Case Title: Bencoe v. Bencoe

Citation: 305 P.2d 370, 62 N.M. 95

Docket Number: 

State: new-mexico

Court: New Mexico Supreme Court

Date: 1956-12-26T00:00:00Z

Document:
305 P.2d 370 (1956) 62 N.M. 95 Paul BENCOE, Plaintiff-Appellant, v. Denis BENCOE, Defendant-Appellee. No. 6114. Supreme Court of New Mexico. December 26, 1956. *371 Jason W. Kellahin, Santa Fe, for appellant. Iden & Johnson, James T. Paulantis, Albuquerque, for appellee. LUJAN, Justice. On October 15, 1954, plaintiff-appellant filed his complaint seeking to recover judgment against the defendant-appellee by reason of defendant's alleged failure to comply with certain agreements entered into between the plaintiff and defendant relative to a limited partnership. The complaint alleged four causes of action. By his first cause of action the plaintiff sought recovery of judgment in the amount of $4,000 and costs of suit for the alleged failure of defendant to comply with the terms of an agreement concerning the sharing of income between the parties and settling an alleged indebtedness in the amount of $4,000. The second cause of action sought recovery of $4,000 on an alleged account stated between the parties. The third cause of action sought recovery of judgment for $10,549.95; and the fourth cause of action sought recovery of $7,549.95. Both the third and fourth causes of action are based upon claims that defendant failed to comply with the terms of an agreement between the parties whereby plaintiff agreed to sell to defendant one-half of his interest in a limited partnership. Under the terms of this agreement a new partnership or corporation was to be formed, but neither was ever formed. On November 22, 1954, defendant filed his answer generally denying the allegations of the complaint and further alleged: "Defendant denies that on or about the 28th day of August 1954, defendant totally repudiated said contract, and states that said contract was never acted upon by either the plaintiff or defendant and that said contract is void and unenforceable; and admits that no new partnership or corporation was formed in accordance with the agreement set forth as plaintiff's Exhibit `A', but denies that plaintiff was without fault as alleged in the complaint." Paragraph 2 of the agreement entered into by the parties on April 10, 1947, provides as follows: Paragraph 5, provides: When the plaintiff rested his case the defendant moved the court to dismiss plaintiff's complaint for the reason that he had not shown substantial evidence upon which the court could base a decision under any one of the four causes of actions set forth in said complaint. Thereafter the court made and entered a judgment dismissing plaintiff's complaint and he appeals. The plaintiff contends that the court erred in dismissing his complaint for the following reasons: Because "(1) A valid contract was entered into between plaintiff and defendant April 10, 1947, creating a partnership between them, or making an assignment of one-half of plaintiff's partnership *373 interest to defendant; there was part performance thereof by plaintiff which was accepted by defendant, and a waiver of full performance, rendering said contract enforceable by plaintiff, at least in part, and entitling him to an action on the contract, and an accounting; (2) an accounting was had between plaintiff and defendant under the terms of the contract of April 10, 1947, in which defendant acknowledged a valid indebtedness to plaintiff supported by consideration, and an account was stated between the parties; (3) a valid contract was entered into between plaintiff and defendant August 1, 1951, supported by consideration, which contract was repudiated by defendant, entitling plaintiff to an immediate action on the contract, and (4) the findings of fact made by the lower court are erroneous and are not supported by the evidence adduced at the hearing, and therefor cannot sustain the judgment." It is elementary that where the agreement contemplated the formation of a partnership at some future time or upon the happening of some future contingency, as in this case, it is evident no partnership is intended until the event or contingency occurs. Therefore, persons who have entered into an agreement to become partners at some future time or upon the happening of some contingency, do not become partners until the agreed time has arrived, or the contingency has happened. After careful reading and consideration of the agreement here in question, it is apparent, the execution of a limited partnership agreement making the defendant a general partner or the organization of said company into a corporation was essential prerequisite to a binding contract between the parties. This view is supported by the fact that Exhibit "A" attached to the complaint shows that "that said purchase price is to be paid simultaneously with the execution of the limited partnership agreement making Denis a general partner of Bencoe, Meader Company or the organization of the corporation as aforesaid." The plaintiff never executed a limited partnership agreement making the defendant a general partner nor was the Bencoe, Meader Company ever organized as a corporation. The Court made the following findings of fact: From the foregoing findings of fact the Court concluded as a matter of law, that: In his narrative testimony about the purported sale of his one-half interest in the Bencoe, Meader Company, the plaintiff testified substantially as follows: "* * *. We called in a mutual friend of ours, Leon Caminez, who was an attorney, and told Mr. Caminez, about the agreement, about the various points we had agreed upon, what our arrangements should be, and we had several conferences with Mr. Caminez, and at the same time I corresponded with Mr. Leon Gordon who was one of the limited partners in Meader Company, telling Mr. Gordon about my desire to have my brother join in the partnership, and asking his consent. Mr. Gordon raised various objections and the matter dragged on as between him and me, so my brother and I informed Mr. Caminez of the situation and Mr. Caminez then said that if a suitable agreement were drawn up between my brother and myself, together with an employment agreement, between Bencoe, Meader Company, and my brother, the partnership arrangement we desired could in effect be established and the door would still be open for formalization of the situation if and when Mr. Gordon consented. (So far as the record discloses Mr. Gordon never did consent). We requested Mr. Caminez to go ahead and Mr. Caminez drew up these two agreements he had suggested, and on their execution they became the Employment Agreement of October 1, 1946, I believe, between my brother and Bencoe, Meader Company, and the April 10, 1947 agreement between him and me. Afterwards my brother and I had one or two conversations on the subject of obtaining Mr. Gordon's consent and my brother said that he wasn't too much concerned about the formalization part of the agreement, that as long as he had the substance he was satisfied. * * * I agreed and we sort of reviewed, in a general way more or less, our financial operations over the years, and it was, there was then a little brotherly argument as to where the amount should be fixed. My brother insisted *375 I was too generous when I said $4,000, I insisted it was right. So finally we nailed down the figure of $4,000 and agreed on it, so that is how the agreement of August, 1951, came about." On cross-examination he testified as follows: A careful examination of the record shows that the findings of fact are justified by the evidence, and the legal conclusions based thereon are without error. It follows from what has been said that the judgment should be affirmed. It is so ordered. COMPTON, C.J., and SADLER, McGHEE and KIKER, JJ., concur.