73 Colo. 534 | Colo. | 1923
delivered the opinion of the court.
Plaintiff in error Milliken, defendant below, had a mine in Nicaragua, Central America. Fredrickson, defendant in error, plaintiff below, had money in Omaha for investment. Milliken needed money to develop his mine; Fredrickson wanted mining property. As each desired to accommodate the other, they entered into a contract March 2, 1915, supplemented by a later one of March 27, which enabled Fredrickson at once to part with some, and later with much more, of his money and afforded Milliken the opportunity to divest himself of an interest in his property. In the first contract there was a recital that Milliken had borrowed of Fredrickson $10,000. The loan was evidenced by a promissory note and secured by a deed of transfer of an undivided one-half interest in the mine. A clause in the contract gave to Fredrickson an option to purchase for $50,000 from Milliken this one-half interest which secured the loan, which was to be exercised within ten days after a thorough inspection of the mine had been made by both parties. In the event that Fredrickson elected to buy, this note was to be cancelled and returned to Milliken and the $10,000, theretofore secured as a loan, was to be considered and taken as one-fifth of the purchase price, all of which purchase price, amounting to
As not infrequently happens in such enterprises, this venture did not prove a success. Each of the parties spent some time in Nicaragua giving to the business in hand their supervision. Milliken, an expert mining man, directed mining operations, and Fredrickson, a business man, devoted his time to the business part. The health of each was seriously impaired on account of climatic and other conditions. The parties were not entirely harmonious. They differed upon some important questions and upon others of a minor character. As the result of such conditions, and the fact that the enterprise was a failure, Fredrickson, brought this action in April, 1917, in the Denver district court to recover of Milliken damages in the sum of $190,000 alleged to have been sustained by him as a result of fraudulent representations by Milliken as to the property. In one of the defenses of his answer, and by way of counterclaim, Milliken requested, in which request the plaintiff by his replication joined, that an accounting be had of the various transactions between them in carrying out their enterprise under these agreements.
It is the contention of plaintiff in error that the district court refused to hear argument or read or examine the evidence, though he had filed specific exceptions to the findings and recommendations of the referee. It is also urged that to the undisputed facts, the referee applied erroneous principles of law, and in making his findings of fact and in his recommendations as to the decree, proceeded" upon a theory which neither of the parties entertained or adopted, but which was contrary thereto and to the statement of claim which the plaintiff himself had filed with the referee.
1. As to the first assigned error that the approval of the court was without investigation or examination of the evidence, the record is not altogether clear whether or not the court failed in this particular. In Jones v. Van Horn, 28 Colo. 126, 63 Pac. 307, and Peck v. Alexander, 40 Colo. 392, 91 Pac. 38, this court said that where exceptions are filed to a report and findings of a referee, it is the duty of the trial court to examine the evidence with a
2. Realizing, as we do, that the disposition of such
In the summary of the transactions of these parties made by the referee, he states two accounts: one, between plaintiff and defendant as individuals; another, a co-partnership account. Among other items he charges plaintiff with the $10,000 note and interest, aggregating $12,264.44 under the individual account, which he finds defendant owes to the plaintiff irrespective of, and not in connection with, the co-partnership account. In the co-partnership account he gives credit to the plaintiff for $29,739.46, one item of which is $18,000 expended by the plaintiff in excess of the $40,000 which plaintiff paid as part of the purchase price of the mine. Another item is $11,737.81 said to be an additional expenditure for joint account, and, therefore, finds that plaintiff’s contributions to the expense of operation amounted to $29,739.46. In the same account he gives credit to the defendant for advances made by him toward expenses of $8607.73, making the aggregate expenditure of both parties about $38,346.15, and by deducting from this aggregate expenditure the sum of $761.04, which he finds should be charged-to the defendant, he computes the net expenditure at $37,586.15, of which the plaintiff contributed $29,730.46, and of which plaintiff’s share was $18,793.07, thus showing an overpayment by the plaintiff of $10,946.48. He finds that the defendant should have contributed $18,793.07, and, in addition thereto, should have assumed and paid the sum of $761.04, which was a bill for services not connected with the mine for which defendant claimed a credit. He credits the
If there is any evidence which authorized the referee to state an individual account, it does not appear in the abstract of the record. The plaintiff’s own statement of claim filed with the referee is upon a different theory, and there is.no justification, so far as we can discover, for charging the defendant in an individual account with the $10,000 note and interest. It is true that Milliken, in his individual capacity, had borrowed $10,000 from Fredrick-son and gave his note therefor, which he was obliged to pay unless released therefrom. This note was subsequently cancelled at the time of the making of the supplemental contract and Milliken’s liability thereon ceased when it was agreed by the parties that the amount thereof should be applied as part of the purchase price of the mine which Milliken conveyed to Fredrickson. It is also true that the one-fifth part of the purchase price was to be applied by Milliken, as was the other four-fifths, by both parties, in developing the property, but the liability on the note as such ceased and Milliken’s liability thereafter, with respect to the $10,000, if any, was, by the express terms of the supplemental contract, for failure to apply the unexpended balance thereof on the mine. This was a partnership obligation he then incurred and any failure on his part so to apply this money was a partnership liability and should be adjusted in connection with, and as part of, the partnership account. It is something more than a technical, it is a substantial, distinction arising out of and based upon, their written agreement. This agreement recites that a portion of the $10,000 which was loaned to Milliken, had been applied before the supplemental agreement was made, in the purchase of supplies and for other expenditures as agreed upon by the par
In the state of the record, as we find it, and for the reasons already indicated, no judgment on the merits should
Eeversed and remanded.
Mr. Chief Justice Teller and Mr. Justice. Sheafor concur.