Sperry v. Petitioner
| Decision Date | 30 March 1915 |
| Citation | 76 W.Va. 106 |
| Parties | Sperry, Adm'r et als. v. Tulley et als. |
| Court | West Virginia Supreme Court |
The question of liability of partners to contribute on account of indebtedness incurred in the purchase of property used by the firm in its business depends upon the relation in time, of the partnership agreement to the purchase. (p. 109).
If the purchase is subsequent to the agreement, it is a partnership transaction and the purchase money debt a firm liability, discharge of which by one or more of the members of the firm entitles them to contribution from their associates. (p. 109).
If, in such case, some of the members of the firm have become insolvent, the solvent members must contribute to the extent of the indebtedness. (p. 109).
(Lynch, Judge, absent.)
Appeal from Circuit Court, Braxton County.
Suit by Clarence B. Sperry, administrator, etc., and others, against J. V. Tulley and others. From decree for plaintiffs, defendants appeal.
Affirmed.
Linn, Byrne & Hines and C. L. Smith, for appellants.
W. L. Armstrong and Hines & Kelly, for appellees.
poffenbarger, judge:
The decree from which this appeal was taken is one enforcing contribution among copartners in a horse transaction.
Trexler Bros. sold them a stallion at the price of $3000.00, upon the understanding and agreement that each was to take one or more of the fifteen shares of $200.00 each, and took, in payment, three one thousand dollar negotiable notes, signed by the subscribers for ten shares. The subscribers for four shares did not sign the notes. By an arrangement with the selling agent, one of them paid nothing, his share being a gift. Three of the shares were paid for in cash, property and independent notes. On the three $1000.00 notes, credits were endorsed to the extent of $800.00, representing the four shares held by those who did not sign them. These notes were assigned to Louis Bennett. One share was not individually subscribed at all, but its price was included in the notes. In other words, non-subscription thereof wrought no abatement from the price of the horse.
In the results of the enterprise, the prospectus was not fulfilled. The returns were but little, if anything, in excess of the expenses. The horse died after this suit was brought and no part of the capital invested has ever been returned. For balances due on two of the notes, the holder recovered judgments, one for $1153.53 against G. M. Sponaugle, J. O. Baxter, L. D. Pepper, G.R. Gibson, Edwin Morrison and L. A. Koontz, which was satisfied by Morrison; and the other for $882.95 against Sponaugle, Baxter, Pepper, Gibson and Cecil Denham, which was satisfied by Denham. Two of the parties, Sigler, subscriber for two shares, and Freil, subscriber for one, were dead at the dates of the procurement of these judgments. In the first action, there was no service of process on Denham and, in the second, none on Morrison or Koontz.
This equity suit was instituted by Sperry, administrator of the estate of Sigler, and Morrison and Denham, against all the other living copartners and the administratrix of Freil, to settle the partnership business and compel those of them who did not sign the notes to contribute to the payment of the two judgments herein described. The bill alleges nonpayment of any part of the purchase money of the horse by T. G. Berry, J. V. Tulley, Momen Rhea, holders of one share each, and J. M. Maple and C.W. Maple, joint owners of another, and charges them with having entered into a secret and fraudulent arrangement with Trexler Bros., by which they were to have four shares for their services in procuring the signatures of the other parties to the notes. The endorsement on the notes, of credits amounting to $800.00 is alleged to have been made in pursuance of such secret agreement, and the real purchase price to have been only $2200.00. and, therefore, a conspiracy on the part of the holders of said four shares to deceive, cheat, defraud and overreach those who executed the notes, is charged. The bill further alleges the partnership agreement antedated the purchase of the horse and contemplated it as a firm transaction, and the agreement for such purchase was consummated, wherefore all became jointly liable for the purchase money, notwithstanding the failure of part of them to join in the purchase money notes. It also charges insolvency of Pepper, Baxter, Koontz and Sponaugle.
Deeming the purchase of the horse to have been made on behalf of all the parties at the price of $3000.00, in pursuance of an antecedent partnership agreement, the court decreed contribution, agreeably to the prayer of the bill. Though the commissioner to whom the cause was referred, for inquiry and...
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