Case Title: Green v. Kensinger

Citation: 199 Kan. 220, 429 P.2d 95

Docket Number: 44,774

State: kansas

Court: Kansas Supreme Court

Date: 1967-06-10T00:00:00Z

Document:
199 Kan. 220 (1967)
429 P.2d 95
R.C. GREEN, Appellant,
v.
HUBERT KENSINGER, Appellee.
No. 44,774

Supreme Court of Kansas.
Opinion filed June 10, 1967.
Wm. Arlen Spies, of El Dorado, argued the cause, and W.H. Coutts, Jr., of El Dorado, was with him on the brief for the appellant.
J.B. McKay, of El Dorado, argued the cause, and James B. McKay, Jr., of El Dorado, and T.D. Hampson, of Fredonia, were with him on the brief for the appellee.
The opinion of the court was delivered by
O'CONNOR, J.:
This action was initiated in Butler county by the plaintiff, R.C. Green, against the defendant, Hubert Kensinger, for a partnership accounting. From an order of the district court sustaining the defendant's motion for summary judgment, plaintiff has *221 appealed. The only question is whether or not the trial court erred in sustaining the defendant's motion.
On December 8, 1964, the present action was filed. Plaintiff's petition alleged defendant was a resident of Los Angeles county, California, and that the parties in 1957 became associated as partners in the business of buying and selling trust deeds, and in so doing, transacted business in Butler county, Kansas, where plaintiff alleged the causes of action arose. The petition was framed in three counts, each for monies alleged to be due and owing plaintiff by the defendant from the partnership operation: Count I  for the balance due plaintiff in the way of compensation pursuant to an agreement between the parties and based upon the gross sales of trust deeds by each of them; Counts II and III  for separate advancements made by the plaintiff to the defendant, for which sums the defendant had never accounted to the plaintiff. Further, plaintiff requested an accounting by the defendant "together with such other and further relief as in equity may be just."
A prior action filed in Wilson county district court, and involving these same parties, was before this court in Green v. Kensinger, 193 Kan. 33, 392 P.2d 122. There, the plaintiff, Green, sought recovery against Kensinger for two alleged loans arising out of the same business association as here. The findings and conclusions of the trial court, which were approved by this court, revealed the nature of the business and the relationship of the parties. It was determined that the two transactions there sued upon, which, incidentally, are identical to those set forth in Counts II and III here, were not loans but were part and parcel of the business of buying and selling trust deeds; that the parties were partners; and since the action was not one for an accounting, the court could not determine if one partner was indebted to the other, and plaintiff was denied relief.
In the present action defendant filed an answer in which he admitted his residency was in California, that the association was in the nature of a partnership, that such partnership had terminated, but specifically denied any business was transacted by or on behalf of the partnership in Butler county, or that the alleged causes of action arose in said county. In addition to denying the amounts alleged to be due the plaintiff, and by way of further defense, the defendant pleaded lack of jurisdiction of the person and subject matter, improper venue in Butler county, res judicata, and the statute of limitations.
*222 After issues were joined and plaintiff had answered interrogatories posed by the defendant, defendant filed a motion for summary judgment which was sustained on the grounds of lack of jurisdiction over the subject matter and person of the defendant, improper venue, res judicata as to Counts II and III, and the action was barred by the statute of limitations.
Plaintiff now appeals and raises three points, one of which is dispositive of this case  namely, the court erred in sustaining the motion for summary judgment, for the reason the action was barred by the statute of limitations. Although the trial court apparently sustained the motion on the ground that each of the three counts of plaintiff's petition was individually barred by the statute, we believe plaintiff's action essentially is one in equity for a partnership accounting, which includes the individual transactions referred to in the three counts. Thus the question more properly stated is whether or not plaintiff's cause of action for an accounting is barred by the statute.
Plaintiff urges that since he did not have access to the books and records of the partnership, he does not know the amount due and owing him from the defendant, and thus no cause of action for an accounting has yet accrued. For the reasons hereafter stated, we believe plaintiff's contention cannot be upheld under the facts and applicable law.
In ruling on the defendant's motion, the trial court had before it the pleadings and plaintiff's answers to interrogatories.
In his petition plaintiff alleged:
Plaintiff's answers to interrogatories were as follows:
Defendant, in his answer, admitted the business relationship between the parties had come to an end, and alleged the relationship was terminated and abandoned by the plaintiff in February, 1958.
When ruling on a motion for summary judgment, a court must resolve against the movant any doubt as to the existence of a genuine issue of material fact; the evidentiary material submitted by the party opposing the motion must be taken as true, and such party must be given the benefit of all reasonable inferences that may be drawn from such material. (Jarnagin v. Ditus, 198 Kan. 413, 424 P.2d 265.)
Let us, in light of the foregoing rule, examine the evidentiary facts before the trial court. It is not disputed there was a complete cessation of the partnership and partnership business. According to the facts alleged by the plaintiff, which facts must be accepted as true, the partnership was not only dissolved but was also terminated in March 1959. Nothing was set forth which would warrant an assumption that the partnership accounts were unsettled or that a winding up of partnership business was necessary. It is clear that after March 1959, the defendant refused to account to the plaintiff for monies alleged to be owing, and the only thing remaining to be done was for the court to determine the amount due and owing as between the partners. It necessarily follows there was no genuine issue of material fact before the district court regarding the status of the business and the relationship of the partners after March 1959.
The present action was filed December 8, 1964  over five years after the events of March 1959. It is conceded that at all times the plaintiff and defendant were and are residents of the state of California.
Is the Kansas or California statute of limitations applicable to the facts of this case?
The general rule in respect to limitation of actions is that the law of the forum governs, and if any exceptions to this rule are to be recognized, such exceptions must be found in the law of the forum itself. (Leonard v. Kleitz, 155 Kan. 626, 127 P.2d 421; Nickel v. *224 Vogel, 76 Kan. 625, 92 Pac. 1105.) As an exception to the rule, we have K.S.A. 60-516, which contains identical language to that formerly found in G.S. 1949, 60-310:
Such statutes are frequently referred to as "borrowing statutes," and have been enacted in nearly all the states. (Goodrich on Conflicts [4th Ed. by Scoles] p. 152; Annos. 75 A.L.R. 203, 149 A.L.R. 1224.)
Under K.S.A. 60-516 the statute of limitations of California is applicable if the cause of action arose in that state. In determining where a cause of action arises, this court in the early case of Bruner v. Martin, 76 Kan. 862, 93 Pac. 165, held:
The rule announced in Bruner has been followed in subsequent decisions of this court, including Naugle v. Naugle, 89 Kan. 622, 132 Pac. 164; Shearer v. Insurance Co., 106 Kan. 574, 189 Pac. 648; Hornick v. Catholic Slovak Union, 115 Kan. 597, 224 Pac. 486; Swift v. Clay, 127 Kan. 148, 272 Pac. 170. Thus in the instant case, if the plaintiff had the right to bring an action for a partnership accounting against the defendant in the California courts, the cause of action not only accrued in that state but also arose there, and the provisions of K.S.A. 60-516 control.
In ascertaining when a cause of action accrues in a case involving the statute of limitations of a sister state, resort must be had to the laws of that state. Pertinent statutes of the California Corporations Code Annotated (Deering, 1962) are as follows:
*225 Ordinarily, the right to an accounting is established by a showing that the partnership has been dissolved. (38 Cal. Jur.2d, Partnership § 140. Also, see Shearer v. Davis, 67 Cal. App. 2d 878, 155 P.2d 708; Sibert v. Shaver, 111 Cal. App. 2d 833, 245 P.2d 514; Glassell v. Prentiss, 175 Cal. App. 2d 599, 346 P.2d 895.) While there is authority that the statute of limitations does not begin to run between partners with respect to matters to be adjusted in an accounting between them until the partnership affairs and accounts are settled and the balance agreed on (Hendy v. March, 75 Cal. 566, 17 Pac. 702; Freeman v. Donohoe, 65 Cal. App. 65, 223 Pac. 431; Danelian v. McLoney, 124 Cal. App. 2d 435, 268 P.2d 775; 1 Cal. Jur.2d, Accounts and Accounting § 87; 31 Cal. Jur.2d, Limitation of Actions § 162; 38 Cal. Jur.2d, Partnership § 143), it is obvious the rule does not apply where, as here, the partnership accounts are settled, the partnership has terminated for all purposes, and nothing remains to be done except the determination of the amount due one partner from the other. The rule is well stated in 2 Wood on Limitations (4th Ed.):
Shearer v. Davis, supra, involved an action for an accounting and dissolution of a joint venture. The parties had entered into the relationship in July 1934, and the last significant act concerning the business of the venture occurred on April 4, 1936. The action was filed on August 6, 1941. The court, noting that the rights and liabilities of joint venturers as between themselves are governed by partnership law (C.C.A. § 2423 [now Corp. C.A. § 15029]; Zeibak v. Nasser, 12 Cal. 2d 1, 82 P.2d 375), held that the dissolution of a joint venture takes place when either party to the joint venture ceases to be associated in carrying on the common business as distinguished from the winding up of the business. In determining that the action was barred by the statute of limitations, the court stated:
The case of Brooks v. Campbell cited above is of interest. There, an action was begun September 19, 1913, for an accounting and settlement for monies due one of the partners from the other partners. The petition alleged the partnership business was closed in April 1908. In holding that the action was barred by the three-year statute of limitations, the court stated:
It was noted in the opinion that while there is no end of authority holding that the cause of action for accounting and settlement between partners arises on the dissolution of the partnership, there are cases holding the statute does not run where a partnership is being wound up in due course, realizing assets and satisfying debts.
In accord with what has been said, we hold that the plaintiff's cause of action for a partnership accounting accrued, as well as arose, in the state of California in March 1959, and under K.S.A. 60-516 the California statute of limitations is applicable.
Is the plaintiff's action for accounting barred by the applicable California limitation statute?
Section 339 of the California Code of Civil Procedure Annotated (Deering, 1959) provides that "an action upon a contract, obligation or liability not founded upon an instrument of writing" must be brought within two years. Section 343 of said code provides that an action for relief not otherwise provided for "must be commenced *227 within four years after the cause of action shall have accrued." An action seeking an accounting and settlement of the affairs of a copartnership is governed by the four-year statute. (§ 343, supra; Freeman v. Donohoe, supra; Shearer v. Davis, supra. Cf. Jefferson v. J.E. French Co., 54 Cal. 2d 717, 7 Cal. Rptr. 899, 355 P.2d 643, holding the two-year statute [§ 339, supra] applies, though an accounting is involved, where the primary purpose of the action is to recover money on an oral contract.) The action in the instant case, not having been brought within four years after the accrual thereof, is barred under the laws of the state of California, and thus cannot be maintained in Kansas. (K.S.A. 60-516; Leonard v. Kleitz, supra; Stockmen's Bank v. Madison, 129 Kan. 253, 282 Pac. 570; Nickel v. Vogel, supra.)
A motion for summary judgment must be sustained where a defendant pleads the statute of limitations and it appears from the matters before the court, in ruling on the motion, that the action is barred and that there is no genuine issue of material fact on the question. (City of Ulysses v. Neidert, 196 Kan. 169, 409 P.2d 800; Hartman v. Stumbo, 195 Kan. 634, 408 P.2d 693.)
Our conclusion that the district court properly sustained the defendant's motion for summary judgment on the ground that plaintiff's cause of action was barred by the statute of limitations renders unnecessary a discussion of other points raised on appeal by the plaintiff. The judgment is affirmed.