64 W. Va. 425 | W. Va. | 1908
S. F. Shelly of the first part, J. G. Fouse, I. K. Bechtel and N. L. Chappelle of the second part, on the 2nd day of July, 1901, entered into a written contract of partnership to
At June Rules, 1902, of the circuit court of Morgan county, John G. Fouse and I. K. Bechtel filed their bill, and at July rules filed their amended and supplemental bill of
The defendants Shelly and Chappelle demurred to the bill and amended bill which demurrers were overruled and the defendants answered, denying all allegations of fraud and misrepresentation on their part. Shelly averred that he had lived up to the covenants of the agreement so far as he was concerned, but had been prevented from the performance thereof bjr the failure of plaintiffs to carry out their part of the agreement; admitted that he had not set over to plaintiffs the three-fourths interest in the real estate, but that he was willing and ready to do so on their complying with their part of the agreement in furnishing the capital to purchase in fee the properties in the agreement mentioned; and praying that the injunction, granted in this case, be dissolved. Chappelle admitted that he had paid no money, but averred that it was understood and agreed between himself and the two plaintiffs that he had performed everything on his part
On the day agreed upon for argument of the cause, counsel for plaintiffs stated that through inadvertence they had failed to allege in their bills that at the time of the execution of the contract of July 2, 1901, and before said contract was signed, plaintiffs asked Shelly what his financial condition was, whether there were any judgments against him and if he owned any real estate, to which Shelly replied that his record was clear, that there were no judgments against him and that he owned certain real estate situated in the town of Berkeley Springs in the county of Morgan, upon which was situated a house in which they then were, being-known as the Willard Corner property and that he owned a half interest in the Fairfax Inn in said town of Berkeley Springs, and that in fact all of said representations were false, that there were.judgments to the amount of several thousand dollars subsisting and unpaid against Shelly in Luzerne county, Pennsylvania, and that he did not own the real estate claimed in Morgan county; and by agreement of counsel the proposal to amend the bill was waived and the allegation considered properly made in the bill, denied in the answer and answer replied to generally.
On July 19, 1904, the cause came on to be.heard upon the bill and amended bill, the agreement of counsel, the answers and general replication thereto, the depositions and arguments of counsel, when the court decreed a dissolution of the partnership, that the deferred payment of $7,-500 due the Tanning Company constituted the first lien on the property sold by said. Tanning Company to Shelly; and that the plaintiffs Fouse and Bechtel were entitled to a lien upon all the property in the bill and proceedings mentioned under said agreement of July 2, 1901, for the repayment to them of the sum of $12,099.96 with interest on each part from the time the same was paid. Further decreed that Shelly was not entitled to anything by way of salary but had been overpaid; and appointed special commissioners to wind up- the partnership business and to sell the. property. Pursuant to said decree the commissioners made sale
From this decree of July 19, 1901, S. F, Shelly appealed and assigns as error the dissolution of the partnership, which was equivalent to annulling the agreement of July 2, 1901; the decreeing that plaintiffs were entitled to a lien for the entire amount paid by them; in refusing to allow appellant the salary stipulated in contract after March 1, 1902; in winding up the affairs of the partnership and decreeing a sale of the property, and in falling to take an account between the parties as asked for in defendant’s answer.
The facts as disclosed by the evidence are about as follows: About the 22nd or 23rd of June, 1901, Fouse received a letter from Chappelle in which he said he had had several confidential interviews with Shelly and had discovered something of importance and requested him to return to Berkeley Springs at once. On the 29th of June, 1901, Fouse returned to the Springs and was taken by Chappelle to Shelly’s office and by him introduced to Shelly, and there they had a conversation which led up to the contract of July 2, 1901. It was proposed that Fouse and Chappelle were to furnish the money for the purposes afterwards set out in the contract of July 2nd. It developed that Chappelle had no ready money and would be unable to assist in raising what was needed for some time. As Fouse did not feel able himself to raise the money for immediate purposes he suggested that his son-in-law, Bechtel, should- be made a party to their contract. Shelly informed the parties that he had an option -on the Tannery property which would expire at noon on the 1st day of July, 1901; that he had made a bargain to purchase the tract known as the Hunter tract of 31 acres for $3,100; that the property known as the Bingham or Biser property was very desirable and that he would like to purchase it, and that he had alease on the Wise land and several other properties and that to acquire and develop these properties money was needed. That as the option on the Tannery property was about to expire, it was necessary to raise the cash payment of $2,500 before noon on the 1st day of July, Í9Q1, in order to purchase under the option, and the further
Plaintiffs under their contract furnished Shelly over $12,000 for investment in the properties and improvements who took conveyances to himself in his own name for the property purchased and utterly refused to secure plaintiffs in the amount thus furnished either by deed of trust or by in any way pledging the absolute title to the property, as was his duty under the provisions of the contract of partnership of July 2,1901. The conveyance of said property, instead of being made to Shelly or some other person as trustee, are all absolute conveyances in fee to said Shelly. And though often requested to secure the money advanced by deed of
It will be further observed that defendant Nathan L. Chappelle, one of the parties of the second part in said agreement of partnership with the plaintiffs, was equally bound by the agreement with the plaintiffs to furnish the necessary capital and purchase money to pay for the properties and for the construction of . the necessary improvements for the proposed enterprise, and it is not contended anywhere-in the record that he ever furnished any part of the money that was furnished to Shelly for the purposes of the contract. The whole burden of furnishing the capital was thrown upon the plaintiffs who were misled not only by the fraudulent representations of Shelly but of Chapi>elle as well, who represented that in a short time he would be able to furnish his proportion of the necessary funds in which he wholly failed.
The second assignment of error is the decreeing that plaintiffs were entitled to a lien for the entire amount paid by them. The language of the agreement is clear upon this point, where it is provided that the absolute title to the property shall be pledged until all of the purchase money, together with the total sum of other expenditures, has been paid out of the profits of the business or otherwise, after the payment of which, dividends, if any there was, should be
This assignment complains that the effect of decreeing a lien for the entire amount paid by plaintiffs was to impose all the debts, expenses and labor of the partnership upon the appellant, and to give the plaintiffs all that they had furnished without any obligation or liability ..incurred during the partnership. The monthly reports made by the appellant from the inception of the enterprise shows that no debts were created and no liabilities incurred, the ' proposed enterprise not having been'put in operation. They further show that he retained his monthly salary for his services and had remaining in his hands a surplus.
The third assignment complains of the action of the court in refusing to allow the appellant the salary stipulated . for in the contract after March, 1902. The contemplated enterprise was never put in operation and Shelly’s salary could only be, under the agreement, $50 per month until the works commenced operation, after which it was to be increased to $100, and when the proceedings for the dissolution of the partnership and the rescission of the contract were commenced his salary would cease. ' The last report made by him shows sufficient money remaining in his hands to pay up his salary and more and he is not hurt by that ruling of the court.
The fourth assignment is that the court erred in winding up the affairs of the partnership and decreeing a sale of the property. This being a proper case for a dissolution of the
It is complained that the court erred in not haying an account stated as prayed for by the defendants. The defendant Shelly made monthly reports up to the time of the institution of this suit with every item of account, the money furnished by the plaintiff .and how expended. The plant never was put into operation and no partnership business was performed except some things preliminary to going into business. And the accounts rendered or reported by the defendant Shelly seem to be all the accounts that could be made up, upon which account the court took no action.
We see no error in the decree and therefore affirm the same.
Affirmed.