Udney H. Penniman and Thomas Mills v. William B. Munson and Lemuel B. Platt, 26 Vt. 164

The opinion of the court was delivered by Isham, J. There can be no doubt that under the contract between each, of the plaintiffs and defendants in this case, a joint interest was obtained in the patent, which was referred to in the bill. That interest was created by the several conveyances of that patent, which were made to, and between these parties, embracing in the first place; the county of Chittenden, afterwards the county of Franklin, and subsequently the residue of this state.

Under those conveyances, each of the parties held an equal undivided fourth . part of the whole interest in that patent, over that territory. It is quite immaterial whether Munson, in negotiating the sale and purchase of that patent right, acted as the agent of Messrs. Penniman, Mills and Platt, or whether he was acting only in behalf of the owner of the patent, as the result shows that the conveyances vested the interest in this patent, over that territory, in these four persons.

The object of this bill is simply to carry into effect the agreement of these parties, which was to take effect, after their joint interest had become perfected. It is obvious, however, that the purchase of the patent from the owner or his agent, was principally transacted by Mr. Munson,-and that the plaintiffs, as well as Mi.

Platt, were each induced to become purchasers of one-fourth of that interest, under a mutual agreement entered into with them by Munson, that they all were to become the exclusive owners of the patent right for that territory, and that each were to pay one-fourth of the purchase money, so that the expenditure made for the purchase of the patent, should be borne by them in equal proportions.

The conviction cannot be easily overcome, that Munson gave to each of the parties who made that purchase, assurances that they should pay for their interest, no more' than he had paid for the same, to the agent or owner of the patent. It also satisfactorily appears from the testimony in the case, that the several, but undivided interests of all these parties were to be made, and held as a joint or common stock, for the purpose of selling and disposing of the same on joint account, and that the net proceeds, arising from the sales, were to be equally divided between them.

It is not pretended that Munson has paid any part of the purchase money, for the interest he holds in that patent; at the same time, he has received considerable sums of money from the plaintiffs, who are jointly interested with him, which they have paid for their interest in the patent. The same is true in relation to Mr. Platt. He has paid little, if anything for the interest he holds. The notes he gave for the purchase money, were re-delivered by Mr. Munson, on the detection of the frauds practiced on him by Mr.

Munson ; and he still holds that interest, and claims his share of the proceeds arising from the sales under the patent. Mr. Platt, in this transaction, stands in no more favorable light than Mr. Munson, for after his notes had been re-delivered to him, he suffered the negotiation to proceed with the plaintiffs, and consummated a contract, by which an additional sum of money was taken from them for the same patent over an enlarged territory.

The conduct of both Munson and Platt was fraudulent, as it respects the plaintiffs; for they have obtained from them, almost, if not the entire amount of the whole purchase money for the patent, when under their contract, they were each to pay but one-fourth of that amount, and all were to share equally in making that payment, so that one should pay no more than the other.

It is proper, therefore, whenever an accounting takes place between these parties in relation to this matter, that the plaintiffs should charge the defendants with an equal proportion of the money, which they have paid for the purchase of that patent, so that both Munson and Platt shall pay as much for their interest, as was paid by the plaintiffs for theirs. This was their agreement, and the inducement by which the plaintiffs became purchasers of the patent.

It is probable, that the mere act of conveying to them undivided : interests in the patent, did not create among them the relation of partners, for individuals may have a joint interest in property, and still not be partners; but when, after that purchase was made, they agreed to convert their separate rights into a common interest, for the purpose of selling the same, and to divide the net proceeds equally between them, there can be no doubt, that a partnership was thereby created, or such a relation formed, that each has the right to call the others to account, for the avails they respectively have received.

The bill states the facts from which the law creates that relation between them, and under this proceeding their agreement will be enforced, as decreed by the chancellor, that the orators and the defendants shall share equally in the original expenditure, for the purchase of the patent right, and in the. net profits and losses on its resale, by either or all of them. Upon the principles stated by the chancellor,. the master has made Ms report,-to which there are no exceptions.

We perceive that the master has allowed the sum of $150,00 as paid for the town of Colchester, when from the evidence we think but $100,00 was paid. That correction should be made. The case will therefore be remanded to the chancellor, to correct the decree accordingly. Its effect will be to deduct three-fourths of the difference between the two sums, with the interest from the claim allowed to Mills, and add the same in equal proportions to the amount due the others. In all other respects, the decree of the chancellor is affirmed.