Fairfield v. Phillips

Beck, C. J. I. The parties, as a copartnership, bought certain mining stock, which was transferred in equal quantities to each separately. The stock in the name of the defendant he transferred, receiving therefor, after two or three transactions to secure payment, .a farm, which was conveyed to him individually. He .subsequently executed a mortgage upon the farm to secure an indebtedness of his own. The plaintiff insists that the mining stock was partnership property, and that, as the defendant had sold it, and appropriated to 573 Ms own use the proceeds of the sale, he is liable to the plaintiff for half the value of the farm. The defendant maintains that the purchase of the stock was not a. partnership transaction, but was made upon the separate individual accounts of the parties. II. The only question in the case is this: Was-the stock partnership property? "We are of the opinion that the evidence clearly establishes that it was. The-following, among other facts, support our conclusion: The stock was purchased with partnership bonds, and the expense of acquiring it was borne by the parties equally. The negotiations were conducted or concurred in by both of the parties, and the purchase was at the-time and afterwards recognized as a partnership transaction ; indeed, it never seems to have been represented by the defendant as an individual transaction until after the suit was commenced. The certificates of stock of both parties were held by the defendant, who seems to have been the custodian of the bonds and papers of the-firm. Other facts pointing to the same conclusion could be mentioned, but the foregoing are sufficient to-uphold our conclusion. The stock was transferred to the parties individually, in equal quantities, in order' to entitle the plaintiff to become a stockholder, as at the time that was thought necessary. It was not so-transferred for the reason that it was separately owned by the parties. There was no claim or understanding-at the time that it was so owned. The defendant, by-taking the title of the farm in his own name, and incumbering it on his own account for a large part of' its value, appropriated it to his own use, and is liable to the plaintiff for one-half of its value and one-half of the rents and profits received therefrom, after deducting disbursements for expenses connected with, the farm and improvements made thereon. The decree of the district court is to this effect. It is, therefore, AFFIRMED.