Case Name: Fletcher vs. Crowell, imp.
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1876-08
Citations: 42 Wis. 341
Docket Number: 
Parties: Fletcher vs. Crowell, imp.
Judges: ByaN, C. J., not being present.
Reporter: Wisconsin Reports
Volume: 42
Pages: 341–355

Head Matter:
Fletcher vs. Crowell, imp.
CONTRACTS. (1) Contract construed. (2) Effect of mutual releases of their undivided interests, by tico of three owners im, common. (3) Effect of stipulation in action, upon, title to land. <
1. By contract between B., C. and B., B. and C. were to furnish B. money with which to construct a certain road, not exceeding $30,000, of which three-fourths was to he furnished by B., and one-fourth by O.j B. was to superintend tbe wort; and certain lands granted to tbe state to aid in tbe construction of said road were to be divided between the three parties, in certain proportions, when earned. P. paid B. tbe sum of money whioh he agreed to pay; but B., by fraudulent representations, without the knowledge of 3?., induced C. to advance to him a larger sum than he was bound to furnish. Held, that P.’s right to that proportion of said lands which was awarded him by the contract, is not affected by the questions whether any and what part of the money furnished by him to B. was actually used by the latter in the construction of the road.
2. P., B. and 0. were entitled to 24,000 acres of land, in the proportion of nine, four and three undivided sixteenths, respectively, and, in an arbi- ■ tration between B. and C. only, an undivided 12,000 acres of said land having been awarded to each of them subject to P.’s rights, they (B. and C), in pursuance of such award, each released to the other all his interest in the 12,000 acres awarded to the other; and subsequently P. released to B. his interest in the 12,000 acres awarded to the latter, Held,
(1) That after the mutual releases of B. and C., each owned an interest equal to 5,250 acres in one undivided half of said lands, and the remaining interest, equal to 6,750 acres in each undivided half, was in P.
(2) That after the release by P. to B., the latter owned one undivided half of the land, while P. owned 6,750, and C. 5,250 acres, of the remaining undivided half.
3. While this suit was pending between B., C. and P., to determine tlieir respective interests in said 24,000 acres, P. executed and delivered to B. an instrument in which he stated that B. had given him a certain note for $3,000, the amount of which, when paid, he (P.) agreed to accept in full compensation for his interest in that half of said land which had been awarded to B. in said arbitration between B. and 0. The note of B. mentioned in said instrument being paid: Held, that the instrument operates as a conveyance to B. of P.’s interest in the undivided 12,000 acres there mentioned.
APPEAL from tbe Circuit Court for Milwaukee County.
In 1863, congress granted to tbe state of Wisconsin certain lands to aid in tbe construction of a military road from Green Bay or Port Howard to tbe Michigan state line. 12 U. S. Stats, at Large, 797. The proceedings under that grant, down to and including a part of the year 1867, are fully stated in Winslow v. Crowell, 32 Wis., 639. That case disposed of the lands earned by the construction of thirty miles of such road by Jackson Hadley.
Tbe contract between tbe plaintiff and tbe defendants Orowell and Babcock (to wbom tbe unexecuted portion of the contract to construct such road bad been assigned by tbe administra-trix of Mr. Hadley’s estate), was, that tbe plaintiff and Orowell should furnish Babcock tbe money with which to construct the road, not exceeding $30,000, three-fourths of which was to be furnished by the plaintiff, and one-fourth by Orowell/ that Babcock was to superintend the work; and that the lands, when earned, should be divided between them in the proportion of nine-sixteenths to the plaintiff, four-sixteenths to Bab-cock, and three-sixteenths to Orowell.
Forty miles of road were constructed in 1867 under this contract, and the lands thereby earned were divided between the parties as therein agreed.
In 1868, twelve and one-half miles of such road were constructed, and accepted by the proper commissioners. The lands thereby earned, being thirty-seven and one-half sections, or 24,000 acres, were duly conveyed by the United States to the state of Wisconsin.
This action was brought to determine who were entitled to such last mentioned lands, and it arose under the following circumstances: The plaintiff paid to Babcock the porportionate sum of money which he agreed to pay for the construction of twelve and a half miles of such road, and is in no default in that respect. Babcock, however, represented to Orowell that the plaintiff was paying nothing on the contract; that he had really abandoned it, leaving only himself and Orowell interested therein; and thereby induced Crowell to advance to him much more money than he was bound by the contract to furnish. Afterwards Babcock and Orowell subpaitted certain differences between them in respect to such lands to arbitration, and the award gave each an undivided one-half of tbe lands, or $12,000 acres, subject to the rights of the plaintiff therein. Each of them thereupon executed to tbe other a release or assignment of his interest in the 12,000 acres of land so awarded to tbe other, with a consent that patents for such lands be issued by the governor pursuant to the award.
The plaintiff was not a party to the arbitration proceedings, but pending the same he commenced this action to determine the rights of the respective parties in such lands, and prayed for an accounting and an injunction.
Pending the action, the plaintiff, in consideration of $3,000, released to Babcock his interest in the one-half of the lands earned in 1868, so awarded to Babcock, and also released all personal claim against the latter in this action.
Upon such releases a patent was duly issued by the governor to the assignee of Babcock for an undivided one-half of said 24,000 acres of land.
The circuit court gave judgment awarding 9,000 acres of the other half of such lands to the plaintiff, and the remaining 3,000 acres to Crowell. ■ The latter appealed from the judgment.
The appeal was first heard at the August term, 1876, on briefs of Finches, Injnde & Miller, for the appellant, and Frank B. Van Valkenbwgh for the respondent, and oral arguments by H. M. Finch and Mr. Van Valhenburgh.
For the appellant it was contended, 1. That the agreement of July 12, 1867, between Fletcher, Babcock and Crowell, did not create a copartnership, because it contained no clause fixing losses. Rud&ich v. Otis, 33 Iowa, 402, and cases there cited; 2 Neb., 348; 10 Johns., 225; 31 N. Y., 328; 41 id., 569; 19 Ala., 780; 44 Cal., 61-2; 15 M. & W., 292; 5 Eng. L. & E., 67; Creen v. Beesley, 2 Bing. N. C., 108. 2. That the legal effect of the contract was to make Babcock an agent; but that it was a several and not a joint contract, under which separate actions would have to be brought by Babcock against Crowell and Fletcher, for any default of either of them in paying his proportion of the $30,000, each being liable only for his own default; that Babcock was therefore the separate cogent of each of the other two parties to the contract; that any defalcation or misappropriation of money paid to him by either Fletcher or Crowell was to be borne only by the party paying it: that if Fletcher ever paid to Babcock the full amount which he had agreed to pay, the evidence vras that only a small portion thereof (not exceeding $780) actually went into the construction of the road, while the whole of the money advanced by Crowell actually went into the work; that Fletcher must bear the loss of moneys advanced hy him, caused by the default of his own agent; and that he could not recover his full proportion of the lands earned, without paying into court for Crowell’s benefit the amount for which he is in default, with interest. 3. That even if the contract created a copartnership, and if Fletcher has fully performed on his part, still the judgment must be modified; that in that case division of the lands must be made as though there had been no arbitration between Crowell and Babcock, Fletcher being neither party nor privy to the arbitration {Sclmman v. Garratt, 16 Cal., 102), and there being no ground upon which he can set it up as an estoppel; and that, irrespective of the arbitration, Crowell was entitled to 1,500 acres more than was awarded him by the circuit court.
Eor the respondent it was contended: 1. That it was clear from the evidence that the parties to the contract here in question intended to create a partnership thereby, and understood and believed that such a partnership had been created, and that the contract did in fact create a partnership between them, providing for community of capital, and for a division of profits and losses (Collyer on Part., §§ 3, 16,17, 38, 39, 41; Story on Part., sec. 3, ch. 3, pi. 15, 16, 18-23, 27, 31-36); and that a partner may provide for perfect immunity from loss. Collyer on Part., §§ 18, 19; Story on Part., see. 3, ch. 3, pi. 20; Bond v. Pittardy 3 M. & W., 357; Chisholm, v. Cowles, 42 Ala., 180; ILasltims v. Btorr, 106 Mass., 48; Wheeler v. Farmer, 38 Cal., 203; Smith v. Moynihan, 44 id., 57; IAnt-ner v. Millildn, 47 Ill., 178; Freese v. Ideson, 49 id., 191; Criteria of Partnership, 10 Am. Law. Reg., N. S., 209. 2. That by virtue of their partnership agreement, Babcock was entitled to four-sixteenths, Crowell to three-sixteenths, and Fletcher to nine-sixteenths, of the lands earned in 1868; that the arbitration between Babcock and Crowell alone, and the subsequent assignments by Crowell and Babcock to each other, could have no effect on plaintiff’s rights; that Crowell’s assignment to Babcock, however, gave the governor absolute authority to convey to Babcock, or to his order, 12,000 acres of land out of the 24,000 acres belonging to the three partners, so far as Crowell could give it; that inasmuch as Babcock’s and Crowell’s interests, added together, amounted to less than 12,000 acres, it would seem that, by that assignment, Crowell transferred to Babcock all his right, title and interest in the whole 24,000 acres; that if Babcock had presented to the gqyernor a contract of copartnership and this assignment by Crowell, and demanded a patent for all of his own and Crow-ell’s interest, he would have been entitled to a patent of seven-sixteenths of the 24,000 acres; that the fact that Fletcher afterwards, on the strength of Babcock’s assertion that he had purchased Crowell’s entire interest, and needed one-sixteenth from Fletcher to enable him to fulfill his contract for the sale of 12,000 acres of that land, assented to the governor’s issuing a patent on Babcock’s order for that 12,000 acres, provided it should not be held to waive his claim to the other undivided 12,000 acres, amounted simply to a sale of the one-sixteenth needed by Babcock, and left Fletcher entitled to the remaining eight-sixteenths, to wit, the entire 12,000 acres now in dispute, the title to which is still held by the state.

Opinion:
The following opinion was filed at the August term, 1876.
LyoN, J.
By means of the false and fraudulent representations of the defendant Babcock, the defendant Crowell was induced to pay Babcock more money than the contract be tween the parties concerning the construction of the road and the division of the lands among them bound him to pay. The plaintiff was not a party to the fraud, and neither requested Growell to mate such payments nor consented thereto. The fraud was that of Babcock alone, and the overpayments became a demand against him alone.
But for the submission and award, the court would doubtless have adjudged the excess of such payments a lien upon Babcock's share of the land, or, by some other proper provision in the judgment in this or some other appropriate action, would have secured the repayment of such excess to Growell. Such overpayments were adjusted, however, by the award and the mutual releases executed in pursuance thereof, and thereby ceased to be a matter for adjustment in this action.
Had the plaintiff been a party to the arbitration, the award would doubtless have disposed of all transactions and all questions under the contract, leaving nothing to be determined by the court. But he was not a party thereto, and hence his rights are unaffected by the award. As the case stood when the award was made, he was entitled, under the contract between the parties, to nine-sixteenths, or 13,500 acres, of the 24,000 acres earned.
His release to Babcock, pendente lÁte, of his interest in an undivided half of the land, is, however, an important factor in determining the plaintiff's rights in the land. The effect of such release, and of the award and the execution thereof by the defendants, vested in Babcock or his assignee the absolute right to an undivided half, or 12,000 acres of the land (which includes Babcock's interest in the whole 24,000 acres), and left nothing for the court to do but to ascertain and adjudge the respective interests of the plaintiff and Growell in the remaining 12,000 acres.
It is argued by the learned counsel for the defendant Crotoell, that the contract between the parties does not constitute them partners in the construction of the road, but that it is simply a contract whereby the plaintiff and Orowell employed Babcock to construct the road at an agreed price, to be paid by them in certain proportions, each thereby making Babcock his individual agent to receive and disburse the money which he agreed to put into the adventure. It is also claimed that the proof fails to show that the money paid by the plaintiff to Babcock, or but very little of it, was actually used by the latter in the construction of the road. Erom these premises, the counsel deduce the conclusion that the plaintiff has no interest in the lands in controversy, or, at most, that he is only entitled to recover to the extent that his money was actually put into the work, if any of it was used therein.
We are .unable to adopt this conclusion. Aside from the question of copartnership, we find nothing in the contract under consideration by which the right of the plaintiff to an interest in the lands earned is made to depend upon the fact that Babcock actually used the money paid' to him by the plaintiff, in the construction of the road. ' The plaintiff paid his money to Babcock as he agreed, and Babcock constructed the road as he agreed. Why, then, should not the plaintiff have his stipulated interest in the lands earned % The fact that Orowell paid Babcock more than the contract bound him to pay, seems to be a matter between him and Babcock, which does not affect the plaintiff, and which was adjusted and settled by the award and the releases executed pursuant thereto. Hence we find it unnecessary to determine whether the agreement between the parties constituted a copartnership.
But the learned counsel further contends that, conceding our view of the contract to be correct, still the defendant Crowell is entitled to 4,500 acres of the land, or 1,500 acres more than the judgment gives him. We cannot agree with counsel in this proposition. The interest of Orowell in the whole 24,000 acres was only 4,500 acres, and the claim of counsel that he is to have that amount out of the 12,000 acres which remains to be divided between himself and the plaintiff, entirely ignores tbe fact tbat be (Crowell) released to Babcoclc bis interest in tbe half conveyed to the assignee of Babcock. That release was not counterbalanced by tbe release from Bab-cock to Croioell of bis interest in the remaining half, for tbe reason tbat Babcock bad no interest in tbe remaining half to release. As already stated, bis interest in tbe whole 24,000 acres was included in tbe half conveyed to his assignee. But Crowell bad an interest in the last mentioned half, of 2,250 acres, to be affected by bis release.
On tbe other hand, counsel for plaintiff contends tbat Crow-ell released to Babcock his interest in tbe whole 24,000 acres, and hence, tbat tbe plaintiff is entitled to tbe whole of tbe remaining 12,000 acres. Manifestly this position is untenable, for the reason tbat Crowell only released to Babcock bis interest in tbe 12,000 acres awarded to tbe latter, and not bis interest in tbe whole 24,000 acres.
"We find ourselves unable, therefore, to adopt the theory of either party, and are compelled to determine the rights of tbe parties in tbe land in question upon grounds not urged in behalf of either. Tbe releases to Babcock, executed by the plaintiff and Crowell respectively, are in form releases of tbe whole interest of tbe releasors in tbe 12,000 acres conveyed to Babcock's assignee. But, inasmuch as tbe plaintiff's original interest therein was 6,750 acres, and GrowelVs 2,250 acres, and the quantity of tbe land actually conveyed by such releases was only 6,000 acres, it is apparent tbat tbe releases did not dispose of the whole interest of tbe releasors therein. "We have concluded, after much deliberation and some hesitation, tbat tbe releases must be held to have conveyed tbe 6,000 acres in proportion to tbe respective interests of the releasors. That is to say, those interests being as three to one, tbe release of tbe plaintiff divested him of three-fourths of tbe 6,000 acres, or 4,500 acres, and that of Crowell divested him of one-fourth, or 1,500 acres. Our doubt has been, whether, inasmuch as Crowell released first, be should not be held to have released his whole interest in the half awarded to Babcock (being 2,250 acres), instead of 1,500 acres. But we have been unable to satisfy ourselves that it should be so held.
Deducting the 4,500 acres released to Babcock from the plaintiff's interest in the whole of the land earned (which interest was 13,500 acres), there remaines 9,000, which is his interest in the 12,000 acres in question. A like process makes Crowell's interest therein 3,000 acres. In other words, the plaintiff is entitled to three-fourths, and Crowell to one-fourth, of the remaining 12,000 acres of land. And so the circuit court adjudged.
By the Cowrt.- — -Judgment affirmed.