.'
",
(Qif'cult(Jowrt·. EJ. D. Ohio,' W; 1). January: 96, 1889.)
.
COUGHLIN.'
P
The articles of between complainant and defendant provided that:comphtinant should, contributeeis his share of the capital the exclusive of his.three-fourths interestlnce,rtain patented improvements, to be use used in the manufacturing. business of the firm, together with his. three'fourths interest in the property and assets of a certain marble company; that 'ihe Ilhouldcontributesuch money as mighth('l needed for the purchase of necessarYlDachinery and materials, pn which he was to have interest. He , was' to attend to the financial management of the business. and place the manufactured goods of the' firm upon the market. Defendant was to contribute as his share of the c!!:pital his ,one-fourth interest in said patented 1'!1provements and his one·fourth interest in the property and assets of saId marble company, and iras 'to apply his skill and experience', and devote all his time and .personalservices to the business of manufacturing. The profits and loss,es were to be shared equally. At the termination of the partnership, each partner, after payment of the firm debts, was entitled first. to withdraw .bis contribution to the capital, and the residue of the assets, if any, to be divided equally. The business proved ·unprofitable,. the bulk of the capital stock being lost. Held, that the articles were not open to the construction that defendant's skill was put in against complainant's capital so as to relieve him from liability to complainant for one-half the loss. ' '
hi-
;Suit by Clemens Hellebush against Reese P. Coughlin to recover a balance on partnership account. ' Long, Avm-y, Kramer&:Kramer,for c0mplainant. '1 Black Oc.Rockhold and Parkins(Y(l, &: Parkinson, for defendant. SAGE, J. The articles of copartnership between the parties provided that the complainant should contribute as his share of the capital the exclusive use of his three-fourths interest in certain patented improvements, to be used in the manufactures of the copartnership, together with his three-fourths interl'st and ownership in the property and assets of the Eagle Marble Company; that he should contribute such money as might be needed for the purchase of necessary machinery and materials, not to exceed $5,000, on which he was to have interest, payable annually. He was to attend to the financial management of the business, and place the manufactured goods of ,the firm upon the market. He alone was authorized to sign checks for the firm. The defendant wasta contributej as his sh_ of the capital, his one-fourth interest in saidpaoonted -im'provement,and his one-fourth interest in the property and assets of said Eagle Marble Company, and was'to apply his skill and and devote all his time and personal services, to the manufactures of the firm, which were to be under his charge and management. The profits and losses were to be shared equally. At the termination of the part·· nership, each partner, after payment of the firm debts, was entitled first to withdraw his contribution to the capital; defendant's contribu· tion to be estimated at $1,000, and complainant's at $8,000, the residue of the assets, if any, to be divided equally. The business was unprof. itable. All the capital stock was lost excepting about $800, now in the
HELLEBUSH ".COUGHLIN.
hands of the receiver. The defendant claims that this loss, excepting what was paid by the sale of his. jnterest in the property and assets of the firm, must fall upon complainant, for the reason that, inasmuch as he lost his time and labor, or, in other words, his skill was put in against complainant's capital, it would be unjust and inequitable to allow complainantto recover one-half of the said loss from him. This position is not tenable, for the following reasons: . 1. Each partner contributed to the capital. The valuation of the contribution of each is fixed by the articles. The province of each in the management of the business. is defined, and the plain construction of the articles leaves no room for the claim that the defendant's skill was put in against the comp]ainant'scapital. was to attend to the finances and to the sales, and the defendant to the manufacturing department. Doubtlessthe defendant's undertaking to de\"ote his and skill to that department secured to him the coocession of an equal share of the profits, but that concession is coupled with the express and explicit stipulation that he should also 'share, equally in the losses, which is altogether inconsistent with the claim now' made. . 2. The articles, in'terms, provide that all that the complainant ·put into the firm should be credited to him as his contribution to the capital. That in words made him a creditor of the firm for the full amount of, his contribution. . This plaiDly refers to the tangible property, and money contributed, and ootto 'the 'contribution of the exclusive right to use his interest in the invention. The defendant was to' have, in' like manner, credit for his contribution. The complainant'Ei' tion amounted-so it was agreed in the articles-to $8,000, ana the defend ant's to $1,000. When the firm became insolvent, the first thing to be done was to pay the creditors who were not members of the firm. The next thing to be done, was to settle the accounts of the partners inter sese,: and 'in thatsettleinent each must be treated as a creditor fortha amount of his'contributions to the capital. If the surplus remaining. after paying outside creditors was more than sufficient to balance the ,ac_, counts of the parties one with the other, the residue would have to. be dividedegually between them, for so it is stipulated in thea'rtic1es. But the entire surplus is insufficient to balance those accountS. It is very much less than the exc,8SS of the complainant's credits over the,de· fenrlant's. This plain statement of the matter, which is in accord with the rule Btated in LindL Partn. § 587; Bates,Parln. 810, 812; and Gunnell v Bird, 10 WalL 304, renders it unnecessary to comment UpOI'l the authorities cited in the briefs of counseJ',' and bringS the court to the oonclutlion thntthe complaina.nt is entitled to 'the entire surplus; and it will' be ortiared accordingly.' ,' >l . ' . . I
298
" FEDERAL· REPORTER,
McMANNEs8 et
al.
11. PAXSON
et w:.
(OWcuit Oourt, W;
n..lfi880Uri, 0. D.
January 14, 1889.)
L
VENDOR AND VENDEE-PAROL CONTRACT-EvIDENCE-SUFFICIENCY. A father purchased land in Missouri With the avowed purpose of ,:tlving"
to his two sons, and, after living on it for two years, returned to his home in Ohio. . He left the defendant. one of' his sons, In possession of part of it, orally promising defeudant,as the latter alleged. to give him the land if he would move on it. After returning to Ohio. the father became embarrassed, and needed the proceeds of the land. whereupon he gave his son notice to leave the land, which he did without objection, and returned to Ohio, where he remained nine years. In the mean time the father conveyed the land to plaintiffs' assignor. subject to certain trusts. with power to sell. Afterwards said assignor sold the land to defendant. taking a mortgage for the purchase money. The deed to defendant referred to the trust under which the mort· gagee the land. and defenul\nt never set up any claim to the land under the oral cont"act with his father until five years later, when plaintiffs sued to foreclose the mortgage. Held. that the alleged oral contract was not estab· lished by the evidence. A defendant mort,:tag-ee in foreclosure of a mortgage containing covenants of seisin and special warranty cannot set up a prior and paramount equita· ble title in himself. .
S.
:MORTGAG;ES-FORECLOSURE-EsTOPPEIr-To DENY TITLE.
In Equity. .On .bill of foreclosure. Bill bY41muel McManness a.nd Maris Paxson, assignees of M. O. Whitely, to foreclose a mortgage executed by defendants Henry Paxson and Maria. Paxson, his. wife, on lands in Morgan county, Mo· .. Draffen <to ,williams, for complainants· . Dan. E;" 'wray, for defendants. PHILIPS, J. . This is a bill in equity, to foreclose a mortgage executed by the defendants Henry Paxson, and Maria, his wife. The mortgage grew out of about the following state of facts: One Eli Paxson, the father oj defendant Henry, resided in the state of Ohio. In .the year 1868 he came to Morgan county, Mo., with the view of making the purchase of some lands.. ' He purchased between five and six hundred acres, for which hepaid:$7,OOO, and received a deed therefor in the fore part of 1869. Be came to this land with the defendant Henry and his other son, Maris, the plaintiff herein, and lived upon it for about two years, when he returned to the state of Ohio. He was then some 70 odd years old. At that time he had other money in bank at his Ohio home. This bank failing in 1878 left him in very straightened circumstances, rendering it necessary for him to make some disposition of this Missouri land to obtain th,e means of support. There was litigation in the courts of Missouri affecting the title to this land. In his he applied to one M. C. Whitely, who was an attorney at law, and an old friend, for assistance. After many suggestions and negotiations it was agreed and ar,ranged between them that Mr. Paxson should convey to Mr. Whitely the said land in Missouri, and thereupon, on the 15th day of March, 1879, Mr. Whitely and Mr. Paxson executed a trust instrument, by which H