Runnells v. Leffel

OLSON, J. This is a suit for an accounting as to moneys received by one partner after a dissolution of a partnership on contracts and notes made before the partnership'was dissolved. The complaint alleges in substance that said commission had been earned by reason of the sale of real and personal property, and to secure this commission an interest in certain promissory notes executed by the purchaser of said property had been assigned to the partnership; that at the request of such purchaser and the defendant, W. E. Leffel, a deed to the property was made to the purchaser’s wife, and that such conveyance was made under the terms and conditions of the original contract with the purchaser; that a commission was paid to the defendant W. E. Leffel, and that such commission was paid under and by virtue of the original con [348] tract between the partnership and C. B. Mays, anclby virtue of the agreements subsequently made, giving an interest in the notes given by the purchaser of the land. o 1, 2. We have read all of the evidence carefully but fail to find such contention supported. The evidence shows that the original contract between C. B. Mays •and GL P. Higinbotham was canceled and the notes surrendered and that a new contract was made with Maggie Higinbotham and consummated. The original contract with Gr. P. Higinbotham was for the sale of both real and personal property, the real property amounting to $45,000, and the personal property to several thousand dollars, the exact amount not appearing. The sale to Maggie Higinbotham was for the real property only, the consideration being $39,000. The original commissioñ to be paid to the partnership was $6,000, of which $500 was paid at the time of making the contract of sale. The commission collected by W. E. Leffel was $5,900. There is evidence in the record upon which the lower court could have found that defendant W. E. Leffel conspired with C. B. Mays to cancel the old contract and have the property transferred to Maggie Higinbotham- merely as a subterfuge in order to defraud his former partner out of his share of the commission, but nowhere in the complaint is there an allegation of fraud on the part of W. E. Leffel, nor of any conspiracy. There is evidence that would seem to show that W. E. Leffel'did tiot take his former partner into his confidence as to the exact situation in regard to the Mays-Higinbotham deal, nor give his former partner an opportunity to protect himself in saving his stare of the commission, but there are no allegations in the complaint as to these matters. The complaint seeks an accounting as [349] to the proceeds of a certain, definite contract and the notes securing the same. The evidence of the plaintiff clearly shows that these notes were not paid, and that no proceeds were received under the terms of said contract. It is true that one partner owes a duty to the other of fair dealing, and that this relationship continues even after the dissolution of a partnership as to the items or contracts or assets remaining unsettled, hut the relation of partnership does not exist as to matters outside of the particular contracts, assets or items so remaining. It is also true that one partnér cannot willfully dissipate the remaining unset-' tied assets and avoid liability for such accounts, but in a complaint filed against him the fraud or neglect or misfeasance complained of must be set out. It has been held by this court that fraud must always be alleged in order to be available: Leavengood v. McGee, 50 Or. 233 (91 Pac. 453). All of the evidence in regard to the intention of defendant ~W. E. Leffel to defraud his former partner by securing the cancellation of the Gr. P. Higinbotham contract, by preventing a loan being made upon the property which might have prevented the cancellation of such contract, is clearly not responsive to any allegation of the complaint. The rule is clearly stated in Eastman v. Jennings-McRae Logging Co., 69 Or. 1, 7 (138 Pac. 216, 218, Ann. Cas. 1916A, 185), as follows: “Section 725, L. O. L., states the cardinal rule of evidence in the following words: ‘ Evidence shall correspond with the substance of the material allegations, and be relevant to the questions in dispute.’ Each party shall prove his own affirmative allegations (Section 726, L. O. L.) that are denied by the other party. A plaintiff can recover only upon the allegations of his complaint. The facts constituting his cause of action must be stated in his complaint, and these allega [350] tions lie must prove, if they are denied. If lie fails to prove any material allegation of his complaint that has been put in issue by an answer, he must lose. “In Union St. Ry. Co. v. First Nat. Bank, 42 Or. 611 (72 Pac. 588), the rule is stated thus: ‘It has often' been held by this court that the plaintiff must prevail, if at all, upon the matters alleged in his complaint. # * ’ 3. Plaintiff contends strenuously that the moneys received from the sale of the property to Maggie Higinbotham, whether such deal was fraudulent or not, were nevertheless paid to W. E. Leffel under and by virtue of the old commission contract between A. M. Bunnells and W. E. Leffel and O. B. Mays. This contention is untenable for the reason that a contract with a partnership for the handling of real and personal property and payment of commission for the sale thereof, dies with the dissolution of the partnership. It is not an assignable contract. It has served its purpose in the sale originally made to Gr. P. Higinbotham, and the rights to a commission as to that sale had already accrued. Such commission contract was not alive for the benefit of the partnership for any sale made to third parties after the dissolution of such partnership. 4. The defendants have filed a cross-appeal on the ground that costs should have been allowed them in the lower court. The taxing of costs in equity cases is a matter within the discretion of the trial court. In view of the fact that defendant W. E. Leffel came into court seeking affirmative relief by way of an accounting, we cannot see there was any abuse of discretion in the trial court in refusing him costs, but as to the other defendants who were brought into court without being concerned in the proceedings, other than being in pos [351] session of moneys sought to be impounded, they are in a different position and should be allowed their costs. In Banc. Mr. A. S. Cooley, for the petition. Messrs. Cochran & Eberhard and Mr. A. W. Schaupp, contra. Affirmed and modified as to costs. AFFIRMED AND MODIFIED. Harris, J., absent.