Court Opinion

ID: 7988696
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:28:30.385399+00
Date Added: 2024-06-11T16:35:17.027379
License: Public Domain

CalhooN, J.,
delivered the opinion of the court.
The single point is the propriety of dissolving an injunction on the motion of appellees, based on the face of appellant’s original bill. In that bill Mrs. Young charges the following to be facts: In February, 1901, her husband, J. L. Young, and the appellees became partners, by written articles, under' the, style of the I. L. Young Lumber Company. And by the terms; of these articles of partnership the appellees were to convey, and did convey, to the partnership all the merchantable timber growing on lands therein described; and her husband, Mr. Young, was to furnish and deliver, and did furnish and deliver,, on the ground, the sawmill plant to saw the timber; and the mill was to be operated at the joint expense -of the partnership, and the proceeds were to be divided, one-half to Mr. Young, and the other half to the appellees. In performance of that contract, Mr. J. L. Young did all he was required to do, and he contributed to the expense of the business $700; but the appellees failed and refused to perform their part, and contributed only $280 to the expense of the business, so that they own the partnership $420, and the partnership is indebted to its creditors $800. In this condition of things, the partner, J. L. *720Young, discovered that his co-partners, the appellees, were trying to sell and convey to other people the timber conveyed by them to the partnership; and they failed and refused to perform their contract, and refused to permit the articles of partnership, which were in their possession, to be filed for record, and were so interfering with the business as to make it unprofitable. Mr. J. L. Young thereupon filed his bill for a liquidation of the affairs of the partnership, and for injunction and receiver. Appellees then agreed, in compromise', that the sawmill business should be managed and controlled by one V. M. Liddell, as agent and attorney in fact for all the co-partners, and that they would not interfere with or disturb Lid-dell, in the management of the business. On the face of this agreement, and as part of it, appellees surrendered and filed for record the articles of partnership theretofore withheld by them; ¿nd Liddell went to Louisville, Ky., and contracted to deliver 500,000 feet of lumber at $8 per thousand, f. o. b. In this situation of affairs, J. L. Young sold and conveyed to his wife, Mrs. Anna H. Young, the appellant here, all his interest in the business, so that she now has all of his rights and liabilities. Liddell had tried to execute his agency, and the ap-pellees so meddled and interfered with him, and with the business, in an effort to oust appellant and to take to themselves all the profits of the business, that it was impossible for him to further execute his agency and to carry out his contract in Louisville, Ky. The prayer of the bill is for a temporary receiver to take charge of the assets, and to carry on the business until the further order of the court, and for an injunction to prevent appellees from interfering with Liddell in his management until the appointment of a receiver, and that the partnership affairs be liquidated and wound up, its assets sold, its debts paid, and the profits distributed under direction of the court. The bill concludes with a prayer for general relief. Pursuant to this bill, the chancellor issued a writ of injunction, restraining appellees from interfering with or disturbing Lid-*721dell in bis management until the further order of the court, upon the execution of a bond by Mrs. Young in $500, which bond she gave, conditioned to satisfy such costs and damages as might be awarded because of the wrongful suing out of the injunction. .Pursuant to notice to appear before the chancellor 'n vacation, to show cause why a receiver should not be appointed, appellees appeared and demurred to the bill because of no equity on its face; because it shows that the complainant, Mrs. Young, has no interest in the partnership; because the sale by J. L. Young to his wife, without appellee’s consent, worked a dissolution of the partnership; because granting the injunction put the management in the hands of one not a co-partner, without bond being required, and because the bill shows that Mrs. Young can have no interest in the business until the debts of the partnership have been paid and the co-partnership wound up. This demurrer was never acted on as such as to the merits of the whole bill, but on it the chancellor dissolved the injunction and awarded damages on dissolution, and Mrs. Young appeals from that order.
In support of the decree dissolving the injunction, it is said that the sale by the partner Young to his wife ipso facto dissolved the partnership, and that she could have no interest in the business, except what might appear to be Mr. Young’s interest after wdnding up the business and stating an account. Counsel say that Mrs. Young was not entitled to the injunction, because, the sale having dissolved the partnership, and all that was left to do being to wind up the business, the agency of Liddell became void, and that the court could not properly keep the agency alive to carry out contracts, thus allowing Liddell, without bond, to do as he saw fit to do. It must not be forgotten that the prayer of this bill, which sets up doings grossly fraudulent, is for a receiver, and for non-interference with. Liddell’s management only until a receiver was appointed, and also for liquidation, as well as for general relief. It is quite plain that the injunction would have b.een rightly issued, as it was issued, *722if issued at the instance of J. L. Young, while a partner, on the allegations of this bill. All the partners had agreed by contract to the agency of Liddell, and that was binding and not disturbable, unless by some showing of his misconduct or incapacity. So the question is narrowed to whether Hr. Young’s vendee was powerless to invoke the like protection for the interest she had bought. We think she is not powerless to do so. We think that even a purchaser at execution sale of J". L. Young’s interest might have filed such a bill, and been entitled to the relief it prays. It seems, from the allegations of the bill, to be essential to the safety of the interest she had bought that the man agreed upon by the partners should not be interfered with, for fraudulent purposes, until a receiver should be appointed. It seems that this should be good ground for the interposition of a court of equity, which, it seems to us, should hold the party in charge by contract until it should appoint a receiver, or until some charge of untrus'tworthiness should be preferred before the appointment of a receiver. That a partner may sell or mortgage his interest goes without saying. No authority impugns this right. That by so doing he gives his assignee the right to an account has never been disputed. It cannot be that the assignee may not protect his interest against fraud. Of course, the assignee cannot claim to be a partner in virtue of his purchase, but he may certainly shield his interest. He may do, for this object, whatever the legal or personal representatives of the selling partner might do; and undoubtedly they could prevent disturbance of the man in charge by contract, if worthy and competent, until a receiver should be appointed. There is no case brought to our attention holding the contrary. If the contrary be true, a court of equity cannot do equity. It surely could do no harm, with a bond of complainant to pay damages, to let the agreed agent carry out the Louisville contract and keep things going for a few days, until a receiver should be appointed, especially to prevent fraud. The particular partnership in this case cannot be *723wound up in a day. Tbe timber must be felled, sawed, and marketed, unless a sale in gross satisfactory to tbe parties or tbe court could be made; and, until a receiver to do tbis be appointed, or agreed on, no barm could result from permitting tbe contract agent to bold, with complainant’s bond, who charges a scheme to defraud her. The learned chancellor, in our judgment, was right in granting tbe injunction, and wrong in dissolving it.

Reversed and remanded.