Court Opinion

ID: 3913103
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:41:27.594466+00
Date Added: 2024-06-11T07:42:41.315101
License: Public Domain

On Motion for Rehearing.
A reconsideration of the record has convinced us that the judgment of the trial court cannot be sustained on the grounds assigned in the original opinion, and that the judgment must be reversed and the cause remanded.
In the interest of brevity we will state generally our conclusions as to the legal principles that should control the adjudication of the rights of the parties, and then point out the reason why the application of these principles to the record will not sustain the judgment rendered. *Page 216 
When Wood sold to the Home Oil  Refining Company a one-half interest in the lease, with the agreement that he was to proceed with the development of the lease for a certain period of time, and the Home Oil Refining Company was to pay him at stated periods one-half of the expenses incurred in thus developing the property, said parties thereby became either partners or joint adventurers, engaged in a joint enterprise for their common benefit. The agreement for the management of the business was in the nature of articles of partnership or association. The Home Oil  Refining Company, after the business had been conducted under this agreement and expenses incurred, could not defeat payment because, on account of the fact that it was a corporation, it could not enter into a partnership. Miller's Indemnity Co. v. Patton (Tex.Civ.App.) 238 S.W. 244, 245(5). The St. Louis 
Fort Worth Producing Company came into this enterprise by purchase of a part of the interest of the Home Oil  Refining Company, taking an assignment of such interest in the original contract with Wood, and allowed Wood to thereafter continue to handle the property as under the original agreement with the Home Oil  Refining Company. While the St. Louis  Fort Worth Producing Company did not expressly assume the obligations of the Home Oil  Refining Company, it seems clear that the assignment was taken in contemplation of a continuance of the joint enterprise as originally launched and the St. Louis  Fort Worth Refining Company simply came in as one of the joint adventurers therein. It thereupon became bound on the original contract with Wood to reimburse him to the extent of its interest in the enterprise for expenditures thereafter made by him in the further development of the property. Bates on Partnership, §§ 216, 217; 20 R.C.L. pp. 983-985. It would not be liable in our opinion, for payment of expenses already incurred.
But the record will not sustain the judgment rendered for the following reasons: It is alleged and shown that the St. Louis  Fort Worth Producing Company acquired all of the interest of the Home Oil 
Refining Company, in subdivisions 12, 13, 15, 18, 35, and 36, of the lease, and only one-half of the interest of the Home Oil  Refining Company in subdivisions 3, 6, 7, 8, and 11, thereof, the Home Oil 
Refining Company retaining the remaining interest in the last-named subdivisions. It is not shown, either by pleading or proof, on what particular subdivisions of the lease the expenditures were made, and there is thus no basis for determining the extent of the liability of the St. Louis  Fort Worth Producing Company, for the expenses actually incurred by Wood since the liability of the parties interested in the enterprise for contribution to Wood for payment of expenses incurred by him would be several and in proportion to their respective interest in the enterprise. Chalk v. Collier (Tex.Civ.App.) 208 S.W. 973. The pleading is also insufficient, we think, in that it is not alleged that these expenses were incurred after the St. Louis  Fort Worth Producing Company came into the enterprise. In fact, the pleading was not drawn and the judgment of the trial court was not rendered on the theory of liability considered by this court, and which we think is the only theory on which the St. Louis  Fort Worth Refining Company would be liable to Wood. However, the petition set out the facts, and, with the exceptions herein stated would, we think, have been sufficient to sustain the judgment.
It is suggested by plaintiff in error, the St. Louis  Fort Worth Producing Company, that Wood could not recover the expenses incurred by him in the joint enterprise without a dissolution of the association and a general accounting. It is true, as a general rule, that one partner may recover of another on transactions growing out of the partnership business only on general accounting and dissolution. This rule is not always applicable. It would not, we think, apply to a case of this kind, where the contract provided for the payment of such expenditures on the 10th day of each month after they are incurred. Bates on Partnership, §§ 911, 916. However the disposition of the interest of the Home Oil Refining Company has complicated the situation; and the subsequent developments, as disclosed by the record, the enterprise having practically come to an end, present a situation that would make a general accounting appropriate, if not necessary.
The plaintiff attached a part of the personal property belonging to the joint enterprise, and it was replevied by the defendants. This fact would not, as defendant in error seems to contend, give him any right to a judgment on the debt sued on that he would not otherwise have had. The property belonging to the joint enterprise might, in a general accounting, be chargeable with an equitable lien to secure the repayment of the expenditures made by Wood in the conduct of the business. Bates on Partnership, § 820; 20 R.C.L. p. 1030, § 273. Whether this lien would be affected by the attachment of the property we need not now consider.
We may have been in error in holding that the Indiahoma Refining Company was not bound by the contract made with Berninghaus, trustee. However, as none of the expenditures were made while the company was in the enterprise, it would not, in our opinion, be liable unless a different state of facts should be developed on another trial.
The judgment of the trial court will be reversed as to the plaintiffs in error, and the cause remanded for a new trial. *Page 217