Barnes v. Clark

169 N.W. 527, 41 S.D. 175, 1918 S.D. LEXIS 174

• Court: South Dakota Supreme Court
• Decided: November 29, 1918
• Docket: File No. 4407
• Status: Published

Opinion

WHITIN'G, P. J.

Action for a partnership accounting. Plaintiff seeks to hold 'defendant for one-half of an item of $4,000 which plaintiff claims to be duie the partnership from (defendant. Trial to the court. Findings of fact, conclusions of law, and judgment in favor of the plaintiff, it being, found and adjudged that the defendant should pay into court for the benefit of the plaintiff $2,000, together with interest. Defendant appealed from the judgment arid from an order denying a new trial.

A statement of some of the undisputed facts is necessary for a clear understanding of defendant’s position. On November 13, 1909, these parties purchased a territorial right for the sale of a certain patented! article. The agreed price for this right was $10,000 of -which each party was to pay $5,000. Each party gave his check to the vendor for $5,000. The plaintiff’s check was paid in regular course of collection through bank drawn on. The defendant’s check did not go through regular course of collection, but instead thereof defendant paid the payee thereof $1,000 in' cash, and, according to -defendant’s testimony, the payee -credited the other $4,000 for commissions that defendant would t'nereafter earn in assisting the payee in selling territorial rights in the states of Minnesota and North Dakota. Defendant testified that the agreement by which he was credited with such -commission was entered into but a few minutes after the purchase by plaintiff and him-self of their territorial right; that he had no previous understanding under which he was to pay such -check otherwise than in cash; and that there -was no partnership agreement entered into until November1 17, 1909. Defendant admits that he never advised plaintiff of this credit of $4,000 which he had received from- the payee of his check. Defendant contends that the purchase of the territorial right was not a partnership transaction; that in the making of such purchase he -owed no -duty or obligation- to the plaintiff ; and that it was absolutely immaterial to the plaintiff— in fact none of plaintiff’s business- — in- what manner he paid for his one-half interest in such territorial right. In other words, de^fendant 'contends that, prior to any partnership agreement or understanding, each, party had purchased a half -interest in this territorial right; and that the partnership agreement was not that each should put $5,000 in the business, -but that each should' put into the .business his one-half interest in this territorial right. .

[1] If we -were to consider defendant’s testimony alone, we would he satisfied therefrom that, from- the time t-hes-e parties first contemplated the -purchase of the territorial right, they understood that such purchase, if it were made, would be for the purpose of, and as a part of, a partnership enterprise. Defendant’s story was not only so unreasonable as to be beyond credence, but he was thoroughly impeached as to imporfant matters relating thereto— in fact, under the record, it is clear that he received this credit of $4,000 for nothing. One can hardly escape the conviction that the credit for $4,000, if it was a commission at all, was for his services in consummating the sale to himself and1 plaintiff. But, even though defendant told the absolute truth, and he fully expected! to pay the full $5,000 in cash up to the time this commis.sion proposition was made to him, yet every principle of honesty and fair dealing demanded of him that he advise plaintiff of the true facts before entering into the partnership contract. It is not strange that the trial court- believed plaintiff, who testified positively to the effect that the purchase of this territorial right took place after and as a part of a partnership agreement. Defendant does not contend but that if the partnership was entered into at or prior to this purchase, the judgment of the trial court was correct.

[2] We are also of the view that the facts of this case are such as to require this court as a matter of justice between these parties to impose ¿Damages for delay which subdivision 5, § 411, 6 C. P., authorizes this court in its discretion to impose. It is therefore the judgment of this court that the judgment andl the order denying a new trial, be affirmed, and that respondent recover of appellant in this court the sum of $320 for and as damages for delay arising from this appeal as well as recover costs upon appeal.