Court Opinion

ID: 6560137
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:08:27.576439+00
Date Added: 2024-06-11T15:56:30.350322
License: Public Domain

Bramhall, Justice (dissenting in part):
I concur with the opinion of the majority except as to one phase of the accounting: the right of defendant to claim as a set-off one-half the net profits incident to the resale by plaintiff of certain rails which were a part of the joint venture and which plaintiff purchased from defendant after defendant had breached the agreement of joint venture. I do not agree, in view of the circumstances under which this transaction arose, that this set-off should be allowed.
Subsequent to the breach of the joint venture agreement, plaintiffs purchased from defendant certain rails for resale to a customer. It later developed that these rails were a part of the rails included in the joint venture. Defendant, in the court below, and before this Court, claimed that one-half the profits from the resale of these rails should be allowed as a set-off in the accounting. The majority have held that it was proper for it to do so.
The record shows that this was an arm’s length transaction. The price paid by plaintiff was “high”. The transaction was treated by both parties as something separate and apart from the joint venture. Plaintiff testified — and his testimony in this respect was uncontradicted — that up to the time of his appearance upon the witness stand, he had no knowledge that these rails were a part of the joint venture. Counsel for defendant at the trial, after objection to this testimony on the part of plaintiff, specifically conceded that if plaintiff didn’t know that the rails were Carrabelle .rails, the .testimony relating to *243this transaction was not relevant. The Vice Chancellor made no finding as to plaintiff’s knowledge concerning the rails; he “assumed without deciding” that plaintiff was aware, or should have been aware,
of the source of the rails which he contracted to purchase from defendant.
As I view this transaction, it is one which must be treated in the same manner in which it was treated by the parties at the time of its completion, that is, an arm’s length transaction for the purchase by plaintiff for resale of goods without regard to the joint venture. The record is entirely devoid of any evidence from which an inference can be drawn that either of the parties treated this transaction in any other manner. In view of the position of the parties at the time the transaction was completed, defendant should be estopped from now asserting that the rails were a part of the joint venture.
The reasoning followed by the majority in reaching their conclusion is, in my opinion, directly contrary to the reasoning followed in this opinion relative to certain other items of the accounting, namely, the items of $4,000 for interest and $8,066 for general overhead. As to these items, we said: “Defendant was not entitled to refuse this offer [Plaintiff’s offer to perform his obligations under the joint venture] and then saddle Canter with the interest and overhead incidental to carrying out their venture.” Applying the same logic, and, if I may be permited to do so, paraphrasing the language above quoted, “Defendant was not entitled to repudiate the joint venture and later saddle plaintiff with its claim to one-half the profits which plaintiff may have derived in a transaction which was handled by both parties as an entirely separate transaction.”
If, as stated in the majority opinion, plaintiff had a duty to defendant to offer the deal to defendant as a part of the joint venture, in the absence of an understanding between the parties, then defendant was under a corresponding duty to plaintiff to notify plaintiff that the rails were a part of the joint venture and that, in the event that it should later be decided that the parties were engaged in a joint venture, defendant would expect plaintiff to account to defendant for its share of the profits. Defendant’s responsibility in that respect was *244equally as great as that of plaintiff. Not having done so, defendant cannot now claim that the profits that plaintiff may have received from the resale of the rails were a part of the joint venture.
I should deny defendant’s claim to a set-off for the profits which plaintiff may have derived from the resale of the rails to a third party.