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Loftus v. Fischer

114 Cal. 131 Court Department Two. Decision date 1896-09-01 Docket Sac. No. 6 English

Delivered by Henshaw, J.

Contents

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p. 131
[Sac. No. 6.
Department Two.
September 1, 1896.]
E. C. LOFTUS et al., Respondents, v. JACOB A. FISCHER et al., Respondents. CHARLES J. BEHLOW, Intervenor, Appellant.

Headnote

Action to Dissolve Partnership between Corporators—Fraud as to Stock — Intervention — Dismissal of Intervenor’s Complaint—, Rescission of Sale of Stock.—In an action for' a dissolution of a co-partnership, between persons who are alleged to have formed a corporation to conduct the affairs of the partnership, under an agreement between the partners that their interests in the copartnership should be represented by shares of stock in the corporation, where the plaintiffs alleged that the defendant, in fraud of the plaintiffs, unlawfully caused their stock to be issued in the names of another person, and afterward fraudulently obtained their stock from such person, a complaint in intervention by such person, which neither joins with the plaintiff in claiming what is sought by the complaint, nor with the defendant in resisting the demands of the plaintiffs, but which merely pleads an individual cause of action in his own right against the defendant, for .a rescission of executed contracts for the sale of other stock to the defendant, in which plaintiffs have no interest, and for a recovery to the intervenor of the stock so sold, and which shows on its face that the • intervenor, by the transfer of all of his stock to the defendant, has ceased to be a member of the alleged copartnership, states no ground of intervention in the action to dissolve the partnership, and is properly dismissed.
Appeal—Costs of Clerk’s Certification—Affirmance of Judgment.— The costs of appellant in procuring the clerk’s certification to the transcript, upon failure of the respondent to join in a stipulation to its correctness, cannot be taken against the respondent, where the judgment appealed from is affirmed,
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Appeal from a judgment of the Superior Court of Tuolumne County dismissing a complaint in intervention. G-. W. Nicol, Judge.
The facts are stated in the opinion of the court.
Henry S. Foote, for Appellant.
Appellant’s interest was such as entitled him to intervene. (Code Civ. Proc., sec. 387; Horn v. Volcano Water Co., 13 Cal. 62 ; 73 Am. Dec. 569 ; Gasquet v. Johnson, 1 La. 431 ; Coffey v. Greenfield, 55 Cal. 382 ;. Stich v. Dickinson, 38 Cal. 608 ; Story’s Equity Pleading, 9th ed., 153; Spanagel v. Reay, 47 Cal. 608 ; People v. Pfeiffer, 59 Cal. 90 ; Poehlmann v. Kennedy, 48 Cal. 201 ; Pomeroy’s Remedies and Remedial Rights, 2d ed., secs. 365, 378, 411, 416, 418, 419; Whitwell v. Barbier, 7 Cal. 57 ; Kirk v. Reynolds, 12 Cal. 99 ; Tillson v. Ford, 53 Cal. 701 ; Murdock v. Brooks, 38 Cal. 596 .) Behlox v, even as-a former member of the partnership, should be a party to the action, and has an interest in an accounting, and by reason of his lien. (Settembre v. Putnam, 30 Cal. 490 ; Gray v. Palmer, 9 Cal. 616 ; Blood v. Fairbanks, 48 Cal. 171 ; 50 Cal. 420 ; Louisiana Board of Trustees v. Dupuy, 31 La. Ann. 305 ; Story’s Equity Pleading, 5th ed., sec. 219; 9th ed., secs. 130, 137, 167, 218; Code Civ. Proc., sec. 389; Williams v. Bankhead, 19 Wall. 571 .) Behlow has never lost his title to his stock which represented his interest in the partnership property. (1 Hilliard on Torts, 4th ed., 69; Woodworth v. Kissam, 15 Johns. 186 ; Cary v. Hotaling, 1 Hill, 311 ; 37 Am. Dec. 323 , and cases cited; Nudd v. Burrows, 91 U. S. 440 ; 1 Story’s Equity Jurisprudence, sec. 252.)
Wheaton, Kalloch & Kierce, for Respondents, Jacob A. Fischer, Samuel A. Fischer, Martha F. Blake, Rozalia Fischer and the Consolidated Golden Gate and Sulphuret Mining and Development Company.
Behlow having parted with his partnership interest cannot join in an action for the dissolution of a co-
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partnership of which he has ceased to be a member. (Behlow v. Fischer, 102 Cal. 208 .) His complaint did not bring him within the provisions of section 387 of the Code of Civil Procedure, and it was properly dismissed for this reason outside of the questions raised by the demurrer. (Rosecrans v. Ellsworth, 52 Cal. 509 .)
John F. Rooney, for Respondent John Loftus.
Estee & Miller, and Reddy, Campbell & Metson, for Respondent W. Gr. Long.
James L. Crittenden, and F. W. Street, for Plaintiffs, Respondents.

This is an appeal by Behlow from the judgment dismissing his complaint in intervention in the above-entitled action.

In the original complaint he, with others, appeared as a plaintiff. Upon appeal to this court it was held that defendant’s demurrer to the complaint for misjoinder of parties, and improper joinder of causes of action, was well taken. (Behlow v. Fischer, 102 Cal. 208 .) Upon the return of the cause to the trial court an amended complaint was filed, which omitted Behlow and other parties as plaintiffs, leaving the action to be prosecuted solely in the name of Loftus and his wife. In all other respects pertinent to this consideration the amended complaint was the same as the original. It contained the same averments of partnership, and the formation of the corporation to conduct its affairs. It averred that by agreement amongst the partners, their interests in the copartnership should be represented by certain shares of stock to them issued. Then follow the same averments of fraud practiced by Fischer upon Behlow and Long, by which it is asserted Fischer succeeded in purchasing from them their stock in the corporation. In short, with the omission of the parties plaintiff above noted, the amended complaint is, for all essential purposes, the same as the original, which was reviewed in

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the 102d volume of our reports. None of the matters of fraud therein contained, and charged to have injured Long and Behlow, appears in any way to concern the interests or rights of the remaining plaintiffs. Their complaint is still for a dissolution of the copartnership. Whether or not Fischer has fraudulently acquired property of Behlow and Long is clearly of no concern to them.

Upon the filing of the amended complaint Behlow disappeared from the case as a plaintiff, but shortly after appeared again as an intervenor. His complaint in intervention is for the most part an exact transcript of the amended complaint. With the exceptions now to be noticed it is identical with that pleading. The first point of difference is this: The amended complaint charges that Fischer, in fraud of the plaintiffs Loftus, unlawfully caused to be issued to Behlow 19,200 shares of the stock, which afterward, and as a part of his design, Fischer fraudulently obtained from Behlow. The complaint in intervention is silent upon this, for Behlow’s contention is that the stock was rightfully issued to him, but was fraudulently obtained from him by Fischer.

The complaint in intervention charges, as does the amended complaint, that Fischer purchased Long’s five thousand shares through fraud, and still holds them. But the complaint in intervention in this regard goes further ’than the amended complaint. Behlow pleads additionally that Long for a valuable consideration has sold to him “ the said part of his interest in said co-partnership, represented by five thousand shares so fraudulently purchased as aforesaid by Jacob A. Fischer.” This allegation seems to have been designed to afford Behlow some standing as a partner. It is, of course, insufficient for that purpose, for, admittedly, the title to the stock is in Fischer, and Behlow’s action is for rescission and recovery of it. Behlow does not ask for a dissolution of 'the partnership, since his status as a partner was lost by the sale of his stock as decided on

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he former appeal. His prayer is for a decree of rescission, and a restoration to him of the stock which he alleges he was induced to part with through fraud. In short, as this court had decided that his cause of action could not be considered and decided in the bill for a dissolution of copartnership, since he was no longer a partner, he undertakes by intervening to have the same causes of action passed upon. The complaint is still an action for a dissolution of a copartnership. The intervention is nothing but an action for rescission of executed contracts of sale, and for a recovery of the stock sold. Whether or not after a decree of rescission Behlow would be re-established as a “ partner ” it is not necessary here-to consider. As the term “partnership ” is understood in the law, it is certainly novel to consider a copartnership wherein one’s interest is much or little, as he buys or sells stock of a corporation— where one ceases to be a partner by selling all his stock and immediately takes on the character again if he purchases new shares; where with sixty thousand shares there may be sixty thousand partners one day and two the next. But these considerations need not be discussed, for, whether Behlow parted with his partnership interest advisedly or not, by his own pleading he did part with it, and cannot join in an action for the dissolution of a copartnership of which he has ceased to be a member. (Behlow v. Fischer, supra.)

His complaint in intervention was, therefore, properly dismissed. He neither joins the plaintiff in claiming what is sought by the complaint, nor the defendant in resisting the demands of the complaint, nor is he opposed to both. He merely pleads an individual cause of action in his own right against defendant, Fischer. If, as to the nineteen thousand two hundred shares issued to him, and by him transferred to Fischer,, he should intervene against the demand of the complaint that this stock belongs to the partnership, and join with Fischer in asserting the legality of its issue, he would, as to this matter and to this extent at least,

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unite with defendant in resisting the claim of plaintiffs. This he does not do. His claim in that regard is to recover the property from Fischer,,not for the partnership, but for himself—a matter with which the plaintiffs have no concern.

For the reasons given in Loftus v. Fisher, 113 Cal. 286 , the motion to allow the costs of the clerk's certification is denied.

The judgment appealed from is affirmed.

McFarland, J., and Temple, J., concurred.

Hearing in Bank denied.

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