142 Iowa 708 | Iowa | 1909
Defendant denies that he ever entered into a partnership with plaintiff, although he admits the sharing of expenses and the division of commission while the parties were engaged in business both at Russell and at Osceola down to July 1, 1907. He says that there was a pool between them as to business where they represented both parties, which under the circumstances would clearly amount to a partnership as to these transactions, and that there was to be and in fact was no division of commissions where but one side was represented in the office. The testimony negatives this thought, however, for defendant did prior to July 1st divide a commission which he in fact earned representing but one side of the transaction. Moreover, in the first Morton-Bosserman deal in which defendant, with consent of the interested parties, represented both sides, defendant entered upon an expense book kept for that purpose his traveling and other expenses connected with that deal and some other expenses incurred prior thereto on another deal. The matter can not be explained upon any other theory than that of partnership. Defendant’s oral explanation thereof is not satisfactory. Each party has some corroborating testimony; plaintiff producing witnesses who testified to admissions of defendant that plaintiff was his partner, and defendant some who testified to admissions of plaintiff that he was not in partnership with defendant. There is also some testimony as to the acts apd conduct of each party which it is claimed tends to support the contention of each. As to these matters we may say that, although defendant argues an estoppel on plaintiff due to his admissions to third parties, the case lacks one of the essential elements of such an estoppel; that is to say, there is no showing that defendant knew of these
benefit of the general public. If the principals agree to it, that is the end of the transaction. The partnership, viewed in its worst aspect, was not to defraud the .public generally, but to take advantage of prospective customers who might or might not consent. Without consent commissions could not be collected from either party but with it could be collected from both. Leekins v. Nordyke, supra; Seymour v. Shea, 62 Iowa, 708; Norton v. Blinn, 39 Ohio St. 145. The commissions having been earned and collected and so far as now involved with the consent of both principals, the question of dual agency arises collaterally, and it should not be held a defense to plaintiff’s suit. Bibb v. Miller, 11 Bush (Ky.) 306; Brooks v. Martin, 2 Wall. 70 (17 L. Ed. 732). The Broolcs case last cited is closely in point on this proposition, and, as there pointed out there is a wide distinction between the enforcing of illegal contracts and asserting title ,t° money which has arisen from them. We quote the following from that case:
It is to have an account of these funds, and a division of these proceeds, that this bill is filed. Does it lie in the mouth of the partner who has, by fraudulent means, obtained possession and control of all these funds, to re*715 fuse to do equity to Ms other partner, because of the wrong originally done or intended to the soldier? It is difficult to perceive how the statute, enacted for the benefit of the soldier, is to be rendered any more effective by leaving all this in the hands of Brooks, instead of requiring him to execute justice as between himself and his partner; or what rule of public morals will be weakened by compelling him to do so ? The title to the lands is not rendered void by the statute. It interposes no obstacles to the collection of the notes and mortgages. The transactions which were illegal have become accomplished facts, and can not be affected by any action of the court in this case.
AVe also quote the following from the opinion in Sharp v. Taylor, 2 Phillips Ch., 801:
The answer to the objection appears to me to be this: That the plaintiff does not ask to enforce any agreement adverse to tire provisions of the act of Parliament. He is not seeking compensation and payment for an illegal voyage. That matter was disposed of when Taylor (the defendant) received the money, and plaintiff is now only seeking payment for his share of the realized profits. As between these two, can this supposed evasion of the law be set up as a defense by one against the otherwise clear title of the other ? Can one of two partners possess himself of the property of the firm, and be permitted to retain it, if he can show that, in realizing it, some provision of some “act of Parliament has been violated or neglected? The answer to this, as to the former case, will be that the transaction alleged to be illegal is completed and' closed, and will not be in any manner affected by what the court is asked to do between the parties.
McBlair v. Gibbes, 17 How. 232 (15 L. Ed. 1321, is also in point, and contains an elaborate review of the authorities. AVe quote the following from the syllabus in that case: “If the fund be paid for the other party to a third person, the latter can not set up the illegality of the contract on which the payment has been made, and withhold it for himself, or, if paid to one of the parties, he
We are impressed with the thought that, defendant having received the money for the 'partnership, he can not ■set up the illegality of the transactions with the landowners as a defense to an action for an accounting, but, however that may be, the transaction now involved — that is, the first Morton-Bosserman deal — is in no sense tainted. This legal transaction may be separated from the illegal, if there were any such, and recovery had thereon. The result of the whole matter is that defendant received $600 on this transaction for which he should account. He paid out $35.15 on account thereof, leaving $564.85, one-half of which is $282.42. Plaintiff confessedly had one-half of $27 more than his share in his possession on prior deals. One-half of this is $13.50, which, deducted from the $282.42, leaves $268.92, for which amount plaintiff should have had judgment, with interest from the time of the trial in the court below.
The case will be reversed for a decree in harmony with this opinion, or plaintiff at his option, exercised within twenty days, may have such a decree here. — Reversed and remanded.