Clausen v. Railey

Opinion op the Court by Judge Lassing Reversing. George C. Clausen, a resident of the State of New York, and Eussell Eailey were partners in the ownership of a saddle horse called “Hunter Eye.” The partnership originated in this way. Mr. Clausen is a fancier of — 351 — high-class saddle horses, and has acted as judge at various horse shows in this country and England. Mr. Bailey is a breeder and developer of saddle horses. Hunter Bye was owned by Mr. Bailey, and because of the reputation of Mr. Clausen as a finished horseman, Mr. Bailey desired to have this horse handled by him. With a view to interesting him, on November 1,1904, he wrote the following lett'er to Mr. Clausen: “BUCK BUN FABM. “Versailles, Ky., November 1, ’04. “Mr. Greo. C. Clausen, “Port Chester, N. Y. “My Dear Sir: “I know you will be surprised to receive a letter of this nature, but feeling convinced that it will be of service to me in the future is why I make you confidentially the following proposition. I have a horse, a bay gelding, six years old, that looks the English Hunter type, rather light waisted, but he is sixteen hands, one inch high, a sharp shoulder, and with a forehead such as you just now and then see — in a word, he can with style and all day long at that any horse in all the land, has a docked tail and carried like he was gingered. At a plain walk, trot and canter he simply stands alone, and while not by any means thoroughly schooled, it will be easy .for you in your hands to simply make him great, for you can’t hide his perfectly faultless style, and his grand outstanding way of going. Add to all this his absolute soundness makes him a perfectly wonderful subject. I want to make you interested because he is simply great, and will in my opinion carry you back to your first love, namely the black horse you had years ago. I will be glad to have you entertain the following proposition: I will ship him to you in N. Y. C. by Exp. at the earliest chance and at an exp. to you, say $45, you to pay the exp., when he becomes your property to do with as you like, and when sold to give me half of the selling price. You can take your time to sell, one month or one year, or after you have fully tried him, and like him well enough to make me an offer I will accept said offer. “Yours truly, “Bussell Eailey. “So you see I think well of the horse, also you.” After some correspondence following the receipt of — 352 — this letter by Clausen, the proposition made him was accepted. The horse was shipped to New York and arrived there some time in November. Clausen took him and began work with him with a Anew of developing him. He kept him until some time in the year 1908, when he sold him for $600. He did not offer to pay over to Railey his one-half of the proceeds of sale. Thereafter he came to Kentucky and notified Railey that the horse had been sold for $600. A dispute thereupon arose betAveen them, it being claimed by Railey that, under an arrangement entered into with Clausen in February, 1906, he was to have $1,000 for his half interest in the horse. He instituted a suit in the Jefferson Circuit Court to recover this amount. Clausen denied all liability in excess of $300. The law and facts Avere submitted to the judge without the intervention of a jury, and he entered a judgment in favor of plaintiff Railey for the full amount sued for. Railey claims the original contract of partnership was modified at the time of their meeting in Lexington in February, 1906; that on said occasion. Clausen said to him, “Railey, I have splendid news for you. I have been offered $2,000 for that horse.” That he thereupon said, “Mr. Clausen, in the name of common sense, tell me why you didn’t sell him. It is about the full Avalué of any horse, besides I am a partner, I would like to have the money.” To which Clausen answered, “Railey, I have a standing offer; I can get it any day I want it, but I can get more; you bide your time and be content, and I will see you get one thousand dollars for your half of the horse, or more.” Irvine Railey, a brother of Russell Railey, says that he was present and heard Clausen make the statements relative to the horse and the offer for him, etc., as detailed above. Relative to this conversation, Clausen testified as follows: “ ‘Railey, Avhy that horse has picked up very much,’ The horse Avas A^ery thin when I got him; I put a lot of flesh on him and put him in good shape. I say, ‘I am getting along Avith him very nicely, and I had an offer on him for $2,000.’ I don’t know whether I told him at the time who made the offer or not, but I told him so, and I was acting in good faith with Railey. I thought we had a friendly agreement and I might as well tell him what was transpiring. He said, ‘Why didn’t you take it?’ ‘Oh,’ I said, ‘No, I wouldn’t take that.’ ‘No,’ I said, ‘That is an untrained horse. I would not sell that horse to anybody now.’ Then he laughed very loud. ‘Well,’ he said, ‘You know — 353 — what my wife said when I shipped you that horse.’ I said, ‘No.’ ‘I would like to see any man in the east who is ever going to ride him.’ ‘Well’, I said, ‘That is quite a compliment to me after being successful in riding him.’ I was still friendly to him however — ‘If this horse turns out right I think I will get a good price for him, but I will not sell him until he is thoroughly fit, until I can warrant the horse.’ ” The correctness of the judgment appealed from depends upon whether or not the contract of partnership was modified or changed in Lexington in February, 1906, when this conversation took place. Accepting the version of appellee Eailey as to what was then and there said by Clausen, does it amount to a promise on the part of Clausen that if Eailey would not insist upon a sale of the horse he would, in any event, pay blm a thousand dollars for his interest in him? It is urged by counsel for appellant that the language used cannot by any fair construction justify such an interpretation, that all it amounted to was a statement by one partner to another that he had been offered two thousand dollars for the horse, but that he was unwilling to take it, that he believed the horse was worth more money, and that by keeping him and developing him further he would get more for him. It will be observed that in that conversation Eailey does not claim to have demanded that the horse be sold at that price. On the contrary, he simply, says he asked why he was not sold, and he states that Clausen told him the reason he had not sold him was that he was worth more monev and that he expected in time to get more money out of him. It is apparent that Clausen did not understand at that time, or at any time, that he had bought his partner’s interest in this horse, and Eailey’s conduct does not justify the plea that he so understood the conversation, else why would he have waited from February, 1906, to the fall of 1908, without demanding his monev- He may have been, and doubtless was disappointed that the horse was not sold at that time for $2,000, but if he was then unwilling to let this offer be refused, he should have insisted upon its being accepted, or else upon the partnership being closed. Had he taken such a position he could have either compelled his partner to sell the horse for such offer as they could then get on him, or else buy him out if he wanted to retain bim in the hopes of getting a higher price. But this assurance, that if he would bide his time the horse — 354 — ■would be sold for more money, was not an effort on tbe part of bis partner to buy bim out, and the language used does not justify tbis interpretation.' According to tbe contract under wbicb appellant took tbe borse, be was to bave bis own time within wbicb to dispose of bim, a month or a year,'that is, as long.as be Wanted'to keep the borse and train bim with- a view of enhancing bis value, be bad a right to do so.' The whole matter was left in bis bands. Appellant’s letter shows that be accepted tbe borse under the terms upon which be was offered to bim, and they were that be should keep him-'and train bim until such time as be should receive a satisfactory offer, when be should sell tbe horse,-tbe proceeds to be divided equally. Suppose the borse bad died a week or month after this conversation took place at Lexington, would appellee bave been entitled to a' thousand dollars? Clearly not. Or suppose appellant bad sold bim for ten thousand dollars, would appellee bave demanded and been entitled to receive bis half thereof? Undoubtedly so. ■ They were equal, full partners. ■ So long as'the borse was kept they ran tbe risk of losing bim. Appellant rejected one offer in.tbe hope of thereafter, securing-a greater price. In doing this be was but exercising a right wbicb the contract clearly gave bim, to-wit, to keep bim until such time as be should receive a-satisfactory offer for him — and be was to be tbe judge of what was satisfactory. It must be borne in mind that appellee was at no expense whatever for the care, keep and training of tbis borse. He furnished tbe borse in bis green or undeveloped state as bis part of tbe partnership account. Appellant paid tbe freight on bim to Néw York and thereafter paid all expense, and the- longer be kept bim tbe greater tbe expense .necessarily, was; hence it was to bis interest to sell tbe borse. at a good price and as speedily as possible. . He testifies that the1 reason be failed to do so was that tbe borse was. a disappointment and did not measure up to bis ■ expectations; that tbe longer be trained him and the more money be'spent on bim tbe less valuable'be became, and finally be sold bim for $600, the best price be could then get; and it is not disputed that tbis is true. An agreement1 of partnership can 'undoubtedly be altered or changed by the parties, so that tbe interest of each may be fixed and determined according to their understanding; but there must be some consideration to support tbe promise on tbe part of a partner to surren — 355 — der his interest or portion thereof in the partnership property. Likewise, there must be some consideration to support an agreement on the part of one partner that the interest of the other in the partnership property shall in any event be a given fixed sum. It is contended that here the agreement bn the part of' Bailey to bide his time and not at that time force a sale of the partnership property was a sufficient consideration. Not so, in the face of the contract of partnership. Under its terms Clausen had the right to determine when the horse should be sold. This right was not given to him in the conversation at Lexington; He already had it. Hence, there was no consideration whatever moving from appellee to support the claim now made that appellant then obligated 'himself to pay him for his half interest in the horse one thousand dollars in any event. Under the contract of partnership and evidence of sale, a judgment of $300, with interest from date of sale, was all appellee was entitled to. The judgment is reversed and cause remanded for further proceedings consistent herewith.