Court Opinion

ID: 9829753
Source: CourtListenerOpinion
Date Created: 2023-09-01 19:35:50.742432+00
Date Added: 2024-06-11T07:43:05.707271
License: Public Domain

On Motion for Rehearing.
Under the facts of this case, the conversion by Morgan, Carlton, and Murphy of the interests of Dyer and Thompson took place at the time the trust agreement was entered into. The legal effect of that agreement was to organize a partnership composed of those who were parties to it. Prior to that time no partnership had existed among the stockholders of the proposed corporation. The evidence justifies the conclusion that. Dyer and Thompson were acting under the impression that the subscribers to stock were legally authorized to begin business, but, if that arrangement be treated as a partnership, it was one from which Dyer and Thompson had a right at any time to withdraw. Thompson and Dyer did withdraw before the trust agreement was formed, and thus terminated whatever partnership there may have been. Thereafter Morgan, Carlton, and Murphy, acting under the terms of the trust agree>ment, took over all of the property of the proposed corporation without the consent of Thompson and Dyer. The latter not only were not copartners in that enterprise, but were demanding a return of their money and protesting against what Morgan, Carlton, and Murphy were doing. We therefore adhere to the conclusion that this diversion of the funds was, under the circumstances, a conversion.
It is contended with much force that it was incumbent on Dyer and Thompson to prove the value of their interests in the pfbp-erty at the time of the conversion. That issue was not specifically submitted to the jurjr. The appellees defend the action of the court in' failing to submit that issue upon the ground that the facts were undisputed that the interests of Thompson and Dyer were equal to the value of the money they had paid into the concern. We are of the opinion that this contention is correct. It is true a portion of the money which had been paid by the subscribing stockholders had been invested in machinery, but no business operations had taken place, and presumably the machinery was worth what was paid for it.
*827There is nothing in the record that justified the conclusion that the interest of Thompson and Dyer in the assets converted by Morgan, Carlton, and Murphy was less than the value of the money wheh they had paid in.
The motions for a rehearing will therefore be overruled.