Opinion
March 12, 1912.
April 23, 1912.
APPEAL from a judgment of the circuit court for Brown county: S. D. HASTINGS, Circuit Judge. Modified and affirmed.
The complaint in substance alleges that on or about the 1st day of October, 1903, the plaintiff and the defendant formed a partnership for the purpose of buying and selling real estate in and around Brown county, Wisconsin, under an agreement that the plaintiff should contribute one half of the money needed for various deals that should arise, and that the defendant should pay the other half; that the parties co-operate in the care and labor of the business, and that the plaintiff should receive one half of the net profits, to be divided after each deal was completed; that all lands were to be purchased for speculation only and not for personal or individual purposes; that said plaintiff and defendant entered upon, and have ever since continued to carry on, said partnership business under and in pursuance of said agreement; that since the commencement of said partnership the defendant has from time to time applied to his own use from the receipts of said business large sums of money, greatly exceeding the proportions thereof to which he was entitled as his share, and has never accounted for said moneys to this plaintiff, although he was frequently demanded so to do; that the defendant has received the sum of $750 over and above his due proportion of the partnership profits, and that he continues to appropriate this money to his own use.
The relief asked for by the plaintiff is (1) that the said co-partnership may be dissolved and an account be taken of all the copartnership dealings and transactions from the commencement thereof, and of the moneys received and paid by plaintiff and defendant, respectively, in relation thereto; (2) that the property of the copartnership be sold and divided between the plaintiff and defendant; (3) that in the meantime the defendant be enjoined from collecting and receiving, or from in any manner interfering or intermeddling with, or disposing of, the partnership money or property; (4) that a receiver of the partnership moneys and property be appointed with the usual powers and duties; and (5) for such other and further relief as may be just and equitable, together with the costs and disbursements of this action.
The answer alleged (1) that between the 1st day of October 1901, and the 1st day of May, 1904, plaintiff and defendant purchased five pieces of property together for the purpose of sale, each agreeing to contribute one half of the purchase price and to divide equally the profits to be earned after paying all expenses incidental to the holding and sale thereof; that said pieces of property were as follows: Crook's farm; Twilliger farm; Boetker farm; Roberts farm (also known as the Zimball farm); and Styres farm; (2) that defendant never entered into any general partnership with the plaintiff to carry on the sale of real estate or for the purpose of carrying on business, and that the above transactions were distinct and separate transactions; (3) defendant, further answering plaintiff's complaint, alleges that he has fully paid plaintiff all moneys coming to him from defendant and that he is not indebted to him in any sum whatever; (4) except as so admitted defendant denies each and every allegation contained in plaintiff's complaint.
The answer then set out four counterclaims, of which the third only is material to the issues, and that was for goods, wares, and merchandise sold and delivered to the plaintiff at his special instance and request, and upon which the defendant recovered the sum of $421.20. The action was begun and tried during the lifetime of the plaintiff William Cook, but final judgment was not rendered till after his death. The case was referred to Carlton Merrill, Esq., to hear, try, and determine. The referee filed three separate reports, the last one being dated September 17, 1909. In that report the referee thus states the partnership account, for convenience, as against Burdeau:
"W. E. Burdeau in account with William Cook. Dr.
To amt. due Cook on Twilliger-Boetker deal $ 981 49 To am. due Crook 513 17 " " Zimball (Roberts) 165 37 " " Boulet 49 00 " " Styres 271 62 " " Cheese factory deal 25 00 _________ Total $2,005 65 Cr. By cash $1,000 00 " 252 70 " 100 00 " 168 50 Due from Cook on Wittold deal 191 00 _________ $1,712 20 $1,712 20 _________ Balance due from Burdeau to Cook on partnership matters $ 293 45 Due to Burdeau from Cook on third counterclaim $ 421 20 Due Cook on partnership matters 293 45 _________
Balance due Cook to Burdeau $ 127 75
The plaintiff would be entitled to the appointment of a receiver to take possession of the mortgage of $450 on the Styres land — the Smith land contract for $400, and the four lots in Cady Burdon's Addn. to convert them into money, pay first the balance of $127.55 due Burdeau and divide balance between Cook and Burdeau equally."
The court confirmed the report of the referee dated July, 1909, wherein the referee found that there was due defendant from the plaintiff on the third counterclaim the sum of $421.20, and that there was nothing due on the partnership account for the reason that the agreements for the purchase and sale of real estate, being in parol, were void, and that neither party was bound to account for the proceeds or profits thereof, and it disregarded the report dated September 17, 1909. From a judgment entered in favor of the defendant on his third counterclaim in the sum of $421.20, together with costs and disbursements, and dismissing plaintiff's complaint on the merits, the plaintiff appealed.
Sol. P. Huntington, for the appellant.
For the respondent there was a brief by Kittell Burke, and oral argument by J. A. Kittell.
Each side takes exceptions as to the correctness of the referee's findings contained in the last report dated September 17, 1909, claiming the referee erred in the allowance of both credit and debit items. In his second report the referee said:
"The plaintiff and defendant are uncle and nephew. For years they have lived in the same neighborhood in the town of Suamico, apparently on the most friendly terms. Burdeau ran a general store where Cook got his household supplies, etc., on running account. There were during the same period covered by the matters in controversy, dickers, dealings, and joint speculations between them other than those involved in this suit, in which considerable money passed between them from hand to hand. Except the store book account and some memoranda made by Burdeau in a little pocketbook, there seems to have been no account kept of their dealings. They both testify much from memory as to happenings of several years past. It is probably beyond human power to determine exactly what is equitably due one to the other. The evidence is meager in exact dates and in description of property, and in many instances wanting entirely; but the dealings took place between October, 1901, and the commencement of this action."
In view of the situation of the parties and the state of the evidence it is not surprising that both sides excepted to the findings made. We have carefully examined the evidence and are satisfied it warranted the characterization given it by the referee. The findings made are all supported by evidence, and we cannot say there is such a clear preponderance thereof against any finding as to warrant us in setting it aside. The superior advantages of the referee to judge of the credibility and weight of the evidence is peculiarly applicable to a situation like the one before us where the evidence is vague, uncertain, and susceptible of conflicting constructions or applications.
The really important question on this appeal is whether or not the court erred in holding that plaintiff could not be credited with the amount of $293.45 found due him on the partnership deals in lands on the ground that the contract to deal in them was oral and so void under the statute of frauds. That an oral agreement to conduct partnership dealings in lands is void under the statute of frauds (sec. 2302, Stats. 1898) was held by this court as early as Bird v. Morrison, 12 Wis. 138, and has been steadily adhered to since. Clarke v. McAuliffe, 81 Wis. 104, 51 N. W. 83; McMillen v. Pratt, 89 Wis. 612, 62 N. W. 588; Seymour v. Cushway, 100 Wis. 580, 76 N. W. 769; Smith v. Putnam, 107 Wis. 155, 82 N. W. 1077, 83 N. W. 288; Scheuer v. Cochem, 126 Wis. 209, 105 N. W. 573; and Langley v. Sanborn, 135 Wis. 178, 114 N. W. 787.
In the case of Bird v. Morrison, supra, plaintiff sought to establish an equitable interest in lands purchased by his partner, Morrison, under an oral agreement that they were to have equal interests therein. The court was asked to declare that one half of the legal title held by Morrison's grantee — the trial court having found he purchased with notice — was held in trust for the plaintiff. The judgment asked affected title to land. In Clarke v. McAuliffe, supra, the action was for an accounting of partnership matters, for a dissolution of the partnership, and for recovery of one half the profits of the purchase and sale of a piece of land. It was alleged that defendant took title in his own name, sold it at a profit of $23,000, and plaintiff sought to recover, among other things, his share of the profits. The court held that he could not, because the agreement to buy for joint profit was oral, and void under the statute, and defendant had at all times repudiated it and had at no time paid any portion of the profits over to the plaintiff. In McMillen v. Pratt, supra, it was held that an action at law could not be maintained for damages for breach of an oral agreement for a partnership for the purchase of standing timber or lands. The court said:
"It is not material to consider what remedies may be had in a court of equity where there has been a part performance of such an agreement, or in actions of fraud or deceit in reference thereto, for at law neither party has any standing to recover damages against the other for a breach of such an agreement."
The case of Seymour v. Cushway, 100 Wis. 580, 76 N. W. 769, was an action to have a trust declared in certain standing timber, the legal title to which had been conveyed to the defendants, and in the profits derived by them from the business of manufacturing it into lumber, and, as it appeared there was no fraud and nothing more than a mere breach of the oral contract to enter into and perfect the proposed partnership and purchase, equity refused to enforce it. In Scheuer v. Cochem, 126 Wis. 209, 105 N. W. 573, the court distinguished the case from Smith v. Putnam, 107 Wis. 155, 82 N. W. 1077, 83 N. W. 288, on the ground that the oral agreement had not been sufficiently carried out so that it could be treated as an executed contract, as was the latter case, where nothing was left to be done but the ascertainment of a money balance due from one partner to another. The case of Langley v. Sanborn, 135 Wis. 178, 114 N. W. 787, was for damages for breach of an oral contract to conduct partnership dealings in land.
It will thus be seen that in each of the above cases, except Smith v. Putnam, either a trust in lands or the proceeds thereof was sought to be declared, or the oral agreement was wholly or partially unexecuted, or damages were sought for its breach. In each case the court was asked to give force and effect to the void oral agreement to an extent at least further than the parties had recognized it even where there was a partial execution of it. In the case of Smith v. Putnam it was held that where the parties had so far completed all the transactions as to leave nothing necessary to be done by the court but the ascertainment of a money balance due from one party to the other, the void contract would be treated as a fully executed one, and therefore not within the purpose or scope of the statute. The cases of Bird v. Morrison, 12 Wis. 138; Clarke v. McAuliffe, 81 Wis. 104, 51 N. W. 83; McMillen v. Pratt, 89 Wis. 612, 62 N. W. 588, and Seymour v. Cushway, 100 Wis. 580, 76 N. W. 769, were cited and approved by this court in Smith v. Putnam. But it was there said:
"In applying the statute of frauds, courts long since recognized an exception, or more properly a distinction, in cases where a contract void by the statute had been fully executed, and one party sought to retain the fruits of the dealing in defiance of his promises. Such situation was declared to be not within the purpose of, and so not sheltered by, the statute. It has therefore been held in a vast array of decided cases that where the parties have fully executed all parts of such a contract relating to or affecting interests in land, so that the courts do not need to enforce anything with reference to the land itself, the rights and duties of the parties resulting from their dealings may be enforced, and each of them prevented from using that statute, not as a protection against, but as an effective means of, fraud. Browne, Stat. Frauds, § 116; Rice v. Roberts, 24 Wis. 461; Niland v. Murphy, 73 Wis. 326, 41 N. W. 335; Pireaux v. Simon, 79 Wis. 392, 48 N. W. 674; Trowbridge v. Wetherbee, 11 Allen, 361; Bowen v. Bell, 20 Johns. 338; Remington v. Palmer, 62 N. Y. 31; Bork v. Martin, 132 N. Y. 280, 30 N. E. 584; Hodges v. Green, 28 Vt. 358; Gordon v. Tweedy, 71 Ala. 202; Negley v. Jeffers, 28 Ohio St. 90; Galley v. Galley, 14 Neb. 174; Ryan v. Tomlinson, 39 Cal. 639, 645; Bibb v. Allen, 149 U. S. 481, 497, 13 Sup. Ct. 950."
In the case at bar all partnership transactions, except those relating to the mortgage of $450, the land contract for $400, and the lots yet unsold, are completely closed up, and nothing remains to be done but to ascertain the amount due thereon from one partner to the other. These transactions, too, like those in the Smith Case, are entirely independent and separate from those not yet fully executed. The answer alleges that each deal was a separate and distinct transaction. The defendant paid plaintiff from time to time at least a portion of the profits of each deal. He claims he paid plaintiff all the profits due him on all the deals. We have, therefore, as to the deals fully closed, a case exactly similar to Smith v. Putnam, namely, the mere determination of the correct amount due each partner on deals otherwise fully executed. Plaintiff claims he has not been paid the correct amount, and the defendant claims he has. In Smith v. Putnam it was held that such a situation took the void agreement out of the statute, and it was further held that, in the absence of seasonable objections, the partnership account could be stated in an action at law. Here the action was brought in equity and a partnership admitted as to each of the five separate deals.
We conclude, therefore, that the trial court erred in refusing to deduct from the amount found due the defendant on his counterclaim, to wit, the sum of $421.20, the sum found due the plaintiff on the deals fully closed, to wit, the sum of $293.45.
The court cannot appoint a receiver to take charge of the mortgage, land contracts, and lots unsold. To do so would be to execute a void contract. As to those deals the parties must be left where they are.
By the Court. — Judgment modified by deducting therefrom as of the day of its rendition the sum of $293.45, and, as so modified, affirmed, with costs in favor of the appellant.