Bartelt v. Smith, 145 Wis. 31

145 Wis. 31 | Wis. | 1911

WiNsnow, O. J.

The pivotal question upon the merits of the case is whether the evidence justifies the referee’s finding that the parties were partners. No formal agreement of partnership was ever made, although a written agreement was drawn by defendant but never signed by the plaintiff. The referee arrived at his conclusion as an inference of fact from the conduct of the parties themselves during the time from November 2, 1902, to March, 1905, during which time they confessedly operated the telephone system together and appeared to be partners. The fact was undisputed that Smith took such title as was taken to the original stem of the system, which was bought of one Drescher, and it was also undisputed that plaintiff advanced all the money necessary to make the original purchase, to buy new material, and to operate the business. From this time the parties operated the business together, the exchange being located in the plaintiff’s house. There were many pages of testimony taken, and this opinion might be extended to great length in reviewing the evidence on the subject, but it does not seem that'any valuable purpose would be gained thereby.

It is true, as claimed by counsel for appellant, that there can be no partnership as between the parties themselves unless a contract of partnership be shown, and that it must include an agreement to share profits as profits, i. e. as common owners thereof. Sullivan v. Sullivan, 122 Wis. 326, 99 N. W. 1022. But it is not necessary that the partners should call themselves such. If they engage in a joint business enterprise, each putting in capital or labor or both, with an agreement to share profits as such, there will be a partnership whatever they may call themselves. Nor need an express contract, either written or oral, be shown. Like other contracts which the law does not require to be in writing, a contract of partnership may be proven by circumstantial evidence, that is, by showing acts and conduct of the parties from which the fact may be inferred that the parties have agreed to become partners and share profits as such. 22 Am. & Eng. Ency. of Law (2d ed.) 39, 40, 47, 48; Voshmik v. Urquhart, 91 Wis. 513, 65 N. W. 60. We have examined the evidence in this case and find much to sustain the finding of the referee that the parties here became partners. Many of the acts of both plaintiff and defendant are only consistent with the theory that they had agreed to become partners in the enterprise and share the profits as profits.

The claim is made that the telephone system in question was real estate and that a parol agreement of partnership would be void, because it would offend against the statute of frauds. It is unnecessary to consider whether the telephone lines in question were real property or not. If they were, and if Smith held the legal title thereto, still, if they were contributed to the capital of the firm business, they would assume the character of firm property so far as paying the debts and closing out the partnership is concerned, even though the legal title remained in Smith. This is elementary.

We think the appellant’s objection to the allowance of the item of $911.25 in the receiver’s account for compensation should have been sustained.

Tbe general principle, very well settled in tbe books, is tbat a party to tbe canse will not ordinarily be appointed receiver unless both parties consent or there are special circumstances present which make such an appointment clearly for tbe best interest of all concerned. Tbe reason is tbat tbe receiver is an officer of court, whose business it is to administer bis trust impartially for tbe benefit of all concerned, and hence be should have no special interests which might influence him in bis conduct of tbe trust in matters where bis interests and tbe interest of any party to tbe action may clash. 23 Am, & Eng. Ency. of Law (2d ed.) 1034. Where a party is appointed, however, tbe general, though perhaps not universal, rule seems to be that be is entitled to no 'compensation for bis services, especially in case of tbe appointment of a partner as receiver on dissolution of tbe partnership. High, Receivers, § 540; 34 Cye. 468.

In tbe present case there is an additional reason why no compensation should be allowed. Upon tbe plaintiffs mo.tion for tbe appointment of a receiver it appears by tbe recitals of tbe order tbat tbe attorneys for tbe defendant appeared, and tbe order then proceeds as follows:

“And tbe attorneys for tbe defendant having stated in open court tbat if tbe court should see fit to appoint a receiver the defendant would have no objection personally against tbe plaintiff, August (?. Bartelt, being left in possession and management of the property, providing tbe fees of tbe receiver could be avoided thereby.”

At tbe close of this recital tbe court proceeds to make tbe appointment of tbe plaintiff. This order was made by Judge Eowleb at Eond du Lac, while tbe final judgment in tbe case was rendered by-Judge KibwaN at Sheboygan. This recital was evidently considered of considerable importance by Judge Eowleb, for a part of it was interlined after tbe typewritten order bad been prepared. We can construe it in no other way except as meaning tbat tbe defendant consented to the appointment of Mr. Bartélt upon the proviso only that in case of bis appointment there would be no fees charged for the receivership. If this be so (and on any other theory the insertion of the recital seems to be unnecessary surplusage), then it is entirely clear to our minds that no fees should be allowed. Mr. Bartelt’s name was evidently proposed by his own counsel. The defendant had a right to make strong objection to it, but he announced that he would forego that right if the payment of receiver’s fees could be avoided by Bar-telt’s appointment. Upon this statement Mr. Bartelt was appointed. Plain principles of estoppel must now prevent him from claiming compensation, and the fact that the receivership lasted much longer than was anticipated can make no difference. This item, therefore, was improperly allowed.

The charge for counsel fees is attacked for the reason that the plaintiff should not, as receiver, have consulted the counsel who represented him as a party, because their advice would probably not be impartial. The general rule that receivers should not employ the counsel of either party to the litigation is approved and very forcibly stated in Speiser v. Merchants’ Exch. Bank, 110 Wis. 506, 86 N. W. 243, and we have no intention of modifying anything that is there said. It is there recognized, however, that where it is made clear that their services to the receiver were of such a nature that no clash of interests was involved between their duties as counsel for the party and as counsel for the receiver, payment for their services may be approved. This is certainly reasonable doctrine. If, as appears in the present case, the advice of counsel was simply with relation to details of his duties, assisting him at the sale of the property and drawing and submitting his report, all being matters as to which there was no conflict but rather community of interest between the parties, we think a reasonable bill, such as was here allowed, for counsel fees to plaintiff’s own counsel may be properly approved, though the practice is not to be advised. The result is that tbe net amount of assets, including tbe amounts due tbe firm from each partner, is $3,271.09, instead of $2,359.84 as adjudged by tbe court; of wbicb eacb is entitled to balf after deducting bis firm debt, making Bartelt’s share $1,565.51 and Smith’s share $1,325.58. Erom Smith’s share must be deducted plaintiff’s costs, $258.02, leaving a balance due him as of tbe date of tbe judgment of $1,067.56, instead of $611.94 as adjudged by tbe court. Tbe judgment must be modified to agree with these results.

By the Court. — Judgment modified as indicated in tbe opinion, and as so modified affirmed, with costs to tbe appellant.