Bailey v. Bailey

• Citation: 345 So.2d 304
• Parties: Evelyn L. BAILEY v. James D. BAILEY. Civ. 988.
• Decision Date: 27 April 1977
• Court: Alabama Court of Civil Appeals

Page 304

345 So.2d 304

Evelyn L. BAILEY v. James D. BAILEY.

Civ. 988.

Court of Civil Appeals of Alabama.

April 27, 1977.

Pat C. Boyd, Birmingham, for appellant.

James M. Fullan, Jr., Birmingham, for appellee.

BRADLEY, Judge.

This is a divorce case.

The suit was initiated when Evelyn L. Bailey filed a complaint in the Circuit Court of Jefferson County seeking a divorce from her husband, James D. Bailey, on the grounds of adultery and incompatibility. She also sought custody of the parties' two minor children, certain real and personal property, and one-half of the business known as the Handy Mart No. 1 located in Springville, Alabama. By subsequent amendments she claimed that during their marriage the parties had formed a partnership to own and operate grocery stores called Handy Mart No. 1, located in Springville, Alabama, Handy Mart No. 2, in Asheville, Alabama, and Springville Big Saver, in Springville, Alabama.

The trial court separated the partnership issue from the remaining issues and tried that issue on February 11, 1976. On March 16, 1976 the court ordered that no partnership had existed between the parties as to any of the three grocery stores which they had operated.

The hearing on the remaining issues was held in April 1976 and the trial court's final decree was issued on June 10, 1976. The court divorced the parties on the ground of incompatibility, awarded custody of the two children to Mr. Bailey, made a property division, and awarded Mrs. Bailey periodic alimony of $500 a month. She was also awarded an attorney's fee.

Both parties moved for an amendment of the judgment and a new trial. These motions were denied. Mrs. Bailey has appealed and Mr. Bailey has requested this court to dismiss the appeal.

On the Motion

Mr. Bailey's ground for dismissal of the appeal is that Mrs. Bailey has accepted the awards made to her in the divorce decree without filing a supersedeas bond in that she has accepted the $500 monthly payment of alimony, accepted $2,500 in attorney's fees for her lawyer, refused to vacate the marital home which was awarded to Mr. Bailey, and continued to possess and use the Lincoln automobile which she was awarded. Citing Earle v. Reid, 25 Ala. 463 (1854), and Murphy's Heirs v. Murphy's Adm'r, 45 Ala. 123 (1871) as authority, Mr. Bailey maintains that since Mrs. Bailey has advantaged herself of the provisions of the divorce decree, she is estopped to deny the validity of the decree.

The wife replies by pointing out that the husband has not cross-appealed nor has he asked for a stay of the judgment pending the appeal; therefore, he has no standing to protest the appeal, especially since her complaint is that the trial court did not permit her to share equitably in the division of assets, i.e. she did not receive her fair share.

We agree with the wife. Since Mr. Bailey did not cross-appeal, we are faced with the alternatives of either affirming the judgment of the trial court or holding it in error for not awarding more assets to Mrs. Bailey. In neither event would her award be reduced; hence, we fail to perceive in what respect Mr. Bailey is injured by permitting Mrs. Bailey to have the judgment enforced pending the appeal. See Fitts v. Fitts, 284 Ala. 109, 222 So.2d 696 (1969); Ryan v. Ryan, 267 Ala. 677, 104 So.2d 700 (1958). Consequently, the motion to dismiss the appeal is denied.

On the Merits

Mrs. Bailey presents to this court three issues for decision:

1. Whether failure of the trial court to find that a partnership existed between the parties and to dissolve said partnership is against the evidence, palpably wrong, and manifestly unjust.

2. Whether the division of the assets of the marriage is manifestly unjust and grossly inequitable on the evidence adduced in this cause.

3. Whether granting to the husband the use and occupancy of the parties' home without compensation to the wife is an award of alimony from the wife to the husband which is not permitted by Alabama law.

The facts will be discussed as they apply to the issues raised and argued.

I

Mrs. Bailey contends that she and her husband operated a prosperous grocery concern as a partnership. Since Mr. Bailey denies the existence of a partnership, the facts pertaining to the acquisition and operation of the business are crucial.

Sometime prior to 1968 the parties to this appeal decided to go into business for themselves. Since their marriage, Mr. Bailey had worked in the food business, first as a store clerk in a supermarket and then as a buyer for a food broker. In his travel for the food broker Mr. Bailey discovered a grocery business, the Springville Big Saver, for sale. He took Mrs. Bailey to inspect the business and after discussion together they decided to buy it. The purchase was financed by a note for $22,500 cosigned by Mr. Bailey and an uncle; Mrs. Bailey did not sign the note. Several weeks before they took over the business, Mrs. Bailey worked in the store so that she could learn the grocery business, as she had no prior experience in that field.

At this time the parties discussed forming a corporation but discarded the idea when they learned that three people were required to incorporate. They did not want to include a third person in the business. Mrs. Bailey said they also discussed forming a partnership; Mr. Bailey said they did not. In any event, no formal agreement of any kind was ever drawn between then. The business never filed income tax returns as a partnership.

Initially both parties worked diligently to make the grocery business a success. Generally, Mr. Bailey did the buying and took care of stock and Mrs. Bailey kept the books and operated the cash registers, since that was where her past experience lay. In Mr. Bailey's words, 'We just had to do everything we could to start with, cut help down as close as we could.' Neither drew a salary so that as much profit as possible could go back into the business. Net profits from its operation were put into a checking account and a savings account owned jointly by the parties. The $22,500 note signed by Mr. Bailey and his uncle was repaid with funds withdrawn from these joint accounts.

The Springville Big Saver was successful and the parties were able to purchase and open another store, the Handy Mart No. 1, using funds from the joint accounts. No debt was incurred by either party. At some point a third store, the Handy Mart No. 2, was also purchased and opened in the same manner. Mr. and Mrs. Bailey divided their time between these stores.

In 1971 the Springville Big Saver was sold. Proceeds from the sale were placed in a joint savings account and later used to purchase the house in which the parties lived at the time of the divorce. In 1972 the Handy Mart No. 2 was also sold and the proceeds placed in a joint savings account.

The financial operation of all three stores was the same. Both parties were entitled to draw on the accounts opened in the name of each store, i.e. the Springville Big Saver, the Handy Mart No. 1, and the Handy Mart No. 2. Additionally both had equal access to a joint checking account and several joint savings accounts all of which were funded with checks drawn on the business accounts. Neither was paid a salary; rather, they used the joint checking account to pay personal and family expenses. Sometimes the parties would take cash directly from a store register, leaving a receipt in the drawer to indicate what amount had been withdrawn, and deposit that amount into the personal accounts. These three grocery concerns were the parties' only source of income after 1968.

Although both Mr. and Mrs. Bailey worked equal hours initially in the operation of the business, after the Springville Big Saver and the Handy Mart No. 2 were sold only Mr. Bailey worked full time at the Handy Mart No. 1. Mrs. Bailey worked one day a week. However, when Mr. Bailey became ill Mrs. Bailey replaced him at the Handy Mart No. 1 throughout his illness. It was Mr. Bailey who dealt directly with the employees and made decisions to hire and fire personnel.

Sometime in the latter part of 1974 the parties' relationship began to deteriorate. It seems that after January 1975 Mrs. Bailey no longer worked in the store at all; how much or little she worked during 1974 was disputed. In 1975 Mr. Bailey had the Handy Mart No. 1 checking account changed by removing Mrs. Bailey's name from the signature card.

On March 16, 1976 the trial court entered a decree finding that no partnership exists or existed between the Baileys in any of the three business ventures previously named. Mrs. Bailey says the trial court is due to be reversed as its finding is against the great weight of the evidence.

Where, as here, there is no written partnership agreement between the parties, and the question is whether as between the two a partnership existed, the question is one of part law and part fact. Adams v. State, 43 Ala.App. 281, 189 So.2d 354, cert. den., 280 Ala. 707, 191 So.2d 372 (1966). The trial court has already made the factual determination that no partnership existed. The ore tenus rule applies in partnership cases as in all others. The finding of the trial judge has the effect of a jury verdict, and the decree will not be disturbed unless it is palpably wrong. Hair v. Beall, 274 Ala. 699, 151 So.2d 613 (1963); Dicks v. McAllister,20 Ala.App. 5, 100 So. 631, cert. den., 211 Ala. 422, 100 So. 632 (1924). Thus, the decree stands with a presumption of correctness.

Alabama has adopted the Uniform Partnership Act found in Title 43, Chapter 1A, Code of Alabama 1940 (Recomp.1958) (Supp.1973), but this case is not due to be decided under that act, since section 5(6) explicitly exempts any association existing prior to the enactment of the act. The act became effective January 1, 1972; all of the businesses in question were acquired prior to 1972. Thus, pursuant to section 5(5), the rules of law and equity will govern the decision of this case.

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