Wax v. Pope

• Decision Date: 11 May 1936
• Docket Number: 31829
• Court: Mississippi Supreme Court
• Parties: WAX et al. v. POPE

168 So. 54

175 Miss. 784

WAX et al. v. POPE

No. 31829

Supreme Court of Mississippi

May 11, 1936

Division A

1 TRUSTS.

In suit to recover one-half interest in property procured by defendant under alleged enforceable trust, evidence held sufficient to establish oral agreement between plaintiff and defendant that defendant would purchase and operate property as partnership or corporation to be organized by parties, but unless constructive trust arose, agreement did not create enforceable trust.

2 TRUSTS.

Oral agreement by defendant to purchase and operate property as partnership or corporation to be organized by plaintiff and defendant held not to create resulting or constructive trust for plaintiff's benefit, where plaintiff acquiesced in defendant's taking title in own name, and made no offer to advance or assume any part of purchase price prior to conveyance to and resale by defendant.

3 TRUSTS.

Where defendant agreed orally to purchase and operate property as partnership or corporation to be organized by plaintiff and defendant, mere nonperformance of agreement, in absence of fraud or bad faith, did not create constructive trust for plaintiff's benefit, even if agreement created fiduciary relation between parties.

4 TRUSTS.

In suit to recover one-half interest in property procured by defendant after orally agreeing with plaintiff to purchase and operate property as partnership or corporation to be organized by parties and resold by defendant, evidence held insufficient to establish such fraud or bad faith as would give rise to constructive trust for plaintiff's benefit.

HON. R. W. CUTRER, Chancellor.

APPEAL from chancery court of Wilkinson county HON. R. W. CUTRER, Chancellor.

Suit by L. H. Pope against Louis A. Wax, Sr., and another, wherein the named defendant filed a cross-bill. From a decree for plaintiff, defendants appeal. Reversed and remanded.

Reversed and remanded.

Jones & Stockett, of Woodville, and Charles A. Holcombe, of Baton Rouge, La., for appellants.

The status of parties as partners under any written instrument or any agreement is to be governed by the laws of the state where the parties reside.

Price v Independent Oil Co. 168 Miss. 292, 150 So. 521; 5 C. J. 1342, sec. 32; Restatement of the Law of Conflicts of Laws, A. L. R. 419, par. 342.

The bill of complaint reading it as a whole is so vague, indefinite and uncertain that one must guess at its meaning. To read the bill is proof sufficient that complainant has no case and knew not what the alleged agreement was nor what relief he was entitled. The bill is contradictory of itself and shows on its face that there had never been at any time a final and settled agreement between Louis Wax and appellee. This contradiction, doubt, vagueness and uncertainty even in the mind of complainant is evidenced and made manifest when the bill of complaint is perused.

The bill of complaint does not contain averments setting forth a resulting trust, it negatives the idea for no allegation is made that any part of the purchase price for the property was paid by appellee or offered to be paid by him at the time of conveyance.

Bush v. Bush, 134 Miss. 531.

Nor does the bill of complaint or the evidence of appellee establish a constructive trust with which fraud is always a part. There being neither proper charges of fraud in the bill nor proof thereof by appellee.

Partnership is a synallagmatic and commutative contract made between two or more persons for the mutual participation in the profits which may accrue from property, credit, skill or industry, furnished in determined proportions by the parties.

Article 2801, Revised Civil Code of Louisiana.

Partnerships must be created by the consent of the parties.

Article 2805, Revised Civil Code of Louisiana; Amacker v. Kent, 144. La. 545.

In numerous decisions of the Supreme Court of Louisiana, we find the law to be that if the understanding between the parties is that a contemplated partnership agreement is subsequently to be reduced to writing, there is no partnership contract until the same is actually written and signed by the parties.

Sheridan v. Reese, 122 La. 1027, 48 So. 443; Fredericks v. Fasnacht, 30 La. 117; Blocker v. Tillmon, 4 La. 80; Wolf v. Mitchell, 24 La. Ann. 434; Laroussini v. Werlein, 52 La. Ann. 424; Kaplan v. Whitworth, 116 La. 337; Knights of Pythias v. Fishel, 168 La. 1095, 123 So. 724; McIntire v. Industrial Securities Corp., 158 So. 849.

The defendant denies the alleged partnership. The burden of proving it is upon Pope.

Atwater v. Colton, 18 La. Ann. 226.

The court will keep. in mind that this is not a suit by one joint owner against another for a partition. It is a suit by an alleged partner to be recognized as a half owner of partnership property which cannot be done under the laws of Louisiana.

A partner cannot sue his co-partner for sums paid or advanced for the partnership or funds placed in it, or goods furnished, or profits made, or losses incurred, during its continuance, until a final settlement, and then only for the balance due.

Morera v. Schwan, 133 La. 643; Stanton v. Buckner, 24 La. Ann. 391; Marx v. Blooms, 21 La. A. 67; Sewell v. Cooper, 21 La. Ann. 582; Crottes v. Frigerio, 18 La. Ann. 283; Baer v. Kopler, 19 La. Ann. 194; Hennigan v. Wilcox, 13 La. A. 576; Conrad v. Callery, 22 La. Ann. 428; Seelye v. Raylor, 32 A. 1115.

A partner, even in a special partnership, cannot sue his co-partner for a special item. It must be for a general settlement.

Reddick v. White, 46 La. Ann. 1198; Myers v. Will, 6 La. Ann. 33.

The liability of the alleged partners as to third parties is governed by the laws of Louisiana.

Cameron v. Orleans Ry., 108 La. 83; Abadie v. Frechede, 22 La. Ann. 423.

If there has been a violation of any partnership agreement, which is denied, he should sue in the courts of Louisiana for a dissolution of the partnership, for an accounting and for the rescission of the sale made by Wax to the Wax Lumber Company.

Borah v. O'Neill, 116 La. 672.

The case of Price v. Independent Oil Company, 168 Miss. 292, 150 So. 521, and the admitted residence of all parties to this case is quite conclusive that the laws of the State of Louisiana control the status of the parties, their rights and liabilities.

W. F. Tucker, of Woodville, for appellee.

A resulting trust is raised by equity to carry out the presumed intention of the party as a result of whose act the trust arises. A constructive trust is raised by equity to effect the ends of justice and to frustrate a possible fraudulent intention of the parties whom equity makes trustee against their will. It is immaterial whether the trust be called resulting trust or constructive trust.

Robinson v. Struather, 106 Miss. 754, 64 So. 724; Winn v. Dillion, 27 Miss. 494; Flynt v. Hubbard, 57 Miss. 471; Thomas v. Thomas, 62 Miss. 531; Barton v. Magruder, 69 Miss. 462; Schrader v. Schrader, 119 Miss. 526, 81 So. 227; Mass v. Sister of Mercy, 135 Miss. 505, 99 So. 468; Holmes v. Holmes, 154 Miss. 713, 123 So. 865; Quin v. Phipps, 113 So. 419; Summers v. Summers, 118 So. 912; 26 R. C. L. 1238, sec. 85.

There was no effort made by the appellant to deny by evidence any allegation of the bill of complaint, and there was no effort made by the appellant to support by evidence any averment made in his answer or cross-bill. There was no evidence introduced by the appellant Wax at all, except the agreement set out in his cross-bill and it only relates to the disposition of certain lumber at Holden, Louisiana.

If the appellant wishes some Louisiana law to control this case they may get some consolation out of Haynesvill Oil Company, Inc. v. Beach 159 La. 615, 105 So. 790.

The Chancellor heard this case and decided the same on the facts, and, as shown by the decree, left to a master in chancery the adjustment in payments on the purchase and repairs of the mill. This court in a score of cases has refused to disturb the findings of a chancellor on facts, and in this case has no reason to overrule that law and reverse the chancellor.

H. V. Watkins and Ralph B. Avery, both of Jackson, for appellee.

The chancery court of Wilkinson county, Mississippi, had jurisdiction of the parties and subject matter.

Section 363, Code of 1930.

The laws of this state control the rights of appellee under the breach of contract.

12 C. J. 450, Conflict of Laws; Hall v. Cordell, 142 U.S. 116, 12 S.Ct. 154, 35 L.Ed. 956; Pritchard v. Norton, 106 U.S. 124, 1 S.Ct. 102, 27 L.Ed. 104; Andrews v. Pond, 13 Pet. 65, 10 L.Ed. 61; Richardson v. Rowland, 40 Conn. 565; Arnold v. Potter, 22 Iowa 194; Davis v. Aetna Mut. F. Ins. Co., 67 N.Y. 218, 34 A. 464; Graham v. Norfolk First Nat. Bank, 84 N.Y. 393, 38 Am. Rep. 528; Montana Coal, etc., Co. v. Cincinnati Coal, etc., Co., 60 Ohio St. 351, 69 N.E. 613; Pittsburg, etc., R. Co. v. Sheppard, 56 Ohio St. 68, 46 N.E. 61, 60 A. S. R. 732; Kanaga v. Taylor, 7 Ohio St. 134, 70 Am. Dec. 62; Waverly Nat. Bank v. Hall, 150 Pa. 466, 24 A. 665, 30 A. S. R. 823; Geneva First Nat. Bank v. Shaw, 109 Tenn. 237, 70 S.W. 807, 97 A. S. R. 840, 59 L. R. A. 498; Davidson v. Browning, 73 W.Va. 276, 80 S.E. 363, L. R. A. 1915C 976; International Harvester Co. v. McAdam, 142 Wis. 114, 124 N.W. 1042, 26 L. R. A. (N. S.) 774, 20 Ann. Cas. 614.

Wax took title to the property as trustee for himself and appellee on equal shares.

Haynesville Oil Co. v. Beach, 105 So. 790; 47 C. J. 659, sec. 49.

Parties to an executory contract of partnership which has been breached have no recourse to an action for an accounting, as they are not partners.

Powell v. Maguire, 43 Cal. 11; Doyle v. Bailey, 75 Ill 418; Wilson v. Campbell, 10 Ill. 383; Frank v. Thompson, 207 Ky. 335, 269...