Frederick v. Cooper

3 Iowa 171
CourtSupreme Court of Iowa
DecidedJune 15, 1856
StatusPublished
Cited by4 cases

This text of 3 Iowa 171 (Frederick v. Cooper) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Frederick v. Cooper, 3 Iowa 171 (iowa 1856).

Opinion

Woodward, J.

In April, 1846, the complainant, with' his father, Jacob Frederick, and his brother, John S., entered into a verbal agreement of partnership. On the 20th November, 1847, this agreement was reduced to writing and signed by them. Their business was the purchase of lands, and the carrying on of husbandry, in any and all of its departments, as they should see fit. The partnership was to continue five years, front the first of August, 1847. In order to arrive at the questions in the cause, and our views upon them, it is necessary to have a construction of the articles of partnership, so far at least as they bear upon the present cause. The partnership actually commenced, under a parol agreement, in April, 1846, which is recognized in the written articles of November 20th, 1847. The previous parol agreement is to be taken as the same in terms with the written. But the written one i& to be regarded as commencing again. Therefore the written articles must govern as to duration, and the interest of the parties, whilst, at the same time, whatever was invested in the partnership business prior to the writing, must be regarded as belonging to the firm, under the articles.

The father, Jacob, was to furnish two thousand dollars, to be invested in lands, stock and implements. The sons were to be charged five hundred dollars each, to be taken from their inheritance in the father’s estate. The father holds two shares in the concern, to one share each in the two sons. The sons are to give their time, labor, and attention. The father also is to give labor and attention to the common interest. If he does not render at least fifty dollars worth of labor each year, he is to pay that sum each year; and if he withdraws altogether from labor and attention to the common concerns, he is to pay one hundred dollars for each year. He is not to share this fifty or one hundred dollars per annum, because if he does not give this labor and [182]*182attention, it is to be found elsewhere; and these sums are supposed to purchase, or to pay for them.

The five hundred dollars to be charged to each of the sons, is one hundred for each year of the duration of the firm. Therefore it is provided, that, if the firm ceases before the expiration of the five years, they shall be entitled to but one hundred each for each year, out of the capital stoclc. Then comes this question. If the firm continues the fiye years, and the capital stock, whether in lands, or otherwise, increases in value, in what proportions are the sons to take ? Are they to have their five hundred dollars only, or are they to have in the proportion which that sum bears to the investment? We say, in the latter proportion. This sum is charged to them, to be taken from their inheritance. It is an advancement by the father. It is an investment by them in the partnership, and in the increase of it, they are entitled to their respective shares. Their care, attention, and labor, has made the increase, so far as any such instrumentalities have done it. In effect, then, the father invests one thousand dollars, and each son five hundred. Beside this, all are to give care and labor, but the sons principally. If the father does not, he pays money. No other capital than this is required, and if any one puts in anything more, he is to have credit. Each may draw on the proceeds, or increase, for his subsistence. In a division, the father is to have two shares, and each son one share. Property which can be divided by number, is to be so divided. Other property, as land, for instance, is to be divided in manner following; each is to make his estimate; then the father’s is to be doubled; and then the sum of all these sums is to be divided by four, and the result taken for the value. And should more than one desire the same piece of property, he who will pay the most, shall have it. This is more especially applicable to the realty. Thus far, we suppose the firm to continue regularly the period of its limitation. We come now to the provisions relating to a premature dissolution.

If either, or both, of the sons, desires to withdraw before [183]*183the expiration of the limitation, he or they may do so, on giving six months’ notice; and should the firm be closed before the time limited, the sons are entitled to but one hundred dollars each of the capital stock, for each year of the existence of .the Company. Thatis, and this means, one hundred dollars of the original investment, but this carrying with it, its due proportion of the profit or increase; for theirs was an investment as much as the father’s; and besides, if they are not allowed the increase, then in case of a premature dissolution, the father takes all the increase, and they the investment only. This might be; but there is nothing in this ease to lead to so harsh a conclusion. This construction is consistent with the thought before suggested, that the father makes an advancement of five hundred dollars in a partnership, which is to continue for five years; and now we see that if that partnership ceases before the five years, the sons are to have only at the rate of one hundred dollars for -each year.

The cause stands before us on demurrer, and we arrive now at the allegations of the bill. The partnership went on until April, 1849, when John S. sold all his right, title, and interest in the firm, to the father, withdrew from the concern, and went to California. He then has no further interest, and we set him out of view. But it appears that the partnership went on between the father, Jacob, and Benjamin P., the other son. Technically, the first partnership was dissolved. But it does not follow, as of course, that the whole affair must be, or was, wound up. The bill alleges that John sold all his interest to his father, and it is fairly inferable, though not alleged in express terms, that the father and Benjamin continued on together as before. Such being the case, they tacitly agree to continue the partnership, with themselves alone as partners. The first effect now is, that the father has an interest of three-fourths, and Benjamin his original one-fourth. The thought that the whole matter has stopped, and there is now no partnership at all, cannot be accepted. This would commit a fraud upon Benjamin. It must be understood that he and his father-[184]*184went on together; and he alleges that he continued, after John’s withdrawal, till the 1st October, 1850, to work said land, and to give his sole attention to the best interest of said company. He then avers that at the date last mentioned, in pursuance of notice given by the said Jacob to him, and by mutual consent, the affairs of said company were closed ; that he and the said Jacob had a full settlement and division of all the personal property belonging to the said company, so far as petitioner’s share was concerned (except as afterwards mentioned), and that they settled their accounts of money, and property paid in and orrt by each. The exceptions referred to are, the claim of fifty dollars a year for labor, his share in the clip of wool for that year (1850), the one hundred dollars a year in the capital stock, and his share in a “claim” sold to C. D. Reinking for fifty dollars. All this shows (on demurrer), that the partnership went on between Benjamin and his father; and it shows further, that all claims as to the personalty were settled, except those specified, leaving open only those named as to personalty, and the broader claim on the land, on which they had not agreed when the death of the father occurred, on the 6th of May, 1852.

Let us examine these claims on the personalty.

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Bluebook (online)
3 Iowa 171, Counsel Stack Legal Research, https://law.counselstack.com/opinion/frederick-v-cooper-iowa-1856.