plaintiff and the defendant agreed to entirely withdraw and segregate the item of the adjustment of their interest in the building and the partnership accounting.
The principal relief asked for by the plaintiff, namely, that the defendant be decreed to hold the checks in trust for the plaintiff and be ordered to indorse them, is properly demandable under the facts proved. In Peoples-Pittsburgh Trust Co. v. Saupp, 320 Pa. 138, 182 A. 376, 378, 103 A.L.R. 844, a somewhat similar situation was presented although on partnership was involved. The defendant held and refused to deliver stock certificates representing a stock dividend to which the plaintiff as pledgee of the original stock was entitled. The Court said: 'Implied trusts arise by implication of law 'because morality, justice, conscience and fair dealing demand that the relation be established.' Dixon v. Dixon, 123 Me. 470, 124 A. 198, 199. In Beatty v. Guggenheim Exploration Co., 225 N.Y. 380, 122 N.E. 378, 380, the New York Court of Appeals, speaking through Mr. Justice Cardozo, said: 'A constructive trust is the formula through which the conscience of equity finds expression. When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity coverts him into a trustee.' Courts act upon the same logic in implying a trust.'
Of course, the defendant here is not attempting to assert or retain for himself any beneficial interest in the checks. However, in order to obtain his own ends he is depriving the plaintiff of his beneficial interest, which amounts to the same thing.
In the alternative, the plaintiff is entitled to a money judgement. The fact that he has not specifically asked for it in his complaint is immaterial. Even his prayer for general relief did not cover it. Federal Rules of Civil Procedure, rule 54(c), 28 U.S.C.A., provides that ' * * * every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in his pleadings.' See Moore, Federal Practice, Section 54.03, and cases cited. If the pleading states a cause of action for relief, the designation of the cause and the prayer for relief, although some indication of the nature of the cause, are not controlling and the appropriate relief under the facts pleaded, will be granted. Kanses City, St. L. & C.R. Co. v. Alton R. Co., 7 Cir., 124 F.2d 780.
In the absence of the proved intention to delay or defraud creditors, there is no legal objection to a transfer of partnership property from the firm to one of the partners. Am. Jur., Partnership, 420. No such intention appears in the present case. The only debt of the firm mentioned in the testimony is a claim in the amount to some $ 1,400 for the recovery of which a subcontractor is now suing, not the firm, but Smith, who contracted with the defendant. The defendant in his letter of December 11, referring to this claim, says 'In any event, whatever the outcome is, I will personally have to make settlement.' Referring to the subject matter of the suit, he testified 'I got Smith (the contractor) to build the box for me.' True, under leading questions from his counsel, he testified that it was a debt of the partnership, but this unsupported legal conclusion is wholly insufficient to establish it as such in this proceeding. Even so, there is nothing to show that it would make the partnership insolvent, and even if there were, the question of fraud upon creditors can hardly be raised in this case by one of the parties to the transfer.
The statements of fact and law in the foregoing opinion may be taken as the Court's findings and conclusions under the rule.
I affirm the plaintiff's 1st, 2nd and 4th requests for conclusions of law and deny the 3rd request.
I affirm the defendant's 2nd request for conclusion of law and deny his 3rd, 5th, 6th and 7th requests. The 1st request is for a fact finding and has been covered. The 4th request is not answered as immaterial.
A form of judgment may be presented.