Palmer v. Tyler

15 Minn. 106
Supreme Court of Minnesota·Decided January 15, 1870·Published·Cited by 2 cases

Opinion

Berry, J.

By tbs Gowrt The plaintiff and the defendants Tyler and Baldwin entered into a partnership tor the manufacture of staves and heading. Tyler and Baldwin contributed to the capital stock a certain mill and machinery, and were to conduct the business. The plaintiff was to contribute $3,000 in money, of which he paid in only $2,542.32. In the written articles of ¡partnership, it was agreed, that “ at the end, or other sooner determination of their copartnership, the said copartners, each to the other, shall and will make a true, just and final account of all things relating to their said business, and at such expiration, the said Charles JR. Tyler and William A. Baldwin shall retain said mill, and the said Edward B. Palmer shall be paid such sum, or sums, as he may have advanced under this agreement as capital stock, and for carrying on said "business, and that then, all gain and increase thereof which shall appear to be remaining, either in money, goods, wares, debts, or otherwise, shall be divided between them, share and share alike, * "x" "x" said parties to share "x" * profits and losses equally between the said three parties, one equal one-third thei'eóf to each.”

The partnership has expired by lapse of time, the business having proved unsuccessful on account of the improvi[111] dent, unskilful and inattentive management thereof by Tyler and Baldwin. The result has been a loss of the whole amount contributed by the plaintiff, and the creation of debts against the firm. The plaintiff has been unable to ascertain from Tyler and Baldwin what is the precise condition of the affairs of the partnership. Disputes have arisen between the. plaintiff and partners in reference to claims made by the latter, and the transactions of the firm, and the plaintiff insists that the rights of the parties cannot be adjusted, and the bnsiness of the concern settled without suit. He therefore asks that an account may be taken. His right to such account, upon the foregoing state of facts set up in his complaint, is clear. The position taken by the defendants’ counsel, that as plaintiff has failed to contribute the full amount which he was to contribute by the partnership agreement, he has no right to call for an account, is, as we shall endeavor to show hereafter, manifestly indefensible.

Shortly before the expiration of the partnership, Tyler, as the complaint alleges, knowing the condition of the business and corruptly contriving with the defendants Metzner and Black, to evade the payment of his, said Tyler’s shave of said-losses, and thereby to cheat both said plaintiff and said Baldwin, secretly made a pretended sham sale of all the stave machinery in said mill, and part of the capital stock of said firm, including a planer bought and paid for with plaintiff’s said money, and of the value of $250, as and for his own individual property, unto said Metzner and Black, who had, at and before such sham sale, and before the delivery of such machinery, and before payment of anything thereon, due notice and knowledge of the rights of said plaintiff and said Baldwin under said contract (of partnership,) in and to said machinery ; yet said pretended vendees thereafter, secretly and fraudulently abstracted said [112] machinery from said mill, and from the possession of said firm, and now claim the same as their sole property under said sale from said Tyler, free and clear from -all claim on the part of said plaintiff and Baldwin under said contract of copartnership. The complaint also alleges, that before and since said pretended sale, said Tyler has been, as plaintiff is informed and believes, secretly disposing of other of the effects of said firm, and appropriating the proceeds thereof to his own use, to wit: staves, heading and stock, without rendering an account to said firm; and that, aside from said mill and machinery, said Tyler and Baldwin are without means or resources, wherewith to pay their share of the losses aforesaid, and worthless.

The plaintiff further avers in his complaint, that he has “in equity, * * a lien upon said mill and machinery, to the extent of the money so advanced by him, less his share of such losses, which right, said defendants Tyler and Baldwin, as well as Metzner and Black, deny.” The complaint prays for an account of the partnership business; that a receiver may be appointed to hold the mill and machinery pending the suit; that the defendants may be enjoined from disposing of the same during said pendency; that the sale to Metzner and Black may be vacated and the machinery turned over to the receiver; that the plaintiff may be adjudged to have a specific lien upon said mill and machinery to the extent of all the money by him so advanced, less one-third of said losses ; that the mill and machinery may be sold and the proceeds applied in satisfaction of such lien, and the costs of this suit, and for such further and other relief, &c.

The defendants, Metzner and Black, demur to the complaint :

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Palmer v. Tyler, 15 Minn. 106 (Mich. 1870).

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172 N.W. 491 (Supreme Court of Minnesota, 1919)
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