Case ID: iowa_30/html/0399-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Beck, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Turk v. Nicholson et al.
    
    1. Contract- abandonment: partnership. Where one party to an agreement abandons it or disregards its provisions, the other party may treat it as no longer binding on him.
    2.-rude applied. Where a creditor entered into an agreement with a firm in respect to the management of the partnership property, upon which he had a lien for an indebtedness to him, and upon which indebtedness, in consideration of the agreement, he was to extend time of payment, it was held, that a dissolution of the partnership by a withdrawal of one of the members, and the transfer of his interest to the remaining one, worked such an abandonment of the contract on the part of the partnership, as absolved the creditor from further observance of it on his part.
    3.-parties. It was further held, that, if the remaining partner were entitled to the benefits of the contract, he would have to claim them in an action alone, and could not for that purpose join in an action with the retiring partner.
    
      Appeal from Black Hawk District Court.
    
    Friday, December 23.
    Action in attachment, to recover upon an account for $2,557, for lumber sold by plaintiff to defendants. The answer sets up, as a defense, that, prior to the commencement of the action, defendants, being indebted to plaintiff in the sum of $2,000, executed to him a promissory note, and mortgage upon their stock of lumber for the sum of $2,500, to secure their indebtedness then existing and further purchases of lumber to be made of plaintiff; that, upon the day of the execution of the note and mortgage, a written agreement was entered into by the parties, to the effect that defendants should have permission to sell the lumber mortgaged in the usual course of trade, on condition that they should keep the stock full by purchases, or reduce their indebtedness proportionally by payments, as they reduced the stock by sales; that it was also stipulated that plaintiff should supply to defendants, at any time when their stock should be reduced below $2,500, lumber in sufficient quantity to bring it up to that value, and that, under this contract, and the mortgage, plaintiff agreed to extend the time upon defendants’ indebtedness for one year. The answer avers that, in violation of this agreement,plaintiff took possession of the stock of lumber upon said mortgage, and sold the same, and refused to extend the time upon defendants’ indebtedness. Damages resulting from the alleged breach of plaintiff’s contract, and on account of the wrongful suing out of the attachment, are set up as a cross-demand. The issues presented by the pleadings, so far as the objections raised by appellants are concerned, relate to the alleged failure of defendants to comply with the conditions of the agreement under which plaintiff undertook to extend the time upon the indebtedness of defendants. There was evidence tending to show that the stock of lumber was not kept up to the quantity provided for by the agreement, and that large sales had been made, not in good faith, by defendants. It was shown by the evidence, that, before the lumber was taken and sold upon the mortgage, and before this suit was commenced, the defendants, who were before copartners, had dissolved the partnership, McCrea selling his interest to the other defendant, who continued the business in the firm name. Other evidence was introduced by the parties which need not be noticed.
    There was a verdict and judgment for plaintiff. Defendants appeal.
    
      Boies, Allen & Couch, for the appellants.
    
      Griffith & Knight for the appellee.
   Beck, J.

The objections raised by appellants to the judgment of the district court are based upon two instructions given to the jury. They are in the „ .. . . following words i

“ The written agreement in evidence was made between plaintiff and the defendants, Nicholson & McOrea, and if you believe that the partnership of -Nicholson & McCrea was dissolved, the plaintiff was not bound to continue the agreement after such dissolution.”
“ If you believe that the partnership between the defendants was dissolved before the foreclosure of the mortgage and the suing out of the writ of attachment, and that the property of the partnership in the dissolution became the individual property of the defendant Nicholson, then the defendants cannot recover any damages in this, suit for any thing done by plaintiff after the dissolution of the partnership.”

In our opinion these instructions are not objectionable. The plaintiff contracted with both of the defendants; he had a right to rely upon the responsibility, integrity and business ability of both, to insure his protection in the performance of the contract. The party who withdrew from the firm may have been the one upon whom he most relied, and whose connection with the business induced him to enter into the contract. At all events, having contracted with both, the withdrawal of one from the firm, and the conveyance of all his interest therein to the other, was an abandonment, on the part of defendants, of the agreement, and justified plaintiff in considering it as no longer binding upon himself. He had the right to demand that it be performed by the parties with whom he contracted, and not by one of them.

If one of the defendants had conveyed all his interest in the firm property to the other, and the firm was dissolved 3. — parties, before the foreclosure of the mortgage and attachment, it is very clear that, under the evidence, the retiring partner is entitled to recover nothing on account of the foreclosure and attachment, even in case each had been wrongful. He had parted with all his interest in the firm, property, which, as we understand the evidence, was taken upon the mortgage and attachment. He could not therefore recover for the wrongful taking of propei'tp in which he had no interest. Nicholson may have been entitled to recover upon the cross-demand, but McCrea was not. They could not therefore join in an action, nor in the cross-demand to recover damages to which Nicholson only was entitled, claiming the recovery jointly. In this view there is no error in the instructions above set out.

Affirmed.