White v. Hutton

52 S.W.2d 542, 1932 Tex. App. LEXIS 748
CourtCourt of Appeals of Texas
DecidedJune 29, 1932
DocketNo. 3767.
StatusPublished

This text of 52 S.W.2d 542 (White v. Hutton) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
White v. Hutton, 52 S.W.2d 542, 1932 Tex. App. LEXIS 748 (Tex. Ct. App. 1932).

Opinion

JACKSON, J.

The record discloses that about the 1st of February, 1929, J. H. White and wife, Thelma G-. White, entered into a written contract with Wm. J. Harris, creating- a limited partnership under chapter 1, title 105, R. O. S. 1925 (article 6110 et seq.), by the terms of which White and wife became the general partners and Wm. J. Harris the special partner.

The articles of agreement provided that the name of the firm should be “Happy Hill Farms’’ and the partnership should terminate on December 31, 1929, unless extended by mutual consent and agreement^ That the partnership was created “for the purpose of conducting, operating and carrying on the business of buying, selling and raising for the market chickens, turkeys, hogs, cattle and other live stock and producing crops of different kinds and doing a general stock-farming business.” In the contract the contributions to the capital stock were enumerated, stipulations for the division of profits 50 per cent, to the general partners and 50 per cent, to the special partner were made. The general partners agreed to reside and conduct the business on Labor 25 in League No. 465 in Lamb county, Tex., furnished by the special partner; to give all their time and attention to the partnership business, diligently look after and care for all the fowls and live stock, and use their skill and ability in raising the best grades thereof for market; prepare the soil and cultivate and harvest crop's on the farm. They were given full authority to manage and conduct the business as they saw fit, to purchase and sell chickens, turkeys, and live stock for carrying on the business, and receive and pay out all the moneys. For their services they were to receive jointly the sum of $2,000 to be paid out of the partnership funds. The special partner was not to do any work or manage or look after the business, but was to be consulted by the general partners relative thereto. . The profits were to be divided on December 31, 1929, and all the expenses, including the $2,000 salary to the general partners, were to be paid out of the proceeds of the business before a division of profits; but if the partnership did not make sufficient gross profits to pay said $2,000, then the firm was not liable to the general partners for said sum, but they were to receive such portion thereof as was made from the business after all other expenses were paid. They were authorized to draw from the funds of the partnership sufficient money to pay their necessary living expenses, but at the expiration of the term if they had drawn more for living expenses than the business was able to pay, after discharging the other expenses, the general partners were to repay to the business the excess. They were to keep true and accurate books of all transactions and furnish to the special partner a written report of the financial condition of the business when required.

The articles of the partnership agreement were not renewed as required by the statute at the expiration of the term therein provided, but the business was continued with the assent and acquiescence of the partners through the year 1930.

About July 3,193Ó, the special partner Wm. J. Harris sold and conveyed the farm on which the partnership business was conducted, together with his one-half interest in said partnership business and property, to A. A. Hutton, the defendant in error herein, who assumed the obligations of Wm. J. 'Harris and agreed to carry out the partnership contract except as to the payment of a certain partnership debt, which for the disposition of this appeal is immaterial.

On or about December 8,1930, defendant in error, A. A. Hutton, upon an ex parte hearing, secured the issuance of a temporary writ of injunction out of the district court of Lamb county, Tex., which was served upon the defendants, enjoining them from certain acts, the nature of which is not revealed by the record. On the 8th day of January, 1931, the court on an ex parte hearing appointed O. H. Grow receiver over the property of the Happy Hill Farms, directed him to take immediate possession of the premises, the assets, books, accounts, contracts, and documents of the partnership, gave him authority to carry on the business, sell sufficient of the property to pay the reasonable operating expenses, and commanded the plaintiffs in error to surrender to the receiver all of the partnership property, books, accounts, etc., and continued the temporary restraining order theretofore issued in force against the plaintiffs in error.

Neither the petition on which the temporary writ of injunction was issued, nor the petition on which the receiver was appointed and the temporary writ of injunction continued, appear in the record.

On March 12, 1931, the defendant in error 'filed a second amended original petition in which he alleged in detail the partnership agreement, his purchase, of a one-half interest of the firm property, his assumption of certain obligations, and asked for an accounting, a division of the property, and a dissolution of the partnership.

The allegations on which he sought to continue the injunction and the receivership were, in effect, that the plaintiffs in error had sold some of the assets of the partnership, failed to account for the proceeds thereof, *544 misapplied and misappropriated property belonging to the firm, and were threatening to sell firm property and retain the proceeds. That he was to that extent being excluded from participation in the business. That plaintiffs in error had no exempt property subject to execution and he would be damaged by the dissipation of the firm assets. That the plaintiffs in error had mismanaged the property, and alleged certain acts which he charged as mismanagement and certain articles which he claimed had been sold. That the property was in danger of being lost and the partners could not mutually agree upon a division, and that it was necessary to continue the injunction and the receivership.

On January 15, 1931, the defendant in error filed a suit in trespass to try title, applied for and had issued a writ of sequestration under which the plaintiffs in error were •dispossessed.

This suit was consolidated with the suit for injunction, receivership, and accounting, and both were tried together.

The plaintiffs in error, on February 24, 1931, answered by general demurrer, numerous exceptions, denied the existence of the facts alleged as a basis for the injunction and receivership, asserted that they had faithfully performed each and every duty and obligation placed upon them by the partnership agreement, pleaded that the contract had been breached by the special partner, claimed certain indebtedness against the partnership for services and money furnished, charged the defendant in error with notice thereof at the time he purchased, and set up a cross-action, alleging that the sequestration was willfully and maliciously sued out, that they were< illegally ejected, for which they sought to recover damages.

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Bluebook (online)
52 S.W.2d 542, 1932 Tex. App. LEXIS 748, Counsel Stack Legal Research, https://law.counselstack.com/opinion/white-v-hutton-texapp-1932.