Dupuy & Howell v. Sheak & Sharra
Dupuy & Howell v. Sheak & Sharra
Opinion of the Court
I. This proceeding is instituted under sections 3053 and 3054 of the Code to ascertain the interest of J. H. Sheak in the firm of Sheak & Sharra, and to subject that interest to the satisfaction of the plaintiff’s judgment. The cause was submitted upon the testimony of Alexander Sharra, and of J. II Sheak alone. The evidence shows that J. II. Sheak was in business in the grain trade in Wray’s elevator in the town of Oskaloosa, from 1873 to 1878, employing a capital of from $3,000 to $5,000, some of which was borrowed. During this time he lost all of his capital, and became indebted from $3,000 to $4,000. On December 21, 1877, the plaintiff recovered a judgment against J. II. Sheak for $509.50. On January 12, 1878, L. Sheak, the wife of J. EL Sheak, and Alexander Sharra, her uncle, entered into articles of copartnership, as follows:
u This agreement, made and entered into by and between L. Sheak of the first part, and A. Sharra of the second part, witnesseth:
“ 1. That said parties do hereby form and enter into a partnership under the name and style of Sheak & Sharra, said business to consist in buying, shipping, and handling grain and produce, and a general produce business on commission or otherwise; said business to be conducted at Oskaloosa, Iowa, and at such other points as said firm may select.
“ 2. The profits and losses shall be shared mutually.
“ 3. Said Sharra is to furnish all the necessary funds wherewith to carry on said business, and is also to devote his time and energies to the prosecution of the business of said firm, and the said L. Sheak, being unable personally to attend to the transaction of said business, agrees to employ J. EL Sheak, or some other suitable person, to aid in carrying on the business, and agrees to pay said employe for his services in behalf of said firm. Said business will be entered upon immediately, or as soon as the parties can get ready to do so. This
“ L. Sheak.
“ Alexander Sharra.
“ January 12, 1878."
“ So much of clause 3 in this article requiring the whole time of said Sharra is hereby annulled, and he will devote such time to the business of the firm as he may see proper.
“ L. Sheak.
“December 19, 1878."
Judgments of courts must be based upon evidence, and cannot be founded upon mere guess or conjectures. Mrs. L. Sheak had a right to become a member of a partnership and to employ her husband to conduct the business for her notwithstanding.his insolvency. Whatever the moral obligation of J. H. Sheak may have been, he was under no legal obligation to engage in business for the benefit of his creditors. It is not probable that Sharra would have been willing to invest his means in business with a partner so largely insolvent. He certainly had a right to refuse such a partnership, and it is not competent for the court, without proof, to infer that he entered into such a partnership. If J. H. Sheak had put his
II. Even if the court was correct in holding that J. H. Sheak was an actual partner in the firm of Sheak & Sharra, still the decree of the court is wrong. The only money put into the business was $1,254, put in by Sharra. The evidence shows that the business was largely conducted by advances made by commission merchants. As soon as a shipment of. grain was made the firm was in the habit of drawing upon the bill of lading almost to its full value. The firm was in debt to about the full amount of the assets, so that, as the evidence shows, after allowing Sharra the amount advanced by him, and charging to the other member of the firm the amount drawn out, nothing would remain to the share of Sheak. Instead of appointing a referee to ascertain Skeak’s interest, the court should have found upon the evidence submitted that upon a division of partnership assets there would have been nothing for his share.
V. The defendants claim that the plaintiff should be enjoined from further annoyance of the defendants, upon the ground that no reply was filed to the answer until after the decree was entered, and that its affirmative allegations are, therefore, admitted. This point is merely suggested and does not seem to be relied on very confidently. A judicial decision that J. H. Sheak is not a member of the firm will afford full protection to the firm against annoyance upon his account, and render interposition by injunction unnecessary. Upon plaintiff ’s appeal Affirmed.
Upon defendant’s appeal
Reversed.
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