Creswell v. Keith, 235 Ark. 653, 361 S.W.2d 542 (1962)

Nov. 5, 1962 · Arkansas Supreme Court · 5-2782
235 Ark. 653, 361 S.W.2d 542

Creswell v. Keith.

5-2782

361 S. W. 2d 542

Opinion delivered November 5, 1962.

*654 Mitchell & Mitchell and Roger L. Murrel, for appellant.

Spencer $ Spencer, for appellee.

Ed. F. McFaddin, Associate Justice.

This is the second appearance of this case in this Court. Our first opinion was on April 3, 1961 (see Creswell v. Keith, No. 2339, 233 Ark. 407, 344 S. W. 2d 854).

On August 28, 1958, Creswell filed suit against Keith et al., claiming, inter alia, that Creswell was entitled to judgment for $61,500.00 because Keith had defrauded him of that amount, and that a receiver should be appointed for the Creswell-Keith Mining Trust, and for other relief. By answer, the defendants alleged that on May 28, 1957, Keith had executed a complete release of all matters involved in the litigation. When the release was exhibited, the Chancery Court refused to hear any testimony and dismissed Creswell’s suit. On appeal to this Court, we held that evidence should be heard to determine whether the release was valid. That was our holding in the opinion of April 3, 1961 previously mentioned. On remand, the Chancery Court heard all the evidence offered and after weighing the same, dismissed the plaintiff’s complaint for want of equity, finding:

‘ ‘ That the original release executed by the plaintiff, Arch N. Creswell, was a valid release executed for valid considerations and that the plaintiff has failed to establish any defense to said release or any grounds on which said release1 could be set aside.”

*655From that decree, Creswell brings the present appeal. To overcome the admitted release, Creswell stated that he received no consideration at the time he signed it. But he finally admitted that he received $910.00 and a certificate for 100,000 shares in the Creswell-Keith Mining Trust, and also a mine in Mexico and certain property at the mine which Creswell had operated for one of the companies in which he and Keith were interested. The chattel property at the Mexico mine had a book value of several thousand dollars. Creswell was the man who knew most about it. He had returned from Mexico and had been in Hot Springs three months before he executed the release in 1957. Certainly there was consideration to support the release; and there is no evidence of duress. As to misrepresentation and fraud causing Creswell to execute the release, the evidence established that Keith had written Creswell about various business matters from time to time while Creswell was in Mexico managing the mine, and of which management Keith was very bitterly complaining. In short, there is no evidence of fraud or misrepresentation.

Finally, Creswell claims that he and Keith commenced their dealings as partners, that on account of such relationship Creswell trusted Keith, and that Keith, in obtaining the release from Creswell, did not observe the standards that law and equity require in dealings between partners. In Alexander v. Sims, 220 Ark. 643, 249 S. W. 2d 832, and in Boswell v. Gillett, 226 Ark. 935, 295 S. W. 2d 758, we had occasion to consider and emphasize the trust relationship that exists between partners ; and we adhere to all the rules therein stated. Certainly Keith owed to Creswell a full and complete disclosure of assets and liabilities before purchasing his *656interest. In 40 Am. Jnr. 218, “Partnership” § 129, the holdings are summarized:

“The general rule that the utmost good faith is required of partners in their relationship with each other, and that, since each is the confidential agent of the other, each has a right to know all that the others know and each is required to make full disclosure of all material facts within his knowledge in any way relating to partnership affairs, is held almost universally to apply in the case of a sale by one partner to another of his interest in the partnership.”

With these guiding principles in mind, we find nothing in the record to show that Keith failed to make a full disclosure of all material facts relating to the enterprises in which he and Creswell were interested. Creswell complains that after Keith acquired his interest, oil wells were commercialized on holdings in Arkansas. But the record shows that on November 26, 1956, Keith wrote Creswell a letter2 while the latter was in Mexico, and told him of the oil possibilities. When Creswell returned from Mexico, he had the right of access to all the books and files of the various enterprises in which he and Keith were interested. So far as the record before *657us shows, the 100,000 shares which Creswell obtained in the Creswell-Keith Mining Trust might have been considered by him as ample for executing the release.

Creswell has not shown that the finding of the Chancery Court is against the preponderance of the evidence.

Affirmed.