Behlow v. Fischer
Before: Fitzgerald, Harrison, Paterson
Synopsis
Pleading—Misjoinder of Causes of Action—Rescission of Sales bt Partner to Copartner—Dissolution of Copartnership.—A cause of action in favor of one partner for a rescission of a sale by him to a copartner, on the ground of fraud, cannot be joined in the same complaint with a separate and distinct cause of action in favor of another copartner for similar relief, neither of them being jointly interested in the property sold, and the sales not being made by the same transaction or for a single consideration, and it appearing that the rescission of the sale by either of them does not affect either of the other parties to the action; nor can these separate causes of action he properly joined in the same complaint with a cause of action for an accounting and dissolution of the copartnership.
Id.—Misjoinder of Parties—Corporation—Rescission of Transfer of Stock.—Where the copartnership formed a corporation to which their mining properties were transferred, and a rescission is sought of a transfer of shares of stock of the corporation, transferred to two of the plaintiffs as the individual property of each, the corporation has no interest in the subject of the action, and is not a proper party in the controversy between the claimants to a portion of its capital stock.
Id.—Partnership Assets—Corporation, Agent of Copartnership— Shares of Stock.—Where a corporation is formed as an agent of a co-partnership, any unissued stock is a part o£ the partnership assets, but shares of stock issued to the partners become their individual property, and shares transferred to third parties not shown to be bound by the partnership agreement are held by them like the stock of any other corporation.
Id.—Accounting of Agency—Parties.—Where the corporation is only an agent of a partnership, it is only the partnership or some one in its interest who would have the right to ask for an account of the agency or for a surrender of its assets.
Id.—Action for Dissolution of Partnership—Improper Parties.—An action for the dissolution or a partnership can only be brought at the instance of a partner, and the joinder of others as plaintiffs who have parted with all their interest in the partnership, does not give to the court jurisdiction to determine in the same action a controversy between them and their vendee respecting the validity of their sales.
Id.—Jurisdiction of Equity-—Complete Relief—Insufficient Bill— Multifariousness.-—The rule that when a court of equity has jurisdiction, it will determine in one action all questions that may arise, and will not remit the party to another tribunal, applies only when the party seeking the relief has a standing in the court of equity upon a sufficient bill, and when it appears that he has no such standing his bill will be dismissed for want of equity, and if it improperly unites distinct causes for relief it will be dismissed for multifariousness.
Opinion — Harrison
Harrison, J. In April, 1889, William G.Long, Jacob A. Fischer, Edward C. Loftus, and Charles J. Behlow [212]formed a copartnership for the purpose of purchasing and working certain mining claims in Tuolumne county upon certain terms agreed upon between them, and thereafter acquired the mining properties contemplated by their agreement. September 1,1889, these four partners agreed among themselves to form a corporation under the laws of this state, with a capital stock of 60.000 shares, for the purpose of carrying on the business of the partnership under a corporate name, and agreed that, upon the organization of the corporation, they would divide 40,000 shares of the capital stock between themselves according to their respective interests in the partnership, and that the remaining 20,000 shares should be disposed of as the partnership should determine. In pursuance of this agreement a corporation was organized under the corporate name of The Consolidated Golden Gate and Sulphuret Mining and Development Company, and, on the 4th of September of that year, the copartners conveyed to it the aforesaid mining property; and of the 40,000 shares that the partners hg.d agreed to divide among themselves, 15,000 were issued to Behlow, 15,000 to Fischer, 5,000 to Long, and 5.000 to Loftus. September 12, 1889, 19,200 of the remaining shares were issued to Behlow in consideration of his paying therefor the sum of $3.50 per share. November 27, 1889, Long sold and transferred to Fischer the 5,000 shares of the capital stock issued to him, for the sum of $2,000; and September 12,1890, Behlow sold and transferred to Fischer all his interest in said co-partnership and 22,500 shares of said capital stock for the sum of $35,160. It is alleged in the complaint that these sales and transfers were made in consequence of fraudulent acts, concealments, and representations on the part of Fischer, and that but for such fraud they would not have been made; that these frauds were not discovered until November 20, 1891; that on the 4th day of January, 1892, Behlow and Long, severally, “gave notice of rescission, and rescinded the said sale and transfer to Jacob A. Fischer .... on the ground of [213]fraud, and tendered and offered to return and repay to said Jacob A. Fischer the consideration received, as aforesaid, for said sale and transfer .... and then and there demanded of said Fischer the return and transfer of their interest in the copartnership, and the return and transfer of said shares of stock.” The complaint further alleges that Fischer had sold and transferred to defendant, John Loftus, 10,000 shares of the capital stock, and had transferred other portions thereof to other persons. The complaint also alleges that, although by the agreement for the division of the 40,000 shares of the capital stock of the corporation, Behlow was to receive 20,000, and Fischer only 10,000, shares, yet Fischer, “ with the intent to defraud said copartnership, and his said copartners,” caused 15,000 shares to be issued to himself, although he well knew that 5,000 of said shares belonged to and should have been issued to Behlow.
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