in count 4, and also avers the United States government, in July, 1923, assessed the firm of Scheuer, Wise & Co. with a federal income excess profits tax for the year 1917 amounting to more than $40,000, and notified said partnership of this additional assessment; thereupon the four members of that firm employed counsel for the purpose of contesting this additional assessment, executed a power of attorney authorizing the attorneys to represent each of said partners in making the contest, and the four members of that partnership agreed with the attorneys as to the amount of their compensation, and each agreed to pay his pro rata part of the attorneys' fee. On the contest this assessment was reduced from over $40,000 to $30,000, "and said partnership (Scheuer, Wise & Co.) was held to be liable therefor." Notice was issued to Scheuer, Wise & Co. that, unless the amount of said additional assessment was immediately paid, their property would be levied upon and sold by the government. The plaintiffs paid, after this notice, said additional assessment amounting to the sum of, to wit, $30,000. The new partnership, Scheuer Bros. & Co., composed of plaintiffs, in the operation of its business after the dissolution of the firm of Scheuer, Wise & Co., on May 1, 1922, "continued selling and disposing of, in the ordinary course of its business, the assets acquired from the old firm of Scheuer, Wise & Co., and that on or before the month of July, 1923, they had sold or otherwise disposed of practically all of the assets of the old firm of Scheuer, Wise & Co., which they acquired at the time of and by virtue of said dissolution."

This court, in Tait v. Murphy, 80 Ala. 443, 2 So. 319, wrote: "The interest of a partner is his share of the proceeds of all the partnership effects after the liabilities have been satisfied." When one partner sells his interest voluntarily to other partners in the business, for an agreed consideration, the vendees are entitled to receive such partner's share of the property "after a settlement of the partnership affairs and the payment of all the partnership debts." Am. & Eng.Ency. of Law (2d Ed.) vol. 22, p. 105, headnote 2; Fields v. Brice, 108 Ala. 632, 18 So. 742; Wilson v. Strobach, 59 Ala. 488.

Each of these counts under consideration avers this federal income excess profits tax was for the year 1917, that it was assessed against Scheuer, Wise & Co. for that year; that it was a partnership liability; and that plaintiffs had to pay it in 1923. So it is evident from the averments this tax was a liability of Scheuer, Wise & Co. when defendant sold by this contract his interest therein to the plaintiffs on May 1, 1922.

Whether these counts are subject to demurrer for plaintiffs' failure to state a cause of action against the defendant, in order to recover from him one-fourth of this tax paid by them, depends primarily on the construction of the written contract of sale and purchase between plaintiffs and defendant, which is attached as an exhibit to each of the counts under consideration.

In construing this contract, the court will look to and consider the whole instrument, so as to decide its true meaning in any and all of its parts. The court will consider the nature of the contract, "the facts and circumstances leading up to and attending its execution, the relation and condition of the parties, the nature and situation of the subject-matter, and the apparent purpose of making the contract." 13 Corp.Jur. p 542, headnote 32; Roach v. McDonald, 187 Ala. 64, 65 So. 823; Watson v. Kirby, 112 Ala. 436, 20 So. 624.

In the first part of the contract the defendant sold to plaintiffs "all his interest in and to the business of Scheuer Wise & Co. for $51,551.43"; $17,183.81 of which was paid him by them in cash, and a note for $17,183.81, due November 1, 1922, and a note for...