Bachand v. Walker, 16692
| Decision Date | 09 May 1990 |
| Docket Number | No. 16692,16692 |
| Citation | 455 N.W.2d 851 |
| Parties | Oscar BACHAND, Appellant, v. Bruce J. WALKER, Appellee. |
| Court | South Dakota Supreme Court |
Steven C. Beardsley and Jon C. Sogn of Lynn, Jackson, Shultz & Lebrun, P.C., Rapid City, for appellant.
Ronald W. Banks of Banks, Johnson, Johnson, Colbath, and Huffman, P.C., Rapid City, for appellee.
Oscar Bachand (Bachand) appeals from a trial court judgment in favor of Bruce J. Walker (Walker). The dispute on appeal primarily concerns the ownership of certain real property. Bachand claims he is entitled to one-half interest in the real property by virtue of an alleged oral agreement with Walker. The trial court found Walker to be the owner of the real property and excluded the property from any consideration as partnership property. Bachand further appeals from the trial court decision relating to certain errors in accounting, denial of bonus credits, and the failure of the trial court to impanel a jury to try claimed fraud issues. We affirm in part, reverse in part, and remand.
Walker began doing business with Bachand in 1964 when Bachand ran and cared for Walker's 200 heifers pursuant to an agreement where Bachand would receive sixty percent of the calf crop. The agreement was not reduced to writing. At this time Bachand was to run the heifers on land he owned. In 1965 Bachand's land was foreclosed; however, he continued to live on the premises for several more years. In any case, this agreement worked out satisfactorily for both parties.
In 1969, Walker became interested in acquiring the Laura Lovgren Ranch. Bachand testified that Walker asked him to look at the ranch and if he (Bachand) liked it "we'll buy it." Bachand interpreted this statement to mean that Walker and Bachand would purchase the land as partners.
On October 20, 1969, Walker and his wife, Carol, entered into a contract to purchase the Lovgren ranch, together with its machinery, improvements and livestock for a total price of $165,000. They paid $20,000 down, and agreed to pay $5,000 annually for 18 years with a $49,000 balloon payment due in December 1989.
Bachand moved onto the ranch in the fall of 1969. Bachand and Walker executed a written partnership agreement effective January 1, 1970. Walker contributed 185 bred cows and some machinery. Bachand contributed some machinery and claims he also contributed some bred heifers. The net disparity in capital contributions was reconciled when Bachand executed a $21,500 promissory note to Walker.
The partnership agreement does not describe or include the real estate as a partnership asset. The agreement provides that the partnership business consists of a ranch operation located on the real estate in question. The real estate taxes were Walker's responsibility. Personal property taxes on the machinery and livestock were to be borne equally by the partners. Walker was to be solely responsible for any building improvements in excess of $500. The partnership income was to be divided on a 50/50 basis, and included any income derived from mineral leases and the sale of gravel. Another provision expressly provided that because Walker was allowing proceeds from the sale of gravel or oil leases to become partnership income, fences or fence repairs would be considered operating expenses borne by the partnership.
Walker delivered a copy of the written partnership agreement to Bachand and asked him to read it. Bachand testified it took him two to four minutes to read it, and that at this time he did not notice that the land was not mentioned as a partnership asset. The agreement was signed by both Bachand and Walker, with Bachand's wife, Charlotte, and Walker's wife, Carol, signing as witnesses.
Bachand later testified that after Walker left he re-read the contract and discovered that there was nothing in the contract about the land. He did not mention this claimed omission to Walker until about three weeks later. Bachand testified that when he mentioned to Walker that the land was not described as a partnership asset, Walker allegedly replied, "I couldn't put nothing in there about the land because I [Bachand] had a judgment against me." In the sixteen and one-half years following, Bachand claims he did not press the ownership of the land because he "trusted" Walker.
Bachand claims that prior to the execution of the written partnership agreement there was an oral agreement that the land was to become a partnership asset. Walker denies there ever was such an agreement. Although Walker testified on adverse examination that he did not know or recollect whether such a discussion ever occurred, he also testified that the land was not a part of the partnership. He and his wife purchased the land. He further insisted many times that the partnership property consisted only of livestock and machinery.
Walker's wife Carol testified that she was present at the time the written partnership agreement was signed and that there was no discussion about including the land as a partnership asset at that time or anytime thereafter. She never was aware of Bachand's claimed interest in the land until he filed this lawsuit.
The trial court resolved this conflicting testimony by its finding that there was no oral agreement respecting either a partnership ownership or an equal ownership in the land in question.
During the course of the partnership, each party made certain draws on partnership funds. The accounting indicates Bachand's total draw was $241,572, and Walker's draw was approximately $225,000.
None of Bachand's draws were applied to the payments due on the land. Walker made payments of $211,600 toward the purchase of the ranch land. Bachand's expert CPA, Wilbur Blundell, testified that all but two of the payments on the land were made from draws charged to Walker and, further, if such payments were to be regarded as a purchase of the partnership, Walker would still be owed all the draws. Additionally, it is undisputed that Walker paid $51,000 in real property taxes and $8,000 toward capital improvements, all of which were made from draws charged to Walker.
There are three issues to be resolved on appeal:
I. Whether the equitable action of accounting fully disposed of the claims of Bachand, thereby negating a jury trial on allegations founded on fraud?
II. Whether the trial court erred in denying Bachand certain "bonus" credits?
III. Whether the trial court's determination that there was no oral agreement between the parties regarding the purchase of the ranch land is supported by the evidence?
The standard of our review is governed by SDCL 15-6-52(a). 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 the credibility of the witnesses. This court will not overturn the trial court's decision unless, after reviewing all the evidence, it is left with a definite and firm conviction that a mistake has been made. Smith v. Sponheim, 399 N.W.2d 899 (S.D.1987). With this standard in mind, we address the issues raised by the appeal.
Bachand claims the trial court erred in refusing to permit a jury trial on the allegations of fraud set forth in his amended complaint.
Prior to the trial to the court, counsel for Bachand asked the court what issues would be tried. Counsel indicated that he understood the issues of the accounting of the partnership, breach of the contract as to the partnership and as to the land, part performance as it related to the statute of frauds and as to estoppel were to be tried. Counsel further stated that he understood the issues of fraud and conversion would be tried to a jury. The trial court agreed these issues would be tried to the court, and said, "The issues later on of fraud, deceit and conversion would be given to the jury, if such is left, you know." At a pre-trial conference on November 28, 1988, the court indicated that all equitable issues would be tried to the court and stated, "And then when we get done with that we'll try it to the jury if there is anything left."
The trial court entered findings of fact on the breach of contract, land claims, and the accounting, and concluded that the court trial on these issues fully disposed of all of Bachand's claims, making a jury trial on the fraud claim unnecessary. We determine, with the exceptions noted, that the...
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