W. D. Reeves Lumber Company v. Davis

• Decision Date: 22 May 1916
• Docket Number: 7
• Parties: W. D. REEVES LUMBER COMPANY v. DAVIS
• Court: Arkansas Supreme Court

187 S.W. 171

124 Ark. 143

W. D. REEVES LUMBER COMPANY v. DAVIS

No. 7

Supreme Court of Arkansas

May 22, 1916

Appeal from Phillips Circuit Court; J. M. Jackson, Judge; reversed.

Judgment reversed and cause remanded.

Fink & Dinning and Moore, Vineyard & Satterfield, for appellants.

1. The demurrer should have been sustained because plaintiff could not sue alone for breach of the contract. Giles was a partner and should have been joined as plaintiff. Kirby's Dig §§ 5099, 6005; 106 N.E. 243; 1 Ark. 59; 31 Id. 175; 29 S.W. 313; 180 S.W. 499; 9 Cyc. 704; 46 N.E. 220; 5 Id. 83; 2 Dana (Ky.) 460; 38 Ark. 72; 19 Id. 566; 24 Id. 555; 110 U.S. 215.

2. A partner can not sue alone for his share of a firm claim. 30 Cyc. 564; 25 S.E. 938; 53 Md. 364; 36 N.W. 95. Misjoinder may be raised by demurrer. Bliss Code Pl. (2 ed.), § 413; 6 Enc. Pl. & Pr., p. 348.

3. The cause should have been transferred to equity. 93 Ark. 447; 110 U.S. 215; 128 S.W. 41.

4. The court erred in excluding the testimony offered. 50 Ill. 332; 98 Me. 57; 9 Cyc. 656; 35 S.W. 272; 42 N.E. 251; 46 Id. 423.

5. If the cancellation of the contract by Giles was in good faith and free from fraud, it bound the partnership. The instructions refused were based upon this theory, and the court erred in excluding the testimony on this subject. 50 Ill. 332; 57 A. 83; 9 Cyc. 356; 35 S.W. 272; 42 N.E. 251; 46 Id. 423. Plaintiffs could not sue for one-half the profits. 93 Ark. 447.

Bevens & Mundt, for appellee.

1. The demurrer was properly overruled. Kirby's Dig., § 6007. Giles was made a defendant properly and there was no misjoinder. 31 Ark. 175; 9 Cyc. 704; 93 Ark. 447. This court only holds that all persons interested must be parties plaintiff or defendant. This was done. 3 Ark. 364; 33 Id. 240; 37 Id. 511; 59 Id. 191; 28 Id. 171.

2. The motion to transfer was properly denied. 93 Ark. 447.

3. One partner has no power to sell the whole firm property, without the consent of his copartner. 1 Ark. 206; 37 Id 228; 104 Id. 119; 27 Mo. 536; 29 Kan. 551; 49 Miss 569.

4. There never was a partnership. Davis and Giles were joint owners of the contract. 30 Cyc. 402; 140 Okla. 523; 78 P. 94; 87 S.W. 182; 44 Ark. 423; 63 Id. 518; 6 Col. App. 334; 38 Me. 246; 24 W.Va. 411; 41 Me. 9; 178 Mo. 789; 60 Me. 169; 56 N.Y. 424; 80 Ark. 23; 93 Id 52.

5. There was no error in excluding the testimony offered nor in the court's instructions. Only general objections were made. 81 Ark. 191; 75 Id. 325; 87 Id. 396; 104 Id. 409; 140 U.S. 76. The testimony was irrelevant.

OPINION

HART, J.

J. M. Davis sued the W. D. Reeves Lumber Company to recover the sum of $ 8,000 for the alleged breach of a written contract whereby J. M. Davis and C. C. Giles agreed to cut and haul for the W. D. Reeves Lumber Company the timber on the lands described in the contract for a stipulated price per thousand feet. The complaint alleged that Giles had released all his right in the contract to the Reeves Lumber Company, and he was also made a party defendant to the action. The jury returned a verdict for the plaintiff for $ 3,375. Judgment was rendered in favor of the plaintiff against the W. D. Reeves Lumber Company for that amount. The lumber company has appealed. The material facts are as follows:

The W. D. Reeves Lumber Company entered into a written contract with J. M. Davis and C. C. Giles to cut and haul to a certain point on the Mississippi River the timber on lands described in the contract at a stipulated price per thousand feet. It was provided in the contract that the timber should be cut and hauled by the first day of September, 1916, and the contract was executed on July 8, 1914. Davis and Giles at once entered upon the land with a full line of equipment, including about thirty teams, for the purpose of performing the contract on their part. On August 10, 1914, the Reeves Lumber Company notified them to stop hauling the timber that was already cut because financial conditions were such that the lumber company could not get money to meet the pay rolls. Giles and Davis stopped the work and Davis thereafter asked the president of the lumber company several times when they would be allowed to commence operations again and was told by him that they could do so when conditions would permit. A short time after this Giles called Davis up and told him that he wanted to get out of the contract. On October 1, 1914, the president of the lumber company told Davis that the contract had been canceled by Giles and that he would not permit any work to be done under the contract until Giles and Davis had a settlement. Davis told the president that Giles had no right to cancel the contract and that he knew nothing about him having done so. He also told him that he would not waive any of his rights under the contract and expected to carry it out. About October 16, Davis entered upon the land again and proceeded to perform the contract. On October 20, 1914, the lumber company notified him to quit cutting timber under the contract and stated that it would not pay for the cutting, and denied the authority of Davis to proceed with the work.

Davis testified that he was financially able to perform the contract and also testified in regard to the profits he could have made under it. It is not necessary to abstract the testimony on this point, but it is sufficient to say that under the evidence adduced by the plaintiff his profits would at least have equaled the amount recovered by him before the jury.

On the part of the defendant it was shown that Giles entered upon the land soon after the contract had been executed and that he did nearly all the work that was done before the lumber company requested them to cease working. On the 1st of October, 1914, Giles canceled the contract with the lumber company.

It is first contended by counsel for the defendants that the demurrer of the defendant lumber company to the complaint should have been sustained. The demurrer was based on the ground that the plaintiff could not bring the action in his name alone, but should have joined his partner, Giles, in the complaint. Section 6007 of Kirby's Digest provides, "Of the parties to the action, those who are united in interest must be joined as plaintiffs or defendants; but when, for any cause, it may be necessary for the purpose of justice, a person who should have been joined as plaintiff may be joined as defendant, the reason therefor being stated in the complaint."

In Ingham Lumber Co. v. Ingersoll, 93 Ark. 447, 125 S.W. 139, the court held that in a suit upon a contract made by a firm, all of the partners have an interest in the subject-matter and are necessary parties. In that case, in construing section 6007 of Kirby's Digest, it was said that where a partner refuses to join in an action to recover a claim of the firm he may be made a party defendant. In the instant case the complaint of Davis alleges that Giles had released and relinquished all of his rights in the contract to the Reeves Lumber Company. Giles in his answer admitted that he had canceled the contract and released the Reeves Lumber Company by a written release in the name of Davis and Giles.

If Giles had canceled the contract and by an instrument in writing had released the Reeves Lumber Company from further performance of the contract, this was equivalent to a refusal on his part to join in an action to recover damages for an alleged breach of the contract. Therefore, under the section of the statute above quoted, the plaintiff properly made Giles a party defendant to the action.

It is next contended by counsel for the lumber company that the court erred in not sustaining its motion to transfer the cause to the chancery court. There was no error in this regard. The action of Giles in canceling the contract and the relinquishment of all his rights thereunder to the lumber company absolved it from any further liability to him under the contract. The lumber company was not interested in any partnership equities between Davis and Giles. The court did not err in refusing to transfer the action to equity.

The court was requested by counsel for the lumber company to give instruction No. 4, which reads as follows "The jury is instructed that before the jury can find for the plaintiff in any event they must find from the testimony that the plaintiff could have made a profit in carrying out said contract, in accordance with its terms, after the cancellation." The court refused to give the instructions as asked but struck out the words "after the cancellation" and gave the instruction as thus modified. Counsel for the lumber company contend that the words stricken from the instruction should have been given, because the right of recovery must necessarily have been from the date of the breach of the contract. The court, however, did give instruction No. 2, which reads as follows: "If you find for the plaintiff in this case his damages are to be measured by the value of the contract to him at the time it was broken and this value is estimated by the profits he would have realized during the continuance of the contract had it been...