Case ID: wyo_28/html/0474-01.html
Source: Caselaw Access Project
Author: {"author": "Kimball, Justice.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

LE GAULT v. LEWIS-ZIMMERMAN
    (No. 1031;
    Decided May 2, 1922;
    206 Pac. 157)
    Partnership — Dissolution op Partnership Agreement — Action por Accounting.
    1. In action for dissolution of partnership and for an accounting in which defendant denied that plaintiff had an interest in the business, evidence held to prove that any partnership contract existing between the parties was rescinded by mutual consent, and that plaintiff for a good consideration surrendered his interest in the business to defendant.
    2. In 'action for dissolution of partnership and for an accounting, defended on the ground that plaintiff had no interest in tlie alleged partnership business, testimony that third party, who had agreed to sell the property to plaintiff and defendant, thereafter executed a bill of sale to defendant alone, held admissible to show plaintiff was without interest in the business under Uniform Partnership Act, § 36, subd. 2 (Comp. St. 1920, § 4207).
    Appeal from the District Court, Park County, Peroy W. Metz, Judge.
    Action by George A. Le Gault against P. E. Lewis-Zimmerman for dissolution of partnership, appointment of receiver and for an accounting. There was a judgment of dismissal and plaintiff appeals.
    
      R. L. Donley, and Ernest Goppert, for appellant.
    The court erred in over ruling the objection of the plaintiff to the testimony of defendant as to defendant’s belief based upon plaintiff’s alleged conduct, that he, plaintiff, had abandoned the partnership; the testimony was merely an expression of opinion and in direct evidence of facts. (Abbott’s Proof of Facts, 3rd Ed., 3. Jacksonville Co. v. Woodworth, 26 Fla. 368.) The court erred in receiving evidence of newspaper notices published of plaintiff’s intention to leave Meeteetse, and of defendant’s testimony of ownership. (Hite v. Stimmell, 45 Kan. 469; Simpson v. Smith, 27 Kan. 565.) The court erred in finding that no partnership had been formed, which finding was contrary to the evidence. Persons who have agreed to become partners and have acted accordingly will be held to be partners although differing in their interpretation of the agreement. (22 A. & E. 15.) Failure to contribute agreed sums to partnership capital will not avoid the creation of a partnership. (Company v. Haas, 33 N. W. 657.) Once formed a partnership continues until dissolved. (20 E. C. L. 811.) He who claims abandonment of property rights assumes the burden of proving the same. The reviewing court will examine the entire record and render such decree as should have been rendered. (Pyeatt v. Estus, 179 Pac. 42; Sehoek v. Fish, 45 Okla. 12; 144 Pac. 584; 3 C. J. 260; Wollenberg v. Minard, 37 Ore. 621; Adams y. Smith, 11 Wyo. 200; 70 Pac. 1043; Schiller v. Blyth & Fargo Co., 15 Wyo. 304.)
    
      Brome & Hyde, for respondent.
    . This is an action for dissolution, accounting and for appointment of a receiver to wind up an alleged partnership business. There is no controverted question of law in the case. Considering the plans urged in the brief of appellant on the subject of partnership, we assume that it is conceded by appellant that one who has not contributed anything in the way of money or labor or any other thing of value to the capital of the partnership may abandon the enterprise, and having done so, will not thereafter be permitted to assert the existence of a relation which he himself has terminated. (Denver v. Roane, 99 U. S. 355; Blake v. Sweating, 121 Ill. 67; Ligare v. Peacock, 109 Ill. 94.) The general principle of law governing the formation and dissolution of partnerships does not seem to have been modified nor abrogated by the uniform partnership act of 1917. The evidence is insufficient to show the creation of a partnership in the first instance, and clearly shows that if there ever was a partnership it was terminated by the plaintiff in surrendering his interest thereon and informing persons who testified at the trial that he did not care to have any interest in the drug store. The evidence shows that plaintiff had ho interest. The findings of the trial court are supported by the evidence and should be sustained.
   Kimball, Justice.

The plaintiff (appellant), claiming to be a partner with defendant (respondent) in a drug business, brought this action for dissolution of the partnership, appointment of a receiver, and accounting. Whether the plaintiff had an interest in the business seems to have been the'sole issue at the trial. Upon a general finding in favor of the defendant, judgment dismissing the action was entered, and the plaintiff appeals. The principal specification of error is that the judgment is against and contrary to the law and the evidence.

In August, 1917, the Meeteetse Drug Company, the owner of a stock of drugs at Meeteetse, Wyoming, agreed with plaintiff upon the price to he paid for said stock of' which the plaintiff then took possession. The defendant was the owner of a stock of similar merchandise located at Mander-son. Desiring to consolidate the two businesses, it was agreed that the defendant’s stock he removed from Man-derson to Meeteetse, to he combined with the other. The stock originally at Meeteetse was transferred by written contract from the Meeteetse Drug Company to plaintiff and defendant who jointly assumed liability to pay therefor. No part of the purchase price was paid at the time, but was to be paid in installments due quarterly. There was no written contract of partnership between plaintiff and defendant, and the evidence of the verbal contract under which the business was launched was contradictory and very unsatisfactory. The two stocks were put together and business thereafter conducted at Meeteetse under the name “Pioneer Pharmacy.” It was agreed that defendant should manage the business at a fixed salary, and that plaintiff would contribute to it no time or service. The foregoing facts were not disputed.

The plaintiff, claiming to be an equal partner, asserts that his obligations to the. partnership were discharged when he paid some expenses of moving defendant’s drug stock from Manderson to Meeteetse, and surrendered possession of the Meeteetse drug stock upon which he had paid nothing. However, his own testimony, as we read it, does not exclude the inference that he promised to pay to defendant an amount equal to one-half his agreed salary as manager. This he did hot do.

The defendant testified that plaintiff agreed to contribute capital equivalent to one-half the value of the Manderson drug stock, and to assist in meeting the payments on the stock purchased jointly by them; that the amount so to be contributed was not definitely fixed, and that when asked to sign a partnership agreement specifying their respective investments, the plaintiff said that that would be done later. Finally, about March 1, 1918, defendant claims he asked the plaintiff if he was going to put any money into the business, and plaintiff replied: “No, I don’t want anything to do with it; the store is yours, ’ ’ and as a reason for not “signing up,” stated that he didn’t want to be tied up at Meeteetse — didn’t know how long he would stay. Defendant contends that after this conversation the business was conducted by him upon his sole responsibility and for his sole benefit.

O. B. Mann, one of the persons composing the Meeteetse Drug Company, who acted as agent for that company, testified that in the spring of 1918, while talking to plaintiff about the payments under the sale contract, plaintiff-said, “I don’t care to have any interest in the drug store; I don’t care to have anything to do with it.” There was no attempt to show that to this time the business had been profitable. The contrary might be inferred, for it appears that on February 15, 1918, to meet a payment of $300 due to the Meeteetse Drug Company under said contract, it was necessary to borrow the money from the bank upon the joint note of plaintiff and defendant. All payments under that contract, both before and after March, 1918, including the note to the bank, were made without any assistance from plaintiff, or were assumed by defendant as his sole and individual indebtedness, with the consent of the creditor company.

On behalf of the plaintiff there was evidence introduced for the purpose of showing that defendant recognized him as a partner after March, 1918. We do not deem it necessary to describe the acts and statements put in evidence for this purpose. They were either denied or explained by defendant, and we see no reason why the finding upon the facts by the trial court should have been influenced by them.

The court was justified in finding from the evidence either that the plaintiff promised to contribute to the business funds equal to the value of the Manderson stock, dr that, pending a definite understanding as to the amount of his contribution, he withheld his consent to a partnership contract. The evidence justified the further finding that in the spring of 1918, having 'failed to contribute his part of the capital, or having refused to agree as to what that contribution should be, the plaintiff announced that he wanted nothing to do with the business; that it belonged to defendant. This announcement was no doubt considered either as an offer to surrender whatever interest he had in the business if he were discharged from the obligations which he had assumed, or simply as a refusal to enter into the partnership relation. We think it was clearly understood that the defendant accepted the offer, or acquiesced in the situation, and that any contract theretofore existing was discharged by mutual consent. If it be conceded that a partnership relation did exist between the parties, it was not only dissolved by mutual consent, but plaintiff for a good consideration surrendered his interest in the stock and business to the defendant. It is clear, therefore, that thejudgment dismissing the action was supported by the evidence, and was not contrary to law.

The other specifications of error relate to the admission of evidence, and will require only brief notice. Defendant was permitted to testify thát in December, 1919, after he had reduced the indebtedness to Meeteetse Drug Company from about $3440 to $1650, O. B. Mann accepted his personal obligatiSn for the amount remaining unpaid, and issued to him a bill of sale. The manifest purpose of this testimony was to show that plaintiff was discharged from a possible or apparent liability upon the contract with the Meeteetse Drug Company. Plaintiff’s objection to the testimony w-as upon the ground that the Meeteetse Drug Company could not again sell the property as it had long before parted with its title by the sale to plaintiff and defendant jointly. We think this objection was not well taken, for, if the transaction described was mot effectual as a sale, it did tend to prove a course of dealing between the Meeteetse Drug Company, as creditor, and defendant, as a person continuing the business,' from which an agreement might have been inferred for the discharge of the plaintiff from liability upon the original contract of sale. (See Paragraph (2) § 36, Uniform Partnership Act, § 4207, Wyo. C. S. 1920.) Its competency and materiality for this purpose was not challenged by the objection.

The other evidence mentioned in the .specifications of error need not be noticed in detail. We think all of it might have been excluded without affecting the result, and therefore the plaintiff was not prejudiced by its admission.

We find no error in the record, and the judgment is affirmed.

Affirmed.

Potter, Ch. J., and Blume, J., concur.