Court Opinion

ID: 882882
Source: CourtListenerOpinion
Date Created: 2013-06-05 01:53:23.255998+00
Date Added: 2024-06-11T12:19:10.901048
License: Public Domain

No.    93-078
              IN THE SUPREME COURT OF THE STATE OF MONTANA
                                     1993

MARY M. TONDU,
             Plaintiff and Appellant,
     -v-
WALTER S. "PETE" AKERLEY,
             Defendant and Respondent.

APPEAL FROM:       District Court of the Fifth Judicial District,
                   In and for the County of Beaverhead,
                   The Honorable Frank M. Davis, Judge presiding.

COUNSEL OF RECORD:
             For Appellant:
                   Max A. Hansen, Max A. Hansen & Associates, Dillon,
                   Montana
             For Respondent:
                   Robert Edd Lee, Crowley, Haughey, Hanson, Toole &
                   Dietrich, Billings, Montana

                                     Submitted on Briefs:   May 13
                                                 Decided:   June .25,1?g393
Filed:     JtiN23 1993
Justice James C. Nelson delivered the Opinion of the Court.

     This is an appeal              from   a Fifth Judicial District Court,

Beaverhead County, judgment in a bench trial.                           We affirm.

     There are two issues on appeal:

     1.      Did the        District       Court       err       in    concluding    that   a

             partnership did not exist between Mary Tondu and Walter
             Akerley?

     2.      Did    the    District       Court    equitably          distribute   the   funds
             at issue?

     Mary M. Tondu (Mary) and Walter S. "Pete" Akerley (Pete) met
in late 1988.        They had similar interests in raising cattle and

soon verbally agreed to enter into business together to raise

purebred     registered         cattle.       Each of the parties contributed
assets,    monetary       and    otherwise,       to   begin      the    enterprise.      Both

parties contributed their knowledge, skills, and experience toward

the management and operation of the business.                            They were to have

equal one-half interests in the business.

     Mary and Pete also entered into                         a    domestic    relationship,

living together and conducting their business in a rental property

in Sheridan.        During this time,             each party also devoted time to
separate pursuits and other employment.

     Wages from these other income sources were added to monies

from the business.              Mary and Pete also took out joint loans to

finance     their    operation.           Mary and Pete had a joint checking

account,     a joint savings account, and two separate checking

accounts,    owned    individually.           In fact,           monies from all income

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sources were commingled within the 4 accounts and used to pay
business and personal expenses.
        Although they shared their                incomes   and     their business
interests,      they filed separate income tax returns during their
venture      together,   instead of a partnership tax return.                    Mary
indicated that the couple's accountant advised her that filing
separately was the appropriate method for filing their returns.
        In the     spring of        1991,    the personal         relationship    was
terminated and in April, Mary moved to Arizona.                   The parties tried
to terminate        their business relationship as well,                  but they
encountered      problems,   and Mary filed this action on January 27,
1992.
        The trial court concluded that no partnership was established.
Mary was entitled to the sum of $2,750, together with her share of
the allocated interest.         Brian Barragree, who performed some work
for the couple, was owed $1,000, and the remainder of the money
from the sale of the business assets sold at the termination of the
relationship and deposited with the Clerk of Court, was awarded to
Pete.     The total account was approximately $14,000.                Mary appeals.
        Our standard of review of a district court's findings of fact
is   clear.     Rule 52(a), M.R.Civ.P., provides in pertinent part:
             Findings of fact shall not be set aside unless
        clearly erroneous, and due regard shall be given to the
        opportunity of the trial court to judge of the
        credibility of the witnesses...
        In    interpreting   this    rule,       we have adopted the following
three-part test:
               First, the Court will review the record to see if
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     the findings are supported by substantial       evidence.
     Second, if the findings are supported by substantial
     evidence we will determine if the trial court has
     misapprehended the effect of evidence.         Third, if
     substantial evidence exists and the effect of the
     evidence has not been misapprehended, the Court may still
     find that "[A] finding is 'clearly erroneous' when,
     although there is evidence to support it, a review of the
     record leaves the court with the definite and firm
     conviction that a mistake has been committed."

Interstate Production Credit v. DeSaye (1991),   250 Mont. 320, 323,
820 P.2d 1285, 1287.     (Citations omitted.)

                 ISSUE I. FORMATION OF PARTNERSHIP

     In her complaint,    Mary asserts that she and Pete formed a
partnership and at its dissolution, Pete must make an accounting

and pay her for her share of the partnership assets.    Pete contends
that they had a cooperative business relationship and he has fully

compensated Mary for her share of the assets.
     Section   35-10-201(l),   MCA, defines a partnership as      "an

association of two or more persons to carry on as co-owners a

business for profit."     Barrett v. Larsen (1993),   50 St. Rep. 96,
846 P.2d 1012, provides the following elements as indicative of a

partnership:

          To establish . . . a partnership, it is necessary to
     determine the intent of the parties: such business
     relationships arise only when the parties intend to
     associate themselves as such.       There must be some
     contribution by each      co-adventurer or partner or
     something promotive of the enterprise.     There must be
     joint proprietary interest and a right of mutual control
     over the subject matter of the enterprise or over the
     property engaged therein, and there must be an agreement
     to share the profits. The intention of the parties has
     to be clearly manifested, and must be ascertained from
     all the facts and circumstances and actions and conduct
     of the parties. (Citations omitted.)

Barrett,   846 P.Zd at 1015.

                                   4
   A. Clear Manifestation of Intent to Establish a Partnership
     In Antonick v. Jones (1989), 236 Mont. 279, 769 P.2d 1240, we

pointed out that     "[t]he initial test of whether a partnership

exists is the intent of the parties.          This inherently implies a

mutual agreement or meeting of the minds."         Antonick, 769 P.2d at

1242-1243.     (Citation omitted.)
     The element of intent to associate as partners              in this

instance is highly debatable.    Pete testified that "1 wouldn't have

considered a partnership."    He also asserted, when asked why by the

court, "Your Honor, I think a partnership has to be equal donations
and equal service.      I've been in comparably the same situations

previous, and I've never seen them work.        And I wasn't about to get

into another one."     Section 35-lo-401(7), MCA, states that "[n]o

person can become a member of a partnership without the consent of

all the partners."     In this case, there is direct testimony that
one of the alleged partners did not wish to be associated in a

partnership.

     Moreover, there is other evidence to support Pete's argument

that he did not want to form a partnership with Mary.       Although the

two parties used the Diamond Dot brand, owned by Pete, it was never

transferred to the partnership.          Mary was a signer on the brand,

not a co-owner.
     Although Mary stated that they conducted business under the

name of "Akerley and Tondu" or Akerley and Tondu d/b/a "Diamond Dot

Ranch" or "Diamond Dot Angus", they never registered the name of

their partnership with the Secretary of State.        They also never put

                                     5
into writing their desire to associate in a partnership.
     Further,         they     filed   separate   tax   returns   instead of
partnership     returns.        The intention of the parties to form a
partnership is not clearly manifested as required.
        B. Contribution and/or Promotion of the Enterprise
     Each party made a contribution to start the business.                The
trial court stated that Mary contributed about $12,000 and some of
her shorthorn cattle to the enterprise and Pete contributed about
$3,000 in cash and "his knowledge and experience in the unique
business of transplants and artificial insemination." The parties
obtained joint loans and jointly purchased cattle and necessary
equipment to facilitate their operation.                  Both parties were
involved in the operation and management of the business.            From the
testimony elicited, it is clear that both parties put considerable
effort into promoting this enterprise.
                             C. Right of Mutual Control
     In the pre-trial order, the agreed statement of facts states
that "[b]oth of the parties actively participated in purchasing and
marketing     their    livestock."      For instance, during the Labor Day
weekend of 1991, Pete and Mary met with Walter Perkins and Floyd
Fredrickson about the sale of some of their cattle.                 Pete had
earlier arranged the meeting with Walter Perkins.            Mary arranged to
have some of the cattle cared for and taken to the winter fair for
show by some Sheridan high school students for possible sale at a
later date.
     When Mary's attorney asked Floyd whether he was dealing with

                                          6
both      Mary and Pete concerning the sale of cattle, Mr. Perkins

stated,     "Yes. "   From the testimony presented,      Mary   and Pete
maintained mutual control over the animals.

                      D. Agreement to Share Profits

       The trial court's findings      of fact concerning sharing of

profits stated:

            The parties had no agreement expressed or implied as
       to the sharing of the financial benefits of their
       business relationship.   Indeed there was little, if any
       profit as the term is commonly used in a joint business
       venture.    It is apparent from the record that the
       enterprize (sic) was aesthetically mutually satisfying,
       and supplemented their individual incomes, providing them
       a good living during the short-lived association. Even
       Mary's daughter was advanced money       and    otherwise
       benefitted from the relationship. Repeatedlytheparties
       withdrew money from the business accounts for their
       respective   personal use.     In November, 1989,    Mary
       actually repaid a $4,500 loan which had been negotiated
       by Pete, from her own personal account. Pete contributed
       $1,700 from his personal account to purchase a tractor
       and horse. Once Mary withdrew $775 from joint funds to
       supplement the purchase by her of an automobile. Neither
       party ever objected to this co-mingling [sic] and joint
       personal use of these assets.
       Mary and Pete both stated that they had no agreement as to

sharing profits.      When asked about any agreement to share profits,

Pete   testified, "No.     Just pool our money.   It was just an oral

agreement.       We would pool and just go on."       Further   testimony

revealed that money from cattle sales would be deposited into any

account at any time and may have been used by Mary or Pete or

jointly by the two.      This is a second element of a partnership that

the Tondu-Akerley business relationship cannot meet; there was no

agreement between the parties to share profits.

       The burden of establishing a partnership is on the party
claiming one.     Antonick, 769 P.2d at 1242.        We conclude that Mary
has failed in her burden of proof, and we hold that the cooperative
business association entered into by Mary Tondu and Walter "Pete"
Akerley does not contain the elements necessary to establish a
partnership.
      This Court notes that a side issue existed which reflected
upon Mary's credibility and her contention that she and Pete had
established a partnership.        There were a number of checks written
on   Pete's   individual    checking   account   which   purportedly   contain
Pete's signature but do not appear to be in Pete's handwriting.
Mary repeatedly denied signing these checks but the trial court
concluded that:
            Mary wrote checks on Pete's account, signing his
      name.    While Mary now denies that she did this, the
      evidence was persuasive that she did.    Pete now denies
      that he authorized these checks, the evidence however
      convinces the Court that he at least knew or should have
      known about it. In any case the so called unauthorized
      checks amounted to less than $2,000.
"The trier of fact is in the best position to hear the testimony
and observe the witnesses and their demeanor....Particularly             where
credibility of witnesses is involved, we give great weight to fact-
findings of a district court."         Scott v. Eagle Watch Investments,
Inc. (1991), 251 Mont. 191, 195, 828 P.2d 1346, 1349. The trial
court was in the best position to determine whether Mary was
credible, and we give its decision due regard.
              ISSUE   II.   EQUITABLE DISTRIBUTION OF ACCOUNT
      As a final issue, Mary seeks a determination as to whether an
equitable distribution of the funds was effected.              "[A] court of

                                       8
equity     will,    when    its jurisdiction has been invoked for an
equitable purpose, proceed to determine any other equities existing
between the parties connected with the main subject of the suit,

and grant all relief necessary to an entire adjustment of such

subject."       Tiffany v. Uhde (1950), 123 Mont. 507, 512-513, 216 P.2d
375,    378.

        Pete's attorney, in moving the court for a judgment upon the
evidence at the close of the hearing, stated:

              . ..that Mary Tondu is entitled to the proceeds from
        cow NO. 161 sold to Fredrickson . . ..that Mary Tondu is
        entitled to registration and entry fees which Pete
        Akerley agreed to pay her during the Labor Day weekend of
        1991 in the approximate amount not exceeding $2,000,
        except for Cow No. 161, which was her cow and upon which
        she ought to pay her own fees....
        However,    in      his   post-trial   supplemental   findings   and
conclusions,       Pete states that Mary should be awarded $849.75 for

registration and other expenses incurred on the sale of Akerley

cattle after the settlement in June 1991.              He also argues that
there was no transfer of Cow 161 and therefore, no money owed for

the animal.

        Mary    states,     in her final proposed findings of fact and

conclusions of law and her additional brief in support of the final

proposal,       that she is entitled to have the partnership capital

accounts       equalized.     According to Mary,    she should receive the

balance of the approximately $14,000 on deposit with the Clerk of

Court after Brian Barragree is paid the $1,000 owed him for his

work.          She also claims an additional payment of $10,900 is

necessary to "reimburse her for her excess capital contributions."

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                                                              --
     The trial court, in its findings of fact, stated that, among
the unfinished business between the two parties, were Mary's
expenditures during the 1991 Labor Day weekend.          It concluded that

registration and entry fees and other costs of approximately $2,000

were incurred by Mary.
     The judgment,    filed on September 10, 1992, awarded Mary the

sum of $2,750 and her allocated share of the interest.                    Pete

Akerley was     awarded the remainder of the trust after              Brian

Barragree,    a fitter the couple hired to prepare some of their

cattle for sale, was paid $1,000 for work performed.            We conclude

that the trial court effected an equitable settlement.

     In     conclusion,    the   findings   of   fact   are   supported

substantial    evidence,   the trial court did not misapprehend the

effect of the evidence and the findings are not clearly erroneous.
AFFIRMED.

We Concur:
                                          June 23, 1993

                                  CERTIFICATE OF SERVICE

I hereby certify that the following order was sent by United States mail, prepaid, to the following
named:

Max A. Hansen, Esq.
Max A. Hansen & Associates, P.C.
P.O. Box 1301
Dillon, MT 59725

Robert Edd Lee, Esq.
Crowley, Haughey, Hanson, Toole & Dietrich
P.O. Box 2529
Billings, MT 59103

                                                     ED SMITH
                                                     CLERK OF THE SUPREME COURT