Cowles v. Garrett's Adm'rs

[DEBT OK KBIÍOSDIKG BOND.] 1. Admissibility of parol evidence to affect writing. — When a written contract, though complete in itself, contains a term which it is impossible for the court to construe without the aid of evidence aliunde, it is proper to resort to such evidence lor that purpose. 2. What constitutes partnership, or tenancy in common. — Where one of the partners in a company formed for the purpose of buying and selling lands on speculation, after the company has ceased active operations, transfers to a stranger one half of the not profits of his share in the company ; the residue of his interest, together with the entire control and direction of his share, having boon previously assigned to one of his co-partners, in consideration of moneys advanced to him on account of it, — this creates between the two assignees, not a partnership, but a joint tenancy in the share of their assignor, nor does it constitute the assignee of subsequent date a partner in the company. 3. When action lies between tenants in common. — One tenant in common cannot maintain an action at law against his co-tenant, so long as the subject-matter of the tenancy remains ; but, if the entire property is sold by one, the other may maintain an action for the conversion ; or, if the proceeds of sale have been received, may sue in assumpsit for his portion of the money. 4. Construction of refunding bond, as to time when suable. — On partial settlement between the two assignees of a partner’s share in an unsettled land-company, the prior assignee, who held the control of the entire share, transferred to the other lands valued at a specified sum, and took from him a bond conditioned as follows : “Now I consent and agree to bind myself, my heirs,” Ac., “to refund to the said 0. the said amount, wiih interest thereon, if my claim on said share of said B. shall bo or is unfounded, and if I am not authorized to receive the same ; and, also, to refund, with interest, any amount that may be overpaid in the setttlement this day made.” Held, that an action could not be maintained on this bond, to recover the amount of an alleged overpayment, until the fact ol' such overpayment had been ascertained on final settlement of the partnership affairs.

Appeal from tlie Circuit Court of Chambers. Tried before the Hon. Jnto. Gill SiioRtek. This action was founded on a bond, of which the following is a copy : “State of A1 ' esents witness, that day had a partial Tallapoosa settlement with Thomas M. Cowles, on my claim in the share of John H. Broadnax in the company of Ware, Dougherty & Co., and that the said Thomas M. Cowles has turned over to me land to the amount of $4,420, which I acknowledge this day to have received. Now I consent and agree to bind myself, my heirs, executors, and administrators, to refund to the said Thomas M. Cowles the said amount, with interest thereon, if my claim on said share of said. John H. Broadnax shall be or is unfounded, and if I am not authorized to receive the same; and, also, to refund, with interest, any amount that may be overpaid in the settlement this day made. In witness whereof, I have hereunto set my hand and seal, this 17th June, 1840.” (signed) “JoHN Garrett.” The first count in the declaration, after alleging the execution of this instrument, and setting it out, averred, “that the said defendant received and was overpaid, in said settlement, a large amount, to-wit, the sum of $4,420,” which he refused to pay on request. The second count, after alleging the execution of the instrument, averred, “that said defendant’s claim on .said share of said John II. Broadnax was and is unfounded, and said defendant was not authorized to receive the same; and that said sum of $4,420 was greatly beyond the amount due the said John II. Broadnax as aforesaid, and the same overpaid said defendant a large amount,” &c., which he failed to repay on request. The third count was in the common form, for money had and received by defendant, to and for plaintiff’s use. The defendant demurred to the whole declaration, and to each count separately; and his demurrer having been overruled, he pleaded, 1st, nil debut; and, 2dly, a special plea which was, in substance, as follows: 2. That said Thomas M. Cowles, William Dougherty, John II. Broadnax, Bobert J. Ware, and others, on the 17th June, 1840, were partners, under the firm name of Ware, Dougherty & Co., in the purchase and sale of lands lying within this State; that said partners, at the time of the formation of the partnership, had entered into a written agreement for its formation and management, and it was unsettled on said 17th June, 1840; that there was also, on said 17th. June, 1840, another partnership in existence in this State, formed for similar purposes, composed of Jacob T. Bradford and others, and known as the “Benton Land Company” ; that ten members of the firm of Ware, Dougherty & Co., of whom said JohnH. Broad-nax was one, owned and held ten shares in the other company on the day aforesaid; “that said Cowles, for a valuable consideration, was entitled to have and receive back his advances, and one half of the net profits of said share of Broadnax in said firm of Ware, Dougherty & Co., and said share was under the sole direction of said Cowles, as respected the operations of the company, as appears by a written agreement between said Cowles and Broadnax, bearing date February 25, 1836”; that said written agreement between Cowles and Broadnax “further acknowledged that said Cowles had theretofore furnished all the money that bad been required to be paid on said share of Broadnax in the firm of Ware, Dougherty & Co., and further agreed that the net profits on said share, from the operations of the company anterior to the date of said agreement, should be equally divided between said Cowles and Broadnax”; that the business and accounts.-of both said companies, and of said Cowles and Broadnax on account of their respective interests in the latter’s share, were unsettled on the 17th June, 1840, and no account had been stated between the several parties, and no balance struck; that Broadnax, prior to the 17th June, 1840, sold to said John Garrett one half of the share which stood in his name on the copartnership articles of Ware, Dougherty & Co.; that Garrett had a partial settlement with said Cowles, on said 17th June, 1840, on account of their respective claims and interests in the share of Broad-nax, and received from Cowles, on said settlement, lands which fell to the share of Broadnax amounting to $4,420, which are the lands and settlement referred to in the declaration; that the accounts and business of said partnerships, and of said Cowles and Garrett on account of their respective interests in the share of said Broadnax, had not been settled on the day on which this suit was commenced, nor had any balance been struck between the several parties ; that there are “no means of ascertaining how the balance or accounts stand between the said Cowles and Garrett, except by some person going through the transactions of said company, and ascertaining the fact in that way” ; and that said Garrett, “in right of his interest in said share of Broadnax, is still interested in said partnership of Ware, Dougherty & Co., and, on that account, is entitled to demand a share of its'profits, and is liable to have his share of the profits reduced by its expenses and losses.” A demurrer to this plea, having been overruled, the plaintiff implied, that he advanced all the money that was paid into said partnership on account of the interest therein of said Broadnax up to the 25th February, 1836, when Broadnax, by written agreement, acknowledging such advances for him by plaintiff, stipulated and agreed that the entire control of his share should be under the sole direction of plaintiff, and that the net profits on said share, prior to the date of said agreement, should be equally divided between them; that said partnership of Ware, Dougherty & Co., by resolution adopted on the 26th February, 1836, resolved to cease operations from thenceforward, and to make no other contracts as a company, except so far as might be necessary to settle its affairs and dispose of its property; that accordingly, prior to the 17th June, 1840, said company sold a portion of its property, converted it into money and notes, and distributed the entire proceeds among the holders of the different shares, reserving only a sufficient sum to meet the outstanding claims against the company, and also made an equal distribution of the property remaining unsold, with the exception of three half sections of land, the titles to which were incomplete or disputed; that these sections of land were all sold before the commencement of this suit, and the proceeds of sale distributed among the holders of the several shares, and the outstanding claims against the company fully paid off and discharged with the sum retained for that purpose, and the business of said company thus finally settled. The replication also contained similar averments respecting the final settlement of the affairs of the “Benton Land Company” prior to tbe 17th. June, 1840. A demurrer having been sustained to this replication, and leave given to reply over, the plaintiff further replied, “in short by consent,” that the firm of Ware, Dougherty & Co. was fully settled up, the interest therein belonging to the share of Broadnax fully ascertained, and the partnership dissolved, before the commencement of this suit; that the interest to which said share of Broadnax was ascertained to be entitled was much loss than $4,420, the sum specified in said bond; and thus, plaintiff avers, he has overpaid said G-arrett, &c. The court sustained a demurrer to this replication, and the plaintiff was thus compelled to take a nonsuit, which he now moves to set aside,— assigning for error all the adverse rulings of the court on the pleadings. 1. The demurrer to the second plea should have been sustained. The facts set out in said plea do not show a partnership between Broadnax and Cowles, nor between Cowles and Garrett, in the share held by Broadnax in the firm of Ware, Dougherty & Co. It simply shows an assignment by Broadnax to Cowles of one half interest in the net profits of said share, and to Garrett of the other half interest; constituting Broadnax and Cowles, in the first instance, and then Cowles and Garrett, part owners, or tenants in common in the net profits. — Story on Partnership, 125-6. If, then, Garrett’s covenant be construed to mean, that he would refund to Cowles whatever sum the latter had paid over and above the amount which Garrett might finally be entitled to receive on said share, a court of law would not be ousted of jurisdiction, by the mere fact that, to ascertain the amount to which said share was finally entitled, it might be necessary to resort to the state of the accounts of Ware, Dougherty & Co. The fact that, in an action on a contract, the state of a partnership account becomes the measure of recovery, is certainly no ground for the interposition of equity, But such is not the true construction of the contract. Garrett's covenant, properly construed, binds him to refund to Cowles whatever amount the latter may have paid over and above what Garrett was then — i. <?., on that partial settlement — entitled to receive. Although a contract is to be construed in the light of surrounding circumstances, it must also be construed most strongly against the promisor. — Hogan & Co. v. [Reynolds, 8 Ala. 59. The surrounding circumstances here, as disclosed by the second plea, do not carry such force with them as to control the express language of the contract, and override the other rule of construction. The affairs of Ware, Dougherty & Co., and of Cowles and Broadnax, being unsettled at the date of said contract, fas the plea alleges, Cowles and Garrett enter into a partial settlement of their interests in the share of Broadnax; and Garrett binds himself to refund, with interest, whatever amount was overpaid to him by Cowles “on this settlement.” There is nothing in the surrounding circumstances, as disclosed by the plea, to show that the parties were then prepared to make a final settlement. They may have met at a distance from their respective homes, and without the necessary books and papers, for a final settlement. Garrett binds himself, under these circumstances, to refund, if the amount due him, when ascertained, should prove less than the agreed value of the lands. Under the other construction, if it should appear on final settlement of the affairs of Ware, Dougherty & Co., made ten years after-wards, that Garrett’s interest in the share of Broadnax was then equal to the agreed value of the lands, although the greater part of this interest might have accrued after the date of the contract between Cowles and Garrett, Cowles could not claim interest from the date of the partial settlement. 2. If the second plea be held good, each replication is a full answer to it. — Rowland v. Boozer, 10 Ala. 690 ; McGehee v. Dougherty, 10 Ala. 863. 1. The facts presented by the second plea constitute a full defense to the action, since they show that Cowles and Garrett were partners in the share held by Broadnax in the firm of "Ware, Dough-erty & Co., and hence an action at law would not lie.— Moore v. Smith, 19 Ala. 774; Ellsworth v. Tartt, 26 Ala. 733. 2. Neither replication alleges such a dissolution or settlement as authorizes one partner to sue the other at law. — Morrow v. Riley, 15 Ala. 710. 3. The contract sued on does not fix any definite time for the refunding of the money overpaid; consequently, in ascertaining the intention of the parties on this point, regard must be had to the nature and subject-matter of the contract, the surrounding circumstances, and the presumptions which the law draws from the other stipulations. Thus construed, and in view of the principle that the law desires to prevent circuity and multiplicity of actions, the only reasonable interpretation of the contract is, that Garrett was not to refund until it had been ascertained, on final settlement, that he had been overpaid. This view is equally correct, whether Cowles and Garrett were partners or only tenants in common. Since, then, the action was prematurely commenced, the demurrer to the plea should have been visited on the declaration.