Walker v. Evans

• Citation: 71 S.W. 1086,98 Mo.App. 301
• Parties: CHARLES B. WALKER et al., Respondents, v. JOHN C. EVANS et al., Appellants
• Decision Date: 02 February 1903
• Court: Kansas Court of Appeals

71 S.W. 1086

98 Mo.App. 301

CHARLES B. WALKER et al., Respondents, v. JOHN C. EVANS et al., Appellants

Court of Appeals of Missouri, Kansas City

February 2, 1903

Appeal from Jasper Circuit Court.--Hon. J. D. Perkins, Judge.

AFFIRMED.

Judgment affirmed.

C. H Montgomery for appellants.

(1) The court committed error in overruling defendant's application for a change of venue. The notice was sufficient. Douglass v. White, 134 Mo. 228; Corpenny v Sedalia, 57 Mo. 88; Reed v. State, 11 Mo. 380. (2) The court committed error in striking out all of the second count of defendant's first amended answer. The part stricken out contained a good defense to the plaintiffs' action. Chemical Co. v. Lackawanna Line, 78 Mo.App. 305. (3) If plaintiffs received more than their property was worth, and received more for it than defendants, they were not damaged. The court's refusal to permit defendants to prove this was clearly error. Bank v. Byers, 139 Mo. 652. (4) The interest in the mills were not partnership property. Newspaper Co. v Farroll, 88 Mo. 594; Bank v. Outhwaite, 50 Mo.App. 129. A partnership in profits may exist without including title to the property out of which the profits may be made. Porter v. Hunt, 50 Mo.App. 541; Rapp v. Vogel, 45 Mo. 524; Bank v. Outhwaite, 50 Mo.App. 124; Donnell v. Harshe, 67 Mo. 170. Several persons who acquire fractional interests in personal property do not thereby become partners. Hedges v. Wear, 28 Mo.App. 575; Newberger v. Friede, 23 Mo.App. 631; Thompson v. Holden, 117 Mo. 129; Newspaper Co. v. Farrall, 88 Mo. 597; Keiley v. Clancy, 16 Mo.App. 549; Musser v. Brink, 68 Mo. 242; s. c., 80 Mo. 357; Clifton v. Howard, 89 Mo. 194; Ashby v. Shaw, 82 Mo. 78.

Galen & A. E. Spencer for respondents.

(1) Under the contract between the parties, they were partners. Defendants admitted that all operations were under this contract. The power to dispose of the joint property is not the test of the question of partnership. Mackie v. Mott, 146 Mo. 230. It is a question of intention on the part of the alleged partners. McDonald v. Matney, 82 Mo. 365. (2) The partners were bound to act toward each other with absolute fairness, and could not make a secret profit. They occupied the position of trustees. Filbrun v. Ivers, 92 Mo. 388; Pomeroy v. Benton, 57 Mo. 531; Parsons on Partnership (3 Ed.), p. 246, s. p., 225; Chandler v. Co., 30 F. 538; Getty v. Devlin, 54 N.Y. 403; Brewster v. Hatch (N. Y.), 25 N.E. 505; Company v. Case, 104 Mo. 579. (3) Under the foregoing authorities the court was right in striking out parts of defendant's first amended answer. If any error was committed, defendants waived the right to urge it in this court, by filing another answer and going to trial thereon. Fuggle v. Hobbs, 42 Mo. 537; Gale v. Foss, 47 Mo. 276. (4) The petition stated a cause of action. See authorities cited under point 2 hereof. (5) Defendant's application for a change of venue was properly overruled. Summers v. Co., 45 Mo.App. 46; Railroad v. Holladay, 131 Mo. 440.

OPINION

ELLISON, J.

This action is based on a charge of fraud in the sale of mining properties in which plaintiffs owned an interest. The judgment in the trial court was for plaintiffs.

Plaintiffs had a contract to work up the "tailings" in the "dump piles" on twelve hundred acres of mining land owned by the Missouri Lead and Zinc Company in Jasper county. They also owned a "steam jig and sledge mill" in which ore was extracted from the tailings. They made a written contract with defendants whereby they conveyed to them "an undivided one-half interest" in the jig and mill and the contract to work up the tailings. As a part of the consideration for this sale to defendants, they were to build a new mill with a capacity of cleaning one hundred tons of dirt per day, costing $ 4,500 at a place on said lands to be selected by plaintiffs. The defendants were to render to plaintiffs every two weeks an itemized statement of cost of construction as the work progressed. The cost of the mill was to be paid to defendants out of the net profits derived from the work it turned out in extracting ore. After the mill was a completed structure each party was to "own an undivided one-half interest in the same." The net profits in the old mill, the one-half of which plaintiffs sold defendants, were to be divided equally between each of the parties and so were those of the new mill after it had been paid for; that is, after defendants were reimbursed for building it, as above stated.

The defendants built the new mill and reported the cost to plaintiffs at said sum of $ 4,500. Both mills were run in the work of extracting ore, the profits from the old one being equally divided, while the profits from the new one were retained by defendants, to reimburse them for cost of construction.

Afterwards, defendants entered into an understanding with Messrs. Palmer and Stephens whereby the latter were to purchase the whole property for $ 10,500, of which $ 5,000 was to be cash and the balance in two notes of $ 2,750 each, secured on the property. But plaintiffs charge that defendants had conceived the idea of defrauding them and to that end, after having negotiated for the sale with Palmer and Stephens at the price aforesaid, they represented to plaintiffs that they could sell for $ 7,500 and advised plaintiffs to consent to a sale at that price. Plaintiffs believing that to be the price for which the property was selling, consented to the sale and division of proceeds was made on the basis of a sale for $ 7,500. When plaintiffs learned that the real price was $ 10,500 and that defendants had kept $ 3,000 out of the division, they begun this action.

1. The petition alleges that plaintiffs and defendants were partners "and as such partners were the joint owners" of the above-mentioned property. The parties seem to have become impressed from the beginning of this controversy that the question whether there was a partnership was of vital consequence. They seem to have made the controversy at the trial to turn principally on that question and so they have carried it on in the same way in this court. Plaintiffs seem to have considered it necessary to allege and show that they and defendants were partners as that term is known to the law. And so defendants appear to have become impressed with the idea that if they could show they were not partners with plaintiffs, at least not partners in all of the property, they could escape liability for the fraud charged against them.

In view of some uncontroverted facts in the case, it can make no practical difference whether the parties were partners at all, either in the whole or any part of the property. It is conceded that the parties, plaintiffs and defendants, owned the property in equal parts and that they together were working it in extracting ore from the "tailings" on the mining lands aforesaid for their benefit.

In such condition of ownership and operation, the defendants, according to plaintiffs' charge, discovered a purchaser for the whole property for the price of $ 10,500. But they falsely represented to plaintiff that the price at which they could sell was $ 7,500, and so induced plaintiffs to sell, under the impression that the latter sum was the real selling price. Whether there was a partnership in all the property, or a partnership in a part of the property; or whether the property was held in mere separate ownership of undivided interests, can make no difference. The fraud and deception and injury could take place with either as a base of operations, and plaintiffs' right of recovery is not affected by the business relation they bore to defendants, or the nature of their ownership of the property in which all had an interest.

2. Notwithstanding plaintiffs have designated the holdings, interests and relations of the parties as a partnership, yet, since the facts charged give them a cause of action, it is of no consequence if it should be true that their relationship had been erroneously named. Gannon v. Gas Co., 145 Mo. 502, 46 S.W. 968.

3. The...