90 W. Va. 719 | W. Va. | 1922
The opinion delivered upon a former appeal, then as now Aaron Catzen, Clark Development Company and L. H. Clark being appellants, settled the principles of the canse as developed by the proof theretofore taken. Kaufman v. Catzen, 81 W. Va. 1, L. R. A. 1918-B. 672. One of the questions discussed, as applied to the facts involved at that time, was as to the validity of Kaufman’s claim to a one-third interest in the profits derived and derivable from the control, management and improvement by Catzen of the 44 acres of land leased in the name of Catzen from Northfork Realty Company August 27, 1907. This claim the opinion sustained, notwithstanding Kaufman’s refusal or failure to provide the $20,000.00, as he assured the lessor’s officers he would do, to aid in the improvement of the property, so as to convert it into a profitable investment, and also notwithstanding Catzen’s incorporation of Clark Development Company, and his assignment of the lease to that company, Catzen being the owner of a controlling interest in the company and its general manager. Nevertheless Kaufman was to be held liable in a settlement of the accounts arising out of the management of the leasehold, and especially for any delays in its development caused by his opposition to the efforts of Catzen and the corporation, upon whom fell the financial burden of its betterment for the purposes of the lease, to obtain a saloon license.
It is shown by this record and 'the former one that the basic object of Kaufman and Catzen in securing this lease was to establish saloons on the lease, and incidentally to improve it as a town site. Kaufman did not desire-to be known in the lease, and an agreement was entered into between him and Catzen for the purpose of showing their joint interests therein. The $30,000.00 paid by Kaufman to the Northfork Realty Company as rentals for 5 years was his contribution to the adventure, for which he was to have a one-third of all the rents, issues and profits arising from the use and occu.pancy of the land. Catzen was to have control and management of the enterprise. Catzen had very little money, and it is not clear from what source the money for the develop
The Clark Development Company simply takes the place of Catzen in the transaction. The money it advanced, if any, to the enterprise is likewise in the nature of a debt.
The purpose of the suit, it is well to remember, is not a dissolution of the relation existing between the parties interested in the enterprise and the conversion of the property into liquid assets, preparatory to a final division among them, as their interests may then appear. . On the contrary, the apparent purpose is the ascertainment of the true status of the parties to each other and a statement of the account upon an adjustment of the revenues derived from the lease; and the amount of money expended to put the leased premises upon a profit producing basis to the date of the entry of a final decree in the cause. Both plaintiff and . defendants excepted to certain items in the commissioner’s report of receipts and disbursements, and the true status of the account as it now appears depends upon a disposition of these exceptions.
The- witness who has the only reliable knowledge of the collections and disbursements is Catzen, and the amount received by him directly from the property up to September 1, 1912, is $24,175.43, and by Clark Development Company from that date to September 1, 1918, $200,342.26, or by both, $224,517.69. Up to September 1, 1912, Catzen expended for improvements $60,000.00, as shown by the report, and after that time Clark Development Company $142,431.79, or a total of $202,431.79. Sixty thousand dollars of the amount expended by Catzen prior to September 1, 1912, he derived not from the property, but, he says, from Morris Catzen $20,000, from Plat Top National Bank $20,000, and the remainder from the sale of his and his wife’s property, from
There is in the report no ascertainment of the unpaid, liabilities of Catzen and the Clark Development Company,
Another issue to be discussed is the sufficiency of the proof of damages attributable to the antagonism of Kaufman, but for which the earning capacity of the property would have developed earlier than it did, according to Catzen’s contention. Under this heading the report shows $6,604.45, and charges one-third of the amount ($2,201.48) to Kaufman, and two-thirds to Catzen. That is, Catzen should bear the greater portion of the -burden chargeable to the wrongful conduct 'of his associate. Evidently this apportionment speaks its own inequality. But the decree disallowed the whole, amount. Not only was the amount so found inadequate, according to counsel for Catzen, but they say it should have been much larger.
While Kaufman did not, as he should have done, being vitally interested in the success of the joint enterprise, render the encouragement and financial assistance necessary for the development of the property, his failure was due in a large measure, if not wholly, to an estrangement between himself and Catzen, beginning soon after the date of the lease. The difficulty between them manifested itself not so much in the failure of Kaufman to provide the $20,-000.00 that he assured the lessor and Catzen he would provide, but in using his influence with members of the county court to prevent Catzen from obtaining license for a saloon on the property; and because of the resort to this direct method of approach to the licensing body, Catzen was compelled, he says, to obtain the assignment of a license granted to another saloon keeper, and for the same reason or cause to establish and stock a saloon for negroes, in order to counteract Kaufman’s political influence in the county and to receive recognition for himself by politicians of the county.
The greater part of the proof of damage relied on by appellants as chargeable to Kaufman’s antagonism tends to show a necessity for the sale of Catzen’s property not involved in the administration of the leased premises, the proceeds of which sales he expended to fit the premises for the purpose of the lease. He does not ask to have the proceeds of the sales returned, or say they have been returned to him out of the earnings of the property. What he does insist upon is the right to be credited with rents that would have accrued and that he would have collected but for such sales. The effect of this insistence on his part, would, if sanctioned, be a double source of profit to him, that is, rents augmented by interest, and a share of the earnings from the property to the production of which the rents contributed. Moreover, he seems to have had more confidence in the earning capacity of the property than in that of the houses sold by him. Careful reading of the decisions cited by appellant’s counsel fails to show in what respect, if at all, they have any bearing upon the question under discussion. They deal with the valuation of property for condemnation purposes. The sums realized by him from the sale of his properties, as well as all of the other sums which he personally furnished to make the adventure a paying one, are properly returnable to him, and the interest thereon is the measure of his damages for the use thereof.
Nor is there any convincing reason advanced for denying Kaufman the right to participate in the rents, issues and profits, from whatever source obtained, except from business transacted by tenants on the 44 acres, including the saloon business conducted by Catzen. The property, not the busi
Our conclusion, therefore, is to reverse the decree and remand the cause, with direction to order another reference to revise and restate the account, showing: (1) The debts and liabilities of the joint enterprise; (2) the advancements made by any party, the dates thereof, the interest thereon, and any payments made toward the reduction thereof out of the revenues or assets of the enterprise; (3) the receipts and expenditures since the former report of Commissioner Marshall in the cause, together with a statement, showing the funds on hand, including any liquid assets.
Reversed and remanded.