Tevis v. Carter

65 S.W. 17, 111 Ky. 938, 1901 Ky. LEXIS 277

• Court: Court of Appeals of Kentucky
• Decided: November 15, 1901
• Status: Published

Opinion

Opinion of the court by

JUDGE O’REAR

Reversing.

Peter Arlund, doing business under the name of Peter Arlund & Co., procured a contract in June, 1898, with the village corporation of New Richmond, Ohio, to' furnish it public electric lighting for a specified period at a certain named rate per light per annum. The lights were to be installed by October 1, 1898, or the contract was to lapse. Appellee, Garter, is alleged to have been a dealer in electrical supplies at Louisville, Ky. Arlund and Carter entered into a contract July 15, 1898, by which Arlund assigned to Carter the contract with the Ohio village, and Carter undertook to install the plant for furnishing the lights — excepting the steam power — by October 1, 1898 The contract is very wordy, and not always clear, but from it we gather the following: Six thousand dollars was to represent the cost of the plant, not including steam power. The note of Arlund and Tevis (the latter having-been assigned one-half of Arlund’s interest) for this sum was to be delivered to appellee, payable at the Bank of Kentucky, with privilege of renewal for four months. Tevis. and Arlund were to furnish the steam power when the plant was installed in other respects. The expense of an engineer and of a general manager, who was to be an electrician, was to be defrayed out of the income of the business. The plant was to be all .in the possession and under the control of appellee, who had the right to’ sell it if the $6,000 note, or its renewal, was not paid at maturity; and after defraying running expenses, and the $6,000 and interest, and ten per cent, on the cost of construction, which was to go to appellee, the remainder, if any, was to go to appellants. There were other provisions, not material as affecting the character of the agreement. To classify this instrument has been the difficulty in this •case. The lower court is said to have treated if as a contract of sale by appellants of their option or contract with the village of New Richmond. Appellant contends he hired appellee to construct the plant and furnish the material, and pledged their contract with the Ohio village and the plant as security for the contract price. From the scope •of the whole enterprise, as shown,in the paper, we conclude that the arrangement was a joint undertaking by the contracting parties to install and operate the electric lighting plant at New Richmond, Ohio. Appellants furnished their “contract” as an asset. Appellee furnished “credit” for putting in the material and doing the work, as his contribution. Appellee was to have the custody of the property, including right of sale, to repay himself the actual cost of construction and running expenses of the plant. Any surplus realized (that is, profit) was to be divided among appellants and appellee thus: Appellee was to have any difference between actual-cost of installing the plant and the $6,000 (if the actual cost was less than $6,000), and in addition thereto a sum equivalent to ten per cent, of such actual cost. Appellants were to have the remainder. We conclude that the arrangement was a particular partnership, providing for an unequal division of profits. It is alleged that appellee violated his undertaking, in that he failed to furnish the material or install the plant within the time limit fixed by the ordinance constituting appellants’ contract with the village of New Richmond, and failed to install the plant at all, and in consequence appellants sustained damage for which they sue. Ordinarily one copartner can not sue another at law until there has been a settlement of the partnership affairs. But this suit is by one party to a contract against the othér party for its breach, because he failed to perform those things required of him for the purpose of creating' the partnership. In Vance v. Blair, 18 Ohio, 532 (51 Am. Dec., 467), the plaintiffs and defendant entered into a partnership agreement for the purpose of obtaining a contract to build a part of the Miami Canal. Defendant broke the contract, by failing to do what he had undertaken in the agreement to do, resulting in the partnership losing-the contract. • The action was for the damages resulting from the breach. Said the court: “We do not think the ease made in the declaration comes within the general rule'' that requires partners to seek redress against each other-in chancery. No part of the object which induced the parties to enter into the contract had been accomplished by them, — no accounts made by them that required settlement. It is a suit brought solel† to recover damages for a breach of the partnership articles. In Story, Partn. p. 319, sec. 218, it is said: 'Whether there is an express stipulation in the partnership articles which is violated by any partner, an action at law — either assumpsit or coven•ant, as the case may require — will ordinarily lie to recover damages for the 'breach thereof.’ We think it a proper case for a court of law.”

We are of opinion that the petition in this case stated a cause of action, and the demurrer should have been overruled. Judgment reversed, and cause remanded for proceedings not inconsistent herewith.