Menzenhauer v. Schmidt

I think the demurrer is based upon a wrong conception of the situation. The transaction sought to be annulled was not, strictly speaking, a sale of a chattel by the complainant to the defendant, for which the complainant obtained a sum of money, and which chattel he seeks to recover back without returning the money which he received. The transaction was, in substance and effect, a dissolution of a partnership, in which the partnership assets and good will were turned over to one partner and the other was paid a consideration for his interest in the assets and business. It was a payment by the instaying partner to the outgoing partner of a sum of money as the value of his interest in the partnership. It ivas, in effect, an amicable dissolution of the partnership.

Now, the scope of the prayer of the bill is not that the partnership relation should be reinstated, but that the dissolution should be judically declared, and an account taken of the partnership affairs, and the interest of the complainant therein ascertained, according to the practice of this court, and the complainant paid that amount. The allegation, which, for present purposes, must be taken to be true, is that the amount of that interest is, and, when judicially aseerained, will prove to be, much greater than the sum of $30,000 received by the complainant. In tailing the account the complainant, of course, will be charged with so much money received by him from the defendant, and the.defendant will be credited with that amount, unless he paid it out of partnership funds. >

This view of the case shows its marked distinction from a case in which a fraud-doer conveys to the defrauded one an article *466of merchandise of little value and, by fraud and chicanery, induces him to pay for it a sum greater than its value. In such a case the defrauded party cannot recover back his money from-the fraud-doer without, at the same time, handing him back the article of merchandise which he received. He cannot receive the money and keep the object for which it was originally paid. But the principle applicable to such a case does not apply here.

If we seek for a parallel to the present case in the sale of a chattel, we will more nearly find it in a case where the vendor of the chattel, by fraud, is induced to part with it for a much less sum than its value, and seeks to recover, not the chattel, but the remainder of its value over and above the amount he has already received.

A short statement of the case is that the complainant is seeking the aid of this court to ascertain the real value of his interest in the partnership at the time of the dissolution, and to compel the defendant to pay him the excess over and above what he has already received.

I will advise that the demurrer be overruled, upon the usual terms.